Page:Harvard Law Review Volume 5.djvu/152

136 136 HARVARD LAW REVIEW. was very characteristic (and well illustrates the methods by which equity accomplishes its objects), namely, by counteracting one preference by means of another preference, and thus bringing about an equality. Thus, if a testator, when he died, owed A and B $1,000 each by simple contract, and the executor has paid A $500 while he has paid B nothing, equity will first pay B $500, and then it will pay them both ratably. 1 The principle upon which equity does this is that, when it takes upon itself the admin- istration of an estate, it succeeds to all the powers which the executor previously had, and that it will wield those powers in such manner as will best serve the purposes of justice. It was, however, in counteracting the preferences given by law that equity achieved its greatest success ; and this it did upon another prin- ciple, namely, that equity is entitled to deal in its own way with rights which are of its own creation. The estates of deceased persons were divided by equity into two great classes of assets, namely, legal and equitable. Legal assets were such as the per- sonal and real representatives of deceased debtors were bound by law to apply in payment of the debts of the latter, while equitable assets were such as they were bound only in equity so to apply. Moreover, this latter class of assets (for reasons which it is not necessary here to enter into) embraced a much larger amount of property than might at first sight be supposed. Whenever, there- fore, equity was called upon to administer an estate which con- sisted in part of equitable assets, it not only applied the latter to the payment of all debts equally, whatever their degree, but, if any creditors to whom the law gave a preference had availed them- selves of that preference, the decree directed that such creditors should receive nothing out of the equitable assets until the other creditors were paid the same proportion of their debts out of the equitable assets that they had received out of the legal assets. 2 Secondly. Equity could not make the real estate of a deceased debtor directly liable for his simple contract debts, without a violation of law; but it exercised the right of throwing the whole burden of the specialty debts of deceased debtors upon their real estate, thus securing the whole of the personal estate for the simple contract creditors ; and this it did by means of subrogation. Accordingly, in every administration suit in which the heir or 1 See supra, p. 126, n. 2. 2 Seton on Decrees (1st ed.), p. 90; Haslewood v. Pope, 3 P. Wms. 322.