Opinion
03-15-1808
Goodall v. Stuart
Hay, for the appellant, Hay, in reply.
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This was in an appeal from a judgment of the District Court of Richmond, affirming that of the County Court of Henrico.
Goodall assigned a bond of one John Beverley to Stuart, in these words: " For value received, I assign the within bond to Alexander Stuart, and make myself responsible for the payment thereof, should Beverley, who resides in Goochland, prove insolvent." This assignment was made on the 10th of April, 1800. Stuart, on the same day, by the like indorsement, assigned the bond to Thomas Nowell, who, on the 18th of April, 1800, brought suit thereon in the County Court of Goochland, recovered a judgment on the 20th of November, and sued out execution on the 26th of November, 1800, directed to the sheriff of Goochland County, who returned, " No effects within my bailiwick, whereof to make the sum as I am within commanded, or any part thereof." Whereupon Stuart, without waiting for a suit, immediately paid the amount of the bond, including principal, interest and costs, to Nowell, and instituted an action against Goodall, upon his assignment, in the County Court of Henrico.
The declaration contained two counts: 1. A special count upon the assignments; and 2. A count for money laid out and expended by the plaintiff for the use of the defendant, & c. On the trial the defendant offered to give evidence to prove that Beverley had goods and effects sufficient to have satisfied the execution, at the time of its return by the sheriff of Goochland; to the introduction of which evidence the plaintiff objected, inasmuch as it would contradict the sheriff's return; and the Court refused to permit the evidence to go to the Jury. To which opinion there was a bill of exceptions; and verdict and judgment having been rendered for the plaintiff, (Stuart,) the defendant, (Goodall,) took an appeal to this Court.
Mackie's executor v. Davis, 2 Wash. (VA) 219.
" Henrico County, to wit. " A. S. complains of P. G. in custody, & c. of a plea of trespass on the case. For that whereas the said P. the defendant, was, on the 10th day of April, 1800, indebted to the said A. the plaintiff, in the sum of 64l. 5s. 6d. and he the said defendant being possessed of a writing obligatory, executed by a certain J. B. to the said defendant, which said bond was dated the 14th day of May, 1799, which said writing obligatory was in the penalty of 1281. 11s. 1d. and conditioned for the payment of 64l. 5s. 6d. whenever he the said B. should be requested by the said defendant, in consideration of the debt aforesaid due from the said defendant to the plaintiff, the said defendant, on the 10th day of April, 1800, at the parish of, in the County aforesaid, assigned and transferred to the said plaintiff all his right and interest in the said writing obligatory, and did then and there agree to make himself responsible for the payment of the said bond to the plaintiff, in case B. who resided in the County of Goochland, should prove insolvent; which said bond the said plaintiff afterwards, to wit, on the day and year last aforesaid, assigned and transferred to a certain T. N. and did then and there agree to make himself liable for the payment of the said bond, should the said B. who resided in the said County of Goochland, prove insolvent; upon which said writing obligatory, the said T. N. afterwards instituted a suit in his own name, as assignee of the said plaintiff, in the County Court of Goochland; in which said suit it was so proceeded, that the said T. N. on the 20th of November, 1800, obtained a confirmation of a conditional judgment against the said B. for the sum of 128l. 11s. 1d. the debt in the declaration mentioned, and ___ for his costs by him about his suit in this behalf expended; which judgment was to be discharged by the payment of 64l. 5s. 6d. together with interest thereon at the rate of six per centum per annum, to be computed from the 14th day of May, 1799, till paid, and the cost; to be credited by 1l. 12s. 6d. indorsed on the said bond. (which said sum of 1l. 12s. 6d. was paid by the said B. before the assignment of the said bond to the plaintiff; ) upon which said judgment, an execution of fieri facias issued from the clerk's office of the said Court of Goochland County, on the 26th day of November, 1800, against the goods and chattels of the said J. B. directed to the sheriff of the said County; on which said execution there was the following return: 'No effects within my bailiwick, whereof to make the sum as I am within commanded, or any part thereof. Heath J. Miller, D. S. (Meaning deputy sheriff) of Wm. H. Miller, sheriff; ' (the said Wm. H. Miller being then and there the high sheriff of the said County of Goochland, and the said Heath J. Miller being then and there his deputy; ) by virtue of which return, the said plaintiff became liable to discharge the amount of the said writing obligatory to the said T. N. together with all costs attending the prosecution of the suit aforesaid; and being so liable, he did afterwards, to wit, on the day of 180, actually pay and discharge the amount of the said bond, and interest and the costs aforesaid to the said T. N. whereby and by force of the assignment made by the said