Case Name: Smith and Ravenel, Administrators of Cripps v. The Executors of Sarah Smith, the Administrator of H. Rutledge, and others
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1825
Citations: 1 McCord Eq. 134
Docket Number: 
Parties: Smith and Ravenel, Administrators of Cripps v. The Executors of Sarah Smith, the Administrator of H. Rutledge, and others.
Judges: 
Reporter: South Carolina Equity Reports
Volume: 6
Pages: 134–148

Head Matter:
Smith and Ravenel, Administrators of Cripps v. The Executors of Sarah Smith, the Administrator of H. Rutledge, and others.
1825.
Charleston.
The testator leaving his chikhen and grand chii-^ terwards re-devised*the*1 whole to his parol under-*1 she1would*14 give it to the grandchild dren. After the testator gaveawrftten aeknowiedg-was indebted ancHhaUt should be any estate she sessed preference to claims61 She c!1(?a “u?h in_ ingbyavo-perty to her son. The Court held that she was a trustee for the children, and that they had a lien on the property given to the son, prior to bond creditors, hut not to anterior judgment creditors of the executrix. But the Court thought it was going very far.
This case arose out of the circumstances of the last case of The Administrator of Hugh Rutledge v.. The Execu-t°rs °f Sarah Smith. Josiah Smith, and Daniel Rave-nel administrator of John S. Cripps, filed their bill, on the 22d of October 1823, against the defendants, which kill stated that Sarah Smith.in her Ufe time, and at the time of her death was indebted to complainant, Josiah Smith, by a bond dated the 12th of March 1806, in the Pena^y of£1151 16 shillings, conditioned to pay £575 18 shillings with lawful interest from the date, payable on.the 12th of March 1807 •, that the bond was given by the said Sarah Smith and her son James Smith, jointly and severally.
That Sarah Smith being thus indebted, and being seised and possessed of a considerable réal and personal estate, died about the 10th of March 1810, having'first made her will and appointed the Honourable John F. GrimJce, Peter Smith, Benjamin Smith, and James Smith, her executors. That the three first named qualified on sa'd will, and by virtue thereof possessed themselves of the estate and effects of the said Sarah Smith.
That complainant’s, Josiah Smith’s, bond being unpaid, he instituted a suit in the Court of Common Pleas for Charleston district against the qualified executors said Sarah Smith. That the said executors ap peared by their attorney and filed a plea of the general issue, and no other. That on the 12th of June 1813 complainant obtained a judgment. That various executions under said judgment had been issued; but the sheriff had not been able to find property of the said Sarah Smith to satisfy the debt. That Sarah Smith at the time of her death was seised and possessed of a considerable real and personal estate; and particularly of large tracts of land in different parts of this state and Georgia, and a valuable house and lot in Church street in the city of Charleston, known by the No. 37. That after her death the Honourable John F. Grimke, one of her executors, and against whom complainant, Josiah Smith, had obtained judgment, took possession of said house, and received the rents thereof until his death on the 9th of August 1819. That previous to his death the said John F. Grimke made his will, and appointed Mrs Mary Grimke sole executrix thereof, who had since qualified. That since the death of the said John F, Grimke, his said executrix took possession of all his estate whereof he died possessed, more than sufficient to pay his debts, and particularly to satisfy so much of the estate of the said Sarah Smith as was possessed by him in his life time; and she also possessed herself of some part of the specific estate of the said Sarah Smith, and likewise retained possession and received the rents of the aforesaid house in Church street. That Peter Smith, another of the executors, died about the-day of -having first made his will, and appointed R. R. Gibbes his executor, who had qualified and possessed himself of his estate, &c. That B. B. Smith, administrator of Hugh Rutledge deceased, on the 12th of August 1820 exhibited his bill in the Court of Equity against the executors and heirs of the said Sarah Smith, therein stating among other things that Thomas Smith the husband of the said Sarah, and grand father of said Hugh Rutledge, in the year 1780 made his will, and among other dispositions of his property