Case ID: miss_15/html/0513-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice ThacheR", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William P. Brooks et al. vs. Thomas Whitson.
    R. obtained judgment at law against \V.; E., alleging himself to be the owner of the judgment, obtained from W. two notes in satisfaction of it, agreeing with W. that if he were not the owner of the judgment he would return the notes thus given to W.; whereupon the execution was returned satisfied ; P. B. alleging himself to be the owner of the judgment at law, entered a motion in the circuit court to have the satisfaction set aside, which was done by that court; B. having become assignee of E. of the notes of W. received by B. as indemnity forja liability of his for E. sued W. at law on the notes, and obtained judgment; W. being prevented by high water from being at coart to defend the judgment, filed a bill in chancery to be relieve! from the judgment of the notes: Held, that the notes having been given on a condition which had failed, were not obligatory; that the reason for not defending at law was sufficient; and that B. being assignee of the notes merely as an indemnity, took them subject to the equities between W. & E.; and that the action of the circuit court, in setting aside the entry of satisfaction, could not be collaterally questioned.
    On appeal, from the decree of the vice-chancery court, at Holly Springs ; Hon. Henry Dickinson, vice-chancellor.
    Thomas Whitson stated in his bill that John Crouch, suing for the use of James M. Ross, had obtained judgment against him on a note made by him jointly with, and as surety for, Needham Stevens, for $1560; that Stevens was insolvent, when execution issued on the judgment: Albert G. Ellis, representing the judgment to belong to him, requested payment of it; that Rawlings & Butler also claimed the judgment, as he had been informed, of which fact he informed Ellis, who insisted that he was sole owner, and agreed to receive, and did receive, his notes, one for $1000, and the other for $500, due the one in February, 1840, the other in September, 1840, in satisfaction of the judgment; with the agreement, that if any other claim superior to his was established, that the notes thus given should be absolutely void, and be returned, upon which the execution on the judgment had been returned satisfied: that afterwards, at the May term, 1841, of the circuit court of Ponola county, Rawlins &. Butler claimed the judgment at law, and had the entry of satisfaction set aside, though Ellis was in court at the time, and resisted it, but took no appeal, or writ of error; and the circuit court ordered an alias ji. fa. to issue for the use of Rawlings & Butler; and that the judgment thus in force against him was yet unsatisfied; that Ellis, in violation of his agreement, assigned the notes, given as above stated, fraudulently and colorably, to William P. Brooks, who had sued him upon them, and at the May term, 1841, of the Ponola circuit court, recovered a judgment against him on the $500 note: that the writ in this suit was returnable to November term, 1840, but there was no court; that he was in attendance, and intended to employ counsel to defend the suit, but as there was no court the counsel did not attend; that he postponed therefore the employment of counsel until next term; that previous to the commencement of the term he was detained in Tennessee, whither he had gone on pressing business, by the illness and death, under distressing circumstances, of his wife, by which, and his age, feebleness, and troubles, he was unable to get back to Mississippi until after the commencement of the May term, 1841, of the court; yet still in time to make his defence; but the very night after his return a violent storm of rain swelled the watercourses to such extent that it was impossible for him to cross them, as they ran immediately between his residence and the court house; that he attempted their passage, but found it impracticable ; nor were they passable until after court adjourned. That General Bradford, an attorney of the court, and an old friend of his, and whom he intended to have retained, was about to file a plea for him to the case, but that Ellis fraudulently represented to him that he had agreed not to make any defence to the suit; and that Brooks was pressing the execution against him; he prayed for a perpetual injunction and general relief.
    Brooks answered, that Ellis had, in 1840, transferred the judgment which he alleged he held against the complainant, and afterwards the notes to him as indemnity for liabilities of his for Ellis; that the complainant was the first to inform him of the transfer of the notes, and expressed his gratification at it, and promised to pay him the notes without suit; that the complainant, at the time he informed him of the transfer, told him that the notes were given in satisfaction of the judgment at law against him held by Ellis, and that in making the arrangement with Ellis he had consulted able counsel; was safe, and would pay the notes. That, relying on these representations, he made no attempt to get additional security or indemnity from Ellis, and insists therefore on being protected in his assignment; as, but for these assurances, he would have obtained other indemnity; that his liability for Ellis was yet unextinguished.
    Ellis answered, that he had purchased of Ross, for full value, the judgment he had obtained against the complainant Stevens, and was the owner of it, and took an assignment from Ross, which he exhibited, rvith his answer; he admitted that the notes were given by the complainant, in satisfaction of the judgment; but denied that there was any condition attached to them; that the complainant stated at the time that he had advised with able counsel, who had instructed him how to proceed, and that he was perfectly satisfied that he was perfectly safe in the arrangement he was making; that the complainant, with his attorney, and the sheriff and respondent, were all present when the notes were given, and satisfaction entered on the execution, and the complainant often consulted his attorney, and expressed his satisfaction with the arrangement; that there was no agreement whatever that in case his title failed to the judgment the notes should be void, or be returned; they were given zoithout condition, for the respondent’s claim to the judgment, on full examination of the nature of that claim by complainant ; who knew at the time that they were to be transferred to Brooks, and expressed his pleasure thereat; Brooks being then, and still, surety in large sums for respondent.
    He denies having prevented General Bradford from filing’ a plea; or that the complainant was prevented by high water from attending court; affirms that the complainant had combined with Rawlings & Butler to give their claim to the judgment against Stevens and complainant a preference over his; and that complainant had received full indemnity from Stevens.
    He admits the motion in the circuit court to have the entry of satisfaction on the judgment, in favor of Couch, use of Ross, set aside; and that he resisted it, and that it was decided in favor of Butler & Rawlings, but he denies that the circuit court had any jurisdiction oyer the motion, at the suit of persons not parties to the record, and affecting his rights also when he was not a party to the record; he admits that he took no appeal.
    He insists, as a plea in bar to the complainant’s right of recovery, that he had filed a bill of interpleader in the superior court of chancery at Oxford, against respondent Brooks, and Butler &o Rawlings, touching the matters in controversy in the present bill, which had been heard and determined against the complainant.
    He denied all fraud, and made an exhibit to his answer of the proceedings on the motion in the circuit court, to have the entry of satisfaction set aside; which it is not deemed necessary to notice further than to state that it appeared that Ellis and ■Whitson, by counsel, resisted the motion; though no written notice was served upon them.
    W. M. Smith, the sheriff of Ponola county, proved the agreement between Whitson and Ellis to be as stated in the bill of the complainant.
    S. W. Evans proved the attempt of Whitson to get to court, and his failure on account of the high water; the creeks being swollen so that they could not be forwarded, and the bridges being washed away.
    Joel Rainer proved similar facts as to the high water, but did not know of his attempt to get to court.
    Calvin Miller proved that he was agent of Brooks and the sheriff and Ellis on the day after the execution of the notes and the entry of satisfaction. Called on him with the notes which were then given to ! as agent for Brooks, with the understanding that if the return of satisfaction should be set aside, or Ellis’s right to the judgment be determined against him, the notes should be re-delivered to Whitson, the sheriff being anxious icst he should be endangered by receiving the notes, if it should turn out that Ellis had no right to the judgment ; that the witness retained these notes under this arrangement, until he was satisfied the sheriff was not likely to suffer loss on account of them, when he delivered them to Brooks.
    S. B. Whitson and R. E. Beaty proved the attempt to reach court, and the failure on account of high water.
    The respondents took various depositions to establish the right of Ellis to the judgment against Stevens and complainant; but it is not deemed requisite to notice them further; they also attempted to show that there was a way by which the complainant might, notwithstanding high water, have arrived at court, being some five or six miles further round.
    The cause being submitted for final decree the vice-chancellor made the injunction prayed for by the bill perpetual; and the defendants appealed.
    
