Case ID: sc-eq_17/html/0037-01.html
Source: Caselaw Access Project
Author: {"author": "Curia, per Dunkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

T. N. Gadsden ads. Brown & Wellsman.
    
    1. C. gaVe Ms bond to P. on the 13th Jan. 1837-, conditioned for the payment of $li-,000, and to secure the payment gave him, also, a mortgage of 34 negroes, of die samo date, recorded 1st Feb. 1837. On the 5th June, 1842, C. also gave his bond to B. and W. for the payment of 4,000, and a mortgage of the same date, recorded the same day, of 22 negroes, fifteen of those contained in the first mortgage being embraced in both.
    2. To prevent a sale under the prior mortgage, defendant, in March, 1841, at the request of C. advanced $5,000, in part payment of a balance then due on it, and took from C. his bond for the amount, as well as a mortgage of eleven negroes, to secure the payment. On the payment of the mo-n ey advanced by defendant, a partial release of the negroes contained in this mortgage was executed — those still retained, with the exception of one, be. ing embraced in both mortgages.
    3. On the 24th Jan. 1842, defendant sold four of the slaves embraced in both mortgages, and received the money, C. having confessed judgment on his bond, in August, 1841.
    • 4. Under these circumstances it was held, that on the execution of the release by the prior mortgagee, an absolute title at law vested in complainants; and that defendant, on the ground of his payment to the former mortgagee, did not thus acquire an equity paramount to their title, so as to entitle Mm to he subrogated to the rights of the former mortgagees, and take precedence of a subsisting mortgage.
    The cause was heard before Chancellor Johnson, at Charleston, February Term, 1843.
    By a decree of his Honor Chancellor Johnston, in July, 1842, this case was referred to the id aster, Mr. Gray, from whose report the facts and the objects of the bill of complainants will be fully understood. The report sets forth that B. K. Carroll gave his bond to Dr. Pinckney, dated 13th January, 1837, conditioned for the payment of $11,-000, and to secure the payment, give him also a mortgage of 34 negroes, of the same date, which was recorded the 1st February, 1837. The schedule No. 1, annexed, contains the names of the negroes so mortgaged..
    That B. R. Carroll, on the 5th June, 1840, gave his bond to Browns & Wellsman, for the payment of $4,000, and to secure the payment, gave them also a mortgage of the same date, recorded the same day, of 22 negroes, of which schedule No 2, annexed, is a list, the first named 15 negroes in schedule No. 1, being embraced in both mortgages.
    That on the 8th March, 1841, there was due on the mortgage to Dr. Pinckney, $6726 43, and Burbage & Pinckney, who were the holders of it, lodged the same with the sheriff of Charleston district, to be enforced. That to prevent the sale of the negroes at that time, Mr. Gadsden, the defendant, at the request of Mr. Carroll, agreed to advance Burbage and Pinckney, $5,000, of the balance so due them, and wait for the future sales of the negroes to reimburse him. The $5,000 were paid by drafts made by Mr. Carroll on Mr. Gadsden, in favor of Burbage & Pinckney, or their creditors, which were discounted in bank and taken up by Gadsden at maturity; on the following day, the 9th March, 1841, Burbage & Pinckney, in writing, released all the negroes contained in their mortgage, except Frank, Joe, Jack, Betty, Sylvy, Phillis and Sophy, of whom all except Sylvy, were embraced in both mortgages, and on the same day assigned the bond and mortgage for the balance then due, to wit: $1726 43, to A. P. Collins. The receipts on this bond, prior to March, 1841, amounted to $6,200, but it is not in proof from what funds thesé payments were made.
    That on the 24th January, 1842, Mr. Gadsden sold the slaves, Hardtimes, Miley, Jack and George, for $784 02, and has received the money, and these negroes are embraced in both mortgages. ^
    That on the 18th August, 1841, M'r.^Carroll confessed judgment in the Court of Common Pleas, to Mr. Gadsdln, for $6,750, which was intended to secure^m, as well fir the $5,000 advanced, as above stated, as ior other debts due by Mr. Carroll, which Gadsden agreed to pay, and Mr. Carroll placed all his property, both land and negroes, with Mr. Gadsden for sale, to pay off the incumbrance above, of which Gadsden had notice, and to repay himself. There was no proof, however, that Mr. Gadsden sold any more of the negroes than the four above named.
    That in March, 1842, Browns & Wellsman lodged their mortgage with sheriff Brown, and directed him to sell the£ negroes contained in it, for payment of their demand; and that on the 8th March, 1842, the sheriff sold 27 negroes named in schedule No. 3, annexed, for $6,614 50, nett, but Mr. Burbage, who was the purchaser of seven of them, for $1,560, not having complied, they were re-sold by the sheriff on the 28th of the same month, and the whole nett sales amounted to $6,262 66
    Which were paid thus.
    To Mr. Collins, 1,847 28
    Mr. Gadsden, 2,043 84
    Browns & Wellsman. 1,393 79
    5,284 91
    Leaving a balance in the sheriff’s hands, of $977 75
    That of the negroes sold by the sheriff, two, to wit, Simon and Daniel, were contained in the mortgage to Browns & Wellmans alone, and brought $245, and that the other negroes contained in their mortgage only, were.not sold by ' the sheriff. That seven of the negroes embraced in both mortgages, viz: Joe, Daniel, Phillis, Betty, Scipio, Sophy and Jack, were sold by the sheriff for $2,105. That four of tlie negroes contained in the mortgage of Pinckney only, viz: Dolly, Sary, Ben and Sylvy, were sold for $645, and the remaining thirteen negroes, not embraced in either mortgage, were sold for $3,230. These were all the ne-groes of whose sales there was any specific proof before the master, although Mr. Carroll, in his testimony, states that all the negroes had been sold. The master further reported, that from the statement of Mr. Gadsden, nnder oath, submitted to him, there had been received by him, ^3,244 43, on Recount pf the $5,000 advanped by him, leaving a balance due him of $1,755 66.
    It is reported, that by a like statement under oath, submitted by Browns & Wellsman, there was due on their bond a balance of principal with interest, to the 21st Feb. 1843, of $1,528 57.
    Both parties claimed the balarme of $977 75, in the sheriff’s hands.
    The piaster submitted, that if the balance be regarded ^as part of the sales of the thirteen negroes not contained in either mortgage, Mr. Gadsden would be entitled to receive it under his judgment and execution; and if he had a right to be subrogated to Burbage & Pinckney, he would also be entitled to retain the propeeds of sale of the four negroes sold by him, contained in both mortgages, If he had no such right, he ought to refund that sum to the complainant.
    
