Allin v. Shadburne's

| Ky. Ct. App. | Apr 9, 1833

Lead Opinion

The Judges in this Case delivered separate Opinions.

Chief Justice Robertson

The appellee, (James ÁI-lin,) as surviving executor of William Shadburne, deceased, sued the appellants, as the executors and heirs of Thomas Shadburne, deceased, in debt, upon a bond executed to the said Allin and another, as executors of William .Shadburne, by Thomas Shadburne and James Allin. The declaration contains two counts ; the first describes the bond as an obligation by Thomas Shadburne onlythe second describes it as an obligation signed by Thomas Shadburne and James Allin. The bond, as exhibited upon oyer, purports to have been'signed by both Thomas Shadburne and James' Allin.

The appellees demurred to the declaration, and filed a plea in bar, averring that James Allin the obligor, and James Allin the obligee, were but one and the same person.

The circuit court overruled the demurrer to the declaration ; and, having'also overruled a demurrer to the-plea, rendered judgment against (lie appellant ; to reverse which, this appeal is prosecuted.

We cannot perceive any ground for demurring to the declaration, unless the appellants (erroneously) supposed that the first count was defective because it described a bond with two signatures as the obligation of only one person ; and that the second count was not good, because it averred that “James Allin” was one of the obligors. But neither of these objections can have any influence. There is no necessary discrepancy between the bond as declared on, and as exhibited ; the simple fact that the name-of James Allin appeared to be subscribed, does not shew that he is an obligor, and cannot be available on demurrer. Nor is it a legal deduction, from the identity of names in the second count, that “ James Jlllin” the obligor, is “ James Jlllin” the obligee. Wherefore, as the declaration appears, -in all respects, to be substantially good, the demurrer to it was properly overruled.

That obligor 8f obligee are the same person, is not a legal deduction from the identity of the names. Voluntary acts of an obligee, which suspend his right of action : as his marriage with, the obligor, appoint ment of Ins debtor,who accepts the office, executor, ^c.-do, in general, release the cause of action,to such deb. tors — and their co-obligors, also ; for a release to @ne is a release to all. If tvvo'persons make ajoint obligation, paya-aole to one of themselves, it is void as to the latter, and is, in effect, the sole obligation ofthe other - against whom the obli- ■ gee (though his own name is to the bond as a co-obligor)may maintain his action at law, for the whole sum.

The plea cannot be aided by the familiar doctrine as to “ confusion of partiesbecause the same person was not both plaintiff and defendant. Nor can it be sustained on the ground of a release of the cause of action, by operation of law.-

When a legal cause of action, once subsisting, has been suspended by the voluntary act of the party who was entitled to it, it is, in most cases, considered as released by law. Thus, if the obligee marry the obligor, and thereby suspend the cause of action, the law deems the marriage a release of the legal obligation. So, if a creditor make one of several joint debtors, or joint and several debtors, his executor and the executor qualify as such, the whole legal obligation is thereby extinguished ; for, as an executor cannot sue himself, the creditor, by appointing one of his debtors his executor, voluntarily suspends, and thereby, in contemplation of law, releases the cause of action as to such debtor ; and a release to one operates as a release to all.

Consequently, if the bond, in this case, had been given to the testator, (William Sliadburne,) the subsequent appointment of one of the obligors to be his executor would, by operation of law, have released both of the obligors from their prior legal liability. But, James AI-lin could not make a contract with himself. The aggregate menlium, indispensable to the making of a contract, forbids the idea of an agreement between James Allin in his individual, and the same James Allin in his fiducial character. As to him, therefore, there never was any legal cause of action, because there never was any contract imposing on him any legal liability. And consequently, as to him, there was nothing to release ; and, surely, the fact that he was never bound, could, not have operated as a release of the obligation of Thomas Shad-burne.

N, therefore, the plea can be sustained, it must be only because the entire contract was a nullity, in consequence °f invalidity as to Allin as a co-obligor. But can such a position be maintained by either authority, principle or analogy ? We think not. We have ^een no direct authority upon this point, unless it can be found in Debard et al. vs. Crow. [Manuscript decision — Fall Term, 1831.] In that case, this court expressed the opinion, that the legal liability of a principal obligor, in a joint and several obligation, was not affected by the fact that his surety was one of the obligees; but that, in such a case, the obligation was that of the principal only. There would be no difference between that case and this, if the bond in the latter had been joint and several, instead of being, as it is, joint, and if, also, it had shewn on its face that Allin was only a surety. But these discrepancies in the characters of the, two cases, are not so essential as to subject them to the operation of different principles. The same principle must, in our opinion, govern both cases.

