25 F. Cas. 734 | U.S. Circuit Court for the District of New Hampshire | 1836
This case has been already before the court in an action of debt, founded upon the joint judgment (referred to in the proceedings), and brought against the present defendant; and the court were then of opinion, that, as an action founded upon the joint judgment, it was not maintainable against the defendant, as administrator of Abbott; but, that at law the judgment survived exclusively against Bar-nabee and Sherburne. [Case No. 14,907.] The present bill in equity is brought to recover the amount of the same judgment out of the assets of Abbott in the hands of the defendant. The defendant admits assets sufficient to pay the amount due to the United States on the judgment; but he denies, that the United States, by reason of their legal priority, or otherwise, haveany right or title whatsoever to satisfaction thereof out of the assets, under the circumstances of the present case. There is no dispute between the parties as to the material facts. It is admitted, that the original bond for the payment of duties was in its form joint and several, and was given by Bamabee as principal, and by Sher-burne and Abbott, as his sureties: that the judgment was obtained against all the obli-gors on a joint suit in the lifetime of Abbott; that Barnabee and Sherburne are insolvent; and that the United States have received the sum of $392.06 in debenture certificates from Barnabee, which have not been deducted from the amount of the- judgment.
The first consideration which arises, is, whether the amount of these debenture certificates ought to be deducted from the judgment debt. I have not the slightest doubt, that it ought to be deducted; for to this extent the judgment has either been satisfied, or the judgment was pro tanto originally taken for a larger amount than what was actually due. The argument for the United States seems to be, that it was properly matter of set-off in the original joint action; and not having been then insisted on, it cannot now be made of any avail. Now, whatever force there might be in the argument upon the ground of laches, if the present were a suit brought by any of the parties to .the original judgment to be relieved against the same to the amount of the debenture certificate, upon which it is unnecessary to give any opinion, though I must say, that it would be difficult to convince a court of equity, that it ought not, under the circumstances, to give the relief, as the case of an omission of credit by mistake or accident; or,,if treated as a set-off, in the nature of a counter demand, which might be, but was not necessary to be, set off in that suit; the argument can have no just application in the present case. The present suit is brought by the United States to enforce a claim against the defendant in equity; and it would be most extraordinary, if a court of equity should lend its aid to any party to recover any debt beyond what in conscience and truth is due to him. One of the fundamental rules in equity jurisprudence is, that he, who seeks equity, must do
We come, in the next place, to the consideration of the point raised by the defendant, as to the release of Barnabee by the secretary of the treasury. X have already had occasion to express my opinion, that the release was inoperative in consequence of the conditions annexed thereto not having been complied with; for Abbott, the surety, in his lifetime never assented to it. and the assent of John E. Abbott, his son, is in no just sense the assent of his legal "representatives,” if such an assent would have been a compliance with the condition. The main argument on behalf of the defendant is, that the release became, in the event, an operative discharge of Barnabee, notwithstanding it has not been delivered, and notwithstanding the condition has not been complied with; because (it is said) the secretary has. required by the condition more than by law he was authorized to require; and also, because a literal compliance with it became impossible. The condition required is, that Sherburne and Abbott should consent to the discharge of Barnabee, without any prejudice to their liability. At .the time of the making of the instrument, Abbott was dead; and, therefore, a literal compliance with its terms was .impossible; and the secretary had no right, by law, to impose the condition. Besides; by the death of Abbott, he was discharged at law from the judgment; and it survived against the other obligors only.. The assent of his legal representatives could not be required to the discharge, for by his death his legal liability Was gone; and they were by law incompetent to give such an assent. Sherburne, the only surety, who is liable upon .the judgment, has assented; and the condition by his assent had been complied with, as far as could be required by law. Such is the argument. The infirmity of the argument is, that it assumes, that if the condition annexed by the secretary is either impossible, or beyond what the law requires, or authorizes, the condition is void, and it leaves the release absolute. Now, that is the very matter in controversy. And my opinion is, that the release of the secretary, if it is to operate at all, must operate throughout. If he has exceeded his authority, the whole act is void, and not merely the condition. The condition is a condition precedent, and if impossible to be performed, the release does not take effect. If illegal to be required, still the release being to take effect only, when it was complied with, the whole instrument, in its original concoction, was invalid. But it doe's not appear to me, that the secretary has exceeded his authority in imposing the present condition. On the contrary, it was within the scope and objects of the laws, under which he acted. The act of March 2d, 1831,. c. 01, § 4 [4 Stat. 167], authorized the secretary. when he was satisfied, that the debtor was insolvent, and had committed no fraud, to ‘"compromise with the debtor