Opinion
June Term, 1836.
A surety, against whom and the principal debtor a judgment has been obtained, by paying the debt and taking an assignment of the judgment to himself satisfies it, and reduces his claim to a simple contract debt, and can, on the footing of the judgment, have no relief in a court of Equity. The proper course is to have an assignment of it made to a person not a party to the record.
THE plaintiff was surety to one Richard H. Hines in a bond payable to one James S. Clark. Clark transferred this bond to one Anderson, who brought a suit on it in the name of Clark, to his (Anderson's) use, and his beneficial interest appeared on the face of the original writ and on the proceeding throughout the whole process of the suit. At August Term, 1831, of the County Court of Pitt (the term commencing the first Monday on that month) judgment in this action was entered up against both Hines and the plaintiff for $735 and costs. The plaintiff paid the amount of this judgment to Anderson, who assigned it to him. By the payment to Anderson, the plaintiff did not intend to satisfy the judgment, but wished to get the control of it, so as to avail himself of any lien which might exist under it upon the property of Hines. Execution issued, tested the first Monday of August, 1831, to the sheriff of Edgecombe, and was by him levied, on the first of November ensuing, upon the land of Hines, subject, however, to a deed of trust to the defendant Williams to secure a debt due by Hines to one Foreman. The defendant Sugg obtained a judgment at August Term, 1831, of the County Court of Edgecombe (which began on the 4th of that month), (367) for $890. Execution issued from the same term, which also came into the hands of the sheriff of Edgecombe, and was by him levied on the land above mentioned. No sale of the land was made, and that fact was returned upon both executions, and writs of venditioni exponas issued upon both judgments, returnable to the February Term, 1832, of the respective courts; that in favor of the defendant Sugg came to the hands of the sheriff; that in favor of Clark, to the use of Atkinson, for the plaintiff's benefit, miscarried. In January, 1832, the defendant Williams sold the land, and after discharging the debt to Foreman, there remained in his hands $715, which he, being indemnified by the defendant Sugg, paid in part satisfaction of the execution in his favor.
Hines was also a defendant, and the prayer of the bill was to have the judgment in favor of Clark, which, the plaintiff contended, had a priority, satisfied out of the surplus in the hands of the defendant Williams.
The case was argued at June Term, 1836, by Devereux for the plaintiff, and by Iredell and Badger for the defendant.
We are of the opinion that the plaintiff has no right to have priority in satisfaction of his debt out of the balance of the purchase money which remained in Williams' hands after satisfying Foreman's deed in trust. It is true that Clark's judgment against Hines and Briley, and the execution issued on the same, were prior in point of time to that of the defendant Sugg. But the plaintiff, who was jointly bound with Hines in the judgment, paid the same to Anderson, who was Clark's agent upon record and authorized to receive the debt. The writ against Hines being in the name of Clark, "to the use of Anderson," and all the proceedings in the cause so entitled, it was notice to the world of such agency, and Clark was bound by the act of Anderson within the (368) authority given him. Clark v. Shields, 3 Hawks, 461. Notwithstanding the plaintiff did not intend to extinguish the judgment by paying Anderson the amount, yet in a court of law and in a court of equity it would have that effect. We have determined it would be so at law in the case of Sherwood v. Collier, 3 Dev., 380. Is payment simply of a judgment of record such an extinguishment of it as to deprive a subsequent bona fide assignee of any remedy in a court of equity against the judgment debtor? To an action on a record, a plea of payment was not good at common law. But if a judgment of record had been paid, the defendant had a right to demand a warrant to some attorney of the court authorizing him to enter up satisfaction on the roll. 1 Archb. Prac., 325; 2 Saund. Pr. C., 713. But by the statute of 4 Ann., ch. 16, sec. 12, payment may be pleaded to an action on a judgment if the whole judgment be satisfied. 1 Chitty's Pl., 426. In analogy to the case of a bond in England it seems to us that the assignee would have no remedy against the judgment debtor. If one have a bond in England, where bonds are not negotiable, and receives the money due upon it, and afterwards assign it for valuable consideration, as unsatisfied, to another, who has no notice of the payment, yet the purchaser can have no avail of this bond. Turton v. Benson, 1 P. Wms., 497; S. c., 2 Vern., 764; 1 Stra., 240. If the plaintiff (a surety) had taken an assignment of the judgment against his principal and himself to a stranger, and did not intend satisfaction, then the judgment would not have been extinguished; and as execution had been issued on the same, it would have held its rank in the scale of priorities. Hodges v. Armstrong, 3 Dev., 253. But that has not been the case here. The plaintiff has paid the debt to the judgment creditor, by which payment he has reduced himself to the situation of a simple contract creditor of Hines. The general rule is, that if one of two joint obligors, being a surety, pays off the debt, he is at law merely a simple contract creditor of the principal; if the principal dies, equity will not convert him into a specialty creditor. Copes v. Middleton, 1 Turn., 231; Worffington v. Sparks, 2 Ves., 569 (as to administration of deceaseds' estates, the act of Assembly makes the surety who has paid a bond, etc., a (369) specialty creditor). In Jones v. David, 4 Russel, 277 (3 Cond. Ch. Rep., 665), the plaintiff joined the testator as surety in a bond which he paid after the death of the testator, taking an assignment of the bond; he was still only a simple contract creditor to the testator. The assignment was but an idle formality. The assignment of an instrument which had ceased to have any legal force could not confer any legal rights. The plaintiff, as a creditor of Hines, cannot in this Court follow the assets in the hands of Williams, a third person, without first obtaining a judgment upon his simple contract debt against Hines and failing to get satisfaction by execution at law.
The bill must be dismissed, but without costs, as the defendant did not demur. Jones v. David, ubi supra.
PER CURIAM. Bill dismissed.
Cited: Peoples v. Tatum, 36 N.C. 415; Hanner v. Douglass, 57 N.C. 266; Tiddy v. Harris, 101 N.C. 593; Liles v. Rogers, 113 N.C. 200; Burnett v. Sledge, 129 N.C. 120.