If a principal obligor in a joint and several obligation could not bar’an action against himself alone, by pleading that another person, who subscribed the bond as his surety, was obligee, and therefore not bound as a co-obli-gor, why should a principal in a joint bond, bar a suit against himself alone, by a similar plea ? In each case the bond would, according to its Ieggl effect, be the obligation of the defendant only : and that is the reason why he could not avoid it by pleading that another person, who had signed it, as his surety, was not bound in law. The reason why the surety is not bound is not material to his principal, to whom the same reason does not apply. Infancy, coverture, duress, .or the fact that the obligee and surety are identical, and therefore cannot make a contract, would each be legal cause for exonerating the surety ; but they are all personal, and no one of them would affect the principal obligor, to whom none of them applied.

In joint (as in joint and several) obligations, each obligor is responsible for, the whole undertaking. If two persons jointly owe a debt, and both sign a bond for it, payable to one' of themselves, he who is alone liable at. law, upon such bond, to his co-obligor, the ob-ligee, might bo relieved, in equity, from the payment of all above his jnst portion of the debt.

In a joint obligation, as well as in a joint and several obligation, each obligor, who is bound at all, is legally liable, in solido, for the whole undertaking. A party to a contract, who was free from personal disability and fraud, and who, for a binding consideration, freely agreed to be bound, should not be exonerated merely because another person, who had no legal capacity to bind himself, had, in form, been associated with him as an apparent co-obligor. Allin could not make a contract with himself only because he and himself are not two persons —his incapacity was personal, and did not apply to Shadburne. Allin on one side, and himself and Shad-burne on the other, were in fact and in law, only Shad-burne as one party, and Allin as the other party to the contract. Two minds only were engaged, and only those two consented. Why is not the contract legal and binding ? And why is it not the sole obligation of Shad-burne, just as it would have been if a feme covert, idiot, or slave, had signed with Shadburne, as a co-obligor ? Even if he and Allin jointly owed the consideration of the bond, the legal effect of the undertaking seems to be that he is bound for the whole amount. It is his obligation, entered into freely, and for a legal- and valuable consideration ; and the fact that the obligor justly owes one half cannot extinguish the obligation, or alter its legal effect, as a sole liability for the whole.

In such case, the sole legal liability would be coextensive with the entire undertaking, and even a plea to.the consideration would be unavailing at law. But a judgment for the whole amount of the bond might be enjoined in equity, and the obligor exonerated, by decree, from paying to the obligee more than his part of the consideration, or original debt, for which he was justly responsible prior to the execution of the bond.

But the bond itself could not be void; and, therefore, must impose a legal obligation on the sole obligor for its whole amount. Whether the consideration be joint or several, partial or commensurable, cannot be essential to the legal character and effect of the obligation. It must be either totally void, or a sole liability for the whole amount. We cannot perceive any reason why it should be void. There was a competent obligor and a compe--tent obligee. There is no question of fraud, or duress, or of. a want of consideration. Allin was never bound aS an °^§01'1 because he had no legal capácity to bind himself. Shadburne had such a capacity, and agreed to be bound. He must be presumed to have known that Allin would incur no legal liability, (if such be the law,) y» ■» ¶ because every person ot legal capacity to make a contract js presumed to know the legal character and effect of that contract. He should be presumed, therefore, to know when he signed the bond, that Allin incurred no legal responsibility as a co-obligor, and that consequently the bond would be binding on himself alone. Knowing, or being presumed to have known, these things, he cannot be permitted to object to a suit on the bond according to its legal effect, and according to his presumed understanding of it when he signed it. . •

Every personea pable, in law, of contracting, is presumed to mi-derstand the le-contract. The same er son cannot he both obligor and obligee,nor pPtl and defendant,

