Case ID: va_73/html/0095-01.html
Source: Caselaw Access Project
Author: {"author": "STAPLES, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Gentry v. Allen & als.
    September Term, 1879
    Staunton.
    A having- recovered a judgment against N, M and J, upon a bond on which they were sureties of O, deceased, flies his bill against them to subject the lands of N to pay the judgment; and he makes G, who had a deed of trust on the land, a party defendant — HErm;
    1. Judgments — Right to Qqestion. — G cannot question the validity of the judgment against N, except upon grounds that would avoid it between A and N, or on the ground that there was fraud and collusion between A and N in procuring' the judgment.
    2. Decrees — Co-Sureties—Contribution.—It is error to decree against N’s land alone for the whole amount of the judgment, until an enquiry had been made as to whether there were lands held by M and J, which might be subjected to satisfy their portion of the judgment.
    
      3. Same — Same—Same.—The rule stated in Morton v. Bond, 28 Gratt. 815, should be followed, viz: The court should order a sale of the lands of each of the sureties, or so much thereof as may be necessary to pay his proportionate part of the said judgment; and if either should make default in the payment of his part, and his lands when sold should prove insufficient to pay such part, the land of the others should be subjected proportionately for the part unpaid;' and so on proportionately, upon the further default of any party, until the lands of all have been sold, if the sale of all be necessary for the complete satisfaction of the jndgment.
    This was a creditor’s suit in the circuit court of Rockingham *county brought by William Allen against Samuel C. Naylor, Wm. S. Miller, S. B. Jennings, H. B. C. Gentry and the assignee in bankruptcy of Naylor, to subject the lands of Naylor to satisfy a judgment for $483.34, with interest and costs, which the plaintiff had recovered against said Naylor, Miller and Jennings upon a bond in which they were the sureties of Joseph H. Conrad, deceased. The judgment was recovered in August, 1866, and was docketed in November of that year.
    In February, 1871, Naylor conveyed the two tracts of land sought to be subjected to satisfy the said judgment, in trust, to secure a debt of $2,850, then held by H. B. C. Gentry.
    In January, 1875, the bill was taken for confessed as to all the defendants, and a commissioner was directed to ascertain and report the liens on the land of the defendant Naylor.
    After this reference Gentry and Naylor filed their separate answers. Gentry, whilst he admits that the judgment of the plaintiff was rendered, does not admit its correctness or validity as against Naylor; but so far as he, Gentry, is informed and believes, Naylor has a good defence in equity to said judgment, of which he proposes to avail himself. And he insists that the plaintiff is not entitled to have more than one-third of his debt proved before the commissioner against this real estate of Naylor; the other sureties, Jennings and Miller, or their real estate, being bound for the other two-thirds, and being good for it.
    Naylor, in his answer, averred that the bond in which the plaintiff’s judgment was recovered was not his deed. That he could not write, and refused to make his mark to the bond unless certain other parties signed the same, viz: T. K. Miller and Jacob Bear; and they did not sign the writing. He also avers that he had no knowledge of the institution of the suit in which the judgment was obtained *until long after it was rendered. He intended to resist any action upon it, and had notified the plaintiff that he was not bound for the debt, and plaintiff knew that he intended to resist it. He insists that there are assets of Conrad’s estate which may be liable for the debt; and that Miller and Jennings are equally liable for said judgment, if it be enforceable.
    A number of witnesses were examined in relation to the execution of the bond, and their testimony was conflicting. This court was of opinion that the averments in Naylor’s answer on that subject were not sustained by the proofs.
    In February, 1876, the commissioner made his report. He stated the judgment of the plaintiff, after crediting it with certain payments made by Wm. S. Miller, at $556.64, with interest on the principal of the judgment from January 20th, 1876. And this judgment is the only lien which the commissioner reports. To this report Gentry filed three exceptions: The first two were as to the validity of the judgment upon the grounds stated in the answers; and that Gentry, or his trustee, was a purchaser' for value without notice. The third was that these lands of Naylor were liable for but one-third of the judgment; the lands of Miller and Jennings being liable for the other two-thirds.
    The cause came on to be heard on the 11th of March, 1876, when the court overruled the exceptions, decreed against Naylor for the sum of $556.64, with legal interest on $483.34 from the 20th of January, 1876, held that this judgment lien was superior to that of the trust deed of Gentry, and decreed that unless the defendants, &c.. should pay the same within forty-five days, a commissioner named should sell the said lands, or so much as should be necessary to satisfy this decree, in the mode and on terms directed in the decree. Gentry thereupon applied to a judge of this court for an appeal; which was allowed.
    *John E. Roller, for the appellant.
    Wm. B. Compton, for the appellee.
    
