21 W. Va. 183 | W. Va. | 1882
announced the opinion of the Court:
The first question presented by this record is, whether the circuit court ought not to haim dismissed the bill, because of the want of jurisdiction on the part-- of a court of equity in the case; there being no affidavit accompanying the bill, of the -loss of the bond of the commissioner of sale, which bond the plaintiffs sought.in this suit to enforce. The bill was not verified by affidavit, nor was any affidavit fileduvith the bill of the fact of the bond having been lost. The bill aauis filed at January rules, 1874. On March 5, 1874, J. M. Bennett filed his ausAver, in which he insists, that the plaintiffs’ remedy is at laAAq and objected to the jurisdiction of a court of equity in the case, because no affidavit was filed with bill of loss ot this bond. On September 8,1874, the plaintiffs’ attorney filed his affidavit stating, that this bond aauis lost AAdienthis suit was instituted, and could not then be found on diligent search, though it was found some time afteiwards AAThere it had been improperly placed by one of the obligors in the bond. The first hearing of the case did not take place till July 25, 1875. The truth of this affidavit having been fully proven in'the meantime, by depositions, and the court then decided, that this bond was valid and referred the cause to a commissioner, thus assuming jurisdiction of the case. Bid the court err in this ?
Courts of equity have always taken jurisdiction to enforce a bond, which has been lost. Originally this jurisdiction was assumed, because the common laAv courts furnished no
In such cases, courts of equity required an affidavit to accompany the bill, when the party sought relief in the court of equity and not simply discovery, that the bond was lost and the plaintiff at the hearing had to establish satisfactorily such loss. For it was the foundation on which the court assumed jurisdiction. See East India Company v. Boddam, 9 Ves. 466; Stokoe v. Robson, 3 Ves. & B. 50. But these rules have been somewhat relaxed in this country. Thus in Graham v. Hackwith, 1 A. K. Marshall (Ky.) 424 it was held, that the affidavit might be dispensed with if the loss be clearly shown. This case however does not show, that objection to the jurisdiction of the court was made in the answer. It is silent on this point, being very imperfectly reported.
In the case of Cabell’s Ex’ors v. Megginson’s Adm’r, 6 Munf. 202, there was no affidavit of the loss of the bond, but the jurisdiction of the court was sustained, and in that case the court below dismissed the bill for want of jurisdiction and the court of appeals reversed the decision, though the record failed to show, that any objection was made in the court below to the jurisdiction of the court for want of such affidavit.
It seems to me, that this decision was right and even if there had been a demurrer to the bill, on well established principles, the court ought not to have dismissed the suit without giving the plaintiff leave to amend his bill and accompany the amended bill with an affidavit, that the bond avus lost when the suit was instituted. The failure therefore, of the plaintiffs in this case, to accompany their bill with an affidavit of the loss of the bond, was a defect cured by .the filing of such affidavit and by the proof of the loss before the first, hearing of the cause. But, when the cause was first heard,the lost bond had been found; this however would not defeat the jurisdiction of the court. See Crawford v. Summers, 3 J. J. Marshall (Ky.) 300; Miller v. Wells, 5 Mo. 6.
In this case a court of equity had jurisdiction ot the case stated in the bill, even had there been no allegation of the loss of the bond; for one of the objects of the suit was, according to the bill, to determine whether the defendant, Jonathan M. Bennett, did nothave on his hands a trust-fund left with him to be applied to the payment of the plaintiffs demand. A court of equity alone had jurisdiction of such matter, and could alone inquire into the question, whether there Avas or was not such trust; and if it found that there
No affidavit o.f the loss of a bond is required, where the case stated in the bill would give-a court of equity jurisdiction, independently of the loss of the bond. Such affidavitis only required, where if the bond had not been lost, the only remedy of the party would have been at law and not in chancery. Purviance et al. v. Holt, 3 Gilmar, Rep. (Ill.) p. 404. So too, the bill sought to make the land bought by the purchaser, "Wf A. Bott, liable for the plaintiff’s demand, if the commissioner’s bond was, as claimed, invalid. A vendor’s lien had been retained on the land for the purchase-money, and it was unpaid if this commissioner’s bond was invalid, as the commissioner would, in that case, have had no authority to collect the purchase-monejA This object of the bill could only be carried out by a court of equity, -and therefore if the commissioner’s bond had not been lost, a court of equity in this case would have had jurisdiction.