he bequeathed to eac¿ of his grand children £500. That afterwards, in 1787, he made another will, whereby he devised all his estate both real and personal to his wife, the said Sarah Smith, absolutely. That the said Sarah Smith, subsequently, to the death of her husband, gave an acknowledgment to the said Hugh Rutledge in the following words, “ I do hereby acknowledge that there is due to my grand son Hugh Rutledge the sum £1367 16 shillings, on account of the legacies left him by his grand father Thomas Smith, esq. deceased, and promise that the same, together with interest to grow due thereon from this date, shall be paid to him by my executors out of whatever estate I shall die possessed of or entitled to, in preference to all other claims thereon, within one year after my death, unless it shall be previously .paid by me: Witness my hand this 23d of June 1809 (signed) Sarah Smith, (witness) Peter Smith.” That the said B. B. Smith, as administrator as aforesaid, instituted a suit in the Court of Common Pleas on said acknowledgment, ¿gainst the executors, of said Sarah Smith, and on the 16th of October 1819 obtained a judgment for the sum of #10,094 98 cents. The said bill prayed for a discovery and that the claim should be paid; and for that purpose that the house in Church street should be decreed to be sold. The complainants further stated that the defendants to the said bill having filed their answer, the cause came on to a hearing, when it was decreed that the rents of the said house should be accounted for and appropriated to the payment of said claim; that the house should be sold by the Commissioner and the proceeds likewise applied to the same; and if these funds were not sufficient, then that complainant should have liberty to take out an execution and levy the same on any of the personal estate of the said Thomas Smith. That from this decree an appeal was taken up to the late Court of Appeals in Equity, where the following decree was pronounced in March term last: “The claim of the complainant is founded on an acknowledgment in writing of Mrs Smith, the widow and executrix of Mr Thomas Smith, on the 23d of June 1819, that there was due £1307 16 shillings on account of the legacies left him by his grand father Thomas Smith, and her promise that the same, with the interest to grow due thereon, should be paid by her executors, out of whatever estate she should be possessed of or entitled to, in preference to all other claims thereon, within the year after her death, unless it should be paid previously by her. Mr Smith by his last will left his whole estate to Mrs Smith absolutely; but it appears, in a cancelled will, made some time before, he had given various legacies to his children and grand children. Mrs Smith frequently said, after his death, ‘she intended, in the distribution of the property of her testator, to be governed by the cancelled will.’ She might make a guide for her own conduct or not, as she pleased, but was under no obligation to do so; nor can any right be derived from the will. The promise of Mrs Smith is binding on her; but it is so entirely by her own act. And the acknowledgment that there was due to the complainant the sum mentioned has the effect merely of shewing the consideration of the promise, but gives no claim against Mr Smith's estate: nor can it be made to extend the promise itself, which is, that the sum ■ mentioned, with interest, should be* paid by Mrs Smith’s executors, out of whatever estate she should die possessed of. The decree of the Circuit Court declares the house in Church street, and the rent of it, from Mrs Smith’s death, liable to complainant’s demand; so far I concur in it: but I think it erroneous, in subjecting to its payment (in case of a deficiency of assets of Mrs Smith’s estate) the property of Mr Smith, her testator. It is ordered and adjudged, that the decree of the Circuit Court, so far only as it declares the house in Church street and the rents liable to complainant’s demand, be affirmed, and the rest of the decree suspended.” That in obedience to the said decree, the Commissioner had advertised the said house for sale, on the'28th of October 1823, for .the purpose of discharging the claim of the estate of the said Hugh Rutledge, and would proceed with the sale unless enjoined by the Court. That the said B. B. Smith had lately departed this life, and administration on the estate of the said Hugh Rutledge had been granted to Alfred Huger, Esq.
