Case ID: va_37/html/0397-01.html
Source: Caselaw Access Project
Author: {"author": "STANARD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Givens and Others v. Nelson’s Ex’or and Others.
    July, 1839,
    Lewisburg.
    (Absent BROOKE, J.)
    Principal and Surety — Sureties in Bounds Bond — Subro-gation — Indemnity of Original Sureties. — The principal in a bond, to indemnify Ms sureties therein, assigns a claim to a trustee, in trust that be shall .collect the amount and apply the proceeds to the discharge of the bond. Before this claim is collected, suit is brought upon the bond, and the sureties contribute ratably to its payment. One of the sureties obtains a decree against the principal for what he pays, and upon this decree sues out a ca. sa. which being executed on the principal, he enters into a bounds bond with sureties, and afterwards breaks the condition, whereby the sureties in that bond become liable. The claim assigned to the trustee being afterwards collected by him. the court of chancery allows the sureties in the bounds bond to participate in this trust fund, in the event of their having made payment. Heed by the court of appeals, that this is erroneous; that the surety who obtained the security of the bounds bond, was bound to proceed thereon against the sureties in the same, and could only come upon the trust fund for any deficiency in his recovery from them; and that the sureties in the bounds bond could have no right to resort to the trust fund for their reimbursement, except to the extent of any surplus that might remain after the full indemnification of the original sureties.
    On the 8th of February 1823, Erasmus Stribling, Alexander R. Givens, James Turk, David Golloday, A. Anderson and Alexander Nelson executed an obligation to pay to Samuel Blackburn, on demand, 3775 dollars, for the payment of which they bound themselves and their heirs, jointly and severally, in the penal sum of 7550 dollars. Upon the obligation there was an indorsement of the same date, under the hand and seal of Stribling, stating it to be the understanding between Blackburn and himself, that the monej7 was to be paid Blackburn at any time when he might need it, on 20 days notice.
    *The sum of 471 dollars 87j4 cents was paid for the interest to the 8th of March 1825, and the obligation credited therewith.
    At the time of commencing an action upon the obligation, Golloday and Anderson were dead. The action was therefore brought against the surviving obligors, and against them Blackburn obtained a judgment on the 31st of August 1827.
    The writ of fieri facias issued upon this judgment being levied upon property of Nelson, a bond was given by Stribling, Givens and Nelson for the forthcoming thereof, in which bond George C. Robertson and Hugh Hamilton joined as sureties, at the request of Nelson and Givens, by whom they were indemnified.
    The forthcoming bond being forfeited, and it being expected that judgment would soon be rendered thereon, Nelson and Givens, on the 19th of January 1828, filed their bill in the superior court of chancery holden at Staunton, setting forth, that Stribling borrowed the money of Blackburn, and the co-obligors were his sureties; that Stribling has become much embarrassed, and the complainants belieye is .entirely insolvent; and that their efforts to obtain indemnity from him on account of their suretyship have proved entirely abortive, except that Stribling has transferred for their benefit a claim which they believe will turn out to be altogether unproductive. Under these circumstances, in order that the cosureties may bear an equal proportion of the burthen to which the complainants are subjected, they the complainants seek the equitable interposition of the court. The bill states that the complainants intend to avail themselves of the remedy by motion, as far as practicable, but that that remedy will not afford adequate relief. The administrator of Golloday alleges that he has fully administered the personal assets, and the complainants believe that the same have-proved insufficient to pay his debts; but Golloday left considerable *real estate, which is liable for his proportion of the debt, both by force of the obligation and by the provisions of his will. Part of the real estate has been sold to Lewis Kellar, who has in his hands about 800 dollars of the purchase money. Another part has been sold to Isaac Sellars; but what amount of purchase money remains in his hands, the complainants are not informed. One of the devisees of Gol-loday has removed out of the commonwealth, and another is in precarious circumstances. Stribling the principal debtor; Golloday’s administrator, widow, heirs and devisees; the purchasers from those devisees; James Turk; and Robert Anderson the executor and devisee of Andrew Anderson, are made defendants. The prayer of the bill is, that Kellar and Sel-lars, the purchasers from Golloday’s dev-isees, be restrained from paying over to their vendors; that contribution may be enforced against the estate of Golloday; and that the complainants may have such other relief as may be equitable.
