Sayre v. King

Green, PRESIDENT, announced the opinion of the Court: This record presents two questions. First, whether a court of equity ought to award to the appellants a new trial in the common law suit because of evidence discovered after its trial at law. In the case of Zickefoose v. Kuykendall, 12 W. Va. 23, this Court held, that “as a new trial should not be awarded by a court of equity because of after-discovered evidence, unless such evidence is not only material, but such as ought to produce an opposite verdict on the merits of the case, and unless it also appears, that the new evidence is such, that reasonable diligence on the part of the party asking the new trial could not have secured it on the former trial.” In the opinion of the Court in Smith v. McClean, 11 W. Va. 668, the law on this subject is thus stated : “In a — 571 — bill brought to obtain relief in the nature of a new trial the bill should allege, not only the discovery of new evidence, but also what that evidence is, that the court may see, that it is material in its object and not merely cumulative, corroborative or collateral, and.also that it is such, that it ought to produce an opposite result on the merits. And the bill must do more than this; it must show that the evidence is such, that reasonable diligence on the part of the defendant could not have secured it at the former trial.” On the same subject I may also refer to Shields v. McClung, 6 W. Va. 79; Alford v. Moore, 15 W. Va. 597; Knapp v. Snyder, 15 W. Va. 434; and Harner v. Price, supra. In the case of Smith v. McClean, 11 W. Va. 655, the court also1 laid down this principle: “A surety cannot rely on his ignorance of a substantial defence arising out of transactions between the plaintiff in the common law suit and the • principal as a reason for opening a judgment against the surety, unless he alleges in his bill and shows by evidence, that he took proper measures to ascertain the true state of the case, and prepare his defence in the common law action, or that he was prevented by circumstances, which rendered it impossible to take such measures/’ These decisions conclusively show, that the appellants in this case are not entitled to a new7 trial of the common law suit. The proper allegations to justify the court in giving such relief were not alleged in the bill; and if they had been, it is clear that the evidence utterly fails to shows a case in which they are entitled to this relief. The bond, which they were sued on, according to their own bill was conditioned not only for the faithful and prompt discharge by their principal, John M. Burdett, of all the duties of the office of sheriff in the township of Mill Creek, but also for the faithful and prompt discharge of any other business undertaken as sheriff by him. I understand from this bill that this bond bound the sureties in it for all taxes undertaken to be- collected by Burdett as deputy-sheriff, whether the tax-payers re — 572 — sided in Mill Creek township or not; and this, I presume, was the reason why the sureties permitted a large recovery against them in the common law suit for taxes collected by Burdett of persons, who did not reside in Mill Creek township. But even if they had not been responsible for his failure to pay over taxes collected of parties not residing in this township, they could get no relief in a court of equity under the circumstances of this case, because by the use of ordinary diligence in the defence of the common law suit they could without any difficulty have shown where the tax-payers lived. The names of the tax-payers, of whom Burdett had collected taxes, could by the most ordinary diligence in the common law suit have been ascertained by them, as the receipts of Burdett for the collection of these taxes of these parties were filed with the declaration ancT were at all times accessible to them and their counsel; and if they had been looked at ever so casually, any one acquainted in the county could have informed them, that a majority of these tax-payers did not live in Mill Creek township. If the appellant, did not know it before the trial of the common law suit, their ignorance can only be accounted for by gross negligence on their part or by a belief on their part and on the part of their counsel, that they were responsible for these taxes collected by their principal and not accounted for, no matter where the tax-payers resided. Sylalbus 2. The other question presented by this record is, whether the appellee, King, did by agreement with Burdett suspend his right of action against him and his sureties on his bond as his deputy sheriff without the consent