Opinion
08-26-1854
HILL v. MANSER & al.
Caperton, for the appellant. Price, for the appellee.
1. A surety in a forfeited forthcoming bond is a surety for the debt; and when he pays it as such surety, he is entitled to all the rights of the creditor against the original debtor, subsisting at the time he became bound for the debt: And the judgment, for the benefit of the surety so paying, is not extinguished but transferred with all its obligatory force against the principal, and constitutes a legal lien upon his real estate owned at the date of the judgment or afterwards acquired.
2. The surety in the forthcoming bond pays to the creditor a sum certain on the execution issued, on the bond, against the principal and himself, and takes a receipt as for money paid by him. The evidence of payment afforded by the receipt will not be repelled by proof of loose declarations that he had loaned the money to the principal debtor, who was his brother, so as to deprive him of the right to be substituted to the rights and remedies of the creditor.
3. The creditor having taken a deed of trust from the principal debtor to secure his debt; and the debtor having subsequently given another deed of trust upon the same and other property to secure debts due to a third party, one of which was for money loaned to pay a balance due upon the judgment, of which this third party had notice, the surety in the forthcoming bond is entitled to have the property embraced in the first deed of trust applied to satisfy the amount he has paid, with interest on so much thereof as went to discharge the principal of the debt; and if that property does not discharge it, to have the land embraced in the second deed subjected to discharge the balance.
In October 1840 Samuel McD. Moore recovered a judgment in the Circuit court of Fayette county against John Hill, for one thousand six hundred dollars, with interest. On this judgment an execution was issued, on which Hill executed a forthcoming bond with Hiram Hill and Pleasant Hawkins as his sureties. This forthcoming bond was forfeited, and execution was awarded against all the parties in August 1841: And the execution was returned levied, and the property not sold for want of bidders.
By deed bearing date the 12th of May 1842, John Hill conveyed to Hudson M. Dickenson two tracts of land, some slaves and other personal property, in trust, that if Hill did not pay the debt due to Moore by the 15th of the next August, the trustee should sell the property upon ten days' notice, for cash, and apply the proceeds to the payment of the debt.
On the 2d of September Moore received from Hiram Hill in money, fee bills and bonds, the sum of five hundred dollars, and he gave to him a receipt of that date, for that sum received on account of Moore's execution against John Hill and others, issued from the Circuit court of Fayette county. On the same day John Hill and wife conveyed to Dickenson and William Tyree a number of tracts of land, including the two previously conveyed to Dickenson, and the slaves included in said deed, to secure a large amount of debt for which Miles Manser was bound, and also the sum of five hundred dollars, which Manser had agreed to pay to Moore in part satisfaction of his debt. And on the 16th of March 1844 John Hill and wife conveyed to the same trustee, other lands and some personal property to secure some of the same and other debts, which were due to Manser, or for which he was bound, one of which was the five hundred dollars which Manser had paid to Moore.
In June 1849 Hiram Hill filed his bill in the Circuit court of Fayette county, in which he stated the foregoing facts; and insisted that he was entitled to be substituted to the rights and remedies of Moore, to the extent of the sum of five hundred dollars, which he had paid upon the debt due from John Hill to Moore. And making John Hill, Manser and the trustees Dickenson and Tyree, parties defendants, he prayed that the court would enforce the judgment lien and other securities of Moore, by a sale of the incumbered property, or a sufficiency thereof, to pay off the debt due to Moore; and that he might be substituted to the benefit of the same to the full amount he had paid, with interest; and for general relief.
Manser answered the bill; and denied that the plaintiff had paid five hundred dollars, or any other sum, as the security of John Hill. He said that the money, fee bills and bonds mentioned in the receipt of Moore, were advanced by the plaintiff not as a payment, but to accommodate his brother, and to get some foreign fee bills settled; and hence he made the arrangement, not as a payment as surety, but as an advance to his brother by way of loan: And therefore, he insisted, the doctrine of substitution did not apply to the case. That at the time he took the securities from John Hill mentioned in the bill, he had no notice of any claim upon the property by lien of any kind held by the plaintiff. And that he had paid off the debt to Moore, and therefore on that account he would be entitled to substitution to all the securities of said Moore which he had at the time of payment.
