Court Opinion

ID: 8487658
Source: CourtListenerOpinion
Date Created: 2022-11-18 15:46:15.041111+00
Date Added: 2024-06-11T16:50:04.593926
License: Public Domain

Chief Justice Johns.
I concur in the opinion that the judgment ought to be reversed for errors in the charge of the Court of Common Pleas to the jury. There are two errors in the charge as to which I entertain no doubt.
First, the court decided the question of due diligence by the assignee of the bond to be a question of fact for the jury to decide. This is error for in this case it is a mixed question of law and fact and the court ought to have decided the law and have submitted the facts to the jury. In other words, the court should have declared to the jury whether, supposing insolvency not to be an excuse for the assignee’s not proceeding to use legal means to recover the debt and no execution issuing on the bond, the law was that due diligence had not been used, and that this discharged the assignor from his conditional liability. Or, if the court was of the opinion that insolvency at the time of the assignment or at the time when an execution could have been issued on the bond was any excuse, or rendered it unnecessary for the assignee to proceed on the bond for the purpose of preserving the assignee’s right to resort to the assignor for the recovery of the consideration of the assignment, then the court ought to have decided the law to be so and left the fact only of insolvency to the jury. It was error to submit to the jury to decide the question of law as to due diligence: first, because the court are bound to decide questions of law if necessary to be decided and the questions are made in the case; and secondly, if on account of insolvency the question of due diligence is immaterial, then the court ought so to have decided.
That the question of law as to due diligence should be decided by the court, I consider is established by English authorities and the decisions of the United States Courts. But if there was a doubt, the decisions of the courts in this state ought to settle the question. In Kuth’s Administrator v. Snow, Chief Justice Read decided the question as to what was due diligence: that a suit must be brought and prosecuted diligently or there would be a want of due diligence and the assignor would be discharged. A verdict for the plaintiff was set aside and a new trial granted. It appeared that three terms elapsed before suit against obligor and two years before narratio filed.
The same cause was tried in the Supreme Court, October Term 1799, before Chief Justice Johns and John Clayton. It was a suit on the assignment of a bond of James Smith’s to James Snow by Thomas Kuth. The bond was dated, January 6th, 1788, the assignment was dated 29 October 1792. Thomas Kuth commenced a suit on the bond against Smith on the 1st August 1793; May *11025th, administrator of Kuth made a party; December 5th, 1795, judgment. December 12th, 1795, fieri facias issued, returnable' to May, 1796. Returned, nulla bona. November Term, 1796, Smith petitioned and was discharged as an insolvent, and there was paroi testimony as to the insolvency of Smith. Among other grounds of defense, a want of due diligence was relied on, to which Mr. Bayard, counsel for the plaintiff, answered, admitting that in the case of Graviston v. Freeman in the Supreme Court, a suit by an assignee against assignor, it was established that an assignor was liable. He also admitted as a general rule that the assignee was bound to sue and that delay would release the assignor but contended that this case was an exception to the general rule on two grounds: first, the insolvency of James Smith at the time of the assignment; secondly, that Snow, the defendant, requested Kuth not to sue Smith without his orders, of which there was some slight testimony.
The court did decide the law as to what due diligence was. The general rule as to the liability of the assignor in the case of Graviston v. Freeman was recognized conditionally, that a suit was brought on the bond by the assignee in due time and prosecuted in common form. The court did decide that the suit if necessary must be brought to the next court after the assignment, and the court did decide that if there was an agreement on the part of the assignor that no suit should be commenced without his orders, it would except the case out of the general rule or excuse the not bringing the suit.
Chief Justice Johns was then of opinion, if insolvency was admitted or proved, it would be an exception to the rule; but whether a technical or notorious insolvency was understood, or what kind of proof of insolvency was to be required he does not know that he then considered. In Cummins and Kennard v. Solomon Smith, in the Supreme Court, October Term, 1806, the court did decide what was due diligence as to the time when a suit must be commenced; and the taking a judgment with the stay of execution for four months could not be an objection to due diligence.
