Case Name: M'Cluny & Co. v. Jackson
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1849-07
Citations: 6 Gratt. 96
Docket Number: 
Parties: M’Cluny & Co. v. Jackson.
Judges: 
Reporter: Virginia Reports
Volume: 47
Pages: 96–107

Head Matter:
Lewisburg.
M’Cluny & Co. v. Jackson.
1849. July Term.
(Absent Cabell, P. and Brooke, J.)
1. It is not necessary that an attachment against an absconding debtor, shall state the character of the debt, whether due by bond, note, account or otherwise.
2. An attachment being sued' out by one member of a firm, for a debt due to the firm, and in the name of the firm, it is proper that the bond executed by the partner who sues out the attachment, and his surety, should bind the obligors to be answerable for the failure of the firm to prosecute their attachment with success.
3. A subsequent attaching creditor may appear to the first attachment, and either in his own name, or in the name of'the absconding debtor, contest the right of the first attaching creditor to recover.
4. Upon a settlement of an account, the creditor takes a negotiable note from the debtor, for the amount found due; and the note is discounted at bank for the creditor. Whilst the note is held by the bank, and before it is due, the debtor absconds : The creditor cannot sue out an attachment against the debtor for the debt due upon the account.
On the 6th of April 1846, James M’Cluny, of the firm of James M’Cluny & Co., obtained from Ephraim Barnes, a justice of the peace for the county of Brooke, a warrant of attachment against the estate of Edward Howard, an absconding debtor, returnable to the next County court. The warrant sets out, that whereas James M’Cluny, of the firm of James M’Cluny & Co., has this day complained before me, <fcc., and made oath that Edward Howard is indebted to the said firm in the sum of 447 dollars 25 cents, with interest, &c., and then proceeds in the usual form. This warrant was placed in the hands of a constable of the county of Brooke, who levied it on certain property mentioned in his return.
The bond required by the statute in such cases, was executed by James and William M’Cluny, who constituted the firm of James M’Cluny & Co., and by Isaiah Steen. The condition thereof sets out, That whereas the above bound James M’Cluny has this day obtained from Ephraim Barnes, a justice of the peace, &c., an attachment against the estate of the above named Edward Howard, for the sum of 447 dollars 25 cents, with interest, &c., (which sum is due to the firm of James M’Cluny & Co., &c..,) if therefore, the said James M’Cluny & Co. shall satisfy and pay all costs which shall be awarded to the said Edward Howard in case the said James M’Cluny Sp Co. shall be cast in the said suit, and also all damages which shall he recovered against the said James M’Cluny Co., for suing out such attachment, then this obligation to be void, else to remain in full force and virtue.
At the June term of the County court, the attachment was taken up for trial, when John G. Jackson, a subsequent attaching creditor of Howard, appeared by counsel and claimed the right to appear in the cause, and make defence: and as a subsequent attaching creditor to claim the property attached; and to introduce witnesses, and cross-examine the witnesses of the plaintiffs for the purpose of shewing that the debt claimed by the plaintiffs had been paid; and that Howard was not indebted to them, and that thereby Jackson claiming as a subsequent attaching creditor, whose attachment was levied on the same property, was entitled to have the property applied to the satisfaction of his debt. The plaintiffs agreed that Jackson might cross-examine their witnesses for the purpose of shewing, if he could, that Howard was not indebted to them, or for any other legal purpose, but they objected to his being permitted to appear and introduce testimony; and the Court refused to permit him to appear in the cause. To this opinion of the Court refusing his application, Jackson excepted. The Court then gave the plaintiffs a judgment against Howard for 446 dollars 41 cents, and ordered that the attached effects should be sold to satisfy the judgment.
There is in the record a statement of the evidence introduced on the trial of the cause, signed by the counsel for the plaintiffs and Jackson, and certified by the clerk of the County court: and there is also a copy of the record of Jackson's attachment suit against Howard, in which he recovered a judgment, and from which it appears that his attachment was levied on the property on which the attachment of the plaintiffs was levied.
From the statement of the evidence, it appeared that on the 16th of September 1845, Howard was indebted to the plaintiffs 547 dollars 46 cents, for which sum he executed to them a negotiable note at four months, which was discounted for them at one of the banks in Wheeling; and that when it fell due he paid 200 dollars, and executed another note to the plaintiffs for 347 dollars 46 cents, at four months, which was also discounted by the bank; and the first was taken up.
