Case ID: va_66/html/0477-01.html
Source: Caselaw Access Project
Author: {"author": "ANDPRSON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Harrison's Ex'or & als. v. Price's Ex'or & als.
    December Term, 1874,
    Richmond.
    I. Chancery Practice — Entries of Record —- Setting Aside. — An order Is made in a cause, that on the motion of the plaintiffs, and by consent of parties, the cause came on to be heard upon the bill and exhibits, and answer and exhibits, on consideration wliereof the court takes time to consider. In fact a number of deeds and two records had been placed by the clerk among- the paper s, by direction of plaintiffs’ counsel, but had not been endorsed as filed; which were intended to rebut the defense set up in the answer. Before the case was decided, the plaintiffs’ counsel, discovering the error in the order, moved the court to set it aside, that the cause might be brought on on replication to the answer and the evidence. The entry is not an order, but a mere statement, and should be set aside, and the cause be heard upon the pleadings as they were intended to be, and all the evidence.
    2. Sureties — Notice to Creditor to Sue. — 'where one surety in a bond gives notice to the obligee to sue the obligor, the statute does not peremptorily require the obligee, after obtaining judgment, to sue out execution upon it; it only requires him to use due diligence in prosecuting suit “to judgment, and by execution.”
    3. Same — Same—Laches of Creditor. — In such case, where the creditor has not been guilty of laches, but the clerk has refused to issue the execution, on the ground that the stay law forbade it, and the court has sustained him in it, whether the judgment of the court was right or wrong in enforcing the stay law, negligence cannot be imputed to the creditor.
    4. Same — Same—Duty of Creditor — Liability of Surety. —Upon such notice to the creditor by a surety, the creditor is not required to pursue the estate of the principal in equity to impeach alleged fraudulent conveyances, or to subject an equity of the principal to the payment of his debt, or to exhaust his remedies against the principal before he can have satisfaction out of the estate of the surety.
    *s. Same — Same—Statute.—The statute which authorizes a surety to give notice to the obligee to sue, gives the surety a more summary remedy than he had before by bill in equity, but does not change the relation or the contract between creditor and surety. It only holds the creditor responsible, if by reason of his laches or negligence, the equity of the surety against the principal is infringed.
    In August 1869, John W. Cunningham, executor of M. M. Harrison, deceased, and George G. Goodrich, assignee of Pleasant Harrison, who sued for themselves and such other creditors of William B. Price, deceased, as should come in, &c., instituted their suit in equity in the Circuit court of Brunswick county, against John H. Rewis, executor of said Price, and his widow and children, all whom were infants. In their bill they charged that they were judgment creditors of the estate of William B. Price, by judgments recovered against the executor; of which they file copies. That the personal estate will not be sufficient to pay the debts of said Price; but that he left a large real estate. And they pray that the accounts of the executor may be settled, and also accounts of debts, and of the absolute and annual value of the real and personal estate of which said Price died seized; that the court would decree a sale of the real estate if it should be found necessary, and for general relief.
    A guardian ad litem was appointed for the infant defendants, and he put in an answer; and Rewis, the executor, also answered. He says, it is true, the personal assets of his testator are not sufficient to discharge his liabilities. He says further, that the debts alleged to be due from the testator to the plaintiffs were contracted by him as surety, and that the complainants, if entitled to a decree against the estate of his testator therefor, cannot be entitled to such decree until they shall produce to the court satisfactory evidence of the insolvency of his principals.
    *The cause came on to be heard on the 15th of October 1867 upon the bill taken for confessed as to Mrs. Price, the answers of the guardian ad litem and the executor, with replications thereto, when the court made a decree directing the executor to render his account of administration before a commissioner of the court. And the commissioner was directed to take the other accounts, asked for in the bill.
    In February 1868 the plaintiffs filed an amended bill, bringing in the co-obligors of Price in the bonds upon which their judgments were obtained. In their amended bill they state that four of these co-obligors, whom they name, had made assignments of their real and personal estate before complainants had obtained their judgments, and complainants do not expect to realize anything from the deeds; there being many other creditors who are preferred to them: That three of them have filed petitions in' bankruptcy; and that execution for one year’s interest proved wholly unavailing against all the obligors against whom the court would give a judgment on a motion for interest.
    The commissioner made his report, which was excepted to by the plaintiffs, and recommitted by the court. And another report was returned in October 1868; which was also excepted to by the plaintiffs.
    On the 14th of October 1869, the defendant, Rewis, had leave to amend his answer filed in the cause. And on the 12th of October 1870, the following entry was entered on the record:
    “On motion of the defendant, leave is given him to file his answer in this cause, to which the plaintiff replied generally; which answer is as follows:”
    In this answer, the executor admits the plaintiffs recovered judgments against him, as stated in their bills,' in October 1866; but he avers, that said judgments *were rendered on contracts for the payment of money upon which his testator was only bound as surety, after and in pursuance of a written notice from him to plaintiffs, requiring them to sue all the parties to said contracts, solvent and resident in the state, and to prosecute said suits to judgment and by execution; and he avers, that the plaintiffs after recovering their judgments, failed within a reasonable time to stie out execution, either against respondent as executor, although the estate of the said Price was then and is now solvent, or against the co-obligors of the said Price, some of whom it is believed arid charged were then solvent. And he avers and maintains, that the plaintiffs by reason of their laches, and neglect in thus failing diligently to prosecute their demands by execution, as they were required by their contract and the law of the land to do, have forfeited all right to demand of the said Price’s estate, or of his co-sureties, or their estates, the whole or any part of the money due upon said contracts, now at law merged in the judgments aforesaid. .
