#### *King Adm'r &c. and Others v. Ashley.

November, 1834,

Richmond.

(Absent Brooke and Brockenbrotjgh, J.)

Chancery Practice — Suit to Subject Land Sold under Decree of Federal Court — Parties.—Upon a bill in the state court of chancery, by a creditor by specialty binding’ the heirs of the debtor, against the heirs, to subject the lands descended to the debt, — it appears, that all the land descended has been sold before the hearing of this cause, under a decree of the federal court, in a suit of the U. States against the heirs, to satisfy a debt due the U. States from their ancestor as collector of customs ; yet the purchasers under the decree of the federal court are not, as such, made parties to this suit; the chancellor decrees a sale of the land descended, to satisfy plaintiff’s demand: Held, it was error to make such decree in this cause, without having the purchaser under the decree of the federal court made parties.

Debts of Decedent — Priorities—United States — individual Creditor — Qu<ere.—Whether the U. States have any priority over an individual creditor for satisfaction out of the lands of a deceased debtor ? and if not, whether the U. States having got the first decree in the federal court, or the individual creditor who brought suit first in the state court, shall have preference ? or whether the real assets should be rateably distributed ?

This was an appeal from a decree of the superiotir court of chancery of Williams-burg. The bill was exhibited by Ashley against King the administrator of Charles K. Mallory deceased, and Mallory’s widow and heirs, shewing that Mallory was indebted to Ashley, by specialty binding his heirs, in the sum of 1800 dollars ; that the administrator alleged that Mallory’s personal estate had been exhausted in payment of debts of equal or superiour dignity; and that Mallory left real estate,which descended to his heirs ; and therefore praying an account of the administration, and, if necessary, a sale of the real estate to satisfy the debt due the plaintiff.

The defendants answered, that Mallory’s personal assets had been duly administered and exhausted ; that the only real estate he left was a house and lot in the borough of Norfolk; and that this property had been sold under a decree *of the circuit court of the U. States for the eastern district of Virginia, in a suit in which the U. States were plaintiffs, and the administrator, widow and heirs .of Mallory, were defendants, to satisfy a debt due the U. States.

The chancellor directed an account to be taken of King’s administration of the personal estate, and an account of the real estate of Mallory, and of the disposition thereof, if any, that had been made by his heirs.

The commissioner’s report shewed, that the personal assets had been duly administered and exhausted ; that Mallory left no real estate but the house and lot in Norfolk; and that the same had been sold under a decree of the federal circuit court, as alleged in the answers of the defendants, to the defendant King and one Lively. And he returned with his report, a copy of the record of the suit in the federal court; by which it seemed (though it did not certainly so appear) that the suit of the U. States against the administrator, widow and heirs of Mallory, was not commenced till after this suit was commenced by Ashley ; that Mallory had been collector of the port of Norfolk, and had given bond for the faithful discharge of the duties of his office, wherein he bound his heirs ; that he died largely indebted to the U. States ; that the object of that suit was, to subject his real estate in the hands of his heirs, to the debt due the U. States ; that the federal court had decreed a sale of the real estate, and that it had been accordingly sold to King and Lively, and the purchase money had been paid by the •purchasers, before the interlocutory decree in the suit of Ashley, was made.

Neither Lively, nor his co-purchaser King, in his own right, was made a party in this cause.

The chancellor decreed, that the dower of Mallory’s widow should be assigned her, and that his real estate in Norfolk should be sold, subject to the dower right, and that the proceeds should be applied to the satisfaction of the debt due to Ashley.

The defendant King, in his own right and as administrator of Mallory, and the widow and heirs of Mallory, “'applied by petition to this court, for an appeal from the decree ; which was allowed.

Stanard for the appellants,

insisted, 1. That the decree of the federal circuit court, having been made by a court of co-ordinate power and concurrent jurisdiction, in favor of creditors having at least equal right with Ashley to charge the real estate of Mallory in the hands of his heirs, and that decree having been made, and the subject sold in pursuance of it, and the proceeds of sale applied to the payment of the debt due the U. States, before this suit of Ashley came to be heard in the court of chancery, this precluded the chancellor from all right to make the subsequent decree in this cause, for the sale of the subject to satisfy the debt due to Ashley. And 2. That, at any rate, the chancellor, with the facts before him, of the previous decree of the federal court, the sale of the subject under it, and the title acquired by the purchasers at that sale, ought not to have proceeded to make the subsequent decree in this cause, for the sale of the same property to satisfy Ashley’s claim, without having the parties interested in the title so acquired, convented before the court.