In the case of Rumsey and Broom v. Smith, in the Court of Common Pleas at May Term, it appears that the court did submit the question of due diligence to the jury, but whether the point was insisted on and the attention of the court called to it, or under what circumstances the opinion of the court was delivered does not appear. The case of James Dyer v. Benjamin Harrow in the Court of Appeals at an adjourned court, 1821, is relied on to show that the Court of Appeals have decided the question of *111due diligence to be not a question of law, and a proper question for a jury to decide. It is true, from the record it may be inferred that the Court did so decide. But this was not the fact. I delivered the opinion of the Court, which was previously reduced to writing which I am now in possession of. This declared, we do not think it necessary [to decide] the question whether due diligence in this case is a question of law or fact, and ought to have been decided by the court and not left to the jury; because it does not appear from the bill of exceptions that this point was insisted on at the trial below, and if the point was not made, and the attention of the court called to it. We are of the opinion, as the court in the charge left the question to the jury to decide, whether it was a question of law or fact or a mixed one that is not an error for which this Court ought to reverse the judgment. In a case brought before us depending upon the question whether the court ought to decide the question or leave it to the jury to decide, then we shall have no objection to decide it.
This decision shows the Court of Appeals did not decide the question and I consider the decisions of the Supreme Court in the cases before mentioned ought to govern this case, as it respected the question whether due diligence is a question of law and to be decided by the court.
The second error in the charge of the court is that if there was a paroi agreement at the time of the assignment by which E. Gilpin, the defendant, agreed to be answerable for any deficiency in consequence of the inability of the obligor to pay, that on this ground the plaintiff below was entitled to recover. I am of the opinion that on the general count in the declaration, the plaintiff could not recover on this ground. If there was any such special contract it should have been stated in the declaration.
Third point. There is a third point which presents two questions: first, whether insolvency will supersede the necessity of bringing a suit and prosecuting it with due diligence; secondly, if yes, what species of insolvency and what kind of proof is required. As to the question of insolvency in the charge of the court, it is stated that if the evidence satisfies the conscience of the jury that John Smith and Joseph Gilpin were insolvent at the time of the assignment and continued so, this insolvency would be a justification to the plaintiff in not suing out process or taking other means against them. I am of the opinion there is error in this part of the charge. Insolvency in this case is a mixed question of fact and law and the court should have decided what is legal insolvency and left the facts only to the jury; that is, supposing insolvency to be sufficient to entitle the plaintiff to recover without having sued on the bond.
*112In the consideration of the question of insolvency, I have endeavoured to ascertain what the law is, as well from my recollections of the opinions prevalent at the bar, as from the decisions of the Courts of Delaware. At the close of the Revolutionary War and afterwards, the scarcity of specie and want of money occasioned much traffic in bonds and notes. They were bought and sold and used as a substitute for money. Before the adoption of the Constitution of Delaware, the liability of the assignor in case of the inability of the obligor to pay was questioned, and if liable the extent, or whether absolute or conditional, if conditional what were the conditions, — were doubtful questions. It was the general opinion that the assignor was liable and the practice was for the assignee to sue the assignor on failure of obtaining payment from the obligor. Some lawyers doubted whether the action could be maintained on the assignment. The practice of suing on the assignment continued without any decision that I know of, until 1796, when in the case of Graviston v. Freeman in the Supreme Court in Kent County, there was a decision; before which, the practice was for the assignee to sue the obligor and I believe the general opinion was that to make the assignor liable, it was considered to be necessary that the suit should be instituted to the next court after the assignment, but I do not believe that the universality of the principle was established so as to require the suit to be necessary in the case of a legal or absolute insolvency.
In Graviston v. Freeman, the liability of the assignor in an action for money had and received in case the money due on bond could not be recovered from the obligor, was established on the principle that the money presumed to be paid to the assignor for the assignment was a valuable consideration which raises an implied obligation on the part of the assignee to repay it in case of failure by the obligor. It might be inferred that the court in this case intend6 recovery, if a suit was instituted and by such the debt could be recovered; but it is not so expressed. In Kuth’s Administrator v. Snow, 1798, Mr. Ridgely, the counsel for the defendant did not consider the law as so settled, for insolvency was insisted on as one of t,he grounds of defense, and two cases were referred to (it is supposed, in the Common Pleas); one in Kent when it was admitted both by counsel and the court, that if the obligor was insolvent at the time of the assignment the assignor was liable. The second in New Castle, that even a suit was not necessary. But Chief Justice Read said that in Graviston v. Freeman when the right of *113action by an assignee was established the court deemed it important and so expressed themselves, that such right could only attach in such cases in which the assignee had or should use reasonable and due diligence to obtain the money from the obligor, the ultimate and necessary step being that of a compulsory suit at law.
In the same case, 1799 (see ante), as a general rule that the assignee must sue was admitted by counsel, but contended that insolvency is an exception to the general rule, and the court divided.
