Case Name: Wilson's Adm'r v. Barclay's Ex'or & als.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1872-08
Citations: 22 Gratt. 534
Docket Number: 
Parties: *Wilson’s Adm’r v. Barclay’s Ex’or & als.
Judges: 
Reporter: Virginia Reports
Volume: 63
Pages: 193–197

Head Matter:
*Wilson’s Adm’r v. Barclay’s Ex’or & als.
August Term, 1872,
Staunton.
Dissolution of Partnership — Assignment of Chose in Action.—M, P, W and B were merchants and partners doing business in Lewisburg, Greenbrier county, W and B living in Rockbridge. In 1843. the partnership terminated, and the firm assigned to B, as a part of his input capital, the bonds of D for $1,038, bearing date in 1843, and secured by deed of trust on real and personal property. In 1843, E and O, creditors of D, by judgment, rendered before the execution of the deed, filed their bill to subject the real estate oí D to the payment of their judgment. B was made a defendant in this snit, but did not answer. He retained the bonds in his possession until 1848, and then sent them with other papers to an attorney for collection. In 1843, there was a decree in the suit of E and C for a sale of part of D's land; but it was never executed. At the May term 1849. N, another judgment creditor of D, made himself a party in the suit; and at the October term there was a decree for the sale of all the property, real and personal, of D. The sale was made in 1850; the personal property bringing but $26.50; though it was in proof, that when the deed was made there was a tavern on the land, well furnished with furniture. In 1851, there was a final decree, applying the proceeds of the sale of the property—first, to pay the debt of E and 0; second, the debt of N; and 'third, the debt of B. The proceeds of sale satisfied the debts of E and G, and of N, but there was nothing left to be applied to the debt of B, except the proceeds of the personal property. At the time of the assignment the debt of D was considered good, but he seems to have had no property except what was embraced in the deed .of trust. In 1860, the administrator of B filed his bill against the administrator and heirs of W, to recover W’s proportion of the said bonds assigned toB. Held:
1. Same—Same—Negligence by Assignee as to Prose» cution.—The negligence of B in having the suit prosecuted whereby interest on the prior debts was accumulated, and the property deteriorated, bars B’s administrator from any recovery against the estate of W.
2. Same—Same —Same.—The negligence in enforcing the deed of trust by the sale of •'’personal property, by which it was allowed to be lost to the trust, bars his recovery.
3. Same—Same—Same.—B not having doné anything to recover the debt until 1848, and his administrator not having brought his suit until 1860, it is upon him to show clearly, that the money could not have been made out of D’s property.
4. Same—Same—Insolvency of Obligor. —If D was insolvent at the time of the assignment of the bonds, or when he became so afterwards, if B relied upon D’s insolvency as excusing B’s prosecution of his suit against D, B should, as soon as he ascertained the fact, have given notice to his assignors, and should have offered to return the bonds; and not having done this, he cannot recover against them.
By an article of agreement under their hands and seals, bearing date the Sth of September 1836, Alexander T.' Barclay and Dr. Hugh Wilson, of the county of Rock-bridge, andWm. Patton and Thomas Mathews, of the county of Greenbrier, entered into a partnership for conducting a mercantile business in the town of Bewisburg, under the name and style of Mathews, Paxton & Co., the business to be managed by Mathews and Paxton, and to continue for five years. Each of the parties was to put in' a capital of $3,000. At the end of the partnership, all debts or losses to be first paid; then the amount of capital furnished by each partner to be returned without interest; and then the net profits to be divided among them as follows: one-third to Mathews, one-third to 'Paxton, and ónethird to be divided between Barclay and Wilson.
The business was continued until the end of the term, and the partners then proceeded to settle up the concern; and in part of his capital put in, Barclay received two bonds of John Deem, one for $1,000, and the other for $38.56, both bearing date the 27th of July 1843, and payable on demand. These bonds were secured by a deed of trust on real and personal estate, and were assigned to Barclay by Mathews, Paxton & Co.
