Case ID: stew_3/html/0009-01.html
Source: Caselaw Access Project
Author: {"author": "By JUDGE CRENSHAW.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Herbert & Kyle v. Hobbs & Fennell, Administrators.
    1. Where a surety lias given verbal’notice to the creditor to sue the principal, to entitle him to a discharge, he must show, that by neglecting to sue, an injury has been sustained by him.
    2. If such notice and injury be shown, it is a good defence both atlaw and in equity. The statute in this respect is merely cumulative.
    3. But without proof of the injury, it is no defence in either court.
    4. And if such defence be omitted in a suit at law, it cannot be afterwards-asserted in chancery, it is waived.
    
      6. A bill in chancery may be dismissed at the final hearing for want of equity, though there be no demurrer, and though the answer does not insist on the want of equity by way of demurrer under the statute.
    This was a suit in Chancery, commenced in October, 1827, by N. Herbert and E. G. Kyle, copartners, against John Hobbs, administrator, and Elizabeth H. Fennell, ad-ministratrix of James Fennell, deceased, in the Circuit Court of Madison county. The complainants charge in their bill, that they became securities to a note made in April 3820 by L. Robinson and payable to the defendants in De-i cember, for @1516 57, on which partial payments had" been made; that Robinson died, and in 1824, the complainants feeling uneasy, verbally requested Hobbs to bring suit on ^ n°te *mme(3iately against Patton, who was the administrator of Robinson, as they wished to be relieved from. their responsibility; that Hobbs replied that Patton had agreed to pay the debt sooner than it could be obtained by suit; and charge that he did not comply with their request;that in September 1826, the defendants brought separate suits on said note, at law, one against Robinson’s administrator, and the other against the complainants, and that on the 11th May, 1827, judgment was rendered against the complainants for @1262 64; they charge that they did not know that a notice in writing was requisite, and took it for granted from the answer of Hobbs, that the defendants had made an agreement with Patton, and would not look to them; and they took no further steps; that they never consented to any agreement for delay. They admit that Robinson’s administrator has paid @893 99 on the judgment, but charge that the remainder is yet due, and that the administrator now refuses to pay any more, and has reported the estate as being conditionally insolvent; they insist that by reason of the delay, they are about to be injured by the collection of the balance of the judgment; ■ that they could not defend at law; and therefore they pray that the defendants be perpetually enjoined from enforcing the judgment at law against them.
    The defendants by their answer deny that they ever made any agreement with Patton by which they deprived themselves of the right to sue him; and they insist that no injury has been sustained by the complainants, because the estate of Robinson was then as solvent as it was at the time of his death; and if insolvent then it was so from the first; and that the defendants made no defence at law, but suffered judgment by default.
    Lewis, a witness, was examined by the complainants to establish the fact of notice to sue; he also proved that Hobbs stated that the reason he had not sued was, that Patton had told him that he would pay it as soon as he could get it by law.
    Patton, the administrator, examined by the defendants-, deposed, that in the fall of 1822 he qualified as administrator; that this claim was the second or third one presented .to him for payment; that in 1823, one of the defendants told him he should have to bring suit on the note if he did not pay it; and that he replied that it would be entirely necessary, as the money would be got as soon without suit; that at that time he considered the estate as fully solvent; that after this, a large claim was presented, which, if successful, would make the estate insolvent; that then he stopped payments, and returned the estate as being contingently insolvent; that the suit on the large claim was yet undetermined. He said that if the note had been sued on,in Robinson’s lifetime, it would probably have been paid; and possibly, if sued against him as early as was possible, but this was doubtful; that.the property of the estate had diminished in value by the fall of prices. He stated however that no agreement was ever made which destroyed or suspend-' ed the right of the defendants to sue him, and that the eá^ late was as solvent as when Robinson died.
    The cause was tried at October term, 1828, before Judge Perry, who decreed for the defendants, from which the complainants appealed to 'this Court.
    Hutchison, for the appellants.
    When a creditor is requested by a surety to sue the principal, he must do so immediately. It is an absolute right, at law, and in equity. To be available as a defence at law, the notice must be in writing; but independently of the statute, the defence is of equitable jurisdiction. No objection however can be taken for want of equitable jurisdiction, the defendants not demurred, but have answered, and have not prayed the benefit of a demurrer in their answer, as the statute provides.  It is then too late to make this objection. 
    
    BRANDON, contra.
    A mere delay to sue in this case is not sufficient to discharge the sureties; there was no ageement to extend the time; and unless there be such agreement, actual injury must be proved; and here there is none in fact. The statute is only cumulative; the defence insisted on, if available, was good to the action at law, and having been waived there, cannot now be insisted on.  No discovery is prayed, but such proof is relied on as could be produced at law; there is nothing even which would have given Chancery jurisdiction in the first instance.
    Hopkins, on the same side.
    To sustain such a defence where verbal notice is relied on, the loss sustained in consequence o 1 the delay must-be proved; else there can be no defence, either at law or in equity. There is an entire in this. No request to sue was made in the lifetime of Robinscm, and it is not shewn when his estate was reported insolvent; nor that there was time enough for a recovery, before it was so reported, and after the notice.' Accordüig to the evidence, the estate was as solvent at one time as another, though it cannot be known until the result of the large claim is ascertained, whether it is or ever was solvent. But we insist on the want of jurisdiction; it is immaterial if the an~ver claim it or not; if the bill does not give jurisdiction, the answer cannot; even consent cannot give jurisdiction. The answer need not claim the benefit of a demurrer to entitle the defendant to objee-ti~s to the bill; the effect of the statute is to give to the answer the effect of a demurrer. The same objection wa~ made in this Court in the case of Ellis vs. Bibb, and overruled. The defence should have been urged to the suit at law; the question is well settled that the Court which first obtains jurisdiction, when it is concurrent, takes it conclusively.
    
