Bank of the Old Dominion v. Allen

76 Va. 200, 1882 Va. LEXIS 19
Supreme Court of Virginia·Decided February 2, 1882·Published·Cited by 7 cases

Opinion

Burks, J.,

delivered the opinion of the court.

In an action at law in the circuit court of Alexandria by Cazenove & Co. against J. H. McVeigh & Son, as makers, and William H. McVeigh as endorser for the accommodation of the makers, of certain negotiable notes, a judgment was recovered by the plaintiffs against the makers, or against J. H. McVeigh (one of them), in Eebruaay, 1868, and at the succeeding August term of the court a judgment was also recovered for a less amount against William S'. McVeigh, the endorser. These several judgments were docketed soon after recovery, and bound lands of the defendants in this State. William S'. McVeigh (the endorser) owned land in Illinois also, and Cazenove & Co. at once took legal proceedings in that State to subject it. They recovered a judgment there upon the Virginia judgment against William S. McVeigh, and sued out execution upon it. William S'. McVeigh then transferred to Cazenove & Co. several notes of third persons, well secured, to be applied to the payment of the Illinois judgment, and the execution on that judgment was returned satisfied December 21, 1869. The notes thus assigned were afterwards paid, the last payment having been made by William S. McVeigh himself in January, 1880. In December, 1879, the plaintiffs, by the written direction of William S'. McVeigh, given the year before, assigned and transferred all their right, title and interest in the Virginia judgments to John Howard, Esq. Previously—to wit: in July, 1873—a creditors5 bill was brought in the corporation court of Alexandria to subject the. lands of J. H. McVeigh and William IT. McVeigh to the payment of the liens and encum[202] brances thereon, and in October, 1873, a general account of the real estate of the defendants and the liens thereon was ordered. Several accounts were taken and other proceedings had from time to time. The several Virginia judgments of Cazenove & Co. against the McVeighs were reported as liens, and it was agreed that, if liens at all, they were the first in point of time remaining unpaid, and the judgments of the Bank of the Old Dominion were the next. Mr. Howard filed his petition in the cause, claiming the benefit of the Cazenove judgments under the assignment before referred to, and praying to be substituted to the lien of the judgments against the lands of J. H. McVeigh. The bank contested his right to subrogation, but at the last hearing of the cause the court granted the prayer of the petition, and by decree ordered that the petitioner should be “subrogated to all the rights and privileges of William N. McVeigh” as to the judgments assigned by him to the petitioner.

It is from this decree the Bank of the Old Dominion obtained the present appeal.

The judgments against the McVeighs were rendered by a court of competent jurisdiction, and their validity cannot be collaterally assailed, except on the ground of fraud or collusion. No such charge is made or attempted to be proved. They were rendered after a vigorous contest, and the argument that if the endorser had brought the case before this court the judgments might or would have been reversed, as the result in similar cases shows—a result which could not have been anticipated with certainty'— and that he should be denied the right of subrogation as against the appellant, because he did not seek- a review by writ of error, is without force. The law imposed no such unreasonable burden on this surety. It is sufficient that he acted in good' faith and resisted the recovery in the court of original jurisdiction with all the means in his [203] power. It was not incumbent on Mm to protract tlie litigation of a doubtful matter in order to protect the supposed rights of third persous. He was under no such obligation, either legal or moral.

This objection out of the way, it cannot be denied that if this accommodation endorser, who was in fact a surety, had, immediately after the judgment was rendered against him, paid it off to the creditor holding it, he would have been entitled eo instanti, on the plainest principles of equity, to be subrogated for his- indemnity to the lien of the judgment on his principales land, and Ms assignee would have had the same right.

But it is contended that this equitable principle of subrogation does not apply under the facts which have been stated.

1. It is insisted that the Illinois judgment operated as a complete merger and extinguishment of the Virginia judgment, and consequently of the lien which was incident to it, and therefore that upon the subsequent payment by the surety there was no existing lien or security of the latter judgment to which he could be substituted.

In support of the general proposition, several cases were cited, the latest being Gould and others v. Hayden and others, 63 Ind. 443, decided by the supreme court of Indiana in 1878. In that case it was held, that where a judgment is recovered in a court of competent jurisdiction in one State, upon a judgment previously rendered in another State, the first judgment is merged in the second, and all its liens on land in the State where rendered are abandoned.

It is not necessary now to determine whether the broad proposition thus laid down in that case, or in similar cases, is sound law or not. The learned judge delivering the opinion admits that there are respectable authorities in conflict with the proposition stated; and the exigencies of the case before us do not require a discussion of the prin[204] ciples affirmed by the authorities on the one side or the other, or the expression of any opinion upon the subject.

As tending to support the doctrine of Gould and others v. Hayden and others, supra, the following cases were cited: Cock v, Armstrong, 25 Miss. 63; Purdy v. Doyle, 1 Paige, 558; Chitty v. Glenn, 3 Monroe, —; Whiting v. Bebe, 7 English (Ark.), 549; Hanna v. Gray, 3 Bush, 91; Lipscombe v. Grace, 26 Ark. 434; Brown v. Clark, 4 How. (U. S.), 4; Denegre v. Haun, 13 Iowa, 240.

Contra, see Weeks v. Pearson, 5 N. H. 324; Mumford v. Stocker, 1 Cowen, 178; Griswold v. Hill, 2 Paine C. C. 492; Andrews v. Smith, 9 Wendell, 53.

“The general principle governing in cases of this kind, and which applies to all securities,” says Chief-Justice Savage in the case last above named, “is, that a security of a higher nature extinguishes inferior securities, but not securities of an equal degree”; and judgments are, of course, of “equal degree.”

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Bank of the Old Dominion v. Allen, 76 Va. 200, 1882 Va. LEXIS 19 (Va. 1882).

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