74 Tenn. 80 | Tenn. | 1880
delivered the opinion of the - court.
A number of cases pending in the chancery court • at Winchester were heard together on the 1st of July, 1879,' and one decree rendered disposing of all of them ■on the merits. From this decree Samuel Mowry, who was the complainant in one of the suits to which ■all the other parties were defendants and the principal •defendant in the other suits, prayed an appeal, and it was granted upon his giving bond with security within .a given time as required by law. Finding himself unable to give the bond demanded by the clerk, Mowry took the oath prescribed for poor persons. The form in which the appeal was granted was, however, not changed, and the oath was treated as insufficient to perfect the appeal: Henly v. Claiborne, 1 Lea, 224. Mowry then presented his petition to one ■of the judges of this court, asking for writs of error • and supersedeas. The judge directed the clerk, upon
The motion to dismiss is rested upon the want of notice of the application, and the failure of the petition to point out any error in the decree below. A writ of error is in the nature of a new suit, and may be obtained, as of right, by any person entitled to it without notice of the application: Spurgin v. Spurgin, 3 Head, 23; Caldwell v. Hodsden, 1 Lea, 305; Code, secs. 3183, 4515. The writ of error in this case was within the time allowed by law, and the pauper oath could not be refused: Morris v. Smith, 11 Hum., 134. The motion to dismiss the writ of error is therefore not well taken.
To sustain a supersedeas ordered by one of the .judges of this court under the Code, sec. 3178, notice to the “ adverse party ” of the application has been held to be necessary under the Code, . sec. 3133: Campbell v. Boulton, 3 Baxt., 354. The “adverse parties ” in this case would be the parties in whose
On the 8th of February, 1870, L. E. Davenport,, by deed with covenant of general warranty, conveyed to Samuel Mowry in fee a large tract of land in. Franklin county, for the recited consideration of $40,-500, of which $25,000 were to be paid in a farm of 309 acres in Saline Township, Wayne county, State of Ohio, $5,000 in cash, and the residue secured by-notes of even date, one due 1 January, 1871, for $1,000, three due respectively on the same day of the next succeeding three years for $2,500 each, and the last due 1 January, 1875, for $2,000. At the time-of this sale, several suits for large amounts were pending against Davenport in the courts of the county, in which suits the land conveyed had been attached to. secure the recovery. The notes of Mowry were, by agreement between him and Davenport, deposited with.
On March 24, 1870, Mowry and wife joined in a deed conveying to Davenport in fee,, with covenants of seizin and general warranty, the land in Wayne county, Ohio, received in the foregoing trade at $25,-000. This deed, after reciting that the consideration of this land' was the tract of land in Franklin county, conveyed by Davenport to Mowry by the deed of February 8, 1870, and that there were encumbrances on this latter tract, expressly provided that if Daven■port failed to remove “any of the said encumbrances which now exist,” then Mowry might advertize as required by the laws of Ohio, and sell for cash so much of the land as might be necessary to remove and discharge the encumbrance or encumbrances enforced upon said Franklin county land, and make a deed therefor.
