#### Shores v. Wares.*

April, 1842,

Richmond.

(Absent Allen, J.)

Equity Jurisdiction Set-Oil against Judgment at Law.—A sale is made of a tract of land, and the terms set forth in articles of agreement executed under seal between the two vendors and the vendee. One of the vendors dies after bequeathing what is due to her, and appoints her legatee executor. A lien being alleged to exist upon the land, the surviving vendor and the executor enter into bond with surety to indemnify the vendee, who thereupon pays most of the purchase money. Afterwards the vendee is compelled to pay a considerable sum to satisfy the lien, and one of the principal obligors being out of the commonwealth, and the other insolvent, he retains for his Indemnity the assets of the surety (of whose estate he is administrator) against other creditors of the surety, some of equal and others of inferior degree. An action of covenant being then brought on the articles of sale, in the name of the vendor who survived, for the benefit of the legatee of the other, against the vendee, a trial Is had, upon which both parties treat the amount of assets of the surety’s *estate retained by the administrator, as a satisfaction pro *tanto*of the Indemnifying bond, and the difference between the amount so retained and the sum paid to satisfy the lien being credited, a verdict is found and judgment rendered for what is supposed to be the balance due of the purchase money. On a bill in equity by the vendee, in his own right and as administrator of the surety, against the surviving vendor and the legatee of the other, shewing the foregoing facts, and that, since the judgment, debts against the surety, alleged to be of superior dignity to that upon the Indemnifying bond, have been demanded of the complainant and claimed by snit, Held, 1. That though none of the other debts against the surety’s estate should appear to be of higher dignity than the claim on the indemnifying bond, still the complainant, as administrator of the surety, is rightly In equity, to obtain satisfaction for the payment made out of the surety’s estate on account of the suretyship; and one of the principals having removed from the commonwealth, and the other being insolvent, he may stay in Ms hands the amount due from himself personally on the judgment. In part satisfaction of the claim of the surety’s estate; 3. That if any of the debts against the surety’s estate shall appear to be of higher dignity than the claim against the surety on the indemnifying bond, and it shall become necessary to apply to the payment of those debts any part of the assets of the surety’s estate, the complainant will for so much have a valid claim in his own right, and to that extent the injunction to the judgment should be perpetuated.

By articles of agreement entered into the 27th of September 1815, between John Ware and Polly Ware of the one part and Thomas Shores of the other part, it was witnessed that John Ware and Polly Ware had sold to Thomas Shores certain lands, to wit, 410 acres of high land and 59 acres of islands, at the following prices, to wit, 8 dollars per acre for the high land, and 60 dollars per acre for the islands; and then, after setting forth that the late mrs. Susanna Wilcox, as administratrix of Edmund Wilcox deceased, had a mortgage on said lands (including certain land in the possession of Washington Ware), the amount of which could not then be ascertained, and that John Porbes as agent for Thompson Snodgrass & Co. had also a claim against the said lands, the amount of which could not then be ascertained, it was *agreed that John Ware and Polly Ware should ascertain, as soon as they could, the amount of said claims, and have the same certified under the hands of the claimants, and Shores should retain in his hands and pay to the respective claimants two thirds thereof (Washington Ware’s part of the land being bound for the other third). The articles then provided for the execution of a deed, the payment by Shores to John and Polly Ware of the residue of the purchase money over and beyond the said two thirds, and the delivery of possession of the land.

Shores paid off the claim of mrs. Wilcox, and also paid to John and Polly Ware part of the purchase money. Polly Ware, by her will, bequeathed the balance due to her on account of the said purchase, and almost all the rest of her estate, to her brother Washington Ware, and appointed her brothers Washington Ware and John Ware her executors, of whom Washington Ware alone qualified as such.

On the 16th of April 1818, a bond was entered into by John Ware, Washington Ware and William Pasteur to Thomas Shores, in the penalty of 4000 dollars, whereby, after reciting that it was uncertain whether the said John Porbes, attorney as aforesaid, had any legal or equitable claim on the land sold to Shores, or against Shores as the holder *22thereof, and that John Ware and Washington Ware, 'as executor of Polly Ware, were desirous of drawing out of the hands of Thomas Shores the balance of the money remaining due for the purchase of the land, the condition was that if John Ware, Washington Ware and William Pasteur should save harmless and indemnify Thomas Shores for all costs or other damages he might sustain in consequence of his paying to the said John and Washington the balance of the said money, in case the said John Forbes agent as aforesaid, or any other person on account of his claim as agent, should recover any money, costs or damages of Shores *in consequence of his purchase, or otherwise interrupt him in the possession of the said land, or in consequence of his paying over to the said John and Washington the balance of the said money, then the said obligation was to be void.

