McLearn v. Wallace

APPEAL from the circuit court of the United States for the district of Georigia.

Archibald McLearn, a native of Scotland, and afterwards a citizen of the United States, purchased a tract of land called Gowrie, and a small island, in Chatham county, in the state of Georgia, on which he established a rice plantation; and having paid part of the purchase money, a judgment was obtained against him for the balance. He died, having devised the whole of his estate, real and personal, to his son, James H. McLearn. The property of the testator consisted, chiefly, of the planation in Chatham county, and the negroes by which it was cultivated. By the laws of Georgia, all the property of the testator, both real and personal, was bound by the judgment against Archibald McLearn.

James H. McLearn, holding under the will of his father Archibald McLearn, the whole of his estate, thus incumbered by the judgment for the balance of the purchase money due for the land, in order to obtain possession from the executors of the will, who insisted on keeping possession until the debts due by the testator were paid; gave to the creditor of his father his bond for the unpaid balance of the purchase money, and executed a mortgage to secure the payment of the bond, on the land, and on the negroes belonging to the estate. He paid a part of the debt, and died without issue, and intestate; leaving a balance of the original debt for the purchase money unpaid, and secured by the bond and mortgage.

The mortgagee foreclosed the mortgage, and sold the land for 19,739 dollars 13 cents: thus satisfying the whole of the claims of the creditors of Archibald McLearn and James H. McLearn, for the original purchase money of the real estate, and for the interest on the same.

James Wallace administered to the estate of James H. McLearn, sold all the personal property, and after paying all the remaining debts of his intestate, there was a balance in his hands, in 1833, exceeding 21,000 dollars; which he invested, by agreement of all interested, for the benefit of whoever might be entitled to the same.

The nearest of kin to James H. McLearn, were John McLearn and others, who were aliens, residing, at the time of the decease of the said James H. McLearn, in Great Britain, and were subjects of the king of that kingdom.

The wife of Archibald McLellan was more remotely related in blood to the intestate, and she and her husband were citizens of the state of South Carolina, at the time of his decease; and she was the nearest of kin to him, capable of inheriting his real estate, according to the laws of Georgia, which do not allow aliens to inherit land. As the next of kin capable of inheriting, they claimed the real estate of James H. McLearn.

John McLearn and wife, and the aliens nearest of kin to the intestate, filed a bill in the circuit court of the United States for the district of Georgia, against James Wallace, administrator of James H. McLearn, and against Archibald McLellan and wife, the remoter kindred of the intestate, citizens of South Carolina. The bill prayed that the complainants should be declared entitled to the estate, real and personal, of James Hendley McLearn; that the same should be delivered to them, and the cash in the hands of the administrator should be paid to them. The bill also prayed, that Archibald McLellan and wife should be decreed to have no interest in the real estate; and for other and farther relief.

Archibald McLellan and wife filed a bill in the same court against John McLearn and others, the alien kindred of the intestate, and against James Wallace, his administrator. The bill prayed that the complainants may be declared entitled to so much of the real estate of James H. McLearn, as remained unsold; that the alien kindred of the said James should be decreed to have no interest in the lands; and that the administrator should be decreed to account to them for the whole of the personal estate remaining after the payment of the debts of his intestate; and to account to them for the amount of the sales of the land, and to pay to them the value of the said land sold, out of the proceeds of the personal estate remaining unadministered, and for other and further relief, &c.

James Wallace, the administrator of James H. McLearn, filed his bill of interpleader, claiming the protection of the court, exhibiting an account; and offering to deliver the unadministered part of the estate to such party as the court may adjudge to be entitled to receive it.

The circuit court decreed that Archibald McLellan and wife, as the nearest of kin to James H. McLearn, capable under the laws of the state of Georgia, of inheriting real estate; they being citizens of the United States at the time of his decase; were entitled to the whole of the real estate of which James H. McLearn died seised and possessed; but the same having been sold, the court allowed them the money for the part sold, and all the real estate unsold: and to John McLearn and the aliens, the court allowed the remaining part of the estate, after the payment to Archibald McLellan and wife of the sum of 19,739 dollars 13 cents, the amount the planation sold for, less the costs of suit, &c. The sum decreed to be paid to John McLearn and wife amounted to 1557 dollars 35 cents. The administrator, James Wallace, was decreed to pay those sums to the parties respectively, and to deliver the title deeds, &c.