The next enquiry is, was the circuit court right in holding this commissioner’s bond valid as against Jonathan M. Bennett. He proved,, that he signed it with the understanding and agreement that Lawson and Jackson, were also to sign it as securities for Gozad, and -it never was signed by Lawson. The bond on its face, when delivered to the clerk, was perfect and he says when first presented to him it was signed only by Cozard, the principal, and Jackson as security, and he would not approve it unless another good name was added as surety; and, that subsequently, Bennett signed it, and when again presented he approved it. This statement is apparently sustained by the appearance of the bond, J. M. Bennett’s name being the third and last signature in order, though of course it is possible that the other names were signed afterwards, but above his signature; and Jackson thiirks he did sign his name after Bennett’s, though he signed it above in a place, which had been left for his signature. These statements, are of course, irreconcilable with the clerk’s statement, that when he first saw this bond Oozard’s and Jackson’s names were on it, but not Bennett’s. But, assuming the statement of Bennett to be according to the real facts, would it render the bond invalid as to him ?
The reason of this is, that the sureties having in such a case willfully caused the obligee to believe, that they were willing to become sureties on the bond in the fonn and with the names on it, which were there when it was delivered to the obligee; and thereby he was induced to accept such bond, and thus. change his previous position, the sureties must thereby be concluded against the obligee from avering, that they were not then willing to sign the bond as the sole sureties in the form in which by their connivance and fault it had been presented to the obligee.
When one of two innocent persons must suffer by the act of a third, he who has enabled such person to occasion the loss must sustain it. The sureties by entrusting the bond to the principal in such a case make him their agent to deliver the bond to the obligee, for this is the ordinary mode of conducting such transactions. And having given the principal instructions, that he must. get other securities on the bond before he delivers it to the obligee, they by giving the bond in a perfect form trust him to carry out such instructions; and if he fails to do so but delivers the bond to the obligee in such perfect form, it must be obligatory on them, for it is their fault, that injury has resulted; and the loss thus resulting they cannot shift to the obligee by proving such private instructions given by them to the principal obligor, except where the obligee is guilty either of fraud or rashness in accepting such bond.
The following are some of the authorities, which sustain this position: Smith v. Moberly, 10 B. Mon. 266; Millett v. Parker, 2 Met. (Ky.) 608; Deardorff et als. v. Foresman, 24
It is true there are cases; which are perhaps not in perfect accordance with these views; among them are The People v. Bostwick, 32 N. Y. R. 445, and State Bank v. Evans, 3 J. S. Green 155. There are also older cases in Virginia, in which the court held, that when an instrument was incomplete on- its face and indicated that others were intended to sign it, it was not binding on those who did sign it, although the condition may not have been known to the obligee when it was delivered to him. See Ward et al. v. Churn, 18 Gratt. 801, and Preston v. Hull, 23 Gratt. 600.
In the case of Miller v. Fletcher et al., 27 Gratt. 405, the court seemed to have gone still further in holding a bond valid. In that case it was decided, that “if a bond, perfect on its face, is delivered to the obligee as an escrow, to be valid on another person executing it, it is valid though the condition is not complied with.” In this case Judge Staples reviews a number of cases as sustaining the position, that a deed or bond cannot be delivered to the obligee as escrow, and if it be, the condition will be regarded as invalid and the deed or bond as absolute.
