Case ID: miss_18/html/0113-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief. Justice Shaekey", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Alexander C. Baine vs. Robert Williams.
    The surety on a forthcoming bond, becomes liable by signing and forfeiting the bond ; the re-delivery of the property is the consideration ; and he cannot go into equity, apart from his principal, to re-investigate the original judgment.
    Therefore, -where a judgment was rendered against A. & M., upon which execution issued and was levied on personal property; and B. joined with them as their surety in a forthcoming bond, which was forfeited; it was held, that B. could not seek relief in equity, in his own name, on the ground that the original judgment was founded on an usurious consideration.
    A debtor, who owes his creditor two distinct demands, has a right, in making a payment, to direct its application; if the debtor make no direction, a court of equity will place the credit where it would be most beneficial to the defendant, on the presumption that it was so desired by him; but if there be any direction that it shall be otherwise placed, or if the defendant waive his right to direct the appropriation, a court of equity will not disturb it.
    Whether, where a forthcoming bond has been given and forfeited, a court of equity has jurisdiction to go behind the judgment of forfeiture, and inquire into the validity of the levy of the execution on which the bond was given,— Query?
    Where a surety sought to be relieved from a forfeited forthcoming bond, on the ground that there had been no levy; and it was proved, that the sheriff came into the defendant’s store with the execution, and that he supposed both parties considered that a levy was there made on the goods; it was held, the proof was entirely too vague to constitute the foundation of a decree, even if equity had jurisdiction.
    It seems, where there is a judgment against a party, and he purchases real estate on a credit, and subsequently gives a deed of trust thereon, to secure the payment of the purchase-money, that the lien of the judgment will be paramount to the vendor’s lien or that of the deed of trust; and the real estate thus purchased, will be liable to sale under the judgment.
    A subsequent purchaser has a right in equity to require an execution creditor to exhaust the unsold property of his debtor, before he resorts to that which has been sold ; so, also, it seems, that one holding an incumbrance on property junior in date to a judgment lien, can force the judgment creditor to exhaust the other property of his debtor before he can sell the incumbered estate; but if the junior incumbrancer permit a sale to take place of the property on which he has a lien, under execution on the judgment, his remedy is at an end ; for though the sale might have been prevented, it does not follow that it will be set aside.
    A surety has a right, under the statutes ,of this State, to require the plaintiff in execution to make the money out of the principal.
    An execution having been levied on certain lands, a junior incumbrancer filed his bill, to compel the judgment creditor to. levy on other property of the judgment debtor ; the chancellor decided against his right to do so, and he prayed and appealed; but before prosecuting his appeal, the property was sold under the execution; he moved this court to have the sale set aside; held, that although he was entitled to the relief originally prayed for, yet, as by his neglect in prosecuting his appeal, he had permitted the sale to take place, it was too late to afford him relief, and the sale could not be set aside.
    Appeal from the vice-chancery court, held at Carrollton; Hon. Henry Dickinson, vice-chancellor.
    Alexander C. Baine states in his bill, that, on the 24th of September, 1837, Robert Williams recovered judgment against William Armour, Henry Lake, and George K. Morton, for fl4,503.50; upon which a forthcoming bond was given with complainant, George W. Lake and Thomas J. N. Bridges (the two last afterwards admitted as complainants) as sureties; and was forfeited on the 9th of September, 1839. This judgment bore ten per cent, interest.
    On the 12th of March, 1839, Williams obtained a judgment against the same defendants, Armour, Lake, and Morton, for $4,410.10, on which a forthcoming bond was forfeited on the 4th of May, 1840, with William Lake as surety; the penalty of the bond being in the sum of $950.97; the residue of the judgment being satisfied. This judgment bore eight per cent, interest.
    That portion of these judgments were founded on usurious contracts. That Morton had paid Williams twelve hundred dollars, which Williams had credited on the latter judgment, in fraud of complainant’s rights, and in violation of Morton’s instructions, and without complainant’s knowledge.
    That, on the 13th of July, 1838, sold to Morton part of lots 75 and 76, in the town of Grenada, and took Morton’s note for the purchase-money, without security; that, in October, 1842, to avoid the expense of a suit in chancery, Morton gave him a deed of trust, to enable him to enforce his vendor’s lien; the judgment of Williams formed a cloud on his right to enforce his deed of trust; that the other parties defendant to the judgment, Armour, Lake, and Morton, had ample property to pay off and satisfy both of the judgments of Williams, in real estate in the town of Grenada.
    He prays for an injunction against the sale of the lots under Williams’s execution, and that it may be made perpetual; that he may be released and discharged from liability on the bond, and for general relief: for leave to examine Morton, as to the usury, &c. Williams and Armour, Lake and Morton, are made defendants to the bill; but process was only served on Williams and Lake.
    An amended bill sets up that no levy was ever made on the execution under which the forthcoming bond was taken; no seizure of goods was made at all; Morton, one of the defendants, wrote in the bond the levy on his goods, and handed the bond back to the sheriff, and no other levy was made. The bill was filed May 27, 1844.
    