A question arising at the time this bond was executed, whether Shores was bound for interest on the money while retained in his hands to satisfy the unascertained claims, this matter was not then adjusted, but Shores paid at that time 1200 dollars.

. An action of covenant was afterwards brought against Shores, in the name of John Ware as surviving covenantee of John and Polly Ware, for the benefit of the estate of Polly Ware, in which action a verdict was found and judgment rendered for the plaintiff against Shores, on the 27th of October 1830, for 2026 dollars 50 cents damages, with interest from the 22d of October 1822 till paid, and the costs. The next day the defendant moved the court to set aside the verdict and judgment, and grant him a new trial, upon the ground of a mistake of the jury in the estimation of damages, committed in the calculation of payments made by the defendant. Whereupon the plaintiff by his counsel agreed to release 1579 dollars *22%*cents parcel of the damages assessed, as of the '22d of October 1822, and the defendant withdrew his application for a new trial.

On the 10th of May 1831, Thomas Shores, in.his own right and as administrator of the estate of William Pasteur deceased, exhibited a bill of injunction, setting forth that the payment of 1200 dollars made at the time the indemnifying bond was given, and other payments made from time to time, fully satisfied the whole purchase money exclusive of interest ; that a decree had been obtained in favour of John Forbes attorney in fact for Thompson Snodgrass & Co. subjecting the lands to sale to satisfy the same, and complainant had purchased the land at the price of 1925 dollars 57 'cents, being *the tw.o thirds to which his proportion of the land was subject; that being compelled to rely on the indemnifying bond for this, sum, and the principal obligors therein being unable to refund the same, and William Pasteur the surety in that bond having died in embarrassed circumstances, he had, with a view of obtaining a preferable claim to the assets over other creditors, become the administrator of Pasteur’s estate, | the assets of which appeared, by the report of the commissioners who had settled his accounts, to amount to about 1600 dollars, and the amount in his hands as administrator of Pasteur he had retained, by virtue of his claim on Pasteur as surety in the indemnifying bond, against other creditors of Pasteur, some of equal and others of inferior degree; that nevertheless a claim has been set up, and a verdict and judgment rendered against him, for an alleged balance upon the original purchase. To shew how that balance is made up, he refers to a statement by which the jury were guided at the time of their verdict. He insists that injustice has been done in charging him with interest upon the purchase money before it was due, and also in charging him interest on the money kept in his hands for the claimants, which money he was at all times ready and willing to pay, if certificates had been produced to him, under the hands of the claimants, of the amount of their claims, and had only failed to pay because of the failure to produce such certificates. And inasmuch as the complainant, as the administrator of the estate of Pasteur, has a just claim against Washington Ware, on account of the assets of Pasteur’s estate retained by virtue of the indemnifying bond in which Pasteur was the surety of John and Washington Ware, and Washington Ware is, by virtue of the will of Polly Ware, entitled to the benefit of the judgment obtained against the complainant, (there existing, as the complainant charges, no debts whatever against Polly Ware’s estate,) the *complainant insists that if the estate of Polly Ware is entitled to recover any. thing of him, it is equitable and just that his demand as administrator of Pasteur should be set off against the same, and the said complainant allowed to retain the same in his hands, to be applied towards satisfying the creditors of Pasteur’s estate, instead of resorting to an action at law to recover the amount so due to Pasteur’s estate, which, if he were so to proceed, would in all probability be unavailing, as Washington Ware is without any visible property sufficient to satisfy the demand, and John Ware some years since left the commonwealth as an absconding debtor, and is not now an inhabitant of the same. The complainant farther states that a credit for 203 dollars 12 cents was allowed by the jury, as the difference between what was supposed to be the amount of assets of Pasteur’s estate, and the amount which the complainant had been compelled to pay under the decree in favour of John Forbes attorney in fact for Thompson Snodgrass & Co. This was upon the idea that the whole of the 1600 dollars would certainly be retained in the complainant’s hands, towards satisfying his demand. But the complainant sets forth, that since the verdict and judgment rendered against him, a debt due from Pasteur by judgment has been demanded from him ; that a scire facias is also pending against him as administrator of Pasteur, upon a recognizance of special bail; and that these debts he may be compelled to pay as debts of superior dignity *23to his own. The bill also sets forth that Pasteur was in his lifetime the administrator of several estates, the accounts of which have not been settled, and it is yet uncertain whether the complainant will not be compelled to pay considerable sums on account thereof. Washington Ware and John Ware are prayed to be made defendants, and an injunction is asked to the judgment against the complainant.

