Case ID: sc-eq_9/html/0077-01.html
Source: Caselaw Access Project
Author: {"author": "Harper, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wilks Caston vs. E. K. Dunlap.
    
    Mero delay to enforce the demand, and indulgence by a creditor to a principal debtor, without any binding alteration of the contract, will not discharge the surety: and this notwithstanding a positive request from the surety that he will enforce the demand against the principal debtor.
    
      Before DeSaussuke, Ch., at Lancaster, July, 1830.
    The bill stated that Jason Hicklin, being indebted to E. K. Dunlap, in the sum of .$1006 72, on the purchase of a house and lot in Lancaster, gave his note of hand for that amount, with the complainant as his surety thereto. After the note fell due — to wit, in the autumn of 1824 — she brought suit thereon against Jason Hicklin and the complainant, Wilks Caston, and obtained judgment against both, and lodged her execution in the sheriff’s office, 14th March, 1825, and has renewed the same, and sold, under the said execution, real estate of the said Jason Hicklin, to more than twelve hundred dollars, and that a renewed execution is in the hands of the sheriff to be levied on the property of the complainant, the surety on said note. It appeared that Jason Hicklin departed this life in February, 1825, leaving considerable real and personal estate; that A, Perry administered on his estate, and that the judgment had not been renewed against him ; that the said administrator, on the 6th January, 1826, sold the estate of Jason Hicklin. The bill charged that the brothers of the defendant attended to the sale and the collection of the money on the execution. The bill further charged, that the complainant told them and the sheriff, at the time of the sale of the property by the administrator, that if the execution was not satisfied, then they should levy on the slaves of Hicklin’s estate, as he wished to be discharged from any liability on the judgment and execution. Notwithstanding which, the brothers of the said Miss Dunlap, acting as her agent since her removal to Georgia, refused to enforce the execution, and indulged the administrator of the said Jason Hicklin with farther time for the payment of the debt, and it was attempted to enforce the said judgment and execution against the complainant, the surety, without even crediting the sales actually made of the estate of Hicklin. That the whole of the estate of Hicklin had been sold, and had not been applied, as it should have been, to satisfy said debt, nor accounted for, or it might appear that there were funds of Hick-lin’s estate sufficient to pay the balance of the debt. The bill prayed for relief and an injunction.
    The defendant admitted that the complainant joined with Jason Hicklin as his surety, on the note in question, and that suit was brought thereon, and judgment obtained, and execution lodged, and that the sheriff had made on the said execution upwards of $1200 00, out of the sale of Hicklin’s estate, of which, however, the sheriff had paid five hundred dollars on older executions in his hands, as appeared by returns on the executions; that the balance was paid to her execution.
    Defendant admitted that Hicklin was dead, leaving a large estate, and that Perry had administered on his estate. The defendant did not know if any sci. fa. to revive the judgment against Hicklin’s estate had been issued ; nor was it necessary, as her right to pursue the complainant was unimpaired; and the sheriff might have attempted to levy on the estate and effects of the complainant for the balance of the debt. The defendant admitted that Perry, the administrator of Hicklin, sold the personal estate of Hicklin; but she denied that she was present at the sale, (having removed to Georgia in December, 1824,) or that she had ever been in this State since, except in February; 1826. She denied that she had any agent here, authorized to give any direction relating to the case, but such as were directed by her brother, with whom she resided in Georgia. She denied that she got any notice from the complainant, either before the sale, at the sale, or at any other time, all the business having been transacted by her brother, with whom she resided in Georgia. And she was satisfied that her brother received no notice, as he came with her to this State after the sale; and that she believed that her brothers in South-Carolina received no notice. That her brothers here had no authority to do anything in the matter ; and as to the sheriff refusing to levy on Hicklin’s personal property she knew nothing ; she had no authorized agent other than her attorney in Court, and asserted that she had been • constantly desirous to get her money, and trying to do so, without effect. The defendant did not know whether any credit had been put upon her execution, as renewed; but she admitted that she had received $709 75 at different times, which she believed the complainant knew was entered on the sheriff’s books, and if omitted on the fi. fa., the omission could have been corrected in the Court of Law* The defendant admitted that she did not sue on the note for some time' after it became due, as the principal debtor was considered perfectly safe, and she denied that the complainant ever required her to do so, either directly or indirectly. She denied that, since the judgment, she had extended the time of payment, either to Hicklin or his administrator, but had been always anxious to have her money collected, and she thought there must have been some improper conduct'between the complainant, Perry the administrator, and the sheriff, or she would have received her money before; and defendant was informed, and believed, that the complainant used his influence with her friends in Lancaster to get indulgence, under a promise to pay in a short time. Defendant did not know if Hicklin’s estate was insolvent, but she believed it was in hands which knew how to manage it without payment of the debt, and she insisted that complainant should be compelled to take upon himself the trouble of getting the money from the administrator of Hicklin.
