Case ID: nc_17/html/0284-01.html
Source: Caselaw Access Project
Author: {"author": "HuetiN, Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Bank of Newbern v. Henry A. Jones et al.
    
    Where two creditors obtained judgments against their common debtor, at the same time, and the clerk wrongfully issued an execution to one of them, whereby the other obtained a priority ; in the absence of a fraudulent combination between the clerk and the creditor thus preferred, a court of Equity will not deprive the latter of the advantage he has thus gained.
    The bill which was filed in Craven, charged, that writs of scire facias, returnable to the August sessions, 1829, of Craven County Court, issued against the heirs of John Harvey, upon two judgments obtained by the plaintiffs against Mary Harvey, a defendant, his administratrix, in which the issue of fully administered had been found for the defendant,rwhcreby the plaintiffs sought to subject the real assets of the intestate in the hands or his heirs ; that at the same term, a similar scire fadas issued upon a judgment in favor of the defendant Jones; that James G. Slanly, the clerk of the County Court, and also a defendant, was one of the heirs oí John Harvey, and the agent of his administratrix; that judgments were rendered for the plaintiffs in those suits at the return term ; but that some of the heirs of the intestate being infants, appeared by their guardian, the defendant Mary; that a combination had been formed between the defendants Jones and Stanly, to give the former a preference, so that he might obtain satisfaction from the real assets of the intestate, to the prejudice of the plaintiffs ; that in execution of this combination, the defendant Stanly, as clerk of the County Court, and agent of the defendant Mary, made an entry upon the record of the judgments in favor of the plaintiffs that execution thereon was staid according to law, and on that of the .defendant Jones’ judgment, that the stay of execution was waived by the defendants, and immediately afterward issued a writ offieri facias on the latter judgment; that the plaintiffs then demanded writs of fieri facias upon their judgments, which were refused because of the stay above-mentioned; that all the parties desiring to have their .rights ascertained, it was agreed to present the questions between them to the Judge of the Superior Court of Craven; that accordingly, at the ensuing term of that court, the plaintiffs applied for a mandamus to the defendant Stanly, commanding him to issue v. hits of fieri fa-cias upon the judgments in their favor, or if they could not succeed in this, that a supersedeas might issue as to the execution of the defendant Jones ; thaf'thc Judge of the Superior Court refused the mandamus, but awarded the supersedeas, from which order, both the plaintiffs and the defendant Janes appealed ; that at December term, 1830, of the Supreme Court, the order/3 made in the court below were reversed, and the mandamus directed to be issued and the supersedeas set aside ; (Vide 2 Dev. Hep. 4T6.) that while this litigation .was pending in the Supreme Court, the defendants Jones and Stanly. in the prosecution of their comhinaton, had issued and bad a levy returned upon the fi.fa. of the former, so that when the plaintiffs only had writs of fieri facias upon their ju;lgT ments, the defendant Jones had a venditioni exponas upon his, and that thereby he had obtained an unjust and iniquitous priority over them. The bill then charged that the defendant Stanly was insolvent, and unable to answer to the plaintiffs for any judgment they might re-recover against him, and that if they were driven to an action upon his official bond, the damages which they might recover wónld be an inadequate compensation to them, and prayed a discovery and an injunction against a sale under the venditioni exponas in favor of the defendant Jones, and that he might he compelled to waive the priority he hatl obtained, and take Out a ft. fa. bearing even teste with that of the plaintiffs.
    The defendant Mary Harvey, in her answer, denied any fraudulent contrivance, cither by herself or by her agent, the defendant Stanly. But sise admitted that she was desirous of giving a preference to the defendant Jones, who was a creditor of her intestate, and had received but a small portion of his debt, whereas her intestate was but. a surety for the debts due the plaintiffs, who had, from the personal estate received a large portion of their claim ; that under these circumstances, she instructed her agent and her counsel to give the defendant Jones a preference, provided it could be legally and honestly done'; that being ignorant of the mode by which this could be effected, she had taken no part in the arrangement of it, but had sanctioned what had been done by her agent and counsel.
    The defendant Stanly, in his answer stated, that being the son-in-law of the defendant Mary, he had aided her in administering the effects of her intestate; that he had no consultation with the defendant Jones, or the defendant Mary, as to any plan by which the former might obtain apriority over the plaintiffs; that the first he knew of such an attempt, was from a suggestion of the administratrix, that she wished it might be done, as the debt of Jones was for services rendered her intestate, and that of the plaintiffs’ was founded on his being a surety to them for another person ; that all the judgments mentioned in the bill when entered up, were accompanied with an entry of a stay of execution for twelve months, which had been universally the practice in that court for twenty years; that afterwards, and during the same term, the attorney of the heirs of the intestate, by an entry in his own hand-writing, made with his consent as one of the heirs, waived the slay of execution as to the judgment of the defendant Jones; that after the August term, 1829, of the County Court of Craven, the defendant Jones called at his office and enquired what was the situation of his suit against the heirs of John-Harvey; and upon being informed of the facts above-mentioned, requested him to make out a writ of fieri fa-cias upon the judgment, and hand it to the sheriff, which was done according to the established custom of the office; that afterwards he was applied to by the counsel of the plaintiff for writs of fieri facias upon their judgments, which he declined issuing, because of the entry above-mentioned, whereby executions thereon were stayed ; that the counsel thereupon gave him in writing, notice to do so, which was accompanied with the reasons upon which it was thought the plaintiffs were entitled; but that he still doubted of the propriety of issuing the executions, and being apprised that the question would be presented to the next Superior Court, he concluded that it was safest for him to await the decision which would then be made, especially as if it should be in favor of the plaintiffs, they would not -loose their, priority, if their executions were issued after the next term of the Superior Court; that after the refusal of the judge to award a mandamus, the plaintiffs applied to the .County Court for an order upon the clerk to issue their executions, which was also refused. He denied all combination with the defendant Jones, and averred, that but for the •entry waiving the stay of execution in his case, he should not have issued one on his judgment.
    The defendant Jones, also denied any combination, and averred that he did not know of the entry waiving the stay of execution on his judgment, until after the term of the County Court when it was made, and that he had before that time, no expectation of having a priority given him ; that after the term of the County Court at which the judgment W'as entered up, he called at the clerk’s office, and ascertaining the facts, he ordered out an execution upon his judgment. He expressly denied any agreement to submit the question to the’Superior Court, or in any way to injure the priority which he had gained. He stated that for the purpose of -preserving his priority, he had his Ji. fa. returned, and sued out a vendi-tioni exponas, and that he forbore to press a sale, because he wras advised that he might postpone it aud not thereby loose his priority.
    A replication was filed to the answers, but no depositions taken. Copies of the reeord of the several judgments were filed as exhibts. - '
    By an interlocutory order, the sheriff was directed to soil, and pay the amount into the office of the clerk and master.
    