The bill further stated, that the estate of the said Sarah Smith was about to be sold, to pay a voluntary debt, which ought not to be paid until all her bona fide creditors were first satisfied. That this voluntary debt was created by a simple contract not under seal, and, on that ground also, ought to be postponed to judgment and bond creditors. That none of the creditors .of the said Sarah Smith were parties or privies to the proceedings under which the house in Church street was to be sold. That, the said house was the only property then known of oh which the creditors could levy their debts, her personal estate being long since distributed or disposed of so that it could not be ascertained or come at. That this was manifest from the very fact, that the administrator of Hugh Rutledge (one of the family,' and who, it was to be presumed, knew the situation of thé estate better than strangers-) did not know where else to resort for the payment of his supposed claim, but to the house; and therefore complainants respectfully submit that his decree, and the execution of it, went directly to frustrate the rights and remedies of the creditors of the said Sarah Smith. That the house was actually bound at law by legal liens, by the administrator of Hugh Rutledge, before the said bill was filed; and the creditors not. being parties, their rights were passed by; and therefore the said decree ought not to,be executed until their rights have been heard and decided on. That the suit ■under which the sale was now proposed to be made was now abated by the death of the said B. B. Smith, the complainant therein, and had not been revived by the present administrator.
The bill prayed that the surviving executors of Sarah Smith, and the representatives of the deceased executors, might answer fully, and set forth a particular account of her estate, and the application thereof. It charged that the said administrator of .Hugh Rutledge insisted on proceeding with the sale, pretending that he had a priority over complainants for payment of his claim; whereas the complainants contended that he had no such priority, but ought to be postponed until their demands were fully paid. That the acknowledgment under which he claimed could not, and ought not, to be considered any thing more than a simple contract debt of the said Sarah Smith, and therefore should be postponed until judgment and bond creditors were paid; and moreover, being merely voluntary, ought not to receive the protection of the Court, when it will tend to the injury and defeat of such creditors.
The bill also prayed, that the sale of the hous.e in Church street might be enjoined; and that complainants might be paid their respective debts, together with all-the interest due thereon; and to that end, that the house or the proceeds thereof, and all the rents and profits received therefrom, subsequent to the death of Sarah Smith, might be decreed as liable to the payment thereof ; and that complainants might have such other relief, &c. as might seem meet.
The answer stated, that defendant was’ignorant of the facts on which the claim of the complainants was found ed, and prayed that the same might be substantiated by satisfactory evidence.
The defendants admitted that Mrs Sarah Smith, being justly indebted to defendant’s intestate, did, at the time specified, execute in writing the acknowledgment recited in the bill, by which she acknowledged the claim of said intestate a lien on her estate, from the time of her'death, in preference to all other demands; as she was bound in justice, and fully authorized by law, to do. That such proceedings were had, in the enforcement of said claim, as were stated in the bill. That the decrees of the Court were not correctly set forth in the bill, as would appear by a reference to the original decrees of record ; but as stated in the bill, both decrees expressly recognized the claim of defendant, as a mortgage on the estate of which Mrs Smith died possessed. The answer also admitted, that the house in Church street was directed to be sold by the Commissioner, and the proceeds appropriated in satisfaction of defendant’s claim. That the creditors of Mrs Smith, were represented by her executors. That to prevent any possible injustice, however, and through abundant caution, an order had since been obtained and regularly published, notifying all the judgment creditors of Mrs Smith, whose judgments bore date anterior to her death, to submit their demands to the Commissioner previous to September last (1824). That from the report of the Commissioner it appeared, that there were but two judgments unsatisfied against said estate; one of which was held by the administrator of Bennett Taylor, and the other by 'Daniel Ravenel, one of the complainants. That in respect to these judgments, defendant was willing to submit to any order which this Court might deem consistent with equity and justice. ■
The defendant could not, in any manner, admit that there Was error in the decree of this Honourable Coui;t, so far as it postponed the demand of Josiah Smith to that of the defendant. That the acknowledgment of Sarah Smith, given to the defendant’s intestate, operated as a mortgage on all her estate, real and personal, from the period of her death, according to the well settled principles of this Court, as recognized and enforced in the decree, which was referred to in the bill. That the claim of Josiah Smith had no lien on her estate at the time of her death, when the defendant’s rights attached; nor was any judgment obtained at law until several years after her death. Defendant denied all combination, and prayed to be dismissed with his costs, &c. &c.
