Wright v. Watt

| Miss. | Apr 15, 1876

Simrall, C. J.,

delivered the opinion of the court.

F. S. Wright brought his bill in chancery'against J. M., Watt and others, to obtain a perpetual injunction against the'collection of a judgment which had been confessed by Wade,. Walton, and the complainant, in favor of Watt, Noble & Mobley, on the 7th of May, 1860.

The complainant alleges that he was surety on the notes,, the foundation of the judgment, which was well known to Watt, the managing member of the firm; that he filed an-* affidavit, under the statute, in the papers of the cause, of his suretyship that on the 23d of April, 1861, the sheriff' levied an execution on three slaves, the property of Wade,., sufficient in value to .pay the. debt, at which time Wade had other property ample to pay the debt.

The further allegations are that the sheriff would have sold-the slaves but for instructions received from Watt, after the levy, “to hold and not press the boys until he (Watt) saw him (the sheriff).” Watt supposed that he had made some* agreement with Walton and Wade to ship cotton to Watt, Noble & Mobley, factors and commission merchants, at New Orleans. Part of the judgment had been made by a sale of' Wade’s property, which reduced him to insolvency, and he had become a bankrupt. Walton died insolvent'. The'sheriff" was about to make the balance of the debt out of complainant. .- The further allegation material to be noticed is that the arrest of the sale of the slaves, in 1861, and also the agreement about the shipment of cotton, were without the knowledge and consent of the complainant. ■ ■

The answer of Watt (who had become the purchaser of the» judgment at .bankrupt sale) denied personal knowledge of the-affidavit of Wright of his suretyship, earlier than 1866, when it was brought to his notice on the trial of a motion, in the * circuit court of Holmes. county, .to enter satisfaction of the.* judgment. • Defendant had no personal knowledge of the levy, nor said or did anything that released the levy, or suspended-the execution for any definite time; denies that the sale or.- ■ execution was held up by reason of any agreement. • Wrigbt never pressed the collection of the judgment. The proof does not sustain these important allegations of the bill so as to •overcome the defendants’ denials.

It was abundantly shown that Wade was not disturbed in his possession of the slaves by the levy — they were left-by the sheriff in his possession, subject to the sheriff’s order — but that Wade continued to control them and enjoy their- labor until emancipated.

The case of the complainant stands, in its legal merits and • effect, as respects his rights on the levy of 1861, and the conduct •of the sheriff in respect thereto. ■ ■

The complainant claims, as having an important bearing, the benefit of the principle that a levy on sufficient personal .property is a satisfaction of the debt. Undoubtedly it is a prima facie or presumptive satisfaction, but not conclusively so. The doctrine was very clearly stated when another branch of this case, involving the effect of the levy of 1861 with the attending circumstances, was before our predecessors in Wade et al. v. Watt, Noble & Mobley, reported in 41 Miss., 251. Adopting the language of the supreme court of North Carolina, in Ex parte King, 2 Dev., 341: “The seizure of personal property on fieri facias is constructively a discharge of the -debt. But if the defendant was never deprived of his property by the sheriff, or if he were and got it back, either with or without the. consent of the sheriff, it would be monstrous to say the defendant had paid his debt.” It is payment if the 'sheriff wastes goods, after seizure, of sufficient value to pay the debt. If it were not so, the debtor might be deprived of his property twice. Banks v. Evans, 10 S. & M., 35.

It was because Wade did not lose his property, but retained and .used it, that it was held, on’the decision of his writ of •error, that the. levy did not work a satisfaction of the debt.