      
       Co-sureties. — In Stovall v. Border Grange Bank, 78 Va. 196, Lacy, J., in delivering the opinion of tbe court said; "This case (Horton et als. v. Bond, 28 Gratt. 815) was cited approvingly in Gentry v. Allen, 32 Gratt. 254, and tbe court in that case said; The decree of tbe circuit court is erroneous in decreeing against tbe property of only one of the sureties. All three of these were made parties to tbe bill, and no satisfactory reason is given for the failure to decree against each his due proportion of tbe appellee’s judgment. And so say we in this case.” See also Hall v. James et als., 75 Va. 111; National Bank v. Bates, 20 W. Va. 222; Bank v. Parsons, 42 W. Va. 154.
    
   STAPLES, J.

This is a controversy between the appellee, a judgment creditor, and the appellant, a trust creditor of the same common debtor. The appellee’s judgment is sought to be impeached upon the ground that the bond upon which it is founded was signed by the debtor merely as surety, upon a condition which was never complied with; and this was well known to the appellee at the time he received the bond. If this be a valid defence, it ought to have been made in the action at law upon the bond. The evidence shows that Naylor, the debtor, was not only served with process, but he was apprized of the pendency oí the action, and had the fullest opportunity of defending it. No rule of law is better settled than that a court of equity will not relieve against a judgment on the ground of its being contrary to equity unless the defendant was ignorant of the ground of defence, or was prevented from availing himself of it by fraud or accident, unmixed with fault or negligence on his part. Richmond Enq. Co. v. Robinson et als., 24 Gratt. 548.

The learned counsel for the appellant does not seriously maintain that the judgment debtor can be heard in a court of equity to assail the judgment upon any of the grounds suggested; but he qlaims that the appellant, who is a creditor having a lien on the same property, stands upon higher ground, and that he ought not to be precluded by the neglect of his debtor from showing that the appellee’s judgment was unjustly recovered.

The appellant, in seeking to subject the property of his debtor to the payment of the amount due him, must of course do so in subordination to all valid liens thereon created by act of the debtor himself, or acquired by operation *of law. In the absence of fraud or collusion, a judgment for money conclusively establishes the relation of debtor and creditor; not only as respects the parties themselves, but all other persons. It is not meant to assert there may not be cases in which the act of the debtor in confessing judgment, or in permitting it to go by default, for what he plainly does not owe, may not amount to such gross negligence as would be of itself conclusive of fraud, and entitle a creditor to relief against the judgment. The rule is, however, settled that unless there is good reason to impute fraud or collusion, a judgment is conclusive of the existence and amount of the debt, and cannot be impeached collaterally either by parties or strangers. Bigelow on Estoppel, 81-2; Freeman on Judgments, §§ 163-512; Christmas v. Russell, 5 Wall. U. S. R. 290; Mattingby v. Nye, 8 Wall. U. S. R. 370; Stovall v. Banks, 10 Wall. U. S. R. 583; Johnson v. Gill, 27 Gratt. 587, 596-7.

Applying these principles to the case before us, there is no sort of difficulty as to the result.