Witnesses were examined, who spoke of conversations with Hiram Hill, in which they understood him to speak of the five hundred dollars he had paid to Moore, as a loan to his brother John Hill; but the money was in fact paid by Hiram Hill to Moore, and it seems to have been considered by both John Hill and Moore to have been a payment by Hiram Hill.
The cause came on to be heard in September 1851, when the court dismissed the bill with costs. And thereupon Hiram Hill applied to this court for an appeal, which was allowed.
Caperton, for the appellant.
Price, for the appellee.
OPINION
ALLEN, P.
The court is of opinion that the appellant as surety for John Hill in a forthcoming bond which was forfeited, became thereby surety for the debt; and when he paid the same as such surety, he became entitled upon the principles of a court of equity, to all the rights of the creditor against the original debtor, subsisting at the time he became so bound for the debt; and that the judgment for the benefit of the surety so paying, is not regarded as extinguished, but transferred with all its obligatory force against the principal, and constituting a legal lien upon his real estate owned at the date of the judgment, and thereafter acquired. Garland v. Lynch, 1 Rob. R. 545; Powell's ex'ors v. White, 11 Leigh 309; Robinson v. Sherman, 2 Gratt. 178; Leake v. Ferguson, 2 Gratt. 419.
The court is further of opinion, that the receipt of the creditor dated the 2d of September 1842, shows that the appellant on that day paid the sum of five hundred dollars to the creditor on account of the execution issued on said forfeited bond, against his principal and himself; and the evidence in the record, of loose declarations that he loaned his principal that sum, or that the witnesses understood it was a loan, do not show any intention on the part of the appellant, to waive any legal right, or that in fact he knew at the time of such payment, that the law raised any such right of substitution for his benefit.
The court is further of opinion, that it fully appears that the appellee had full notice of said judgment when he took from the said John Hill the deed of trust of the 2d day of September 1842; as by the terms of said deed, provision was made thereby to indemnify the appellee for the sum of five hundred dollars, which he had bound himself to pay on said judgment, for said John Hill at a future day.
The court is further of opinion, that the appellee is not entitled to priority on account of the payment of said last mentioned sum: no such claim is set up in the answer; and the appellee not being surety, if he intended or contemplated relying on previous liens, should have taken a transfer thereof; his was a loan to John Hill, for the security of which, together with other claims against said John Hill, he took his deed of trust aforesaid, and upon which alone he must rely.
The court is further of opinion, that as it appears that said John Hill by a deed of trust duly executed, and acknowledged, and recorded on the 12th day of May 1842, conveyed sundry lands, together with personal property, to a certain Hudson M. Dickenson, in trust for the security and payment of said debt, the appellant is entitled to be substituted to the rights of the creditor under said deed of trust, and to require a sale by the trustee of the property conveyed by said deed of trust, or so much thereof as may be forthcoming, and the application of the proceeds thereof, or so much as may be necessary to pay said sum of five hundred dollars, with interest from the 2d of September 1842, on so much thereof as at the time of payment was applicable to the principal of said execution. And if the property described in said deed of trust of the 12th of May 1842, or so much thereof as may be forthcoming, should prove insufficient to pay said sum of five hundred dollars, with interest as aforesaid, then that the appellant should be at liberty to resort to any other lands owned by said John Hill at the date of said judgment, or afterwards acquired, for satisfaction.
The court is therefore of opinion, that said decree is erroneous, and it is reversed with costs against the appellant; and the cause is remanded to be further proceeded in according to the principles of the foregoing opinion and decree, in order to a final decree.
DANIEL and MONCURE, Js. dissented.
DECREE REVERSED.