    The defendant further admits that certain of the co-obligors of his testator have made deeds of assignment for the benefit of their creditors; but he charges that several of said deeds, by reason of large reservations to the grantors, were fraudulent upon their face, null and void, and no obstacle to a levy, had the plaintiffs sued out executions upon their judgments at the time or soon after they were rendered. That if any executions were issued against the co-obligors of said Price for a year’s interest upon the judgments recovei'ed against them, which proved unavailing, the same was issued more than twelve months after the said judgments were obtained. And if any of said co-obligors have been adjudicated bankrupts, which *he admits is the fact, that their petitions in bankruptcy were filed more than twelve months after the rendition of said judgments. And he avers the same facts as to all other creditors of Price who have joined in the suit, except certain whom he named.
    On the 13th of October 1870, the following decree was entered of record:
    On the motion of the plaintiff and others claiming to be creditors of the estate of William B. Price, deceased, who have united with the .plaintiffs in this bill, and by consent of parties, this cause came on this day to be heard upon the papers formerly read, the amended bill with exhibits, taken as confessed as to defendants, naming the co-obligors, the answer of J. H. Bewis, executor, with exhibits, this day filed by leave of the court, and was argued by counsel. On consideration whereof the court wishing further to be advised, takes time to consider.
    On the 21st of April 1871, the following order was entered: ‘ ‘Upon motion of the plaintiffs by counsel, leave is given them to file the petition of G. G. Goodrich and affidavits of E. Turnbull, S. Thrower, G. Dromgoole and W. E. C. Gregory; and thereupon the plaintiffs moved the court to rescind the decree made at the October term 1870; which motion being argued by counsel is overruled by the court for the following reasons
    1st. The said order or decree of October 1870 was entered in open court, in the presence of G. Dromgoole and Eo. Turnbull, two of the counsel marked upon the record as counsel for the plaintiffs; that said order was read aloud in open court at the term it was ordered to be entered, having been submitted to one of the said counsel before it was presented to the court; the deeds and other papers specially referred to. *in the petition of the plaintiffs, were not referred to in the pleadings in the cause nor marked as exhibits, nor even endorsed filed by the clerk; and that some of said papers were sent to the court after the term at which the cause was submitted on the said order.
    2d. Because the cause was set for hearing by the plaintiffs, without an opportunity afforded the defendants to take proof in support of their answer, and because the legal effect of that order is but fair and just in this case.
    The petition referred to in the above order, states that he did not consent that the cause should be heard simply upon the bill and the exhibits therewith filed, and the amended answer and exhibits therewith. The petitioner is informed that a replication was put in, which has been disregarded in bringing on the case, and that important testimony, to wit: a series of deeds executed by the co-obligors of Price, and also the record styled Harrison’s ex’or v. Edmunds, and a copy of a judgment recovered by Harrison’s ex’or v. Edmunds and another at the October Term 1867 of this court, on a motion for interest, and of the execution thereon with the return of “no effects,’’ upon which the plaintiffs relied as testimony in the cause, to show diligence in making the money out of every obligor who could be-reached by execution, has been entirely overlooked or disregarded in bringing on the cause. That this testimony was placed among the papers in the cause previous to the last term, as will appear by the certificate of the clerk. He therefore insists the said interlocutory decree ought to be amended, and made to conform to the pleadings and proofs in the case.
    The clerk of the court certifies that seven deeds from the co-obligors of Price, and the judgment and fi. fa. of Harrison’s ex’or v. Edmunds and Pitchett, on a ^motion for interest, were copied by him and put among- the papers in the cause, by the instructions of the plaintiff’s counsel, before the October Term of the court for 1870. That another deed he names, was put in his hands before the last term of the court, with directions to file the same in the cause; and that before the last term he was instructed by G. Dromgoole, one of the counsel of the plaintiffs, to copy and file in said cause a certain record styled Harrison’s ex’or v. JV. G. Edmunds & als., which had been made out for the court of appeals; and he suggested to Dromgoole the propriety of getting the copy from Major Gregory (one of the counsel) to save the expense of another copy. And Dromgoole states that he, as counsel, placed this record in the bundle of papers previous to the entering of the interlocutory decree.
    It appears from the affidavits filed, that the decree or order was prepared by one of the counsel for the defendant; that none of the counsel for the plaintiffs understood the order as excluding- the papers which had been, as they supposed, filed in the cause, and that Dromg-oole had argued the cause in writing, upon the belief that the evidence was filed, and supposed it was a mere formal order; and he was not aware that the defendant’s counsel were assuming to act for the plaintiffs.
    The cause came on to be heard on the 21st of April 1871, upon the papers formerly read, and upon the amended bill taken for confessed as to the defendants, naming the co-obligors, the answer of the infant defendants by their guardian ad litem, and the answer of John H. Bewis, executor, to the amended bill without replication; and it appearing to the court that William B. Price was surety upon the claims asserted against his estate by Cunningham, executor of Harrison, ^Goodrich, and a number of others named, and the court, being further satisfied that these parties, after receiving notice in writing, &c., did institute their suits and obtain judgments in a reasonable time, but have failed to sue out executions against solvent and resident defendants; the court is of opinion that by reason of this neglect and failure of said creditors to sue out execution as aforesaid, the estate of the said William B. Price is wholly exonerated from their demands. The bill of the plaintiffs, and of the other named creditors, who had become parties thereto, was therefore dismissed with costs. And as to the other creditors the cause was remanded to rules. Prom this decree Harrison’s ex’or and Goodrich applied to a judge of this court for an appeal; which was allowed.
    Jones & Bouldin, for the appellants.
    Page & Maury, for the appellees.
    
