Tinsley v. Anderson
Nelson Anderson sued Richard Anderson in the High Court of Chancery. Nelson alleged that Richard, an insolvent debtor, held property encumbered by debt. Nelson argued that the property’s equity was more than enough to pay Richard’s creditors and enable himself to collect repayment as well. Nelson requested that the Court decree a sale of the property otherwise there would be no other way for him to obtain relief. After Richard’s answer was filed in September 1796, several other creditors joined as plaintiffs to Nelson’s suit. One such creditor was Thomas Tinsley, the administrator of Charles Tinsley. Thomas claimed that he had judgments against Richard by a trust deed.
The Court's Decision
In March 1791, Chancellor Wythe decreed a sale. Eight years later, Wythe ordered the proceeds of the sale be applied first to the mortgages and judgments according to priority, and the remaining balance to the creditors proportionally. Not pleased with Wythe’s method of allocation, Thomas appealed to the Court of Appeals. The Court of Appeals affirmed Wythe’s decision, but declared the proceeds of the sale should be distributed another way.