Guernsey Legal Resources

“…[T]outes ses obligations, dès l’instant de sa mort, passent de sa personne en celle de ses héritiers, qui deviennent en conséquence, dès cet instant, chacun pour la part dont ils sont héritiers, sans qu’il intervienne rien de leur part, propriétaires de toutes les choses dont le défunt étoit propriétaire, créanciers de tout ce dont il étoit créancier, débiteurs de tout ce dont il étoit débiteur, ont, dès cet instant, le droit d’intenter toutes les actions que le défunt auroit eu droit d’intenter, & sont sujets à toutes celles auxquelles le défunt auroit été sujet.”

3 The same principle is repeated later (ibid., Chap. III, Section III, Art. I, para. IV, at 138). The person who accepts the succession is (inter alia) “. . . créancier de tout ce dont il étoit créancier, débiteur de tout ce dont il étoit débiteur . . .”

4 The proposition advanced on behalf of L that there is general support for this principle in Guernsey legislation is also correct. In addition, the leading case referred to later, Priaulx v. Le Ray (1), proceeded on that basis before particular legal arguments were advanced on the individual circumstances that existed.

5 The problem which has caused most consideration is the submission made by O that personalty is regarded as the seat of the debt. Hence an unsecured pecuniary debt is firstly to be paid from a deceased’s personal estate. The maxim “les meubles sont le siège des dettes” is part of the armoury of the Guernsey advocate as “un principe de droit coutumier.” Accordingly, O seeks the striking out of this application. The most modern references to it that I have found are in Advocate Dawes’ valuable book, The Laws of Guernsey, at 198 (2003):

“Under customary principles personalty is regarded as the ‘seat’ of debt. Accordingly, and subject to the express terms of a will, unsecured money debt is paid from the gross residue of personal estate before distribution . . . If the personalty is insufficient the heirs of realty may be proceeded against with any residual gift of realty being exhausted first . . .”

and in an erudite article by Advocate Howitt, The Nature of Tenancies in Guernsey Law, in 8 Jersey Law Review 172, at para. 54 and footnote 70 (2004), where the principles are referred to without demur.

6 O also puts forward Jeremie in support (op. cit., at 148, 149 and 154). Only if there is a shortfall in the assets of O’s mother’s personal estate could L consider the realty (op. cit., at 156–157, for additional support). The main passage is as follows (op. cit., at 148):

    “As a general rule, heirs, executors and saisis are liable for the debts of the deceased or of the bankrupt—whom they may be said to represent—even beyond the value of the assets they receive from his property, of which they become the owners; and that such is the case may be clearly inferred from the terms in which the last clause of the twenty-fifth article is drawn up, it being therein stated that universal legatees shall be liable for their proportion of the excess of personal debts, after all the personal property arising from the estate has been applied to its discharge.”

7 Jeremie is here commenting on the reforming Loi sur les Successions of 1840, especially art. 25 (“Charges aux quelles les légataires à titre universel seront tenus”). The article reads:

“Les légataires à titre universel seront tenus, de concurrence avec les héritiers ou les légataires résiduaires, pour leur proportion des charges réelles qui sont dues généralement sur tout l’héritage, sans avoir de fonds spécifique. Ils seront aussi tenus de la même manière de leur proportion de l’excédent des dettes mobilières, après que tout le mobilier de la succession aura été employé à les acquitter.”

8 It is the last sentence which is regarded as particularly significant. In L’s skeleton, it is also pointed out that in Jeremie (op. cit., at 135) it is stated that, before the Law of 1840, personal property was solely liable “in the first place” to pay the testator’s debts, “as was always the case before the promulgation of the new law, which has done away with the absolute prohibition to dispose of real property by testamentary bequests.” Accordingly, it is submitted that a creditor can proceed against the heir to the real estate. However, the Law of 1840 did not change very much in this context; all it did was to provide that a devisee of real property was liable for the debts if the personalty were insufficient. Before that and since then a person who inherits real property on intestacy was and is liable for the debts on the insufficiency of the personalty, but not otherwise.

