Opinion
(June Term, 1848.)
1. The jurisdiction of a court of equity to give relief in the case of lost bonds is now too well established to be called in question.
2. Delay, merely, by the creditor to sue the principal debtor does not discharge the surety.
3. A person who pays off a bond due to a creditor, without the request of the debtor, express or implied, cannot recover from the debtor at law. But in equity he is considered as the equitable purchaser of the bond, and is therefore entitled to relief against the debtor.
4. In a bill for that purpose he may join the obligee to whom he made the payment.
5. In a bill brought by a cestui que trust to recover an amount alleged to be due to him, the trustee is a necessary party, in order that his legal interest may be bound by the decree.
CAUSE removed from the Court of Equity of ROCKINGHAM, at Spring Term, 1848.
Morehead for plaintiffs.
Iredell for defendants.
The bill in this case was filed in the court of equity for Rockingham and made returnable to Spring Term, 1841, by Thomas L. Boyd and Mitchell Carter, both of the county of Wythe in the State of Virginia, against Pendleton Jones and Pleasant Black of the county of Rockingham in this State, and Thomas Smith of the county of Wythe aforesaid. It is stated, in substance, that on or about 4 November, 1837, the defendant Smith sold to the defendant Jones a wagon and team, for which Jones executed to him a bond for the sum of $700, with the defendant Black as surety, payable on or about 15 January, 1838; that said Smith being indebted to the plaintiff Boyd by judgment, (197) on which an execution had issued, which was then in the hands of the sheriff of Wythe County, offered this bond in part discharge of the debt, which the officer refused, unless Boyd would consent to it; that Boyd, upon being applied to, declined taking it, for reason that he knew nothing of the circumstances of the obligors; that the plaintiff Carter, hearing of this, and meeting with Boyd, stated to him that he was well acquainted with the defendant Black, and that he was a man of property and had the reputation of being a gentleman; that Boyd still declined taking the bond unless Carter would say that it was good, and that the latter thereupon took the bond and indorsed upon it: "This is a good bond. Black is good and a gentleman"; that Boyd then received it from Smith, with his indorsement, in part satisfaction of the execution; and that all this was done before the bond fell due. The bill stated further, that after the bond became due, the plaintiff Boyd, for the purpose of having it collected, inclosed it in a letter addressed to Emanuel Shober, an attorney at law, living at Salem in this State; that the letter was stolen from the postoffice or the mail, and the bond taken thereout and destroyed or concealed, so that Boyd never heard of if afterwards; that Boyd then informed the defendants Jones and Black of the loss of the bond, and demanded payment of it, which they refused, when, being in want of money, he sued Carter on his guaranty, and recovered a judgment in Wythe County court, which Carter paid on 11 February, 1839, under an execution against him.
The bill then charged that after the payment of the money by Carter to Boyd, the plaintiff Carter frequently applied to the defendants for payment of the bond, offering to indemnify them against every liability that might accrue in consequence of its loss; but they and each of them refused to pay the same or any part of it. The prayer is for payment of the bond with the interest accrued thereon, the plaintiff offering to give any indemnity the court might require to protect the (198) defendants from any further liability on the bond.
The defendant Smith failed to appear and answer, and the bill was taken pro confesso against him.
The defendants Jones and Black filed their answer, and therein admitted the execution of the bond as stated in the bill and that it had not been paid, but they denied all knowledge of the assignment of the bond by Smith to Boyd, the guaranty of Carter, the loss of the bond, and the recovery by Boyd against Carter on his guaranty and his payment of the same; and they required strict proof of all those allegations. They insist, as a defense, that if the plaintiffs could recover at all, their only remedy was at law; and that at all events the bill could not be sustained in the joint names of Boyd and Carter, when it appeared from the bill itself that Boyd had been paid the full amount of the bond, and had no other interest in it. They insisted, also, that Carter was not a guarantor of the bond, and that the recovery against him by Boyd was wrong, and that if he, by negligence or by conspiracy with Boyd, suffered a judgment to be taken against him, he ought not now recover from the defendants. The answer of the defendant Black insisted, further, that the plaintiff, by delaying to apply to his principal for payment for an unreasonable length of time, had discharged him.
