Case ID: nc_37/html/0440-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Ruffin, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOSEPHUS HEWETT vs. JOAB OUTLAND.
    Where a judgment at law has been assigned and the debtor pays the assignee, the assignor cannot afterwards, on account of any equities between him and the assignee, compel the debtor to pay the amount to himself.
    If in any case an assignor can annul the operation of his assignment, as an authority to the debtor to pay the debt to the’ assignee; it can only be done upon distinct personal notice from the assignor to the debtor, that the former looks to the latter for the money.
    This was an appeal by the defendant Outland, from a decision of his Honor Judge .Pearsojst, at Spring Term, 1843, of Northampton Court of Equity, 'disallowing a motion made by the defendants on their answers coming in for a dissolution of the injunction, which had been obtained in this case. The bill was filed to enjoin the defendant Out-land from collecting a judgment in Northampton Superior Court of Law for about $159, which had been obtained by the defendant Outland against the present plaintiff. The allegations of the bill were briefly these:
    On the 30th of May, 1842, Outland assigned the judgment to the defendant, Giles Futrell, in part payment for a negro then conveyed by him to Outland. The negro had been previously levied on by virtue of executions issued by a justice of the peace against the goods of Giles Futrell and the other defendant, Sanders Futrell, who was surety for the debts, and this was communicated at the time of the sale by Giles F. to Outland, between whom it was agreed, that said Giles should collect the debt from Hewett, and therewith pay the executions levied .on the negroes. Instead of doing so, the said Giles in a few days assigned to Sanders Futrell the judgment againt Hewett, in payment of a debt 
      to Sanders, and he also executed a deed of trust of all his other property to one Powell for the purpose of securing other sums which he owed Sanders; Under that deed the property has been sold for less than the debt mentioned in the deed, and Giles Futrell is insolvent. On the 8th of June, 1842, the constable was about seizing the negro and offering him for sale under the executions, before levied on him, and in order to prevent it Outland was obliged to- pay the debts due on the executions, which amounted to $210. On the first of October following, Hewett paid the judgment against him to Sanders Futrell,-and took his receipt. Subsequently thereto Outland sued out another execution on the judgment in his name and delivered it to the sheriff, with directions to levy the money and pay it to him, and when informed by the plaintiff, (as the bill states) that he had paid the debt to Sanders Futrell, and requested to re-call the last execution and acknowledge satisfaction of the judgment, he insisted that as he had not got a clear title to the slave, the said Giles and Sanders were not entitled to the judgment, but that it belonged to- him. The plaintiff then filed his bill, in March, 1843, against Outland, and Giles and Sanders Futrell, praying to be relieved in the premises, and, in the mean time, for an injunction.
    The answer of Outland admits the material statements of the bill. But it is therein alleged, that, on the day of lhe purchase of the negro, this defendant and Giles Futrell informed Sanders Futrell of the terms of the contract, and the latter fully assented thereto, and perfectly understood, that,according to the agreement, the money due on the judgment against the plaintiff was to be applied towards discharging the encumbrance of the executions on the negro. This answer further states, that on the 30th June, he, Outland, heard that Giles was about to execute the deed of trust for the' security of Sanders, and enquired of the latter as to the truth thereof, and expressed his anxiety that, for his safety, the executions against the negro should be satisfied or the debt secured, and received for answer from Sanders, that he, Out-land, might make himself easy, as there was enough of Giles Futrell’s property to pay all his debts, and that ho, Sanders, would discharge the executions, so that Outland should'lose nothing by his purchase: and, again, that, alter execution of the deed, when Outland expressed his uneasiness to said Sanders, the latter shewed him the assignment to himself of the judgment against the plaintiff, and said that he, Outland, was in no danger, and repeated his previous promises to take the debts on himself: That the sale under the deed of trust took place in the summer of 1-842, and Sanders became the purchaser at very low prices, as he, Outlaw considered himself secure by the engagements of Sanders, and did not bid for the property; and that then Sanders Futrell refused to reimburse to him the money he had paid on the executions. The answer then states, that this defendant, Outland, upon finding himself thus deceived-, directed the sheriff to levy the debt from the plaintiff and pay the money to him, Outland, and that after he had given those directions, and after the sheriff had informed the plaintiff of them, he, the plaintiff, paid-the money to Sanders Fu-trell, who gave to the plaintiff a receipt and a bond of indemnity for making such payment, and also gave the sheriff-an indemnity for not levying the money on the execution then in his hands, and returning nulla bona. The answer then admits that'Outland from the next term sued out an alias ji. faon which the sheriff was about acting for his benefit; when the plaintiff filed his bill, and the defendant insists, that the plaintiff paid the money to Sanders- Futrell collu-sively, and that by reason of the indemnity to the plaintiff and the agreements between him and Sanders Futrell, this is, in effect, the suit of the latter, and, therefore, that there is the same equity against both of those persons. Each of the Futrells put in an answer, but as they are in no wise material to the present question between the other parties, it-is unnecessary to notice them.
    