      Schedule No. 1.
    Dr. Pinckney’s bond, I3th January, 1837, condition $11,000; mortgage do, do., recorded 1st February, 1837, of the following slaves, viz : Scipio, Frank, Joe, Bossar, Hard-times, Jack, Edward, Cynthia, Phillis, Mily and two children, Sophy, Betty, Jack, Silyy, Polly, Sam, Sary, Siddy, Little Ben, Ben, Sandy, Marian, Dick, Peggy, Hector, Phil-lis, Sam, Cuffy, Hercules, Venus, Henry, Edward — In all, 34.
    
      Schedule No. 2.
    Browns and Wellman’s bond, 5th June, 1840, condition $4,000, — mortgage ditto., recorded same day, of the following slaves. The first named fifteen as above, with Simon, Daniel, Sary, George, Tom, Carpenter Tom and Joe. In all, 22.
    
      «!Schedule No. 3.
    Sheriff Brown sold Simon, Silvy, Susan, Joe, Phoenix, Frank, Daniel, Caroline, Sary, Phillis, Mary, Stephen, Betty, James, Scipio, Dolly, Sampson, Sary, Sophy, Mahaly, Mary, Charity, Edward, Ben, Jack, Sary, Scipio.' In all, 27.
    Johnson, Ch. The report of the master, Mr. Gray, contains in detail most of the leading circumstances of the case. There is, however, another fact which appeared at the hearing, and is not stated in the report, which is regarded as important to the rights of the parties. It is, that at the time the defendant agreed to advance the $5,000, to be appropriated towards the satisfaction of Carroll’s bond and mortgage to Pinckney, he took from Carroll a bond for the amount, and to secure the payment, Carroll gave him a mortgage on eleven slaves, and on this bond the judgment referred to in the report was confessed by Carroll to Gadsden, the defendant; and the question is, whether under these circumstances, the defendant Gadsden is entitled to be subrogated to the rights of Pinckney and Burbage under the bond and mortgage held by Iheni, to the extent that they had been extinguished by the money advanced by him.
    The doctrine of subrogation is a pure unmixed equity, having its foundation in the principles of natural justice, and from its very nature, never could have been intended for the relief of those who were in a condition in which they were at liberty to elect whether they would or would not be bound, and'as far as I have been enabled to learn its history, it never has been so applied. If one with the perfect knowledge of the facts, will part with his inoney, or bind himself by his contract, in a sufficient consideration, any rule of law which would restore him his money or absolve him from his contract, would subvert the rules of social order. It has been directed in its application exclusively to the relief of those that were already bound, who could not but choose to abide the penalty. Sureties, for example, who have before become bound, are amongst the especial objects of its care. Thus, if a surety pays the debt of his principal, he is entitled to stand in the place of the creditor, and to have the benefit of all securities, funds, liens and equities, to which the creditor was entitled; 1st. Story’s Eq. 477-8, 589, et seq ; 1st Hill’s Ch. Hep. 351. If he be bound for a specialty debt for his principal, and the principal die, and he afterwards pay the debt, the surety is entitled to the right of a specialty creditor of the principal, although it would have been otherwise, if he had paid the debt in the lifetime of the principal. Pride vs, Boyce, Rice’s Eq. Rep. 275; so if the creditor take a mortgage or other security from the debtor, and release it, the surety will be discharged. 1st Story’s Eq, 481; 4 J. C. R. 130.
    Another example of the application of the principle, will be found in the case where two creditors have mortgages or other liens on the same property of the same debtor. There, if the subsequent creditor pay the prior debt, he is entitled to be substituted to the rights of the prior creditor, as a means, without injury to the prior creditor, of enabling him to secure the payment of his own debt. But I have seen no case, and none has been referred to in the argument, in which a stranger, who was in a condition to make terms for himself, and demand any security he might require, has been protected by the principle.