In March 1860, Barclay’s executor instituted a suit in *equity, in the Circuit court of Rockbridge county, against Wilson’s administrator and heirs, in which, after setting out'the foregoing facts, he says that Deem was much embarrassed, if not wholly insolvent, at the time of the assignment of his bonds to him, all of his property being covered by deed of trust or other liens. That Barclay had the deed of trust enforced, when a very small sum was realized. That the other partners thereupon became liable to pay him their proportion of this loss; and that Mathews had paid his proportion to Barclay, and Paxton had paid his part to the plaintiff; but that Wilson had not paid, and up to the time of bringing the suit, there was due from Wilson $486.44, of which $258.03 was principal. That Wilson removed to Texas, and died there in 1857 or 1858.
The pra-yer was for an account of the administration upon Wilson’s estate, and payment of the amount claimed to be due.
Wilson’s administrator answered, saying he had no knowledge of the facts stated in the bill, except what he had derived from the information of others, and the papers in the cause. He relied upon the statute of limitations, and also insisted that the negligence and delay of Barclay and his executor in prosecuting the claim had deprived him of all right to look to Wilson’s estate for relief.
Thomas Mathews, examined for the plaintiff, after stating the assignment of Deem’s bonds to Barclay to the amount of $1,025.50, on account of his capital, states that they were at the time deemed available, as they were secured by deed of trust upon real and personal property. It, however, proved worthless, by reason of prior liens on the same property; and when sold, did not produce a price that reached Barclay’s debt; and Deem had no other property. Witness, satisfied that nothing was made out of Deem, paid his proportion of the debt.
*A witness who had examined the records stated that on the 27th of July 1842, Deem executed a deed of trust on his real estate, to secure the bond of $1,000 to Mathews, Paxton & Co., which was duly recorded. In August he executed another deed on his real and personal estate, to secure Erskine, and Erskine & Mathews certain debts. In 1843 Henry Erskine and others instituted a suit in chancery against Deem and others, the object of which was to enforce judgment liens upon his land, which were obtained prior to the execution of these deeds of trusts. The first decree in this cause was in October 1843, in favor of Erskine, Caperton and others, among them Mathews, Paxton & Co., for the debt secured by the deed aforesaid. At the May term 1849, John A. North filed a petition in the cause, claiming to be a judgment creditor of Ileem; and in the progress of the cause he obtained a decree. Various orders and decrees were made in the suit; by one of which, made in 1849, the land and personal property was sold in 1850, the personalty for $26.50. On the 21st of May 1851, a final decree was entered, and the money was distributed, first, to the payment of the debts due to Henry Erskine; second, the debts due to North; and third, to the debt due Mathews, Paxton & Co. The two first debts were paid; but nothing was paid to Mathews, Paxton & Co., except the proceeds of the personal estate.
In 1848 John Echols was employed by Barclay as counsel to attend to the collection of the bonds transferred to him by Mathews, Paxton & Co. Among them was the debt of Deem. He says that when he came to collect this debt, he found it necessary to institute a chancery suit in Green-brier county, there having been a deed of trust to secure the debt, and there being various other encumbrances on the property. The result of the suit and the sale was, that the property sold for barely enough to pay the encumbrances which were *prior to Barclay’s for this debt. He received in January 1851, twenty-five dollars from the trustee in the deed, from the proceeds of the sale of the personal property of Deem; and that was all he ever received on the debt, except what was paid by Mathews.
It appears certain that Deem was regarded as insolvent as early as 1847, and that from 1842 he had no property but that conveyed in the deeds of trust; several of the judgments against him were rendered as early as March and May 1830.
In September 1860, there was a decree for an account, and the cause came on to be finally heard on the 24th of April 1868, when the commissioner having reported the fourth of Deem’s debt to be $611.12%, of which $258.13% was principal, the court made a decree in favor of the plaintiff against Wilson’s administrator for that amount, with interest on the principal from the 12th of April 1868, till paid, and the costs. And Wilson’s administrator thereupon obtained an appeal to the District court of Appeals at Charlottesville, and the cause was after-wards transferred to this court.
Upon the suggestion of the judges, the record of the case of Erskine & others v. Deem & als., was brought up by consent; but the counsel for the appellee, after examining the record, withdrew his consent to its being considered a part of this record, and .it is not in the possession of the reporter, though it is referred to in the opinion of the judge.