      
      Rights of Sureties. — The principal case Is cited in Coffman v. Moore, 29 Graft. 248; Price v. Harrison, 31 Gratt. 114; Yuille v. Wimbish, 77 Va. 311.
    
   ANDPRSON, J.

delivered the opinion of the court.

The court is of opinion that the entry made in this cause on the 13th of October 1870 ought, upon the petition which was presented by the plaintiffs, with the exhibits and. affidavits accompanying the same, to have been set aside; and that the case ought to have been brought on to be heard upon the pleadings as they were in fact, and all the proofs in the cause. The said entry is not a decree. It is merely a statement that on the motion of the plaintiffs, and by consent of the parties, the case was submitted that day upon the pleadings and papers described. It is evident from the affidavits and other evidence filed that this statement was not true. And no decree had been made upon that alleged submission, until after the said ^motion was made by the plaintiffs and overruled at a subsequent term of the court. The whole matter was in the breast of the court, and the fact was palpable that the said entry was erroneous, and it ought to have been rescinded. It was clearly error in the court to proceed to hear and determine the cause upon a misstatement of the pleadings, and upon only a part of the evidence in the cause, excluding from its view and consideration important documentary evidence, which had been filed with the papers in the cause, by order of plaintiffs’ counsel, pi-ior to the making of said entry on the 13th of October 1870, and which was brought prominently to the notice of the court before the final hearing and decision, and was relied upon by the counsel in their note of argument before the papers were placed in the hands of the court.

The court is also of opinion that as between the obligors and the oblig'ee, the obligors are all principals. But as between the obligors themselves, it is competent for any of them to show that he executed the bond for a co-obligor, who was the principal debtor. And that the statute which discharges the surety from the obligation of the contract, if the creditor fails to sue in a reasonable time after notice, and to prosecute his suit with due diligence, being designed only to give effect to the equities of the surety against his principal, it is competent for an obligor, in order to avail himself of his rights under this statute, to show, that as between him and his co-obligor, he executed the bond as his surety.

