Garrard v. Webb

HITCHCOCK, C. JThis is a writ of error to the Circuit Court of Lauderdale County. The defendants here, who were the complainants in equity below, allege in their bill, that on the eighteenth of March, eighteen hundred and twenty-nine, they became the accommodation endorsers for one George Boggs, junior, on a bill of exchange, drawn by him on White & McClain, of New Orleans, for the sum of four thousand eight hundred and eighty-nine doF lars and eighty-one conts, due twelve months after date ; that .said endorsement was upon the condition that said Boggs should execute a deed of trust upon certain real estate in the town of Florence, belong* 'ing to said Boggs; that in conformity with said agreement, the defendant, Garrard, drew up a deed of trust, in which he was constituted the trustee, which was executed by said Boggs, but which remained in the hands of said Garrard, not recorded: that on the fifteenth of April, eighteen hundred and twenty-nine, said Boggs again applied to them, stating that White & McClain declined accepting said bill, unless the — 78 — complainants would become joint drawers with said Boggs, of said bill, which was to he drawn on White; the firm of White & McClain having just then been dissolved. That accordingly, on the eighteenth April, eighteen hundred and twenty-nine, another bill was drawn by Boggs and the complainants, as drawers, in favor of Kirkman & Rosser, on White,, for the sum of four thousand eight hundred and eighty-nine dollars and eighty one cents, payable twelve months after date; upon which the first bill was given up and destroyed; which last bill was accepted. That upon the executing this last bill, it was agreed between the parties, that the complainants should be secured upon the same by deed of trust, as was done in the first bill: that in the month of September, eighteen hundred and thirty, the complainants applied to Garrard to complete the deed of trust, that the same might be executed anti recorded: that Gar-rard, without adverting to the change which had been made in the date, and the manner of the responsibility of the complainants, adopted the former deed, by changing the date to the twentieth September ; that the deed was then executed and recorded, without the discrepancy being observed, till long after, by the complainants. The bill charges, that the deed was executed expressly for the purpose of securing the complainants for their liability on the last bill, and for no other purpose. It charges, that Boggs failed to pay the bill, and that the same, at maturity, was protested; and that it has been paid by the complainants : that Boggs has become entirely insolvent; and that their only chance for indemnity is upon the property secured by the — 79 — deed of trust: that they have called upon Garrard to cause the property to be sold, but he refuses, alleging that he has a superior lien on the same property, which is of later date. . The answer of Boggs admits the material allegations of the bill. Garrard admits the execution of the deed as described by Boggs; but which he states was not recorded at the request of Boggs: that he heard nothing more of the matter until the twentieth September, eighteen hundred and thirty, when Boggs and the complainants, Webb & Smith, called on him to enquire if the deed had been recorded, when he informed them that it had not; upon which, they requested him to to have it done : that upon his advising them that, as sixty days had elapsed, the recording would answer no purpose, they requested him to change the date; upon which he advised them to have a new deed drawn out, rather than to interline the old one, which they requested him to do : that as he was about to write the deed, he enquired of the parties present, if any change was to be made in it, when he was told, no other change than that of the date was required. He denies that he had any knowledge or intimation of the change in the bill. He further states, that on the fourteenth March, eighteen hundred and thirty-one, Boggs and one Woodcock applied to him to be their security for the sum of two thousand nine hundred and forty-eight dollars and ninety-two cents, and that Boggs proposed to give him a deed of trust on the above named property ; upon which, on enquiring of Boggs, he was informed by him, on his honor, that the debt secured by the deed of trust mentioned in the complainants’ — 80 — bill, had been satisfied; that from the length of time that had elapsed, and he never having heard the subject mentioned by any of the parties, combined with the pledge of Boggs that the debt had been paid, reluctantly became the security of Boggs and Woodcock, and took a deed of trust upon the same property ; which he sets up against the deed first above mentioned. The case was heard upon bill, answers and exhibits, and a decree was made, directing the property to be sold, and the money paid over to the complainants : and a commissioner was appointed to take an account of the rents and profits of the property. From which decree, the case has come here. It is conceded by the counsel for the plaintiff in error, that as between the complainants and Boggs, a Court of Equity would be authorised