Opinion
December Term, 1849.
1. The commissioners of New Bern recovered a judgment against the sheriff and his sureties for the amount of the taxes due to the town, which he had failed to pay over. Afterwards one of the sureties had the money paid and an assignment made to a third person of the judgment, by the attorney of the commissioners, which was afterwards ratified by the commissioners, and a receipt was given by the treasurer of the board to the sheriff, to enable him to renew his bonds:
2. Held, first, that the payment of the money and the assignment to a third person of the judgment did not amount in law to a payment and satisfaction of the judgment as against the defendants therein.
3. Held, secondly, that, although the receipt may have operated as a fraud upon the court, yet it is not conclusive as to the fact of payment by the defendants in the judgment, but may be explained.
4. Held, thirdly, that, though a judge is not required to respond in the very words of an instruction prayed for by counsel, yet it is error if he does not substantially meet the matter of law and put the matter of fact directly to the jury.
APPEAL from the Superior Court of Law of CRAVEN, at Fall Term, 1849, Manly, J., presiding.
This was a sci. fa. to Phillip Pipkin, administrator of John B. Dawson, deceased, to revive a judgment recovered by the commissioners of the town of New Bern, at the February Term, 1843, of Craven County Court against his intestate, John B. Dawson, Joseph L. Bryan, John Bryan and John M. Bryan, sureties to his bond, for the default of the said Dawson, as Sheriff of Craven County, in not paying over the town taxes due on the property listed in 1841, brought up to the Superior Court by appeal from the County Court. The pleas are nul tiel record, payment, accord and satisfaction, release.
(437) The plaintiff introduced the record of the judgment upon which the sci. fa. issued.
James W. Bryan was examined as a witness and testified, as stated in the annexed paper (marked B), which is referred to for greater certainty as a part of the case.
Allen Grist proved that the money was paid by Patrick M. Bryan, and the assignment made to Pritchett was for his benefit, and it was by his instructions that the witness made his return upon the venditioni exponas.
The defendant exhibited and proved a receipt in writing to his intestate from Thomas S. Gooding, Jr., the treasurer of the commissioners, for the taxes due on the property listed in 1841, bearing date 15 August, 1843, which for greater certainty is referred to as part of the case and marked (C).
Thomas S. Singleton, introduced on the part of the defendant, who was commissioners and intendant of police at the time the judgment was recovered, and also at the time the assignment was made, proved that he had been instructed by the board of commissioners to employ an attorney to collect the taxes due on the property listed in 1841, from the sheriff, and that he had accordingly employed the services of James W. Bryan for that purpose, but had not received from the board of commissioners any authority to sell and assign the debt, and had not therefore given any. He further proved that, on the day after the assignment, John B. Dawson exhibited his receipts to the County Court, as required by law, and was permitted to renew his bond and to qualify as Sheriff of Craven County, to which office he had been elected for the term of two years from August, 1843.
It was admitted that no other money had been paid on the execution except that by P. M. Bryan; that Gooding was the treasurer whose duty it was to receive all the money due to the town, and to dispose of the same under the directions of the commissioners. It was also admitted that the money paid by P. M. Bryan went into the treasury of the (438) commissioners, was received by them and disposed of to the use of the town, and also that the sci. fa. was issued in the name of the commissioners by the assignee, Pritchett, and was prosecuted for the benefit of Bryan, and with the acquiescence of the commissioners.
The counsel for the defendant contended that the receipt to Dawson was a satisfaction of the judgment; that the money advanced by Bryan would in law operate as a payment, unless there was a valid assignment of the judgment; that neither the attorney nor treasurer had the authority to sell or assign it; that if they had been made by the special instructions of the commissioners, and it was a part of the agreement that Dawson should have a receipt from the treasurer to enable him to renew his bonds, the contract was void and could not be set up by the assignees as an explanation of the receipt.
The defendant's counsel requested the instruction that there was no evidence of any authority from the commissioners to the attorney or treasurer to sell or assign the judgment.
The court instructed the jury that the receipt produced by Dawson's administrator was not conclusive in its nature, but liable, pursuant to well-established principles, to be explained, and it was therefore their duty to inquire, upon a due consideration of all the testimony, whether the money advanced by P. M. Bryan was intended between the parties as a satisfaction, according to the words of the receipt, or a purchase, If the money was paid by P. M. Bryan in order to effect a purchase, and so received by the treasurer of the company, with the approbation of the intendant, the transaction could not be invalidated as such, or, in other words, operate as a payment and extinguishment, because there was no previous authority in their corporate capacity to sell. The want of a previous power, if it (439) were necessary, would at any rate be cured by a subsequent ratification of the act, reception and use of the money thus raised, if such were the fact.