      Bragg for the plaintiff.
    
      JB. F. Moore for the defendant.
   Ruffin, C. J.

The court is of opinion, that the disco lution of the injuction was properly refused. The equity of the plaintiff is founded on the assignment of the judgment and payment by him im conformity thereto. Those facts are admitted in the answer. But it seeks to avoid their effect, by sotting up a distinct equity of this defendant against the other defendants upon certain transactions between them, not apparent upon the assignment. If,the matter of evidence be well founded in law, yet the injunction must stand, until the truth of the facts be established on the hearing. For this reason alone the motion to dissolve might have been properly overruled. Lindsay v Etheridge, 1 Dev. & Bat. Eq. 36. But even if the answer be received as true throughout, there was no error in the order, as it seems to us. Ontland has much cause of complaint against the other defendants, and has, doubtless, a redress against them. Still, it might be questioned, whether he could treat his assignment as null as against them, while he continued to hold the slave, for which the judgment was in part the consideration.

But, without considering that point, he misconceived his rights, we think, in assuming, as against the present plaintiff, to be the absolute owner of the judgment after having assigned it, and complicating the plaintiff with the other defendants, so as, in effect, to render him responsible for their acts or oh their promises. By the assignment the plaintiff at law bacame a trustee for the -assignee. But he was not an ordinary trustee, for the assignee was-not only the real owner of the debt, but also had an authority to receive payment. The assignor is a trustee in the sense that he is the legal owner, and that the assignee shall have the right to use his name to enforce payment, but not in the sense of its being his duty or his right to receive the money and account for it to the assignee as cestui que trust. By tolerating the assignment of a judgment and obliging the debtor to pay the assignee, as the creditor, equity must needs protect the debtor in making the payment. It is true, the debtor is not charged with knowledge of the assignment of a demand that is not negotiable, and, therefore, he may rightfully pay. his original creditor, until he knows that another person has become his creditor. It is obvious, that good faith to the debtor, and ordinary diligence in attending to his own secu-nty, forbid the assignee from trusting to rumor or other indirect method for conveying to the debtor information of the assignment, and require him to give, as from himself, direct and precise notice of the assignment, and that the payment must be made to him. After such notice, the debtor is to look to the assignee as his creditor, to whom the lav/ expects and encourages him to make payment. By a parity of reasoning the assignor, if he claim any interest in the judgment against his assignment] must give' to the debtor a notice as distinct and particular. It cannot be sufficient in such cases, that something reached the debtor’s ears, which might have put him on enquiry, according to the rule respecting a purchaser from one affected by a trust. In that case caveat emptor is the rule; as he ought not to lay out his money, where there is a ground to doubt the title, and he may secure himself by covenants. But a debtor may be compelled to pay, and therefore may voluntarily pay, his creditor, until plainly informed that the debt belongs to another. If in any case the assignor can annul the operation of his assignment, as an authority to the debtor to pay the debt to the assignee — a point not now necessary to decide — yet we think, that it can only be upon distinct personal notice from the assignor to the debtor, that the former looks to the latter for the money. It is bad faith towards the .debtor to leave him in doubt to whom he is to make payment. Even payment to an ordinary attorney is good, until certain information of the revocation of the authority be communicated to the debtor by the principal of the attorney. Much more must that hold, when the power to receive is in the form of an assignment., and is apparently irrevocable. For the want of such a notice to the presént plaintiff by or from Outland, we .think he cannot impeach the payment made by the plaintiff, but must look to the other party, to whom the plaintiff paid the money. It is true, as was said at the bar, the plaintiff might have made payment to the sheriff, and left the other parties to contend'for the money. But we do not think that varies the rule, which is applicable alike to the assignment of all securities that are not negotiable. The question is, who is , . ? . , the owner m equity, for in every case, we suppose, a debtor may pay the creditor without compulsion by suit or execution, whether the debt be due on note, bond, or judgment.

The court is likewise of opinion, that the plaintiff lost none of his rights by taking an indemnity from'Sanders Futrell for making payment to him. It was but a reasonable precaution against possible loss by a defect in the assignment, or by the expenses of litigation, in which he might be involved in the premises. The plaintiff has none of the funds of Futrell in his hands, out of which Outland can ask to be satisfied, but only a covenant of indemnity against the consequences of paying his own money to the assignee of the judgment. This suit is, therefore, the plaintiff’s.own, and for his benefit^solely, and it in no wise effects Outland’s claim or redress against both or either bf-the Futrellsin another proceeding. For these reasons, our opinion is, that there is no error in the interlocutory order, which must be certified accordingly to the Court of Equity.

The defendant Outland must pay the plaintiff’s costs in this Court.

Pisja Curiam. - Ordered accordingly.