# Bank of the United States v. Weisiger/Opinion of the Court

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* Case Syllabus
* Opinion of the Court
United States Supreme Court
27 U.S. 331
Bank of the United States v. Weisiger
APPEAL from the circuit court of Kentucky.
The complainants' bill, filed in the circuit court of Kentucky, on the 22d of November 1822, stated that, on the 25th of July 1821, Peter G. Voorhees made his promissory note for $2,560, payable sixty days after date, to Daniel Weisiger; that Weisiger assigned to John H. Hanna, and Hanna to the complainants, who discounted the note. That they duly instituted a suit against Voorhees, on the common law side of the court, recovered judgment, and prosecuted him to insolvency. It prayed that the defendant may be decreed to pay the amount, with interest and costs.
Annexed to the bill is a copy of the record of the proceedings against Voorhees, from which it appears, that the declaration was filed on the 2d of October 1821; and on the same day a writ of capias ad respondendum was issued, with this memorandum-'This is an action of debt; bail required.' The marshal made return to the writ, as follows-'Executed 6th of October 1821: and committed defendant to jail of Franklin county: receipt hereon.' The jailor's receipt bears dete 5th of November 1821.
At November term 1821, judgment was entered for the plaintiffs, by default, for $2,560, with interest from the 26th of February (September) 1821, and costs. Afterwards, on the 14th of December 1821, the jailor of Franklin county surrendered the body of Voorhees into court.
On the 29th of December 1821 a fieri facias issued, which was placed in the hands of the marshal on the 19th of January; and the marshal returned-'No estate found.'
On the 11th of April 1822, a writ of capias ad satisfaciendum issued, to which the marshal returned-'Not found.'
To this bill the defendant Weisiger moved the court for leave to file a demurrer, alleging for cause, that the bill did not aver the prosecution of any suit against Hanna, the immediate assignee of the complainant, and that Hanna was not made a party defendant; that the bill contained no case of equitable jurisdiction, nor for a decree against Weisiger; and was altogether void of equity.
Afterwards, in the same term, the defendant Hanna appeared, and waived all objection to a decree, on account of the want of service of process upon him, and Weisiger waived the demurrer, so far as respected the want of proper parties.
And at the following term the court overruled the demurrer.
At May term 1826, the defendants failing to answer according to rule, the bill was taken for confessed, and the cause came on for hearing on the bill and exhibits; whereupon the court decreed that the complainants should recover from the defendant Weisiger the sum of $3,278 17 cents, and costs, unless, &c.; which decree was afterwards set aside on Weisiger's motion, and leave given him to file an answer.
The answer of Weisiger, protesting against the jurisdiction of the court, relies and insists, by way of plea in bar to the relief claimed, that the matters contained in the bill, if true, do not constitute a case for the interposition of a court of equity, but are cognisable at law, and relies upon the 16th section of the judiciary act of 1789. It admits that he may have put his name on the note, but denies that he ever received any consideration for the same, or that it was ever passed or negotiated by him or for his use or benefit. He answers further, that he did not, of his own knowledge, know of the discount of the note, although he was informed that such discount had been made, and for a long time believed that it had been fully satisfied by Voorhees; that he is advised that the proper measures were not adopted in due season to enforce the payment; and that the proceedings had, were not such as to authorise a recovery against him, inasmuch as the return of the marshal shows that Voorhees was committed to jail, and it does not appear that he had ever been discharged, or escaped, and there does not appear to have been any order to charge him in execution; nor is there any return that he had no property or estate on which the fieri facias might have been levied. He does not admit that Voorhees was insolvent at the time the judgment was obtained against him, but believes he then estate within the district sufficient to satisfy the same, in whole or in part.
The complainants' amended bill states, that before the rendition of the judgment against Voorhees; he was brought before the district judge, took the oath required by the act of congress, and was discharged as an insolvent from the custody of the jailor. Shortly after, and before the return of the fieri facias, he left the state, and has ever since remained out of it, leaving no estate upon which the amount could be levied, or any part of it; all of which is averred to be personally known to Weisiger, as is also the fact that he indorsed the note for the accommodation of Voorhees, and to give him credit, and with the view and expectation that it would be discounted by the bank.
The exhibit referred to in the amended bill, states the proceedings to discharge Voorhees from imprisonment, in three suits of the bank of the United States, entitled as follows:
The president, directors, and company of the Bank of the United States, plaintiffs, vs. Peter G. Voorhees, defendant.
The same vs. the same.
The same vs. George M. Bibb, Charles S. Todd, and Peter G. Voorhees.
The judge's order to discharge, dated 14th December 1821, states that Voorhees was imprisoned in the jail of Franklin county by process in these suits; that judgment had been rendered in the suits, and he had petitioned to have the oath administered to him; that a citation had been served upon Henry Clay, esq. agent, &c.; that they appeared, and no good cause being shown, the oath was administered, and he was discharged.