De Saussube, Chancellor.
In a former suit in this Court brought by the administrate of Hugh Rutledge, Jun. deceased against the executors of Sarah Smith and others, it was decreed by the late Court of Appeals, that so much of the decree of the Circuit Court as declared the house in Church street and the rents applicable to the complainant’s demand should be affirmed. At that time none of the other creditors of Mrs Sarah Smith were before the Court. Two of them have since filed the bill in the present case, and insist that they, not being parties to that suit, were not bound by the decree in that case, and that they have prior claims which are entitled to a preference over the demand of the deceased Hugh Rutledge. There can be no doubt that the present complainants, creditors of the late Mrs Sarah Smith, not having been parties to the former suit, are not bound by the decree which was made on the case then presented to the Court; and if their claims are entitled to a priority, they must have the benefit of it. It is conceded on the part of the representatives of Hugh Rutledge that the judgment, obtained on a bond by the late Mr John S. Cripps against Mrs Sarah Smith in her life time, to wit, on the 14th day of June in the year 1806, is entitled to a preference over the claims of Mr jjfagh Rutledge, which was acknowledged in writing by Mrs Smith on the 23d day of June in the year 1809. -', J . , , , There could be no doubt on this point, and the decree must be framed accordingly. We are next to consider the claim of Mr Josiah Smith to a priority over the demand of the late. Mr Hugh Rutledge. The demand of the latter arose as follows :
■ [Here His Honour recapitulated the case as stated in the bill.]
The question is whether either of these debts, and which, is entitled to a priority “? It is objected against the claim on behalf of the estate of Hugh Rutledge, Jun. deceased, that the acknowledgment of Mrs Sarah Smith, of a debt due by the estate of Mr Thomas Smith for certain legacies bequeathed by him by a will which he afterwards revoked and gave the whole estate to his wife Mrs Sarah Smith, could not operate to set up those legacies as a right, or have any legal or equitable claim on the estate of Mr Thomas Smith. That it was a voluntary act on her part, and bound her only as a simple contract, being without seal. The question, as to the nature and character of the acknowledgment made by Mrs Smith to her grand son Hugh Rutledge, appeared to the Court of Appeals in the following light. The moral feeling of obligation, and the character of implied trust, which she believed herself under, shewed a fair consideration for her written promise, and made that a just debt due by her — so that the same might be set up legally, as well as equitably, as her debt. Accordingly a judgment was obtained thereon. And this is strengthened by the consideration that the property, now in controversy among these conflicting claims, was derived from herhusbandMr Thomas Smith’s estate; so that there is a connection, though not a' lien, between the origin of the debt and the fund out of which it is claimed to be paid. I have no doubt then that this was a good subsisting debt, afterwards established by judgment at law. And we must now consider what station it is entitled to among the debts of Mrs Smith. If it had stood as a mere acknowledgment without seal, it would have been a simple contract debt and postponed to the bond debt of Mr Smith. But it is contended for defendants, that the acknowledgment contains an engagement which amounts to a lien on her estate. That claim is founded on the following words of the acknowledgment : “ and I promise that the same, together with interest to grow due thereon, shall be paid him by my executors out of whatever estate I shall die possessed of, or entitled to, in preference to all other claims thereon.” Do these words create a lien on her estate? The Circuit Court of Equity thought that these did and decreed accordingly. As between the complainants and other parties I am not aware that in the present suit, which is is to decide on the rights of the contending creditors, that, we can come to any other conclusion ; for having satisfied ourselves that the debt to Mr Hugh Rutledge was a just and legal debt, it is a mere question as to the effect of the words which charge that debt on her whole estate in preference to any other debt. The words are very general, but the import and meaning is plain enough. In the case of