On the books of M'Cluny & Co., Howard was credited with the amount of the note aforesaid of 547 dollars 46 cents, on the day of its date, at which time his account was balanced; and then a new account was opened in which he was charged with this sum of 547 dollars 46 cents. He was also charged in this account for various articles of merchandise, amounting to 98 dollars 95 cents, which were proved on the trial; and he is credited under date of the 14th of January 1846 with 200 dollars, leaving the balance of 446 dollars 41 cents.
Upon the application of Jackson, the Circuit court awarded a supersedeas to the judgment in favour of the plaintiffs; and when the cause was heard, that Court held that the County court erred in refusing to allow Jackson to introduce evidence to prove that the claim of M’Cluny & Co. against Howard had been paid, or that it did not otherwise exist; and therefore reversed the judgment of the County court, with costs.
It was then agreed by the parties that the statement of the evidence accompanying the record of the said judgment should be taken as a part of it: and that the Circuit court should, without remanding the cause, proceed to render a final judgment in the case. And thereupon the Court gave the plaintiffs a judgment against Howard for 98 dollars 95 cents, and their costs; that being the amount due upon their account against him, excluding therefrom the note for 347 dollars 46 cents, as not being then due and payable. To this judgment M’Cluny & Co. applied to this Court for a supersedeas, which was awarded.
Price, for the appellants,
insisted:
1st. That the County court did not err in refusing to permit Jackson to appear and contest the plaintiffs’ attachment. That at common law no third person is allowed to intervene, and contest the plaintiffs’ right of action ; and that the statute does not apply to a party appearing in the attitude assumed by Jackson. The statute, 1 Rev. Code, ch. 123, § 12, 13, p. 478, only permits claimants of the property attached to interplead; but here there was no offer to interplead, and no claim to the property set up by Jackson.
2d. That there was no substantial objection to the appellants’ attachment. That in setting out their debt in the warrant of attachment, the language of the statute had been literally pursued; and it is not required that the warrant should describe the character of the debt, or state whether it is due by bond, note or open account.
That it was competent for one partner to sue out an attachment, as was decided in Kyles v. Connelly, 3 Leigh 719. That the bond does not vary from the warrant, but is executed by the members of the firm, and recites that the attachment had been sued out for a debt due to the firm. The firm were necessarily the plaintiffs in the attachment; and the bond properly bound the parties to answer for the damages which should be sustained by Howard upon the failure of the firm to prosecute their attachment with success.
3d. That the appellants, by consenting that the Circuit court should proceed to render a final judgment in the case, did not thereby release or waive their objections to any error in the judgment of that Court reversing the judgment of the County court. That judgment of reversal had been pronounced before the consent of the appellants was given; and that consent was given that the Circuit court might decide the cause upon the evidence, without waiting to have it certified by the County court.
4th. That the Circuit court erred in refusing to give the appellants judgment for the amount of the note. That the essence of the rule of law is, Was it agreed that the note should be taken as payment ? Another rule is, that if the note is not paid the original debt is not extinguished, and the creditor may sue on the original contract. Here Howard was indebted when the attachment was sued out; and the appellants had taken up the note before judgment was rendered by the County court. The counsel referred to 2 Greenleaf’s Evi. § 520; Puckford v. Maxwell, 6 T. R. 52; The People v. Howell, 4 John. R. 296; Cummings v. Hackley, &c. 8 Id. 203; M'Guire v. Gadsby, 3 Call 204; Tobey v. Barbour, 5 John. R. 68; Johnson v. Weed, 9 John. R. 310; Herring v. Sanger, 3 John. Cas. 71; Shehy v. Mandeville, 6 Cranch 253.
5th. That the failure to decide the case at the first term after the levy of the attachment did not operate a discontinuance. This Court will presume in the absence of any objection on this ground in the County court, that the attachment was returned to the proper term of the Court, and then docketed and continued. In Amis v. Koger, 7 Leigh 221, it appeared that on the motion of the plaintiff the case had been continued beyond an intervening term.
William Smith, for the appellee,
insisted:
1st. That the warrant of attachment was defective, because the character of the debt was not stated; it not appearing whether it was a debt due by bond, note or open account. This he said would not be sufficient in a declaration; and there was every reason why the same strictness should be required in an attachment.
