Van Bibber v. Reese

• Decision Date: 18 December 1889
• Citation: Van Bibber v. Reese, 71 Md. 608, 18 A. 892, 6 L. R. A. 332 (Md. 1889)
• Parties: VAN BIBBER v. REESE.
• Court: Maryland Court of Appeals

18 A. 892

71 Md. 608

VAN BIBBER

v. REESE.

Court of Appeals of Maryland.

Dec. 18, 1889.

Appeal from circuit court of Baltimore city.

Argued before ALVEY, C. J., and ROBINSON, BRYAN, STONE, and MCSHERRY, JJ.

W. Pinkney Whyte and Geo. L. Van Bibber, for appellant. John P. Poe and Frank Gosnell, for appellee.

MCSHERRY, J. The bill in this case was filed by the appellee against the appellant to procure the specific performance of a contract for the sale of real estate located in the city of Baltimore. The facts upon which the main and the important question here involved depends are these: Edwin Reese, the husband of the appellee, died on November 22, 1887. By his last will and testament, which was admitted to probate by the orphans' court of Baltimore city shortly after his decease, he bequeathed to his father a legacy of $500, and made his widow his sole residuary devisee and legatee, and appointed her executrix. Letters testamentary were issued to her, and she at once gave notice, under article 93, § 109, of the Code, to the creditors of her deceased husband's estate, warning them to exhibit their claims, properly authenticated, on or before the 31st day of May, 1888. She subsequently made report to the orphans' court that she had given this notice, and her report was ordered to be recorded pursuant to sections 110-112, art. 93, of the Code. On the 2d of November, 1888, she settled an account in the orphans' court. By this account it appears that she paid all the debts proved against the estate, and many others, and the legacy of $500, and the costs of administration, and there remained in her hands a balance amounting to $7,704.10. This balance belonged to her as residuary legatee. In addition to the personal estate included in this account, Mr. Reese owned in fee-simple, at the time of his death, a house situated in the city of Baltimore. This house, which is the real estate involved in the pending litigation, the appellee acquired under the will of her husband. On the 3d of September, 1888, Mrs. Reese sold the house to the appellant, Dr. Van Bibber, for $25,000, and on the 20th of the same month he took possession of it. We make no reference to the circumstances under which possession was taken, because they have no relation to the only question which we deem it necessary to consider and decide. Shortly after the memorandum of sale was signed, it was suggested that possibly Mr. Reese owed debts beyond the amount of the personal estate left by him, and that therefore his creditors might follow his real estate, and subject it to the payment of those debts, even though the appellant had purchased it from the devisee, and had paid her for it in full. This suggestion, after much fruitless negotiation, ultimately led Dr. Van Bibber to decline complying with the agreement of September the 3d; and on January 3, 1889, Mrs. Reese filed the bill now before us for a specific performance of that contract. The relief prayed was granted by the circuit court of Baltimore city, and a decree was signed accordingly. From that decree Dr. Van Bibber has appealed.

Section 188, art. 16, of the Code gives rise to the main controversy in the case. That section, which is a codification of the Act of 1785, c. 72, § 5, and its various amendments, provides that, "when any person dies, leaving any real estate in possession, remainder, or reversion, and not leaving personal estate sufficient to pay his debts and costs of administration, the court, on any suit, instituted by any of his creditors, may decree that all the real estate of such person, or so much thereof as may be necessary, shall be sold to pay his debts," etc. By the common law, as is well known, the heir of a deceased debtor was only bound for the payment of the specialty debts of his ancestor, because of the express terms of the obligation; and then only in respect and to the extent of the real assets descended. And if a debtor, instead of suffering his real estate to descend to his heirs, devised it to any person; or if the heir aliened the land before an action was brought against him, the creditor was without a remedy. To obviate this injustice the statute of 3 & 4 Wm. & Mary, c. 14, was enacted, and the heir and devisee were made liable to the extent of the value of the land so acquired and then sold by them, though the land itself, in the hands of a bona fide purchaser from either of them, was declared to be entirely free from the claims of the decedent's creditors. But the legislation of this state, as embodied in the section quoted from the Code, goes much further, and makes the land devised or descended liable to be sold for the payment of any demand due by the decedent, if the personal estate left by him should be insufficient to discharge all his debts and the costs of administration. Obviously this liability is not absolute, but only conditional. It depends upon the insufficiency of personal assets. Now, the practical and important question before us is, how long does that liability continue? Or, in other words, is there any point of time after which the heir and devisee may sell the land to a bona fide purchaser, without the latter incurring the risk of having the real estate so purchased by him sold afterwards for the payment of the ancestor's or the testator's debts? If there be such a point of time, what is it? This precise question has never been decided by this court. While there is not in the Code, as in the statute of 3 & 4 Wm. & Mary, any express saving in favor of a bona fide purchaser, there must, of necessity, be some point of time when land descended or devised may be said to be free from this conditional liability. To hold otherwise would substantially convert the section quoted into a prohibition upon the alienation of such land,—an effect manifestly never contemplated or intended by the trainers of that legislation. Such property would be placed extra commercium almost indefinitely; because as long as there remained a possibility that debts might appear, there would remain a like possibility that the property would be made liable for their payment, no matter in whom the title might chance to be. It would not be difficult to suggest numerous instances where liability might arise on a guardian's or a trustee's bond many years after its date, or on other obligations which might mature at very distant periods. These possible claims would be sufficient to prevent conveyances for years and years, in palpable contravention of the general policy of the law, which disfavors unlimited restraints or alienations. It may fairly be concluded, then, that there is some point of time after which a bona fide purchaser may safely purchase such devised or descended real estate. Now when can he do so? We have said that the land of the decedent is, under the express language of the Code, only contingently or conditionally liable to be sold for the payment of his debts. His personal estate is the primary fund to which resort must be had. If that be sufficient, a court of equity has no jurisdiction to decree a sale of his real estate for the payment of his debts. It is, consequently, only when it appears to the court that the personal assets are not sufficient, that its jurisdiction can be exercised. The law has created a different tribunal for the administration of the personal estate of a decedent. It has pointed out with exactness and particularity what course is to be pursued, from the grant of letters testamentary or of administration down to the final settlement of the estate in the orphans' court. By section 109, art. 93, creditors are to be notified to file their claims within six months. This enables the executor or administrator to ascertain the extent of the indebtedness. Under other sections he is required, within limited periods, to return and file in the orphans' court inventories of the whole personal estate, to the end that its value may be known, and that it may be applied, if necessary, to the payment of debts. Under section 1, after the notice provided for in section 109 has been given, the executor or administrator may, within 12 months after the date of his letters, make a settlement of the personal estate; and the manner of his proceeding is carefully and minutely defined in the various sections of that article. He is then required to make oath or affirmation to his account, that its verity may receive the strongest possible sanction. When all this has been done, in exact conformity with the law, the fact as to whether the personal assets are or are not sufficient to pay the known debts of the decedent and the costs of administration is clearly and formally, though of course not conclusively,...