From these decrees, John McLearn and others, aliens, appealed to this court.

The case was submitted to the court, on the part of the appellants, by Mr Berrien, on a printed argument, handed to the court by Mr White; and was argued at the bar by Mr Preston, for Archibald McLellan and wife.

Certificates from gentlemen of distinguished legal acquirements, and many of whom had held high judicial stations in the state of Georgia, were laid before the court in support of the construction given by the counsel for the appellants, of the laws of Georgia; and the application thereof in cases of intestacy in the courts of that state.

1. That the debts of an intestate, whether by simple contract or by specialty, are chargeable equally on his real estate and personal estate in Georgia. The law of England, which declares the latter to be the primary fund for that purpose, and marshals the assets to enforce that liability, by the exoneration of the real estate, is not the law of Georgia.

2. Even in England, the debt for which the land was sold, under the mortgage given by James H. McLearn; having been contracted by Archibald McLearn, and being for the unpaid purchase money of the same land; such debt, notwithstanding the bond and mortgage given by James H. McLearn, ought, as between his representatives, to be charged on the land.

3. In the worst aspect of the case, the personal estate could only be liable to contribution.

4. In any event the commissions on the sales of the land, cannot be charged to the personal estate.

The printed argument of Mr. Berrien was prefaced by the following 'preliminary remarks.'

'The degrees of kindred of the respective parties are not in controversy-neither is the account of the administrator; but there is one question, to which the attention of the court is called, before entering into the general argument; because if decided in favour of the complainants in the first bill, it disposes of the whole case. It is, whether those complainants, although aliens, and therefore incapable under the laws of Georgia, of holding the real estate specifically, are not, under those laws, entitled to its proceeds.

'Prince's Dig. 135, art. 15.

'Although aliens are incapable of holding lands, they are entitled by this act to take the proceeds of real estate, and devisees, or next of kin, of a deceased citizen. It recites that vexatious lawsuits had been prosecuted by the escheators against the estates of citizens, who had bequeathed their estates to persons residing in foreign parts, and provides that their lands may be sold, and the proceeds paid over. The words of the recital are confined to persons dying testate, citizens who bequeathed their estates; but the enacting clause applies also, to cases of intestacy, for it authorizes the executor, or administrator, to sell such real estate, and pay over the proceeds to the devisees, or legal representatives of the deceased. It authorizes this, however, only where the citizens shall die, leaving no heir who can inherit the same, because of his being an alien; and the argument, against which he have to contend is, that when any of the kindred of the deceased, however remote, are citizens, their claims, as to the real estate, will prevail over those of the devisees, or nearest of kin, being aliens. Such is the letter of the act, the words being, 'shall leave no heir, &c. &c.' Sed qui haeret in litera, haeret in cortice. Its manifest intention is, to remove the disability of alienage, from the next of kin, or devise of a citizen; and these words, 'shall leave no heir, &c. &c.' may, without any extravagance of version, be construed as equivalent to a provision in the following words: 'shall leave next of kin, or devise to persons who are incapable of taking because of their being aliens.' It was the design of the legislature to permit a citizen to leave his real estate to the natural, or selected objects of his bounty; not specifically, for that the policy of the law was supposed to forbid, but by a sale and delivery of the proceeds.

'This view is confirmed by the act of 1789, which declares, that 'should any case arise which is not expressly provided for by this act, respecting intestate's estates, the same shall be referred to, and determined by the common law of the land, as it hath stood, since the first settlement of this state, except, only, that real and personal property shall always be considered, in respect to such distribution, as being precisely on the same footing.' Now here is a case of distribution of an intestate's estate, not expressly provided for by that act; and according to the argument we are contesting, the real and personal estate would be disposed of in a different manner. But the act itself declares, that the common law, modified by its own express provisions, shall constitute the rule. The common law inhibits an alien from holding real estate, but permits him to hold personalty. This act provides that these two species of estates shall be precisely on the same footing in respect to distribution. How are these conflicting provisions to be reconciled? Must the disability of alienage, which the common law confines to the realty, be extended to the personal estate; or shall the privilege of holding personalty, be extended to the real estate? It is only in one of these two modes that the requirement of the act of 1789, that real and personal estate shall be in respect to distribution, precisely on the same footing, can be complied with; unless by a liberal interpretation of the act of 1810, (Prince 135) the claim of the alien to take the proceeds of the estate, is admitted.'