On September 3, 1870, Davenport, by deed with covenants of general warranty, conveyed to Samuel Mowry certain lots in the town of Decherd, in Frank
On February 21, 1871, Jos. A. Mabry, as a creditor of Davenport, filed his bill in the chancery court of Franklin county against Davenport as a non-resident of the State, and attached the notes of Mowry in the hands of Marks & Fitzpatrick as the property of Davenport, and sought to subject Mowry’s indebtedness to the satisfaction of his, Mabry’s, demand. In his answer to this bill, Mowry stated that early in February, 1870, Davenport sold to him in gross, for the consideration of $40,500 paid and to be paid as above set out, the land embraced in the deed of the 8th of February, 1870, with the crops, stock, farming implements, vehicles and household furniture thereon, and the lots in Decherd afterward conveyed by the deed of September 3, 1870. He also stated that Davenport had failed to deliver, and had carried off, in violation of the contract of sale, certain specified articles of persona] property, had fraudulently overestimated the number of stock and quantity of produce on the place, and his right to certain chattels subsequently claimed and taken away by third persons. The answer further mentioned the facts • touching the sale of the Decherd
Marks & Fitzpatrick, who were also made defendants to Mabry’s bill, filed an answer in which they said that the notes of Mowry had been placed in their-hands, by agreement between the parties, for the purpose of first securing their fees, and then of indemnifying Mowry against the liens on the land. They also specify a number of suits of various parties against Davenport pending at the time of the sale, in which attachments had been levied on the land, and, among others, the action at law of Lethia M. Coover and the-
On March 15, 1871, S. Cauvin & Co., on May 25, 1871, G. W. Saul paw & Co., on September 11, 1871, W. F. Kcrcheval, and on June 1, 1872, J. G. Ogden, each as creditors of I). E. Davenport, filed severally ■a similar bill as that of Jos. A. Mabry, attaching the indebtedness of Mowry to Davenport by the notes in the hands of Marks & Fitzpatrick, and seeking to .subject it to the satisfaction of their respective demands. Mowry and Marks & Fitzpatrick filed, in substance, the same answers as those in the Mabry case to each ■of these bills.
On July 1, 1873, Samuel Mowry filed his bill .against Davenport, Marks & Fitzpatrick, Jos. A. Ma-bry and the complainants in the other four attachment bills, Lethia M. Coover, and some other persons claiming to be creditors of Davenport, whose names and •demands it is not necessary to specify. In this bill Mowry sets out his contract with Davenport, the val’ions conveyances, the loss of personalty and of the Decherd lots, the deposit of his notes for his indemnity, and his payments thereon substantially as in his answers to the bills of the attaching creditors. He makes the same claim for deduction or abatement be■cause of the failure of consideration of his notes and for indemnity against liens as in his said answers, but does not mention by name the attachment suit of the Mc-Minnville & Manchester Railroad Company, nor the ■other attachment suits specified in those answers. He •does mention the suit of Letbia M. Coover, and states
Coover answered, admitting the compromise and entry of judgment as alleged, and insisting that the addition of a thousand dollars to the amount agreed upon was without her knowledge, and made by Davenport’s lawyer for his own benefit. She filed a cross-bill for the purpose of rectifying the judgment to this extent.
The attaching creditors filed separate answers, each admitting that he had brought suit as charged, and, without denying or in any way noticing the other allegations of the bill, insisted upon his or their prior right to satisfaction over the complainant out of the proceeds of his notes. Sometime afterwards, each of these defendants was permitted to file an amended ■answer stating the fact that Mowry had, on the face
Proof was taken which was read as evidence in all the cases, subject only to exception for incompetency. The chancellor, on final hearing, reformed the Coover judgment, and allowed it to be enforced against the land to the extent of $3,000, with interest. He declared that Mowry, as against Davenport, was entitled to recover the value of the personalty not delivered or lost, the value of the Decherd lots sold for taxes, and the Coover judgment with interest and costs,, but, as against the attaching creditors, that he must look alone to the security of the lien retained on the Ohio land. He made a reference to the master to ascertain the amount of Mowr'y’s claim against Davenport. And he gave the creditors of Davenport, Marks, & Fitzpatrick first, and the attaching creditors in the order of time of their respective bills, judgments for the amount of their respective claims against Mowry to the extent of the balance found to be due on his. notes after deducting the payments not contested. The proof showed that the McMinnville & Manchester Railroad Company’s' suit had been compromised at $2,500, which Mowry had paid on February 1, 1875. The chancellor refused to notice this payment, or the lien of that suit, because the case was not mentioned by name in Mowry’s bill. He directed the costs to. be paid by Mowry, the amount to be allowed him as a credit on his notes.