      Gaston, for the plaintiffs.
    
      J. U. Bryan, for the defendant Jones.
    
    
      W. G. Stanly, for the other defendants.
    
      An agreement between two creditors, to refer the decision of then-rights to a court, will in equity, prevent cither of them from acquiring a priority, pending the refer-
   HuetiN, Judge.

The form of tlie proceedings at law gave to the defendant Jones, the advantage of acting on iiis execution before the plaintiffs could regularly communicate to the County Court the judgment of this court upon the several appeals mentioned in the pleadings.— The bill does not, and could not properly complain of that in itself. But it alleges that there was an agreement or understanding, that the rignts of the parties should then abide the opinion of the court upon the question whether the parties were originally equally entitled to immediate execution. Such an agreement would certainly give the plaintiffs the equity claimed by them. The conduct of Jones, in not selling pending the appeal, affords by itself, a fair ground to infer such an agreement. But that is the only evidence of it, and that inference is entirely rebutted by the express and positive denial by this defendant of such an agreement or any other, by which would be given to the judgment of this court, any other effect than by its own force it would have. His appeal from the order of a supersedeas, left him at liberty to continue his process of execution. He did continue it pending the appeal, for the purpose, as he says, of preserving the preference he then supposed himself to have. He admits he did not proceed to a sale, but he avers, that he refrained solely upon the ground, that the judgment might be against him, and not because of a new contract, of which he denies the existence altogether.

it is however, chiefly insisted for the plaintiffs, that there was a combination of the defendants to give Jones an undue preference, by entering the judgments in such manner as would apparently justify the clerk in refusing to issue the execution of the bank, and in issuing that of Jones immediately, and that accordingly Stanly did so act in reference to the executions.

It is to be considered, how the facts assumed in this proposition are in reality, and also how far the conclusions of law are correct.

Supposing that it were in the power of the parties to give the preference alleged, it becomes a question, (without now adverting to the official character of Mr. Stanly,) whether a court of Equity could relieve against it. It is quite unnecessary at this day, to discuss the considerations which may in conscience justify the satisfaction of one creditor, to the total disappointment of another; or, on the other hand, review the arguments upon which courts of Equity have adopted, the maxim, that equality is equity. It is perfectly settled, that at law, an insolvent debtor, or his executor or heir, may pay which creditor ho chooses. This court acts upon its own maxim, when called on to apply a fund, the subject of its own exclusive jurisdiction. But it has never been able to restrain the exercise of the power at law. This is not because it is a-just right of the person exercising the power. Ho may perhaps have acted against sound morals. Possibly the disappointed creditor may be an infant ward, or otherwise the most meritorious. Or perhaps nothing may justify the dealing with an unequal hand with creditors. Yet it is allowed to stand here, when the law permits it. Why? Only because the favored pei'son has got nothing that was not due to him, Being a just creditor, he can with a safe conscience keep as much of his debt as he can get. There is no equity against him. Each creditor takes care of himself, and is not charged with the interest of the other, when there exists between them no other connexion but that of being the several creditors of the same insolvent. The mere fact of the preference of Jones, if such had been gained by the method of letting the judgments pass, does not render him liable to share with the plaintiffs.

If a debtor can, at law, give ons creditor apriority, a court of Equity will not restrain Mm from doing

Because the favored creditor gets nothing but what he has a right .to receive.