In Thomas vs. Thomas, 3 Lit. 8 — Sanders’ Heirs vs. Sanders’ Executors, 2 Ib. 321 — Allen vs. Gray, 1 Mon. 98— and Lyle vs. Gatewood, 5 Ib. 6 — this court decided J ’ only that the same person could not .be both obligor and obligee, and could not be both plaintiff and defendant in. the same action. But not only is there no intimation in any of those cases, that such a bond as that which we are considering would be void, but there is an implied admission in all of them, that it would be binding on an Obligor who is not also an obligee, and that a suit at law could be maintained on it against those, but those only, who may be bound. If such had not been the opinion of the court, it is reasonable to presume that, instead of arguing to prove that in consequence of a confusion of parties to the action, it could not be maintained, the court would, at once, have said that the bond was void altogether, and, therefore, that no suit at law could be maintained upon it.

In Allen et al. vs. Gray et al. (supra,) Paul Skidmore and others had signed a bond to Paul Skidmore and other different persons. The suit was brought in the names of all the obligees, against Paul Skidmore and others ; and the counsel for the plaintiffs having endeavored to shew that, as the suit had been abated as to Skidmore? 'the action conic! be maintained, this court said : — £i It is true the replication of the plaintiffs, to which the defendants demurred, and which was adjudged insufficient by the court' below, alleges, that after the action was commenced, and before the defendants appeared and pleaded, Skidmore departed this life, and the action as to him was abated ; but if the principle of law be as wc have supposed, (that is, that Skidmore could not he both plaintiff and defendant,) the action was irregularly commenced, and being erroneous in its origin, the error cannot have been cured by the subsequent abatement.” Here is an obvious admission, tacitly and virtually, that if the suit had not been originally brought against Skidmore, it might have been maintained. But in Debard et al. vs. Crow, that point has been directly so decided; and we have not been able to find a single authority or even dictum to the contrary. And consequently, as principle and analogy seem to sustain the doctrine ruled in Debard et al. vs. Crow, we have no disposition to overrule or unsettle it.

In this case, if, as is probable, Allin signed the bond as surety only, then the case would stand thus : as an executor was willing to be the surety of a debtor to the testator’s estate, or, in other words, was willing to dispense with security, therefore, and therefore only, the debtor insists that his own bond is void; that is, that it cannot be enforced against him, because he gave no security, or because his surety was not bound, in consequence of personal or legal incapacity to bind himself.

But whether Allin signed the hondas surety, or as a co-principal, is not essential. In either event, Thomas Shad-burne was sole obligor, and the bond has, as to him, precisely the same legal efficacy as it would have had if Al-lin had never signed it.

This conclusion appears to accord with principle, analogy, authority an A justice ; all of which seem to oppose the opposite doctrine.

There is no confusion of parties; there has been no release, by operation of law, of any preexisting legal liability ; the bond, according to its legal effect, was, ah origine, a sole and legally binding contract, by Thomas Shadburne, to pay the whole amount ; it imposed no 1c-gal obligation on Allin ; the suit is brought upon the bond, as the sole obligation of Shadburne ; and, consequently, the circuit court erred in overruling the demurrer to the plea.

Wherefore, it is the opinion of this court, (Judge, Nicholas dissenting,) that the judgment of the circuit court be reversed, and the cause remanded, with instruc-tions to sustain the demurrer to the plea.

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Dissenting Opinion

Judge Nicholas

dissenting:—This case may, in effect and substance, be fairly and briefly stated thus: — Thomas Shadburne and James Allin executed a joint obligation to said Allin, for the payment of money, who now seeks a recovery of the whole amount from Shadburne, by an action on the bond. There is nothing to shew, that one was principal and the other surety, or to destroy the necessary, usual and legal inference from all joint contracts, that they mutually and equally participated in the benefit of whatever it was, that constituted the consideration of the obligation — even if such matter, had it been shewn, could have any influence in the determination of the question of Shadburne’s liability, which it is not conceded that it could. That Allin cannot have a right to maintain an action on this obligation, against Shadburne, strikes my mind with the force of a self-evident proposition ; but, like most other propositions of that sort, it may be very difficult to prove it, to another mind, by deduction from any regular chain of reasoning. His right to maintain the action, is admitted to be unsustain-ed by any precedent, except that of Debard vs. Crow, which is still in the power of those who made it, to revoke as an authority. The cases referred to of Mien vs. Gray — Sanders vs. Sanders, &c. will be found, on examination, to have no bearing whatever upon this, and not to contain the slightest intimation in favor of the right to recover here. The case must have often occurred, from the awkward efforts of ignorant men to reduce their agreements to writing; and as the books furnish no trace of any adjudication, or even dictum, recognising the right to maintain such action, it is very persuasive evidence of the non-existence of such right. I cannot perceive how it is to be maintained upon any established legal principle, or any of those analogies, upon which it is attempted to be based.