1. Upon the first point it was contended, that the course of legislation in Georgia, had been, uniformly, to put real and personal estate on the same footing for the payment of debts, as well as for other various purposes. The doctrine of the common law of England, which gives land to the heir, and chattels to the executor or administrator, has never been recognized in the state. Both species of property pass under the laws directly to the executor or administrator, to be applied by him as assets in payment of debts; or for distribution among the next of kin of equal degree.

No person is known, under the laws of Georgia, as heir, in contradistinction to the distributees of a decedent, as they are identical; unless in such a case as this now before the court, where it is said the disability of alienage intervenes to incapacitate the nearest of kin from taking the real estate. But in this case, the more remote kindred must sustain their claim, if it may be sustained, under the statute of distributions of Georgia; and do not take by descent at common law.

In support of these positions, he cited, Wat. Dig. 15, 29, 313, 414; Prince's Dig. 559, art. 160; Prince's Dig. 160, art. 42.

The courts of Georgia have given effect to the provisions of the constitution and laws of Georgia, which have been cited; and have rejected the distinction which exists under the law of England between the heir of the real, and distributee or representative of the personal estate; and with it the power which is exercised by the English courts of chancery, of marshalling the assets of a decedent's estate, as between these parties.

By the laws of Georgia, lands as well as chattels may be taken in execution, and sold in precisely the same manner. The former are assets for the payment of debts in the hands of an executor or administrator, primarily or equally with the personal estate; and without any proceeding against the heir to render them so. That such is the law of Georgia, was recognized by this court in the case of Telfair v. Stead's Executors, 2 Cranch 406, 1 Peters's Cond. Rep. 211; cited also, Prince's Dig. 211, 212, art. 12; Dawson's Dig. 216; Dawson's Dig. 595; Prince's Dig. 158, art. 29.

The common and statute law of Great Britain, which were 'usually in force in the province of Georgia, in May 1776,' and not contrary to the constitution, laws and form of the government of the state; were declared to be in force, 'until repealed, amended or otherwise altered.'

It is necessary then, that McLellan and wife, who seek to enforce what they conceive to be the English rule in this case, should show, affirmatively, that it was usually in force in Georgia in 1776; and negatively, that it has not been since repealed, amended or otherwise altered: which is believed to be impossible. The onus is with them. But if this were not so, it seems very clear, that our own legislation, and the decisions of our courts, will show, affirmatively, that it is not the law of Georgia.

The whole course and spirit and purpose of the laws and decisions of the courts of Georgia, have been in opposition to the rights which, in England, form the policy which there prevails in favour of the heir. The law of descents of Georgia is different. The right of creditors to enforce the payment of their debts is different; and the marshalling of the assets of a decedent's estate is fixed and regulated on dissimilar principles.

2. Will the English rule, which is appealed to in behalf of McLellan and wife, sustain their pretensions; the debt which has been paid by the sale of the land, having been originally contracted for the purchase of the same?

Judgment for this debt was recovered against Archibald McLearn in his lifetime; and by the law of Georgia, it bound all his property, and the plaintiff in the same could have levied for the debt on either the real or personal estate, or on both.

Such was the state of things on the death of Archibald McLearn. The judgment remained in full vigour; was an incumbrance upon his estate, and capable of being enforced against his property, real and personal, in the hands of his executors. James H. McLearn, who was the general devisee of his father Archibald, on coming of age, in order to obtain possession of the property from the executors, and on their requisition, substituted his bond and mortgage of the land and negroes devised to him by his father, and on which this judgment was an incumbrance.

The only change effected by this was to convert the general lien existing under the judgment, on all the property of Archibald McLearn, into the specific lien created by the mortgage on the property mortgaged, and to release the remaining property; which is shown, by the accounts of the administrator, to have been very small, from the lien of the judgment.