    An injunction was awarded accordingly.
    The claim mentioned in the bill as transferred by Stribling, was a claim under an obligation of Daniel Sheffey, bearing date the 25th of September 1826, whereby Sheffey acknowledged that he had received from Erasmus Stribling an assignment of a contract entered into between him and Tagart of the county of Baltimore in Maryland, dated the 22,d of August 1826, and which was ratified on the 12th of September 1826 by Mary Tagart, Elizabeth E. Tagart,' another Mary Tagart, William Tagart, John Tagart jr. and Samuel Tagart, by which, for certain services to be rendered by the said Stribling, the contracting parties agreed to pay him 5000 dollars, if the debt claimed by them should be wholly recovered 'from James Caldwell; if not, in proportion to the sum recovered. The undertaking of Sheffey was to account with Stribling for four fifths of whatever amount he might obtain under the agreement assigned to him as aforesaid.
    *By an assignment made the 27th of October 1827, Stribling transferred Sheffey’s obligation to Nicholas C. Kinnej', in trust that he should collect the amount, and apply the proceeds, so far as might be necessary, to the discharge of the forthcoming bond executed to Blackburn.
    On the 24th of August 1830, the court of chancery pronounced its decree: wherein it is set forth, that on the motion of Blackburn, execution has been awarded on the forthcoming bond against the obligors therein, for the amount thereby secured, to wit, the sum of 4476 dollars 12 cents, with interest thereon from the 18th of October 1827 till paid, and 7 dollars 12 cents costs; that by reason of said premises, and the insolvent circumstances of Stribling, the plaintiffs became entitled to call on Turk and the estates of Golloday and Anderson, for the respective contributive proportions of Turk, Golloday and Anderson of the principal sum, interest and costs last mentioned ; that the plaintiffs have, upon motions for that purpose made, recovered judgments against Turk and the executor of Anderson for their proportions, on which last mentioned judgments executions have been awarded, and forthcoming bonds taken and forfeited, and executions thereupon awarded; that the plaintiffs are .still entitled to recover against the estate of Golloday his contributive proportion, amounting to 896 dollars 64% cents, with interest on 895 dollars 22% cents, part thereof, from the 18th of October 1827 till paid; that the personal assets of Golloday have been fully administered, except a small balance, which will probably be required to defray the current expenses of the administration, and which is moreover probably subject to prior and superior claims to that of the plaintiffs; that of the purchase money for the real estate of Gol-loday which has been sold, there remains unpaid by Kellar the sum of 800 dollars, to wit, 400 dollars which fell due on the 1st of September *1829, and 400 dollars which will fall due on the 1st of September 1830, and in the hands of Sellars more than enough to discharge the balance of the contributive proportion due from the estate of Golloday, with the interest thereon, and the costs expended by the plaintiffs in ■ this suit, after the application thereto of the aforesaid balance of purchase money due from Kellar; that the transfer by Stribling to Kinney, to indemnify his sureties, is not now available for the purpose of such indemnity; and that, in .the opinion of the court, the purchase money in the hands of Kellar and Sellars ought to be applied to the aforesaid con-tributive proportion due from Golloday, with the interest and costs. In conformity with this opinion, the court decreed against Kellar and Sellars. And then the court, declaring Stribling liable for reimbursement to the plaintiffs of their contributive proportions of the debt, interest and costs secured by the forthcoming bond, decreed that he pay to.the plaintiff Nelson 896 dollars 64% cents, with interest on 895 dollars 22% cents, part thereof, from the 18th of October 1827, and that he pay as much principal and interest to the plaintiff Givens.
