King v. Thompson/Opinion of the Court
In 1812, Thompson married the daughter of King, who, being a man of considerable estate, offered to give Thompson a house and lot in Georgetown, then in a dilapidated state, if Thompson would repair the premises so as to make them a comfortable residence; King saying, he intended the property for his daughter, the wife of Thompson.
Thompson accepted the offer, went into possession, and expended in repairs and improvements, four thousand dollars.
About 1816, Thompson claimed to have the property conveyed to him by King, who refused; but offered to vest the title in trust for Thompson's wife. Thompson made several alterative propositions; one amongst others, that the house and lot should be valued as of the date when it was put into his possession; and that he would pay the amount over to King, and take a title; which proposition the latter accepted: or, offered to convey a part of the lot, including the house, to Thompson, and another part to Thompson's wife. Under these circumstances, Thompson continued to occupy the premises for a time, and afterwards removed from, and rented them; King setting up no claim to have the property returned to him.
In 1820, he died, and the title descended on his heirs. King, at his death, was largely indebted, say 36,000 dollars, and much over the means of payment; his creditors filed a bill to have satisfaction of their demands, out of the real as well as personal estate: and the trustee appointed by the Circuit Court to sell the property, amongst other lands, sold that claimed by Thompson. The latter filed his bill to avoid the sale, and for a specific performance against King's heirs, the trustees of the creditors, &c.; the record in which cause, as reported in 9 Peters' Reports, is, by the exceptions and an agreement, made a part of this proceeding.
The creditors denied the existence of the title set up by Thompson; claiming the house and lot as subject to King's debts, and went to issue. The Court below decreed specific performance, from which the defendants appealed to this Court, where the decree below was reversed. But Thompson having an alternative prayer in his bill, claiming priority of the general creditors of King, in the form of a lien on the property, to the value of the improvements he had put upon it; this Court held, that although there was not sufficient evidence to authorize a decree for title, still Thompson had, by the rules of a Court of Equity, a lien for the money expended on the improvements: and the cause was remanded with a mandate that the property should be advertised and sold, and the proceeds of the sale be applied: first, to the satisfaction of the money expended by Thompson in making the improvements; 'and the balance, if any, to be paid over for the benefit of the creditors of King.'
The property was accordingly sold, and brought little more than 800 dollars, leaving upwards of 3000 dollars unsatisfied.
The trustee of the creditors of King's estate, from time to time, made various sales and reports; and at April term, 1837, reported that Alexander Caldwell, the administrator of Thompson, (then deceased,) had presented as a debt due from the estate, the balance not refunded to Thompson by the sale of the house and lot. The other creditors resisted the claim, as forming no demand on the estate; and insisted Thompson's remedy extended only to the property improved and fixed with the lien, by the decree of the Supreme Court. But the Circuit Court overruled the exception, and adjudged that Thompson's administrator should come in for an equal dividend with the general creditors.
From this order the creditors appealed. Thompson, by his bill to subject the house and lot, claimed a priority of lien, and had it allowed to him, in exclusion of the general creditors; he proceeded against the thing, and did not set up any personal demand extending beyond the lien, against the other estate of King: and we are clearly of opinion none exists. And therefore order, that so much of the proceeding in the Circuit Court, as allowed the administrator of Thompson to come in with the general creditors of King, to receive a dividend founded on said claim, be reversed; and that the cause be remanded for further proceedings.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States, for the District of Columbia, holden in and for the county of Washington, and was argued by counsel. On consideration whereof, it is adjudged and decreed by this Court, that so much of the decree of the said Circuit Court in this cause, as allowed the administrator of Thompson to come in with the general creditors of King, to receive a dividend founded on his claim, be, and the same is hereby, reversed, with costs; and that this cause be, and the same is hereby, remanded to the said Circuit Court, for further proceedings to be had therein, in conformity to the opinion of this Court.