Holmes v. McGinty

44 Miss. 94 | Miss. | 1870

SllIRALL, J.:

In October, 1858, Robert F. McGinty was elected sheriff and tax collector of 'Jefferson county, and shortly after executed bond for the faithful discharge of his duties as tax col- . lector, in the penalty of $25,259, with Thos. H. Bradford, J. W. Birch, William Holmes, and Olaudius Pintard as his sureties. In June, 1860, McGinty having, collected a large amount of taxes-for the state, whilst in transitu to the capital, pay them into the state treasury, was robbed at yicksburg of the money. The sureties being advised that unless the taxes were paid into the treasury within the time prescribed by law they would be responsible on their bond for tli9 further sum of thirty per centum damages on the principal amount for which the collector was in default. It was therefore arranged that they should raise and advance to McGinty $6,000 to enable him to supply the amount of his loss, on the execution of a mortgage by himself and wife on certain real and personal property. Accordingly McGinty and wife executed a mortgage on real and personal property owned by him, to the sureties, to secure them the payment of any moneys they might then pay or thereafter pay on account of their suretyship. The mortgage, by mistake, recited, the date of the bond as on the 3d of January, 1861, -when the true date was the 3d of. January, 1860, which deed was duly acknowledged, and, on the day of its execution, filed for record. Thereupon Holmes and Pintard, two of the sureties, advanced to McGinty $3,000 each, to put him in funds to settle his indebtedness to the state, who so applied it. McGinty, on the 28th of January, 1860, made and delivered to Holmes his promissory note for $3,000, at one day after date. On the 28th of June, 1860, a note for like amount was made and delivered to Pintard. Both notes bear interest from the 28th of June, 1860, and contain in the body these words: “ Secured by mortgage on real and personal estate against loss on my bond as tax collector.” These notes were transferred to the complainánts by endorsement, who filed their bill'in chancery to subject the mortgaged property to their payment.

The answer of McGinty and wife set up three -several grounds, of defense. First, that at the date of the mortgage, Mary L. McGinty was the wife of her co-defendant, Eobert' F. McGinty. Second, that the notes of McGinty to Holmes and Pintard were not signed and executed by the said Mary L., and are not mentioned and described in the mortgage. Third, that the $6,000 advanced by Holmes and Pintard was borrowed, one-half by each of them, and that neither of them have repaid the money, but that judgments have been recovered by the respective lenders, against each of them, which have never been collected, and, therefore, they have sustained no damage on account of their suretyship.

The case was submitted to the chancellor on the bill, answer and exhibits, who dismissed the bill. The questions are whether either or all the points of defense are well taken. The terms of the mortgage are, that McGinty « is desirous to secure, save harmless, and indemnify his sureties, and each of them, from all loss, damage, injury, or moneys by them, or either of them, sustained, received, or paid, or that may hereafter be sustained, ” etc., etc. In the conditional clause of the mortgage occur, among .others, these words : “ Shall fully satisfy and refund to said sureties, their heirs and assigns, all, and any moneys which they, or either of them, shall or may duly pay out and expend as sureties,” etc. It is very clear that the mortgage covers any moneys paid by the sureties or either of them, on account of their undertaking for McGinty. Nor is it denied in the answer that Holmes and Pintard have each furnished McGinty with $3,000 to repair the loss said by him to have been met with at Vicksburg, and that this money enabled him to settle his accounts with the state. It is not perceived how the omission or failure of McQinty’s wife to sign the notes in anywise vitiated the transaction. She joined in the mortgage, doubtless, relinquishing her incohate right to dower. The granting part' of the conveyance is by the husband alone. “The said Robt. P. McGinty doth bargain, sell, alien, convey,” etc., is its language.

The single object of the mortgage was to indemnify and save harmless the sureties, and each of them. The instant the $6,000 were provided and applied for that purpose, by Holmes and Pintard, McGinty became their debtbr, and' the mortgage a security therefor. The subsequent execution of ■the notes was not a satisfaction, nor intended to be (as the words of the notes show), of the mortgage, but became evidence of the amount and reason of the indebtedness. It mattered not what shape the evidence of the indebtedness assumed, so long as it could be traced back to the money paid by Pintard and Holmes for McGinty on account of the taxes, the mortgage still covered and protected it.

In this view of the subject, the notes are the written evidence of the money paid by these sureties, and no more impair their rights under the mortgage, than if the proof of the balance of the money depended on oral evidence, resting in the memory of witnesses, ox on the written acknowledgment of McGinty that it had been paid.

. McGinty has no concern or interest in the question whether Holmes and Pintard supplied the money from their own purses, or whether they borrowed it from others; nor whether they have paid it back or not. It is quite certain that the creditors of Pintard and Holmes have no recourse on him in this behalf.

It is not improbable that if McGinty had punctually refunded to these sureties the $6,000, they might have taken up their obligations to their creditors.

It is no legal excuse for McGinty to persist in a failure to comply with his contract with Holmes and Pintard — that they are under obligations' to other persons, which they do not fulfil. McGinty also relies, in his answer on the ground that the transfer of the notes to the complainants was made for the purpose of evading, respectively, the creditors of Holmes and Pintard, and that no value was paid by the assignees.

If the transfer was covinous, for the object of defeating and defrauding creditors, then at the instance and on the objection of creditors, the dioses would still be deemed for their benefit the property of Pintard and Holmes, and would be so subjected. That, however, would not absolve McGinty from his duty of paying the debt, but would only direct the payment to another channel.

In this record there is no creditor contesting the fairness of the transfer of the notes. The assignment as between Holmes and Pintard and the complainants was good; no other person except a creditor can impugn it. Moreover, .if this question of fraud and transfer without value could be of any avail to McGinty, it is affirmative matter brought forward by him, and which he ought to have proved.

The transfer of the debt here represented by the notes, is an assignment in equity of the mortgage, which follows the debt as an incident, and is a security for whomsoever may be the beneficial owner of it. The complainants are only entitled to the principal debt, and six per cent, interest thereon, from 28th June, 1860, and not the greater rate of interest specified in the notes.

Wherefore, the decree of the chancellor is reversed and canse remanded, with instructions to the chancery court of J efferson county to render a decree in accordance with this opinion.