The citation bears date the 14th of December 1821, and requires appearance on the 7th of January following. And then there is a paper of which the following is a copy:
'I agree, on behalf of the Bank of the United States, to waive the previous imprisonment by law to entitle the defendant to take the oath of an insolvent debtor, and that the said oath may be now administered, with the same effect as if that imprisonment had taken place. 14 December 1821.
(Signed) H. CLAY, Counsel of the B. U.S.'
Upon the bills, answer, and exhibits above set forth, the court, at May term 1827, decreed the complainants' bill to be dismissed with costs.
Mr Sergeant, for the appellants, complainants below, made the following points:
1. The defendant not being the immediate indorser to the complainant, but a remote indorser, the case was cognisable and the complainant relievable only in equity.
2. That, having proceeded at law, with due diligence, against the drawer, and the drawer being insolvent, the complainant was entitled to relief against the indorser.
3. That the discharge by the district judge, or the consent of the counsel of the plaintiff to waive the thirty days' notice, or the thirty days' imprisonment, or any part thereof, did not impair or affect the right to recover against the indorser.
4. The fact of Voorhees's insolvency is established by the oath taken by him before the district judge, which is at least prima facie evidence, and sufficient until the contrary appear, as well as by the return to the fieri facias; and that fact being established is sufficient to entitle the complainant to recover: For,
5. The discharge could not prejudice the indorser. His cause of action against the drawer will accrue by the payment of the money, and be unaffected by the discharge.
6. That the decree below ought to be reversed, and a decree rendered for the appellant.
1. As to the objection that the bill contained no case for equitable jurisdiction, and was altogether without equity; he said the whole of the questions in the cause, the present included, depended upon a law peculiar (as far as he knew) to Virginia and Kentucky, and derived by the latter from the former. It was not created by statute, but was the common law of the state, in the case of indorsers or assignors, as expounded by judical decisions.
The first case in the books was Mackie's executors vs. Davis and Young, in Virginia, 1796. 2 Wash. Rep. 219. It makes no distinction between bonds and notes, sealed and unsealed instruments. It established in general, 'that the assignor is liable to the assignee, provided due diligence be used by him against the obligor or drawer, and the latter prove insolvent.' Tuck. Bl. 442, in note. In Lee vs. Love, 1 Call, 497, 1799, it was decided that the assignee of a note must sue the maker before he can resort to the assignor. The liability of the indorser, therefore, is dependent upon a condition which elsewhere does not belong to it, of due diligence being first used against the drawer and failing from his established want of ability to pay.
Against the immediate indorser the remedy is at law; against a remote indorser, in equity. Mandeville vs. Riddle, 1 Cranch, 293. Riddle vs. Mandeville, 5 Cranch, 322. Drake vs. Johnson, Hardin, 218. S. P. 3 March. 163.
This being decided by the Supreme Court of the United States, as well as by the tribunals of Kentucky, there can be no doubt that the present is a case for equitable jurisdiction; being the case of a remote, and not of an immediate indorser; there is no jurisdiction at law.
That the bill was without equity is supposed to be made out, because Hanna, a subsequent indorser to Weisiger, was not first prosecuted to insolvency, and because (as alleged) there was no consideration from the bank to Weisiger.
To the first of these suggestions, after stating that Hanna was a party defendant, he replied that it was no part of the condition of the holder's resort against one indorser, that he should first proceed against another. Their common liability was dependent upon one and the same condition, that is, the failure by due diligence to obtain the money from the drawer; upon which condition they all became liable, and the holder might proceed against either. Such was the law as decided. Independently of this, it must be obvious that no reason can be assigned for requiring the holder first to proceed against a subsequent indorser, inasmuch as a recovery from him would give him an immediate action against the prior indorser. This is contrary to the principle of Riddle vs. Mandeville. There is no ground, however, for the suggestion.
To the other he replied, that if it appeared (which he did not admit) that there was no beneficial consideration from the bank to Weisiger, still there was a consideration sufficient at law and in equity to support the contract-the consideration of injury to the bank. The money was loaned (whoever may have received it) upon the credit of the indorser. His contract was the inducement to lend, without which the loan would not have been made.
2. The complainants, he said, had fully performed the condition to entitle them to recover from the indorser. They had proceeded at law with due diligence against the drawer until he became insolvent, and further pursuit became hopeless. To proceed further could not be required, and would be liable to censure if attempted at the expense of the indorser. He is answerable for costs reasonably incurred, but not for expenses entirely thrown away.
