Court Opinion

ID: 6672585
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:13:32.341348+00
Date Added: 2024-06-11T16:00:35.633716
License: Public Domain

The opinion of the Court was delivered by
Moses, C. J.
We concur in the conclusion of both the Chancellor and the Referee, that there was no actual fra'ud in the confession of judgment by the defendant, Sizer, to his sureties. 'Neither is any to be implied from the transaction between them, which preceded or followed the sale.
There was an existing liability, on the part of the 'defendants, for their co-defendant, Sizer, to a large amount, and in the course which they pursued to protect themselves from a loss more than probable, from his then pecuniary condition, they do not appear to have violated any of those salutary principles which Courts of Equity enforce to secure fair and honest dealing in the business *65affairs of life. When they are transgressed, a firm disposition to repair the wrong is always exhibited by the Courts; but fraud is not to be presumed ; it must be shown by circumstances so strong as to lead to conviction, and the burden of proof is upon those who seek the aid and interposition of judicial tribunals to set aside and vacate instruments under which legal preferences have been obtained.
A judgment confessed as an indemnity for liabilities incurred by another, as indorser, or security, is good. — Ford vs. Elkins, 2 Speer, 147.
The fact that it was given after suits by other creditors had been brought, ofitself constituted no fraud. A debtor has a right to prefer one creditor to another, but it must be a preference which secures no benefit or advantage to himself, as the price or consideration, or reserves to himself an interest, to which, of right, his other creditors may be entitled.
If Sizer had remained in possession after the sale, the principle laid down in Smith vs. Henry, 1 Hill, 16, would not have been a circumstance from which fraud in the original transaction could have been inferred, for it has been held not to apply to the property of a debtor acquired through a Sheriff’s sale. — Pringle vs. Rhame, 10 Rich., 72 ; Guignard vs. Aldrich, et al., 10 Rich. Eq., 253.
Here, too, the proof is clear, that the possession was in the son, Anson Sizer, under a bona fide contract of renting and hiring from year to year.
The judgment confessed was for $8,863.38. It was founded on a bond in that amount, which recited liabilities on the part of the plaintiffs to whom it was confessed, supposed to be at least equal to the sum expressed, and set out with such reference to them that there could be no misapprehension of the debts, as against which the purpose was to protect the obligees.
All the real and personal estate of Sizer was levied on under an-execution junior to the confession, and sold by the Sheriff of Lancaster on sale days in February, 1859. The property brought fail-prices, and was purchased by 'Potts, one of the plaintiffs, (in the confession,) under an arrangement with his co-plaintiffs to attend the sale, make the property bring its value, and, if necessary to that end, to purchase it. To this understanding there was no evidence that Sizer was a party.
The real estate and some slaves were sold on the first day, whereupon a written agreement was entered into between Potts and the *66otlior sureties, (the defendants here,) together with J. H. Wither-spoon, who held the judgments next in rank, ratifying the purchase, acknowledging the land and negroes so bought to be for the joint benefit of the sureties, and that he (Potts) should hold possession, sell the same, and apply the proceeds to the satisfaction of their fi. fa. to the extent necessary for their indemnity as sureties for the said Sizer, as secured by the said judgment, continuing the agency of Potts as to the farther sales to be made the next day, as to the property he might then buy, with the stipulation that, after satisfying their execution, any balance should be applied to the execution of the said J. H. Witherspoon, and the remainder to that of J. E. Cureton.
The amount of all the purchases so made by Potts was $8,457.12, which he paid, (except as to the costs,) by giving a receipt to the Sheriff for the sum on the said execution which he and the other sureties held against Sizer, which was senior in date to all which existed against him. If the liabilities covered by the bond reached that amount, then the said purchasers would be the owners of the property so bought at the Sheriff’s sale, with no duty to perform except the discharge of the trust which devolved on them through the bond, in favor of the creditors whose debts were referred to iñ it as those on which the obligees were sureties, and as to which they were to be protected by the judgment, on the same day confessed.
It is alleged, however, by the counsel for the appellants, in the statement which he submitted in his argument, that the liability of the sureties on the bonds and notes intended to be covered by the confession, at the time of the sale, amounted only to $7,664.33, and that may be accepted as the correct sum, as it is, by $238.95, in excess of the amount stated by the Circuit Judge in his decree as the payments then actually made.
_ Potts and his co-plaintiffs, however, received from the proceeds of the sales on their execution $8,457.12, and if their liabilities for fíizer, on the debts which the confession was to protect, was only $7,664.33, then they have received $792.79, which, after first paying the judgments of J. H. Witherspoon, amounting on day of sale to $586.15, leaves $206.64 in their hands. This sum they hold through the property which they purchased and paid for by giving a credit on their execution. It is applicable, however, to the other judgments, in their order of priority, unless Potts and the plaintiffs in the confession can maintain their right to it, o'n the ground which they assume, and which was sustained by the Circuit Judge.
*67They contend that, as the purpose of the parties interested in the bond was, through it, to secure the obligees against all liabilities on behalf of Sizer, the debts on which they are responsible for him, though omitted in the instrument, are to be regarded as impliedly included.
The very specification and recital of the liabilities against which the sureties were to be protected excluded those which are not by name included in it. The parties themselves have stated, in precise language and terms, the end designed and contemplated by the bond. In addition to this, there is an endorsement on the confession that it is made “to the intent and meaning of the within writing obligatory.” It was competent, by the use of more general terms, to have availed themselves of a more enlarged benefit through the bond and the confession, by extending it to all debts for which they might be in any way responsible for the said Sizer. How can they, however, without any allegation of mistake, be permitted, in fact, to change the terms of a sealed instrument, specifically enumerating certain demands, so as to comprehend others which are not referred to, when, too, it is to be assumed that they had knowledge of all the debts on which they were sureties for the said principal ? A more legitimate inference is, that, not inserting, they intended to exclude them ; and this receives support from the concluding words of their answer: “ The confession of judgment aforesaid might have been for a larger amount than that for which it was given, and that, too, on actually incurred liabilities.” *
It appears, then, that the plaintiffs in the confession have in the property which they so purchased the said sum of §206.64, which property was liable to the judgment creditors junior to Witherspoon, in the order of their date. This they are bound to pay; and if by reason of their insolvency, they are not competent to do so, the land must stand liable to the amount, for they held it in trust for such judgment creditors, having used their funds to that amount in the purchase of it.
Pringle and Chafee are the only creditors before the Court. Pringle, however, has no claim to the §206.64, because that sum is absorbed by priorities.
Chafee, the other plaintiff, had died before the- hearing on Circuit, and the fact is not noticed by the Circuit Judge in his decree.
His representatives, or the firm which (in the rather uncommon language of the bill) he represented, have an interest to the extent already stated, and it will be lost to them, if the general order dis-*68missmg it is confirmed. The bill as to him abated before the hearing.
The effect of an abatement at law and in equity is materially different. “In the sense of Courts of Equity, an abatement signifies only a present suspension of all proceedings in the suit from the want of proper parties capable of proceeding therein. At the common law, a suit, when abated, is absolutely dead.” — Story’s Eq. PI., § 354.
The order dismissing the bill as to Pringle is confirmed. We do not think it a case for costs, and he should pay only his own, and it is so adjudged. As to Chafee, let the case be remanded to the Circuit Court, that the parties representing him, or the firm, as they may be advised, may have the opportunity of becoming parties to it, and of moving for such orders as may place them in a condition to carry out the views and principles announced in this opinion.
Willard, A. J., and Wright, A. J., concurred.