      Hawkins, for appellants.
    1. The circuit court had no right to adjudicate upon the rights of the parties who claimed the judgment. That it is the practice of circuit courts to protect assignees not of record, is admitted, but such practice is modern, and an assumption of jurisdiction, and as such should be construed so as to limit it strictly within decisions, and not to extend it. The practice originated in equity of protecting assignees, and courts of law followed chancery in protecting assignees upon suits in courts of law; but the decisions do not show that courts of law go further than to protect assignees, so that their rights may not be jeopardized. “ When facts can be clearly ascertained assignees will be protected.” 4 Black. Com. 442. Which author shows that in so doing courts of law adopted a new and liberal course, and aided equitable rights. “Courts of law will afford every protection to assignees of choses in action, not inconsistent with established principles and modes of proceeding.” 1 Cond. R. Supreme Court of the United States, 416, in note referred to 1 Wheat. 233.
    “ An indorsee of unnegotiable paper, under the common law, had to resort to a court of equity.” 5 Rand. R. 43; 2 Black. Com. 442 ; 4 Cruise’s Dig. 104. The act in Pennsylvania, making bonds assignable, was to prevent the assignee from releasing after assignment. 1 Dal. R. 28, last paragraph. In the case of McCulhim v. Coxe, 1 Dal. R. 139, the court protected the assignee, but said that the docket should show for whose use the action was brought. 1 Mass. R. 488. “ By the modern practice the assignee may sue in the name of the obli-gor, as his attorney, but there should be an express authority inserted in the assignment. 1 Bacon’s Ab. tit. Assignment, A, note a.
    The first instance of a court of law protecting an assignee is in Bosanquet & Puller’s Reports. In this case the court did protect, but expressed a doubt whether it could do so summarily upon motion, or upon audita querela, or should not turn the parties over to chancery.
    2. Brooks was not a party to the proceedings on motion, and could not be concluded by the judgment. If the rights of assignees are so precious, here was Brooks, an assignee for a valuable consideration, without any notice of adverse equities; lulled to security by the representations of complainant himself; without notice of the motion, who might have a good equity against complainant, as will be shown, even if Ellis had such. Can his rights be adjudicated upon by notice to Ellis only? 1 Johns. R. 550.
    3. Butler & Rawlings should be made parties to the bill, as well as Ross and Ellis; without them a decree cannot be made.
    4. Ellis is a purchaser for a full and valuable consideration, without notice of a prior equity. “When there are two bona fide equities the court will not interfere to give preference, or act against either; he who has the advantage at law would be left to enjoy it.” 1 Johns. R. opinion of Kent. C. J. 566, 567. It is an established rule in equity to give no assistance against a purchaser for a valuable consideration, without notice. He has equal claims upon the equity of the court. 2 Fonb. 3d Amer. ed. page 442, marginal, 147, note *; l Eq. Dig. 187, sec. 4, 5, and 62.
    5. Brooks was an innocent purchaser, for a valuable consideration. “He has equal claims to the equity of the court.” See authorities above quoted. “ A subsequent assignee may have better equity than the prior assignee.” 1 Eq. Dig. 196, sec. 77; 5 How. R. 471, 698; 1 Eq. Dig. 187, sec. 4, 5, and 52.
   Mr. Justice ThacheR

