Case ID: va_36/html/0068-01.html
Source: Caselaw Access Project
Author: {"author": "BROCKENBROUGH, J. *CABEEE, J. I", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

■Ashby’s Adm’x v. Smith’s Ex’x.
    January, 1838,
    Richmond.
    (Absent Brooke and Parker, J.)
    Principal and Surety — Restoration of Attached Effects to Principal — Discharge of Surety.* — Principal debtor and surety being bound in a bond for money payable at a future' day, the surety, before the debt has become payable, represents to the creditor that the principal is about to remove himself and his effects out of the commonwealth, and requests the' creditor to sue out an attachment against him, under the statute, 1 Rev. Code, ch. 123, § 14, and the creditor sues out the attachment accordingly, and it is levied on goods of the principal debtor sufficient to satisfy the debt; but afterwards, the creditor accepts a mortgage from the principal debtor to secure punctual payment of the debt when due, and thereupon the attached effects are, with the creditor’s consent, restored to the debtor, and the attachment no further prosecuted; and the debtor eloigns the mortgaged effects: Held, the surety is, in equity, discharged from the debt.
    Same — Right of Surety to Require Creditor to Sue Out Attachment — Quere, whether, in such case, the surety had a right, under the statute, 1 Rev, Code, ch. 116, § 6, to demand that the creditor should sue out and prosecute such attachment against the principal debtor?
    In 1820, Cuthbert Million, with Robert and John Ashby, his sureties, executed a bond to Thomas Chapman for 750 dollars, with interest thereon from the 11th February 1821, payable on or before the 11th February 1825 ; and in June 1821’, Chapman assigned this bond to George Smith. Before the money was due, Smith the assignee died, and the appellee, Delia Smith, qualified as his executrix ; and Robert Ashby, one of the sureties, also died, and administration of his estate was taken by Elizabeth Ashby, the appellant. Some four years after the date appointed in the bond for the payment of the debt, Smith’s executrix brought a suit on the bond against Ashby’s administratrix, in the county court of Stafford, and recovered judgment against her for the debt. Whereupon, Ashby’s administratrix exhibited a bill in chancery in the same county court, against Smith’s executrix, for an injunction to restrain her from further proceeding at law to enforce her judgment, upon the ground, that she had so dealt with Million, the principal debtor, in regard to the debt, and had so forborne to enforce satisfaction of. the debt out of his property when it was completely in her power to do so, as, in equity, to exonerate the sureties from all liability. The-state of the case appearing by the pleadings and proofs in this suit in chancery, was, in the view of this court, as follows :
    Mrs. Ashby, in June 1823, represented to mrs. Smith, that Million, the principal debtor, designed to remove himself and his effects from the commonwealth, before the debt secured by the bond would become due, and solicited her to sue out an attachment against his effects, in order to secure payment of the debt when it should become due, out of the same, under the statute concerning absent and absconding debtors, 1 Rev. Code, ch. 123, § 14, p. 478. Mrs. Smith was herself .convinced of the design of Million to abscond and carry away his effects ; but she referred mrs.' Ashby to her brother and agent, Murray Forbes, and her counsel, John M’Rae; and by their advice, an attachment was sued out against the effects of Million, in June 1823, returnable to the county court of Stafford ; mrs. Smith herself making the affidavit (required by the statute as the foundation of the proceeding) that she believed Million ^intended to remove himself and his effects put of the commonwealth