Case Name: German National Bank v. Engeln's Committee, &c.
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1879-04-15
Citations: 14 Bush 708
Docket Number: 
Parties: German National Bank v. Engeln’s Committee, &c.
Judges: 
Reporter: Kentucky Reports
Volume: 77
Pages: 708–712

Head Matter:
Case 46 — PETITION EQUITY
April 15.
German National Bank v. Engeln’s Committee, &c.
APPEAL FROM LOUISVILLE CHANCERY COURT.
I. The creditor of A lunatic is entitled to have the estate of such lunatic, not subject to exemption, sold to satisfy his debt.
If the estate of a lunatic is not sufficient to pay his debts, “ the same, not subject to exemption, may, by a circuit or chancery court, be ordered to be sold, and proceeds distributed and estate settled, as prescribed by law for the settlement of the estates of insolvent decedents.” (Sec. 25, art. 2, chap. 53, Gen. Stat.)
BYRON BACON for appellant.
The legal and equitable rights of a creditor of a lunatic should be enforced against his estate. (Steinburg v. Schoolcroft, 2 Barb. 153; Robertson v. Lane, 19 Wend. 650; Bac. Abr., Idiots and Lunatics, D.; 2 East. 102; 2 Term Rep. 390; 4 ibid. 121; 6 ibid. 133; 12 Yes. jr., 38; 3' Page, 200.)
2. It is now unnecessary to discuss whether the statute of 17 Edward II, Be Prerogativa Regis, was remedial or declaratory of the common law, etc., or to discuss any statute prior to the Revised Statutes, as section 1, chapter 48, Revised Statutes settles the question as to the rights of the creditors of the lunatic.
In administering the estate of a lunatic, his debts should be provided for and paid out of his estate, or his estate should be distributed pro rata among his creditors.
The English rule, that the chancellor, exercising the prerogative of the king, will not apply or permit any fund or part of the estate of the lunatic to be applied in satisfaction of the claims of creditors until the support of the lunatic and his family is assured, has found no place in American jurisprudence. The chancellor of the Louisville Chancery Court has no prerogative power. (Maguire v. Maguire, 7 Dana, 188.)
O. H. WEHLE FOR APPELLEES.
1. The maintenance of the lunatic and his family has priority before creditors. (Shelford, 2d ed., 1847, page 458; 2 Law Lib. [*358]; Mad-dock’s Oh. 747; Ex-parte Hastings, 14 Yes. 182; In reDeller, Shelford; In re Buckle, Shelford; In re Adey, 1 C. P. Cooper, 225; In re Railton, 1 Jurist, 574.)
2. This rule is a part of the common law, and the statute, 17 Edward II, chap. 10, is only declaratory of it. (1 Black. 303 ; 2 Maddock’s Ch. 555; Shelf ord, p. 12; 2 Law Lib. [* 12]; Oxenden v. Compton, 2 Yes. jr., 71; In re Barker, 2 Johns. Ch. Rep. 237; In re Latham, 4 Ired. Eq. 235.)
3. This rule was also declared the common law of Virginia by statute. (Morehead & Brown, p. 793.)
4. Nor does the use of the king’s sign-manual prove that the chancellor of England acts in matters of lunacy not as equity judge. The use of the sign-manual is a mere form. (Ex-parte Grimstom, Ambler, 707; Shelford, 17; 2 Law Lib. [*17]; 1 Campbell’s Lives of Chancellors, p. 13 and note.)
5. This court has declared all English rules in lunacy applicable in Kentucky, which are for the benefit of the subject. (Nailor v. Nailor, 4 Dana, 339; Statute of Virginia, supra; Pearl v. McDowell, 3 J. J. Mar. 659.)
The English rule was applied in North Carolina, in ex-parte Latham, 2 Jones’s Equity, 411.)
6. The rule binds in the United States all the estate,.because, by the appointment of a committee, the whole estate is put in custodia legis. (Niblo v. Harrison, 9 Bosw.; L’Armoureux v. Crosby, 2 Paige, 427; In re Heller, 3 Paige, 200; In re Hopper, 5 Paige, 490; Williams v. Cameron’s estate, 26 Barb. 173; Bolling v. Turner, 6 Rand. 586; Wright’s appeal, 8 Barr, 57; In re Latham, 6 Ired. Eq. 406; Salter v. Salter, 6 Bush, 633.)
7. The common-law rule which was brought over to Kentucky (Hunt v. Warnicke, Hardin, 62) is not abolished by the fact that the General Statutes contains a chapter on “ Idiots and Lunatics.” (Thomasson v. Risk, 11 Bush, 620.)
8. A general repealer of statutes does not affect principles of the common law declared by statute. (Stewart’s note to De Camp v. Dobbins, 2 Stew. N. J. Eq. R. 36.)