    Defendant Gadsden was not the surety of Carroll, but the creditor — he advanced the money, confiding in Carroll’s ability to repay him; and it would seem he intended to put the matter beyond all controversy, by selecting his own security; a mortgage on his own property. He did not pay the money to Burbage and Pinckney, but lent it to Carroll to pay them.
    The reasoning of my brother Johnston, in the decree pronounced in this case, at thelast June Term, would seem to lead to a different conclusion, and is relied on as conclusive of the question, but it does not profess to decide it— on the contrary, he remarks in the conclusion that “it is impossible to determine any thing on the obscure proof” furnished him, and refers the case back to the master, to ascertain the facts ; and it is apparant that some at least of the most important facts were not brought to his view; and however much respect I may feel for the opinions of my learned brother, I am constrained to differ from him on the question, if indeed they were formed on a knowledge of the facts.
    It is therefore ordered and decreed, that the defendant Thomas N. Gadsden, do pay to the complainants, seven hundred and eighty-four dollars and two cents, with interest from the 24th January, 1842, with the costs of these proceedings.
    From this decree the defendant appealed, on the following grounds.
    1st. Because it is submitted, that the defendant was entitled to be subrogated to the rights of Burbage and Pinckney, the mortgage creditors of B. R. Carroll, and the negroes in question being part of those relieved by the defendant’s payment, he was entitled to the proceeds of sale.
    2d. Because the defendant was a surety, and as such having paid his money was entitled to subrogation.
    3d. Because it is respectfully submitted, that the defendant’s money went to obtain a release from the first mortgage creditor, and to permit the release thus obtained to operate in favor of the complainants, whose mortgage was subsequent, is contrary to the whole equity of the transaction.
    4th. Because the payment of the money by the defendant to the first mortgage creditor, the release by that creditor of part of the mortgaged premises, and the agreement between the first mortgage creditor and the debtor on the one hand, and the defendant on the other, that the latter should sell and reimburse himself from the property which had been relieved of the incumbrance, was a clear equity, sustainable against the complainants, the said mortgagees, who took their lien subject to the first incum-brance.
    5th. Because the mortgage mentioned in his Honor the Chancellor’s decree, was no part of the evidence in the case. It was produced as evidence by Mr. Memminger, in the case of Thomas JSF. Gadsden vs. Alexander H. Brown etai. The only testimony in the present case was the report of the master.
    6th. Because if the mortgage alluded to had been in evidence in the present case, it was a mere nominal security, embracing the very negroes contained in the mortgage by Carroll to the complainants.
    7th. Because the decree was otherwise against the equity of the case, arising out of the facts embraced in the report of the master.
    J. B. Thompson, for the appellant.
    Magrath-, contra.
   Curia, per Dunkin, Ch.

This Court concur in the views of the Chancellor. So soon as Burbage and Pinck-ney éxécüted the release, an absolute title at law vested in the complainants, Brown & Wellsman. The defendant attempts to set up an e'quity, paramount to this title; on the ground of his payment to the former mortgagees. But there was no agreement that he should be subrogated to their rights as mortgagees; there was no assignment — -on the contrary, the defendant took other securities for his advancements. The authorities cited in the decree are conclusive that; under such circumstances, there is no right of subrogation, and no equity to take precedence of a subsisting mortgage-. The appeal is dismissed:

Harper, Ch., concurred.

•Johnston, Ch., absent at the argument.