before the debt would become due. This attachment was levied on the effects of the debtor ; but it was dismissed by the countj’ court, because, as mrs. Smith alleged, no proof of Million’s intention to abscond could be produced; whatever was the reason, it did not appear in the judgment of dismission. But it did appear, from a letter of Forbes, the brother and agent of mrs. Smith, which was written on the 30th June 1823 while the attachment was pending, and which was before the county court at the time it was dismissed, that he requested an interview with Million on the subject; saying, he had little doubt they could come to some agreement by which all Million’s property could be turned to him ; that all his sisters wished was to get the debt made secure at the time it should become due ; and that it was not wished to dispose of his property.
    That attachment having been dismissed, mrs. Smith again, at the renewed request of mrs. Ashby, and on her repeated representations that Million was about to abscond, and in the belief that he intended to do so, made the affidavit to that effect and executed the bond required by the statute, for the purpose of obtaining another attachment against the effects of Million, and, on the 5th April 1824, sued out the process ; leaving the rest of the proceeding to the management of her brother and agent Forbes and her attorney M’-Rae, whom she authorized to act as in their discretion they should think best for her interest. This second attachment was levied by the sheriff on slaves the property of Million, amply sufficient for the satisfaction of the debt; and return was made of the attachment, and of the levy thereof, to the county court.
    But, on the 9th April, four days after this attachment had been taken out and levied, a deed of trust was executed by Million to Forbes and M’Rae, conveying to *them ample property, part real and part personal, to secure the debt; and this deed was accepted and signed by Forbes and M’Rae as trustees, and after-wards duly recorded. The deed recited the debt due from Million to Smith’s estate, the second attachment sued out by the executrix against Million, and the levy thereof on his property ; and that she was willing not to prosecute the attachment, provided the property could be otherwise secured for satisfaction of the debt, reserving to he'rself, however, the right to proceed to judgment on the attachment or not, in her discretion, according to circumstances ; and that this deed should not prejudice mrs. Smith’s right of action upon the bond when the debt should become payable, but was only intended as a collateral precautionary security: and then the deed assigned and conveyed to the trustees, all the property that had been taken under the process of attachment, and in addition thereto, sundry debts due to Million, and some real estate ; upon trust, that if the debt should not be paid on the 11th February 1825, when it was to become due, the trustees might at any time afterwards sell the land and specific chattels thereby mortgaged, and collect the debts assigned, and apply the proceeds of sales and collections to the satisfaction of the debt due to Smith’s estate, and the costs of the attachment, in case the same should be dismissed by the creditor. The property thus mortgaged was a most ample security.
    Immediately after the deed of trust was executed, the property which had been attached was restored to the possession of Million, probably with the express consent, certainly with the knowledge and acquiescence, of Forbes, the agent of mrs. Smith, and she herself was apprized that it was so restored very soon afterwards, and acquiesced. From this time, no further proceeding was ever had on the attachment, except that it was continued from time to time in the county court, and, for aught that appeared, was still pending.
    
