Case Name: Tinsley v. Anderson
Court: Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1802-11-10
Citations: 3 Call 329
Docket Number: 
Parties: Tinsley v. Anderson.
Judges: 
Reporter: Virginia Reports
Volume: 7
Pages: 529–530

Head Matter:
Tinsley v. Anderson.
[Wednesday, November 10th, 1802.]
Insolvent Debtor — Order of Payment of Debts. — In what order debts against an insolvent debtor, who is living, are to be paid.
Bond — Presumption of Payment. — [A bond dated more than twenty years before it was exhibited for payment, shall be taken prima facie, as paid.]
Nelson Anderson, brought a suit in the High Court of Chancery, against various persons having mortgages from Richard Anderson, upon lands, slaves, and personal property. The bill charges, that the said Richard Anderson hath incumbered his whole estate to the defendants; that the property in mortgage, is more than sufficient to pay the debts due the mortgagees, and praying that the same may be sold, the mortgagees paid, and that out of the balance a sum for which the plaintiff is bound, as security for the said Richard Anderson, may be paid, the plaintiff being unable to obtain redress any other way.
The answer of Richard Anderson, filed September, 1796, states, that it will be highly ruinous to him, if, in order to pay the plaintiff, the mortgage property should be sold for satisfaction of so many debts at once. That he has a reasonable expectation of raising the money, before the next year’s crop is finished, and is desirous that the plaintiff should be paid by a sale at that time, if not paid before.
^Several other creditors filed bills, and were admitted parties plaintiffs.
The debts consisted of mortgages, judgments, (some of which had been satisfied out of the effects of the securities thereto, but those securities had never been re-paid by Anderson,) bonds and open accounts.
In March 1797, the Court of Chancery decreed a sale, and, in March 1799, ordered the proceeds to be applied, first to discharge the mortgages, and judgments according to priority, and the residue among the other creditors proportionally, and the Commissioner was ordered to take an account. In March 1800, the distribution was ordered to be carried into effect. And, thereupon, Tinsley appealed to this Court.
Wickham, for the appellant.
Three objections to the decree, occur in this case. 1. That the report is not certain enough to enable the Commissioners to proceed. 2. That as there are separate mortgages, and specific liens, they ought to be considered separately, and not blended together; but each lien ought to be satisfied according to its date. Therefore, the Commissioner ought to have reported the date of each judgment and mortgage. 3. That securities are suffered to take preference of specific liens. Thus Woodson, without any lien, is preferred to judgment creditors; although it was decided, in Eppes v. Randolph, 2 Call, 12S, that an expired judgment constituted no lien; and although the contest here, was not between the debtor and the creditor only, but between the latter and other creditors, having equal equity: In which case, they ought to be permitted to retain their legal-advan tages- ; Of course, Tinsley having a legal flight, ought to take preference in the distribution.
.Duval, contra.
There is no impropriety in the direction, for the first mortgage is to Anderson; *and of course, according to the appellant’s own principles, it ought to be preferred. The security, having paid off the judgment, ought to be substituted in the room of the creditor, and to take his preference.
Cur', adv. vult.
Judgment Creditors — Order of Payment — Priority of Time. — The principal case is cited in Withers v. Carter, 4 Gratt. 417. See monographic note on “Judgments” appended to Smith v. Charlton, 7 Gratt. 425.
Same — Lien of Judgment — Elegit— In Taylor v. Spindle, 2 Gratt. 57, the court, in expressing its disapproval of the dictum in Eppes v. Randolph, 2 Call 125, that it is necessary to the preservation of the lien of the judgment against subsequent purchasers from the debtor, that the creditor should either sue out. or enter of record his election of the writ of elegit, said that, on the contrary, the principal case sustained the lien of the judgment from its date, where execution had issued within the year and a day, irrespective of the nature of the execution, and without enquiry wh ether the creditor had entered on the record his election of the elegit.
So also in the case of United States v. Morrison, 4 Peters 124. though there was no elegit or election of one, and though there had been a voluntary suspension of execution for years, the lien of the judgment was sustained against parties claiming under a conveyance for valuable consideration made during the period of the suspension.
The principal case is cited in Taylor v. Spindle, 2 Gratt. 68. See monographic note on “Judgments” appended to Smith v. Charlton, 7 Gratt. 425.
Presumption of Payment. — As to the presumption of payment, after lapse of time, see the principal case cited in Bowman v. Hicks, 80 Va. 810.
Sureties — Subrogation.—The principal case is cited in Tompkins v. Mitchell, 2 Rand. 429, in support of the rule, that a surety is entitled to every remedy which the creditor has against the principal debtor; in short, to stand completely in the place of the creditor.
The principal case is cited in this connection in Watts v. Kinney, 3 Leigh 296; Powell v. White, 11 Leigh 332.
