Neely v. JonesNeely v. Jones
- Reporters:
- ,
- Before:
- Green
delivered the opinion of the Court:
The first enquiry presented by the record is, whether the original bill in this cause was fatally defective on demurrer. This bill states that Neely, the sheriff of Doddridge county, paid to the plaintiffs in several judgments against the defendant, Thomas S. Jones, on which executions had issued, the amount of those judgments; and the defendant, Thomas S. Jones, having a tract of land, on which these judgments were a lien, Neely, the sheriff, by this bill claims that he is entitled to be substituted to the rights of the plaintiffs in these judgments, who were co-plaintiffs with him in this cause, and to enforce the same out of said lands. The judgments were rendered in 1855; and this suit was instituted in 1858.
From these decisions it would seem to follow as a necessary consequence, that, if after the stranger pays a debt the debtor ratifies the payment, as by relying on this payment as a payment when sued upon the debt, or in any orher manner, he would be liable in an action of *637assumpsit brought by the stranger against him for money paid at his request for his use, the subsequent ratification being equivalent to a previous request. See Lipscomb, adm’r, v. Litilepage, 1 H. & M. 453.
But if the debtor instead of ratifying the payment of his debt by the stranger should repudiate this payment by a stranger of his debt, which he might well do, because he disputed that he was bound for the original obligation, or because he himself had paid it, or did not for any reason owe the debt, and for many other conceivable reasons, then the payment by the stranger could not operate as a discharge of the debt, but the debt would still continue to have an existence after the payment by the stranger. The legal right of action would of course remain in the original creditor, and the suit at law would necessarily be in the name of the original creditor. But as the original creditor had received full payment of the claim from the stranger, it seems to me that he would be under an implied obligation to transfer the debt to the stranger, after the debtor would not ratify the payment and thus extinguish the debt. For if under these circumstances a court of equity would not regard the stranger as the equitable owner of the debt, the result would be that the creditor could make it out of the debtor, after it had been paid in full by the stranger; and thus the creditor would be twice paid his debt, while the stranger would have no one to whom he could look for the repayment of what he had paid out. This result would not only be inequitable, but contrary to .the obvious implied understanding bet vveen the creditor and the stranger when the debt was paid. It is obvious that the stranger did not mean to present’ the creditor with the amount paid, for it was made as a payment of the debt, and not given as a present. And if it can not operate as a payment, because of the debtor’s refusal to recognize it as a payment, the general object, which the parties had in view, would under such circumstances be carried out to the extent to which it would under such circum*638stances be capable of being carried out, by the creditor assigning the debt to the stranger. And under these circumstances, it seems to me, a court of equity would, when the debtor refused to ratify the payment, imply that there was such contract, and the rights of the parties would be the same, as though the agreement had been originally, that the payment by the stranger to the creditor shall operate as a full discharge of the debt, if the debtor would ratify it as a payment, and if he would not, and it could not therefore so operate, then that the creditor would transfer to the stranger his right to the debt.
These conclusions are, I think, not only the legitimate result of the authorities I have before cited, but are, I think, sustained by other decisions more directly. It is true, that it has been frequently decided, that it is only in cases where the person paying the debt stands in the situation of a surety, or is compelled to pay in order to protect his own interests, that a court of equity substitutes him in the place of the creditor as a matter of course without any agreement to that effect. See Jannes v. Stephens, 2 Pat. & H. 11; Douglass v. Fagg, 8 Leigh 588, 602; Swann v. Patterson, 7 Md. 164; The Bank of the United States v. Marston, 2 Broch. 254; Burr v. Smith, 21 Barb. 262.
