Case Name: Joseph Johnson, and Others, Executors of Sarah Johnson, v. Executors of Nathaniel Slawson, and William Harth; Executors of Nathaniel Slawson v. Joseph Johnson, and Others, Creditors of Nathaniel Slawson
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1831-04
Citations: 1 Bail. Eq. 463
Docket Number: 
Parties: Joseph Johnson, and Others, Executors of Sarah Johnson, v. Executors of Nathaniel Slawson, and William Harth. Executors of Nathaniel Slawson v. Joseph Johnson, and Others, Creditors of Nathaniel Slawson.
Judges: O’Neall, J., and Harper J., concurred.
Reporter: South Carolina Equity Reports
Volume: 8
Pages: 463–468

Head Matter:
Joseph Johnson, and Others, Executors of Sarah Johnson, v. Executors of Nathaniel Slawson, and William Harth. Executors of Nathaniel Slawson v. Joseph Johnson, and Others, Creditors of Nathaniel Slawson.
An agreement in writing, but not under seal, to give bond, secured by mortgage, for the purchase money of land, will not intitle the vendor to be paid as a bond creditor, where the purchaser has died insolvent, before giving bond pursuant to the agreement; although the vendor is intitled to a specific lien on the land itself.
Equity relieves when, through mistake, an instrument is not what it was intended to be; but will not aid a security, by giving to it an effect not intended by the parties, when it was entered into: and although there are cases, in which an agreement for a specific lien will he enforced, there is no case, where, in the administration of assets, the Court has carried into effect an agreement to confess a judgment, or to give a bond, or other general security, to the prejudice of other creditors.
Where the allegations of the hill are denied by the answer, a single witness is not sufficient to establish them, unless strongly supported by circumstances.
These causes were heard together at Charleston, in May, 1830, before Harper, Chancellor, from whose decree the questions made will be sufficiently understood.
Harper, Ch. The bill in the first of the cases stated, charges that complainants entered into a written agreement with Nathaniel Slawson, deceased, for the sale of a tract of land, which they had purchased at the commissioner’s sales, and for which he was to receive titles from the commissioner; that it was a part of the agreement that the purchase money, four thousand dollars, should secure^ by two notes of hand for the amount of one thousand' dollars, indorsed by the defendant, William Harth, and by bonds for the residue, payable in one, and two years, with the said Harth as surety, together with a mortgage of the land ; and that in pursuance of the agreement, the notes were given, indorsed by Harth, and Slawson went into possession, and continued in possession until his death, but, from causes alleged in the bill, delayed to execute the bonds and mortgage. It appears, that since the death of Slawson the land has been sold, with the assent of the defendants,his executors, and that complainants have received the proceeds, which, however, were not sufficient to satisfy their demands under the agreement. The objects of the bill are to set up the residue of the demand, as a bond debt, against the estate of Slawson, and to charge the defendant, Harth, as surety, who, it is stated, was present when the agreement was executed, and assented to it. The answer of the executors of Slawson admits, generally, the facts charged, but states that the estate of Slawson. is insolvent, and submits that complainants’ demand cannot be set up as a bond debt, to the prejudice of simple contract creditors. The answer of the defendant, Harth, admits that he indorsed the notes, as he had often done for Slawson, without knowing for what purpose they were to be used ; and positively denies, that he ever agreed to become Slawson’s surety on the bonds, or that he even knew of the existence, or contents, of the agreement exhibited by complainants. The bill of the executors against the creditors of Slawson is for the administration of the assets of his estate.
3? L 454
The first question is, whether the demand in question can be set up as a bond debt, to the prejudice of the other creditors of SlavvS°n' ®ur s^atu^e rá 1165 prescribes, that the executors and administrators shall pay bonds, and then simple contract debts, as they existed at the death of the testator, or intestate. At the death of defendants’ testator, the complainants’ demand was a simple contract debt merely. It rested on the agreement, which was not under seal. Upon what ground am 1 to take it out of the words of the statute ? Equity inclines to regard all creditors as equally meritorious 5 and upon what principle of equity shall the Court interfere to postpone those who, with equal equity, have obtained legal equality 1 The cases chiefly relied on for the complainants are those, in which a bond made joint, when it was intended to be joint, and several, has been set up as a joint, and several bond, against the representatives of a deceased obligor. ' The case in which this subject has been most fully considered, is that of Burn v. Burn, 3 Yes. 573. This is the first case in which it was decided expressly, and in terms, that such a demand may be set up to the prejudice of creditors, although there was no doubt it might be done as against the representatives of the obligor himself. The heir at law might be charged with it as a bond debt, yet the Chancellor seems to have doubted as to the principle, and upon what equity the party could be intitled to preference over simple contract creditors. Ib. p. 575. And he subsequently decides upon the authority of the previous cases, in which creditors must have been affected, although not expressly named.
There seems to be something anomalous in the doctrine, and I should not be disposed to follow the cases further than they neces. sarily lead, especially against the plain provisions of a statute. Yet there is an obvious distinction between that class of cases and the 'present. Those were cases of mistake : the parties intended to make an instrument which should have the effect of a joint and several bond, and supposed that they had done so. As explained by the Chancellor, in Gray v. Chiswell, 9 Ves. 124, “ the cases of mistake, &c., differ in respect of the intention of the transaction ; the intention originally to constitute a legal demand against the deceased man, as well as the survivor. The decree goes upon the intention.” See also Underhill w. Harwood, 10 Ves. 227. In those cases it might be argued, that the simple contract creditors were put in no worse situation than they would have been, if the parties had done what they intended, and supposed they had done. In the present case there was no mistake; but the parties did what they intended. There was no intention “ originally to constitute a legal demand.” This, I think, constitutes a sufficient distinction between the cases relied on and the present.
