Case ID: va_54/html/0205-01.html
Source: Caselaw Access Project
Author: {"author": "SAMUELS, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Harnsbarger’s Adm’r v. Kinney.
    July Term, 1856,
    Lewisburg.
    I. Chancery Practice — Relief from Judgment — After» Discovered Evidence. — in an action at law on a bond against the surety, he defends it on the ground of usury; but there is a judgment against Mm. The surety then dies a bill for relief against the judgment, on the ground of after-discovered evidence. But there was evidence to the same point before the jury. The after-discovered evidence being merely cumulative, it is not ground for relief.
    
      2. Same — Same—Defence Allowable at Law. — In such a case the surety seeks relief on the ground that the principal obligor had sold to the obligee a tract of land for three thousand dollars, which was to be credited on the bond, but that only two thousand five hundred dollars had been so credited. This defense might have been made at law, and is ho ground of relief.
    3. Same — Same—Case at Bar. — The surety further charges that the .obligee agreed upon the sale and purchase of said land, to release the sureties; but although there is proof that pending the negotiation, the obligee said he would take a bond for the balance from the principal obligor with his sons as sureties, and would wait with him for the money during his life, upon his paying the interest, and it was also proved that the principal obligor was anxious to relieve his sureties, yet in the final execution of the contract nothing having been provided to carry out the arrangement, and the obligee retaining the old bond, credited with the price of the land, and obligor paying interest upon it, there is no ground for relief on that account.
    