Replications were filed to the answers, and proof taken which fully sustained all the allegations of the bill not admitted by the answers.
Upon the admission in the answers of the defendants Jones and Black, that the bond has not been paid, and the proof that it is lost or destroyed, and that the latter has paid the full amount of it to Boyd, the plaintiff Carter is clearly entitled to a decree against (199) the defendants, unless their objections that Carter was an officious intermeddler, and for that reason not entitled to relief, and to the bill on account of Boyd's being a party plaintiff, can avail them; for the other objections are clearly untenable. The jurisdiction of the court of equity to give relief in the case of lost bonds is now too well established ever to be called in question. Allen v. Bank, 21 N.C. 3; Dumas v. Powell, 22 N.C. 122. It is equally well settled that the delay merely by the creditor to sue the principal debtor does not discharge the surety. Cooper v. Wilcox, 19 N.C. 90; Pipkin v. Bond, ante, 91. The recovery by Boyd against Carter, in the county court of Wythe, on his guaranty, has not been proved to have been obtained by negligence or fraud, as alleged, and as it was obtained in a court of competent jurisdiction, it must be presumed to have been regular and proper. But it is said that Carter was an officious intermeddler, and on that account can have no claim to the interference of a court of equity. It is true that he paid the amount of the bond to Boyd without any request, express or implied, from the defendants Jones and Black, or either of them. He could not, then, have recovered at law, as was decided in a suit at law brought by him against them. Carter v. Black, 20 N.C. 551. But in this Court the plaintiff Carter stands in a very different situation. He is not suing here for money paid for the use of the defendants at their request. He became bound on the bond at the instance of the plaintiff Boyd and the defendant Smith, and, having paid the amount of it to Boyd, he claims as an equitable purchaser of it, and seeks here to recover on it as lost, in the same manner as Boyd might do. The bond has not been extinguished by Boyd's recovery against Carter, as is expressly said in the case at law. See Carter v. Black, ubi supra.
We can see no reason, therefore, why he should be denied this (200) relief.
The objection that Boyd is improperly joined as a party plaintiff remains to be considered. It is said that he has no interest; that he can have no decree in his favor, and that, therefore, he has been improperly made a party plaintiff. From what has been before said, in considering the objection that Carter was an officious intermeddler, it is to be deduced that Boyd must be regarded here as bound to assign the bond to Carter. If that be so, and we think it is, then the case of Ryan v. Anderson, 3 Madd., 175, is an authority directly in point; for it was there held that an assignor and an assignee might sue together for satisfaction of a debt. See, also, Calv. Parties in Equity, 240; Story Eq. Pl., sec, 153. Boyd and Carter may likewise be regarded as standing towards each other in the relation of trustee and cestui que trust; Boyd having the legal and Carter the equitable interest in the bond. Viewing them in this light, they are both necessary parties; Carter as entitled to a decree for the amount of the bond, and Boyd in order that his legal interest may be bound by the decree. Story Eq. Pl., sec. 153. And they may both be made parties plaintiff. Thompson v. McDonald, 22 N.C. 463. It must be referred to the clerk and master to ascertain the amount due on the bond mentioned in the pleadings, for principal and interest, for the payment of which the plaintiff Carter is entitled to a decree, upon executing a proper indemnity.
PER CURIAM. Decree accordingly.
Cited: Thornton v. Thornton, 63 N.C. 213; Wilson v. Bank, 72 N.C. 626; Davison v. Gregory, 132 N.C. 396; Moring v. Privott, 146 N.C. 564; Liverman v. Cahoon, 156 N.C. 201, 207; Bank v. Bank, 158 N.C. 248.
(201)