The note fell due the 26th of September 1821. Suit was brought against the drawer the 2d of October 1821, to the next term. At the next term judgment was obtained. A fi. fa. issued December 29, 1821, and a ca. sa. the 11th of April 1822. In the mean time, to wit, December 14, 1821, Voorhees was discharged under the insolvent law of the United States. So that here there were due diligence, and established legal insolvency. There was even more than due diligence; for after the insolvency, the process of execution was unnecessary and could only have been taken out from abundant caution.
He then examined all the decided cases in Kentucky, so far as they were accessible(a), and proceeded to state, that
(a) The following abstract of the cases which have been decided in the courts of Kentucky, for which the reporter is indebted to the counsel of the appellant, will be found highly useful and interesting to the profession.
M'Kinney vs. M'Connell, 1 Bibb, 239. 1808.-Assignor holding up obligation for fourteen months without suit, was guilty of gross negligence. Not accounting for this delay, he was not entitled to recourse against assignor. If the debtor was in doubtful circumstances, the necessity for due diligence was therefore the greater.
Smallwood vs. Woods, 1 Bibb, 542. 1809.-Assignee to use every compulsory process of the law against the debtor; and all the incidental remedies to compel payments; except where obligor is out of the commonwealth, and such absence was not contemplated by assignor and assignee. To omit to demand bail, where bail was of right demandable, in case the ca. sa. should be returned non est inventus, would be negligence. Where bail given, the assignee must proceed against bail, upon n. e. i. returned against principal. Refers to Mackie's Ex. vs. Davis, 2 Wash. 219; Boal's Ex. vs. M'Connell, Pr. Dec. 152.
Spratt vs. M'Kinney, 1 Bibb, 595. 1809.-Assignment on assignment of a covenant. Absence of debtor from the circuit is not sufficient to entitle the assignee to recourse against the assignor. Diligence by suit cannot be dispensed with by averring that debtor was insolvent.
Drake vs. Johnson, Hardin, 218. 1808.-The assignee of a bond or note cannot sue a remote indorser, for there is no privity between them. Refers to 1 Cra. 209: Mandeville vs. Riddle, S. P. 3 Marsh. 163; 2 Tuck. Bl. 442, a case in district court, Virginia; and a case in Maryland, see p. 222.
Hogan vs. Vance, 2 Bibb, 34. 1810.-The sheriff's return of no property to a fi. fa. directed to the county where debtor resides, is conclusive evidence that he had no property in the county; and prima facie, that he hath none elsewhere. But such return on an execution, directed to a county where he does not reside, is no evidence of insolvency. The assignee must use due diligence to recover the money from the obligor; if he do not, and debtor become insolvent, he makes the debt his own.
Thompson vs. Caldwell, 2 Bibb, 290. 1811.-Suit against two obligors, (first one and then the other added,) fi. fa. against one, and afterwards ca. sa. against both. Sheriff returned that he had taken defendant and released by county court. Held not sufficient against assignor. Ought to have been a fi. fa. Doubt, to which defendant the return applied. Doubt, as to power of court.
M'Ginnis vs. Burton, 3 Bibb, 6. 1813.-Assignee of note (bond,) holding up for ten months without bringing suit, and not accounting for delay, guilty of negligence. Staying execution by plaintiff, after property seized by sheriff, discharges assignor. Replevying debt is conclusive evidence of solvency at the time, and if bond afterwards quashed for irregularity, remedy is against officer, and not assignor. (Seems otherwise, 2 Litt. 132, post, in this note.) he perceived in them nothing which appeared to him to interfere with the complainants' right to recover.
Young vs. Cosby, 3 Bibb, 227. 1813.-If the assignee prosecute diligently as far as a prudent man would do, in a case where he was solely interested, that is all that is required to give him recourse upon the assignor. If he sue a fi. fa. which is returned nulla bona, and then a ca. sa. upon which the debtor is arrested, and discharged for want of security for prison fees, this is not laches, unless the debtor had property not within the reach of a fi. fa., which the assignor must prove.
Campbell vs. Hopson, 1 Marsh. 228. 1818.-On a transfer of a bond, a covenant to be liable if obligor not solvent, does not vary legal liability of assignor. Must be diligence. 'Failing to commence his action for four months, inexcusable delay. Fatal negligence not so to prosecute it, as to ascertain insolvency or fix the bail.'
Stapp vs. Anderson, 1 Marsh. 535. 1819.-The insolvency and removal from the state of the drawer, per se, subjects the assignor without suit against the drawer. 'The law does not require any one to do a vain or idle act.' A note negotiated in bank is a mercantile paper, &c. See S. P. Dodge vs. Bank, 2 Marsh. 610.
Collyer vs. Whitaker, 2 Marsh. 197. 1820.-Assignee preferring a petition and summons, and thereby waiving his right to bail, must show payee's insolvency by ca. sa. not aliunde. Note, in this case, no neglect imputed for not requiring bail, which is contrary to 1 Bibb, 542. (Perhaps they may be reconciled: the one speaking of a return of non est, and the other supposing an arrest.) As to time of bringing suit, the case says, 'shortly and within a reasonable time after note became due;' not immediately. As to fi. fa. 'which issued in reasonable time;' not immediately. Supposes that in general 'insolvency only legitimately proved by suit,' & c. 'The prosecution of suit, however, is essential barely as the means of ascertaining,' &c.