      4. Same — Same—Same.—The principal obligor having been remiss in paying the interest upon the bond promptly, as he was required to do, on two occasions when he sent an agent to pay the interest due, directed him to '.pay the interest up to the period when the interest would next become due. This, however, was voluntary on his part, and not required by the obligee; but endorsements of the payments were made upon the bond. This is no ground of relief to the surety.
    This case is a sequel to that of Harnsbarger1 s adm’r against Kinney, reported 6 Grattan 287. When the cause went back, Kinney filed his bill in the Circuit court of Augusta county, to enjoin the judgment upon various grounds; the first of which was of after discovered *evidence. After stating the execution of the bond of April 1821, by Moses McCue and John H. Hyde to Addison Hyde, and its assignment to Harnsbarger, he charged that Harnsbarger knew that it was an accommodation bond, and that with that knowledge he discounted it at ten per cent, by the assignment of other bonds to Addison Hyde, which, at the same time and in his presence, were assigned by Hyde to McCue; and that Harnsbarger knew that Hyde had no right to them, but that they were intended to be assigned to McCue. He stated that since the last trial of the cause he had discovered most important evidence, which by no diligence could he have discovered before; since he had knowledge of no fact or circumstance to direct enquiry to it. That on the trials at law it was clearly proved by Addison Hyde that the said bond was an accommodation bond, and that Harnsbarger knew this at the time of the assignment to him; “but there was a failure of proof satisfactory to the court or jury, as it would seem from the result, to show that he gave less for it than its par value, which if proved would have made the transaction clearly usurious and void.” That soon after the decision of the cause in the Court of appeals he had discovered for the first time, that a certain Overton Gibson would have been a material witness for him on the trial, to prove that the transaction out of which the bond grew was usurious. That said Gibson was frequently at the house of Harnsbarger about the date of the old bond from McCue and John H. Hyde to Addison Hyde, of the 30th of April 1821, in consideration of which the bond on which the judgment was rendered was given; and often heard from Harnsbarger the history of the circumstances connected with the execution of said bond. That Harnsbarger had informed Gibson that McCue had applied to him for a loan of money; that McCue had agreed to take bonds, and allow Harnsbarger to shave his bond at a *large discount, and pay for it in bonds. And that Harnsbarger had informed said Gibson that he made by said exchange some three or four hundred dollars; which he said was a good day’s work.
    Other grounds for the injunction were, that the land sold by McCue to Harnsbarger and conveyed to Hamilton, was extorted from McCue at about half its value, under the pressure of his embarrassments, and when he was in a state of mind which partially if not entirely incapacitated him for the transaction of business. That there was an actual contract on the sale of said land, that if McCue would let Harnsbarger have it at a certain price Harnsbarger would release his securities; which condition was performed, and the contract of release thereby consummated. That Harnsbarger also agreed that if the interest on the balance of the debt remaining after the sale of the land, was punctually paid, he would indulge the said McCue, without the privity or consent of said securities; which latter condition was also performed for many years afterwards, whereby said securities were deprived of their bill quia timet. The prayer of the bill was for an injunction to the judgment; for a new trial; and for general relief. And the injunction was granted.
    Harnsbarger’s administrator answered, denying all knowledge of the usury, extortion or agreements for release of the securities or for delay, charged in the bill. The facts stated in the bill as to Harnsbarger’s statement of the circumstances, attending the execution of the first bond, and the profit which Harnsbarger made on the discount of the bond, were testified to by Overton Gibson; and his statement of the discount of the bond at ten per cent, was also testified to by Richard Gibson. There was also evidence as to the sale and purchase of the land, and the condition of McCue at the time.
    *Tbe cause came on in February 1853 upon a motion to dissolve the injunction, when the court declining at that time to express any opinion as to the claim of the plaintiff to tie relief prayed for on any of the four grounds stated in-his bill, nevertheless rejected the motion to dissolve the injunction, and gave the plaintiff leave to amend his bill, and put in issue another ground of relief appearing from the endorsements on the bond.
    In pursuance of the leave given, the plaintiff filed an amended bill, in which he charged that Harnsbarger on the first of April 1833, did for a valuable consideration, contract and agree with McCue the principal debtor, to receive the interest in advance upon the bond upon which the judgment had been obtained against the plaintiff as surety for McCue; and that in pursuance of that agreement said Harnsbarger did on that day actually receive from McCue the sum of one hundred and eighty dollars which would have fallen due on said bond on the last day of April next thereafter. And in like manner said Harnsbarger did, on the 20th of November 1834, make another agreement with said McCue based upon valuable consideration, by which he agreed to receive from said McCue payment on account of interest not then due upon said bond; and accordingly he did on that day receive the sum of one hundred and twenty-seven dollars from McCue, that being the amount of interest on said bond to the 10th of April next thereafter; both of which payments said Harnsbarger caused to be endorsed on said bond. And the plaintiff averred that all this was without his knowledge or consent; and that in pursuance of said agreements said Harnsbarger did extend the day of payment to McCue from the dates of said payment up to the periods when the interest so paid in advance fell due; and that this giving time was without the consent of the plaintiff.
    *The administrator answered the amended bill. He denied that any contract for indulgence or stay of suit was made between Harnsbarger and McCue, at the time the endorsements referred to in the bill were made on said bond. He said that the endorsements were made by Moses H. McCue, the son and agent of Moses McCue ; that on neither occasion was there any contract for further indulgence on the bond; and that the bond was at the time due, and both the principal and interest were demandable of all the obligors in the bond. He alleged further that Harnsbarger was particular in requiring prompt payment of interest due him; and that McCue having been in arrear in that respect, when Moses H. McCue was sent to make said payments he was instructed, in consideration of the previous long delay in paying interest, to make the payment large enough to cover the interest for the current year. That this was the voluntary act of Moses McCue, not required or demanded by Harnsbarger; and that it was done without any stipulation or understanding that Harnsbarger should wait one moment if he chose to sue, or was required by the sureties therein to sue, on said bond.
    Moses H. McCue was examined as a witness ; and he sustained the statements of the answer. He stated that the endorsements on the bond were made by himself, and that the payments had been made by him as the agent of his father at the house of Harnsbarger: And he sustained the statements in the answer, expressly negativing any contract or agreement for delay ; and stating that the payments were voluntary on the part of McCue, made because of his previous delays in the payment of interest, and to keep Harnsbarger in a good humor, in the hope that he would not press for the payment of the principal of the debt.
    *The endorsements on the bond referred to in the bill and answer, were as follows:
    April 1st, 1833. — Paid this day $180, being the amount of interest till 10th of April next. M. H. McC.
    November 20th, 1834. — Paid this day $127, being the amount of interest on this note, down to the 10th of April next.
    M. H. McCue.
    The last payment made previous to these was April 16th, 1831, when the interest for three years was paid.
    The cause came on to be finally heard in June 1854, -when the court perpetuated the injunction. Whereupon Harnsbarger’s administrator applied to this court for an appeal, which was allowed.
    Stuart and H. W. Sheffey, for the appellant.
    Michie and Baldwin, for the appellee.
    
      
      Now Trial — After»Discovered Evidence. — For the proposition that a new trial will not be granted on the grounds of newly-discovered evidence when the evidence is merely cumulative, the principal case is cited and followed in Brown v. Speyers, 20 Graft. 808, and note.
      
      Principal and Surety — Discharge of Surety. — In Poling v. Maddox, 41 W. Va. 786. 24 S. E. Rep. 1002, it is said; "Nor is the promise of Poling to put no more collections in the hands of Maddox binding, as he had the right to do so, and his promise was based on no consideration, and is like the promise of a creditor not to make his debtor pay, or like a promise to a surety to exonerate him, which does not bind. An agreement without consideration is no bar to legal rights. Mosby v. Leeds, 3 Gall 439; Herm. Estop. § 1093: Harnsbarger’s Adm,’r v. Kinney, 13 Gratt. 511.”
      