9 L’s skeleton also deals with the last sentence of art. 25. It is suggested that the article refers only to legatees of real estate and “if this were a generally accepted principle of law, it need not be stated.” It is necessary to consider Jeremie’s observations once more (op. cit., at 148) as quoted in para. 6 above. It must be noted that Jeremie refers to a “general rule” and that this “may be clearly inferred from the terms in which the last clause of the twenty-fifth article is drawn up . . .” L’s submission that, if it were a generally accepted principle it need not be stated, is of little assistance, especially as it could be argued that if not stated it is manifestly not an

10 The case of Priaulx v. Le Ray (1) had to be examined very carefully. It turned out to have been an Homeric saga of litigation and the case is remembered chiefly for the ruling on specific performance and the use of lésion ultradimidiare as a defence. It was a contest of pleadings which went up and down to and from the appeal court—then the Cour des Jugements et Records. L relies on the case to bear out the propositions that there is a clear precedent there for proceeding against the heir to the real estate alone (which is what L wants to do here) and that there was no obligation for the plaintiff to exhaust the personal estate before proceeding against the heir to the real estate. The Royal Court records need to be considered in the light of an article (A Long Lawsuit) by Sir Ambrose Sherwill, joint counsel for the defendants, in 23 Quarterly Review of the Guernsey Society 31 (1967), appended to L’s skeleton. It needs to be understood that most of the case ultimately rested on other considerations and much of the article is only relevant for background.

11 This background is that the deceased agreed to sell his realty to the plaintiff at a price which appeared to be less than half its true value. This property was left by will of realty to his niece, the original defendant. After the deceased’s death shortly after signing this agreement, the niece was presented with a demand to carry out his undertaking and convey the property. The price mentioned did not cover all of the deceased’s liabilities. In the first place the niece pleaded (inter alia):

    “2. Que la dite action est irrégulière en ce que telle action en dommagés-intérêts aurait du être intenteé contre les héritiers aux meubles ou les exécuteurs ou administrateurs de la succession mobilière du dit feu William Le Ray soit seuls ou conjointement avec la dite défenderesse.”

12 This succeeded in the Ordinary Court, but on appeal it was held that “la deuxième exception est premature.” The plaintiff then brought a new action in damages (having failed on specific performance) against the original defendant and the “héritiers aux meubles.” The exceptions then pleaded included the following: “Que la dite action est irrégulière en ce qu’il n’est pas allégué qu‘il y ait eut aucun défaut de la part de qui que ce soit qui donnerait lieu à telle action.”

13 Both the Ordinary Court and the appeal court upheld this exception. The case was eventually resolved by findings against the plaintiff on the facts so that the bargain was deemed an unconscionable one.

14 L argues that the decision on appeal pronouncing the first exception premature “suggests it did not entirely agree with the court at first

“A claim in damages against the estate of a deceased person is, under Guernsey law, to be satisfied primarily out of the personal estate and only to the extent that this does not suffice, out of the real estate.”

16 This observation by an eminent former Bailiff is a weighty argument, in my judgment, for O’s position in the present application. But what about L’s point—that in that case the action proceeded against the heir to the realty only? I have considered this at some length. The answer, I think, is that L has proceeded one station too far along the line. In order for those heirs of personalty to have been under any liability, i.e. responsible for a debt, that liability had first to be established. On the particular facts in that case such liability could not attach as no default could be laid at their door. They had never had power to convey the realty which was the subject of the action. In other words, if some default were pleaded and established, then recourse could be had to them. The debt was not proved as against the heirs to personalty. The facts differ from the present case. If this conclusion is incorrect, and this aspect of the case wrongly decided, this does not alter my decision, as the basic and well-established principle on exhausting personalty first remains unimpaired.

17 Notwithstanding the admirably clear submissions set out by Advocate Fooks, I consider that the established principle applies. Hence, I find in favour of O’s application that pursuant to r.52 of the Royal Court Civil Rules 2007, L’s cause be struck out. I consider that this decision accords with the general theme of Guernsey property law, which accords particular protection to realty.

18 Costs are reserved. If L continues the action then the question of costs needs to be considered as a whole at the end of proceedings. If not,