      The answer of Williams denies the usury ; and states that the $1200 was placed as a credit on the judgment bearing eight per cent, interest, by Morton’s direction; he admits that the other defendants to the judgments have property out, whether sufficient to pay the debt, he has no means, of knowing, and denies complainant’s right to the relief he asks.
    The testimony of Morton was taken, as to the usury and the payment of the $1200, and the appropriation of it. It is not deemed requisite to set it out, as the court refused to inquire into the question of usury; and held the appropriation of the $1200 to have been directed by Morton to the judgment bearing eight per cent, interest. Morton proved also that the sheriff came into his store with the execution, on which the bond was given; when the levy was written in the bond; he and the sheriff both regarded it as a levy; there was no intention to deceive or defraud any one by it. The cause was referred to a commissioner, who reported that $2,020.37 was due by Baine and the others on the judgment.
    At the June term, 1845, of the vice-chancery court, the vice-chancellor dismissed the bill, and on the 20th of December, 1845, Baine appealed, and prosecuted his appeal on the 1st of March, 1846.
    At the January term, 1847, of this court, Baine moved the court to set aside the sale of the lots on which he claimed a lien, which had been made under execution on the judgment in favor of Williams, on the 4th day of May, 1846 ; and the cause was submitted on the motion, and also for final decision, on the whole record.
    
      E. S. Fisher, for appellant,
    insisted,
    1. That it was alleged and proved, that Armour, Lake, and Morton, had ample other property to satisfy the debt which should have been first sold.
    2. That it was alleged and proved, that the judgments were based on usurious considerations.
    3. That there had been no valid levy on the goods, and the bond was void. Long v. Bank of United States, Freeman’s Oh. Rep. 381.
    
      4. The credit of $1200 was fraudulently placed on the smaller judgment.
    5. The vendor’s lien was in full force, and was paramount to the judgment, and should have been enforced.
    6. The sale in May, 1846, since the date of the appeal, should be set aside; the appeal suspends the decree. 4 S. & M. 681.
    
      William and William Q. Thompson, for appellees,
    contended,
    1. That a surety could not maintain a bill for relief against the debt of his principal, without making his principal a party by service of process. Edwards on Parties in Ch. 99-102.
    2. The credit of $1200 was properly placed on the smaller judgment, as it was assented to by Morton, and approved by him.
    3. There was ho sufficient proof that the other defendents to the judgment had property sufficient for its satisfaction.
    4. Morton was an incompetent witness.
   Mr. Chief. Justice Shaekey

delivered the opinion of the court.

The appellant filed his bill in the vice-chancery court, to enjoin the sale under execution of two lots in the town of Grenada, and for general relief. He was not a party to the original judgment, but had become liable on a forthcoming bond. The vice-chancellor decreed against the complainant, and he appealed. The judgment was in favor of Williams, and against Armour, Lake, and Morton.