These cases are Simonton’s Case, 4 Watts 180; Duncan et al. v. Pope, 47 Ga. 445; Cinn., W. & Z. R. R. Co., v. Iliffe, 13 Ohio St. 235; Ward v. Lewis, 4 Pick. R. 518; Currie v. Donald, 2 Wash. 58; 2 Lom. Dig. 38; 3 Wash. on Real Property 268. And he also cites numerous cases, which he asserts sustain the same position. See Brackett v. Barney, 28 N. Y. 333; Worrall v. Munn, 1 Seld. 238; Jackson v. Catlin, 2 Johns. 256; Black v. Shreve, 13 N. J. Eq. R. 456; Herdman v. Bratten, 2 Har. (Del.) 396; Mad. & Ind. Plank Road Company v. Stevens, 10 Ind. R. 1; Brown v. Reynolds, 5 Sn. [Tenn.] 639; Gibson v. Partele, 2 Dev. & Bat. R. 530; Haygood v. Harley, 8 Rich. Law R. 325; Graves v. Tucker, 10 Smeedes & M. (Miss.) 9; Fireman’s Insurance Company v. McMillan, 29 Ala. 147, 161; Shepherds’ Touchstone, vol. 1 p. 58, 59; Hicks v. Goode, 12 Leigh 479, 490; Ward v. Churn, 18 Gratt. 801.
In opposition to these views, Judge Staples finds no cleci
But nevertheless, these views cannot perhaps be easily reconciled, if at all, with the decisions in Stuart v. Livesay, 4 W. Va. p. 45 and Newlin v. Beard et al., 6 W. Va. 110. It is not however necessary for us to determine in this ease, whether the law as laid dowir in Miller v. Fletcher, 27 Gratt. 403 is or is not sound law. There is nothing in the two West Virginia cases,- which conflict with the law as laid down in Nash v. Fugate, 24 Gratt. 202 as above quoted. And for the reasons we have stated, we regard it as well sustained both by reason and authority. Admitting this as good law it is obvious, that the commissioner’s bond in this case must be held valid against all the obligors in it. The handing of it to the clerk was its delivery. It was beyond controversy, that it was then a complete and perfect instrument on its face, and it is valid against all the obligors including J. M. Bennett, though it was executed by him upon the condition, that it should not he delivered until executed by Lawson. There is no question but that, when-it was delivered to the clerk, he was not informed of any condition and the first time he saw Bennett, he asked him in the clerk’s office, whether it was all right and ho was understood by the clerk to assent to its being all right; certain it is, that he did not say there -was anything wrong about it, nor did he ask to examine it to see if it was signed by Lawson, though he says it was understood, that he and Lawson were to acknowledge it in the clerk’s office at the same time. He had thus good reason to believe, that it had not been executed by Lawson and yet, he made no objection to it when asked if it was all right.
There can be no question, on the authorities we have cited, that this bond is valid against him unless it be a bond, which
Section 1 of chapter 132, Code of West Virginia, p. 629, provides, that “no special commissioner appointed by a court to make a sale of property, should receive money under such decree until he gives bond before the said court or its clerk.” And section 1 of chapter 10 of Code of West Virginia, p. 79, (Acts of 1872-1873, chapter 42, section 1), provides, that “every bond required by law to be taken, or approved by, or given before any court, board or officer, shall unless otherwise provided, be made payable to the State of West Virginia, with one or more securities deemed sufficient by such court, board or other officer, and be proved or acknowledged before such court, board or officer.”
Now this section 1, last quoted, applies to two very different kinds of bonds. It applies to bonds of permanent pnblic officers, such as clerks, sheriffs, State officers and other public officers, whose bonds are required to be filed in the particular offices named in the statutes. All such official bonds by section 20 of chapter 10 of Code of West Virginia, and section 17 chapter 42 of Acts of 1872-1873, are required to be reorded in a well bound book. This section 1 of chapter 10 of Code of West Virginia, applies also to a very different class of bonds such as injunction-bonds, appeal-bonds, &c., which are private bonds but are required to be taken before some public officer, and are not required to be filed in a public office nor required to be recorded.
