State Bank v. Edwards

20 Ala. 512 | Ala. | 1852

CHILTON, J.

We deem it unnecessary in this case to notice any other than the question whether the defendants in error, who were the complainants in the court below, are not entitled to relief by reason of the interference 'of the Bank, in ordering the sheriff to return the execution which had been levied on the principal debtor’s property, by means of which the levy was discharged.

The proof in this case that the execution was delayed by the Bank, is not very explicit; but we < kink the answer of the Bank not being sworn to, the same amount of evidence is not required to disprove its denials as in other cases, and that the proof of the sheriff and deputy sheriff is sufficient, under the circumstances, to show that the return of the fi. fa. against Houston was by order of the Bank. 17 Ala. Rep. 258. We come then to consider the effect of this interference on the part of the Bank upon the rights of the securities. The counsel for the defendant in error supposes that the previous decisions of this court have settled, that the creditor’s right to enforce payment out of the securities is not impaired; but upon a careful examination of them, we find none which go to' this intent. The furthest this court has gone was, in holding that the sureties were not discharged by a return of an execution against the principal debtor by order of the creditor, when it appeared there was. property of the principal, which could have been levied on, sufficient to pay the debt, and that he afterwards became insolvent. Sawyer v. Bradford, 6 Ala. Rep. 572; Royston, Adm’r, &c., v. Howie, use, &c. 15 Ala. Rep. 309.

It is further held, that the mere delay or want of diligence in enforcing the execution, or an agreement to delay based upon no valid consideration, will not affect the creditor’s right. See cases above, and The Bank v. Godden and Lowry, 15 Ala. Rep. 616, and cases there cited. True, in the case last referred, to, it is stated that a levy bad been made in the case of Sawyer v. Bradford, supra; but this was a mistake, as will be seen by reference to that case.

In this case, after allowing the credit of $838 as of the 2d May, 1838, but a small balance, say $250, would have remained due upon the execution. To pay this, the sheriff levied on ten bales of cotton, the property of Houston, the principal debtor, which he doubtless deemed sufficient to satisfy the execution, and which we infer from the proof of its subsequent sale at the usual rates, was sufficient, had it been applied. The effect of a withdrawal of this execution was an abandonment of the levy, and a return of the goods in which the sheriff, for the benefit of the creditor, had a qualified ¡property.

The authorities are generally agreed, that this operated a discharge of the securities. The principal case upon the subject is that of Mayhew v. Crikett, 2 Swan. Rep. 185, where the creditor, after a levy, had withdrawn the execution. Lord Chancellor Eldon held, that the creditor was a trustee of his execution for all the parties interested, and although he might remain passive if he chose, yet if he took the debtor’s goods in execution, and afterwards withdrew the execution, he discharged the surety both at law and in equity. This has been the settled law since that case, and the principle there decided has been adopted by the elementary writers on the subject. Pitman on Pr. and Su. 176-7; Theob. on Pr. and Surety, 143; Burge on Suretyship, 206; 1 Story Eq. §§ 324-5-6. It is unnecessary for us in this case to decide whether we should hold the securities discharged absolutely, or only pro tanto, since we regard the levy in this case sufficient.

This view is not only supported by authority, but in most cases will mete out substantial justice, as it certainly does in this. No one can read this record, which discloses that this debt was extended by the execution of a new note, with other security, anterior to the judgment against these securities; the misapplication of an instalment paid by Falls, as proven by the deposition of himself and the cashier, to the payment of another demand; the order to credit, after the judgment; the execution issued thereon, with $838 TW the proceeds of the note given to renew the demand on which this judgment was rendered, which, note had been discounted long anterior to the rendition of the judgment; followed by an order to return the execution, which had been levied on the property of the principal debtor, who was then in failing circumstances, and who shortly thereafter became insolvent — but must see that palpable injustice will be done them to enforce this payment. They had the right to repose on the assurance, which the conduct of the Bank was so well calculated to create in their minds, that the demand was paid; otherwise the Bank would have suffered the sheriff to sell the debtor’s property, and thus have made the money. We apprehend, moreover, that when the Legislature enacted that the sheriff' should levy on the property of the principal debtor first, as by the statute, Clay’s Dig. 206 § 23, it was not intended that the creditor should frustrate this provision, designed for the securities’ protection, by discharging the levy, and yet hold the security liable.

-We are of opinion that the securities are entitled to the relief which they seek, and that the court of equity is the proper forum in which to obtain it.

Let the decree be affirmed.