defendant to the said plaintiff, and by force of the return of the said execution against the said J. B. the said defendant became liable to pay the said plaintiff the amount of the said bond with all interest due thereon, and costs incurred in prosecuting the suit against the said B. and the said defendant being so liable, afterwards, to wit, on the day of, 180, did assume upon himself and promise to pay to the said plaintiff the amount of the said bond, with interest and costs as aforesaid, whensoever he the said defendant should be afterwards required by the said plaintiff." The second count was for money laid out and expended, (to which might have been added a third for money had and received,) with the common conclusion. --Note in Original Edition. The declaration, in this case, being very special, and one which may serve as a model to the young practitioner, it is presumed its insertion will be acceptable to many of our readers.
Here Judge Roane repeated part of his opinion delivered in the case of Barksdale v. Fenwick, as follows:
" In the case of Mackie v. Davis, the general doctrine and ground of an assignor's liability was considered and laid down by the Court. It is therefore unnecessary to go into that doctrine in the present case, further than (for myself) to explain one or two positions there stated. " In that case we were much pressed to lay down the precise line at which the assignor's liability commenced; the criterion ascertaining wherein due diligence consisted: but the Court resisted the application, and left it upon the foot of due diligence, under all the circumstances of each case. " In the case of bills of exchange and negotiable notes, it is more easy, and perhaps more necessary, to lay down a general rule upon this subject, than in the case of bonds: more easy, because the diligence required in respect of them by the English law is more simple, consisting only in making a demand and protest: whereas in the case of bonds, it is necessary to sue in a reasonable time and in a judicious manner: more necessary, because bills and notes are more in the nature of currency than bonds; circulate more rapidly and generally; and are more affected by the usage of merchants. The sanction of this Court has been given to a distinction in this respect, between the two securities, and particularly in the case of Norton v. Rose. (a) (a) 2 Wash. (VA) 233. " The time, however, may come, when a more general transfer of bonds added to the real utility of having a certain rule, will make it necessary for the legislature, or for the Courts, if they have power, to fix a rule also in relation to the subject before us. I should find considerable difficulty in proposing such an one if it were now necessary; but perhaps one might be adopted by analogy to the act of 1794, enabling sureties in bonds to call upon the creditor to bring suit. Perhaps it would be a reasonable rule not to impute a want of diligence in suing, until a refusal, after a request by the assignor; and further, that a return of " nulla bona," upon a fieri facias, should be sufficient evidence of diligence, in pursuing the judgment, unless the assignor should have requested the assignee to sue out another kind of execution. I throw out these hints, however, at present, merely for consideration. " The uncertainty under which the assignee now stands, as to what may or may not, in future, be deemed due diligence, by throwing a risk upon him, tends to produce a rigour of proceeding against the obligor, which is hostile to the distinction between bills of exchange and bonds, before alluded to, and will probably tend to throw the latter, when assigned, into as rapid a course of prosecution as the former. " In the case of Mackie v. Davis, it is said to be the duty of the assignee to bring suit. This is true as a general, though I think not as an universal proposition. There may be strong cases, (such for instance as an absolute insolvency in the obligor under the statute of bankruptcy, recently after the assignment,) in which a suit would be entirely fruitless as against him, and might even produce injury to the assignor; for example, by postponing his recourse to (possibly) an ulterior and collateral indemnity; the fund for which might in the mean time be jeopardized and lost. It was said by one of the appellee's counsel, that it is not enough that a want of diligence be shewn to exist, but also that a loss ensued therefrom. The answer is, that it lies upon the plaintiff in the action after a neglect of duty is fixed upon him, to exculpate himself by shewing that due diligence would not have altered the case. " Nor is a return of nulla bona upon an execution in all cases sufficient. There may be cases in which a fieri facias would certainly be ineffectual, and another kind of execution certainly produce the money. A debtor, for instance, may not have an atom of personal property, yet he may have a valuable estate in lands, or he may possess a place or office yielding him a considerable income, and which would be lost by his imprisonment. In these cases, the obligation to pursue due diligence, (which involves a judicious course of proceeding,) would point out to the assignee the propriety of deviating from the usual course of execution." --Note in Original Edition.