Where twocre.-entTttedTo^McS tions, and the sueüífavorofoné of them, it is not ence!** °f pTefe>

But in truth, no such preference was obtained, however it may have been designed. No doubt that was the design of the defendants Mrs. Harvey and Mr. Stanly. But the attempt proved ineffectual. The opinion of the Supreme Court determines conclusively, that notwithstanding the forms of entering up the judgments, the bank was enti-tied to immediate execution as well as Jones. The plaintiffs might have demanded, and did demand execution forthwith, and after the decision of the Supreme Court, again demanded it.

And it seems, that the creditor has no redress against the other, unless perhaps where the latter induced the clerk not to issue the execution of the first.

To these demands, the clerk returned positive denials-, although At the time of the last he was informed, not officially, of the opinion of this court.

I think the case is reduced to the single enquiry, how those denials and the subsequent conduct of the parties affect them respectively.

There is nothing to charge Mrs. Harvey with a knowledge, much less a concurrence in this part of the transaction.

The acts of the clerk are plainly wrongful. He was guilty of an official malfeasance, and is responsible for it.

It is insisted further, that the defendant Jones cannot, with a safe conscience, take benefit from that wrong.

If there were evidence that Jones participated in the wrong, by advising or procuring the clerk to refuse the plaintiffs an execution, it would be necessary to consider the effect of such active interference. Perhaps it might be distinguished from the common case of a sheriff paying money upon indemnity, or otherwise, to an execution creditor, who was not entitled ; in which, the sheriff is clearly liable, but in which, there is no adjudication of relief at law or in equity, as between the creditors. If there were a remedy for the one .creditor against the other, it would seem to be at laiv, and upon this ground, that one had received more than by law he was entitled to. But no case of the sort is found ; nor any, where the satisfied creditor has been made to reimburse to the sheriff, the money he has been compelled to pay to the other creditor. In other words, the sheriff acts upon his own responsibility, and must answer without reference to inadvertence, or mistake on his part, or he must provide an indemnity for himself by contract. I do not perceive any solid distinction between the two cases. But this cause does not at all depend upon that analogy, and is decided without reference to the rights and liabilities which might arise upon a state of facts, shewing ah active participation in the refusal to give the plaintiffs their execution.

The least incitement or suggestion on the part of Jones to the clerk to that effect, is explicitly denied by Jones, and disclaimed by Stanly. All tlie former did, was to sue out his own execution. "That, he had a right ^ to do. He did not interpose the slightest obstacle in the Avay of the other creditor. There is no fault in Jones in this respect, it is that of the clerk exclusively. Whatever aid a sense of private justice may prompt Jones to extend to Stanly, upon the score of the benefit accruing to him from the others default, I do not see that he is liable to either party upon legal principles. For Stanly avows, that he acted on his own opinion ; and it is to be collecfed, that if Jones had requested the clerk to issue the plaintiff’s execution, he would likewise have refused, because he thought it to be his duty to refuse. As a creditor preferred, and even improperly gaining a preference by the default of the officer under these circumstances, the plaintiffs have not an equity against Jones ; because, he has committed no wrong, and because they have a direct and complete remedy against the officer himself. The question is not one of loss between the creditors, for neither of them can lose any thing. The question is between Jones and the officer — which of them shall pay the sum to the plaintiffs, acknowledged by all to be due to them. And upon that, in the actual state of the case, I think there can be no doubt; even should tiro law be different had Jones been accessory to the official malfeasance.

His only remedy ciaTbond^of'the clerk,

And the measure tamed by his mis-, “ference To^his motives,

It was slightly intimated in the argument, that the action against the clerk, might prove to be an inefficient remedy ; because it is a question of damages, and the jury might be influenced by circumstances improperly deemed by them to lie in mitigation. That would be equally an objection to every assessment of damages. But if it could in any case, it cannot have an effect here, because this is not the case of a vindictive action, but there is a fixed measure of damages, namely, the actual loss sustained by the misconduct of the clerk. Damages in such a case, may be aggravated by corrupt motives, but they cannot be reduced below a real compensation for the injury in fact sustained. A ministerial officer is paid as well for his responsibility as his time and labor, and must therefore answer for all the consequences of his default to the full extent. The plaintiffs then have sustained no loss, as between them and Jones, to be made up out of his gains. The plaintiffs have an adequate remedy against another person, for their whole loss. To meet this view of the case, the bill further charges the insolvency of Stanly. I do not pretend to say how that might operate, if we could find the fact to be as al-ie2.c(|. J5ut we must take it to be otherwise. The personal insolvency of the clerk, docs not materially imPa*r the security of a demand founded on his official conduct. He is required to give bonds with approved sureties annually, and these are all cumulative securities up to the breach. It appears from tlie pleadings, that Stanly has been in office many years, so that it is next to impossible, that insolvency should run through his sureties! and to the present purpose, their solvency is his.

Whether the m-clerk and his sure-Sy MferencT— Qu?

It is the opinion, therefore, of the court, that the plaintiffs have adequate remedy at law against the defendant Stanly, and that the bill be dismissed with costs.

Per Curiam — Bin, dismissed.