9. As to section 25, article 2, chapter 53, General Statutes, it is an affirmative statute, and such statutes must, if possible, be reconciled with the common law or with the prior statute. (Sedgwick’s Statutory Con. 29, 105; Potter’s Dwarris, 154; Eccles v. Stephenson, 3 Bibb, 517; Lee v. Forman, 3 Met. 114.)
10. This rule is distinct from the rule, abolished by the Revised Statutes, abrogating the common law, and must be strictly construed. Lee v. Forman, 3 Met. 114, was decided under the Revised Statutes.
11. The paragraph is reconciled by looking to the mischief intended to be remedied, which consists in an anomaly, to which attention was drawn by Salter v. Salter, 6 Bush, 633.

Opinion:
-CHIEF JUSTICE PRYOR
delivered the opinion oe' the court.
In the month of April, 1875, John Engeln, by proper proceeding under the statute, was adjudged a lunatic, and Jacob Dolfinger was appointed his committee. A petition was filed under article 2, chapter 53 of the General Statutes, asking a sale of so much of the real estate belonging to the lunatic as might be necessary to pay his debts and maintain his family. During the progress of the action, and at the instance of the wife and children of the lunatic it was adjudged by the chancellor that the claims of the lunatic and his family, for a support and maintenance, were paramount to the claims of creditors, and this is the only question necessary to be noticed in the case. The practice of the English chancellors is relied on in support of the judgment below, and interesting briefs have been filed by counsel on each side as to the character of the jurisdiction asserted by the chancellor when denying the 'claims of creditors; the one maintaining that the administration of the estates of lunatics was a matter of rdyal prerogative, and the chancellor's action alone ministerial; while the other asserts this jurisdiction was exercised by the chancellor as equity judge, and not as minister of the crown. It is not necessary to determine this issue made by counsel, as we are satisfied, from whatever source, this jurisdiction was derived, it can not be exercised by the courts of this country. In this state, while the courts of chancery have control over the lunatic and his estate, the creditor is entitled to have the estate sold for the purpose of satisfying his debt. The 25th section of article 2, chapter 53, General Statutes expressly provides that, " If the estate of a lunatic, or person .adjudged to be incapable of managing his estate, be not sufficient to pay his debts, the same may, by a circuit or chancery court, be ordered to be sold, and proceeds distributed and estate settled as prescribed by law for the settlement of the estate of insolvent decedents."
Here is a plain statute, regulating and directing the action of the chancellor in such cases; and when he comes to distribute the fund, unless liens have been created upon the estate, each creditor gets his pro rata portion of the estate or its proceeds, less the sum to which the lunatic or his family may be entitled by reason of the exemption laws of the state. The mental condition of the debtor gives him no rights or privileges over other debtors, and the discrimination, if any is made, is in favor of the creditor, the statute requiring that his debt shall be paid, or an equitable distribution of the proceeds of his estate between his creditors.
It is insistéd, however, that the statute referred to can not operate to repeal the common law, and that it must have been enacted with a view to the law as it then existed.
Recognizing the origin of the English rule on the subject, as maintained by counsel for the appellees, still the statute directing the mode of applying the assets of the lunatic, when considered in connection with the exemption laws of the state, leaves no discretion with the chancellor except to see by his judgment that the claims of creditors are just, and to make such a disposition of the estate as will satisfy their demands within a reasonable tipae.
The creditor, when he loaned his money or parted with his property, knew what estate of the debtor was by the law of the state exempt from the payment of his debts, and when he comes to ask the chancellor to make payment, it is insisted that the debtor is not only entitled to the property exempt by the statute from sale under a judgment, but that he is absolutely entitled, in preference to the creditor, to the possession of his estate, that the income may be applied to his support and that of his family.
In this case there is an income of $1,100 per annum after the payment of taxes, every dollar of which is applied to the use of the lunatic and his family, consisting of his wife and three children, and the relief which is sought by the creditor is denied.
In this state we have institutions for the abode and comfort of lunatics: This unfortunate class is maintained by taxing the creditor and the debtor under just and humane legislative enactments, and after taxing the creditor for this benevolent purpose the chancellor is asked to go further and suspend all the remedies he has for the collection of his debt against the estate of the lunatic, and to finally withhold all payment if the property owned by the lunatic is insufficient for his support and that of his family. The creditor and his family may have been wrecked in fortune, or with such human afflictions, other than lunacy, as preclude them from making a support, yet it is urged, notwithstanding the humane means devised by law for the protection and support of the lunatic, that his creditor must still further contribute, even to the loss of his entire debt.
If the law-making power intended to make such an exemption in favor of lunatics, it would have been found in the statute, and when basing such an exemption on the ground of public policy we see no reason why it should not extend to every form of human affliction where the unfortunates are unable to comply with the demands of creditors.
The owner of property must pay his debts, and can only retain such of his estate as is exempt by statute for the maintenance of the debtor and his family.
Judgment below is reversed, and cause remanded for further proceedings consistent with this opinion.