    Givens having sued out a fieri facias upon his decree against Stribling, property was taken under it, and sold on the 20th of October 1830. The net proceeds of sale amounted to 474 dollars 74 cents.
    Nelson sued out upon his decree a writ of capias ad satisfaciendum, under which Stribling was taken and committed to jail the 30th of October 1830. Stribling on the same day gave bond to the sheriff, with Nicholas C. Kinney, Robert Hemphill, David W. Patteson, Jacob K. Stribling, John C. BoW3rer, James Crawford, Benjamin Crawford and William S. Eskridge his sureties, with a condition reciting that the execution under which he was taken, with the legal costs attending the same, amounted to 986 dollars 29 cents after deducting a credit directed by the plaintiff’s attorney, and that Stribling *had taken the benefit of the prison rules assigned and laid out by the county of Augusta, for one year. The condition was, that if Stribling should not depart from nor go out of the rules or bounds of the said prison, and should render his body to prison in satisfaction of said execution at or before the expiration of one year from the date, then the obligation was to be void.
    This condition was broken, and the bond being thereby forfeited, the sheriff assigned it to Nelson.
    Nicholas C. Kinney, to whom the assignment of the 27th of October 1827 was made, succeeded in collecting the fund thereby assigned to him, the net amount of which was 4713 dollars 40 cents.
    Whereupon Turk, Givens and others contended that the bounds bond enured to the benefit of all Stribling’s sureties, and that Nelson should be turned over to his indemnity on said bond, in exoneration of the trust fund. They also contended that the sum of 474 dollars 74 cents, received by Givens on his execution against Stribling, enured to the benefit of all Stribling’s sureties, and should be so taken, in exoneration of the trust fund.
    On the 21st of June 1837, the court pronounced its opinion that the fund of 4713 dollars 40 cents, together with the amount made by Givens on his execution, with interest on both to the time of division, should be divided into five equal parts, one of which parts should be paid to the plaintiff Givens, another to the executor of Nelson (in whose name the cause had been revived), another to the representatives of Golloday, another to Anderson, and the other fifth to Turk; unless the sureties in the bounds bond had paid the amount due thereon to Nelson’s executor, in'which case they were to be subrogated to the rights of Nelson’s executor, and the part assigned to Nelson’s executor was to be paid over to them, according as they might have contributed to the payment of said bounds bond.
    *By an indorsement on the bounds bond, it appeared that the sureties therein had paid 500 dollars in part of the amount thereof, and that 750 dollars, other part thereof, had been paid by Nicholas C. Kinney out of the trust fund in his hands. These payments were credited as of the 2d of January 1837.
    A decree being entered on the 21st of June 1837 in conformity with the opinion pronounced by the court, an appeal was allowed therefrom on the petition of Givens and Turk, who insisted that the decree ought to be reversed for the following reasons :
    1. Because, while it adds to the trust fund the amount made out of the property of Stribling by Givens, it fails to apply the same rule to the sum made out of the sureties in the bounds bond and indorsed as a credit thereon, together with the part of the trust fund credited thereon.
    2. Because the executor of Nelson, who has an ample security for his debt in the bounds bond (a security furnished by Stribling the principal debtor) is admitted by the decree into an equal participation in the trust fund with his cosureties.
    3. Because the sureties in the bounds bond, for as much as they pay thereon, are subrogated to the rights of Nelson in the fund. These sureties are not entitled to subrogation. Stribling was the principal debtor, and bound to pay his debt and protect his sureties; and the sureties of Strib-ling in the bounds bond can occupy no better ground than he does.
    Peyton for the appellants.
    Michie for the appellees.
    