      Before the debt became due, Million eloigned all the personal property which had been attached and mortgaged for the debt: the real estate, which was the only part of the trust subject mortgaged by him for the debt that could be rendered available for the purpose, was sold; and the proceeds fell far short of satisfying the debt.
    It appeared, that after Million had absconded and eloigned his property, a request was made on behalf of mrs. Smith, to mrs. Ashby, that she should sign an order for the dismission of mrs. Smith’s attachment against Million, under the impression (apparently) that that proceeding had been instituted for mrs. Ashby’s benefit, and was subject to her control. Mrs. Ashby refused to sign the proposed order, or to interfere in any way, considering herself no longer implicated in any responsibility for the debt.*
    The county court was also of that opinion ; and, therefore, upon the hearing, perpetuated the injunction it had awarded, to restrain Smith’s executrix from farther proceeding on the judgment at law which she had recovered against Ashby’s administratrix. Smith’s executrix appealed from the decree, to the superiour court of chancery of Fredericksburg, from which the cause was transferred to the circuit superiour court of Spottsylvania ; which reversed the decree of the county court, dissolved the injunction, and dismissed the bill. And then Ashby’s administratrix applied by petition to this court, for an appeal from the decree of the circuit superiour court; which was allowed.
    Morson, for the appellant,
    contended, 1. That the acceptance by mrs. Smith of Million’s deed of trust for the *security of the debt due by the bond, was a new agreement, which of itself, in equity, discharged the sureties in the bond. For, he said, the deed of trust postponed the sale of the trust subject to a day far beyond the time when a sale of the attached effects would have been made, if the creditor had prosecuted her remedy on the attachment. And the execution and acceptance of the deed of trust were, in effect, an extinguishment of the attachment. On this point, he cited Boultbee v. Stubbs, 18 Ves. 20; Miller v. Stuart, 9 Wheat. 680 ; Bowmaker v. Moore, 7 Price 223 ; Steele v. Boyd, 6 Leigh 547; Hopkirk v. M’Conico, 1 Brocken. 220. — 2. That the subject mortgaged by the deed of trust for the security of the debt, had been lost to the creditor through gross neglect; and for that reason also, the sureties bound in the bond were exonerated. 3. That the mere failure of the creditor to prosecute her remedy on the attachment she had sued out against the principal debtor, w-is enough to exonerate the surety; since there was no doubt that that remedy, if diligently prosecuted, would have been effectual; and it was a remedy which the creditor alone could pursue, and which was not assigna/ble to the surety. Theobald’s Princ. & Sur. 147 ; Law Library No. 1, p. 87 ; Capel v. Butler, 2 Sim. & Stu. 457; 1 Condens. Eng. Ch. Rep. 543; Law v. East Ind. Co., 4 Ves. 824; Loop v. Summers, 3 Rand. 511. — 4. That the restoration of the property of the principal which had been attached .for the debt, was made with the consent, or at least with the knowledge of the creditor’s agent, and she afterwards acquiesced in and thereby sanctioned it; and this, at all events, exonerated the surety. He suggested, that the surety for a debt payable at a future day, had the like right to require the creditor to proceed by attachment against the principal about to abscond and to carry off his effects, as the surety for a debt due had to require the creditor to bring suit against the principal, under the statute 1 Rev. Code, ch. 116, § 6, p. 461. *But however that might be, he said the creditor here had in fact sued out the attachment against the principal, and the attachment had been levied on the principal’s property, which gave the creditor the same lien on it as an execution levied would have given her; and the restoration to the principal of his property taken on the attachment, had the same effect to exonerate the surety, as a voluntary discharge by the creditor of property taken in execution would have. He cited Mayhew v. Crickett, 2 Swanst. 185 ; Baird v. Rice, 1 Call 18; Bullitt’s ex’ors v. Winston, 1 Munf. 269 ; Chichester v. Mason, 7 Leigh 244.
    Harrison, for the appellee,
    answered, 1. That the taking of the deed of trust from the principal, to secure punctual payment of the debt on the very day appointed for the pay-meat thereof by the bond, a deed of trust whereby a subject amply sufficient for .the security of the debt was mortgaged, was indeed a new agreement, but it was one which neither took away nor suspended any right or remedy on the bond, of the creditor or of the surety, and therefore could not have the effect of exonerating the surety. The mortgage provided at the same time an idemnity for the surety, and a new security for the creditor. 2. He denied the fact that the property mortgaged by the deed of trust had been lost through any negligence of the creditor or her agents» or the trustees ; it was eloigned by the debtor before the debt became due. And there was no evidence in the record to prove the imputed laches, or to shew that any diligence would have been availing. 3. He insisted, that as the attachment against the effects of the principal was sued out by the creditor at the solicitation of the surety, so it was a proceeding instituted by the creditor for the benefit of the surety, which the surety had a right to prosecute; and the creditor had taken effectual care not to debar the surety of that right, by reserving to herself the right to pursue the remedy. 4. He denied, that, in point of fact, the attached effects *of Million had been restored to him, by any act of the creditor of her agents: but supposing the property was restored to the principal debtor, by the act or consent of the creditor, still, in order to exonerate the surety, it must appear, that the creditor did, by that act, injure the surety, by impairing her rights or remedies; that the creditor, by the restoration to the principal. debtor of his attached effects, obstructed the right of the surety to- pay the money herself, and thereby to require the power of pursuing the debtor for, indemnity, or her remedy by bill quia timet. He cited Norris v. Crummey, 2 Rand. 323, 334-8; Hunter’s adm’rs v. Jett, 4 Rand. 104 ; M’Kenny’s ex’ors v. Waller, 1 Leigh 434 ; Alcock v. Hill, 4 Leigh 622. And (referring to the language of Green, J., in Norris v. Crummey) he insisted, that, in this case, the surety had not been deprived, by the act of the creditor, of any legal or equitable remedy for relieving herself, nor had any such remedy of the surety been impaired by the creditor.
    