It is attempted to be likened to cases of joint contract, where one of the contractors is a married woman, a lunatic, or an infant. But the resemblance is not discerned, nor can it be admitted. In those cases the sole liability of the other joint contractor is allowed on the ground, that, as to 'the feme, the lunatic, or the infant, it was void, or voidable, from a want of capacity to make an obligatory contract. Here there is no natural or legal incapacity on the part of Allin to contract, but merely the incapacity, common to all, of contracting with himself. Can he, laboring under no disability to contract, after having induced another to enter into a joint contract with him to himself, be permitted to allege his own disability to contract with himself, as a ground of exemption from his share of the obligation, and thereby cast its whole burthen, upon the other, as if it had been the sole contract and separate liability of that other ? Reason and justice will promptly answer no. I think their response, is the response of the law also. If he can be permitted so to do, it is a solitary and anomalous instance, where the law fails to estop a man by his own free and voluntary act.

The legal, as well as natural presumption from this, like all other joint contracts, being that the co-obligors were joint and equal participants in the benefit which induced the giving of the joint obligation, Allin can, in justice, recover from Shadburne, no more than a moiety of the obligation. But if it be sustained as a valid obligation against Shadburne, upon which Allin can recover any thing, he must be permitted to recover the whole. How then is Shadburne to be relieved from the injustice of being compelled to pay Allin that moiety of the debt which Shadburne does not owe, but which if it be due from any one, is due from Allin himself ? There is no process known to the common law, by which he could be redressed. The recovery in this action must be forever final and conclusive between the parties, and after tfw? of the money, in the course of this judicial proceeding, Shadburne would never be allowed to recoupe any part of it, in any other suit between them concerning it. ft is needless to inquire, whether a court c^ancelT W0!'ld interpose,1 and afford relief, in such case, for even if it be conceded that it would, that could by no means affect the question. The principles of the common law, as expounded in its own courts, are based exclusively upon its own mode and power of action in its own courts,1without reference to the manner in which the matter might be treated of, or acted upon, in, chancery. In looking to results, in order to ascertain the propriety of applying any principle of law so as to create a legal liability in a new case, those results depend, in the estimation of the law judge, exclusively upon the action of his own forum upon the subject. If the result so ascertained, operates manifest and irreparable injustice to one of the parties, that, of itself, conclusively shews, either that the supposed principle is unknown to the law, or that it is not properly applicable to the given case. So here the manifest and .irreparable injustice of permitting Allin to recover from Shadburne, his, A1--lin’s, own share óf a joint liability, is an unanswerable argument, to prove, either that there is no legal principle>such as is here contended for, or that it is not properly applicable to this case.

It is no fair answer to this view of the subject, to.say, the contract created a liability upon Shadburne, though it .creat'ed none upon Allin, and that, therefore, it is only making Shadburne shoulder his own several liability, and not the joint liability of himself and Allin. This is a mere .begging the question — a mere assumption of the . liability of Shadburne, which is itself the thing to be proved. The rational deduction from the circumstances, as presented, to us, is, that Allin received a full share of the consideration upon which the obligation is based; and the true question is, whether the law, under those" circumstances, will permit jiim to treat the obligation as a valid one against Shadburne, and recover its whole amount from him. The fair inference from the face of the contract, which is all that is given us to build even a conjecture upon, is, that Allin and Shadburne, by a joint purchase, or otherwise, incurred a liability, which they supposed to be a joint one, to the executors of William Shadburne, and attempted to evidence that liability in an obligatory form, by executing a joint note to the ■ í»i tp executors, though Alim hunselt was one oí them. II this attempt to create a joint, legal liability, be pronounced idle and inefficacious for any purpose, they each stand severally responsible to the estate of William Shadburne, for their several portions of the debt, as if no such joint liability had been attempted to be created; and no injustice is done any where. But, if it be declared efficacious, so as to enable a recovery against Shadburne for the whole amount, it puts it in the power of Allin to wrong and defraud Shadburne, to the amount of one half the debt; or under the most favorable view that can possibly be taken, drives Shadburne to his action, to recover back from Allin, the amount which Allin will thus have wrongfully collected from him ; which, in a very supposable case, that is of Aliin’s insolvency, by no means mitigates the hardship and injustice of the result. When such are the opposite results of these two modes of treating this contract, or attempt at a contract, it would seem to me, that neither law, reason, or justice, can hesitate in making the election between them.