      
       Sureties — Contribution.—See foot-note to Preston v. Preston, 4 Gratt. 88; Garland v. Lynch, 1 Rob. 545.
      The principal case is cited in Harnsberger v. Yancey, 33 Gratt. 540; Sherman v. Shaver, 75 Va. 10; Stout v. Vause. 1 Rob. 180.
      See monographic note on “Subrogation” appended to Janney v. Stephen, 2 Pat. & H. 11.
      Same — Order of Liability — Injunction Bond — Judgment. — A principal debtor in a Judgment obtains an injunction thereto, and executes an injunction bond, with a third person as surety; the surety in the judgment not being a party to the injunction. The court held that, upon the dissolution of the injunction, the surety in the injunction bond is liable for the debt enjoined, before the surety in the judgment. Bentley v. Harris, 2 Gratt. 361, citing with approval, the principal case. Parsons v. Briddoclt, 2 Vern. R. 608; Wright v. Maley, 11 Ves. R. 12; Douglass v. Fagg, 8 Leigh 588.
    
   STANARD, J.

The decree of the court below affirms two propositions: 1st. That it was proper to make Givens account for the amount he had made from Stribling’s property, and limit his share of the indemnity ^furnished by the assignment of Tagart’s claim, to a sum equal to the excess of an equal aliquot part of the aggregate of the amount so made and the indemnity fund, above the amount so made. 2ndly. That the sureties in the prison bounds bond were entitled to substitution to the original rights of Nelson, so as to enable them to share with Nelson’s cosureties the said indemnity fund, in like manner and to like extent as Nelson could, if satisfaction of his claim on Stribling, and consequently on the indemnity fund, had not been obtained from the sureties in the prison bounds bond.

Though, under my present impressions, I should dissent from the first proposition, (strongly inclining to the opinion that the proper rule is to make the amount that Givens recovered in the pursuit of his separate remedy against Stribling, available to the other original sureties so far only as the recovery of that sum lessened the amount required from Givens’s equal share of the indemnity fund, to complete his indemnity,) I forbear to enter into an investigation of the question, or to give a definitive opinion on it, because the decree in this respect conforms to the principle that Givens in the court below assented to, and even contended for, and he only is interested in applying the different rule that I incline to think is the correct one.

I dissent from the second proposition, and think this dissent is justified by authority and reason. The proposition is opposed to the direct adjudications, or to principles avowed in or deducible from the cases, of Parsons v. Briddock, 2 Vern. 608; Wright v. Morley, 11 Ves. 22; Hull v. Pitfield, 1 Wils. 46; Douglass v. Fagg, 8 Leigh 588. Sound reason equally condemns it.

The fund, to a participation in which the decree admits the sureties in the prison bounds bond in equal degree with the original sureties of Stribling, substituting them to the supposed right of Nelson one of the original sureties, is the produce of an assignment of *Stribling. To the indemnity of those sureties, including Nelson as one of them, the assignment had dedicated that fund. When the sureties had paid their respective parts of the debt for which they were sureties, they were severally entitled to demand of Stribling reimbursement of the sums so paid, and they had equal right to resort to this fund as a security for that reimbursement. The right to resort to the fund depended on the continuance of the necessity of that resort, to obtain reimbursement; and the termination of that necessity, by the discharge of any one of the claims of the several sureties on Stribling, liberated the fund from the claim so discharged, and left it liable for those that remained undischarged. The primitive and overruling right of the sureties, as between themselves, was to have it applied to the indemnity of - all and each, and it could not be applied to any other object until that was attained. None of the sureties could claim participation in it but for the purpose of indemnity, and the whole fund remained chargeable by each for that purpose until the indemnity was complete or the fund exhausted. Each, then, as a consequence of the nature and quality of their primitive rights, had an interest in the diminution or discharge of the claims of each, as such diminution or discharge lessened or might lessen the charge on the fund. Each, too, was at liberty to seek reimbursement from any other source, and the success of such pursuit by any one of them was incidentally the success of all, so far as it diminished the occasion of that one to draw equally with the others on the indemnity fund to complete his reimbursement. If a new security were acquired by any of them, he held two securities for his reimbursement, while the other sureties held but one; and in such case, under a familiar and clear rule of equity, if, before he made the new security available, he had been reimbursed in whole or in part from the indemnity fund, the other sureties (the x'inc'umbrancers of that fund) would be entitled to be substituted in his place, and claim under the new security, at least out of the surplus thereof that might be left after he had been fully satisfied, a sum equivalent to that he had received from the indemnity fund. This principle of equity is stated in, and illustrated by, adjudications too numerous and familiar for citation. If the new security be an incumbrance on property of the debtor, no one would question the soundness of this principle, or resist its application. The decree therefore must have proceeded on the supposition, that where the new security is not a lien or charge on the property of the debtor, but the personal responsibility of another, though that responsibility came in the place of some lien on or remed3’’ against the property or person of the debtor, obtained by the pursuit of the creditor, then the principle does not apply. In such a case, according to the principles of the decree, the new security is wholly unavailing to improve the condition of the other original incumbrancers: if it is not enforced by the party who may have obtained it, the other incumbrancers are not entitled to a cession of it, and the enforcement of it is of no benefit to those incumbrancers, as the party against whom it is enforced takes the place of the creditor he has satisfied, and the original charge on the fund in respect to the debt satisfied is undiminished. Examples illustrating the operation of the principles which conduct to such a consequence, are perhaps the aptest means of testing their soundness. Thus, one or more incumbrancers, who have a security in common with others on a particular fund, in pursuit of additional security or satisfaction from the debtor, obtain judgment against him, sue out execution, and levy it on property sufficient to satisfy the claim. If the property be sold and the claim satisfied, the common fund for the security of all is liberated pro tanto, and remains a security for the others. But instead *of a sale under the execution, the property is restored to the debtor on the interposition of a friend as a surety in á forthcoming bond, and his responsibility stands in place of the satisfaction thus intercepted by his intromission; and on this responsibility he is eventually charged and compelled to pay. It seems but reasonable that this payment should produce the same effect on the rights of the incum-brancers, as if satisfaction had been had from the sale of the property levied on. Yet according to the principles of the decree, all this is fruitless of benefit to the incumbrancers, and their rights are the same as if the debt had not been discharged: and this result is produced by the active interposition of a court of equity, in favour of the party whose voluntary intromission has frustrated a satisfaction of the claim, that would have removed it from the incumbered property. This, I think, instead of being sanctioned, is forbidden by the principles of equity. It is not perceived that the sureties in a prison bounds bond would have a better title to substitution than those in a forthcoming bond. The body in execution, though it be not a satisfaction, yet tends to satisfaction, and the sureties in the bond, by becoming bound as such, withdraw the debtor from prison, and enable him, by escape from the bounds, to deprive the creditor of his lien on the body. Their obligation holds the place of that lien, and its value is tested by the amount realized from that obligation.