Brockenbrough, for the appellants.
H. W. Sheifey, for the appellee.
The principal -case is cited among others in Merchants’ Nat. Bank v. Spates, 41 W. Va. 37, 23 S. E. Rep. 685, as authority for the proposition that “if the assignee attempts to excuse himself for not suing, then he should immediately have demanded the money from the assignor with an offer to return the instrument assigned, that the assignor might take measures to recover from the maker.”

Opinion:
STAPEES, J.
This is an appeal from a decree of the Circuit court of Rockbridge county, in a suit instituted by the executor of Alexander Barclay, deceased, against the administrator and heirs of Hugh Wilson, deceased. It appears that upon the dissolution of the firm of Mathews, *Paxton & Co., in the year 1843, of wffiich plaintiff's testator and defendants' intestate were members, two bonds amounting in the aggregate to $1,038.56, with interest thereon from their respective dates, were assigned to plaintiff's testator, as a part of the capital stock invested by him in said partnership. These bonds were never collected, as is claimed, in consequence of the insolvency of the obligor; and this suit was brought to recover the share or proportion for which the estate of Hugh Wilson is responsible.
I do not deem it necessary to consider the question so elaborately discussed at the bar, of the effect of the statute of limitation upon the plaintiff's right of recovery. In my view of the case, the want of due diligence, on the part of Barclay, in enforcing the trust deeds given to secure the debts assigned to him, and the long delay of his representative before instituting this suit, are sufficient, of themselves, to defeat this claim.
The bonds in question were assigned to Barclay in March 1843. He retained them in his possession until the year 1848, and then, for the first time, placed them in the hands of an attorney for collection, along with other papers relating to the concern of Mathews, Paxton & Co. The attorney states, he found it necessary to institute a suit in chancery in consequence of the various encumbrances upon the property of Deem, the obligor in the bonds. This is no doubt a mistake; as at that time the suit of Erskine & Caperton was pending. That suit was brought in 1843 ; the object was to enforce the liens of various judgments against the real estate of Deem. Although Barclay was made a party to this suit in the beginning, it does, not appear that he ever answered the bill, or manifested the slightest interest in the conduct of the cause. At the October term 1843, a decree was rendered for the sale of part of Deem's real estate. This decree was, however, never executed ; nor was any other step taken in the case, until the year 1849. *At the October term in that year, another decree was rendered for the sale of all the real estate belonging to Deem; and directing proceeds of sale to be applied—first, to the judgments in favor of Erskine & Caperton; second, to the North judgments; and third, to the debt due to Barclay. The sale was made in 1850; and confirmed in the year 1851. It will thus be seen that the suit was permitted to remain seven years on the docket, without the slightest attempt on the part of Barclay to enforce the sale, either under the trust deeds, or the decrees of the court.
In the meantime, it is highly probable, the lands were deteriorating in value, while the interest was accumulating upon the debts having priority over those secured by the trust deeds. These deeds embraced several tracts of lands, upon one of which was a hotel with its appurtenances, and also a large quantity of personal property of considerable value. There were also two other tracts not included in the deeds, but subject to the lien of the judgments. It does not appear what becaihe of the personal property. It was probably consumed by the family, or sold and applied in discharge of other debts.
Although the Chancery court had taken jurisdiction over the real estate of Deem, there was nothing to prevent a sale of the personal effects under the trust deeds. These deeds were executed in July 1842, and the debts assigned in March following. By the exercise of the least diligence in enforcing a sale of the personal property, there cannot be a question but that Barclay would have realized the greater part, if not the whole amount, of his claim.
This is the aspect of the case as presented by the record brought here at the suggestion of the court, and filed in the cause with the consent of counsel. In as much, however, as that consent was given before the record was seen, and as the counsel for the appellee seems to apprehend that some injustice may thereby be done his ^client, it is proper to consider the case very briefly without reference to the facts disclosed by that re'cord.
After this long delay, it must be conceded that the laboring oar is upon the plaintiff. It is incumbent upon him to establish clearly all the facts necessary to fix the liability of the defendants. It was his duty—not that of the defendants—to show the quantity and value of all the property embraced in the deeds, and that no portion of the debts could have been made from a sale of that property.