In the case of Cummins and Kennard v. Smith, decided in 1806 (see ante), Messrs. Clayton and Hall, pro plaintiff, Mr. Fisher for defendant, the ground of insolvency was relied on to entitle the plaintiff to recover without prosecuting a suit with due diligence. There was a judgment with stay of execution four months, and no execution issued until nine months had elapsed and five months after the stay had expired. Mr. Clayton contended that insolvency at the time of the assignment was sufficient. Mr. Hall, insolvency at the time of the judgment, and that as soon as the obligor became insolvent the liability of the assignor was fixed and that the assignee was not bound further to proceed in the suit against the obligor. The defendant’s counsel insisted there was a want of due diligence because a copias ad satisfaciendum was not issued; and I remark there was no sale of the land. The case of Rumsey and Broom v. Lofland, in 1804, was cited in which it was decided by the Common Pleas that if the obligor was insolvent the assignee was not bound to sue the obligor. In this case against Smith, the court (Johns, C. J., and Cooper, J.,) recognized the general rule as to the right of the assignee to maintain a suit against the assignor on the ground that the assignment (if it was not otherwise agreed) was a conditional warranty to repay the consideration money, provided due diligence was used by the assignee and the debt could not be obtained from the obligor. It was also decided that the insolvency of the obligor at the time of the assignment would be sufficient to make the assignor liable in this case, and also that insolvency at the time when the plaintiff could have taken out execution would be sufficient to make the assignor liable and entitle the plaintiffs to recover.
The case of [Deputy] v. Bradley was cited by the respondents’ counsel, decided by Common Pleas in 1817, in which it was alleged and not denied that, that court decided that insolvency was sufficient to make the assignor liable. If decisions in our own courts are to decide what the law is as to the question of insolvency, in both the Court of Common Pleas and the Supreme *114Court, the liability of the assignor on the ground of insolvency at the time of the assignment was settled; for all the decisions affirm the principle except the case of Kuth’s Administrator v. Snow, in 1798, which is at variance with and contradictory to all the other decisions; in that case the question as to insolvency was a point in the cause and the court did decide that a suit at law by the assignee against the obligor was necessary to make the assignor liable.
I confess that the great respect I have for the opinion of Chief Justice Read, the reason for requiring a suit to be instituted (which I understand to be the using legal means), and the inconvenience that might result from holding the assignor liable after he parted with the power of suing'without requiring the assignee to sue, and the general practice of commencing suits by the assignees against the obligors, — afford ground to doubt. But when it is considered that the law does not require the assignee to do an act positively useless, as to sue an insolvent, and that although it may be a sound principle and good as a general rule, that the conditional liability of the assignor means that he is liable if the assignee sues the obligor, prosecutes the suit with due diligence, and cannot recover; yet, like all general rules, it is liable to some exceptions. And the performance of conditions in some cases the law does dispense with or excuse: as, if the performance be prevented by the act of God; and so, if prevented by the act of the party for whose benefit the condition is to be performed as in the case of Kuth’s Administrator v. Snow, where the assignor requested the assignee not to sue the obligor without his orders; and so also, if the obligor has no property, it seems to be unreasonable that the assignee should be bound to sue an insolvent when no effect can be produced.
The practice of suing by the assignee was a safe one, for, if the debt was not recovered, it furnished him with evidence to recover of the assignor. But, if insolvency could be proved and the assignee will take the burden of the proof, why should he not be permitted to recover on such evidence. When a technical insolvency may be proved where no suit has been instituted by the assignee, as when the obligor is discharged under an insolvent or bankrupt law or has made an assignment of all his property for the benefit of his creditors; and again, suppose there to be judgment and executions against the obligor at the suit of a creditor not the assignee, all the property is sold and not sufficient to pay the executions. This would be clear and certain proof of insolvency, and it would be unreasonable in such cases to compel the assignee to sue the obligor, whereby *115he must subject himself to expense, trouble and delay, and recover nothing before he could commence a suit against the assignor. It is therefore my opinion that a case of a clear and absolute insolvency at the time of the assignment should be considered an exception to the general rule and that in such cases the assignee may maintain an action against the assignor. But, for reasons assigned (see ante), I consider the charge of the court as to this subject erroneous.
But, as I know three of the four judges, the Chancellor, Judges Davis and Rowland, sitting judges in this case have concurred in a different opinion, the law must now be considered to be settled; and that, if the assignee neglects to commence and prosecute a suit against the obligors, this will discharge the assignor from any liability to repay the assignee the amount of the bond even if the obligor was insolvent at the time of the assignment; which is conclusive as to the present cause for no such suit was instituted in the present case and consequently the plaintiff had no right of action.
And the judgment of Common Pleas must be erroneous and ought to be reversed.

 Manuscript reads “intend by recovery.”