Same — Same—Specialty Debts. — Sureties in a bond, who pay it off after the death of the principal, are entitled to rank as specialty creditors of the principal, and if they he administrators of his estate, may retain whatever they pay on account of such suretyship, out of the assets that come to their hands as administrators, against other specialty creditors. Powell v. White, 11 Leigh 309, 316, citing Eppes v. Randolph, 2 Call 125; Tinsley v. Oliver, 5 Munf. 419; Tinsley v. Anderson, 2 Call 329; Enders v. Brune, 4 Rand. 438; Watts v. Kinney, 3 Leigh 272; Lidderdale v. Robinson, 12 Wheat. 594.
See monographic note on “Subrogation” appended to Janney v. Stephen, 2 Pat. & H. 11.

Opinion:
PENDEETON, President.
The Court doubt whether judgment creditors, or sureties,' who are to be placed in their situation, are to be paid by priority, or rateably out of the general fund? But they doubt also, on a more important question, whether in this case, where equity is applied to, to distribute the funds of a living debtor, the legal- preference of debts according to dignity, in distributing legal assets of the dead, ought to give the rule, or that of Chancery in the distribution of equitable assets?
,On these points, we wish to hear counsel.
Wickham. They are not to. be considered as equitable assets; but as property generally, subject to legal consequences. Therefore, : the first mortgages are to have preference over all other claims, and the judgments next; even against subsequent mortgages. Of judgment creditors, those prior ip time have the preference where they can sue Elegits; but where they cannot, they are to be postponed to those who can.' Eppes v. Randolph, 2 Call, 125. After these two classes are satisfied, bond and all other creditors, without liens, are t,o be paid pro rata. 1 Pow. on Mortg. 163. The mortgages not recorded, fall within the la,tter class; because, against creditors, they are void as mortgages: With respect to,the securities, they Will have the advantage .where the mortgages and judgments remain unsatisfied; but not where they have been discharged. Several of the creditors are defendants, and are not asking any . , • favor of the Court; they therefore . -cannot be bereft of any*legal advantage which they may have-
. Duval. Where the bond creditor comes as plaintiff, to ask equity, he will be postponed'to mortgages and judgments; because he has no lien. [Bristol v. Hungerford,] 2 Vern, 525. The sureties are to stand in the room of the judgment creditors, and to have the same liens, as they might compel an, assignment of the judgments. [Parsons et al. v. Briddock et al.] 2 Vern. 608; Eppes v. Randolph, 2 Call, 125.
Wickham. The difference between this case, and that of Eppes v. Randolph is, that in this, some of the judgments have be.en completely satisfied; but in that, the bond was not' discharged; for there was only a decree in Chancery, which had not been fully paid: So that Randolph's representatives might have been sued upon the bond-itself.
PER CUR.
The Court is of opinion, that the decree aforesaid is erroneous in this, that it directs the Commissioners of sale to assign bonds to such creditors who hdd incumbrances upon the lands by mortgages, and creditors by judgments allowing prior satisfaction to prior demands, leaving to the said Commissioners, the power of judging what was the force of the different incumbrances, and their operation upon the different funds, which should have been decided by the Court, and specific sums decreed to each claimant, to be paid out of his appropriate fund; that the claims ought to be adjusted upon the following principles, that is to say: The mortgage to William Anderson is legally proved; but he appearing to be fully indemnified, except as to twenty shillings, that sum together with the money paid by John Woodson, another surety, to Charles Thompson, in part of his judgment, ought to be first paid out of the money for which the land conveyed by the said deed was sold; and the residue of that sale to go into the general fund. That the mortgage to John Eox being for personals *only, is of no consequence, but he is to be considered, as in the place of William Johnston, who is a creditor bj' judgments. All the other conveyances stated in the record, not being proved and recorded according to law, are void as to creditors, and those meant to be benefited thereby are to be considered as specialty, creditors at large, except where they have judgments so as to be arranged in that olass. That all the creditors, by judgment or decrees, ought to be paid out of the general fund, according to the priority of recovery, with this reservation, that when a prior creditor shall not have received his money of sureties, or sued out execution-on his judgment within a year, he shall yield priority to subsequent judgments, on which executions shall have been so issued, or the money received of sureties. In both instances'of the riioney paid by sureties, as well as in all other instances, sureties ought to be placed in the situation of the creditors they shall have paid, or be bound to pay. That the remaining funds, if any, shall be distributed, pro rata, among the several creditors who have no lien upon the lands. And that the bond to Dorothy Johnston, appearing to be dated above twenty years before it was exhibited, is to be presumed paid, and rejected, unless William Johnston, having notice, shall give to the said Court of Chancery, satisfactory reasons to avoid the said presumption. The decree, therefore, is to be reversed, and the Court proceeding to make such decree as the High Court of Chancery ought to have pronounced: Decrees, that the said Court of Chancery, after having directed a Commissioner to state the several claims of the parties, according to the principles of this decree, do direct specific sums to be paid to each claimant, and that the costs in the said Court be first paid out of the general fund.