Clair vs. Barr, 2 Marsh. 255. 1820.-If drawer dead at time note falls due, without heirs or letters testamentary, parol evidence may be received of insolvency. But if he be alive when note falls due, insolvency does not absolve holder from necessity of suing; he may have had credit, though without property. Note 1. In this case, the drawer died on the third day of the first term after the note fell due, being about two months. The court say that a suit was essential, that proof of insolvency could make no difference, and yet reverse the judgment below, because parol proof of insolvency was not received. Note 2. 'He might not have been without credit,' &c. i. e. there was no open, public, or legal insolvency; therefore he might possibly have paid, & c. In this sense (which is the obvious one) it is correct. It cannot be proved that he would not have paid, as he was going on. Many men are insolvent. This reconciles it.
Smith vs. Blunt, 2 Marsh. 522. 1820.-Omitting to issue a ca. sa. for five months after the return of the fi. fa. is an unreasonable delay, and discharges assignor. Note. There appears to have been some interval between judgment and fi. fa. Certificate of discharge as an insolvent debtor in another suit, is not evidence, as he is liable to be imprisoned in other suits.
Parker vs. Owings, 3 Marsh. 59. 1820.-Assignor not liable, though drawer has taken the oath and surrendered a schedule; unless schedule produced and amount of property ascertained, the assignee is bound to pursue the property.
Oldham vs. Bengan, 2 Littell, 132. 1822.-1. Not obliged to sue at first term, if he cannot by so doing get judgment. 2. Not obliged to apply the The point to be established by a reasonably diligent pursuit, is the insolvency of the drawer, or the impossibility of getting the money from him. Upon that being established, the right arises against the indorser. It may be established in various ways.
1. By showing that he was out of the state and not within the reach of process, and without property in the state. This he inferred from Spratt vs. M'Kinney, 1 Bibb, 595. Stapp vs. Anderson, 1 Marsh. 535.
2. By the use of due diligence, and inability to recover, or prosecution to insolvency. He must sue in a reasonable time. M'Kinney vs. M'Connell, 1 Bibb, 239. M'Ginnis vs. Burton, 3 Bibb, 6. But there is no fixed time. Collyer vs. Whitaker, 2 Marsh. 197. Perhaps it must generally be the next term. Clair vs. Barr, 2 Marsh. 255. He must use the ordinary remedies. Smallwood vs. Wood, 1 Bibb, 542. But he is not bound to use extraordinary ones. Oldham vs. Bengan, 2 Littell, 132. He must in general issue fi. fa. and ca. sa. and issue them in succession. He cannot issue them together. No decided case gives any countenance to the suggestion that he can do so. The records in this court show that he cannot. The return to the fi. fa. directed to the county where party resides, is conclusive to show that there is no property in the county, and, prima facie, that there is none in the state.
The result is to be insolvency, evidenced by legal pursuit. The end and object is to make this appear.
3. Insolvency, legally ascertained by other means. When this occurred after the note fell due, he contended, that it dispensed with legal pursuit. When it occurred after proceedings begun, he contended it dispensed with further prosecution. The contrary doctrine woule be absurd, the object being to ascertain insolvency. Why proceed after it had been ascertained?
Upon this point, there was a seeming contradiction in the decided cases, but it was not a real one. It was explained by the principle of the decisions, which was this: that parol evidence should not be received to prove insolvency. It must be a legal insolvency, legally or judicially ascertained.
This would appear from a brief attention to the cases. In Collyer vs. Whitaker, 2 Marsh. 197, it is said, 'insolvency, in general, only legitimately proved by suit.' 'The prosecution of suit, however, is essential, barely as the means of ascertaining, &c.' In Young vs. Cosby, 3 Bibb, 227, 'if the assignee prosecute diligently as far as a prudent man would do in a case where he was solely interested, that is all that is required.' In Stapp vs. Anderson, 1 Marsh. 535, insolvency and removal of the drawer from the state were held sufficient, per se, to subject assignor, without suit against drawer. 'The law,' says the count, 'does not require any one to do a vain or idle act.' If sued to insolvency on one note, therefore, not necessary to sue upon another. These cases are supposed to be contradicted by Clair vs. Barr, 2 Marsh. 255. In that case, the drawer was living when the note fell due. He died on the third day of the first term, being about two months after the note fell due. The court decide that proof of insolvency did not absolve the holder from the necessity of suing: 'he (the drawer) may have had credit, though he had no property.' The decision, therefore, amounts to nothing more, than that, at a subsequent time, parol evidence shall not be received to prove that the party was actually insolvent at a prior time. In other words, actual insolvency no excuse. The debtor was going on in business, 'had credit,' and possibly might have paid. How could this be if he were legally divested of all his property, and stripped of all his credit, by judicial insolvency? It is a reasonable distinction; the same that is made by the priority laws of the United States. They disregard actual insolvency.