    HuTonIsoN, in conclusion,
    An injury is established in this~c~se; the property has declined in value, and the estate is now declared insolvent. The doctrine in Cha~n-cery is, that a delay to sue discharges, and it does not re quire injury to be proved; a failure to comply with the re quest is sufficient. Chancery will protect securities witF particular care. It is contended by the appellees thai Chancery has no jurisdiction in such cases, and if it has~ it is now waived by the omission to defend at law in thie case. The idea of a defence of this kind first originated in a Court of Chancery. In New York, when such a defence was first offered in the Courts of law, it was resisted on the ground df its being available only in equity. In Ring vs. Baldwin, decided in the Senate of New York, the opin. ion of Kent was overruled, and it was acknowledged that this was a Chancery defence. We insist that the defence was of concurrentjurisdietion. Cases of usury are cited to shew that the defence should be made at law; but usury is always considered as a defence purely legal. Cases are also cited, such as the one in Littell, where defences at law were attempted, but failed; here no defence at law was attempted; the party preferred asserting his claim for Relief in a Court of Chancery, and he had the right to elect the tribunal in which he should make his complaint.
    
      
       7 Johnson's Rep. 332. 13 ibid. 383, 174. 17 ibid, 175, 384.
    
    
      
       Laws of Ala. 492
    
    
      
       2 Johns. Ch. Rep. 369. 4 ibid, 290. 10 Johns 587.
    
    
      
       1 Littell 139. 1 Stewart 11. 2 Dessausures R. 380 389.
    
    
      
       Laws of Ala. 492.
    
    
      
       2 Stewart 63.
    
    
      
       Harris v. Jones' Ex'rs. 1 Stewart 81. 1 Johns. cases 492, 4964 3 Wheat. 532.
    
    
      
       iT John. 3~4
    
    
      
      Note. And even if a recovery liad been had against Patton, it would have been an individual loss to Mm; this is an equitable consideration.
    
   By JUDGE CRENSHAW.

The bill seeks relief in equity on the supposition that the defence would have been unavailing in the action at law, because the request to sue was not in writing as required by the act of Assembly. The answer denies that Fennell’s administrators were prevented from bringing suit by reason of any agreement with the administrator of Robinson, and avers that no prejudice or injury has resulted in consequence of any delay to sue, and that Robinson’s estate is in no worse condition than it was at the time of his death. The testimony does not materially contradict the answer, but in fact supports it in several respects.

In the argument, it was contended on the part of the appellants, that the neglect to sue on request the administrator of the principal, and the consequent accruing of injury to the securities, was, in equity, a discharge of thesecurity, and that if the request had been in writing, it would have been a good discharge in law.

We are ofopinion, that a neglect to sue on a verbal request, and consequent injury thereon, is by the securities available as a defence both in law and equity; and that as the securities did not insist on its benefit in their defence to the action at law, they are now precluded from relying on it as a ground of equitable jurisdiction.

The opinion of this Court pronounced by Judge-Taylor, in the case of Bruce v. Edwards, settles the doctrine, that our statute which requires the request to sue to be in writing in order to discharge the security, is cumulative merely of what the law was before the enactment of the statute; and that to make a plea of this nature available at common law, it is necessary to aver and prove that the principal has become insolvent after notice given to sue him, anc}. that the means of recovering the debt of him, have been lost the

In the present case, the answer does deny that there was any contract or agreement to extend the time of payment, oí that the appellants have sustained any injury by reason of a delay to sue their principal. And a mere verbal request to sue, without a resulting injury, is no discharge of the security either in law or

But it is insisted,'that our statute regulating proceedings In Chancery, virtually prohibits the Court from dismissing a bill for want of equity, or when the party could havft-Been relieved at law, unless a general demurrer be filed, or unless the answer prays the benefit of a demurrer. The object of the statute in this particular, was to prevent the filing of pleas and special deciurrers to a bill in equity; and can by no rule of construction be extended to a denial of the power or right to dismiss a bill for want Qf equity, or want of jurisdiction.

We believe it entirely consistent with the rules dfprae~ tice in Chancery, and not repugnant to the provisions of the statute, to dismiss a bill, at least on a final hearing, for the want of equity, or the want of jurisdiction, though the benefit of a demurrer is not prayed in the answer.

We are unanimously of opinion that the decree was cor~-. rect.

Decree Affirmed.

Judge Perry not sitting. 
      
       Laws of Ala. 451.
     
      
       Laws of Ala. 492.
     
      
       vide Moore v. Dial. decided the present term. 1 Johns. cases 492 496. 9 Wheat.532. I Lit. 139. 2 Des. 380.