Opinion
09-23-1875
OMOHUNDRO v. HENSON & als.
Wm. J. Robertson, for the appellant. Watson & Perkins, for the appellee.
I. An assignor of a bond secured by deed of trust upon land, the assignment being absolute, is not a necessary party in a suit by the assignee against the vendee of the obligor, to subject the land to satisfy the debt.
II. H and B, as his surety, execute their bond to M, executor, for land purchased of him by H, and which H afterwards conveys to O. M recovers judgment upon the bond against H and B, and B pays the debt, and M assigns it to him without recourse. On a bill by B against O and H to subject the land to satisfy the debt. HELD:
1. Whether B claims as assignee, or as a security who has paid the debt, M is not a necessary party.
2. B is entitled to have the land sold to pay his debt without proceeding first against H; especially as O did not ask for such a decree in the court below.
3. O may, if he chooses, make an issue in this case between himself and H, and have the equities between them settled.
By deed bearing date the 13th day of December 1860, William W. Minor, as executor of Dabney Minor, deceased, conveyed to Bartlett A. Henson a tract of land lying on Mechunck creek, in Albemarle county; and by deed of the same date, Henson conveyed the same land to S. V. Southall, in trust to secure the payment of four bonds of the same date as the deed, and each for $1,415.10, given by Henson to Minor as executor, for the purchase money of the land. These deeds were duly admitted to record in the clerk's office of Albemarle county on the 7th of January 1861.
Bartlett S. Henson paid off three of the bonds to Minor, the executor; and then by deed bearing date the 1st of September 1863, and duly admitted to record, he conveyed the land he had purchased from Minor to Richard F. Omohundro.
In 1866 it would seem, though the date is not given, Minor brought suit in the Circuit court of Louisa county, upon the unpaid bond against Bartlett A. Henson, Benjamin Henson and two others, who were obligors therein, and recovered a judgment. The interest on this judgment was paid from time to time, from September 1867 to June 1870, by Benjamin Henson, and he, at this last date, paid the whole amount then due to Minor, the plaintiff; and, by an endorsement on the receipt, Minor assigned the judgment to Benjamin Henson without recourse.
In May 1871 Benjamin Henson instituted a suit in equity in the County court of Albemarle against Bartlett A. Henson and the other obligors in the bond to Minor, Richard F. Omohundro, and Southall, the trustee, in the deed to secure the debt; and in his bill he set out the foregoing facts, and averred that Bartlett A. Henson was the principal on said bond, and the plaintiff and the other obligors were his sureties; and that Omohundro took the land with full knowledge of the deed of trust to secure the debt. He claims that having paid the money he was entitled to be substituted to the rights of Minor under the said deed of trust; and he prays that the land may be sold, and the money he had paid might be repaid to him, and for general relief.
Omohundro answered the bill. He admitted as true the facts, so far as they were sustained by record evidence; but as to all other facts alleged, especially payments said to be made by the plaintiff to Minor, he called for strict proof.
The case was referred to a commissioner to state an account of the payments made by the plaintiff, and the report was several times recommitted. The last report stated the amount paid by Benjamin Henson, charging interest on the payments, from the date of payment, at $2,257.20, as of January 1st, 1872. He made a special statement omitting the interest, showing the amount paid to be $2,143.38.
Omohundro excepted to the report, 1st, because it was made prematurely; Wm. W. Minor, the executor of Dabney Minor, deceased, not having been made a party in the suit; and 2d, to the fixing the amount due at $2,257.29, because it results from compounding the interest; which was erroneous.
After filing the exceptions to the report, Omohundro was, on the 10th of October 1872, allowed to demur to the bill, on the ground that Minor was a necessary party. And on the same day the cause came on to be heard, when the court overruled the demurrer, and adopting the special statement of the commissioner, made a decree, that unless Omohundro, within six months from the date of the decree, should pay to the plaintiff, Henson, the sum of $2,143.38, with interest on $1,415.10, part thereof from the 1st of January 1872 till paid, and the costs of this suit, a commissioner named should proceed to sell the land in the bill mentioned, in the mode and on terms stated in the decree. After the decree was made the cause was removed to the Circuit court; and then Omohundro applied to this court for an appeal; which was allowed.
