Loud v. Sergeant

The Vice-Chancellor. I doubt the propriety of putting forward all this matter by way of plea, even though the cir [166] cumstances themselves may'form a sufficient defence to the bill. The criterion by which to determine how far a defence is proper by wray of plea is, to ascertain whether the cause is thereby reduced to a single point creating a complete bar to the suit. It is true the matter of a plea may consist of a variety of facts and circumstances, provided they are not inconsistent with each other and all tend to one point, making out one connected proposition sufficient of itself to form a defence to the bill—and not showing separate and distinct defences, one of which would have been sufficient: for then, the plea will be bad for duplicity: Coop. Eq. 223, 225; Beame’s Pl. 19, and cases there mentioned. I cannot say the plea under consideration falls within the rule connected with duplicity: because I do not perceive how any of the matters which are pleaded, when taken separately, could constitute a bar or defence to the suit. I am also at a loss to discover upon what principle the whole of the matter taken together can be a bar. It seems to me much more expedient that this defence, if it is to be available, should be taken by answer. The object of a plea is to save the parties the expense and trouble of examining witnesses at large,' by putting an end to the suit upon some single ground of defence. Where this defence consists of a variety of facts and circumstances, there can be no saving by a plea; because the examination of witnesses must still be as much at large as if the defendant had put it forward in an answer ; and another reason given in the books is, that by allowing a plea containing such various matter, the court gives judgment, in effect, upon the facts and circumstances of the case before they are made out by proof. Ishall proceed to dispose of the question upon this plea, not upon the point of duplicity or inexpediency, but upon other grounds *—and which I think are fatal to it. In the first place, it is said, that this defence could have been made at law, and as the defendant Sergeant has not availed himself of it there, he cannot now set it up in avoidance of the judgment. I agree with the counsel for the complainants in this proposition. Upon proving [167] a transfer of the notes by Thomas Loud to the complainants without consideration, the defendant might have been let into any and every defence which he could make provided Thomas Loud had been the defendant in the action; and the rule is well settled, that this court will not relieve against a judgment at law on the ground of its being contrary "to equity, when the party has, by his own neglect, suffered it to pass against him or omitted to avail himself of a defence which he might have made and which he knew of during the pendency of the action: Lansing v. Eddy, 1 J. C. R. 51, and other cases. There is no allegation in this case of the defendant Sergeant’s being ignorant of any of the matters which are now pleaded or of his having been prevented by accident or any other cause from making his defence at law. He is, therefore* too late. But, there is a view to be taken of this case which, in my judgment, shows that the matter of this plea is not a complete defence to the present suit. The defendant Sergeant endorsed the notes by way of security for the purchase money of the lands sold by Loud to Divers. Loud retained the legal title in himself as a further security until the notes should be paid, under an agreement, as is alleged, to sell the lands and apply the proceeds to the payment of the notes; and it is also averred, that he still holds the lands which are an ample security. Now, according to this statement, the transaction may be considered the same, in effect, as if Loud had delivered a deed of the lands to Divers and had taken his bond, with Sergeant as a surety therein, and a mortgage by way of additional security. What then would be the rights of the parties? Loud could sue upon the bond and it would be no defence for the surety to say the debt was secured by a mortgage. The surety would still be personally liable. He bound himself for the payment of the debt; and the mortgage was but an incident and a collateral of the bond to be resorted to in case the personal security failed. It might also have been resorted to in the first instance at the election of the creditor. Even under the regulations contained in the Revised Statutes the right to proceed at law upon the bond against both principal and surety is not taken away in [168] consequence of the creditor’s likewise holding a mortgage. Bu6 if the surety is resorted to in any case and compelled to pay the debt, an equity at once arises in his favor to be substituted-in the place of the creditor and to have the benefit of all securities which- he held. The defendant, Sergeant, if he pays-the debt as surety for Divers, will he entitled to have the lands sold or conveyed to him for his indemnity; and this, court, upon-a bill filed for the purpose,- will aid him : but he cannot, for this reason, avail himself of the matters pleaded as a protection against paying the judgment recovered upon the notes. If the agreement set up was ever of any force, it would have availed the defendant, Sergeant, at law—and there he ought to have made use of it. He has no excuse for not having done so and he cannot now be permitted to set it up against the judgment. I must disallow the plea, with costs; but I shall order it to stand for an answer, with leave to the complainants to except-