upon such terms and conditions as he may think reasonable and proper, under all the circumstances of the case.” A broader discretionary authority could scarcely have been given; and it has not, in any manner, been restricted by the subsequent acts, so as to touch the present condition. The amendatory act of July 11th, 1832, e. 227 [1 Stat. 305], extends the provisions to reach the present, case; and further provides (section 3) that the debtor shall not be discharged "until it shall appear to the satisfaction of the secretary of the treasury, that the sureties of the debtor are unable to pay the said debt, and that they are entitled to the provisions of this act in like manner, as the said principal debtor shall be entitled to the same, or unless said sureties shall file their consent, in writing, with the secretary of the treasury, that the privileges of this act, and the act, to which this is an amendment, may be extended to their principal without any prejudice to their liability; or unless such discharge can and shall be given in such manner, as not to affect the legal liability of such sureties.” It is apparent, that the secretary imposed the present condition with this directory clause immediately under his view. The act of June 7th, 1834, e. 45 [4 Stat. 676], further provides, that if any surety, or co-surety, of the debtor, shall be dead, ‘"the consent of the legal representative or representatives of such deceased surety or co-surety shall be received, and entitle the applicant for relief in like manner as the consent of a living surety or co-surety would do, by the provisions of the 3d section” of the act of 1832. So, that the very case now in judgment has been expressly provided for, viz. that of a deceased surety. And there is no pretence to say, that if the legal representative of such surety might, or could, at law or in equity, be made liable for the debt, his assent to the discharge might not be required by the secretary, as a proper and reasonable condition of granting it.
The next question is, whether the United States are entitled to maintain the present bill, under the circumstances of the case, against the defendant, as a matter of equitable jurisdiction. I am of opinion, that they are. The estate of Abbott is insolvent; and, in a ease of insolvency, the United States are, by virtue of the act of March 3d, 1707, c. 74 [1 Story’s Laws, 464; 1 Stat. 512], entitled to a priority of payment out of the assets of the deceased debtor. In my judgment, there is no difference, as to the right of priority, whether the debt due to the United States is a legal debt, or an
The only real remaining question is, whether the deah of Abbott operated to discharge him altogether from the original debt, both at law and in equity; for if his estate is liable in equity for the debt, it is wholly immaterial, how the matter would stand at law. The argument of the defendant is, that the present is the case of a surety, and against a surety a court of equity will take no step to enlarge his liability, or to make him liable, where he is already discharged at law. Generally speaking, this doctrine is true, and fully supported by the authorities. See 1 Story, Eq. Jur. § 1(54; Id. § 82. But the question is, whether it applies to the present case. This is not a case, where the plaintiff seeks to have a bond, or other contract, joint in its form, reformed, so as to make it joint and several against a surety, living, or dead. In such a ease, a court of equity- will not interfere, unless there is the most plenary evidence to establish the fact, that it was the intention of all the parties, that it should be several, as well as joint. But if such an intention is clearly established, courts of equity will enforce that intention, when there has been an omission to express it by accident, or mistake, or fraud, as well against sureties as against the principal debtor. Under such circumstances there is no distinction between the case of sureties and that of principals; for it is a mere specific performance of the original contract, as understood by all the parties. The true difference between principals and sureties is. that in the ease of principals, courts of equity will ordinarily presume, that a contract, in form joint, was intended to be joint and several, as all are equally debtors. But in the case of sureties, courts of equity will presume nothing beyond what the positive facts substantiate; and if the contract is in form joint, they will not presume it to have been intended to be joint and several, unless upon distinct and satisfactory proofs to that effect. The cases of Devaynes v. Noble (Sleech’s Case) 1 Mer. 564-568; Sumner v. Powell, 2 Mer. 36; Thomas v. Frazer, 3 Ves. 399, 402; Rawstone v. Parr, 3 Russ. 424. 539; Wiser v. Blachly, 1 Johns. Ch. 607: Berg v Radcliffe, 6 Johns. Ch. 302; Miller v. Stewart, 9 Wheat. [22 U. S.] 680; Hunt v. Rosmaniere’s Adm’rs, 8 Wheat. [21 U. S.] 211, 212; Id. 1 Pet. [26 U. S.] 16; Weaver v. Shryoek, 6 Serg. & R. 262, 264, 265,—fully recognize the general doctrine and the distinction, each of which indeed is so reasonable in itself, that as soon as it is enunciated, it carries with it its own intrinsic justification. But no reform whatever is required of the instrument in the present case. It is a bond joint and sev-eral in its form, as is required by the duty collection act of 1799, c. 128, § 62 [1 Story’s Laws, 627; 1 Stat. 673, c. 22]; and therefore it is the several, as well as the joint contract of each of the obligors. As between the obligors themselves, Sherburne and Abbott were the sureties, and Barnabee the principal debtor. But as between them and the United States, they were all principal debtors, jointly and severally liable as such by the general principles of law, as well as in equity. The reasoning of Mr. Chancellor Kent, in Berg v. Radcliffe, 6 Johns. Ch. 302, is entirely satisfactory and conclusive upon this point, if it admitted, as I conceive it does not, of any reasonable doubt.