The proposition on which the decree rests, raises the right of the sureties in the prison bounds bond to participate in the indemnity fund, to an equality with that of the original sureties. The primitive rights of the original sureties to participate in that fund for the purpose of indemnity, were equal, and continued so in each and all, while the fund was required for that purpose. It was the inherent and essential quality oí such a right, to terminate in respect to any one of the sureties *when he should be indemnified, in favour of others not indemnified. When any one obtained indemnity under his separate remedy against the principal for his separate claim on nhe principal, his right was extinct in favour of the other sureties, from the law and equity applicable to their relations to and interest in the fund, and no remedy or right remained in him, to which to subro-gate the sureties in the prison bounds bond ; and it was not the proper function of a court of equity to revive this extinguished right, in favour of sureties that had taken the place of the debtor, -and come in the stead of one of the remedies against him, for the purpose of diminishing the legal or equitable rights of those to whose benefit the successful enforcement of that remedy enured. Authority and reason concur in pronouncing a dissent from the second proposition on which the decree is based.

The following decree was concurred in by all the judges:

‘■The court is of opinion that there is error in the said decree, in so far as it provides that the sureties in the prison bounds bond should participate in the trust fund for the indemnity of the original sureties in the debt to Blackburn, in the event of their having made payment to Nelson. On the contra^', the other sureties for that debt had a right to demand that their cosurety Nelson should prosecute the demand to a recovery against the said sureties in the bounds bond, and should be only entitled to come upon the common fund for any deficiency in his recovery from them; and the sureties in the bounds bond could have no right to resort to the trust fund for their reimbursement, except to the extent of any surplus that might remain after the full indemnification of the original sureties; or if Nelson received any thing from the common fund before a recovery on the prison bounds bond, the other sureties 'x'were entitled to have the prison bounds bond enforced for their benefit, to the extent of the sum so received by Nelson from the common fund, until those sureties were fully reimbursed the principal and interest of the sums they had respectively paid as original sureties of Stribling. ” Therefore decree reversed, so far as it is above declared to be erroneous, and cause sent back for further proceedings.