20 Ind. 155 | Ind. | 1863
Action by the appellant against the appellees. Demurrer to the complaint sustained.
The following is the case made by the complaint: It is alleged that, in July, 1858, the defendant, Roberts, recovered a judgment in the Court of Common Pleas of said county against the plaintiff and Henry Shafer, for 247 dollars and 33 cents, upon a promissory note, before that time, given by said Shafer, as principal, and the plaintiff as surety to the said Roberts.
That on the 3d of April, 1858, said Henry Shafer fraudu
Prayer, that the parties be enjoined from collecting the judgment out of the plaintiff’s property; that the deed of
In examining the validity of the complaint we may assume that the deed of assignment from Shafer to Wynn and Roberts was fraudulent, and hence void; for it is alleged to have been fraudulently made and that the assignees well knew the premises. The assignment then, so far as it would otherwise be deemed a justification of the acts of Roberts, may be left out of view. The case then may be briefly stated thus: Roberts had a judgment against Shafer, as principal, and the plaintiff as surety. An execution, issued upon the judgment, became a lien on sufficient personal property of Shafer to pay the debt. This property Roberts, under color of a fraudulent assignment from Shafer, took out of the county, beyond the reach of the execution, and sold, appropriating the proceeds to his own use, and this for the purpose of collecting the judgment out of the property of the plaintiff who was the surety.
On the supposition that the assignees of the judgment occupy no better position than Roberts, the original judgment creditor, we think the acts charged against Roberts, on principles of equity, release the plaintiff, Robeson, from the payment of the judgment.
While a creditor may not be bound to active diligence in the collection of his claim, yet if he does any act injurious to the surety or inconsistent with his rights, the latter will he discharged. 1 Story’s Eq., sec. 325.
The creditor is not entitled to relinquish any hold which he has actually acquired on the property of the principal, and which might have been made effectual for the payment of the debt. Thus, when property has been levied upon, and the levy relinquished by the creditor, or where property has been voluntarily delivered by the principal to the creditor as security, and afterwards surrendered, the surety will be dis
The decisions, however, are not uniform that the withdrawal of an execution before levy does not discharge the surety. Thus in Glass v. Thompson, 9 B. Monroe 235, (a case which we do not find in the work above quoted,) it is held that, “ a stay of an execution by the creditor when it has been levied on the property of the principal, without the privity or assent of the surety, will have the effect to release the surety, inasmuch as it greatly increases his risk, and may ultimately subject him to the payment of the debt. (3 Bibb. 467.) "When a lien on the property of the principal is created, by an execution in the hands of an officer, and such lien is lost or waived by the act of the creditor, the injury to the surety is the same, and as the same effect ensues, the surety, under such circumstances, is also exonerated in equity.”
That case differs from the one before us in two essential particulars, if not more. That was an action at law to recover damages, and not a proceeding on the chancery side of the Court to be relieved from the payment of the judgment. This is an application to be thus relieved. In that case the property was removed by a third person. The judgment creditor had nothing to do with, and was not responsible for-
We proceed now to inquire whether the assignees of the judgment occupy any better position than Roberts, or whether they took it subject to the equity which attached to it in his hands. It will be observed that the complaint admits the due assignment of the judgment, and does not charge the assignees thereof with any notice. We must take them to be purchasers in good faith. The statute which authorizes the assignment of judgments, (2 R. S. 1852, p. 335,) does not seem to contain any provisions which, in themselves, answer the question here involved. It provides how judgments may be assigned so as to “ vest the title to such judgment or decree in each assignee thereof successively.” It provides also that “payments or satisfaction on such judgment or decree, to the assignor*, shall be valid, if made before notice of assignment to the judgment debtor, but not otherwise.” This last provision relieves the judgment debtor from the necessity of examining the records to see if a judgment against him has been assigned, and throws-the burthen of notifying him on the assignee. Without notice, other than the record, a payment to the judgment creditor after assignment would be good. This provision does not throw much light on the question involved. Eor a solution of the question we must look to general principles. In the case of Reid v. Ross, 15 Ind. 265, it was said by this Court, in speaking of the assignment of a judgment, “we see no good reason why this transfer does not stand upon the same ground as any personal chattel.” We do not yet see any reason for any different conclusion, except in one particular, which will be noticed
We think that the assignee of a judgment under our statute, takes it subject to whatever equities exist in favor of the judgment debtor. We do not, however, decide that such assignee takes subject to equities in favor of third persons of which he has no notice. The difference between the two cases is clear and substantial. The party proposing to take an assignment of a judgment can go to the judgment debtor and ascertain the true state of the case. If the debtor have any equitable ground for refusing to pay, he can so state; if not, and he so state to the party proposing to take an assignment, and the purchase is made on the faith of such disclaimer, he will be thereafter estopped to set up any such matter.
But a party who proposes to purchase a judgment has no means of ascertaining what claims third persons may have, or pretend to have on the judgment, unless such claims appear on or attached to the entry of judgment where the same is to be assigned. Hence it would seem that an assignee without notice should take the judgment freed from the claims of such third persons. See authorities last above cited.
The conclusion is that the assignees of the judgment, in the case before us, took it subject to the right of the plaintiff to set up his claim to be released, in the same manner as if the judgment had not been assigned.
There is yet another ground on which the plaintiff was entitled to relief. The real estate embraced in the fraudulent assignment was situated in Franklin County, where the judgment was rendered, and the judgment became a lien upon it. This real estate was subject to sale on execution. 2 R. S. 1852, p. 158. The surety had the right to have this real estate levied upon and sold, before levying upon his own. It does not appear that this real estate has been sold by the assignee, or that it has otherwise passed into the hands of innocent purchasers.
~We have thus determined the question that seemed to us to be involved in the complaint, but we can not reverse the judgment of the Court on the demurrer, because there was no final judgment rendered in the cause. The Court sustained the demurrer to the complaint, but rendered no final judgment for the defendants. The cause is still pending, so far as the record before us shows, in the Court below. The plaintiff may yet take any step in the cause, by getting leave to amend his complaint, or otherwise, without again summoning the defendants to appear. The judgment on the demurrer is evidently not a final one from which an appeal lies to this Court. 2 R. S. 1852, p. 158, see. 550.
The appellees have asked us, notwithstanding there was no final judgment, to pass upon the questions involved, and we have done so. Perhaps this course will save the necessity of bringing the case again to this Court.
The appeal is dismissed with costs.