Wm. J. Robertson, for the appellant.
Watson & Perkins, for the appellee.
OPINION
ANDERSON, J.
The court is of opinion that William W. Minor, executor of Dabney Minor, deceased, had no interest in the subject of the suit, and was not a necessary party. The deed of trust was executed to secure the payment to the said Minor, as executor as aforesaid, of four bonds, which had been given to him by Bartlett A. Henson and his sureties, Benjamin Henson, the appellee, and others, for the purchase money of a tract of land belonging to the estate of Dabney Minor, deceased, which had been sold and conveyed by deed of record by said Minor, executor as aforesaid, to the said Bartlett A. Henson, and which, subsequently, the said Bartlett sold and conveyed to the appellant. Three of the bonds were fully paid by the principal himself to the said Minor. Upon the fourth and last bond suit had been brought, and judgment obtained by the said Minor, which was fully satisfied by Benjamin Henson, the appellee, one of Bartlett A. Henson's securities, who brought this bill in equity, to enforce by right of subrogation, Minor's lien upon the land.
What interest could Minor have in the suit? He was fully satisfied of the debt secured by the deed of trust, and had no further interest in the subject. And the security of the debtor was entitled for so much of it as had been paid by him, to be subrogated to the securities and remedies of Minor, the creditor, upon well established principles of equity.
If the appellee was seeking to enforce this lien as the assignee of Minor, upon the authority of Littlejohn v. Ferguson, 18 Gratt. 53, 81, 82 and 83, Minor would not have been a necessary party. Minor did assign to him without recourse. But it is insisted by the learned counsel for the appellant, that the assignment was nugatory, because Minor having received payment, the debt due him was discharged, and he had no interest in the bond and security to assign. Whether the assignment was nugatory or not it is not material to decide. But the argument that it is, is based on the concession that Minor had no interest in the subject of the suit. Why then should he be made a party to a suit in which he had no interest? There is less reason for making him a party to a bill by a security who paid the debt, to substitute him to his rights and remedies, than in a bill by his assignee to enforce the lien; because, in the latter case, the security does not rely on the ground of a transfer of his right by the act of Minor.
And it is not necessary that he should be made a party for the protection of the appellant, the subsequent purchaser of the land, because, when the appellee paid the debt, his payment was a full satisfaction and discharge of the obligation of his principal and his securities to Minor, and is a legal bar to any claim which might be made by him to the land. Minor has no claim that he could set up against it. His bond is filed in the clerk's office with the record of the suit, and is merged in the judgment, which the return upon the execution shows is satisfied. After the bond was discharged he has no claim against the land which he could ever assert. It is not then necessary for the appellant's protection that Minor should be a party to the suit; and there is no error in the judgment of the court overruling the demurrer for this cause.
The court is further of opinion that there is no error for which the decree should be reversed for not decreeing primarily against Bartlett A. Henson personally. Omohundro asked for no decree against him. He, as grantee of Henson, took the land as it was in the hands of Henson, subject to the lien. And as it was competent for Minor to have proceeded primarily against the land in the hands of Henson, to subject it to the payment of the debt, so it was competent for him to have proceeded against it primarily in the hands of Omohundro, the purchaser from Henson, with notice of the lien; and if Omohundro had paid Henson, he had recourse against him on his covenants. But the court having all the parties before it, to the end that complete justice might be done, might have decreed over in favor of Omohundro against Henson, his grantor, if, upon an issue being made between them, it appeared that Omohundro was entitled to recourse against him. But no such demand was made by Omohundro, and no such issue was made between him and Henson. If it had been, it was a matter of interest only between the appellant and his grantor, which did not concern the appellee. He was entitled to stand in the shoes of the creditor, whose debt he had paid, who had an unqualified right to recourse primarily against the land. And if a decree over against his grantors can be of any avail to the appellant, the cause is still open for him to ask for such decree, which might raise an issue between him and his grantor, if he should have any equities against it, which may still be determined by the court below in this cause; but it is not right that the appellee should be postponed to give the appellant further time to litigate such matter with his grantor,--if he should desire to do so.
The court sees no error, and is of opinion to affirm the decree of the Circuit court with costs and damages.
DECREE AFFIRMED.