Carpenter v. Devon

COLLIER, C. J. The material questions arising in this case,, may be thus stated: 1. Does the relation of principal and surety cease upon the recovery of a judgment against them, so as to prevent the latter from insisting upon his discharge in consequence of an indulgence given to the former without his consent, under a contract with the creditor? 2. Where the bill filed by a surety states, that the creditor suspended execution upon his judgment, under a contract with his p”incipal, without the sureties’ knowledge or consent; and the answer denies that the indulgence was-given without the complainant’s knowledge or consent; and affirms the reverse to be true, on whom does the onus lie of proving the sureties’ assent to the agreement? 1. In Lenox v. Prout, [3 Wheat. Rep. 520,] it was determined, that where a judgment has been recovered against the maker and indorser of a promissory note, the plaintiff may countermand execution, against the former, without exonerating the latter from liability. “And the reason,” say the court, “is obvious; for, by the judgment, they have both become principal debtors, and if the indorser suffers any injury by the negligence of the judgment creditor, it is clearly his own fault, it being his duty to [724] pay the money, in which case he may take under his own direction, the judgment obtained against the maker.” [See, also, 18 Eng. C. L. Rep. 273.] So in Bay v. Tallmadge, [5 Johns. Ch. Rep. 305,] it was decided, that after judgment against bail, their character of surety is at an end, and they cannot claim any advantage of the creditor, on the ground of a want of due diligence in prosecuting the principal debtor, or giving him indulgence upon a valid consideration. We might add other citations in accordance with those made, but this is entirely unnecessary, as will be seen from the view we take of the case. In The Commonwealth v. Miller’s Adm’rs, [8 Serg’t & R. Rep. 452,] the court said, “there is no clearer rule in equity, than that where the creditor has the means of satisfaction in his hands, and chooses not to retain it, but suffers it to pass into the hands of the principal, the surety can never be called on.” Again; “But it is said, the distinction between principal and surety ceases after judgment bas been obtained on the original security, and that as to subsequent transactions, equity views them with equal favon If that be so, I am ignorant of any authority that bears it out; and on the ground of reason, it certainly cannot be supported. The distinction is carried throughout.” So it has been held, that a stay of execution by a creditor, after a levy of it on the property of the principal will exonerate the surety, if the lien resulting from the levy be extinguished, and the surety did not approve of the indulgence. And further, that the discharge of the surety is not less complete, though the property levied on was insufficient to discharge the whole debt. [Sneed v. White, 3 J. J. Marsh. R. 526.] The indulgence of the principal to the prejudice of the surety, by one of several equitable proprietors of an execution, it seems would operate a release of the surety, to the extent of the interest of the paity indulging. [Givens v. Briscoe, 3 J. J. Marsh. Rep. 534.] And it has been also determined, that the stay, by the creditor, of an execution levied on the property of the principal debtor, without the privity or consent of the surety, 'will discharge the latter. [Jones v. Bullock, 3 Bibb’s Rep. 467, See, also, Solomon v. Gregory, 4 Harrison’s Rep. 112.] In Comegy’s and Pershouse v. Booth and Bell, [3 Stew’t Rep. 14,] no distinction was attempted to be made between the rights of a surety, before and after a judgment, against the principal and [725] himself; and in that case, the surety was released, because time was given to the principal after a judgment had been rendered upon the original security. In fact, it has been the understanding, both of the bench and the bar in this State, (as indicated by several adjudged cases,) that the relation of the parties continues as it was in its inception, notwithstanding the recovery of a judgment. Such would appear to be the conclusion of reason, and we believe is well sustained by authority. It may be also remarked, that the legislature seem to re cognize this to be the rule of law, for the act of 1811, “to empower securities to recover damages in a summary way,” enacts that, “when an execution may issue against any principal and security, on any bill, bond, note, or other instrument, the sheriff, or other officer, shall levy on the property of the principal first, if he has any property in the county where the security resides, &c.” [Clay’s Digest, 206, § 23.] 