      
      See what is said in foot-note to Humphrey v. Hitt, 6 Gratt. 510, on this subject
    
    
      
      It may be proper to state, that there were some contested questions of fact in the cause ; but there was not much doubt about them; and in stating- the facts of the case the reporter has followed the opinion of the court upon the evidence. — Note in Original Edition.
    
   BROCKENBROUGH, J.

The ground on which the circuit superiour court rendered its decree, was, that there was not sufficient matter in the record to shew, that mrs. Smith, the appellee, was privy and, consenting to the procurement and execution of Million’s deed of trust of the 9th April 1824, or that she, by express directions, in person or bi' an agent authorized by her, required or allowed the sheriff to restore to Million the effects on which he had levied the attachment. It may be true, that she did not give those specific directions: yet if, she constituted a general agent with full powers to carry on legal proceedings against Million, for the purpose of securing out of his property the amount of the debt which was after-wards to fall due, and if she afterwards, by her acts or omissions, sanctioned the proceedings of her agent, she is as much bound by his acts, as if she had given him special and particular directions. Now, I think it clear enough, that mrs. Smith *did constitute her brother Murray Forbes her agent in this transaction, with plenary powers ; that he procured and accepted Million’s deed of trust, and it was with his consent, that the property of Million on which the attachment had been levied, was restored to him ; and that mrs. Smith-must afterwards have been informed of his proceedings, and acquiesced in and sanctioned them. The attachment was hers, not mrs. Ashby’s : and she was bound to hold on upon the security which it gave her, and not, by letting it go, jeopard the interest of the surety.

Such being my understanding of the facts of the case, the question for adjudication is, whether the release of the attachment lien which the creditor had on specific property of the debtor, is a discharge, in equity, of the surety ? In M’Kenny v. Waller, this court adjudged, that the withdrawal of an execution which had been delivered to a sheriff and which the sheriff was about to levy on property, but .had not levied, did not absolve-the surety, the creditor not binding himself to suspend the execution for any definite time, and having suspended it without any consideration. The same point was adjudged in Alcock v. Hill. I incline to the opinion, that those cases are rendered of doubtful authority by the opinions of our brethren Brooke and Cabell, in Chichester v. Mason ; to which we may add the opinion of the president, who had decided that case in the court below. But, however this may be, there is a sensible distinction between them and the case at bar. In those cases, the lien was not complete ; it was an inchoate lien on the chattels generally of the debtor : but here was a perfect lien on specific property. In the case of Mayhew v. Crickett, in which the creditor had taken the debtor’s goods in execution, but afterwards withdrew the execution, lord Eldon said, “I think it clear, that though the creditor might have remained passive if he chose, yet if he takes the goods of the debtor in execution, and afterwards withdraws the execution, he discharges *the surety, both at law and in equity.” The distinction between an execution delivered, and one levied, was strongly adverted to by our late brother Carr, and made the foundation of his opinion, in the case of Chichester v. Mason. .So, in Ward v. Vass, 7 Leigh 138, the same judge said, “ If the creditor discharges any specific lien.on the principal’s property, out of which he might have made the debt, he releases the surety from his obligation.”