The proof is clear that the sale by Davenport to ■ Mowry, in consideration of the $40,500, was a lumping ■ one of the tract of land conveyed on February 8, 1870, the crops, stock, and other personalty thereon, certain specified articles excepted, and the lots in the town of Decherd. The proof further shows that a part of' this personalty was afterwards carried off by Daven--
It is suggested, not argued, that these claims for losses are colorable, and collusive between Davenport -and Mowry, to deqtrive the attaching creditors of the benefit of their attachments. The only circumstance which tends to sustain the suggestion is, that Mowry had paid one of his notes, and made payment of $600 ■ on another, without, so far as appears, having made complaint of the losses in question, of which the loss of personalty must certainly have been known to him very soon after his purchase. On the other hand, it does not appear that he did not complain, nor are the ■circumstances attending the payments brought out as they might have been on cross-examination. The extent of loss is, no doubt, exaggerated; but the facts may be sifted on the reference. In the absence of any positive testimony to the contrary, that there has been some loss must be considered as established sufficiently for a reference.
It is also said that the testimony introduced to show '■■that the personalty and Decherd lots constituted a part
It is further said that the record fails to show that Mowry has been evicted from the Decherd lots, which were sold for taxes. In his answers to the attachment bills, Mowry does merely say that these lots are claimed by the government, and the title is encumbered and doubtful if not wholly lost. Perhaps at the time no effort had been made under the tax title to interfere with his possession. In his bilb
To the extent of the value of the -personalty lost to Mowry, there was a failure in the consideration of his notes, and for that value there could be no recovery on the notes by Davenport, nor, of course, by his creditors: Hinkle v. Currin, 2 Hum., 137. The loss on the lots would be equally a failure of consideration. But if it be treated as a debt for which an action would lie on the covenant of warranty in the deed of conveyance, it would be a case of opposing debts existing at the date of the several attachments, and only the balance due, after deducting the set-off, could be reached by the garnishment bills: Arledge v. White, 1 Head, 241; Fay v. Reager, 2 Sneed, 200; Mayor v. Potomac Ins. Co., 2 Baxt., 303.
The reservation retained in favor of Mowry in the deed to the Ohio land is only to indemnify him against the encumbrances then subsisting on the land conveyed by deed of February 8, 1870. Neither the claim for the loss of personalty or of the Deeherd lots could be considered as encumbrances. Mowry has,
The proof of Mowry and Fitzpatrick establishes beyond doubt that the notes of Mowry were, by agreement of Davenport, deposited about the time of their execution in the hands of Marks & Fitzpatrick to ■secure their fees, and to indemnify Mowry against the liens then on the land, the liens specially intended being those created by the attachments levied on the land in pending suits. And the record clearly shows that two of those liens existed in the cases of the McMinnville & Manchester Railroad Company and of Lethia M. ■ Coover. The deposit or pledge of the notes for the purposes specified was undoubtedly good, and created an equity in favor of the beneficiaries ■ superior to that of a subsequent attaching creditor: Sugg v. Powell, 1 Head, 221; Gayoso Savings Institute v. Fellows, 6 Cold., 467; Flickey v. Loney, 4 Baxt., 172. And the security thus obtained could not be taken from him by a garnishment bill until he was fully indemnified against the intended liens: Nolen v. Crook, 5 Hum., 312.
The chancellor refused to notice the lien of the McMinnville & Manchester Railroad Company because it 'was not specifically mentioned in Mowry’s bill, and the same reason is relied on in the argument submitted in this court. But the lien, and the suit pending
The suit of the McMinnville & Manchester Railroad’ Company against Davenport was pending at the filing-of each of the bills in this case. If it had been-still pending at the hearing, all that the court could have done would have been to declare the rights of' the parties, and order a reference to ascertain the amount of the lien charge when it was determined. The proof shows that it was compromised, by Davenport admitting a liability to the company of $2,500,. which sum was, on February 1, 1875, paid by Mowry-in order to relieve the land. These facts could be-brought before the court directly by proof, as well as by a report on a reference, at any rate, in the absence-of any demand by any party for a reference.
