Opinion
09-20-1877
SITLINGTON v. KINNEY'S adm'r.
William J. Robertson, for the appellant. Sheffey & Bumbgardner, for the appellee.
Absent, Anderson, J.
In 1856 G made his note for $775, which was endorsed by J, S and K, and which being protested was taken up by K. G then made a deed by which he conveyed in trust certain personal property, and among it a slave named Jenney, in trust to secure these endorsers and five others, equally for all their suretyships for him. At the same time he conveyed to the same trustee on the same trusts certain real estate, all subject to liens. G being insolvent, K, who was his father, undertook to obtain a release of the slave Jenney, and the other parties except S signed a release on the consideration that the wife of G would release her right of dower in the land conveyed in trust. To induce S to sign the release, K promised to release him from his liability on the said note, and upon that promise S signed the release. K's administrator afterwards recovered a judgment upon the note, and S enjoined it. The trust fund of G was insufficient to pay the claims upon it, and J and S had to pay large amounts for G. Pending the injunction, both J and C became insolvent; and these facts are shown by an amended bill. Upon demurrer to the bills--HELD: The agreement of K to release S, whether an executed or executory contract, is a good ground of relief against the judgment, and S might properly go into equity for relief.
In March, 1861, A. K. Sitlington filed his bill in the circuit court of Highland county, to enjoin proceedings on a judgment recovered against himself and John Sitlinton in that court by the administrator of Nicholas C. Kinney, deceased, and also the sale of a slave named Henry, ordered to be sold by a decree in a cause depending in the same court. In his bill he states that on the 7th of May, 1856, one George N. Kinney, made his note for $775 to John Sitlington, negotiable and payable at the office of the Bank of the Valley, at Staunton, one hundred and sixteen days after date, which was endorsed successively by John Sitlington, A. K. Sitlington and Nicholas C. Kinney; that this note, so far as complainant was concerned or knew, was an accommodation note; that when it fell due on the 3d of September, 1856, it was protested for non-payment, it having been left at the bank by Nicholas C. Kinney for collection.
He further states that on the 1st of October, 1856, George N. Kinney conveyed to William C. Jones certain personal property embracing three slaves, one of them named Jenney, who was about ten years old, in trust to secure and indemnify John Sitlington, A. K. Sitlington, Nicholas C. Kinney and five others named, in any and every debt in which they, or any of them, were bound for said Kinney or Kinney & Bruffy, and to secure any debt that was due to them individually. And if a sum sufficient was not realized from this trust fully to indemnify all of said endorsers, they were to share the proceeds pro rata; and on the same day the said George N. Kinney conveyed to the said Jones certain real estate, subject to the liens thereon, upon the same trusts; that the amount raised under these trust deeds was $4,426.07, on the 9th of March, 1858, as appeared by the commissioner's report made in the case of Scott, Baker & Co. v. G. N. Kinney & others, then pending in said court; but all the property conveyed in said deeds was not sold, and among that not sold was the girl Jenney. As to this girl, complainant says that, about April, 1857, George N. Kinney having determined to leave Virginia with his family, and being in very needy circumstances, desired to take with him the negro girl Jenney, and his father, Nicholas C. Kinney, desiring to advance the interest of his son, undertook the office of getting from the trustee and beneficiaries in said deeds of trust a release of their interest in the said girl Jenney. He procured the consent to a release of their interest from all the creditors in said deeds except the complainant, who refused in any manner whatever to release his interest in said girl, acquired by said deed of trust. The said Nicholas C. Kinney then proposed to the complainant that he would release him from all liability as endorser of said negotiable note if complainant would sign the following release, to-wit: For and in consideration of the release of Elizabeth W. Kinney, of all her dower interest in the real estate of her husband, George N. Kinney, we, the undersigned, do hereby release for her use and benefit the within slave Jenney, aged ten years, and will not hold the trustee, William C. Jones, in any manner liable or responsible for the same. Witness our hands, this 7th day of April, 1857. Which release complainant. avers he, with some of the other creditors, signed, under a promise and with the express understanding, that he, the said Andrew K. Sitlington, should be forever released from all liability as endorser of said negotiable note or otherwise; and without such consideration he never would have signed said release. And he avers that the said negro was worth seven or eight hundred dollars, and was taken possession of immediately by the said George N. Kinney, and was either conveyed beyond the limits of the state or sold by said George N. Kinney to a negro trader, and has not been heard of since. He avers that the dower interest of Mrs. Kinney was of small value, and never could have availed him anything, as said trust property was all consumed in paying liens older than the deed of trust.
Complainant further says that all the slaves were given by John Sitlington to George N. Kinney, and that Nicholas C. Kinney not only engaged that said Andrew K. Sitlington should be released from all liability as endorser on said note, but intended that the said John Sitlington was also to be released, and that said note was to be forever satisfied and discharged. But that in the spring of 1858, the said Nicholas C. Kinney instituted an action on said note in the circuit court of Highland, and on his death it was, in 1860, renewed in the name of his administrator, and at the October term, 1860, judgment was rendered against John Sitlington and complainant for the sum of $775, with interest and costs, the writ having abated as to George N. Kinney by the return of " no inhabitant."