Such is the established doctrine as to executions levied ; and I think the same reason applies to an attachment levied.on the goods of an absconding debtor. The statute places the attachment on the same ground with the execution. It directs, that when judgment is ren dered in behalf of the creditor on the attachment, “all goods and effects attached shall be sold and disposed of, for and towards satisfaction of the plaintiff’s judgment, in the same manner as goods taken in execution upon a writ of fieri facias.” The attachment levied, then, being a security which the creditor is entitled to apply in discharge of his ■ debt, he is bound either so to apply it, or to hold it as a trustee for the surety, ready to be applied, should the surety desire it (Theobald, p. 143, 2 Swanst. 185), and if he voluntarily parts with that security, the surety is absolved.

In this case, the creditor, by her agent, did part with a security on which she had a legal hold, and which would have been adequate, if retained, to pay off her whole debt; she was guilty of gross neglect in not regaining the property after she had let go her hold ; and she accepted, by her agent, an inferiour security, so far as regarded the property attached ; for although the same chattels which had been levied on were conveyed to the trustees, yet the possession of them, so far from being given to the trustees, was resumed and retained by the debtor. By this conduct of the creditor, I think that the surety was completely discharged.

I think the decree should be reversed, and the injunction perpetuated.

*CABEEE, J. I

concur. It is not necessary to decide, as a general question, how far the creditor of a debt payable at a future time, is bound, at the request of the surety, to sue out an attachment against the principal. It would seem, however, that the creditor, in this case, admitted her obligation to do so ; for she did in fact sue out an attachment, at the request of the surety; ,and having thus commencedit, she ought to have prosecuted it diligently. This she did not do ; for the attachment was, in fact, abandoned.

But there is another and a higher ground on which I place the discharge of the surety. The attachment sued out by the creditor was levied on property abundantly sufficient for the payment of the debt. This levy created a specific lien on that property ; and the discharge of this lien by the creditor, without the assent of the surety, was, on general principles of equity, a discharge of the surety. That this is so where the creditor waives the lien of an execution levied, was decided by lord Eldon in Mayhew v. Crickett. And I can perceive no difference in this respect, between the lien of an execution levied, and that of an attachment levied. This court, in the case of Chichester v. Mason, carried the principle still farther ; for it was there decided, that the waiver of a general lien on the property of the principal, resting on the mere delivery of an execution to the sheriff, was a discharge of the surety.

TUCKER, P. I am also of opinion, that the decree should be reversed.

By our statute providing remedies for sureties, a surety apprehending loss may require his creditor to proceed against the principal, in case an action has accrued against him. This requisition must be in writing; and upon its being made, the creditor is bound, within a reasonable time, to institute suit and to prosecute it diligently to judgment and execution ; and if he fails to *comply, the surety is by law discharged. Now in the present case, it is true it may be a question, whether, as the debt was not at the time due, the requisition could have been made by the surety. On the one hand, an attachment may truly be said to be an action ; and if there is reason to believe the debtor intends to abscond, the creditor may have this action ; and it is by no means clear, that in this, the case of the greatest exigency, the law did not intend the remedy to the surety. On the other hand, it may well be doubted, whether it ever could have been designed to Compel the creditor to institute a proceeding, which he cannot institute unless he himself really believes in the intention to abscond, and by which he renders himself responsible for heavy damages, if his fears should turn out to be groundless. But, be this as it may, mrs. Smith did commence this proceeding upon the requisition of mrs. Ashby ; and whether she was bound to do it or not, and whether the request was in writing or not, is now no longer of any importance. Having commenced the process at the surety’s instance, and having attached effects sufficient to secure the debt, she was thenceforth bound, in the language of the statute, to “proceed with due diligence in the ordinary course of law to recover judgment ” and obtain an order of sale. For, having already commenced the proceeding, it would have been a vain thing for the surety, after the debt became due, to make such demand in writing as the statute required; and the rather, as the pendency of this attachment would have been an obstacle to any other proceeding. All that the surety could expect was, a compliance with the statute in the use of due diligence. Has the attachment been prosecuted with due diligence ? It cannot be pretended ; and the legal consequence is a discharge of the surety.

Decree reversed, and injunction perpetuated.