None of the witnesses examined by him, tell us anything in respect to the personal property, or what became of it. It is true that Mathews, one of the partners, seems to'have been satisfied of the insolvency of Deem, and to have paid Barclay his share or proportion of the bonds; but it is equally true that the other partners we.re not so easily satisfied, and have as steadily refused or declined to assume any such liability.
The testimony of the other witnesses examined by plaintiff, was given nearly twenty-five years after the date of the assignment, and the execution of the trust deeds, and relates to events and transactions with which neither was personally acquainted. It would be eas3r to show that all this evidence is wholly insufficient to establish plaintiff's case. It is clear, as a general rule, the assignee must sue the maker or obligor before he can resort to the assignor. This rule is varied where it is perfectly manifest a suit would be wholly unavailing. It is equally clear, that where the debt which has been assigned, is secured by a specific lien, it is the duty of the assignee diligently to enforce such lien before he can have any recourse against the assignor. If he fails to pursue this course, it is incumbent upon him clearly to show that the security was worthless, and that no loss or damage has resulted from his lack of diligence. In the present case there is a manifest omission to establish these important facts.
*It will be borne in mind, that the assignment was made in the year 1843. . If at that time the obligor was insolvent, as is claimed, the assignors were immediately liable upon the contract of assignment. It was the duty of Barclay then to institute his suit against his co-partners, or reasonably to notif3r them of his inabilit3r to collect the debt. Let it be conceded, however, that Deem's insolvency did not appear until the sale of his real estate in 1850. This suit was not brought until the year 1860—-nearly ten years after the sale, and seventeen years after the assignment. After this long delay it is very doubtful, to s,ay the least, whether there can now be a safe determination of the matters in controversy. The danger of injustice, from loss of information and evidence, is great. And what is more material, the remedy of the defendants over against others is greatly impaired, if not wholly destroyed, by death and insolvencies. Under such circumstances, a court of equity should refuse to afford a remedy, though no statute of limitations may directly affect the right of recovery. In Wagner v. Baird, 7 How. U. S. R. 234, 259, Mr. Justice Grier, quoting the observation of Lord Camden, that nothing but conscience, good faith and reasonable diligence, can call this court into activity, used this language: "Length of time necessarily obscures all human evidence and deprives parties of the means of ascertaining the nature of original transactions; it operates b3T way of presumption in favor of the party in possession." Doggett v. Helms, 17 Gratt. 96, and cases there cited; Tazewell's ex'or v. Whittle's adm'r, 13 Gratt. 329.
In Deane v. Scholfield, 6 Leigh, 386, Judge Cabell, in discussing the duties and obligations of assignees, said: "If the assignee attempts to rest it on the ground that he was under no obligation to pursue the maker, he must equally fail; for even admitting that he was under no obligation to pursue him, then he should immediately have demanded the money from the assignor, *with an offer to return the note, that the assignor might take measures to recover from the maker. It would be against all justice that the assignee of a note should" seek to subject the assignor to its payment, after thus having held it up for years without any notification of his intention to hold him liable, and without offering him the means of saving himself by suing the maker."
These observations strongly apply to this case, and present controlling reasons for the rejection of the claim asserted by this bill. I think the chancellor erred in sustaining it; that the decree for this cause should be reversed and the bill dismissed.
The other judges concurred in the opinion of Staples, J.
The decree was as follows:
The court is of opinion, for reasons stated in writing and filed with the record, that the said decree is erroneous. Therefore, it is decreed and ordered, that the same be reversed and annulled; and that the appellee, James H. Paxton, executor of Alexander T. Barclay, deceased, out of the assets of his testator in his hands to be administered, do pay unto the appellant his costs by him expended in the prosecution of his appeal aforesaid here. And this court proceeding to pronounce such decree as the said Circuit court ought to have rendered: it is further decreed and ordered, that the plaintiff's bill be dismissed, and out of the assets of the testator in his hands to be administered, that he do pay unto the defendants their costs by them about their defence in the said Circuit court expended; which is ordered to be certified to the said Circuit court of Rockbridge county.