of his sureties. If he did' so, he thereby discharged his sureties from all liability on this bond. See Shields & Mahon v. Reynolds, 9 W. Va. 485; Norris v. Crummey, 2 Rand. 333-4; Nesbit v. Smith, 2 Bro. C. C. 579; Reesse v. Berrington, 2 Ves. Jr. 540. And the court of equity is the only court, in which this defence, in such a case as is presented by this record, could be made. The appel — 573 — lants could not have pleaded in the common law suit, which was brought on this bond of Burdett and his sure-' ties, that they as sureties were discharged by King, the plaintiff having made a parol agreement with their principal, Burdett, whereby he suspended his right of action on this bond for a time. See Devers v. Ross, 10 Gratt. 252; Steptoe’s adm’r v. Harvey’s ex’r, 7 Leigh 501; Ward v. Johnson, 6 Munf. 6. If therefore King did in point of fact enter into any contract with the principal in this bond, Burdett, whereby he agreed to suspend or did suspend his right to sue upon this bond for any.time without the consent of the sureties in this bond, they were thereby discharged from all liability; and as they could not rely on this defence in the common law suit brought against them, they had a right to have the collection of the judgments obtained against them on this bond enjoined and the court erred in dissolving it. But if King did not enter into any contract with Burdett, which suspended his right of action on this bond, then the court properly dissolved this injunction. There are decisions to the effect, that if commercial paper, as a bill or negotiable note, payable at a future time be taken for an existing debt, the law implies from this transaction an agreement to wait till the bill or note matures, and it will therefore discharge the sureties for the existing debt, who had not consented to such arrangement. See Okie v. Spencer, 2 Wharton 253; Mercer v. Lancaster, 5 Barr 160; Myers v. Welles, 5 Hill 463; Fellows v. Prentiss, 3 Denio 512; Bangs v. Mosher, 23 Barb. 478; Brooks v. Wright, 13 Allen 72; Anderson v. Marrett, 58 Me. 539; Appleton v. Parker, 15 Gray 173. But there are many cases, in which it is held, that the taking of such bill .or note is only prima facie evidence, that it was taken as a conditional payment, and therefore that existing right of action on the original debt was suspended, and that it may be proven, that it was not so taken, but was taken as collateral security, in — 574 — which case the right of action on the original debt will not 'be suspended. See Armistead v. Ward, 2 Patt. & H. 504; Elwood v. Deifendorf, 5 Barb. 398; Weakley v. Bell, 9 Watts 273; Shaw v. The Church, 3 Wright 226; Ripley v. Greenleaf, 2 Vt. 129; Pring v. Clarkson, 1 B. & C. 14; Wade v. Stanton, 5 How. 631; Paine v. Voorhees, 26 Wis. 522; Appleton v. Parker, 15 Gray 173. But it must be observed, that this doctrine, that the giving of a bill or negotiable note is prima faoie conditional payment, which operates to suspend the debt, seems to be more a branch of the commercial law than a part of the common law, and therefore where a single bill unnego-tiable or a bond or mortgage or an assignment of chattels to be delivered at a future period has been taken for an antecedent debt, there is no legal implication of an agreement to forbear the collection of the antecedent debt; and unless such agreement is otherwise proven than by the mere proof of the taking of such single bill or other chose in action not commercial paper, the sureties for the original debt will not be discharged. See United States v. Hodge, 6 How. 279; Emes v. Widdowson, 4 C. & P. 151 (19 Hog. C. L. R. 316); Twopenny v. Young, 3 B. & C. 208 (10 Eng. C. L. R. 54); Burke v. Kruger, 8 Tex. 66. See also Griffith v. Owen, 13 M. & W. 58; Bates v. Churchhill, 32 Me. 31; Elwood v. Deifendorf, 5 Barb. 398; Remson v. Graves, 41 N. Y. 472; Cruger et al. v. Burke et al., 11 Tex. 694; Hamsbarger adm’r v. Kenney, 13 Gratt. 520; Oxley et al. v. Storer, 54 Ill. 160; Spangler v. Sheffer, 19 P. F. Smith (69 Pa. St.) 255; Hays v. Wells & Babbitt, 34 Md. 512. Syllabus 3. While some of these authorities, which we have cited in this opinion, cannot well be reconciled, an examination of them has led me to the conclusion, that these legal propositions are deducible from them. The taking of a bill or negotiable note for an existing debt is prima facie conditional payment thereof; but it may be shown by direct or circumstantial evidence, that the bill or negotiable note was taken as an absolute payment or as col — 575 — lateral security merely; but this is rather a branch of the commercial law than a part of the common law. If instead of commercial