The argument of the defendant proceeds upon the supposition, that if a bond, joint and several in form, is sued against all the obligors, and a joint judgment is obtained thereon, that joint judgment, though unsatisfied, ipso facto, extinguishes the several, as well as the joint obligation ex contractu. No authority has been cited, which supports such a doctrine even at law; and it is somewhat difficult to ascertain the principles, by which it can be. maintained. A joint judgment upon a joint contract without doubt operates at law as a merger of the joint contract; and having passed in rem judica-tam no joint suit can afterwards be maintained upon the contract, but only upon the judgment. That has been the well-established law at least ever since Higgens’s Case, 6 Coke, 11-16; on the ground, that a judgment, being matter of record, is of a higher nature than a mere specialty; and the law will not in point of policy allow a plaintiff to multiply suits for the same cause of action against the defendant, to his op-' pression and injury. See Com. Dig. “Action,” K, 3, K, 4; Lechmere v. Fletcher, I Cromp. & M. 632, 633. If one of the judgment debtors dies, the judgment survives against the others; and no remedy at law lies upon it against the executor or administrator of the deceased debtor. If, however, the original debt was in reality the joint debt of all the parties, as partners, or as otherwise having a joint interest, and the survivors are insolvent; in such a case a court of equity will enforce the judgment, as it would have enforced the original contract, against the assets of the deceased debtor, upon the ground, that it ought, under such circumstances, to be treated as a several, as well as a joint contract. In the present case the contract is several, as well as joint; and it becomes necessary to consider, whether the joint judgment could even at law operate as a bar to a several suit brought against Abbott in his lifetime or against his legal representatives after his decease upon the several obligation created by the bond. Treated as a matter of principle it would be difficult to affirm, that a joint judgment ought to be held any bar except to the joint contract, on which it was founded. In a
I have thought it proper to say thus much upon the general question at law. But in my judgment, it is wholly immaterial in this case, whether a suit could be maintained at law, or not. The joint contracts of debtors, having a common interest, are in equity treated as joint and several, wherever the joint remedy at law fails to enable the plaintiff to obtain satisfaction. Thus, if a joint debt of partners exists, and one of them dies, and the other is insolvent, a court of equity will compel payment out of the assets of the deceased partner. In such a ease, a court of equity- raises, by implication the several liability. A fortiori, the same principle will be applied by a court of equity in the case of a contract, in form joint and several, where the survivors are insolvent. If the joint judgment could be treated at law (as I think it cannot be.) as a merger of the several obligation; so far from that constituting a ground in equity to refuse relief against the assets of the deceased party, it furnishes a clear ground for its interference; for it is against conscience, that a party, who has severally agreed to pay the whole debt, should, by the mere accident' of his own death, deprive the creditor of all remedy against his assets. So courts of equity have always treated this matter; and tne present case is but a new application of a very old and well-established doctrine. I'do not go over the authorities. The principle to be deduced from them, and the authorities, by which it is-supported, are sufficiently stated in the work cited at the argument. 1 Story, Eq. Jur. § 676, and note 1; Id. § 164, and note. Sir Wm. Grant, in Devaynes v. Noble (Sleech’s Case) 1 Mer. 564, 565, and in Sumner v. Powell. 2 Mer. 30, 36, has given a very clear exposition of the doctrine, and of the grounds of equitable interference. It is applied to all .cases, where the contract is in facj:. or ought in contemplation of law to be held, joint and several; and then it is immaterial, whether all are principals, or a part are sureties. Rawstone v. Parr, 3 Russ. 424, 539, fully recognizes this doctrine, though the case was finally disposed of upon another ground, viz. that there was no sufficient proof, that a joint and general contract was intended by the parties.
Upon the whole, my opinion is, that the United States are entitled to a decree tor the amount of the debt now due to the bond, after deducting therefrom, the amount of the debenture certificates, with interest upon the balance, to be paid out of the assets of Abbott now in the hands of the defendant, in virtue of their general right of priority of payment in a case of insolvency.