Creager v. Brengle

5 H. & J. 234

• Court: Court of Appeals of Maryland
• Decided: June 15, 1821
• Status: Published

Opinion

Dorsey, J.

delivered the opinion of the court. In examining the decree of the chancellor, the first inquiry ■which must engage the attention of the court is this-—Was the money paid by George Creager, junior, to. Gebhart, the menoy of George Creager, senior, or was it the money of the former, and paid by him in purchase of the judgments? The complainant in his bill charges that the money was for-, nished by the elder Creager, 'and paid by Creager, junior,, to Gebhart, in satisfaction of the judgments-. Creager, the. ■younger, in his answer swears, that no part of the money was furnished by Creager, senior, that he borrowed the same from the Frederick Town Branch Bank, and that the payment was made by him to Gebhart in the absence, and without the knowledge of Creager, senior, in purchase of the judgments, and not in discharge or satisfaction thereof, Creager, senior, in his answer, most explicitly denies that he furnished the money, or had any agency in borrowing the same, or in its subsequent application; and the answers, of both these defendants, in relation to this point, are supported by Lewis Creager, who proves that the money paid to Gebhart belonged to Cre- ger, junior, and was raised on paper discounted for his use at the Frederick bank, and this witness, on his cross examination, states the motives which induced Creager, junior, to purchase the judgment?.. The answers of Creager, senior, and Creager, junior, when considered in connexion with the testimony oí Lewis Creager, furnish, in the opinion of the court, a mass of testimony, which must be considered as conclusive. To be> sure Gebhart swears that it was his impression, at the time of receiving the money, that Creager, junior, meant to discharge the judgment, but he does not disclose the grounds of his impression, and it is most evident that the circumStance uf Creager, junior, requiring an assignment of the judgment, when he paid the money, was calculated to create an impression, the very reverse of that which was made on the mind of Gebhart; and the impatience manifested by Creager, junior, to procure the assignment, before the complainant could be present, was perfectly consistent with the fact of his being a purchaser, and is fairly referriblc to the apprehension that the complainant would endeavour, if present, to prevent Gebhart from making the assignment. The other testimony offered by the complainant on this point, is considered by the court as inconclusive, and at best only calculated to create slight suspicions, which cannot prevail against the unambiguous answers of the defendants, supported as they are by the positive testimony of Lewis Creager. It is clear, therefore, that the decree of the chancellor cannot be supported on the ground that the money paid to Gebhart was paid in discharge of the judgments.

We proceed to inquire, whether there is any other foundation on which 'the decree can be sustained? It has been urged by the complainant’s counsel, that the complainant, on tendering to Creager, junior, the amount of the judgments, was entitled to an assignment oí the judgment against Creager, senior, with liberty to proceed against his bail, and that as Creager, junior, refused to assign the judgment, unless the complainant would engage not to pursue ■the bail, the receipt of the money due on the judgments by Creager, junior, was?against conscience, and that therefore a court of equity would be well warranted in- decreeing a repayment thereof. It must be observed, that the act of 1763-,' ch.. 23, cannot be brought in aid of this position. That act provides, ‘ ‘that where any person or persons shall recover judgment against the principal debtor-and surety, and such judgment shall be satisfied by the surety, that the creditor shall be obliged to assign such judgment to the surety satisfying the same, and that the assignee shall be entitled mnto, and have in his own name, as assignee, the same execution against the principal debtor, in virtue of such assignment and this act, as the creditor might or ought to have had, the said -assignment being first recorded in the said court wherein the judgment shall have been rendered or obtained.” From the language and provisions of this act, it is evident that the legislature contemplated an assignment of the judgment by the legal plaintiff. The net uses the expressions, creditor and original debtrf^and provides that the assignee shall, in virtue of the assignment, have an execu-" lion in his own name against the principal; now, if a cestui que use was obliged, under this act, to assign the judgment to the surety, on his paying the same, the assignee would be entitled to sue out an execution in his own name, when hia assignor would ha\ e been obliged, if he had not assigned, to have enforced the judgment in the name of his trustee,to wit, the legal plaintiff, a construction which produces-such an anomaly ought not to be given to the act, and it would be an anomaly indeed to hold, that an assignee of a judgment should have a legal remedy in his own name, When the person under whom he claims, and to whose rights he is substituted by assignment, had no such remedy. Whether a surety who had paid the amount of a judgment, and has received from the legal plaintiff a statutory assignment, can proceed against the bail of the" principal, on a ca. sa. being returned nan est, or whether such bail could, on the plea of payment, defend himself on the ground that the payment made by" the surety operates as a payment by the principal, so far as respects the bail, are questions which it is not necessary to decide in this cause.