paper another chose in action, such as an unnegotiable note, a bond, deed of trust or mortgage or an obligation to deliver goods be given by the debtor to his creditor, such chose in action is 'prima facie collateral security for the original debt; but it may be shown by direct or circumstantial evidence, that such chose in action was received as an absolute or conditional payment. If any chose in action was received absolute payment of a preceding debt, it discharges the sureties in the original debt; and if received as conditional payment, and such chose in action is payable at a future time, it amounts to a suspension of the right of the creditor to sue on his original debt; and if taken without the consent of the sureties in the original debt, it discharges them from all liability. If such chose in . action was received as collateral security, though it be payable at a future time, unless there was an agreement to postpone the right of suit on the original debt proven by other evidence direct or circumstantial, the taking of such collateral security does not suspend the right of action on the original debt, and therefore does'not discharge the sureties from their liability therefor. SyIIatras 4- 5- In the case before us it is satisfactorily proven, that the consideration, which induced Burdett to have his settlement or more properly rough estimate of the amount due from him to King, was not that he might make an arrangement whereby the prosecution of the suit on his bond as sheriff against him and his sureties might be suspended, but only that he might give a lien on his farm to enable it to be applied to the relief of his sureties, and thus prevent its application to pay another debt which he Burdett owed as security. The five months’ time, on which the single bill given by him to King for or on account of his indebtedness secured by the deed of trust was not either by an express nor by an implied agreement between the parties designed to operate as a — 576 — suspension of the prosecution of the suit against the principal and his sureties then pending. Had it been so intended, the counsel who was prosecuting this suit would certainly have been so told by the parties, as he was present all the time these arrangements were being made, and aided in the making of them, drawing the .deed of trust. Burdett was insolvent and could have had no expectation of paying off this large debt in three or four months. He could not have wanted time with this expectation; and if he had, he could have had much longer time by not making such arrangements, as the iudgment against him and his sureties, if prosecuted vigorously could not have been had in three or four months. King, it appears, did not desire specially to make this arrangement. The farm covered by the deed of trust did not, when sold, pay one third of his debt; and it seems altogether improbable, that he intended to suspend or abandon his suit against the principal and his sureties in order to realize so small a part of his debt, as there is nothing in the record to indicate, that his whole debt was not perfectly secure, but rather the reverse. We have seen, that the burden of proving by express evidence or by circumstantial evidence, that there was an agreement on the part of King to suspend the prosecution of this common law suit against Burdett and his sureties, rested by law on the sureties, and that such an agreement could not legally be inferred from the mere giving of this single bill payable at a future time and securing it by a deed of trust on the farm. There is not only no express evidence of such an agreement having been made, but the evidence fails to induce us to conclude, that such an agreement could be inferred from the circumstances surrounding the case. On the contrary the conclusion we would draw from the evidence is, that there was no such agreement express or implied, and King’s right of action on the bond of Burdett as bis deputy was never for a moment suspended. — 577 — For these reasons we think the judge-of the circuit court did not err in dissolving the injunction which he' had awarded ; and that the order made by the judge of tbe circuit court of Jackson in vacation on the 13th day of January, 1879, must be affirmed, and the appellee, George S. M. King, must recover of the appellants his ' costs expended in this court and $30.00 damages; and this cause must be remanded to the circuit court of Jackson to be further proceeded with according to the principles laid down in this opinion and further according to the rules governing courts of equity. Judges Haymond and Johnson concurred. Order Affirmed. Cause Kemanded.