Supposing there had been an after-arrangement between Dawson and the treasurer of the commissioners, by which the receipt in question was to be given, and an imposition thus practiced upon the court in the renewal of the sheriff's bonds, and supposing, further, that the sheriff could avail himself of his own fraud, such an arrangement would not affect injuriously the rights of one not a party to it. Indeed, if there had been an original fraudulent design entertained by Dawson and Gooding, afterwards carried into effect by the execution of the receipt, it would not invalidate the transaction as a purchase, unless the purchaser participated in it. Under the instructions the jury found a verdict for the plaintiffs, and from the judgment thereon the defendants appealed.
(B.)
[ James W. Bryan's testimony.]
I was employed by Henry S. Singleton, Esq., the intendant of police of the town of New Bern, to obtain judgment against John B. Dawson, Sheriff of Craven County, and his sureties, for the town (New Bern) taxes, due on the property listed in 1841. This judgment was obtained according to the due course of the court in Craven County Court, and the execution was issued to the Sheriff of Beaufort County, the defendant in the same (Dawson) being sheriff of Craven, and there being no coroner of Craven County. At the August Term, 1843, it became necessary that John B. Dawson should renew his bond as sheriff of Craven, and, on Monday, when I went to the courthouse and before I entered the courthouse, I met at the door Allen Grist, the sheriff of Beaufort, Thomas S. Singleton (440) and Thomas S. Gooding, also one of the commissioners of the town of New Bern, and treasurer, as I was informed subsequently, of the board of commissioners. There was much conversation about Dawson's being unable to renew his bonds in consequence of his inability to settle the public dues and produce the required receipts; but by whom this conversation was had I am unable now particularly to say. P. M. Bryan came to me and asked me if he could not purchase the execution in question in favor of the commissioners of New Bern, and have it assigned to him. I told him he could certainly do so, and I left them all below stairs and went up into the courtroom. Shortly thereafter, Thomas S. Singleton, Allen Grist, sheriff of Beaufort, Thomas S. Gooding and P. M. Bryan came into the courtroom. Thomas S. Singleton, Allen Grist and Thomas S. Gooding came into the bar; the former took his seat on the left-hand side of the bar and Thomas S. Gooding and Allen Grist seated themselves on the same bench beside me on the right-hand side of the bar. Upon taking their seats, Thomas S. Gooding remarked to me, "We have arranged this execution with P. M. Bryan, and he is to pay the money and take an assignment of the execution, and we wish you to make the calculation and assignment," and thereupon Mr. Grist laid the execution before me on my table. I made the calculation and wrote the receipt and assignment, as appeared on the execution, having previously asked to whom the assignment should be made, whereupon P. M. Bryan, who was standing at my back outside of the bar, remarked that he wished it made to Mr. Pritchett. P. M. Bryan then handed to me some money and one or two checks of the Wilmington branch of the Bank of the State on the bank here, which were payable to said Bryan and endorsed by him. Upon the receipt of these moneys and before I would settle with Thomas S. Gooding, knowing that he was of dissipated habits, I inquired aloud if Mr. Gooding was the treasurer of the commissioners of the town of (441) New Bern, and was informed that he was. I thereupon paid Mr. Grist his commissions, gave my check to Thomas S. Gooding, as treasurer of the commissioners of New Bern for the amount due the commissioners on the execution, and also gave my check to P. M. Bryan for the balance due him, the checks exceeding the amount due on the execution, and Thomas S. Gooding signed the receipt and I accordingly made the assignment. Thomas S. Singleton, who all this time was sitting on the opposite side of the bar, asked if the business was completed or the arrangement made, I do not know which, and upon being informed that it was, they all left the bar.
I had no special authority from the commissioners to make the assignment of the execution, other than what took place as herein stated with Thomas S. Singleton and Thomas S. Gooding, both of them at the time being commissioners of New Bern, the former the intendant of police and the latter treasurer of the board, and I acted in the matter, as I then and now conceive, under their instructions alone. The advancement of the money was intended by the parties to be a purchase, out and out, of the execution, and the money due upon the same, and was so expressed at the time when I was sitting in the bar. John B. Dawson was not present when this transaction took place. Thomas S. Gooding received the moneys for my check on the Bank of the State. I deemed it best, as Gooding was a dissipated man, for my own protection, that he should put his receipt on the execution, but P. M. Bryan had nothing to do with this transaction of taking Gooding's receipt. I knew nothing of any other receipt given by Gooding, and no mention was made of such a thing to me.
(442) (C.)
Received of John B. Dawson, Sheriff of Craven County, six hundred and sixty-eight dollars and fifty-nine cents ($668.59), being the amount of taxes due to the commissioners of the town of New Bern for 1841, and being all that is due to the said commissioners from the said Dawson.
THOMAS S. GOODING, JR., Treasurer.
15 August, 1843.
W. H. Haywood for plaintiffs.
Donnell for defendants.
The counsel of the defendants insisted that the money advanced by Bryan would in law operate as a payment, unless there was a valid assignment of the judgment.