This case, therefore, leaves in full force the reasonable doctrine of Young vs. Cosby, and Stapp vs. Anderson: otherwise understood, it would be contrary to the very principle of the law, and would go far towards extinguishing all liability of the indorser, already sufficiently reduced.
3. The discharge by the judge, and the waiver of the thirty days imprisonment, or thirty days notice, did not take away the right of the complainants. Why keep him in prison?
The insolvency would no more have been ascertained at the end of thirty days, than at the beginning. It would have been mere wanton cruelty to keep the debtor in prison. The law does not require it. The decisions in Kentucky, which are in the spirit of humanity to the debtor, do not require it. Else why not require the creditor to pay the prison fees, and thus continue the debtor's imprisonment? It is not necessary to use undue severity or indulge in unproductive cruelty. Young vs. Cosby, 3 Bibb, 227. It has been supposed (and perhaps the belief led to this decision) that Clair vs. Barr established the doctrine, that a creditor was bound to keep in prison a destitute and insolvent debtor, in the hope that, though he had nothing himself, something might be extorted by his sufferings from the charity of his friends. This is not a just motive, nor one that a court can countenance. Imprisonment of a debtor is not to be used at this time of day for inflicting a punishment upon him or his friends. Why then, it is said, is a ca. sa. given? The answer is very easy. It is to compel the surrender of property, which, from its nature or locality, cannot be made amenable to other process. But Clair vs. Barr does not proceed upon the principle imputed to it. Rightly understood, it is in harmony with the other cases, and with the obvious dictates of humanity and justice.
As to the supposed neglect to charge Voorhees in execution, he said he doubted whether it was in any case required, or even admissible; for the decisions in Kentucky made it necessary first to issue a fi. fa. But without entering into that question, he said that in this case the discharge under the insolvent law dispensed with that step, and, indeed, made it impossible.
He submitted, therefore, that the decree below was not warranted by the principles upon which the liability of indorsers rests, nor by the decisions in Kentucky; which had certainly gone far enough in limiting and crippling the rights of the holder.
Mr Wickliffe, for the appellee, stated that it was denied that any consideration had been received for his indorsement by Daniel Weisiger; and he also denied that the bank had used due diligence to obtain payment of the note from the drawer. The facts of the case are uncontradicted upon the pleadings and exhibits, as there was no evidence introduced to oppose the statement and allegations in the answer of the appellee in the circuit court.
The Court should be aware of the nature and legal character of paper of the description of that upon which the appellants claim to receive. Such instruments are not negotiable by the laws of Kentucky; the statute of Anne never having been in force in that state. The party who sues may do so upon a statute of Kentucky, which authorises the suit in the name of the assignee, but goes no further.
The true principle upon which the responsibility of the assignor depends, and upon which it can alone be supported, is the general liability to refund that which he may have received, on a consideration which has failed. 1 Bibb, 545. In 1 Marshall, 544, it was decided that this liability was thus restricted, and did not extend to the amount stated in the note. Under the authority of cases in Kentucky, the assignor is not liable without a consideration received by him; nor unless the consideration be alleged and proved. 1 Bibb, 596. 2 Bibb, 425.
The only case which impugns the aniform current of decisions in Kentucky upon these principles, is that of Allen vs. Prior, 3 Marshall, 305.
The appellee received nothing for his indorsement of the note; and he is, therefore, protected from all liability upon it, by the decisions of the courts of Kentucky.
There cannot be a liability by the appellee, considering him as having guarantied the debt. Such a liability should have been in writing; as, unless it is so, the statute of frauds destroys it.
It is not denied that the injury a promissee may receive, as well as a benefit given to the promissor, is a good consideration; but if the principle is otherwise, it can be claimed only in favour of an original indorsee. In this case the bank stands independant of such a principle, for to the bank no promise was ever made by the appellee, his engagement having been made to Hanna, the preceding indorsee. But if a responsibility by the assignor does exist, in a case where he received no benefit, and a chancellor will interpose and enforce the contract; this will only be where the condition imposed by the law governing the contract has been performed.
The next inquiry is, therefore, has the law creating this liability of the assignor been complied with?
The assignee ought to take every compulsory process of law against the original debtor, until his insolvency is established; or the suit and all incidental remedies are found insufficient to coerce payment. Smallwood vs. Woods, 1 Bibb, 546.
To omit holding to bail, when bail is of right demandable, if on a ca. sa. the return is non est inventus; is negligence. 2 Marshall, 197.