Now keeping in mind that this was originally the debt of Archibald McLearn, contracted by him for the purchase of this very land, which is now claimed by McLellan and wife; and consequently that it did not, as in the case of money taken up on mortgage, enure to the benefit of his personal estate: it is submitted that even upon the principles of equity, applicable to the subject, which are recognised in the English courts of chancery, no one of these circumstances can, nor can all of them combined, throw this debt, exclusively, or primarily, on the personal estate of James H. McLearn.

We are not now called upon to consider the lien which a vendor has for unpaid purchase money, as against his vendee, or a purchaser from him. The point presented in this case, is between the kindred of the general devisee of the vendee of the land: one claiming the land purchased, the other admitted to be entitled to the personalty; and both asserting their claims under the statute of distributions of Georgia. As between them, until the purchase money is paid, it remains chargeable in equity on the land purchased. Neither is this a question, whether the general, real or personal estate shall be charged with this debt. The inquiry is more simple. It is whether the specific land purchased, but not paid for, by Archibald McLearn, shall bear its own burthen? Whether, upon any principle of equity, McLellan and wife can claim this land under the statute of distributions of Georgia, and make the other kindred claiming under the same statute, who have no interest in it, and neither have derived, nor can derive any benefit from it, pay its price? Cases cited and examined as applicable to this point: Hughes v. Kearney, 1 Sch. & Lefr. 13; Pollexfen v. Moore, 3 Atk. 236, 272; Cumberland v. Coddrington, 3 Johns. Ch. Rep. 252; Evelyn v. Evelyn, 2 P. Wms 664; Mathewson v. Hardwick, 2 P. Wms 664, note; Billingshurst v. Walker, 2 Bro. Ch. Rep. 604; Bassett v. Percival, 2 P. Wms 664, note.

In concluding the argument on this point, it was submitted, that as this debt was originally contracted by Archibald McLearn, and was a lien upon his property at the time of his death; and as James H. McLearn did not, by giving his bond and a mortgage on the same property which was before bound, make this his own debt, so as to throw it upon his personal estate, as between the representatives of James H. McLearn, it is not a debt exclusively chargeable upon his personal estate, even according to the rule in the English court of chancery.

3. The third point is not presented by the appellants as if this were a case for contribution. It is admitted indeed, that James H. McLearn, who was the proprietor of the whole estate, had a right to charge any part, or the whole of it, with the payment of this debt; and that, in point of fact, he has so charged certain real and personal property belonging to the estate by way of mortgage. If the claim of McLellan and wife, to be exclusively entitled to the real estate, be sustained; it will result that real and personal property, subject under the mortgage to a common burthen, has become vested in different persons: but it is also to be remembered, that this incumbrance was created by the purchase of the real property mortgaged; that the debt, to satisfy which this land was sold, was the unpaid balance of the purchase money of the same land, for which the purchaser and his heirs, however indefinite the series, were but trustees to the vendor, until the purchase money was paid.

As the court gave no opinion on the fourth point, the argument is omitted.

Mr Preston, for the appellees.

The construction given to the law of Georgia, Prince's Digest, 135, art. 15, by the counsel for the appellants, is denied. It is contended that the proceeds of land will, under this law, go to aliens; although the real estate could not have gone to them after the death of the owner.

The law referred to by the counsel was not intended to remove the disabilities of aliens; and this is shown in the title and the purpose of it. It is an act to explain the escheat laws. It had no view to extend or modify the rights of aliens. The act of 1810 was intended to explain the act of 1805, and to correct the abuses under it. The law is construed to extend to cases of testacy; and to put an end to the vexatious acts of the escheators, in those cases.

By the laws of Georgia, as they exist, aliens cannot inherit real estate; the estate is cast by descent on the heritable blood. The real estate of John H. McLearn then descended to the appellees; and the real and personal estate should go together. As they take the real, so they ought to take both.

If this is the law of Georgia, then the appellees, McLellan and wife, take all the property of James H. McLearn, both real and personal: and as the proceeds of the real estate have been absorbed in paying a debt due by, and which ought to have been paid out of the personal estate, the balance in the hands of the administrator should be paid to the appellees.

The circuit court has decided that the balance of the personal estate, after paying the debt for which the real estate was sold, is to go to the nearest of kin. This is not according to the law of Georgia.

In 1795, aliens were, by the laws of Georgia, allowed to hold real estate by devise; but this act was repealed in the following year. Walker's Dig. 600. Thus the legislature, by positive enactment, declared their determination that none but citizens of the United States should hold a fee simple estate in lands.