delivered the opinion of the court.

This is a writ of error to the vice-chancery court of the northern district.

The bill of complainant, in the court below, sets out that John Couch, for the use of James M. Ross, recovered a judgment against him in the circuit court of Ponola county, in the sum of about $1550, upon a promissory note, upon which he was surety for Needham Stevens; that Albert G. Ellis approached him, claiming to be entitled, by assignment, to the amount due upon the judgment, and proposing to him to settle and satisfy the said judgment, by giving two promissory notes, one for $1000, payable in February, 1840, and the other for $500, payable in September, 1840, and promising to surrender up the said notes and hold them void, if any claimant to the judgment, with a superior title to that of Ellis, should succeed in pressing his title. The bill further charges that the complainant, after some conversation with Ellis respecting a title which Rawlins and Butler were supposed to have to the judgment, agreed to the proposition upon the aforesaid terms, and made and delivered the notes; but that shortly after Rawlings & Butler entered their motion in the circuit court of Ponola county, and succeeded in setting aside an execution upon the judgment which had been returned by the sheriff, as satisfied by virtue of the agreement between the complainant and Ellis, as before described, and obtained an order for the issuance of an alias fieri facias, to issue in their own behalf. The bill further alleges that Ellis, conspiring with William P. Brooks, assigned the notes to him, and that Brooks instituted suit upon the note for $500; that the com-plainaut attended the court at its first term after the institution of the suit, for the purpose of defending it, but the term failed to be holden, and that at the subsequent term, he was detained and prevented from attending by the death of his wife, in the first instance, and by high water, which rendered the roads impassable, and that an attorney, a friend of the complainant, who was desirous of entering a plea in the case, was prevented from so doing by the representations of Ellis that there was an agreement that no defence was to be made. The answers of Ellis and Brooks deny all fraud, and insist that the transaction was dona fide, and for a good consideration.

The evidence of William W. Smith, the sheriff of Ponola county, supports that portion of complainant’s bill relating to the conditions upon which Whitson, the complainant, made and gave the notes to Ellis. He says, that, “before the notes we' given up, Ellis agreed that if it should turn out that he had not a good right to the execution, that Ellis was not to collect the notes of Whitson.” Calvin Miller, another witness, testified that it was agreed between Smith, the sheriff, and Ellis, that if it should turn out that Smith had no authority under the direction of said Ellis to receipt'said execution by means of the notes, that they should be given up to Whitson. It was likewise found that the usual road from Whitson’s house to the courthouse of Ponola county was obstructed by the high water at the period mentioned in the bill of complaint, and that Whit-son attempted, and was prevented from making his way there.

It is clear that the delivery of the notes by Whitson to Ellis was a conditional contract, and that the condition upon which they were to be collected by Ellis failed. The propriety of the judgment of the circuit court in favor of Rawlings & Butler, cannot now be inquired into. It is enough, however, that that judgment defeats the condition of the contract. Brooks received the notes merely as indemnities against his liability for Ellis, and he consequently took them, liable to the equities subsisting between Ellis and Whitson.

The point made by Ellis, in his answer, that a decision of the case has already been had in chancery, and that it operates as a bar to this action, is not accompanied by any record of such decree, and cannot be considered.

The decree of the vice-chancellor, ordering the injunction to be and remain perpetual, against the judgment and execution upon the note of $500, be and the same is hereby affirmed.

Mr. Justice Clayton, having been counsel in the court below, in one branch of this cause, gave no opinion.