Court Opinion

ID: 5549463
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:30:08.298777+00
Date Added: 2024-06-11T08:35:01.626869
License: Public Domain

The Vice-Chancellor, :
This case is somewhat peeuliar. The will of Richard Cunningham is in the nature of an appointment under the will of his wife Gloriannah, by which he, in effect, appropriates the property left to him by that will to the payment of the debts of his late co-partnership of Cunningham & McCormick. Thus selecting a class of creditors for whose benefit he creates a trust. And it is such a trust as is authorized by the revised statutes. Still, it is a question whether the trust to pay the debts of the, partnership includes debts barred by the statute of limitations at the time of this testator’s death ?
expression of the will strongly indicates the intention not to make such a distinction or discrimination. He says: “ to pay and divide the same among the creditors of *573the late firm to whom I, as one of the late firm, may debted at the time of my death rateably, &c. so far as the executor shall be able conveniently to ascertain the same : and to enable him to do that he directs the executor to advertise one month in two newspapers for creditors to produce their claims, &c. And such as do so shall be entitled to their dividends, whilst all others shall be excluded and all debts of whatever grade to be placed on an equal footing. But even since the case of Burke v. Jones, 2 V. & B. 275, it has been an established rule that a devise of real estate in trust to pay debts which the personal property might be insufficient to discharge, did not revive debts upon which the statute had taken effect at the death of the testator. Lord Brougham, it is true, went against it in Jones v. Scott, 1 Russ, and M. 255 ; but his judgment was reversed in the house of lords : 4 Clark and Finn. 482 ; and the rule in Burke v. Jones was restored and has since been followed by Lord Cottenham in Freake v. Cranefeldt, 3 Mylne and Cr. 499; and by the master of the rolls in Evans v. Tweedy, 1 Beavan, 55, where the argument founded on the idea of there being a trust was not allowed to prevail. These cases are decisive of the present on that point.
The next question is, whether the statute had, in fact, run against the demands presented to the executor in consequence of his advertisement?
The debts due to the Mechanics’ Bank and to Hegeman (in judgment) were not affected by the statute of limitations, being debts of record. Nor is the debt to Brown, now represented by Ward, affected by the running of the statute, since this answer expressly avers a promise to pay within six years and the answer is uncontradicted—not having been replied to. So, with regard to the demand of Messrs. Ketchum and Fessenden, to the amount of one hundred and nineteen dollars, being a balance due them for costs of a suit pending at the time of the testator’s death, that is not affected by the statute; but the rest of their claim, fifty-two dollars and seventy cents, is confessedly outlawed. And such is also the case with respect to the note held by Phila Cunningham. Nothing is shown by her answer to take it out of the statute, except the expression in the will—and *574that, we have seen, is not sufficient for the purpose. Her demand, therefore, and the claim of Ketchum and Fessenden, to the amount of fifty-two dollars and seventy cents, are to be excluded from any dividend __ of the fund in the hands of the executor. I suppose it is a matter of no moment to marshal the assets in this case, since the debts to be paid, according to my views, will absorb the whole of both funds held by the executor, yet, I am of opinion and the decree may so direct that the four thousand seven hundred dollars—proceeds of Gloriannah’s estate—is, by the will of Richard, constituted the primary fund for the payment of the debts of the firm of Cunningham & McCormick and must be divided accordingly, considering those debts placed upon an equal footing by the will and to - be paid rateably.
The costs of all parties are to be paid, in the first instance, out of the four thousand seven hundred dollars ; and, then, the residue must be divided between the two judgment creditors and the two simple contract creditors Ward and Messrs. Ketchum and Fessenden. The other fund, of three thousand eight hundred dollars, not being appropriated by the will, is to be applied in due course of administration. In the absence of individual debts of the testator Richard Cunningham, this money is to be applied to the balance that will remain due on the two judgments rateably as preferred debts and if more than sufficient to satisfy them, then, to go towards the balance due on the two simple contract debts before mentioned.
Decree accordingly.