to make a decree for the complainants : that the security having- been intended for the indemnity of the complainants against their responsibility on the second bill, the mistake, error, or omission, to describe it properly in the deed of trust, can not be taken advantage of by him; it being the peculiar province of a Court of Equity to compel a party to perform his agreement according to its terms, and to the manifest intention of the parties. But it is contended, that however true this may be with respect to the original parties, yet, that this can not be done, to the prejudice of third persons, who have honestly acquired an interest in the subject matter, and that in this instance, the conduct of the parties, in negligently omitting, when they applied to Garrard, to have the deed perfected and re — 81 — corded, — to apprise him of the change in the date, and manner of the liabilities of the parties, — gives him a superior equity over them. Admitting the correctness of the principle, it is difficult to perceive the application of it to this case. If the existence of the lien is admitted as between the original parties, and Garrard has been led to believe, from the complainants, that it had not been discharged, of what consequence to him was it, whether there was an error in the description of the bill, or not. The important fact for him was, whether the property was incumbered. That it was so, is true: that he knew it, is equally so; and if he has been misled, is it not owing entirely to his reliance upon the assertion of Boggs, that the lien had been discharged. The language of Boggs to him was, that the debt for which the deed was given, had been paid. Now what was the debt 1 The bill described, had been cancelled, it is true ; but the debt} which in contemplation of law, was secured, was not paid. The inference which he drew, from the silence of the parties, and the length of time that had elapsed, can not aid him, as they are no bar, at law or in equity, to the complainants’ demand. The record of the deed was notice to all the world, of the existence of the lien ; and nothing could discharge it, but the payment of the debt, or thq voluntary relinquishment by the cestui que trust. The only negligence which involves any responsibility, was in his incautiously trusting Bogg’s declaration: and having relied on his veracity, he must take the consequences of his treachery. If he had been apprised of the error, in the description of the bill, it would not — 82 — have effected the case. He could, with the same propriety, rely upon the matters he now relies upon —the silence of the parties. — The length of time, and the declaration of Boggs, would have applied in that case, as well as in this. If there is any thing wanting to make the case conclusive against him, it is, that he was himself the trustee of the complainants — bound to protect their right, and through whom they were to convert the property into money, in case of need. The counsel for the plaintiff in error, relies upon the case of Hunt vs Rousmaniere’sadm’rs ;* in which it is held, “ that a Court of Equity may compel parties to execute their agreements ; but it has no power to make agreements for them.” The object of that bill was to compel the administrators of Rousmaniere to carry into effect a contract, which it was admitted, the intestate, in his life time, intended should be effected. The Court refused to aid the party, on the ground, that the intestate had, in his life time, executed precisely such an instrument, as upon reflection, and advice of counsel, was thought the most proper to effectuate the contract: that was done, which the the parties intended to do. There was no mistake, either in fact or law, to correct. The death of Rous-maniere had defeated the execution of the intention of the parties; of which his other creditors claimed the benefit. The principles recognised in the case cited, are directly applicable to the case before us, and are binding upon Garrard as well as Boggs. Claiming under Boggs, with notice of the lien, he is estopped, as — 83 — well as Boggs. There is no application here to make a new contract, or to reform one. We are, therefore, clearly of the opinion, that as he was affected with notice of the trust deed, and' not having been misled by any act of the complainants, he is .chargeable with their prior equity. It is insisted by the counsel for the defendants in error, that the decree in this case, is not such a final one as will authorise a writ of erroi*. It is true, that after disposing of the main principle of the bill,' the Court has directed an enquiry into the value of the rents and profits during the time the property has been in the possession of the defendant below; of which he should make report to a subsequent term of the Circuit Court: and there is no decree for costs. There is, therefore, something left for the action of the Court below, and which can not be done in this Court. If the final action of the Court- below, had been had upon this part of the decree, this Court would have felt bound to reverse it. Under the circumstances of the case, the writ of error must be dismissed, with costs. Footnotes [*] 1 Peters,