President of Farmers' Bank v. Gilpin

1 Del. 561

• Court: Supreme Court of Delaware
• Decided: June 5, 1835
• Status: Published

Opinion

Chief Justice Clayton delivered the opinion of the Court.

Clayton, Chief Justice:

On the 28th of August, 1822, Joseph Robinson made his promisspry note, payable at sixty days, to Thomas Bradun, for the sum of @3000, which was by him endorsed and delivered to the.Farmers’ Bank of the State of Delaware, and not being duly paid, it was protested. Joseph Robinson made and executed his deed bearing date the 30th of August, 1822, and did thereby convey, assign and transfer to Vincent Gilpin and John F. Gilpin, their heirs and assigns, all his real and personal estate in trust to sell and apply the proceeds in the first place to the satisfaction of a certain preferred debt, and after the discharge of the same, to apply all the residue of the proceeds of the said real and personal estate, among all the other creditors of the said Joseph Robinson, who should within sixty days thereafter, execute a release to the said Joseph Robinson of their respective claims and demands in equal proportion, according to the amount of their debts. Thomas Bradun, by his attorney, W. Rice, did execute a release within sixty days. This bill is filed by the Farmers’ Bank, to enable it to stand'in the place of Thomas Bradun, and to have such benefit under the assignment as he was entitled to. Judgments were recovered against the drawer and endorser of the note, and upon execution process against Robinson, the sum of 1530 dollars was levied upon his property at the suit of the Bank.

The first question that arises in this case is, was Bradun at the time of the release executed a creditor of Robinson? It is admitted that there was no legal indebtedness; but that equity would treat him as a creditor. We are to consider the operation of his release at law; for if he released nothing, he was not entitled to any benefit under the assignment. As a mere endorser, not having discharged the note at the time, he had no debt, demand, or interest upon which the release could operate; and if he had released nothing, if the creditors of Robinson derived no advantage from the release, he could not avail himself of any benefit under the assignment. It would be unjust to the other creditors to say that he could. The Farmers’ Bank was left at liberty to proceed upon this note as the holder of it; and it did proceed, and collected 1530 dollars. Its hands were not tied by this release; it was left at liberty to use every means in its power to collect its debt; and it used those means. What would be the consequence if the Bank should prevail in this case? It would retain what it has received upon its execution, and standing in the place of Bradun, supposing his release to be operative, it would get such share of the dividends as he would have taken; when by the terms of the assignment the creditors were to take equally in proportion to their debts. Robinson was only indebted at the time in 3000 dollars, and that debt was due to the Bank; but the complainant goes upon the notion that he was legally indebted to the Bank in this sum, and that he was equitably indebted to Bradun in a like sum; whereas in truth he can only owe 3000 dollars. Had Bradun ^discharged the note the Bank would have been no longer a creditor; and Brandun then being the creditor might have released. (Hardcastle vs. Commercial Bank, ante)

J. A. Bayard, for appellants. Wales, for respondents.

To this bill there was a demurrer, and the demurrer was overruled, and the defts. ordered to answer. The Gilpins, the trustees, put in their answer, and the creditors not answering, the bill as to them was taken pro confessa. On the hearing the chancellor dismissed the bill as to all parties, and decreed the complainant to pay the cost. On this ground it is insisted that the decree is erroneous; that the bill should not have been dismissed as to those against whom it was taken pro confessa, or at all events that they should have been decreed to pay costs; because it is said that by overruling the demurrer the court decides that on the facts appearing on the bill the the plff. has an equity which, if the answer does not displace, there must be a decree accordingly. 5 Sim. 168-9.

But a demurrer is nothing more than an allegation by a deft, which, admitting the matters of fact alledged in the bill to be true, shows that as they are therein set forth, they are insufficient for the plff. to proceed upon, or oblige the deft, to answer: it therefore demands the judgment of the court whether the deft, shall be compelled to make answer to the plff’s bill. Mil. Pl. 97, et seq. It is said by Lord Hardwicke, 2 Atk. 297-8, “If a man demurs at law it is a perpetual bar if the judgment should be against him; and therefore it is at his own peril he does it; but if a deft, demurs in equity, and it is overruled, he may insist afterwards upon the same thing in his answer.” But a plea shows some cause why the suit should be dismissed, delayed or barred. Mit. Pl. 97-8. It is said in Chit. Dig. that though a bill be taken pro confessa, yet the plff. must prove his charge: 2d. vol. 889; Deck. 588. So a bill taken pro confessa, and plff. appearing to have no equity, bill dismissed. Deck. 667; 2 Chit. Dig. 889.

In this case the trustees answered, and upon the hearing, the chancellor dismissed the bill with costs. If the bill was rightfully dismissed as to them, it manifestly follows that no decree could be had against the creditors claiming under the assignment. The trustees had all the funds and effects in their hands; and the creditors could only be affected through them. We apprehend that the overruling of a demurrer means nothing more than that the deft, shall answer, and the trustees having answered in this case, we think that upon the hearing the chancellor did right in dismissing the bill as to all the defts.

Consequently his decree is affirmed.