*The statement of the jury, a copy whereof was exhibited with the bill, contains no credit of the 1200 dollars paid at the time the indemnifying bond was given. The amount, including interest to the22d of October 1822, was, according to the calculation of the jury, 2230 dollars 30 cents. Then the following credit was given : “ 22d October 1822. Cr. by amount due Thomas Shores by Pasteur’s estate, occasioned by not receiving from said estate sufficient to pay the debt to Thompson Snodgrass & Co. for which said Pasteur was security, $203. 82.” This sum being deducted, the statement concluded thus : “ By this amount due W. Ware 22d October 1822, $2026. 50.” And subjoined was the verdict of the jury for 2026 dollars 50 cents damages, with interest from the 22d of October 1822.

The answer of Washington Ware alleges, in general terms, that in the action at law every just claim which the complainant brought forward was allowed. While, however, it controverts those allegations in the bill which were made to shew that injustice had been done in charging interest, the other specific allegations are left uncontradicted, the payment of 1200 dollars at the time of the execution of the indemnifying bond is admitted, and it is stated that the claim of Forbes amounted, when settled, to nearly 3000 dollars.

With his answer, Washington Ware filed a statement of his claim against Shores, according to which the amount in his favour, with interest calculated to the 16th of April 1818, was 2110 dollars 11 cents. This was without any deduction on account of the lien of Forbes, or of the 1200 dollars.

Against the defendant John Ware, the plaintiff proceeded in the mode prescribed by law in relation to absent defendants.

The cause coming on to be heard before the Circuit court of Fluvanna (to which the case had been removed) that court decreed that the injunction be dissolved, and the bill dismissed with costs.

*Shores, in his own right and as administrator of Pasteur, petitioned this court for an appeal.

By the petition it was admitted that it did not distinctly appear in the record on what account the sum of 1579 dollars 22 cents was released as of the 22d of October 1822, but it was said to be fairly inferrible that it was the principal and interest of the 1200 dollars paid the 16th of April 1818, amounting to about 1524 dollars, and some other small item of omitted credit, or of error in the interest charged. It was, the petitioner contended, certainly not on account of the payment to Forbes, because the jury had already allowed on that account the supposed difference between this payment and Pasteur’s funds in the petitioner’s hands. And he insisted that in equity his right to use the payment to Forbes as a setoff against the judgment was perfectly clear, because in equity Washington Ware is principal debtor and principal creditor, and equity would not allow that the petitioner should retain the assets of the surety his intestate, and pay the claim of the principal debtor.

The appeal was allowed.

C. Johnson, for appellant.

Ryons and Patton, for appellees.

*

For monographic note on Debts of Decedents, see note at end of case.

STANARD, J.