It seems to be thought that such a compromise, made after the filing of the attachment bills, could not be binding upon the attaching creditors. There is high authority for the position that a judgment obtained, without fraud or collusion, which concludes the debtor, whether rendered upon default, confession,' or after a contestation, is, upon all questions affecting the title to his property, conclusive evidence against his.
There seems .to be some doubt whether the Coover branch of this case has been brought- up, so far as it ascertains and determines the amount of her judgment against Davenport, and that it is a lien on the land attached. If it be not included in the writ of error, as it clearly is not in the supersedeas, then the decree of the court in her behalf remains in full force, and Mo wry is entitled to be indemnified against the recovery. The compromise in this case was also a judicious one for Davenport, and there is nothing to impeach its good faith to the extent of the amount allowed by the chancellor. The suit was commenced in the State court and removed to the Federal court. That court might, for good cause, have remanded the case to the State court, or the parties might, perhaps, have remanded by consent, the jurisdiction of the court being suspended, not extinguished. And the fact that the judgment was rendered before the entry of a formal order of dismissal in the Federal court, would not avoid the judgment, the subsequent entry, in accord-
The plaintiff in error bargained for and obtained security against the existing attachment liens on the land bought, both in the pledge of his notes and in the indemnity reserved by the deed of the Ohio land. To the extent of the amount paid to the McMinnville ■& Manchester Railroad Company, and the .amount agreed to be paid to Coover, in release of their respective attachments, he has therefore two securities for his .indemnity. The appellees have only attached one of these securities.
Under these circumstances, it is said by the counsel of the creditors that Mowry having taken the lien on the Ohio land with knowledge of the facts, thus carving out his own security, is bound to look alone to that security. It is difficult to see the force of the suggestion, for it is a mere suggestion, not sustained by any train of reasoning. Both securities were doubtless bargained for at the same time, when the original trade was entered into, and were, at any rate, obtained long before either of the creditors acquired a lien by attachment. Every person who stipulates for indemnity may be said to carve out his own security, and there is no rule of law which requires a creditor to
The real question on this branch of the case is, whether the attaching creditors have any equity to marshal the securities so as to give them the benefit of the security on which they alone have a lien. The general principle is, that if one party has a lien on or interest in two funds for a debt, and another party has a lien on or interest in one only of the funds for another debt, the latter has a right in equity to compel the former to resort to the other fund, in the first instance, for satisfaction, if necessary, wherever it will not touch upon the rights, or operate to the prejudice of the party entitled to both funds: 1. Sto. Eq. Jur., see. 633; Lanoy v. Duke of Athol, 2 Atk., 446; W. & T. Lead. Cas. Eq., notes to Aldrich v. Cooper, 8 Ves., 382; Henshaw v. Wells, 9 Hum., 580. And it is universally conceded in the practicable application of the principle, that the securities will not be so marshaled as to deprive the party with two funds of any legal right, or operate to his prejudice. The equity is, indeed, not against the creditor, but the common debtor, to prevent him from obtaining the one fund by reason of the recourse of the creditor on the other. It is a creature of the court of equity for the attainment of justice, not to do injustice. It
Without undertaking to say that the court would.
The record shows that on September 30, 1874,. John H. Martin, guardian of Robert Sharp, a lunatic, filed a bill against Samuel Mowry and others to recover 160 acres of the land sold by Davenport to Mowry; and that on October 3, 1874, Francis Ferrill and others filed a similar bill to recover 40 acres of the land. Both of these bills rested the right of recovery on a title paramount to that of Davenport. The chancellor, it is said in argument, refused to allow the records to be introduced as evidence, because not men-. tioned in the pleadings. The decree seems to be silent on the subject, and the arguments submitted on behalf of the plaintiff in error say nothing in regard to them. The chancellor is probably right in his holding that these suits were not properly put in issue, and it seems clear that they are not now before us-The decree will not prejudice the rights of the plaintiff in error, if any, arising from the pendency or result of these suits.
The decree will be reversed, and a decree rendered here in accordance with this opinion. The costs of this court will be paid by the attaching creditors, and the costs below as directed by the chancellor.