Judgment affirmed.
Hay, for the appellant, contended that this was a special assignment, which differed it from an ordinary case. The responsibility of Goodall depending entirely upon the insolvency of the obligor, it was incumbent on Stuart or his assignee to prove that insolvency. The return of " no effects" upon an execution issued to the sheriff of the County in which Beverley resided, was not sufficient. He might have removed out of the County, or might have had property in another County, or even in the same County which the sheriff could not find sufficient to satisfy the debt. In all those cases, it would be competent to the assignor to direct the execution accordingly, and to shew that the obligor was not insolvent. It was the duty of the plaintiff in the action against Beverley, to have done every thing which Goodall might have done. Goodall would have directed the execution so as to have given it effect; and was prepared to prove the very point in issue, the solvency of Beverley, but was prevented by the Court. That the return of the sheriff may be controverted, is proved by many cases. It is every day's practice to sue him for a false return.
The Attorney General, for the appellee. If the principle contended for by Mr. Hay, be once established, the policy of the law which authorises assignments of bonds and other instruments for the payment of money will be entirely frustrated.
It is admitted, that the assignee of a bond ought to use due diligence; but there can be no better criterion of such diligence than the regular and judicious prosecution of a suit, and the return of the sheriff. If the sheriff return nulla bona, it has been held to be sufficient to charge the assignor. a Nor ought any evidence to be admitted to contradict this return; because it would be to contradict a record. The executions are to be preserved among the papers of the Court, and are considered as matter of record in all legal proceedings. Another objection to the admissibility of such testimony in this form, is, that the sheriff is a sworn officer, and the Court ought to presume that all acts done by him in the execution of the duties of his office are right till the contrary appear; and it would not be proper to try the validity of his return in this indirect way. Would it be proper in a case in which the sheriff is not a party to subject him to censure without an opportunity of answering for himself? It would be to punish him for a false return, unheard and undefended.
But, it is said, the sheriff may be sued for a false return. This is admitted, but a very different inference drawn from it. If the sheriff make a false return, any person injured may have an action against him. This course ought to have been pursued by Goodall; and then the question would have come fairly on, and the sheriff would have had an opportunity of justifying his conduct.
2 Bac. Abr. Gwil. Ed. 736, tit. Execution, let. M.
If the doctrine contended for should prevail; if the assignor shall be permitted, at the trial, to go into evidence of the solvency of the obligor, in opposition to the return of the sheriff, there would be endless litigation. The assignee, even after the Jury should be sworn, might be surprised by proof of property, in some other place, supposed to belong to the obligor: and, after suffering a nonsuit, and suing out another execution, it might appear that this property was under some incumbrance. Thus he might be kept in a perpetual round of bringing actions; the assignor might hold up his evidence till the trial, and then bring in a witness to contradict the sheriff, who is supposed to know the property in his County. Great mischiefs would result to assignees from the adoption of this rule; whereas no injury would arise in the other case, because the assignor might sue the sheriff for a false return; and this being an official act, the securities of the sheriff would be liable.