But it must not be inferred from these decisions that the right of substitution arises from a supposed contract between the principal debtor and his surety. As Chancellor Kent says in Hays v. Ward, 4 Johns. Chy. 130, “This doctrine does not belong merely to the civil law s/stem; it is equally a well settled principle of the English law, that a surety will be entitled to évery remedy, which the principal creditor has, to enforce every security, and to stand in the place of the creditor, and have those securities transferred to him, and to avail himself of those securities against the debtor. This right stands not upon contract, but upon the same principle of natural justice upon which one surety is entitled to contribution against another.” Lord Brougham speaking of this right of substitution in Hodgson v. Shaw, 3 Myl. & K. 183, said : “ The rule here is undoubted, and is founded *640on the plainest principles of natural justice, that the ‘surety paying off the debt shall stand in the place of the creditor, and have all the rights he has for the purposes of obtaining his reimbursement. It is scarcely possible to put this right of substitution too high ; and the right results more from equity than from contractor quasi contract, unless in so far as the known equity may be supposed to be imported into any transaction, and so to raise a contract by implication.”
The right of substitution therefore does not arise from any supposed contract between the principal debtor and his sureties; and one is entitled to avail himself of this right, who is compelled to pay a debt for which he is not primarily responsible, though he may not stand in relation lo the principal debtor strictly as a security; as when he guarantees a debt, for which he is not bound, at the instance of the creditor and not the debtor, and though this guarantee was made without the knowledge or consent of the debtor. See Mathews v. Aiken, 1 Com. 595; Peake v. Estate of Darwin. 25 Vt. 32; Carter v. Jones, 5 Ired. Eq. 197; Elhiton v. Newman, 8 Harris (20 Pa. St.) 281.
It is true that the syllabus in Carter v. Jones, 5 Ired. Eq. 196, states in broad terms, that “a person, who pays off a bond due to a creditor without the request of the debtor express or implied, cannot recover from the debtor at law. Put in equity he is considered as the equitable purchaser of the bond, and is therefore entitled to relief against the debtor.” But this statement is not justified by the decision actually rendered in that case, and is not supported by the authorities. In that case the stranger, when he paid off the bond, was compelled to pay it off, having previously guaranteed its payment, it is true without the consent or knowledge of the original obli-gor. It really therefore resembles closely the case of Mathews v. Aiken, 1 Com. 595.
Of course the stranger, at the time he pays to the creditor the amount of the debt, may take an assignment of it without the consent or knowledge of the debtor; and if, when he pays the amount, there be an express agreement that the debt is to be assigned to‘the stranger, this would amount to an equitable assignment of the debt, though no formal assignment was ever executed; for this understanding shows, that the stranger did not pay *642the debt, but really purchased it, which of course he could do without the consent of the debtor. But unless such express agreement is proven, the payment of the debt by the stranger, if subsequently ratified by the debtor, from the time of its ratification extinguishes the debt at law and in equity. But if the debtor refuses to ratify the payment made by the stranger, the debt is not extinguished in law or equity. Its legal existence continues in the original creditor; but the equitable title to the debt vests in the stranger.
In the case before this court the other judgment-creditors of the debtor have not been made parties to this suit in any manner; and they not being before the court, *643it is not proper to express any opinion on the question, whether the sheriff because of his paying these judg-’ ments or of his taking an equitable assignment of them can enforce them for his use against the lands of the debtor to the prejudice of what would otherwise be the rights of these judgment-creditors on the lands of the debtor. In the case of Clevinger et al. v. Miller, 27 Gratt. 740, it was decided, that “a sheriff or other officer who pays an execution in his hands for collection, without an assignment at the time of the judgment on which it is founded, or of the debt, is not entitled to be subrogated to the liens of the creditor whose debt he has paid, as against other creditors having liens by judgment or otherwise.” In the case of The People, ex relatione Luther v. Onondaga, C. P., 19 Wend. 79, there had been an actual assignment of the judgment to the sheriff, when he paid the amount to the plaintiff, and yet under the circumstances of that case the court held, the rights of the sheriff as’the assignee of this judgment to make the same out of the real estate of the debtor must yield to the right of subsequent judgment-creditors to first make their debts out of such real estate. In the absence from this court of the subsequent judgment-creditors it is not proper for us to determine, whether these decisions are properly applicable to this case, or whether the law is correctly laid down in these cases.