2. It is conceded, that an affirmative allegation in an answer irresponsive to the bill, but in avoidance of some statement, cannot be regarded as evidence for the defendant. But it is insisted, that as the complainant has negatively averred his ignorance of the agreement between Devon and Reid, by which time was given to the latter, and has denied that he assented to it, the answer of Devon in affirming the reverse to be true, is responsive to the bill, and unless disproved according to the rule recognized in chancery, must prevail. The justness of this conclusion must depend upon the fact, whether the complainant’s case could be aided by any answer that could be made to the allegation. Mr Justice Story says, “one test of materiality, is to ascertain whether, if the defendant should answer in the affirmative, the admission would be of any use to the plaintiff in the cause, either to assist his equity, or to advance his claim to relief. If it would, it must be answered, for it is material; if not, it is immaterial, and need not be answered.” [Story’s Eq. Plead. 655.] Again, says the learned author, “every bill presents a statement of facts, and a claim of right on the part of the plaintiff, in regard to which, he seeks relief; and it further seeks a discovery from the defendant, in order to establish or aid in the proof of such facts and claim of the plaintiff. Now to such discovery, at least so far as the facts and claim constituting the plaintiff’s case are concerned, ho has an unquestionable right. The rule has been laid down by a very [726] able writer in the following terms. “It is the right as a general rule of the plaintiff in equity (as we have seen) to examine the defendant upon oath, as to all matters of fact, which being well pleaded in the bill, are material to the proof of the plaintiff's case, and which the defendant does not by his form of pleading, admit.” [Id. 514, 435.] It would not be a good plea for a surety sued at law, to allege that the creditor under a contract with the principal debtor, had extended the day of payment; but it should go farther, and aver that the indulgence was given without the consent of the defendant. This point was expressly so adjudged in the Bank of Steubenville v. Carroll’s adm’rs, [5 Ohio Rep. 207.] And as both facts must concur in order to perfect the defence, it would seem to be unquestionable upon principle, that the plea should be sufficiently broad to embrace them in its allegations. Now, although it is a general rule that the allegata and probata must correspond, and that a party need not allege more than he is bound to prove; yet the rule is not of universal application.— Sometimes a party is required to negative the existence of a fact, the onus of proving which, rests upon his adversary. And such is the case where the surety sets up as a defence, an extension of the time of payment by the creditor, to his principal. The case of Everett, et al v. The United States, [6 Porter’s Rep. 166,] maintains, that where the surety proves that time was given to-the principal, it is incumbent upon the creditor to show, that the-former assented to it; and that such an inference cannot be indulged in the absence of proof. And that such is the law, is the dear-deduction both from principle and authority. The party averring the non-existence of a fact will not as we have seen» be always bound to support the allegation by evidence — in fact, the-difficulty of establishing a negative, will sometimes relieve him-from the necessity; and in other cases, the justice of requiring the opposite party to show the affirmative, if it be true, will throw the onus upon him. [2 Phil. Ev. C. & H’s notes, 483-4-5-6-7; The State v. Gaus, 9 Porter’s Rep. 633; Blann v. Beal, 5 Ala. Rep.] Now, if it is necessary to allege in a plea at law, that the surety did not consent that the principal should be indulged, it must be equally essential to a bill where the surety seeks relief in equity to make such an allegation. But this averment is necessary, [727] only to prevent a demurrer from being successfully interposed; and when the surety has proved that time was given to the principal, it is (as at law) incumbent upon the creditor to show that the former assented to it. The defendant, Devon, need not have answered the negative averment of the bill, and his answer cannot, in this respect, be received as evidence against the complainant; because, if he had answered in the affirmative, the admissien would not have been of any use to the plaintiff, “either to assist his equity, of to advance his claim to relief,” or in any manner material to the proof of his case — though it may have estopped the defendant. The case of the Branch Bank at Huntsville v. Marshall, et al. [4 Ala. Rep. 60,] is not analagous in principal with the case before us. There, the bill perhaps stated more than was necessary to give the court jurisdiction, or to present the complainant’s case fairly; yet, the unnecessary allegation was pertinent, and so stated as to make it a material part of the plaintiff’s case. Its admission by the defendants would have relieved the complainant from what, by the frame of its bill, it had undertaken to prove— in fact, it was an allegation that required an answer. Our opinion upon both the points made, is, that the chancellor erred; the decree of the court of chancery is consequently reversed, and although, perhaps, a final decree might be here rendered, we think it the safer course, and accordingly, direct that the cause be remanded.