    DeSaussuke, Ch. The complainant claims relief, on the ground that indulgence was given to the principal debtor, to the prejudice of the surety. The defendant contended that Miss Dunlap, the creditor, never gave any indulgence to the principal debtor, and that her brothers, James and Samuel Dunlap, were not her authorized agents, and that if they were, they, never gave indulgence to the prejudice of the surety, and that the estate of Jason Hicklin has not been shown to be insolvent, and complainant should have recourse to that estate for indemnity.
    'It appears, by the evidence, that Miss Dunlap was not in this State, and never did personally give indulgence to the debtor, to the prejudice of the surety. It does hot appear that there was any written authority given by her to her brother, to act for her in respect to this debt. ' But it does appear that, on her leaving this State, she directed her two brothers, who remained, to see to her business and collect her money, and they did so, and remitted the money which they had received. There certainly seems not to have been any regular authority, even to collect the money, much less to give indulgence to the debtor. Yet the brothers acted as her agents, pressed the execution on her behalf, received the money from the sheriff, and remitted it, and their sister received it, and thus recognized their acts, as done by her agents.
    The evidence, as to the indulgence given by the two brothers of Miss Dunlap, is somewhat at variance; but the weight of the affirmative evidence, derived from Col. Sims, the sheriff, and Mr. Perry, and in part acknowledged by James Dunlap, does establish that indulgence was given by these brothers, acting as agents of Miss Dunlap, which has eventuated to the prejudice of the surety, or may probably do^so. The indulgence was to Perry, the administrator of Hicklin, and afterwards to Caston, the surety. Of the last the surety has no grounds of complaint. The indulgence to the estate of Hicklin prevented the sale of the slaves of that estate, under the execution of Miss Dunlap. This indulgence was made contrary to the express request of Caston, the surety; and the administrator having since sold the slaves, and the money not being forthcoming, the surety is put in jeopardy by the act of these agents of the creditor. What effect this should have on his claim to be relieved remains now to be considered. This is a very mixed case. There is some difficulty as to the authority given by Miss Dunlap to her brothers, and some as to their acts, and her recognition of them. But, taking the whole of it, there does not appear to be such a case clearly made out, as falls within the well settled doctrine, that a creditor agreeing to enlarge the time of payment by his principal debtor, releases the surety. Nevertheless, the evidence does disclose that the brothers of Miss Dunlap, acting as her agents, and their agency acknowledged after the acts done, did expressly indulge the administrator of the estate of the principal debtor, and postpone the sale of the slaves, when the enforcement of the execution on a small part of the slaves would have secured the payment of the balance of the debt, and that the administrator, availing himself of the opportunity of this indulgence, sold the slaves, and the funds are not forthcoming to protect the surety. Now, the object of the equitable rule is to protect sureties against ill-judged indulgences to debtors, at their risk, and the circumstances of this case come within the spirit of the rule: for the indulgence was against the wishes of the surety, and has put in jeopardy the payment of the debt, out of the funds of the principal debtor. I do not, however, feel at liberty to say that the surety is absolutely discharged. But I do think that the act of. the agent of the creditor, in permitting the property of the principal debtor (which was the proper primary fund for the payment of the debt) to be disposed of, was such as entitles the surety to some protection, so that he should not, at any rate, be called upon to pay the debt, till the creditor should diligently pursue the fund put in jeopardy by that act. Without, therefore, giving any opinion as to the ultimate liability of the surety, until that be necessary, and the injury and its causes ascertained, I will make a provisional order.
    It is ordered and decreed, that credit be given on the surety debt of the complainant, Caston, for the amount actually paid to Miss Dunlap, the defendant, or her brothers, who received the same as her agents; also, that the injunction be continued for the balance until the further order of the Court, and that, in the mean time, she do pursue her remedy against the administrator on the estate of Jason Hicklin, generally, but more especially as to the proceeds of the sale oNthe slaves of that estate, made by the administrator, under the indulgence and with the approbation of the creditor, through her agent.
    The defendant appealed on the ground ; That, from all the facts and circumstances, as they appear in the case, the bill ought to have been dismissed, with costs.
    Mills, for appellant.
    Williams, contra.
   The opinion of the Court was delivered by

Harper, J.

