Moss v. Pettingill

[219] .By the Gowrt — Elandrau, J. Where .a party recovers a judgment against several Defendants, parties to a promissory note, and levies upon property of one of the parties primarily liable sufficient to satisfy the judgment, and then releases the levy without the consent of those Defendants whose liability is only secondary, it will operate as a satisfaction of the judgment as against them. It is the same principle which we decided in the case of Willis vs. Davis, argued at the July term of this Court in 1859. There the creditor had come into the possession or control of property sufficient to satisfy his demand by assignment'to a trustee for his benefit, and he consented to a reassignment to the debtor, and we held that it operated to discharge the parties standing in the relation of sureties. A levy of an execution upon property puts .the creditor in possession of the means to satisfy his demand, and it is his duty to use all diligence to see that it be made available to that end. If he voluntarily relinquishes his levy, and consequently his control over the property, the sureties, or parties who would have been benefitted by an execution of the levy, shall not be prejudiced by his act, but the result shall be the same to them as if he had, done his duty toward them. 11 Wend. 125; 12 John. 207; 7 John. 128; 6 Wend. 562; Exparte Lawrence, 4 Cow. 117; 7 Cow. 13; Ib. 310. The English decisions are to the same import. The complaint contains facts enough to discharge the Plaintiff, Moss, from liability on the judgment, as he occupied the position of an accommodation endorser upon the note upon which the judgment was recovered, and his relation and rights are not changed by the recovery of judgment. 2 American Leading Oases, 319 and the cases there cited. It alleges fully that the property levied upon was sufficient to satisfy and pay the execution, and was of the value of seventeen thousand five hundred dollars, and that the levy was relinquished by order of the Plaintiff’s Attorneys. The injunction was properly issued upon these facts appearing to the satisfaction of the Court. The equities of the'Plaintiff’s case consist of the facts that the Defendant, Pettingill, had possessed himself of the means220 of satisfying his judgment, and had relinquished this advantage to the detriment of the Plaintiff. Now what does the answer set up in opposition to this state of facts ? It admits that the execution was levied as stated in the complaint, but avers that-the property was owned jointly by the Defendant, Myrick, and another, as partners. That it would not have realized at public sale more than three thousand dollars, and that the liabilities of the partnership were upwards of twenty thousand dollars. The legal consequence of these allegations is, that the property so levied upon, being first applicable to the satisfaction of the partnership debts, it would have loft nothing to apply on the Defendant, Pettingill’s execution, and the levy would have proved of no avail, and this we think is a defence to the action; but the question is not upon the sufficiency of the answer as a defence, but upon its sufficiency as neutralizing the complaint, and authorizing the dissolution of the injunction which was issued upon it. The general rule is, that when the answer fully denies and puts in issue the equities of the bill, the injunction will be dissolved. When the Plaintiff swears to his bill, he acquires a preliminary advantage .over the Defendant by his right to an injunction, but when the Defendant has denied upon his oath the facts which were proven by the bill, he restores the equilibrium which previously existed between the parties, and cancels the temporary rights the Plaintiff has obtained. This rule is just in principle, as why should the Defendant bo restrained when he has destroyed the effect of the Plaintiff’s charges against him by their negation. It is upon this principle that the Court below dissolved the injunction in this case. The Judge has assumed that matter in an answer which amounts to a defence, is equivalent to a denial of the bill, and relieves the Defendant from the disabilities imposed upon him by the injunction. This however is an error. Where the defence is by new matter set up in the answer, it will be seen that it leaves the principal facts of the bill admitted, and presents a new issue on the part of Defendant, the affirmative of which he assumes; by this condition of the pleadings, the original advantage which accrued [221] to the Plaintiff is not assailed nor shaken, but admitted, and sought to be counteracted by the establishment of a distinct and substantive position, aimed at the consequence of the Plaintiff’s facts, but not their existence. If the Defendant fails to make good by proof what he sets -out in his answer, the injunction will be made perpetual upon the admitted facts in the bill. In such cases the injunction will be continued until the hearing. Minturn vs. Seymour, 4 John. Ch. R. 497; Allen vs. Orobroft, Barnardist Ch. B. 373-4. The pleadings in this case stand thus: the complaint affirms that the Defendant levied his execution upon the property of Nathan Myrick, of sufficient value to pay the debt. The answer admits that the levy was made upon the identical property mentioned in the complaint, and avers that it was partnership property against which were debts of the partners more than sufficient to absorb it all. This evidently gives the affirmative to the Defendant. The denial that the property was the property of Nathan Myrick, taken with the other allegations of the answer, does not change this result. In the ordinary case of an answer which puts in issue the equities of the bill, the coming in of the reply does not affect the question of the dissolution of the injunction which de’ pends upon the bill and answer alone, but where the defence is by way of new matter, as in this case, the reply is of vital importance, as it determines whether the Plaintiff will admit or deny the new matter. Should he admit it directly by the reply, or by an omission to reply, of course the bill and its incident, the injunction, would fall; but on the other hand should it be denied, the injunction will be allowed to stand until the hearing. The Court should not entertain a motion to dissolve an injunction upon an answer of this character until after the time to reply had expired, or at least should only entertain it to deny it. IJnder this view of the case, it becomes unnecessary to comment upon the irregularities complained of by the Appellant concerning the manner in which the motion was brought on to a hearing. Suffice it to say that we are fully satisfied that the Counsel for the Defendant 5yho made the niotion, and the Court that decided it acted in [222] perfect good faith, being ignorant of the fact that a reply had been served in the case. It is urged that the Defendant, Pettingill, had no right to relinquish his levy, hut was obliged to pursue it to a legal and actual demonstration that the property levied upon would all he consumed by the partnership liabilities. ¥e think however that when he had made his levy, and discovered that the extent of firm liabilities was so great as to preclude the possibility of anything remaining to apply on his execution, he adopted the best course in abandoning it, taking upon himself the responsibility of establishing the facts, if any surety, or party standing in that relation to his debt, should question the propriety of the release. It would he a very unwise doctrine that would compel him to prove the insolvency of the partnership by clinging to a levy which the affairs of the concern made it evident was hopeless and unavailing. The better plan is to abandon the levy and stand ready to justify the propriety and good faith of the act against parties claiming to be prejudiced. This is now the Defendant’s position in the action. If he substantiates it by proof on the trial he is vindicated, as a sale could not have lessened the Plaintiff’s liability ; if he fails, the Plaintiff will be discharged from the judgment to the extent that the levy would have satisfied the execution. The Court erred in dissolving the injunction, and the order is reversed with ten dollars costs.