The court is also of opinion that the act' of assembly, chap. 144, | 5, p. 993, Code of 1873, which is the same in the Codes of 1849 and 1860, does not peremptorily require the creditor to sue out an execution *upon the judgment. It only requires him to use due diligence in prosecuting suit “to judgment, and by execution,” that is, in executing the judgment. In this case it is admitted that the plaintiffs brought suits and obtained judgments in a reasonable time; but it is alleged that they were guilty of gross laches in failing to sue out execution. They did not sue out executions. But their failure to do so is not attributable to negligence or laches on their part. It is shown by the record that they demanded of the clerk to issue fi. fas. upon the judgments, soon after they were rendered. But the clerk refused to issue them upon the ground that he was prohibited by the act of assembly of March 2d, 1866, commonly known as the staylaw. They then sought the interposition of the court, to compel its officer to issue the executions. But the court refused and sustained the action of its clerk. The appellants were not responsible for the stay law; or for the action of the courts or its officers, in recognizing its obligation. It was not in their power to issue the executions. They did all that they could do to cause the executions to be issued by the officers of the law, who only could issue them. Baches or negligence cannot be imputed to them for not prosecuting the suit by execution, whether the judgment of the court was right or wrong in enforcing the staylaw. As well might it be said, if the court by erroneous rulings had delayed the plaintiffs in recovering judgments, that they had not prosecuted their suit to judgment with due diligence.

The court is also of opinion, that the act of assembly requiring a creditor to sue, and to prosecute his suit with due diligence to judgment, and by execution, upon receiving notice from the surety to sue, does not require the creditor to pursue the principals’ estate in '^equity, to impeach alleged fraudulent conveyances, or to subject an equity of the principal to the payment of his debt, or, in a word, to exhaust his remedies against the principal before he can have satisfaction out of the estate of the surety. Such a requirement would be repugnant to the rights of the creditor under his contract, and inconsistent with the relation between him and the surety; who is equally bound to the creditor with the principal for the payment of the debt. His obligation is not conditional but absolute. The creditor may sue him alone, if the obligation is several, or joint and several, and may levy execution upon the property of the surety, instead of the principal at his pleasure, and the surety has no equity against the creditor that would entitle him to a stay of execution. And there is nothing in the statute which changes this relation or the rights and obligations of the parties under it. The statute creates no equities in favor of the surety against the creditor, but proceeds on the ground of an equity in the suret}' against his principal, and is designed to make it availing; and holds the creditor responsible, only for its infringement. (Humphrey v. Hitt, 6 Gratt. 509.) Independently of the statute, the surety might enforce his equity against the principal. If he was apprehensive of loss by the delay and forbearance of the creditor he might file his bill in chancer}' to compel his principal to pay the debt. The statute gives him a more summary remedy, but does not change the relation or the contract between the creditor and surety. It only holds the former responsible, if by reason of his laches or negligence the sureties’ equity against his principal is infringed.

We have seen that the creditor has not incurred that responsibility in this case. But as all the parties *are before the court, the appellee, if his testator is shown to have executed the bond as surety, ought to have a decree over against his principal, upon payment of the debt, if he desires it, subjecting any estate the principal may have to refund what he pays, and also a decree against his co-sureties for contribution.

But as the decree of the Circuit court undertook to decide the cause, without considering the plaintiffs’ replication to the •defendants’ answer, and without looking into important evidence which had been filed with the papers in the cause, the entry ■of October 13th, 187Ó, and the decree made pursuant thereto, should be set aside, and the cause remanded to the Circuit court, to have the same status in that court that it had before said entry was made, and to be brought on to be heard there upon the replication, the depositions, exhibits, and all the other evidence in the cause. And the plaintiffs’ exceptions to the commissioner’s report and all other questions decided by said decree, which have not been reviewed and decided in this opinion, are, by the setting aside of said decree in toto, left open and undecided here, to be passed on by the Circuit court when the whole case is before it.

The court is of opinion therefore to reverse the decree of the Circuit court with costs, and to remand the cause for further proceedings therein in conformity with this opinion.

The decree is as follows:

The court is of opinion that the Circuit court erred in overruling the motion of appellants to rescind the entry made on the 13th of October 1870; and in not bringing on the cause to be heard upon the true state of the pleadings, and upon all the evidence in the cause; and in holding that William B. Price’s estate *was wholly exonerated from the demands of the plaintiffs, the appellants, and the creditors who united in the suit with them, who had received notice to sue, by reason of the failure of the plaintiffs to sue out executions upon their judgments, and in dismissing the plaintiff’s bill as to 'the said Price’s executor and devisees, &c., with costs. It,is therefore ordered and decreed that the said decree of the Circuit court of Brunswick county be reversed and annulled, and that the appellees pay to the appellants their costs expended in - the prosecution of their appeal here; and the cause is remanded to the said Circuit court for further proceedings to be had therein in conformity with the principles herein declared, and with the opinion of this court filed with the record.’

Decree reversed.