Hubbell and Curran v. . Carpenter

| NY | Jul 5, 1851

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Assuming, but without deciding, that the rights and obligations arising out of the relation of principal and surety continue to exist between the creditor and the surety after the judgment against the latter; this case must, according to my view of it, be decided against the defendant, on the ground that he voluntarily rejected the offer and abandoned the right of being substituted in the place of the creditor, and of having the benefit of his remedy against the principal debtor.

On the 23d of February, 1844, Carpenter wrote to the complainants a letter, dated at Carthage, Jefferson county, where he then resided, requesting them to send to that place an execution against himself subject in all respects to his own control, with positive directions to the officer not to attempt to harrass or perplex him in the least, but to do with it as he should direct; stating that Ellis and his counsel had always assured him, that he should be kept harmless and protected throughout, and that he thought if the execution was so sent, they might be induced to arrange it in whole or in part; but that unless he could have the entire direction of it, it would be of no use to send it.

This was very clearly a proposition to which the complainants were under no obligation to accede. They had at that time an execution in the sheriff's hands against Carpenter on the same judgment unreturned, and which Carpenter had told the sheriff he had no means of satisfying; and Carpenter told the plaintiffs so in the same letter in which he asked for another execution. The plaintiffs were certainly not bound to put themselves into Carpenter's power by any such directions as he asked in relation to the executions against himself. Instead of doing so, they sent him a fi. fa. against Ellis, with the following letter:

"UTICA, Feb. 28, 1844.

"H. Carpenter, Esq.: — Dear Sir, annexed we send you a "fi.fa. against J.P. Ellis, subject in all respects to "your control except to endorse it satisfied; and you are "authorized to receive proposals for a compromise to send "them to us for our acceptance. We believe the above is "full authority for you, as requested in yours of the 23d instant; "but if it is not, write us. We hope you will succeed "in collecting enough to at least protect yourself; and we "think now, if Ellis would do that and pay the costs on this "judgment that was made by his defence, that we would "release him. Please keep us advised of your progress. "The fi. fa. against you is yet in the sheriff's hands.

"Yours, c., "HUBBELL CURRAN."

To this letter Carpenter returned the following answer:

"COURT HOUSE, WATERTOWN, March 4, 1844.

"Gentlemen, — I have received yours enclosing an execution "against Ellis. I wish to have nothing to do with thisexecution. "I did not ask it. I said if an execution was here in the "hands of the sheriff against me and under my control, I "thought it very likely they would pay rather than see me "suffer, as they have always agreed to do. This is all I "meant to say. You probably misunderstood me. The sheriff "however has not returned the execution against me, and "if you choose to write me or him, giving me the control "over it, except to receipt, I will try and do something for "you. There is no catch or trick about it, but to put it in a "situation to induce them to relieve me, which I will do if I "can control the sheriff, otherwise not.

"Respectfully yours, "HIRAM CARPENTER."

Here then was an explicit offer on the part of the complainants to give to Carpenter the benefit of the judgment and execution against Ellis: and a positive refusal on his part to have any thing to do with it. This was not merely an offer to give him the benefit of the execution upon payment of his part of the debt. It was an offer to give him that benefit before payment, and therefore better than the complainants were bound to make; and yet it was rejected.

At the time of this correspondence Ellis was, and had been for more than a year, insolvent. Carpenter represented himself to be so. Carpenter's right as surety to make use of the complainant's judgment against Ellis must have been regarded by him as of no value, and it was probably for that reason renounced. Under these circumstances, it seems to me that the complainants were at liberty to pursue such course for the collection of the balance as seemed most conducive to their own interest, without regard to Carpenter's equitable right to subrogation.

The equity of a surety can never be set up in such way as to embarrass the creditor in an honest endeavor to collect his debt from the principal debtor. If he claims equity, he must do equity. Carpenter could not, or would not pay the debt; nor would he take the control of the execution to collect it from Ellis. The complainants afterwards advertised for sale under their execution property in the possession of Ellis, claimed by other persons, and when the day of sale arrived it was ascertained that they could not proceed with the sale without encountering the hazard and expense of obstinate litigation. This they were not bound to do for the benefit of the surety. They made a compromise, which they had a right to do. Carpenter by this defence places himself in the attitude of a surety who will neither pay the debt himself, nor permit the creditor to collect it of the principal debtor. This is not a surety's equity.

The arrangement made on the 21st of August, 1845, was not a satisfaction of the judgment against Ellis. The complainants stipulated that they would never enforce it against Ellis; but with a reservation or condition that the stipulation should in no way affect their rights and claims under their judgment against Carpenter. Ellis agreed to this by his acceptance of the receipt; and the effect of it was to give to Carpenter the right to compel Ellis to refund to him whatever he might afterwards be compelled to pay to the complainants. (Pitman on Pr. and Surety, 181-2and 189.)

The complainants at the same time assigned their judgment against Ellis to McOmber, but with a similar reservation of their remedies against Carpenter. It is unnecessary to say whether Carpenter, if he should pay the complainants, would still have a right to claim from McOmber the benefit of the judgment and execution against Ellis. Admit that he would not, and the case is not altered. Carpenter, by refusing to take the control of the execution when he might have had it, and when he ought to have taken it, justified the complainants in making such fair and honest disposition of it, as was most advantageous to themselves. All Carpenter's rights against the principal debtor remain, excepting the right of making use of the complainants' judgment; and of that, if lost, he has deprived himself.

The judgment of the supreme court at the general term should therefore be reversed, and the judgment at the special term affirmed, with the costs of the appeal to the general term.

Ordered accordingly.