But it is said, that Shadburne, being bound to know the law, must be presumed to have known that though Allin signed the note with him as a joint obligor, yet he was not bound thereby, and therefore he, Shadburne. understood that he was incurring, and was willing to incur, a sole, several, liability, for the whole debt. This argument, in addition to the objection that it contains an assumption of the thing to be proved, is liable to the further objection, that it is a false deduction from its own premises. For though Shadburne knew that Allin was not bound, it does not follow that he either knew that he would be, or was willing that he himself should be bound, for the whole debt. He might well reply, that he knew that they were both bound, or neither was, and if he had not known, the law would not permit Allin to turn it into a sole liability upon him, he never would have signed a note for the whole. Or he might retort this reasoning on Allin, and say, you knew that where two equally capable and willing to contract, do, for a mutual consideration, enter into a joint obligation, they are anally bound, and if, from any cause, it is legally-inoperative as to one of iis, it must be inefficacious as to the other also ; and as you knew you could not contract with yourself, when you took our joint obligation to yourself, you knew it could have no legal effect, and therefore was willing it should not be obligatory on me. The one process of reasoning is as satisfactory and conclusive as the other, and equally well adapted to a rational result.

Strip the case of the immaterial circumstance of the contract being reduced to writing, and suppose it an attempt to create a joint parol agreement, for a consideration jointly received, to pay Allin, as executor, a sum of money, It will not be pretended by any one, that a recovery could be allowed against Shadburne, upon such-agreement, for the whole amount. The law would pronounce such attempted, joint contract a nullity, and in lieu of it, would create an implied contract upou Shad-burne, to pay his half only of the debt. The same result must follow the contract when clothed in the form of a written obligation. It can acquire no validity from the mere circumstance of its being in writing. The legal impossibility of a man’s making an obligatory agreement for any purpose, by entering with another into a joint contract to himself, applies equally to either mode, and renders such attempt utterly abortive.

The impropriety of making this'writing obligatory upon Shadburne, may probably be further and better illustrated by a few - supposable cases : — A, B and C are desirous that something shall be'done, or left undone by A, and to induce him thereto, B and C are each willing to incur a several responsibility of indemnity, to the extent of one-third the liability; but possessing no better information than Allin and Shadburne had, of the proper mode of drafting legal obligations, they enter into an agreement like this: uWe, A, Band C, promise to ■indemnify A, &c.” Could, A, upon such a covenant, be permitted to recover a full and entire indemnity from B and C ?

Or suppose the obligee in a bond, sign it with another, as joint sureties for the principal. In the event of the obligor’s insolvency, could the obligee recover the whole amount from the other surety ? Or suppose A and B enter into a joint obligation to the wife of A — could A, in the name of himself and wife, recover the whole from B ?

The ready response that must await each of these queries, from every intelligent mind, upon principles of mere abstract justice, is, in my opinion, the response of the law also; and equally forbids the recovery, by Allin, of the \vhole of this debt from Shadburne.