The assignee is bound to issue a fi. fa. and a ca. sa. all if the debtor is not found, to proceed against the bail. Nothing short of this will do. 1 Bibb, 147. In M'Kinney vs. M'Connell, 1 Bibb, 239, it was decided that a delay of fourteen months, is per se negligence, no matter what other steps may have been taken.
Averment of insolvency, and consequently proof of that fact, by any other means than a legal proceeding on the note assigned, will not be sufficient to charge the indorser, 3 Bibb, 6.
Mr Wickliffe also cited the case of Hogan vs. Vanel, 2 Bibb, 34; Thompson vs. Caldwell, 2 Bibb, 290; also 3 Bibb, 6; and Young vs. Cosby, 3 Bibb, 227; upon these points. Also 2 Marshall, 524; 2 Littell, 134; and Parker vs. Owingson, in 3 Marshall.
These authorities, he contended, maintain the absolute obligation of industry and vigilance on the part of the assignee; and they also establish the principle, that the rules in relation to a guarantee are to be construed under the law, with great strictness.
He also argued that the proceedings under which the drawer was discharged from the process against him by the district judge, were irregular, and subjected the appellants to all the consequences of their illegality.
By the pleadings and evidence it appeared that the note fell due on the 23d of September. A writ was issued on the 2d of October, in which bail was required: this was returned 'executed' on the 6th of November, the defendant having been committed to prison on the preceding day. On the 20th of November, judgment was entered by default, and afterwards in December, during the same term, the jailor surrendered the body in court. It was the duty of the plaintiff to charge the defendant in execution; and if not so charged within thirty days, then, and not before, he might be discharged under the insolvent law.
The discharge by the district judge was before the thirty days, of a prisoner not in execution; and this was done by a waiver of the time required by law. The assignee is not permitted to run a-head of the law, and discharge a debtor before, under its provisions, he is entitled to it. By not proceeding according to law, and failing to pursue the course the law marks out, he releases the assignor from all responsibility to him.
The district judge had no jurisdiction. His authority was to administer the oath; but the act of congress directs him not to do so until after thirty days. The period of thirty days is given for the benefit of the creditor, and of those who are interested that the debt should be paid. All such are therefore parties interested in the proceeding; and if the consent of the creditors can give the right to discharge, all should consent. The assignor should have consented, as his responsibility became consummate by the discharge.
The consent of the counsel for the appellants, alone gave jurisdiction to the district court; or was so considered. If it did not, where is the prisoner? The discharge being illegal, he has escaped, and may be pursued and retaken, or the jailor was liable.
It is manifest that the appellants considered that they had not used the diligence required of them. They proceeded afterwards by a fi. fa. which was issued on the 29th of December, but which did not reach the hands of the marshal until the 9th of January following; and which was in March returned 'no effects.' After the return in March, a ca. sa., issued in April, one month having expired.
It has been decided, that it is the duty of the party to place his writ in the hands of the officer in a reasonable time. Tremble vs. Webb, 1 Monroe, 100.
He further argued, that if the discharge of the drawer by the district judge was not in the suit brought upon the note for which the appellee was now claimed to be liable, and this might be inferred from the record, the discharge in another suit was not evidence of insolvency.
In reference to one of the cases cited by the counsel for the appellants, he argued, that where it had been considered that not holding to bail was not laches, the case was one in which a speedier remedy was obtained by petition and summons, in which no bail was allowed, and good faith was presumed.
Mr Justice JOHNSON delivered the opinion of the Court.
This case turns altogether upon doctrines peculiar to the states of Virginia and Kentucky. It is the case of a suit in equity, instituted by the indorsee, or, in the language of the country, the assignee, of a promissory note, to charge an intermediate indorser. All the doctrine on the subject will be found fully stated in the two cases of Riddle & Co. vs. Mandeville & Jameison, reported among the decisions of this Court; and in the cases of Smallwood vs. Woods, and Spratt vs. M'Kinney, to be found among the decisions of the court of appeals of Kentucky.
The defendant here has demurred to the bill, for want of equity, and this raises the first question in the cause.
In the last case decided in this Court, between Riddle & Co. vs. Mandeville & Jameison, which was a case in most respects similar to the present, this Court decided, that a suit could be maintained in equity by the holder of an indorsed note against a remote indorser; and upon grounds perfectly familiar to courts exercising equity jurisdiction. It was a Virginia contract, governed by the same law which is of force in Kentucky. This Court had before decided, that by the laws of the country, governing the contract, a suit at law could not be maintained between the holder of the note and a remote indorser. But then a suit at law could have been maintained by him against the immediate indorser, and by him against the preceding indorser, and so on through any number of indorsers. This presented the ordinary case of an assignment of a chose in action, which transfers an interest without the right of action.