Menude v. Delaire, 2 Desaus. Rep. 564, it was decided that an acknowledgment of the debt, with a declaration that the same should be secured by a mortgage of certain property therein mentioned, should operate as a mortgage. The Judges declared that, though the paper, had not the legal form of a mortgage, it bore all the features of one, and the Court of Equity regarding substance, and not forms, will give it the efficacy of a mortgage. So ini Read v. Gaillard, 2 Desaus. Rep. 552, the same point was decided. It is true that in both these cases the informal lien was given on specific property. But I am not aware tjje piecjge of the whole of the debtor’s property is less obligatory than a part. If the whole had been spe-cjpe¿ jn detail, nobody could have doubted. The only case cited on this point by the complainant’s counsel is' that of Williams v. Lucas, 2 Cox’s Cases, 160, quoted by Maddock in his Treatise (Yol. I. 539, 2d Edit.), where the Master of the Rolls decided, that a promise in writing to give a security, by mortgage of lands when required, was, on his death, no lien on his real estate. In the case before us, however, it is not a promise to give a mortgage when required, but the. paper acknowledges the debt and expressly gives an informal lien on the whole estate; and as the Court regards substance, and not form, it is bound to give effect to the instrument as an equitable lien. It was further contended that' the instrument, not having been recorded, lost the lien which it otherwise might have had. The acts respecting the recording of mortgages do not, however, require them positively to be recorded. They only give priority to the recorded over the unrecorded mortgages, though the latter may have been first executed. And it. has been decided, that unrecorded mortgages prior in date have priority over subsequent judgments. Nor does the act of 1789, commonly called the exeeutors’ act, prescribing the order for the payment of the debts of the deceased, appear to touch this question. By that act, judgments, mortgages and executions are to be paid next to debts to the public, but these words are added —“the oldest first.” Now the instrument which we have considered a mortgage is prior in date to the judgment of Mr Smith, which indeed was not obtained till till after the death of Mrs Smith the debtor. His demand at that period was merely a bond debt. It is only in a subsequent clause, when speaking of payment of debts in equal degree, that it is said that no preferences shall be given to creditors in equal degree, where there is a deficiency of assets, except in the cases of judgments, mortgages that shall be recorded and executions lodged in the sheriff’s office, the oldest of which shall be first paid, or in those cases where a creditor may have a lien on any particular part of the estate. Now at the death of Mrs Smith there was no judgment in favour of Mr Josiah Smith, so that it was not in equal degree with the lien previously given to Hugh Rutledge. After all, however, this is a delicate and difficult subject, and I have not absolute confidence in the opinion I have formed. I should be well satisfied that the judgment of the Court of Appeals should be consulted.
It having been referred to the Commissioner to inquire and report what judgments were existing unsatisfied against Mrs Sarah Smith, he reported that they were only two :fto wit, the judgment of Mr J. S. Cripps, and another in favour of the administrator of Bennett Taylor.
It is therefore ordered and decreed that the injunction be dissolved, and that the Commissioner do proceed to sell the house in question situate in Church street and to collect the arrears of rent due, and to apply the proceeds to the payment of the two judgments above mentioned : and the balance towards satisfaction of the claim of the administrator of H. Rutledge, deceased, and if any thing be left, towards paying the debt to Mr Josiah Smith.
From this decree Josiah Smith appealed, and made the following points : 1st. That the instrument of writing, given by the said Sarah Smith to the said Hugh Rutledge, created only a voluntary debt, and the payment ought to be postponed until after the discharge of the claims of judgment and bond creditors.
2d. That the said instrument of writing created no lien on the estate of the said Sarah Smith, to the prejudice of her judgment and bond creditors.
3d. That the decree was in other respects, contrary to equity and good conscience.
Ranee for the motion.