To this second class really belongs the bonds executed by commissioner of sale appointed by chancery courts. These bonds, which taken before the clerk of the court and those included in this first section, chapter 10 of the Code of West Virginia, are not required to be filed in any public office and are not included in section 20 of chapter 40 of the Code and are therefore not to be recorded. Now section 2 of chapter 73 of Code of West Virginia, p. 469 provides, that “where any writing is to be recorded, the recorder, now clerk, shall admit the same to record in his office as to any person whose name is signed thereto, 'when it shall be acknowledged by him or proved by two witnesses as to him, before such recorder, now clerk.” And the 5th section pro-
’When therefore a bond is required to be taken before any clerk or officer, ancl it is a bond, which this statute law requires to be recorded, there must be such an acknowledgment or proof before such clerk or officer, of the execution of the writing, and it must be formally certified on the bond in order to comply with these recording statutes. Otherwise it could not be recorded.
Therefore when the first section of chapter 10 of Code of West Virginia p. 79 speakes of a bond required by law tó be taken or approved by, or given before any officer and directs, that it shall have the sureties approved as sufficient by such officer and further directs, that such bond is to be proved or acknowledged before such officer, this language must be construed with reference to the objects with which such proof or acknowledgment is' required. If it be an official bond required to be recorded, there must be it seems to me, a preservation by endorsement on the bond of the proof or acknowledgment of it, that such proof or acknowledgment may be recorded with the bond. But if the bond be a private bond or one not required to be recorded, as for instance, the bond of aspecial commissioner of sale appointed by a chancery court in a particular suit, then there seems to be no such necessity for the formal endorsement 'on the bond of the acknowledgment of it by the obligors, or’ of the proof of their signatures, as it is not to be recorded and therefore an attested copy of it cannot be received in evidence in the courts as the original. In such case, such acknowledgment or proof is required it seems to me, for the protection of the officer, who is required to approve the bond, and he need make no endorsement of such acknowledgment or proof on the bond; as it would in no manner protect or serve any purpose, so far as third persons interested in the bond are concerned, where it is not to be recorded. As it seems therefore, that when the bond is in the nature of a- private bond and is not required to be recorded, the acknowledgment or proof of it before the clerk or other' officer, is only required
My conclusion is, that the boud of a commissioner of sale, appointed by a chancery court will be valid, though it was neither executed in the clerk’s office before the clerk nor proven before him provided, that the clerk accepted the bond officially and approved of the sufficiency of the sureties on such bond. It is certainly however, a very careless thing in a clerk to accept such a bond without its being acknowledged or proven before him. For if it should turn out, that the signatures were forgeries or for any reason the bond was not binding on the sureties, doubtless the clerk and his securities would become responsible for any loss sustained by any one, because of such carelessness of the clerk. lie is authorized for his own protection to take such acknowledgment or proof, and he ought as a prudent person to endorse the fact of such acknowledgment on the bond. It would also be, in most cases, prudent to endorse on the bond, that the sureties had made oath to their sufficiency as such sureties. But the failure of the clerk to do these things, which he has a right to do for his own protection, in no manner affects the validity of the bond.
We regard therefore the provision in section 1 of chapter 10 of Code of West Virginia, p. 79, which provides, that
Our statute does not require endorsement of the bond by the clerk, any more than it requires the acknowledgment and approval of the bond to be manifested by any matter of record or by waiting, though it is certainly prudent, in the clerk to endorse on such bond its acknowledgment and aj> proval. See McClure v. Colclough, 5 Ala., new series. It is contended however, that in this ease Sutton, by taking the bond of the commissioner of sale vdth security, payable in twelve months for the supposed balance due him, in consideration of interest at the rate of ten per cent, per annum, released the securities on his official bond, on the ground that any extension of time given to the principal, without the consent of the sureties, operates a release of the securities. It has been questioned, whether this admitted principle applies to the bond of a sheriff or any other official bond. See Norris v. Crummey et al. 2 Rand. 323. But, be this as it may, it certainly has no application in this case. Sutton agreed to take this new bond giving an extension of time in satisfaction of his claim, if the commissioner of sale would execute it with good security. And such an apparent bond w^as sent to him, but the person whose name purported to be signed to it as security testifies, that his name was forged. There is
Again it is claimed, that the securities are not as reported by the commissioner and decided by the circuit court bound for the amount of the.first bond of the purchaser, which it is claimed was paid before October 7, 1870, at which time the bond of the commissioner of sale aud his sureties is dated. Many authorities are cited to show, that these sureties can can not be bound for moneys collected by the commissioner of sale before the execution of his bond. And these among other authorities are referred to as sustaining this position: U. S. v. Giles, 9 Cranch 212, and Bruce v. U. S. 17 How. 437.