The record shews with satisfactory certainty, that in ascertaining the balance for which the jury’s verdict was rendered, Shores was not credited for the payment of 1200 dollars confessedly received by. the party for whose benefit the suit at •law was prosecuted, nor was he credited for more than 203 dollars of the amount of the lien of Forbes attorney in fact of Snodgrass ; that on the trial of the case before the jury, both parties treated the amount of assets of Pasteur’s estate, retained by Shores the administrator of Pasteur on account of his claim on the bond to indemnify him against *the said claim of Forbes, as a satisfaction pro tanto of that bond; and that the amount of the said lien of Forbes on the land purchased by Shores (being two thirds of the entire claim of Forbes) though not precisely shewn, was from 1800 to 2000 dollars. These facts are proved, 1st, by the statement of the appellee’s claim on the covenant, which, excluding the credit for the payment of 1200 dollars, and the lien of Forbes, exhibits a balance of a little upwards of 2100 dollars. 2dly, By the statement shewing the manner in which the balance for which the verdict was rendered was ascertained. 3dly, By the uncontradicted allegations of the bill. 4thly, By the admission of the answer, that the entire claim of Forbes was about 3000 dollars. I am also satisfied, that in the adjustment of the credit which was allowed against the amount found by the verdict, the said sum of 203 dollars only was taken into account, as resulting from the lien of Forbes, and the residue of the lien was considered as covered by the assets retained of Pasteur’s estate, so that the Wares have been charged with but the said 203 dollars on account of that lien. The judgment at law, then, placed the parties in this predicament: Shores was indebted on his own account to the Wares in the amount of the judgment at law, and the Wares were indebted to Shores as administrator of Pasteur, in the amount of the assets of Pasteur’s estate, that he had by retainer applied in part satisfaction of the claim on Pasteur as the surety of the Wares in the indemnifying bond: and such is still their predicament, if the retainer by Shores of the assets of Pasteur’s estate has not been disturbed by other creditors of Pasteur, having claims of higher dignity than the claim on the indemnifying bond. Were this still the predicament of the *24parties, Shores as the administrator of Pasteur was rightly in a court of equity, to obtain satisfaction of a claim of Pasteur’s estate for a payment made on a suretyship for the defendants, and at all events the bill ought *not to be dismissed. As the bill suggests that one of the principals (John Ware) had removed from the commonwealth and the other was insolvent, the plaintiff had further title to stay in his hands the amount due from him personally on the judgment in favour of the Wares, in part satisfaction of the claim of Pasteur’s estate, and which might become the claim of Shores in his own -right, if the assets of Pasteur are charged by debts of higher dignity. than..that; of Shores on the indemnifying bond. The bill further suggests that suits of the creditors of Pasteur are depending, in which the assets retained by Shores are claimed. The success of those suits, so far as they might withdraw the retained assets, would reinstate the claim of Shores in his own right to retain the purchase money for which the judgment was rendered, and to offset it against the judgment ; and this arising since the rendition of the judgment, was an ample foundation for the 'title to relief in a court of equity. Had there been no other foundation for relief, the court below ought not to have dismissed the bill, but should at least have retained the injunction until the fate of the pending suits was ascertained, and to the extent that the assets retained might be charged by other creditors of Pasteur, have perpetuated the injunction. On the whole, my opinion is that the decree is erroneous, and ought to be reversed with costs, and the following entered as the decree of this court:

> “The court is of opinion that it appears with sufficient certainty, that on the trial of the action in which the judgment enjoined in this case was rendered, no credit was given to the appellant in respect of the lien of Forbes attorney in fact of Snodgrass, except the sum of 203 dollars 82 cents, credited, in-the statement by which the jury ascertained the balance for which the verdict was rendered, as the excess of that lien above the assets of Pasteur’s. estate retained by- the. appellant as the administrator of PaSteur, in virtue of his claim *on Pasteur as the surety in the indemnifying bond; and that the sum agreed as a credit against the amount of the verdict, was for the omission of the jury to credit the appellant 1200 dollars paid by him when the indemnifying bond was given, and for miscalculations of payments made by the appellant to the Wares, and did not include any allowance for the lien of Forbes. The court is further of opinion that instead of dissolving the injunction and dismissing the bill, the' court below should have directed a commissioner to ascertain the amount of Forbes’s lien, whether discharged by Shores or still outstanding, and the amount of the assets of Pasteur’s estate that was retained by the appellant to indemnify or reimburse him for the lien of Forbes, and the amount (if any) that other ■creditors of Pasteur may have charged on the .assets so retained; that-for the amount of the assets so retained, so far as they have not been charged by creditors of Pasteur, the principals in the indemnifying bond (John Ware and Washington Ware) are responsible to the appellant as the administrator of Pasteur, and so far as they may have been charged by other creditors, are responsible to the appellant in his own right, and the appellant is entitled to set off these responsibilities (first, that which may accrue in his own right, and then that accruing to him as administrator of Pasteur) against the judgment, and have a perpetual injunction to the judgment to the extent of such setoff, and, for the excess (if any) of the said responsibilities above the judgment, 'to'-'a decree-against the said principals in the indemnifying bond, in the right in which such excess may be due to him ; and that the said decree is erroneous. Decree therefore reversed with costs, injunction ordered to be reinstated, and cause remanded to circuit court for further proceedings to be had therein in conformity with the foregoing principles.”

■The other judges concurring, decree entered accordingly.