Complainant refers to a suit in said court by William H. Brown & Co. against himself and his wife, in which all of his property had been sold except a negro man named Henry; and that the proceeds of said sales are sufficient to pay all his debts except this debt of Kinney, without the sale of this negro Henry; but that the court at its last October term, anticipating said Kinney debt, had made a decree directing the sale of said negro Henry. He charges that there is no necessity for the sale, except to pay said debt. And making the administrator of Nicholas C. Kinney and John Sitlington parties defendants, he prays for an injunction to stay all proceedings upon the judgment, and also to stay the sale of the negro man Henry; and for general relief. The injunction was granted.
The administrator of Nicholas C. Kinney answered the bill, contesting the agreement set up in the bill; but it is unnecessary to say anything more of the answer.
In September, 1873, A. K. Sitlington filed an amended bill. After stating in substance the averments of the original bill, he says: The release of Mrs. George N. Kinney was gotten up by Nicholas C. Kinney, and is in his handwriting. The other beneficiaries in the deed of trust signed said deed upon the consideration therein expressed except complainant, who refused to sign it until after Mrs. George N. Kinney had made her deed relinquishing her right of dower. And he repeats that he never did agree to sign said release until Nicholas C. Kinney promised and agreed, & c., as before stated. He says that on the same day that Nicholas C. Kinney prepared the release, he wrote a deed of relinquishment of the contingent right of dower of Mrs. George N. Kinney; which she executed on the 10th of April, 1857, and it is made upon the consideration " that all the securities and endorsers, except A. K. Sitlington and John Snyder, had released to her their rights under said deeds to the negro girl Jenney, in consideration of her said dower right."
Complainant further states that George N. Kinney resided in Highland county until the spring of 1857, when he removed to Texas; that he professed to practice medicine, and was engaged at the same time in merchandising in connection with one Jason N. Bruffy; and in 1856 he finally failed, leaving John and A. K. Sitlington to pay large sums of money for him as security and endorsers. His other endorsers paid little or nothing for him, and said Nicholas C. Kinney paid nothing but this note, because John Sitlington and A. K. Sitlington were first on his paper. That John Sitlington had paid at least $8,000 as endorser and surety, and A. K. Sitlington at least $2,600 for said George N. Kinney. That John Sitlington was considered solvent on the 7th of April, 1857, and up to September, 1857. After that time he was entirely insolvent. That George N. Kinney has been insolvent since 1856, and the estate of Nicholas C. Kinney has turned out to be insolvent, though he in his lifetime and his estate until the end of the war was considered solvent.
Complainant further charges, that at the time Nicholas C. Kinney promised and agreed to release complainant from liability on account of said note, he intended not to hold any of the parties bound; and this is made more apparent from the fact that being a party to the suit of Scott, Baker & Co., and an observer of the proceedings therein, and by which the property of the Sitlingtons as well as that of George N. Kinney was sold, and the proceeds applied to the debts therein reported, he stood by and never set up any right or privilege to report said debt; nor did he sue thereon until it became apparent that John Sitlington was insolvent. And he further charges that after the exhaustion of the funds in the suit of Scott, Baker & Co., complainant was compelled to pay a number of debts of George N. Kinney in which John Sitlington was the prior endorser, and also a number of debts of his father, John Sitlington, as would appear from the report of debts in the suit of William H. Brown & Co., he being his surety and endorser. And he insists that Nicholas C. Kinney having been a party in the suit of Scott, Baker & Co., and having failed to claim said debt as against the George N. Kinney fund in said suit for his share of the proceeds of said deeds of trust, would operate as a release of said debt in favor of complainant and the first endorser, if not for the whole at least in part. And as the estate of said Nicholas C. Kinney is insolvent, and a judgment at law against his administrator upon his agreement would be fruitless, he insists that equity has jurisdiction to relieve him.
The administrator of Nicholas C. Kinney demurred to both the original and amended bill. And the cause coming on to be heard upon the demurrer and also upon notice of a motion to dissolve the injunction, the court sustained the demurrer, and dissolved the injunction with costs. And thereupon A. K. Sitlington applied to a judge of this court for an appeal; which was allowed.
William J. Robertson, for the appellant.
Sheffey & Bumbgardner, for the appellee.
CHRISTIAN, J., read the decree of the court.
This day came again the parties by their counsel, and the court having maturely considered the transcript of the record of the decree aforesaid and the arguments of counsel, is of opinion that the circuit court of Highland county erred in sustaining the demurrer to the appellant's original and amended bill.
Whether the agreement set out in the original bill between the appellant and the appellee's intestate (N. C. Kinney) be regarded as an executed contract or one that was executory only, it is plain that the allegations of the original and amended bills taken together, contain such averments of facts as, if true (and upon demurrer they must be taken as true) constitute sufficient ground of relief in a court of equity, and which could not be set up by plea in an action at law, so as to afford to the appellant a complete and adequate remedy.
The court is therefore of opinion, and it is decreed and ordered that the said decree of said circuit court be reversed and annulled, and that the appellant recover against the appellee his costs by him expended in the prosecution of his appeal here; and the cause is remanded to said circuit court to be determined and decided upon the bill and answers, and depositions now in the cause, or other evidence which may be hereafter taken by either party upon the issues made by such bill and answers. All of which is ordered to be certified to said circuit court for further proceeding to be had therein in conformity with the opinion of this court herein declared.
DECREE REVERSED.