      The principal case is also cited in Coffman v. Moore,29 Gratt. 248, and cases cited; Sayre v. King, 17 W. Va. 574; Glenn v. Morgan, 23 W. Va. 469.
    
   SAMUELS, J.

A plaintiff who comes into a court of equity asking the new trial of an issue at law, on the ground of having discovered evidence after the trial, must show that he has not been guilty of laches in making the discovery; that the evidence is material to the issue; that it is not merely cumulative, or in addition to other evidence of like import heard at the trial. In the view I take of this part of the case, it is not necessary to consider any question other than the one whether the newly discovered evidence is cumulative, or whether it be such that no evidence of like substance was heard by the jury which tried the case. It was incumbent on the plaintiff to make out his case in all its material parts; he should have shown what newly discovered evidence he proposed to offer on a new trial; also what evidence had been offered *at the former trial, to the end that the court might see that the new evidence was not of the like substance and import with any portion of that already heard. The plaintiff in this case in his bill alleges that upon the former trial it was proved, “that the said bond of three thousand eight hundred and fifty dollars was an accommodation bond, and that said Harnsbarger knew it to be so, but there was a failure of proof satisfactory to the court or jury, as it would seem from the result, to show that he gave less for it than its par value, which, if proven, would have made the transaction clearly usurious and void.” This is not an allegation that no proof as to the particular fact stated had been offered, but only that the proof wras “not satisfactory to the court or jury.” This is not enough to justify the interference of the court; for in every instance in which the jury finds against a party who has offered proof to establish a fact or a series of connected facts to sustain the issue on his part, it is because the evidence is not satisfactory to the jury. The plaintiff seems to have been wholly intent upon proving in this case the usury alleged in defense, and to have omitted the plain duty, required by his case, of showing either that there was no proof at all, or no proof on which a jury might have acted, in regard to the fact he now seeks to prove by the newly discovered evidence. He has utterly failed to meet the exigency of his case, by showing that the evidence is not merely cumulative.

In the argument here, the counsel on both sides relied upon the record in the suit at law, of which the evidence at the trial is made a part. I do not perceive that this record has been made part of the record in the chancery cause (now before us) whilst in the Circuit court; and it cannot therefore be properly looked into. If it were otherwise, I would say that proof of precisely the same import as 'that now proposed to be offered, was heard on the trial at law; and that the *new evidence is merely cumulative. Thus I am of opinion no new trial of the issue on the plea of usury should be directed.

The appellee seeks relief upon the further ground that his principal McCue in his lifetime had sold to Harnsbarger, the appellant’s intestate, a tract of land at the price of three thousand dollars, to be applied as a credit to the bond on which the judgment was obtained; and that credit was not given for this price, but only for two thousand five hundred and twenty dollars, part thereof. Without stopping to comment upon the defects of the appellee’s proof of the fact alleged, or on the probable application of a portion of the price to another debt from McCue to Harnsbarger, it is enough to say that this is a defense which, if well founded, might have been made on the trial at law, and that no reason is shown for the failure to make it there.

The appellee seeks relief upon the further ground that the contract by which McCue sold to Harnsbarger the tract of land already mentioned, was extortionate and unconscionable, and wrung from the fear and distress of the debtor by his grasping creditor. If this were all true as alleged, it is impossible to perceive how the appellee can found thereon any claim to relief in this case. At a proper time and between proper parties it might have been a question fit to be investigated whether the contract of sale should be rescinded; yet this would afford no relief to the appellee whose obligation existed before the sale; he could not claim to have a new and different contract established, and credit for a larger amount placed on the bond.

The appellee seeks relief upon the further ground that by the contract for sale of land above mentioned, the sureties Kinne37 and Sowers were to be discharged from all liability ; and further that Harnsbarger should indulge McCue for the balance of the debt as long as Harnsbarger should live. These grounds for relief are *not, nor is either of them, established by proof. It is shown that pending the negotiation for the sale Harnsbarger did say that if McCue would sell the land on certain terms, McCue should never be troubled for the balance due on the bond ■ whilst his (Harnsbarger’s) head “was hot;” that Harnsbarger offered to take a new bond for the balance with McCue’s sons as sureties, but that it was not given; that McCue was anxious to relieve his sureties; that the deed was executed, and two thousand five hundred and twenty dollars credited on the bond. There is no proof whatever as to any thing said ór agreed upon when the contract was finally consummated, and in the final execution of the contract the parties were aided by others who were fully competent to put their agreement into an authentic form. In the absence of proof to the contrary, we must hold that the bond still retained by Harnsbarger, with the credit endorsed but in nowise changed beyond placing the credit on it, showed all that was agreed to be done in regard to the bond or the parties to it; that the written evidence of what was done contains every thing upon which the parties had agreed.