The next enquiry is, whether on principles of equity, the complainant had a right to demand from Creager, junior, an assignment of the judgment against Creager, senior, on his paying or tendering to him the amount of. the judgment? On this point the court have no doubt. It is a well established principle of equity, that the surety on paying the debt of the principal debtor, has aright in a court of chancery to call on the creditor for an assignment of tire judgment, and all liens which the principal has given to the creditor. But whether the bail of the principal could not plead the payment made by the surety, in. virtue of which he obtains the assignment, as a payment by the principal, or whether a court of equity, which decrees the assignment, would not enjoin the surety from proceeding against the bail, are questions entirely distinct from the ?-ight of the surety to claim an assignment of the judgment against the principal. On principles of common law, and independently of any statutory provision, we hold it to he, clear, that if a surety in a bond, whether the same be joint or several, pays the amount to the creditor, the principal liiáy, -óti á suit instituted against liini by the creditor, rely bn such payment as a bar to the siiit—So also, if the surety pays the amount of the debt after judgments are obtained against him and the principal, and the creditor should proceed against the bail of the principal, the bail might discharge himself by pleading the payment, and giving in evidence the payment made by the surety. The creditor, álthough he has different securities, is entitled to but one satisfaction, and the payment by the surety would operate as an extinguishment of the creditor’s right to charge the bail, otherwise the surety in the foregoing cases would not be able to maintain an action agdinst the principal for money paid, laid out and expended for his use. Such at common law is the legal effect of a payment made by the surety in every case where the principal, or his bail, have an opportunity of pleading such defence in bar of the action, Or scire facias, as the case may be. Rut if we should admit that the bail of the principal could not at law avail himself, byway of defence, of a payment made by the surety, and in virtue of which the court of chancery had decreed an assignment of the judgment against the principal, still we think that the chancellor would énjoin all proceedings-against the bail. What equity has the surety, who became bound with his principal, to look to the bail of the latter, and who were not fixed at the date of the assignment, for his indemnity? Their engagements were not contemporaneous, or of the same nature. The undertaking of the surety was long prior in point of timé tó that of the bail, and the extent and nature of their obligations were essentially different. The surety stipulated absolutely and unconditionally for the payment of the money; and the debt Which lie engaged to pay, witli reference to the creditor, was his own debt. The engagement of the bail was contingent; he Undertook that the principal would, if a judgment was rendered against him, either pay the amount thereof, or surrender himself to prison. This engagement, therefore, could be gratified by tlie performance of a collateral act unconnected with the discharge of the creditor’s claim <—nay, the undertaking of the bail became inoperative in the event of the death of the principal before the return of a c«. sd. The engagements, therefore, of the surety and bail were not ad idem. The surety, when he became bound for the principal, looked to him, and such fixed se - cutities as he had given to the creditor, for his indemnity? and to permit him to proceed against the bail, who were not fixed at the time of the assignment, would be contrary to the first principles of justice. If the surety had this right, it would necessarily follow that the creditor could, at no stage of the proceedings after the bail piece was filed, enter an exonerelur against the consent of the surety. The latter might address the creditor in this language—“Upon paying the debt tor which I was bound as surety, I am entitled to the benefit of all securities, whether absolute or contingent, which the principal had given to you, and as you have released the bail, you have impaired my security, and thereby discharged me from my engagement. ” But the power of the creditor to release the bail of the principal before judgment, has never been questioned. We may safely say, a j udicial doubt has never been breathed on the subject. The case of Parsons & Cole vs. Briddock, cited from 2 Vernon, 608, does not apply. The principal had given bail in an action—Judgment was recovered against the bail—afterwards the surety was called upon and paid, and it was held, that he was entitled to an assignment of the judgment against the bail. It will be borne in mind, that a judgment in the foregoing case was obtained against the bail before the surety paid the debt of the principal, the contingent engagement of the bail had passed in rein judical,ani, and the bail as a debtor,' stood in the place of the principal, and therefore, as the bail came in the room of the principal debtor as respected the creditor, they likewise came in the room of the principal debtor as respected the surety. And although this case has pushed the doctrine of substitution to its utmost verge, it affords no principle by which the claim of the complainant in this case can be supported. As the bail, therefore, of Creager, senior, could not have been made liable, if an unqualified assignment lmd been made by Creager, junior, to the complainant, we think that the latter ought to have received the assignment which the former was willing to give. For these reasons we think that Creager, junior, could conscientiously retain the money paid to him by the complainant.