This position is untenable. It is well settled that judgments, as well as notes, may be kept up for the benefit of a surety, who advanced the amount of the debt to the creditor. This could not be if a valid assignment was necessary, for judgments are not negotiable, and an assignment does not pass the legal interest. If the money be advanced by the surety, it is presumed to be a payment, and it is necessary to rebut this presumption by taking an assignment to a third person. If it be a note, the legal interest passes to the assignee, to the use of the surety. If a judgment, the legal interest does not pass; and the only effect of the assignment is to rebut the presumption of payment by an unequivocal act, showing the intention to be to keep up and not extinguish the judgment.
If the money be advanced by a third person (as was done in this case), there is no presumption of payment, for a payment cannot be made by a stranger, and there is no occasion (443) for an assignment. The only purpose it can answer when the security is not negotiable is to furnish proof, in reply to any that, by possibility, might be made tending to show that the money belonged to the debtor. For such purpose it is not necessary that the assignment should be valid; it is sufficient for it to be made by the person to whom the money is paid, as explanatory of the act — a part of the res gestae, showing the intention.
The counsel further insisted that "if it was a part of the agreement that Dawson should have a receipt from the treasurer to enable him to renew his bonds, the contract was void, and could not be set up in explanation of the receipt."
The charge in response to this is, "supposing there had been an after-arrangement between Dawson and the treasurer of the commissioners, by which the receipt in question was to be given and an imposition thus practiced upon the court in the renewal of the sheriff's bonds, and supposing further, that the sheriff could avail himself of his own fraud, such an arrangement would certainly not affect injuriously the right of one not a party to it. Indeed, if there had been an original fraudulent design entertained by Dawson and Gooding, afterwards carried into effect by the execution of the receipt, it would not invalidate the transaction as a purchase, unless the purchaser participated in it."
The defendant excepts because the charge is not responsive to the instruction prayed. We think the exception well founded. The instruction prayed for is not stated with much distinctness, and it is probable that in the hurry of the trial his Honor did not fully apprehend it; it alleges, as a fact, that Bryan was a party to the fraudulent agreement, and, as a matter of law, that if such was the fact, the plaintiffs could not explain the receipt.
If the court was against the defendants upon the law, they had a right to have the opinion positively expressed; (444) if with them, to have the fact directly and distinctly submitted to the jury. We infer that his Honor was with the defendants upon the matter of law. But the fact was not directly and distinctly left to the jury. The first proposition, which supposes an after-arrangement between Dawson and the treasurer, and the second, which supposes that Dawson could take advantage of his own fraud, and the conclusion, that such an arrangement would not affect injuriously the right of one not a party to it, do not touch the instruction prayed for.
The last proposition, that if there was an original fraudulent design between Dawson and Gooding, it would not invalidate the transaction as a purchase, unless the purchaser participated in it, is an inferential expression of opinion in favor of the defendants as to the law. But it does not bring to the notice of the jury the matter of fact, whether Bryan was or was not a party or privy to the fraud. In the prominent and direct manner in which the defendants had a right to have it presented it was the pivot upon which the case turned, so far as the jury were concerned, yet it is introduced indirectly, with the word "unless," treating it as a new qualification of a preceding proposition.
A judge is not required to respond in the very words of the instruction, but it is error if he does not substantially meet the matter of law and put the matter of fact directly to the jury.
The defendants are entitled to a new trial, if the matter of law be with them, assuming the fact to be as they allege.
The agreement was a fraud upon the public; if it was executory, no court would enforce it; but it was executed, and the inquiry is as to its effect.
(445) The defendants insist that as a fraud was practiced upon the court by Dawson and the treasurer of the plaintiffs and Bryan, for whom the plaintiffs hold the legal estate, the receipt by which the fraud was effected cannot be explained, and it must be taken as a fact that Dawson did pay the judgment.
It is clear that this is not according to the truth, for Dawson never paid one cent. The money belonged to Bryan, and he allowed Gooding to give Dawson a receipt for the taxes of property listed in 1841, by which the court were deceived. Upon what principle can this establish a payment by Dawson, or shut out the truth, as between the parties to the fraud? If, instead of a receipt for the taxes for which the judgment was taken, satisfaction had been entered upon the record, that would have discharged the judgment (as a release discharges a bond) and the parties would have been concluded. But a receipt never concludes; it is merely a written admission, and may be explained like a verbal one. Here the very fact of the fraud explains the receipt, and shows how it happened to be given when no money was paid by Dawson. It is a key to the transaction, and opens it at once. Bryan advanced the money, took the judgment as a security, and permitted a falsehood to be certified to the court, to accommodate his friend Dawson.
Relieved of all collateral matter, it is simply this case: a creditor gives his debtor a receipt (no money being paid) to enable him to acquire a false credit. Does that pay the debt, or prevent the creditor from explaining the receipt? What right a person defrauded by such a falsehood may have, is another question. The debtor cannot, on a receipt, except as evidence of a payment, and the other evidence shows it to be false.
Upon the whole, the defendants have no right to complain.
PER CURIAM. Judgment affirmed.
Cited: S. v. Hinson, 83 N.C. 642.
(446)