2d. That the attachment varied from the bond. The attachment purported to be issued at the instance of James M’Cluny, for the benefit of the firm. The bond should have bound him; but it binds the firm, and no action could be maintained upon it for the misconduct of James M’Cluny alone; whilst the firm is not responsible in damages for suing out the attachment. Kyles v. Connelly, 3 Leigh 719; Jones v. Anderson, 7 Leigh 308.
3d. That the attachment issued on the 6th of April 1846, returnable to the April term of the County court, and it does not appear that the cause was docketed and continued regularly until the June term ; and that this was a discontinuance. Amis v. Koger, 7 Leigh 221.
The counsel insisted that on the grounds stated, the attachment should have been quashed by the County court; and that this should have been done ex officio, though no motion had been made to quash the attachnient. Mantz v. Hendley, 2 Hen. & Munf. 308; Jones v. Anderson, 7 Leigh 308.
4th. That Jackson being a subsequent attaching creditor, he was immediately interested to contest the plaintiffs’ claim. That the common law rule, forbidding third persons to intervene, does not apply to this statutory proceeding. That it had been decided by this Court, that a third person may replevy the property; Smith v. Pearce, 6 Munf. 585; Smith v. Pearce, Gilmer 34; and there can be no good reason why a like defence may not be made for the debtor where the property is not replevied; especially when that defence is made by a person directly interested in the question.
5th. That the plaintiffs having consented that the Circuit court should decide the case on the merits, was a waiver of all errors in the judgment of that Court, reversing the judgment of the County court.
6th. That the judgment of the Circuit court upon the merits was correct. The evidence shews that on a settlement of their accounts, Howard was charged with the amount of the account and credited with the note. This entry is evidence that the note was accepted in satisfaction of the account. The note was negotiable, and this also, is prima facie evidence that it was taken in satisfaction of the account. The bona fide holder of the note was entitled to sue the maker upon it, and he could not be liable also to an action by the plaintiffs on the original account. At least, the action on the account was suspended until the note fell due. The counsel referred to Thacher v. Dinsmore, 5 Mass. R. 299; Maneely v. M’Gee, 6 Id. 145; Goodenow v. Tyler, 7 Id. 43; Chapman v. Durant, 10 Id. 47; Johnson v. Durant, 11 Id. 362.

Opinion:
Allen, J.
The judgment of the Circuit court is assailed by both the plaintiffs and the defendant in error. The latter insists that the attachment was defective, and should have been quashed, whilst the plaintiffs in error maintain that the attachment was free from objection, but that the Court erred in permitting the defendant in error to appear and make defence, and in refusing upon the merits, to give judgment for the whole of the debt claimed. The attachment is alleged to be defective, because it does not describe the character of the debt, whether due by bond, note or account. The attachment sets out that James M'Cluny, of the firm of James M'Cluny & Co., had complained and made oath, that the absconding debtor was indebted to the firm in the sum named, with interest. In this, it seems to me, the terms of the statute are complied with. The act does not require the warrant to describe the claim with the precision of a declaration. The amount due must be specified, as a guide to the officer, that he may attach so much of the debtor's estate as may be sufficient to satisfy the debt and costs. The evidence of the debt is to be exhibited to the Court which passes upon the validity of the claim.
It is further maintained, that the bond executed by the party obtaining the attachment is defective, inasmuch as the condition binds the obligors to pay all costs which may be recovered of the firm, should the firm be cast in the suit, and also all damages which may be recovered of the firm for suing out the attachment; whereas it appears from the attachment, that it was sued out by one member of the firm alone. The attachment recites that James M'Cluny, of the firm of James M'Cluny & Co., made oath that the debtor was indebted to the firm. Both the cases referred to, of Kyles v. Connelly, 3 Leigh 719, and Jones & Ford v. Anderson, 7 Leigh 308, decide that it is competent for one partner to institute such a proceeding for the firm. Being a suit for a partnership demand, it must proceed in the name of the firm: and the judgment for costs, should the plaintiffs be cast, would be against the firm. Here the bond was signed by both the members of the firm, and if a question could arise in any case, as to the liability of the firm for damages in consequence of one members suing out the attachment for a firm debt, it could not be raised in this case ; for by uniting in the bond, each partner recognized the proceeding as one instituted for the benefit of the firm, and for the consequences of which, the firm was responsible. In Jones & Ford v. Anderson, the attachment was sued out by one partner for a firm debt, but in the bond, the firm was not named, and for this it was held to be defective ; for the attachment was sued for the firm, and the bond was given by one member alone in his individual character, and not as a member of the firm ; whereas the law requires that the bond shall be given by the party for whom the attachment issued. In this case, that has been done. In the case of Kyles v. Connelly, the bond was executed by one partner, and recited that as one of the firm, he obtained the attachment, and of course not for himself but the firm ; and so the residue of the condition was considered as having reference to the partnership demand, and was such a bond as the defendant could recover on for costs incurred or damages suffered, by the attachment of Kyles. The phraseology of the bond here is different, and expressly provides for what the Court, in the case of Kyles v. Connelly, by a liberal construction, held to be the legal effect of that bond. The condition is precisely what the law requires according to those cases.