Chase, Ch. J.

The case now before the court is, that George Creager, senior, with Lawrence Brengle his seen.. rity, executed a joint and several bond on the IstMay 1808, to Thomas Burke, for §1000.- The bond, by an equitable assignment, came into the hands of John Gebhart, who instituted separate suits against both obligors, in Burk’s name, for his use, and obtained judgments for the balance due. The judgment against Brengle to be released on payment of the judgment against Creager, and costs.

By the act of 1763, ch. 23, s. 8, if a surety pays the money due on the judgment, the judgment creditor shall be obliged to assign the judgment to the surety satisfying the same, and the assignee shall have in his own name the same execution against the principal debtor by virtue of such assignment, and this act, as the creditor might have bad, the said assignment being first recorded in the same court.

No person could be, or was entitled to, a legal assign-ment of the- judgment but Brengle, the surety. No person could give a legal assignment but Thomas Burke, in 'whose name the judgment was obtained for the use of Gebhart. Gebhart had sold his equitable interest to Creager, junior, who had it entered on the docket, by the order of Gebhart, for Creager’s use. The money paid by Creager to Gebhart was obtained from the bank of Frederick, and was not the money of his father. Creager, junior, having purchased the equitable interest of Gebhart, had the full control over it, and might dispose of it in what way he pleased; he might release the bail, and proceed against the original defendant, or he might retain full power over it, and $uffer it to remain as it was. The surety, Brengle, had no right to interfere until he got a legal assignment of the judgment from the judgment creditor, and no attempt has been made to obtain such assignment of’ the judgment. As it’appears to me, Brengle, the surety, had no right to call on Creager, junior, for the assignment of his equitable right; and if he did, it was at the option of Creager tore-fuse or comply on such terms he might think proper to prescribe. His refusal or compliance, on certain terms, could be no fraud or injury to Brengle. On the proof in the case, Creager, junior, was a bona fide purchaser, with his own money, of the equitable interest, and nothing appears to impeach his title. The motives which induced him to come forward are no ingredients of fraud, nor do they diminish or impair his right to the money. The bail was not fixed, and could not be fixed, until all the legal steps were pursued, and a judgment obtained against the bail.

As it appears to me, Brengle, the surety, had only one course to pursue to obtain the money he had paid for the principal debtor; that was, the using the proper means to obtain a legal assignment from the judgment creditor. If a legal assignment had been obtained, under the act of 1763, from the judgment creditor, the assignee would have been clothed with all the right of such creditor'—would have ¡stood in his shoes, and could, in his own name, have proceeded to fix the bail, by suing out a ca. sa. against the principal, &c. This, in my opinion, is the plain and fan-exposition of the act of 1763, and will place the surety, where it was intended he shpuld stand, in the shoes of the judgment creditor. This construction gives the assignee all the rights of the judgment creditor for his indemnification, which accords with the intention of the act, and does not increase the responsibility, or change the liability of the bail. It is conceded that the equitable assignee can, in the name of the assignor, take every step, and issue all process, necessary for fixing the bail, and subjecting him to the payment of the money; and what good reason can be suggested why the legal assignee should not, in a court of lav/, enjoy the same rights? The right to issue execution against the original debtor is expressly' given, and the right to proceed against the bail is an incident growing out of the right to issue execution against the debtor, and results from it; and why not? It does not augment the liability of the bail, or change his condition in any respect. If, according to a confined and literal interpretation of the act of 1763, the legal assignee could not pursue the bail to ini demnify himself, it would be better to accept of an equitable assignment, becap.se the equitable assignee, by pursuing the bail in the npme of the assignor, and obtaining a judgment against him, would render him liable to the payment of the debt.

I do suppose, independent of the act of assembly, the surety who paid the money due on the judgment could have no right to demand an assignment of the judgment; all that he could require was a receipt, or release, which would entitle the surety to demand' a repayment of the same as so much money paid and expended for his use.

I am of opinion there has been no fraud or collusion in ibis .case, and that the decree of the chancellor ought to be reversed.

DECREE REVERSED.