The first ground on which relief is sought, is, that the judgment was founded on a usurious consideration. This defence should have been made at law, by Armour, Lake, and Morton. They are defendants, instead of being plaintiffs, in this bill. The surety in a forthcoming bond becomes liable by signing and forfeiting the bond; the re-delivery of the property is the consideration, and he cannot go into equity, apart from his principal, to re-investigate the original judgment.

The same plaintiff had recovered two judgments against the same defendants, in both of which forthcoming bonds ha'd been given, with different sureties. Complainant insists that a credit or payment of $1200 should have been placed on the judgment on which he was liable, because it was bearing ten per cent, interest; whereas the other was drawing eight per cent. The debtor, in making payment, has a right to direct its application, but no direction was given. Williams asked Morton on which judgment the payment should be credited, but he would give no direction. Morton was examined as a witness, and stated that Williams expressed a desire to place the credit on the judgment bearing ten per cent. It would seem that several conversations were held on this subject. If there was no proof on the subjdct, equity would place the credit where it would be most beneficial to the defendant, on the presumption that it was so desired by him. The facts developed in this case, tend to show that Morton did direct that the credit should be placed on the judgment drawing eight per cent. They certainly amount to a waiver of his right to give direction.

It is also objected against the validity of the bond, that no actual levy was made before it was taken. Morton says, the officer came into his store with the execution, and he supposes both parties considered that a levy was made on his stock of .goods. The proof on this subject is entirely too vague to constitute the foundation of a decree, even if it be a proper subject of equity jurisdiction.

In the last place, the complainant claims the right to restrain the sale of the two lots mentioned. The lots were purchased by Morton, from the complainant, after the rendition of the judgments. He gave no other security for the purchase-money, but his note, a greater part of which still remains unpaid. To avoid the necessity of resorting to a court of chancery, to enforce the vendor’s lien, Morton gave a deed of trust on the lots, for the benefit of complainant. This was in 1842; the lots having been originally sold in 1838. It is claimed, that these lots should be exempted from sale, because Armour, Lake", and Morton have an abundance of property to satisfy the executions, without the lots. The plaintiff had a vendor’s lien on the lots, and also a deed of trust. A subsequent purchaser has a right in equity to require an execution creditor to exhaust the unsold property of his debtor, before he resorts to that which has been sold. Clowes v. Dickenson, 5 Johnson’s Ch. Rep. 235.

To this position, it is answered, that the judgment is a lien on complainant’s property, as well as on Morton’s. His being a surety in the bond, cannot change the rule, because, as such, he has a right to require the plaintiff in execution to make the money out of the principal. H. & H. Dig. 641. Besides, he had not such an interest in these lots as was subject to a levy. And having the right to compel the plaintiff in execution to go against the principal first, he may also protect property on which he has a lien.

It appears, from a motion made in this case, that after the decree in the court below, but prior to the appeal, the lots were sold under execution. If so, the complainant’s remedy is at an end ; for, although the sale might have been prevented, it does not follow that it will be set aside. The property was liable, and, as the complainant did not take the proper steps to prevent the sale, by prosecuting his appeal, he must abide by the consequences. Nor can the court award indemnity, as was done in Clowes v. Dickenson. There the purchaser, under junior judgments, was seeking to enforce an older one against an intermediate purchaser, when in equity the property he had purchased was first liable. The complainant is entitled to his costs, and the decree is therefore reversed; but the motion to set aside the sale must be dismissed. 
      
       See the case of Laughlin v. Ferguson, 6 Dana’s Rep. 112, where the power of a court of chancery, to relieve surety on a forthcoming bond, when there had been no levy, or an illegal one, is considered) and it is held, that, in such case, equity has no jurisdiction; the defence being complete at law, in a motion to quash the bond. See also on the same point, Hagan v. Tobin, 5 Dana, 264 ; Saddler v. Glover, 5 Dana, 551; Lusk v. Ramsay, 3 Munf. 417.