I think there is no valid objection to the form of the attachment or to the bond.
On the first calling of the case after the return, the defendant in error, alleging himself to be a subsequent attaching creditor, (a fact not controverted in the Court below, but apparently conceded throughout the proceedings,) appeared by his counsel, and claimed the right to make defence, and shew that the plaintiffs' debt did not exist, or was paid, and that thereby his subsequent attachment levied on the same property entitled him to shew that the property should enure to his attachment. The 8th section of the act 1 Rev. Code 477, provides that all attachments shall be repleviable by appearance and putting in good bail. When this is done, the cause is remanded to rules and there proceeded in, in like manner as if it had been commenced by writ. In the construction of this section, it was held in the case of Smith v. Pearce, 6 Munf. 585, that a third person might replevy the attached effects, although the debtor did not appear in person, and it appeared to the satisfaction of the Court, that he was still an absconding debtor. By the 12th section of the act 1 Rev. Code 478, it is provided that in all cases of attachment, the defendant shall be permitted to make defence, and any other person claiming the property may interplead, without giving bail, but the attached property shall not thereby be replevied.
This defence may be made without a personal appearance ; and I can perceive no good reason why a third person claiming a right to have his debt satisfied out of the attached properly, should not be permitted to make it, either in the name of the debtor or in his own name. He cannot interplead as a claimant of the property in his own right, because he is seeking to subject it to the payment of his debt as the property of the debtor. Generally speaking, the subsequent attaching creditor is the only person having an interest to controvert the justness of the claim preferred by the first. The debtor is a fugitive, and unless the subsequent creditor is permitted to make defence, a claim which he could shew to be unjust, might consume the whole estate, and the real creditor would be without remedy. Such a construction might lead to gross injustice, and would violate the spirit of the act which authorizes the defendant to make defence without giving bail. The reasons and necessity for extending the privilege to third persons seeking for payment of their debts out of the attached property, are stronger than for permitting persons to replevy. The plaintiff in the first attachment, cannot object that this defence is made in the name of a creditor who will be liable for costs, rather than in the name of a fugitive, and generally an insolvent debtor.
At the trial of the cause, the plaintiffs claimed the amount of their account as the debt due from the defendant. It appeared that on settlement of their accounts, the defendant being in arrear to the amount of 547 dollars 46 cents, made his negotiable note to the plaintiffs, for which there was a credit on the books of the firm. The note being endorsed by the plaintiffs, was discounted for their benefit at the bank at Wellsburg, 200 dollars being paid, and a new note made by the debtor to the plaintiffs for the balance; it was endorsed by the plaintiffs, and with it the first note was retired. This last note had still some time to run at the date of the attachment, and was then held by the bank. Not being paid at maturity, it was protested and afterwards lifted by the plaintiffs. Upon this state of facts, it is not necessary to consider in this case, whether the making and acceptance of this negotiable security merged the simple contract, so that no action could be maintained for the original consideration. At the date of the attachment, the note was a valid security, held by a third party, who had a right to call for payment. Such payment would have extinguished the plaintiffs' demand pro tanto. Whether the acceptance of the note under-such circumstances amounted to an extinguishment or discharge of the original debt or not, the remedy was suspended during the currency of the security. The plaintiffs could have no right of action before the dishonour of the note. Chitty on Bills 172; Chitty on Contracts 766; Burden v. Halton, 15 Eng. C. L. R. 37. I think, therefore, the Court properly excluded the amount of this note from the plaintiffs' claim, and that the judgment should he affirmed.
Baldwin and Daniel, J's concurred in the opinion of Judge Allen.
Judgment affirmed.