Court Opinion

ID: 6679040
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:18:56.736723+00
Date Added: 2024-06-11T16:00:47.203880
License: Public Domain

Mr. Chiee Justice McIver,
dissenting. The facts are so fully stated in the leading opinion of Mr. Justice Jones, that I do not deem it necessary to restate them here, as it is conceded that all of the facts material to the issue and all the principles of law involved are the same in all of the cases, I shall, for convenience of phraseology, speak of them as one case, intending that the view which I shall present. shall-be applicable to each of the cases stated in the title.
The case is treated by Mr. Justice Jones as a case in equity and not as a case at law, though this may well be questioned. For the plaintiffs, in bringing their action, selected their own forum, and the complaint unquestionably shows that the forum selected was the law court, as the allegations in the complaint are simply those appropriate to an action on an ordinary money demand to recover the amount mentioned in the notes set out in the complaint, and there is not a single allegation which would impart to the action any feature of equitable cognizance. It is only when we look into the so-called reply that any allegation can be found upon which a claim to equitable relief could be founded. Whether this paper, called a reply, can have the effect of converting the action into an action for equitable relief, I shall not stop to inquire, as, according to my view of the case, it is immaterial whether the action be regarded as an action at law or in equity. It is very manifest that the whole case turns upon the inquiry, whether the release, the execution of which is admitted by the plaintiffs, operates as a bar to the action brought to recover the balance alleged to be due on the notes set out in the complaint. There can be no doubt, that a creditor may discharge his debtor from further liability for either a part or the whole of his debt, by executing a release of the debt tmder seal,, even without any consideration, for the seal im*280ports a consideration. Hope v. Cavis, 11 Rich., 135; Carter v. King, 11 Rich., 125; in which last named case certain words, “hastily used” (as it is said), implying the contrary, in Matlock v. Gibson, 8 Rich., 439, are explained and corrected. Now, in this case, there can be no doubt that this release was under seal, for it is so distinctly alleged in the answer, and in the admitted facts upon which the case was heard below, it is stated that the allegations of the complaint, answer, and reply are admitted, with certain exceptions, which do not include this matter of the seal. The fact that the so-called copy of the release, as set out in the' reply, does not show a seal, certainly is not sufficient to overthrow the admission of the allegation in the answer that the release was under seal, for such copy is manifestly incomplete, as it contains neither the date nor the signature, the very place where the seal would appear. Taking this release to be an instrument under seal, it becomes important to inquire, whether the objection of plaintiffs is based upon the ground of want of consideration or upon the ground of fail-ztre of consideration; for, as is said in Carter v. King, supra, “there is a great difference between the objection to an obligation that the consideration which has really moved it has failed, and the objection that it never had a consideration. If want of consideration appeared, the inference would be that for that reason it was put into such form that the deliberation implied from the seal should stand in the room of consideration. How could any deed of gift or covenant to stand seized (to uses) ever prevail, if the same want of consideration which. renders a parol promise void would avail to defeat a specialty? If, therefore, the release here in question never had a consideration, it could not be defeated upon that ground; but if it was originally founded on a valid consideration which has subsequently failed, then it might be attacked upon that ground. It seems to me that the real ground of attack is, that the release never had any consideration, and not that there has been a failure of the consideration which originally existed, for none ever *281did- exist. If the release does not now .secure priority, it never did, for the law in this respect is the same to-day as it was when the release was executed. It cannot, therefore, be said that the consideration of the release has failed by reason of anything which has occurred since it was executed, but it must be said the release never had any consideration, and, as has been shown, it cannot be attacked. It is no doubt true that the plaintiffs supposed, at the time of the execution of the release, that they would thereby acquire a priority over other creditors in the distribution of the assets of the assigned estate of Dacus & Jordan, but that supposition was based upon an erroneous construction of the law by the plaintiffs, for which Dacus & Jordan were in no wise responsible. Dacus & Jordan, being embarrassed, surrendered their entire estate for the benefit of their creditors, and the plaintiffs, with a view to acquire priority over other creditors, executed the release whereby Dacus & Jordan were discharged from further liability to the plaintiffs; and if the plaintiffs have been disappointed in realizing what they expected, by reason of their own erroneous judgment of what was the law, I am ‘unable to see any reason why the consequences of such erroneous judgment should be visited upon Dacus & Jordan. It is conceded that Dacus & Jordan were not parties to the action of Armstrong v. Hurst, 39 S. C., 498, in which it was adjudged that the release executed by the plaintiffs was insufficient to effect the purpose which the plaintiffs expected; and it does not appear that Dacus & Jordan have ever, in any way, either by word or act, claimed that the release-was insufficient. That was a matter with which Dacus & Jordan had nothing whatever to do, and in which the plaintiffs acted solely upon their own responsibility, and they should be held to the consequences of their own incautious act.