There is nothing in the assignment, in this case, to distinguish it from an ordinary one. But if any thing could be gathered from the terms of the assignment, it would present a case still stronger against Goodall; because it would seem that the effect of the execution was to be limited to Goochland, where it is stated the obligor resided. But it never can be contended, that the assignee is bound to send an execution into every County in the state. There was no suggestion that the obligor had property in any particular place; but only a general offer to prove that he had effects sufficient. Goodall might be presumed to be best acquainted with the circumstances of his debtor; and if he knew of property of his, he ought have shewn it to the sheriff.
Hay, in reply. Mr. Nicholas's first remark may be retorted upon himself. If his doctrine shall be established, there will be no security for assignors. It will encourage negligence in assignees; who, knowing their ulterior security, will give themselves but little trouble in the collection of the money from the obligor. All that I contend for, is, that the assignee shall do that which he might or could do if he had no further security.
It is to be taken for granted, that the party was prepared to prove the fact which he offered to prove. Goodall was sued in consequence of Beverley's being insolvent; and offered to provethat he was not insolvent; and yet, according to the doctrine advanced on the other side, he is not to be admitted to disprove the very position on the establishment of which, by his adversary, his liability depended. Suppose an attempt had been made to prove the insolvency of the obligor, in the first instance, without resorting to a suit; would it be contended, that the assignor could not be permitted to introduce evidence to shew that he was not insolvent, by proving that he had effects sufficient to satisfy the debt.
The case of Mackie's executor v. Davis, turned upon the question of due diligence; and the Court did not undertake to say what would be sufficient to ground an action against the indorser. In England, it is considered the province of the Courts to decide on the question of diligence; but, in this country, it is always left to the Jury. The general doctrine of the liability of indorsers, however, does not apply to this case, because the parties have entered into a particular stipulation by the assignment.
The return of the sheriff is not a record, but only filed among the records. Nor can the oath or integrity of the sheriff be impeached by going into evidence to prove the solvency of the obligor; because, although the defendant may have property, the sheriff may not know where to find it.
Though an action may be brought against a sheriff for a false return, yet a case has already been stated in which it would avail nothing. Suppose the obligor has property in another County, which is known to the assignee; the sheriff of the County in which the obligor resided, in returning no effects within his bailiwick, does not make a false return. Goodall offered to prove Beverley solvent; and if he had done so to the satisfaction of the Jury, would they have given a verdict against him?
Judge Tucker. Judge Roane. Judge Fleming. Absent Judge Lyons.
OPINION
Thursday, March 17. The Judges delivered their opinions.
JUDGE TUCKER, after stating the case, proceeds as follows:
It has been settled upon solemn deliberation in this Court, that the assignee of a bond, may recover against his immediate assignor, if the bond be not paid, without any special undertaking on the part of the assignor to pay the money, in case it be not paid by the obligor. And this upon common law principles, because every assignment of a negotiable paper, (as a bond is in this country,) imports in itself a valuable consideration paid. In this case Mr. Goodall expressly acknowledges to have received such a valuable consideration. Upon common law principles, then, he is liable to make good the money, if not got of Beverley. The judgment and execution, with the return of the sheriff, shew that it was not to be had by the ordinary course of law. Was Stuart obliged to send a fieri facias into every County of the state, or an execution against his body, before he could resort to Goodall? I think not: for the execution and return of nulla bona thereupon must be considered as at least equal to a protest upon a bill of exchange or promissory note, as evidence of non-payment, or non-acceptance. The assignor may, by a special assignment, indeed, protect himself from a suit, until the assignee shall have done something more than the law requires in ordinary cases. And it is contended that he has done so, in this case, by declaring that he " makes himself responsible should Beverley prove insolvent." But this was the case by the mere operation of law, without any such express agreement on his part; of course these words do not vary the nature of the undertaking. If indeed he had stipulated that he should not be responsible until it should appear that Beverley was totally insolvent, and that his body could not be taken in execution to satisfy the debt, these negative words might perhaps have altered the case, or at least have imposed it as a duty upon the assignee to pursue every species of execution to obtain the money, before he could resort to the assignor. But as the undertaking contains nothing more than what the law itself would have implied, he cannot shelter himself by the addition of these words to his assignment.