The general principle pervading our adjudications is that the creditor must do some, positive, act,, or omit to do something required by law in the particular circumstances, in order to deprive Mm of tbe advantages incident to Mis judgment. He is not affected by tbe negligence of tbe sheriff. Lucas v. Stuart, 3 S. & M., 231 ; Talbot v. Melton, 9 S. & M., 9 ; G. G. Bank v. Henderson, 192. Most of tbe applications of tbe prmciple bave occurred in conflicts between senior and junior judgment creditors. But it bas also been extended to dealings and contracts between tbe creditors and principal debtor,, alleged to-be prejudicial to the surety as an interference with bis original contract, or exposing him to increased risk and peril. Indulgence or non-action, though in tbe meantime tbe principal should become insolvent, unaccompanied with any act of tbe creditor whereby tbe hazard is increased, will not. discharge the surety. Caruthers v. Dean, 11 S. & M., 178. Nor will tbe failure of tbe creditor to present bis claim to tbe ¡ administrator of tbe principal, whereby tbe debt against bis . estate was lost. Johnson v. The Bank, etc., 4 S. & M., 165. Nor the failure to issue execution or point out property, or, if ' tbe execution be levied on tbe principal’s property, tbe failure to make up an issue with a claimant who has replevied. Melton v. Howard, 4 Humph., 103. Nor tbe omission to enroll a judgment on a forfeited forthcoming bond, whereby a junior judgment obtained priority. Pickens v. Finny, 12 S. & M., 468. These are all instances of non-action, and bave been held not to discharge tbe surety.-

, But if indulgence is granted for a definite time, pursuant to ■ an agreement supported by a valuable consideration, so as to tie up tbe bands of tbe creditor, and tbe surety does not consent to such an arrangement between tbe creditor and principal debtor, be will be exonerated ■ from bability. Newell v. Hamer, 4 How., 684; McGehee v. Metcalf, 12 S. & M., 53; Pope v. The Bank, 6 ib., 24.

Tbe allegations of-the arrangement with Walton and Wade to sloip cotton are.vague and unsupported by testimony.

There is a class of cases to tbe effect that tbe creditor is bound to deal with: all collateiTil. securities given loim by the principal debtor impartially, and if, by bis negligence or im- ■ ■ proper conduct, they are lost or surrendered, the surely is ■ released, at least to the extent that the securities might have been made available, for the obvious reason that the surety " !has the right to pay the debt and be subrogated, on payment, "to these rights of the creditor. Payne v. Commercial Bank, 6 S. & M., 38; Cooper v. Wilcox, 2 Dev. & B. Eq., 90. But 'the surety must be able to'refer the loss to the negligence or . affirmative act of the creditor. So, too, a valid contract for • delay would be, or might be, detrimental to the surety, because ■■it would suspend his right to pay the debt, and would debar 'him from taking immediate measures to reimburse or secure himself. These principles apply as well to the creditor by judg- ■ meut as by simple contract-.

The reason which underlies all this doctrine, that mere passiveness and non-action will not exonerate the surety, is the right which he has to go forward and pay off the debt, and thereby take the necessary measures for his own security and protection by obtaining the benefit of subrogation to securities, or of reimbursement from the principal. The 65th chapter of the Code of 1857, p. 362, is framed on that policy, and perhaps enlarges the rights of the surety. Making and filing the affidavit provided for-in the 2d article — that the affiant has paid the judgment, and was a surety — works by operation of law an assignment of the judgment, with the right to final process to enforce its collection. The judgment is esteemed as •unsatisfied for the use of the surety, who is substituted to all the advantages as against the principal debtor which the original creditor had.

There is no act of Watt, Noble & Mobley, or either of them, which suspended the right of the defendant. We have been referred to cases which place the release, by the creditor, • of a levy on the personal property of the principal debtor, on very much the same footing as the release of collateral securities, if done without the consent of the surety. Beeson v. Beeson, 9 Penn. St., 279. In Sneed’s Ex’rs v. White, 3 Marsh. J. J., 528, it was said that a stay of execution by the -creditor, after levy on personal property of the principal, will -exonorate the surety if the lien resulting from the levy be •extinguished, and it be done without the surety’s consent. See, also, Bank v. Reynolds, 13 Ohio, 104. But in this case nothing of the kind was done by the creditor.

It was the duty of the sheriff to have completed execution by a sale of the property. His neglect to do so imposed a heavy responsibility on him. If his conduct had been ■prompted by the creditors, they would have assumed the risk •of the consequence.

Filing the affidavit of suretyship under the statute deprives The creditor of none of his rights under the judgment, except to control the order of liability as between the principal and -surety. It makes it imperative that the principal’s property .shall be first taken in execution, but it leaves the effect of indulgence and passiveness as it was before.

The affidavit does not make it incumbent on the creditor promptly to pursue the principal to satisfaction, at the risk of losing his right against the surety by indulgence.

Decree affirmed.

Judge Campbell, not having heard the argument, took no part in the decision.