632 CAPE SABLE COMPANY'S CASE.—3 BLAND.

BLAND, C., 18th August, 1832.—This case standing ready for
hearing on the auditor's reports, and the exceptions thereto; and
the solicitors of some of the parties having been heard, and the
notes of the solicitors of some others of them having been read,
the proceedings were lead and considered.

* It is a general rule, that all liens and incumbrancers
655 which are not in themselves vicious or defective must be satis-
fied according to their respective priorities. Rankin v. Scott, 12
Wheat. 177. Two of these parties, Oliver and Carroll, rely on their
judgments as giving them liens which entitle them to be satisfied
in preference to all other creditors of the Cape Sable Company.
These plaintiffs and some of the other creditors, however, not only
deny the legality of their liens, but the very existence of their
claims; and as between Oliver and Carroll themselves, each claims
a priority over the other. It will, therefore be necesary to enquire
whether they are in truth to be considered as judgment creditors
and from what date.

Upon the principles of equity by which this Court has been so
long governed in relation to the distribution of the estate of an in-
solvent living person among his creditors; and in regard to the
application of the estates of deceased persons to the payment of
their debts; upon the ground that creditors have by the misfortunes
or death of such debtors been confined to a single fund from which
alone they can obtain satisfaction; I can see no reason why this
Court may not, upon the same principles, where a corporation is
admitted or shewn by proof to be in a condition of absolute insol-
vency, and especially if such insolvency must inevitably eventuate
in its total dissolution, take cognizance of the matter, call in its
creditors, and apply its effects in satisfaction of their claims, ac-
cording to the course of proceeding in a creditor's suit. Hammond
v. Hammond, 2 Blawd, 310; Shepherd v. Towgood, 11 Cond. Chaw.
Rep. 206. And this case having heretofore, by the admissions of
the parties, been submitted as a creditor's suit, I shall therefore
continue so to consider and treat it.

The decree of the 5th of April, 1828, is founded not only on the
admitted fact, that these debts were then due from the company to
Oliver and Carroll; but also upon the concession, that the Cape
Sable Company was then in a condition of absolute insolvency.
That decree, and the agreement upon which it was passed, there
being then no other creditors but Oliver and Carroll before the
Court, necessarily involved these facts and admission; because the
Court could not, otherwise, have treated the case as a creditor's suit,
and have ordered a sale to pay debts, none of which were then ad-
mitted or established; nor could the Court have ordered notice to be
given to the other creditors to bring in their claims upon any other
* ground, than that the debtor then before Court had been
656 admitted or shewn to be in such a condition of insolvency