As to the position of the appellant's counsel, that real estate is chargeable equally with personal estate, by the law of Georgia; this is denied. It is admitted that the whole estate of one deceased is liable for his debts; but the primary fund is the personal property.

Attempts have been made in that state to make them equally liable, but they have not succeeded so as to make them inseparable. The heir-at-law takes the real estate, and the executor takes the personal property; and after the debts are paid, it goes, if they are not aliens, to the personal representatives. The executors must pay the debts out of the personal assets; and if any construction of the law prevails so as to apply the real estate in equal responsibility with the personal, it is in opposition to the plain meaning of the law.

What is the fixed and settled general law of the state of Georgia cannot be readily ascertained. It is difficult to obtain reports of the decisions of the courts, and there has been hitherto no court of errors or appeals, having a general and final jurisdiction over cases which have been decided in the courts of the state. What rights over, and what interests in the real estate of a testator, do executors acquire under the laws of Georgia? Prince's Digest 178.

The law authorizes executors to make title to lands which the testator, in his lifetime, contracted to sell and convey. If the executors took the lands, they could sell and convey without such a provision, in the same manner as they may sell personal property. The law, however, imposes peculiar solemnities; which must, in cases of sales of lands, be observed by executors. It is therefore apparent that lands are not assets in the hands of an executor. By the law of 1810 it must be admitted, that real property cannot, in case of intestacy, go to an alien. Prince's Digest 156. Can the proceeds of real estate, sold after the decease of the intestate, go to such alien? The law is clearly established, that such proceeds have all the characteristics of the realty, and are governed by the same rules, and subject to the same rights, as the real estate was.

What has an executor to do in Georgia? The law provides only for his care and distribution of the personal estate, and is silent as to the realty. Prince's Dig. 171.

In all the states of the union, personal property is first made applicable to the payment of debts due by a deceased person.

In 2 McCord's Chancery cases, it was held, that the English rule prevailed in South Carolina. As between creditors, this was of no moment when they sought to enforce the payment of the debts due to them; but as to all others, the law is different.

The heir is entitled to the profits of the real estate immediately after the death of the person last seised; and the executor takes the personal property. This shows the difference between the rights of persons interested, and the clear distinction between them. The heir holds the land until it is sold; and even in the case of a will giving executors power to sell land, no title to it is given; and the heirs continue in possession until the sale.

Mr Justice Wayne stated, that in Georgia executors never sell land for payment of debts, but by order of court.

The same law prevails in Georgia as in other states.

The common law of England is in force in Georgia except when altered by statute; and it certainly cannot be claimed, that at the common law such a right as that which is asserted by the appellants would prevail.

As to the second point presented by the counsel for the appellants, it is contended that no proceedings by the creditor of the intestate can impair or affect the rights of the heir. The creditors cannot decide who shall suffer by his actions, the heir or the next of kin. He has a right to his debt; but the rights of others, after his debt is paid, are left where he found them. By what rule will the court decide that the creditor may despoil the rights of the heir.

It is important that the court shall look at the facts of this case, in considering the questions arising on this point. The estate of James H. McLearn was not, at the time of his death, liable for the debts of his father. He had extinguished the debt due as the purchase money of the estate, by substituting for it his own bond and mortgage. Thus the lien on the land when it descended to him was dissolved-was at an end. It was not then to enforce the principle of law that land continues liable to the lien of unpaid purchase money, that the land was sold by the mortgagee.

This court has decided that the equity of the vendor for purchase money, exists only when he has taken no additional security for his debt. So too it is waived by changing the security, and this is considered as waiving the equitable lien. Brown v. Gilman, 4 Wheat. 55, 4 Cond. Rep. 445; same point, 1 Mason 191.

The was done by the creditors of Archibald McLearn. They took the bond and mortgage of James H. McLearn; and they ceased to have an equitable lien on the land for any balance of the purchase money.

The court will then sustain the decree of the circuit court, as to the proceeds of the real estate remaining in the hands of the administrator. It is also asked that they will refuse to the appellants the the portion of the proceeds of the personal estate which that court gave to them.

Mr Justice McLEAN delivered the opinion of the Court.