The several grounds of relief above mentioned were not passed upon by the Circuit court. The decree of that court, it would seem, is founded upon the allegation in the amended bill, that Harnsbarger, on two occasions, without the consent of the surety, did agree to receive from McCue the principal a sum of money as interest on the bond in advance of the time at which the interest was payable; and that the interest on these several occasions was so prepaid and endorsed on the bond. The endorsements are found upon the bond giving credit for money paid for interest which was thereafter to accrue. The evidence of a witness proves that the mone3r above mentioned was paid by him as the agent of McCue; that Harnsbarger did not require such prepayment, and that there was no express ^contract for indulgence in consideration thereof; that McCue was i-n pecuniary embarrassment, and that forbearance on the part of Harnsbarger was very desirable; that he had at times suffered the interest to fall in arrear, at which Harnsbarger was dissatisfied; that the prepayments were voluntary on the part of McCue, as well for the purpose of quieting Harnsbarger as of making amends for defaults in payment of interest at other times; that these were the motives which prompted McCue to make the payments in advance, but Harnsbarger was not informed of those motives.

Although it is not expressly stated in the decree of the Circuit court upon what ground the relief was granted, yet there is enough to show that it was upon the ground last stated.

It must be conceded that the doctrine of equitable releases to sureties is too firmly-settled in Virginia by the decisions of this court to be again drawn in question; that an agreement for valuable consideration between a creditor and a principal debtor, whereby the creditor, without the consent of the surety, contracts to forbear for a definite time the collection of his debt, is, in equity, a release of the surety, cannot now be doubted. Yet when the attempt is made to bring' a case of different facts within the principle of those decisions, we may well look into the principle itself to see whether its intrinsic justice and conformity with the general principles of equity require that it should be extended to a new class of cases. The decisions heretofore made have all proceeded upon the theory that by the contract for forbearance the surety would be subjected to liability for a longer time than that prescribed in his original obligation; that his right of substitution to the rights and remedies of the creditor would be impaired in case he paid the debt; and especially because the surety is thereby prevented from resorting to a bill quia timet, or a notice to the ^'creditor to collect the, debt. An agreement between creditor and debtor for forbearance is no bar to an action at law, unless it be a covenant never to sue, which is equivalent to a release to the party with whom the covenant is made. Regarding the subject as the courts of law regard it, a contract for indulgence would not delay a suit for the debt, and the surety might avail himself of his remedies to enforce the collection thereof, and thus obtain exoneration from liability. Ward v. Johnson, 6 Munf. 6; Steptoe’s adm’rs v. Harvey’s ex’ors, 7 Leigh 501; Devers v. Ross, 10 Gratt. 252.

Courts of equity, however, do interfere in any case in which the creditor and principal debtor, without the assent of the surety, make a contract fora consideration, however small, to delay the collection of the debt for a time, however short," and as it seems, relieve the surety; and this without enquiring whether the obligation of the surety has been varied in any appreciable degree, or whether his remedies, for all practical purposes, have remained unimpaired. This doctrine is founded upon the hypothesis that the principal debtor might enjoin a suit brought in violation of the contract for indulgence, and thus specifically enforce that contract. If there be no surety, a contract for indulgence would be enforced in equity only in a case in which the general principles of the court require that such relief should be given; that is, in case adequate relief may not be had at law: yet, if a surety be bound, then the debtor is held to have the right, in all cases, to -enjoin until the delay contracted for has been enjoyed; and the surety is thereby held to be discharged because of the change in his obligation, and the suspension of remedies whereby he might have sought exoneration. See 2 Rob. Prac. (old ed.) 134, and the cases there cited.

The case before us differs from all others decided in ^this court, in this, that no promise for indulgence was expressly given or contracted for; that the debtor having been in default in paying the interest theretofore due, made these prepayments as in some sort a compensation for his former remissness ; and further in the hope of propitiating the creditor to give future indulgence. Prom these facts the attempt is made to imply a contract that Harnsbarger should postpone the collection of the debt to the time when the principal of his debt should have earned the interest so paid in advance. I am of opinion that such implication is strained and unjust, and at variance with the facts as shown in evidence.

In the argument here the counsel cited many cases decided in different courts on the question whether the isolated fact of prepayment of interest on a debt already due would of itself justify the implication of a contract for indulgence, whereby sureties would be entitled to a release in equity. Some of these cases are in conflict; others of them were decided upon the peculiar laws of the states in which they were made, and could afford no aid in the decision of a case in this state. Not regarding this as a case of that kind, I deem it unnecessary to consider the question. It is the duty of the court to declare the law upon the case as it stands, and not as it would be if some of the facts did not appear therein. It will be the time to decide this much controverted question when it shall arise in some case depending for its decision upon the solution thereof.

I am of opinion to reverse the decree, to dissolve the injunction, and dismiss the bill.

The other judges concurred in the result.

Decree reversed.