Another class of cases relied on are those, in which agreements to mortgage have been executed to the postponement of other creditors. The distinction between a mortgage, or specific lien, and a judgment, or general security, is pointed out in Finch v. Winchelsea, 1 P. Wms. 278. If a person having articled to sell land should afterwards confess a judgment to a creditor, who had no notice, this would not affect the land in equity; but if he should sell, or mortgage, the purchaser for valuable consideration, withers notice, would be protected. The like distinction prevails, ií p trustee should confess a judgment, or give a mortgage. There in no case, so far ag J know, where, in the administration of assets, the Court ... has carried into effect an agreement to confess a judgment, or give a bond, or other general security, to the prejudice of other creditors. Some of the cases seem also to indicate another distinction with respect to agreements to mortgage, or give a specific lien, which appears conformable to principle, and reason, between the instances, in which a party advances his money on the faith of the agreement, and where it is made to secure a previously existing debt. . This however it is not necessary to consider at present. In Williams Lucas, 2 Cox’s Cases, 160, where a party having borrowed money, gave his note promising to give security by a mortgage of land generally, it was held that this debt was not a charge on the land. The case of.,Rutledge v. Smith, of which the sequel is reported in 1 M’C. Ch. 119, and which was cited in the argument of this case, goes very far in establishing a lien. Without however questioning the authority of that case, although the present Court of Appeals speak doubtfully of it in Smith and Ravenel v. Smith, 1 M’C. Ch. 148, there is the obvious distinction between that and the present case, that the Court did not profess to carry into effect an agreement for a future security, but decided on the construction and effect of the security, such as the parties had made it. It is expressly put on that footing by Chancellor De Satjssuke, in Smith and Ravenel v. Smith, 1 M’C. Ch. 144. The opinion of the Court of Appeals says that the former Court held it to be a specific lien. This is conformable to the distinction taken in Falkner v. O’Brien, 2 Ball & Beatty, 223, between a covenant that all the estates of the covenantor are charged with a sum of money, and a covenant that he will charge his estates ; the former is a charge upon all the covenantor’s land, the latter is not. The complainants have already had the benefit of a specific lien on the land sold by them, and I think they are not infilled, as against other creditors, to the general security of a bond.
As to the case against the defendant, Harth, it is not made out by evidence. He positively denies that he knew of, or assented to, the agreement made by Slawson ; and his answer is contradicted but by a single witness. One witness will not do, however respectable, unless strongly supported by circumstances ; and I perceive acne such. The testimony of the witness, Carew- goes strongly to support the answer; and indeed the testimony of Major O’Hara, th® witness against the answer, is rather matter of conviction, and inference, than positive fact: of very strong conviction, to be sure, but still subject to uncertainty and mistake.
It is therefore ordered, and decreed, that the bill of the Executors ot Sarah Johnson be dismissed, with costs ; and that m admtnisleriug the assets of Nathaniel Slawson the demand of the said Executors be ranked as a simple contract debt.
From this decree the complainants in the bill of the Executors of Sarah Johnson appealed, and .now moved, that the same might be reversed, or reformed, on the following grounds.
1. That the agreement of the defendant’s testator, to give bonds, intitled the complainants, under the circumstances of this case, to have their demand ranked as a bond debt, in the administration of the assets of the estate.
2. That his Honor, the Chancellor, was mistaken in supposing, that the laud was sold by the complainants, or that they have received the proceeds; the fact being, that the land was sold, under an order of Court in this cause, by the late master, and that he, or his successor, still holds the bonds taken for the purchase money, subject to the order of the Court: wherefore it is submitted, that, in any event, these bonds should be ordered to be assigned and delivered to the complainants.
3. That in no view of the case ought the bill to have been dismissed with costs; inasmuch as it is conceded by the decree, that the complainants are intitled to a specific lien on the land, for the satisfaction of their demand, and this lien could not be enforced but by coming into equity.
M’Crady, for the motion,
cited, and commented on, the following authorities. Pegge v. Skynner and Richardson, 1 Cox, 23. Staines v. Morris, 1 Yes. & Bea. 9. Wilkins v. Fry, 1 Mer. 244. Pember v. Mathers, 1 Bro. C. C. 52. Wood v. Griffith, I Swanst. 43. Griffith v. Sheffield, 1 Eden, 73. Taylor v. Wheeler, 2 Vern. 565. Williams v. Lucas, 2 Cox, 160. Freemoult v. Dedire, 1 P. Wms. 429. Falkner v. O’Brien, 2 Ball & Beatty, 223. Read v. Administrator of Simons, 2 Desaus. 552. Polony v. Keenan, 3 Desaus. 74, and Ex Parte, Brightwen, 1 Swanst. 3.

Opinion:
Johnson, J.,
delivered the opinion of the Court.
We concur in opinion with the Chancellor, that in the administration of the assets of the defendants' testator, the complainants are only intitled to rauk with simple contract creditors, as to the balance due them, after deducting the nett proceeds of the sale of the land. Upon the principles of the decree the complainants had a specific lien on the land, and are intitled to the bonds given for the purchase money. The order dismissing the bill was founded on the mistaken supposition, that they were already in their posses ®rei1!ss';ance rendered it necessary that tLo complainaa's chork* como into this Court, end supplies a very edequate reason for the ,-concession, made by comise!, (hat the eosts should Wí °f the fmd'
It is therefore ordered, and decreed, that the master, or other officer, having the custody of the bonds, do forthwith assign, and deliyer them to the complainants; and that the costs be paid out of the proceeds of the sale of the land. In other respects the decree is affirmed.
O'Neall, J., and Harper J., concurred.
Order modified.