To give the paper the effect a mort£a§e> ought to point out some specific fund, as was the case in Reed v. Guillará,,where the schooner and hands were designated in the written promise to give a bill of sale; but in this case there is no fund particularly designated, and no specific lien. Delaire v. Keenan, Cabornev. Godfrey, 3Desaus. Rep. 74. 514.
The specific property intended to be mortgaged was pointed out in Burn v. Burn, 3 Ves.'Jun. 575, 576. 582. The delivery of deeds for the purpose of having a mortgage drawn does not constitute an equitable mortgage. 12 Ves. 192. A promise in writing to give a mortgage of land is not a lien after one’s death. 1 Madd. Ch. 537. 539. 2 Cox’s Ca. 160. The case of Atkinson v. Scott, 1 Bay’s Rep. 307, was before the executors’ law was passed. In that case then the question as to recording the mortgage could not have arisen. An obligation arising out of a breach of trust is a simple contract debt, unless it is under seal. 2 Madd. Ch. 455. 2 Comyn, 463, 464. 2 Atk. 119. 7 Bac. 153.
When a claim is made under a declaration of trust, the property must be specified. 2 Madd. Ch. 6.
Bumikin, contra.
As between mortgage and judgment creditors, it is not necessary that the mortgage should be recorded. 2 Bay’s Rep. 86.

Opinion:
Curia, per
Nott, J.
This may be considered as a branch only of the case of the Administrator of Rutledge v. The Executoré of Smith et al. and it involves two questions which are now submitted for the consideration of the Court.
1st. Whether the paper given to Mr Rutledge, recog- sizing a legacy due to him under the' will of his grand lather Thomas Smith, gave him such a lien on the property, of which he died possessed, as would entitle his representative to a priority to bond creditors, in paying the debts of her estate.
2d. Whether, if he ever had such a lien on the property, he had not lost it by not having it recorded.
The Court are of opinion that the first question has been decided in the case of the Administrator of Rutledge v. The Executors of Smith et al. And although the creditors were not parties to that case, yet, so far as it went# to settle an abstract principle of law, all persons must] be bound by it. The question was, whether that paper-should have the effect of a mortgage; and the decision-1 could not have been varied by any consideration of the parties to be affected by it. In one part of the circuit decree in the case of the Administrator of Rutledge v. The Executors of Smith et al. this contract of Mrs Smith is said to be a specific charge, on whatever estate she should die possessed of. In another part it is said, the complainant has a lien on the house and lot as a part of the estate of which Mrs Smith died possessed. Harwood v. Oglander, 8 Ves. 125. And that the lien was the ground on which the Chancellor held the house and lot liable to pay the legacies without regard to the personal estate, which otherwise would have been the proper fund out of which they ought to have been paid. Milnes v. Slater, 8 Ves. 295. That part of the decree has been supported by the unanimous opinion of the former Court of Appeals. It has, to be sure, decided nothing with regard to the rights of the present claimants. But as it is decided that the complainant had a specific lien on the property, the necessary result was, that he had a preference over those who had no such lien. The judgment' creditors who had obtained a prior lien were entitled, as a matter of course, to a priority ; but the bond creditors had no such lien, and must therefore be postponed. Whether if the question had been open for investigation this Court would have concurred in that opinion, is a question on which it is not now necessary to express an opinion. I would however observe that it would require great consideration. The English judges have carried the doctrine to a great length. But they now lament that it has been carried to such an extent. I certainly think that it ought not to be further extended. The second question has also been settled by the case ofthe Legatees of Ash v. Executors of Ash, 1 Bay's Rep. 304. I must tponfess, I have never been perfectly satisfied with that decision. But it has been received as a law and acted uPon f°r upwards of thirty years, and ought not to be questioned .
sold under an against* an executor or though there' Si assets. Lands may be
The opinion of the Court therefore is that the decree the Circuit Court in this case ought to be affirmed also.
Decree affirmed.
That case has since been fully confirmed by an opiniohfdelivered by the Appeal Court in June 1827, viz. Latta v. Smith, brought up from York. See Rutledge v. Smith.