It is unnecessary to consider this law question, as in my judgment the proof shows, that this bond rvas collected after the 7th of October, 1870. The only proof on this subject is the deposition of the purchaser, Bott, and his whole statement is: “I paid to said Cozad the commissioner of sale one thousand three hundred and eighty-five dollars divided into three payments of four hundred and sixty-one dollars and sixty-six and two third cents each- T paid said purchase-money in cash. The first payment I paid off- before it fell due, and the other two as they fell due. I think but I am not certain, that the first note was paid shortly after it was given.” The first note was for four hundred and sixty-one dollars and sixty-six and two third cents payable six months after date with interest from date, and it was dated July 5, 1870. The presumption is of course, that Cozad did not collect this note till he was authorized to collect it, that is till October 7, 1870, when he gave his bond. This evidence, it seems to me, was entirely insufficient to rebut this presumption. Gozad gave his bond three months before this first note fell due, and he gave it then, it is to be presumed, in order to put himself in a situation that would justify him in collecting this bond, as Bott wanted to pay it before it fell
It is unnecessary and improper to determine or consider, whether there was a trust fund in the hands of Bennett, applicable to the payment of the plaintiff’s, claims. The plaintiff, Sutton, seems to have concluded to abandon his demand for this trust fund, and was satisfied to take a decree against Gozad and his sureties for his demand and interest and costs of suit. This he had a right to do, and the circuit court waived the consideration of this question as to how this fund in Bennett’s hands was improperly applicable, reserving all the equities of all persons to this fund.
It is objected, that the amount of the commissioner’s .report of what was duo the plaintiff is too great, as he charges interest on all the notes given by Bott, the purchaser of the land, from their date. And it is deemed, that as the decree directed the land to be sold on a credit of six, twelve and eighteen months from the day of sale without saying, that the purchase-money notes were to bear interest from the day of sale, that it ought to be presumed that "Cozad, the commissioner, collected the purchase-money and the interest on it that would be clue under the decree. But it is proven beyond controversy, that all the purchase-money notes .dicl in fact bear interest from their date, and Bott proved, that he paid to Cozacl all these purchase-money notes, which payments included the interest on these notes from their date.
As a matter of course, if it had been as is deemed a mere mistake in drawing the notes and this back interest was not really paid, it was perfectly easy to have proved, that this back interest was not received by Cozad, as Bott knew the fact and was examined. Finally it was claimed, that in the settlement made by Cozacl with Sutton, when ho gave him the note claimed to be forged, he gave it for a less sum than the commissioner reports to be due, and this settlement as it is called of the parties, ought not to be set aside. It could hardly be called a settlement, as there had been paid to Sutton but two sums ninety dollars and two hundred and ten
With this proof before the court of the fraudulent character of Cozad’s conduct in this transaction with Sutton, it could not hesitate to correct the amount stated by him to be due and to render a decree for the correct amount, there being as I understand there was, no doubt about what was tire correct amount. The decree was for the amount really due and is correct.
I am therefore of opinion, that the decree of March 6, 1878, should be affirmed and that the appellees, John S. Lyttle and John Sutton, guardian of William Sutton, must recover against the appellant their costs in this Court expended, and damages according to law.
Judgment Affirmed.