Leigh, for the appellee,

referred to the acts of congress of March 3, 1797, ch. 74, § 5 ; 2 Bior. p. 595, and of March 2, 1799, ch. 128, § 65 ; 3 Bior. pp. 197, 8, and to Conrad v. The Atlantic Ins. Co., 1 Peters 438-9, to shew, that the U. States had no priority, by statute, over individual creditors, for satisfaction out of real estate of their debtors in the hands of their heirs. And he insisted,-that Ashley’s *159suit had been commenced in the state court before the suit of the U. States was commenced in the federal court, and that, therefore, the jurisdiction of the state court attached on the subject before that of the federal court, and could not be ousted by any subsequent proceedings in the federal court. He said, it was the duty of the defendants in the federal court, to have shewn the proceedings previously commenced against them in the state court; and if they had done so, the federal court would not have proceeded to make *the decree it did make. Ashley having brought his suit before the U. States brought their’s, acquired thereby priority over them. 3 Bac. Abr. Heir *6*Ancestor, E'. p. 460. The purchasers under the decree of the federal court, if they had right, were not affected by this decree. King was not a party in the court of chancery, in his own right, and he could not take an appeal in his own right; and certainly, King in his character of administrator of Mallory, and the widow and heirs of Mallory, had no ground to complain of the decree.

CARR, J.

I think the decree palpably erroneous. The great objects of a court of equity are, to do complete justice by settling the rights of all persons interested in the subject of the suit, to make the performance of the orders of the court perfectly safe, and to prevent future litigation and multiplicity of suits. To these ends, it is necessary that all persons interested in the matter, should be before the court, in such way as to be bound by its decree. If the bill omit some who are interested, or if, in the progress of the suit, a new interest arises in one, not a party, it is the practice of every day to change the proceedings, either by amended or supplemental bill, so as to bring these new parties before the court : and lord Hardwicke says, “ it is frequently known, that after a cause is gone into, and even thoroughly heard, yet the court is compelled to let it stand over for want of parties. ” Jones v. Jones, 3 Atk. 111. This bill was filed ag'ainst the administrator and heirs of Mallory : it claimed the amount of a bond binding the heirs ; suggested that there was a deficiency of the personal assets: and, in that case, prayed to subject to the payment of the debt, the real estate of Mallory, which consisted of a house and lot in Norfolk. The heirs answered, admitting the defect of personal assets, and also that their father died seized of the house and lot, but alleging, that, since his death, this property had been sold, under a decree of the circuit court of the U. States, for a debt due the U. States from Mallory, as collector of the port of Norfolk, and purchased by Lively and King. Here *is, in truth and substance, a disclaimer ; a fact disclosed, shewing that the heirs, by proceedings under the decree of a competent tribunal, have been divested of all title and interest in the property, and the title transferred to other persons whose names are given. The fact is brought directly before the court: it is put in issue. What, then, should the court have done? Perhaps, as the defendants did not file as part of their answers, the record of the suit in the federal court, it was not improper in the chancellor to refer this matter to the master, as he did. But when his report came in, with this record forming a part of it, shewing a regular proceeding- in a court of record ; the decree ordering the sale of this house and lot, and the report of the marshal, that he had sold to King and Lively, that they had paid the purchase money, and received a deed, and the final decree approving and confirming all this ; surely it was time for the court to look into this matter. These were not pendente lite purchasers, in the proper meaning of that phrase. They claimed under Mallory’s title, but not by voluntary alienation. The chancellor, then, was bound to notice their title. He could not *decide*upon it, nor even discuss it. without having the claimants before him. The property was wholly unrepresented: the heirs had disclaimed, and others had their title : how was it possible, under these circumstances, to decree a sale of the land ? Will it be said, that this might be done, because as such decree would not bind the purchasers, it could not injure them ? I answer, that the very fact of its not binding them, convicts it of error. The court is by its rule, to have all the interests represented, in order to bind all rights, to settle every thing and cut up future litigation by the roots; but here, a right is brought to its knowledge, a right standing on record evidence ; and without touching it, it decreed a sale of the property ; thus sowing the seed of future litigation, instead of cutting it up ; for when this house and lot shall be sold under this decree, how will the purchaser get possession ? King and Lively hold under their deed: he must sue them, and the whole race is to be run over again. I hold, then, that so soon as this title was thus *brought to the knowledge of the court, it should have laid the plaintiff under a rule to make these purchasers parties, or have his bill dismissed ; and that to render a decree without having them before it, was clear error.

There is another reason against such a decree. It is directly contrary to Lane v. Tidball, Gilm. 130. There, this court said, that equity ought to in join the sale of land by trustees, where the title was under a cloud, and full value could not probably be got for it. Here, the court of equity is itself the agent to subject this land to the hammer, when the cloud upon the title is so dark and lowering, that no prudent man would think of risking his money. The plaintiff would probably buy it in for a trifle.

It will be observed, that I have said nothing of the validity of the title claimed under the decree of the federal court. I think it would be wrong to do so, on two grounds : 1. that this is an appeal from an interlocutory decree, where we are only to correct what the chancellor has done amiss, and as to this point he has done nothing ; and 2. because as nothing we could say as to this title, could bind it while unrepresented, we ought not to touch it at all; it is not before us.

I think the decree should be reversed, and the cause sent back for such proceedings as I have stated.

CABELL, J., concurred.

TUCKER, P.

I doubt whether the parties before the court have any ground of complaint. There is no decree against King as *160administrator of Mallory; and he is not _ a party in his own right, and cannot appeal in that right. As to the heirs, they have no interest, the property having been sold under a decree which bound them.

Decree reversed, and cause remanded.