To maintain this demurrer then, it was incumbent on the defendant to have shown, that there was some principle in the jurisprudence of Kentucky, that could sustain a distinction between his case and that previously decided here: but every thing concurs to repel the idea of such a distinction. In the case of Drake vs. Johnson, the court of appeals of Kentucky also decided, that a suit at law could not be maintained in that state by the indorsee against a remote indorser.
The conclusion then results from our own decisions that he must be let into equity; for an indorsement is certainly no release to the previous indorsers, and the ultimate assignee alone is entitled to the benefit of their liability. And this we understand to be consistent with the received opinions and practice of Kentucky.
The second point made for the defendant is, that as he received no consideration for assigning the note, he is not liable at all.
But on this it is only necessary to observe, that he indorsed it to give credit to Voorhees, the promissor; and the law therefore imputes to him the consideration paid to Voorhees.
The most material point in the cause, and that on which the decision below was rendered in favour of the defendant, was the want of due diligence against the drawer of the note. The law is settled there, as it is in Virginia, and in this Court, upon Virginia contracts of this description; that every reasonable effort must be made to recover of the drawer by suit, before the assignee can have recourse against the assignor or indorser. It is on the question what constitutes such diligence, that all the difficulties arise on suits upon these contracts. And certainly this Court cannot be called upon to carry the obligations imposed upon assignees on this point, further than the state courts have already extended them.
There are three grounds on which the defendant would impute to the complainant a want of diligence, fatal to his right to recover.
The first is, that the fi. fa. did not come to the marshal's hands, until the expiration of about thirty-six days after the judgment was obtained, and nineteen after it issued.
The second, that the ca. sa. did not issue until about three months and a half after the fi. fa.
Let it be observed, that the note fell due on the 25th of September, the writ was issued on the 2d of October; the judgment was entered the November term following; and the drawer, Voorhees, being held in custody for want of bail, was discharged, as insolvent, on the 14th of December of the same year.
Justice can bardly be charged with a halting gait thus far. As to her subsequent progress, it does not appear on what day the court for November term adjourned; but as the fi. fa. bears date on the 29th of December, it is presumable that it sat on that day. The fi. fa. did not reach the office of the marshal until three weeks after; and the ca. sa. was not sued out at the time when the fi. fa. issued. But it was sued out at the term to which the fi. fa. was returnable, to wit, on the 11th of April 1822. So that from the time the note fell due, to the last step in the progress of judicial means for enforcing payment, we count but six months and a half. We do not recognise the supposed obligation or power of the party, in the circuit court, to sue out the ca. sa. contemporaneously with the fi. fa.; and with the exception of that interval, we are rather inclined to attribute to the complainant extraordinary diligence, than culpable delay.
But, why were the executions issued at all in this case, except from abundant caution, and to avoid the imputation of laches? Was it necessary? The courts of Kentucky have certainly decided otherwise. In the case of Stapp et al. vs. Anderson et al. 1 Marsh. 240, they express themselves thus:
'The discharge of an insolvent under our statute is a judicial act, of a record character, and is in its nature, as it must be in contemplation of law, the most satisfactory evidence of the insolvency of the person disclarged.'
This, it is true, was declared respecting a discharge in another suit, on a different cause of action, under the insolvent law of the state, and upon a ca. sa. But it would be difficult to assign a reason, why it should not apply to a discharge in a suit on the same cause of action, under the law of the United States, and where the defendant was in custody under an order for bail. In both instances, a state of insolvency is judicially eatablished; and as the court expresses itself in the same case, 'it would have been worse than idle,' nay, in this case it would have been false imprisonment, to have re-taken the debtor; if, as the defendant contends, and no doubt was the fact, he was discharged under the suit upon this note.
The third and last ground of laches, and that which it appears, by a report handed to us, influenced the court below, was the consent of the agent of the complainant to dispense with the imprisonment to which the drawer of the note might have been subjected, before he would have taken the oath, and received a discharge under the act of congress.
The correctness of the decision below upon this point must be tested by considerations drawn from the object of the imprisonment; the influence of the discharge upon the loss of the debt; and from adjudged cases. We are inclined to think, that it has been rather too hastily conceded, that no case similar to the present has been adjudicated. That it adds another to the long list of instances of laches which have been held to be fatal to the recovery of the assignee against his assignor in that country, cannot be doubted.
This case, it must be recollected, comes within the fifth section of the act of January 6th, 1800, entitled 'An act for the relief of persons imprisoned for debt.' The second, third and fourth sections of that act make provision for the discharge of persons confined under execution, and the fifth section extends 'the privileges and relief' of that act, to persons in confinement, against whom judgment is obtained but no execution issued. Under the provisions in favour of persons charged in execution, on the day of arrest, a notice may be served upon the person at whose suit they are confined, and at the end of thirty days they may be discharged. By the fifth section it is enacted, 'that any person imprisoned upon process issuing from any court of the United States, except at the suit of the United States, in any civil action, against whom judgment has been or shall be recovered, shall be entitled to the privileges and relief provided by this act, after the expiration of thirty days from the time such judgment has been or shall be recovered, though the creditor should not, within that time, sue out his execution and charge the debtor therewith.'