The doctrine of equity seems to be very well settled, that mere indulgence given by a creditor to the principal debtor, mere delay to collect his debt, even if there has been negligence, does not discharge the surety. The doctrine has been recognized by this Court in the case of Hampton vs. Levy, 1 M’C. Ch. 107. The subject was very fully considered by Chancellor Kent, in the case of King vs. Baldwin, 2 Johns. Ch. 554. He declared the established doctrine to be, that mere delay in calling on the principal, will not discharge the surety, provided that delay be unaccompanied with any settled or binding contract for that purpose. The English cases on which the doctrine has been settled, are all of this sort — there has been some stipulation, putting it out of the creditor’s power to proceed against the principal debtor. Nesbit vs. Smith, 2 Bro. C. C. 579 ; Rees vs. Berrington, 2 Ves. jun. 540 ; Boulbee vs. Stubbs, 18 Ves. 20. The case of the Trent Navigation Company vs. Harley, 10, East, 34, was one in which there had been great neglect and delay, and yet the surety was not held to be discharged. The principle seems to be, that the creditor has no right to make for the surety, without his privity, a different contract from that which he entered into. It is an equity of the surety to compel the creditor to proceed at law, and enforce his demand against the principal. But if the creditor has put it out of his power to proceed, the surety is deprived of the benefit of this equity. Perhaps it is more correct to say, as expressed by Sir Vm. Grant, in Antobrus vs. Davidson, 3 Meriv., 578, that a surety may come into equity to compel the principal to relieve him of his liability, by paying off the debt. So in Kanelaugh vs. Hayes, 1 Ver. 190, it is said, although the surety is not troubled nor molested for the debt, yet at any time after the money becomes payable, the Court will decree the principal to discharge the debt, it being unreasonable that a man should always have such a cloud hanging over him. The Court, however, would not compel the principal to pay to a creditor who had stipulated by a binding contract, for further forbearance. In the present case, supposing the brothers of defendant in this State, to have been her legally authorized agents, it is not pretended that they agreed to indulge the administrator of Hicklin by any binding contract, which would have put it out of defendant’s power at any time to enforce her execution.

Another rule was contended for, viz: that if the surety applies to the creditor, and makes a positive request that he will enforce his demand against the principal, and he neglect to do so, and gives indulgence, the surety will be discharged. The only authorities I have found to this effect, are the cases of Pain vs. Packard, 13 Johns. R. 174, and King vs. Baldwin, 17 Johns. R. 384. Chancellor Kent examines the case of Pain vs. Packard, in King vs. Baldwin, 2 Johns. Ch., 554, and dissents from the doctrines established by it; and though his opinion was afterwards overruled upon appeal, yet I cannot but think it better supported by principle and authority. Contrary decisions are said to have been made in Dehuff vs. Turbett, 3 Yates, 157, and in Commonwealth vs. Wolbert, 6 Binn. 292. The English decisions go upon some alteration of the contract made between the creditor and principal, or some positive act injurious to the surety. It is said by Lord Eldon, in Wright vs. Simpson, 6 Ves., 734, that the surety is a guarantor, and it is his business to see whether the principal pays, and not that of the creditor. There certainly is no rule that a creditor shall exhaust his remedy against the principal, before proceeding against the surety: yet this would seem almost a necessary consequence of determining that he was bound at any time to proceed against the principal at the surety’s request. The truth is, that, with respect to the creditor, both are principals: he has the option to proceed against either. There is no difference between the rules of law and equity in this respect, only the creditor must not alter the terms of the contract, or do any act which may operate-a fraud on the surety. Such would be the releasing of a mortgage which he had taken of the principal debtor, to the benefit of which, the surety would be entitled, in the event of his being compelled to pay off the debt. In this case, the defendant might have enforced her execution against the complainant alone, refusing altogether to proceed against the estate of Hicldin; how then can it be said that she was bound to proceed against the estate of Hicklin, at his request? If complainant had paid off the judgment, he would have been entitled to the control of it for the purpose of reimbursing himself.

With respect to the authority of the brothers of defendant in this State, to control the execution, or give indulgence, there is no evidence that any direct authority was given for such purpose. The defendant denies it in her answer, and one of the brothers in his testimony. I suppose, that in consequence of the nearness of their relationship, they took upon themselves to. interfere as they supposed might be to her advantage; but this would not bind her, if in fact she gave no authority. The Chancellor, in his decree, puts it upon her recognition of their acts, by receiving the money they remitted her; but I would suggest, with deference, that this could hardly amount to the recognition of any authority in them. I suppose she would have received the money through whatever hands transmitted. But on the principle of law, we are satisfied that the motion must be granted, and the Bill dismissed.

Bill dismissed.