*644
The commissioner in his report of March 15, 1864, stated that Thomas S. Jones had on December 25, 1857, conveyed this tract of land to his sons, and it is presumed therefore, that this amended bill was put in the papers of the cause after that date. A decree entered January 5, 1876, speaks of the cause being heard on amended bills and answers thereto, and this is the only recognition in the record of the existence of this bill and answer. But this report of March 15, 1864, stated also,that there were three other judgment-creditors, two of whom held judgments of the county court, in which the suit was brought, and where the land sought to be sold lay, who had liens on this tract of land, and the amount of their *647liens were also reported. Yet the plaintiffs in their amended bill making the sons of Thomas S. Jones parties defendant do not make these creditors, reported to have liens on this tract of land, parties defendant, and though by the commissioner’s report the lien of one of these parties was prior in time and superior obviously to a portion of the plaintiffs’ claim, yet the court in its decree of January 5, 1876, after correcting the report in some particulars, in which it had been excepted to so far as it related to the plaintiffs’ debt, expressly sustains the exception to this report so far as the three other judgments were concerned, because these judgment-creditors were not parties to the suit, and then proceeds to direct the sale of the tract of land to satisfy the debts of the plaintiffs only, and- after the sale was made by the decree of June 2, 1877, it applied the whole proceeds of the sale of the land to the payment of the plaintiffs’ debt only.
It would certainly have been improper for the court to render any decree in favor of these three persons, who were not parties to the suit either formally or informally. See Snyder v. Brown et al., 3 W. Va. 143. But it is equally obvious, that as they had an interest known to the court in the proceeds of the sale of the tract of land about to be sold, the court could not render a decree, ordering the sale and afterwards disposing of the proceeds, without their having been made parties in some way to the cause. It has been questioned, whether it was necessary to make persons, occupying the position these persons did, formally parties to such a suit, and whether it was not sufficient for a party, who files a bill to subject the land of a living debtor to the satisfaction of a judgment, to make all other judgment-creditors parties to the suit by the plaintiff suing on behalf of himself and all other judgment-creditors. In this Court it would seem to have been held in the case of Hoffman et al. v. Shields, 4 W. Va. 490, that it was necessary to make all such judgment-creditors formally parties. In this case there was another error fatal to. the appellees, and the *648court does not appear to have maturely considered this question. We cannot follow to its full extent the apparent decision in this case, because the judgments of all the courts in the State, as well as the judgments of all justices of the peace, are liens on the lands of the debtor, and it would be impracticable, if not impossible, for the plaintiff, who desired to enforce his judgment-lien, to make all the judgment-creditors in the State formal parties defendant in his bill, as he could not ascertain who they were. They being an undefined class having alike interest with the plaintiff, he ought on general principles to be allowed to sue on behalf of himself and all other judgment-creditors without making them formal parties.
I am therefore of opinion, that the whole of the decree of October 28, 1859, except that portion of it which overrules the demurrers of the defendants to the plaintiffs5 amended bill, must be reversed, set aside and annulled ; and also the decree of January 5, 1876, ahd also the whole of the decree of June 2, 1877, except that portion of it which confirms the sale and report thereof made by commissioner Lewis Haymond, which under the provision of section eight of chapter one hundred and thirty two of the Code of West Virginia cannot be set aside because of the reversal of the decree ordering the sale. And this Court proceeding to render such decree as the court below ought to have rendered doth sustain the demurrer of the defendants to the original bill, and doth remand the cause to the circuit court of Harrison county with instructions to permit the plaintiffs within a reasonable time to be fixed by that court to amend their bill, and sue on behalf of themselves and all other judment-creditors of Thomas S. Jones, and to make as defendants to the same Moses Jennings, F. M. F. Smith, C. J. Stuart, William S. Jones and Thomas S. Jones as sole heir at law of Aaron S. Jones, deceased, and all other proper parties, and with directions to cause the amount due from Floyd Neely, the purchaser of the land sold by Lewis Haymond, commissioner, to be collected and paid into the court and then a proper deed to be made to said Floyd Neely for said land, the purchase-money to be disposed of by the court to whatever parties may hereafter appear to be entitled thereto; and further to proceed with this cause according to the principles laid down in this opinion, and further according to the rules governing courts of equity.
The Other Judges Concurred.Decrees Reversed. Cause Remanded.