Suppose A, B and C, co-partners in trade; that A sells something to the firm, and receives from B the note of the firm for the payment of the purchase money. Could he recover in an action upon the note against B and C, or either of them ? Certainly not against C, for B had no authority to bind C, as his partner, except by a contract which would be mutually and equally obligatory upon the whole firm. Could he then recover from B the whole amount, as upon his sole and separate obligation, after,'by his acceptance of the note in that form, having recognized B’s authority to usé the name of the whole firm in that way ? It surely cannot seriously be contended that he could. Then I ask for a discrimination to be drawn between that case and this. Every argument which is used to fasten a liability upon Shad-burne, equally applies, and will as necessarily fix it upon B. Nor will it do to postpone the determination of that, or any such supposable case. In the adoption of any new principle, or in the application of any supposed old principle to a new class of cases, we must look diligently around, to see whither it is to lead us. If its destination is inevitable error, we are bound to pause and forbear its application. It is the duty of a judge, to be ever timid in the pursuit of any path where he can find no foot print of a predecessor. I like not the maze into which I think I see that we are to be led by adopting the principles of the opinion delivered by the court, and must, therefore, withhold my assent.

If some effect must, perforce, be given to this contract, and Shadburne rendered liable upon it, much the most legal, as well as equitable, turn to give it, would be to treat Allin’s 'co-executor as sole obligee, and allow a recovery by him, or his representatives, against Allin and Shadburne both. I by no means concede that this could be done, but suggest it as the better and much the most plausible mode of giving effect to the contract, so as to bind Shadburne.

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Concurrence Opinion

Judge Undekwood

— concurring with the Chief Justice : — , The principles which rule this case being questioned by Judge Nicholas, I am induced to state the grounds of my opinion. I shall do it in a few words.

“A .contract is an agreement, upon sufficient consideration, to do or not to do, a particular thing ” A man cannot pass a consideration from himself, to himself; and hence no man can make a contract with himself. The thing is impossible.

All persons who execute written contracts as obligors, must be regarded, if bound thereby, either as principals, or sureties. A man cannot, as principal, contract with himself, not only because he can pass no consideration to himself, upon which to base the contract, but likewise, because he is both morally and physically incapable of receiving from himself a payment of the debt contracted, and of coercing himself to perform by legal remedy. It is equally impracticable for a man to create an obligation to himself, as the surety for another. He cannot, by any device of the sort, make the debt due by the principal more safe. It is idle, therefore, to look upon a man as a surety to himself, for the debt which another owes him.

In this case, the question is,whether Shadburne is discharged from his written promise, because Allin signed the instrument as co-obligor to himself. Allin’s signature could impose no obligation upon him, to himself, for the reasons stated. How can his signature vacate Shad-burne’s covenant ? If a consideration passed from AHin !ío Shadburne, then an essential ingredient to constitute a contract, exists as between them, and a promise or covenant founded thereon, ought, in justice, to be enforced. Why shall it be void if Allin performs the idle act of putting his signature to the instrument ? If a stranger had forged his signature to the instrument, the forgery would not vitiate the contract, and exonerate Shadburne. Allin, by putting his name as an obligor, can no more make it a contract with himself, than if his •name was forged. His signature, signed by himself or another, can neither benefit nor injure Shadburne. Wherefore then shall he be exonerated from the payment of the sum he has stipulated to pay, and for which, if he be principal, he has received an equivalent, according to legal presumption ? If he received no consideration, if he merely executed the instrument as surety for Allin, who, being executor, might have supposed that he •could, in his individual capacity, execute an obligation to himself as a fiduciary, then I think Shadburne is not bound. He might defend upon the ground, that there was no consideration : for if theré be no consideration passing to the principal, none can pass to him who signs as surety merely. There is no debt which Shadburne •can pay as surety for Allin, because All-in cannot owe himself.

Those who enter into obligations with infants, or femes ■covert., are^ bound by them, notwithstanding the infant co-obligor, or feme covert, is not ; and yet the obligors who are bound may insist with truth, that they would not have entered into the contract at all, had they known that tiie infant, or feme covert, could escape contribution. Nonage and coverture are facts of which we may be ignorant. The law allows no one to be ignorant of the principle, that a man canuot contract with himself. Consequently, there is more reason to exonerate a man from his obligation,when an infant, or feme covert; unites with him in its execution, than there is when the obligee perforins the idle act of signing as a co-obligor.

The effect of a note executed by a member of a firm, in the name of the firm, to a co-partner in his individual capacity, for goods or produce, did at first present some difficulty. I do not deem it important now, to attempt explaining and elucidating it, because the present case is manifestly not one of that character, and it will be - time enough to dispose of that case when it comes.

Allin being styled executor in the obligation sued on, cannot render his signature as an obligor efficacious. That is merely descriptio personas.