It is said that the plaintiffs’ allegation (as it is called) in the third paragraph of their reply having been admitted by the defendants, it must be considered that the defendants *282have admitted that the release was executed upon the condition that the plaintiffs would thereby acquire priority over non-releasing creditors; and the argument is that such condition not having been fulfilled, the release became inoperative. The paragraph of the reply referred to reads as follows: “That these plaintiffs claimed that the said release had been filed within the time fixed by the said assignment, and the condition of the release being that they should have priority over non-releasing creditors, they were entitled to such priority. This, however, was resisted by the defendants, and by creditors who had not filed releases; and upon argument of the question, the Supreme Court held that the release had not been filed in time, and that these plaintiffs were not entitled to priority.” In the first place, it is manifest from the terms of this paragraph that the plaintiffs were speaking of what occurred in the case of Armstrong v. Hurst, to which case it is admitted that the defendants herein were'not parties, and, therefore, had no opportunity of either admitting or denying the allegations therein contained. Besides, I do not understand that a defendant, when he admits the facts alleged in a complaint, has ever been regarded as thereby admitting what is '•'■claimed'''' to be the legal result of such facts.
In addition to this, the plaintiffs, in the next preceding paragraph of the reply,.undertook to set forth a copy, or rather a partial copy, of the release, and there is nothing which implies that it was executed upon any condition. It only purports to set forth what the plaintiffs regarded as the motive for its execution, for it reads: “In consideration of the amounts to be received by us, and of our having priority over non-accepting creditors in the distribution of the assets of the firm of Dacus & Jordan, we hereby release the said Dacus & Jordan from further liábility on account of our claims against them.” This language, so far as relates to the priority over non-accepting creditors, only amounts to an assertion of what the plaintiffs supposed would be the effect of the release, and I am unable to see any warrant *283for the change in the phraseology of this paper, such as that suggested in the opinion of Mr. Justice Jones.
Again, it is urged that the release should be declared inoperative, upon the ground that it was executed and accepted under a mutual mistake in law. I do not see the slightest ground for supposing that there was any mistake, either of law or fact, upon the part of Dacus & Jordan. After they had executed the deed of assignment and surrendered their property to their assignee, they had. nothing further to do -with the matter. It does not appear that they had anything whatever to do with the execution of the release— indeed, it does not appear when they first learned that such a paper had been executed.
It is not pretended, and could not' be, that there was any mistake of fact on the part.of the plaintiffs, and I do not think there was any such mistake of law on their part as would justify a court of equity in relieving them. As is said in 2 Pom. Eq. Jur., sec. 843: “The rule is well settled that a simple mistake by a party as to the legal effect of an agreement which he executes, or as to the legal result of an act which he performs, is no ground for either offensive or affirmative relief. If there were no elements of fraud, concealment, misrepresentation, undue influence, violation of confidence reposed, or other inequitable conduct, in the transaction, the party who knew or had an opportunity to know the contents of an agreement or other instrument, cannot defeat its performance, or obtain its cancellation or reformation, because he mistook the legal meaning and effect of the whole or any of its provisions.” The doctrine thus laid down by this distinguished text-writer has the support of the highest authority in this country—Hunt v. Rousmaniere's Adm., I. Peters, 1; and has also been approved by authoritative decisions in this State—Keitt v. Andrews, 4 Rich. Eq., 349; Munro v. Long, 35 S. C., 354. Now the case under consideration manifestly falls within this well settled rule. There is no allegation and certainly, no evidence of any “fraud, concealment, misrepresentation, *284undue influence, violation of confidence reposed or of other inequitable conduct” on the part of Dacus & Jordan, whereby the plaintiffs were induced to execute the release in question. On the. contrary, the plaintiffs undoubtedly knew, or certainly had the means of knowing, all of the facts; and their error, for which no one but themselves is responsible, was that they “mistook the legal meaning and effect” of the release. As they construed that paper, they were entitled to priority over the non-accepting creditors, and they seriously and earnestly contended for the correctness of their construction in the case of Armstrong v. Hurst, supra, and it is only when they learned from the decision of this Court, that they had misconstrued the legal meaning and effect of the release, they turn around and claim that the release is to have no effect at all. To use the language of Dargan, Ch., in Keitt v. Andrews, supra, “Such a misconstruction is rather an error of the judgment than a mistake either of the law or of fact,” from which they are not entitled to relief.
The views which I have adopted will find support in the cases cited by appellants: Shepard v. Rhodes, 7 R. I., 470, reported also in 84 Am. Dec., 573; Baker v. Baker, 75 Am. Dec., 245, a New Jersey case, and in Claflin v. Dacus, 59 Fed. Rep., 998, where the same question was presented in a case between other creditors and these defendants, Dacus & Jordan, where it was held by his Honor, Judge Simonton, that the release was a bar to the action. It is true, that the actions in the three cases last cited seem to have been actions at law; but having shown that the release cannot be avoided in equity, these three cases are cited to show that at law the release is a bar to the action. The case of Western Bank v. Sherwood, 29 Barb., 383, cited by counsel for respondents, simply decides the admitted doctrine that, since the Code, a defendant may avail himself of any defense, either legal or equitable, which he may have to the claim sued on, even though the action be prosecuted by an as-signee of an unnegotiable instrument, inasmuch as he takes subject to all the equities existing between the original *285parties to the contract at the time of the assignment. I am, therefore, unable to perceive how'that case applies to the real question in the case under consideration.
For these reasons, I am unable to concur in the conclusion reached by Mr. Justice Jones, and, on the contrary, think that the judgment of the Circuit Court should be reversed and the complaint dismissed.