There is no evidence in the record even tending to convict the appellee of fraud or collusion in obtaining the judgment and the bond upon which it is founded. No such charge is set forth in the pleadings. The testimony offered to show that the bond was delivered as an escrow is met by opposing testimony equally satisfactory. It appears also that Naylor, the debtor, instructed the appellee to institute suit on the bond; that suit was accordingly brought, and process duly served upon all the sureties; that Naylor, after the judgment, actually paid a part of the interest and costs without objection. The idea cannot for a moment be entertained that upon such a state of facts a court of equity can interpose and give final relief against a judgment, or even award a new trial of the action at law. If it be conceded that a judgment may be invalidated at the instance of a creditor upon the ground *that no debt is due, the testimony ought to be of the most satisfactory character and decisive of the result upon a future trial. Nothing of the kind appears in the present case.

Upon the merits, therefore, the decree of the circuit court is plainly right. It is, however, erroneous in decreeing against the property of only one of the sureties. All three of these were made parties to the bill, and no satisfactory reason is given for the failure to decree against each his due proportion of the appellee’s judgment. The learned counsel for the appellee says this point was not made in the court below. This is a mistake of the learned counsel. The assertion was made both in the answer of the appellant, and in the exception to the commissioner’s report; and on both occasions it was insisted that the other sureties had property, and ought to be proceeded against for their share of the debt. But even though the objection had not been formally made, it was the appellee’s duty to take his decree against all the sureties, or give some satisfactory reason for his omission. It is claimed that Miller, one of the sureties, has already paid his portion, and that Jennings, the 'other surety, is insolvent. In the first place, it is not clearly shown that he is insolvent; he may have had real estate upon which the judgment still constitutes a lien. But if Jennings is insolvent, as asserted, then it is apparent that Miller has not paid all that he is liable to pay. Instead of one-third, his portion would be one-half the judgment; and it is not pretended he has paid that amount. The principles decided by this court in Horton et als. v. Bond, 28 Gratt. 815, 826, and in all that class of cases, leave no room for doubt as to the proper course to be pursued here.

In that case this court held (Judge Burks delivering the opinion), that the circuit court ought to have ordered a sale of the lands of each of the sureties, or so much thereof as might be necessary to pay his proportionate *part of the judgment; and if either should make default in the payment of his part, and his lands when sold should prove insufficient to pay such part, the land of the others would be subjected proportionately for the part unpaid, and so on proportionately, upon further default of any party, until the lands of all have been sold, if the sale of all be necessary for the satisfaction of said judgment.

The principle being that all the sureties being before the court, the entire burden should not be thrown upon one of them; but each should be required to bear his just share of the debt. If one or more should be insolvent the others must contribute proportionately.

So much of the decree of the circuit court as is in conflict with the said opinion is therefore reversed; and the cause remanded to that court, to be proceeded with in conformity with the views herein expressed.

The decree was as follows:

This day came again counsel, and the court, having maturely considered the transcript of the record of the decree aforesaid and the arguments of counsel, is of opinion, for the reasons stated in writing and filed with the record, that there is no error in the decree of the circuit court refusing to set aside and vacate the judgment recovered by the appellee, Allen, against 'Samuel C. Naylor, S. B. Jennings and William S. Miller, sureties of J. H. Conrad, at the August term of the county court of Rockingham, 1866. The court is further of opinion that the said circuit court did err in subjecting the property of said Samuel C. Naylor to the satisfaction of the appellee’s judgment without first ascertaining how much of said judgment is properly charged thereon, and without also ascertaining whether there is any estate of . the other sureties, S. B. Jennings and William S. Miller, subject to the lien of said judgment and properly chargeable therewith; *the principle being that the upon one of the sureties, but each should be required to bear his just share of the same.

It so much of said decree as is in conflict with this decree be reversed and annulled, and in all other respects affirmed, and that the appellee, William Allen, do pay to the appellant his costs by him expended in the prosecution of his appeal and supersedeas here. It is further decreed and ordered that the cause be remanded to the said circuit court to be there proceeded with in conformity with the opinion of this court in Horton and als. v. Bond. 28 Gratt. 815, 826.

Which is ordered to be certified to said circuit court of Rockingham county.

Decree reversed.