The question then is, whether in this action the Court ought to have admitted the evidence offered. If a sheriff make a false return upon a precept directed to him, any person aggrieved thereby may bring an action against him, and falsify his return by any evidence that he can produce for that purpose. But in a suit or contest between other persons, any fact, as between those persons, which is verified by the sheriff's return, cannot, I conceive, be controverted; for he is a sworn officer, and shall be presumed to have done his duty, until the contrary be proved, by a recovery against him for his false return. I therefore am of opinion, that the evidence was properly rejected, and that the judgment ought to be affirmed.
JUDGE ROANE. I cannot understand the assignment in this case as imposing upon the assignee any further or other terms or conditions than would have resulted by the construction of law from a general assignment. The insolvency intended by that assignment cannot reasonably be extended further in this case than in that; 1st. Because the analogy between this case and that is natural and apt; and 2dly. Because it is unreasonable to impose upon the assignee, who is generally a stranger to the affairs of the obligor, (whereas the obligee is supposed to be acquainted with them,) the responsibility of knowing, finding out and pursuing all the effects of the obligor, wheresoever existing. I shall therefore not very this case from the case of a general assignment.
In the case of Barksdale v. Fenwick, I had occasion to review the case of Mackie v. Davis, and the general doctrine of the assignor's liability. As a report of that case has never been published, and as some of my reflections in that case appear to me to apply to this, I will beg leave to refer to a part of my opinion delivered in that case. 1 In the case before us, it does not appear that there was any defect of diligence, or that an injudicious course of execution was adopted. It is not shewn that the assignee had any reason to believe that any other execution would more probably have produced the money, or that the assignor gave any instructions on the subject. The appellee therefore has done all that was necessary, under the circumstances disclosed in this case, when he recovered judgment against the obligor, in the County in which he resided, and issued a fieri facias against his estate, upon which the return of nulla bona has been made.
2 Wash. (VA) 219.
I am of opinion, therefore, to affirm the judgment.
JUDGE FLEMING. In the case of Mackie v. Davis, this general principle, that an assignor of a bond, where the obligor proves insolvent, is responsible to the assignee for the amount of the debt without any special undertaking to that effect, was settled by the unanimous opinion of the Court; and has not since been controverted. And it seems to me that when an assignee of a bond brings a suit against the obligor, and prosecutes it to a judgment, on which a fieri facias issues, he has done all that is incumbent on him to perform; and that, on a return of nulla bona on the fieri facias, he has recourse against the assignor, and may immediately institute his suit, and recover against him the amount of the bond and the costs of the former suit. As to the special assignment in this case, " that Goodall should be responsible in case Beverley should prove insolvent," it seems to be mere surplusage, as the law would have made him so, unless there had been a special stipulation to the contrary. Mr. Stuart, the assignee, who was probably unacquainted with Beverley's circumstances, was not to presume that the sheriff had made a false return, and on that ground, to order a second fieri facias, nor does it appear that it was a false return. Beverley, if he had property in the County might have had the address to secrete it from the sheriff? and, if so, Goodall, who, it is presumed, best knew the circumstances of his debtor, ought, in order to exonerate himself from his responsibility, to have shewn the property (if any) to the sheriff. I am therefore of opinion that the Court very properly rejected the testimony offered by the appellant, at the trial; and that the judgment ought to be affirmed.
2 Wash. (VA) 219.
By the whole Court, (absent JUDGE LYONS,) the judgment of the District Court was affirmed.