It has been argued, that under this section the defendant must remain in prison thirty days after judgment before he can sue out his notice to the plaintiff, thus requiring him to remain sixty days in confinement, in the cases which come under this section; whereas he remains but thirty days, when confined under execution.
There can be no reason for the distinction, and we think that in favour of liberty and with a view to consistency, the the construction should be otherwise. If such were the true construction, the relief would not be the same as is extended to the debtors of the other class. We think therefore, that the day of entering judgment under the fifth section, is the day that corresponds to the day of arrest under the previous provisions of the law; and, therefore, that in thirty days after judgment, he may be discharged by complying with the other requisitions of the law. The day of entering the judgment appears no where in this record, but as the notice was served on the plaintiffs' agent on the 14th of December, we must presume that the judgment had then been entered; and on the same day the agent signed that consent to dispense with 'the previous imprisonment by law to entitle the defendant to take the oath of an insolvent debtor,' by which, it is now insisted, that the complainants are barred of their right to recover of the assignor.
The error of the court below obviously consists in this, that it considers the imprisonment to which the defendant is subjected, as among the means of coercing payment. The arrest certainly is so; but the thirty days confinement that ensues, is only incidental to the notice required to be given to the plaintiff of the defendants' intention to claim his discharge as an insolvent. Now he must be insolvent when this notice is given, and what is to be forced from an insolvent man by the thirty days imprisonment? It is obvious that the confinement is not regarded as the means of coercion, but only as a time necessary to the investigation of the defendants' circumstances, or the collection of evidence to repel his insolvency. The coercive means of the law are to be found in the searching oath to be administered, and in the fear of prosecution for perjury, and recommitment in the same actions.
If, then, this imprisonment has no other object than to make the debtor await the investigations of his creditor, it is difficult to assign a reason why the creditor may not dispense with it, when satisfied that the application is an honest one, and that delay would discover nothing that he was not already acquainted with. In the language of the Kentucky court, it would be 'worse than idle,' to detain him. Nothing but unavailing hardship upon him, and ultimate expense to his indorser, could result from it.
Nor do we think ourselves unsupported by the Kentucky decision in this view of the subject.
In the case of Young vs. Cosby, the drawer of the note being in custody under a ca. sa. issued by the assignee, was discharged for want of security for the payment of prison fees. This discharge, it was contended, was imputable to the assignee and barred his recovery against the assignor; unless he could prove that the drawer had nothing which might have been wrung from him by a protracted imprisonment. But the court of appeals decided otherwise; and established, that if the assignor had sustained any injury in that respect, it was incumbent upon him to prove it. The language of chief justice Boyle, on that occasion, was this. 'It has repeatedly been decided in this court, that to entitle the assignee of a bond or note to recover of the assignor, it was necessary to show that he had used due diligence by suit, to recover the amount from the payor or obligor; but it has never been required of him to prosecute the suit against the payor or obligor, farther than a man of ordinary prudence and diligence would do, in a case where he was solely and exclusively interested. To make it necessary to do so, would be unreasonable and unjust; inasmuch as it would tend to accumulate costs without the prospect of any probable advantage to either of the parties.'
We entirely approve of the opinions here expressed: they are conceived in the reason and benignity of the law, and we are unwilling to extend the diligence required of the assignee beyond the limits there laid down.
In the case of Oldham vs. Bengan, the doctrine laid down in Young vs. Cosby is considered and affirmed, and chief justice Bibb observes 'that although due diligence has always been required in such cases, yet in no case has all possible diligence been exacted.'
And both these cases concur to establish this principle, that it is not on the ground of a mere possible injury that the assignor can claim his discharge; much less where it is improbable, as judge Rowan remarks in the case of Stapp vs. Anderson, before cited. The present case presents the drawer in a situation in which it is not only improbable, but scarcely possible, that the assignor could have sustained an injury. For a discharge under the insolvent law of the United States, is confined in its effects altogether to the particular case, and even as to that, does not exempt the debtor's present effects, or future acquisitions, from the process of the law; nor is his person exempt from confinement for the same debt, should he be detected in a fraud upon the creditor. The bare speculative idea, then, of a possible acquisition of property within the thirty days, during which Voorhees might have been compelled to await the will or inquiries of his creditor, and of property not tangible by the process of the law; is too feeble a consideration to affect the rights of the complainant.
The decree below will be reversed, and a decree entered here that the complainant recover his demand.

## Notes

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