Womack v. Paxton's Ex'or

Hinton, J., delivered the opinion of the court. The facts and proceedings necessary to he stated in order to .a clear apprehension of the questions to he decided in this cause, are these: On the 15th day of Hovember, 1866, W. A. Glasgow and J. G. Paxton, executors of James Paxton, deceased, pursuant to the will of their testator, sold a tract of land of 404J acres, lying in the counties of Botetourt and Alleghany, at the confluence of the Jackson and Cowpasture rivers, and known as the “ Forks Farm,” to John L. Circle, at the price of $22,025 00. The purchaser complied with the terms of sale by paying ten — 19 — per cent, of the purchase-money in cash, and giving his bonds for the deferred payments with Charles S. Circle, Margaret Circle, Sarah A. Circle, Oliver Shirkey, and, the appellant, Wm, M. Womack, as sureties. For the purpose of facilitating a distribution of the estate, each deferred payment was divided into twenty-four bonds; and to secure the payment of all of these bonds, a deed conveying the land to the purchaser and a deed of trust conveying the land from him to said Glasgow, as trustee, were simultaneous^ executed and recorded. Of these bonds, many have been transferred, under a decree in another suit, by the surviving executor to the distributees of said Paxton in satisfaction of their respective interests in the estate. The purchaser, Circle, being in default in the payment of some of the deferred instalments of purchase-money, the trustee, Glasgow, made an effort to re-sell the land pursuant to the terms of the deed of trust-, which proved abortive. He then filed his bill in equity, in which, after reciting this fact and the terms of the deed of trust, he says: That he has reason to believe that no person could be found who would pay the large amount then due, in cash, and provide for the payments yet to fall due conformably to the terms prescribed in the trust deed; that he fears that the trust subject may fail to make good the balance due on it, and that he may be compelled to go against the sureties; and he then prays, amongst other things, that the court would “ direct him in the execution of his trust and make sxich alteration and modification in the terms of sale as will most certainly insure a fair price for the property,” &e. To this bill, Circle and his sureties were made defendants. < On the 22d March, 1871, the court entered a decree modifying the terms of sale prescribed in the deed of trust, recognizing the trustee, Glasgow, as its commissioner, and directing him to sell the land as a whole or in parcels, as he thought best, for ten per cent, in cash, and the balance in three equal annual instalments, with interest from the day of sale. Under this decree, Glasgow, trustee, and commissioner, sold the prop — 20 — erty on the 30th May, 1871, to Wm. E. Walkup, for $13,750 00, but this sale, at the instance of Circle, the court refused to confirm: whereupon, the commissioner, acting under the same decree, sold the land on the 24th October, 1871, to the same Circle, who was also the original purchaser, for the sum of $14,000, whereof $1,400 was paid in cash, and this is all that was ever collected of this purchase-money. For the deferred, payments, Circle, the purchaser, gave his bonds with Isaac Reynold, James Davis, Belle Circle, and the same Charles S., Sarah A., and Margaret Circle as sureties. On the 12th September, 1872, the court, on the application of the said John L. Circle, allowed him an abatement of $2,034 03, with interest from 15th November, 1866, on his purchase money for a deficiency in the quantity of bottom land. On the 7th April, 1873, the purchaser, John L. Circle, being in default in paying the purchase money of the sale made to him on the 24th October, 1871, a decree was entered directing a resale. Under this decree the land was sold on the 10th November, 1873, to the appellant, William M. Womack, for the sum of $10,600, and by him was turned over to William E. Walkup upon terms which the record does not disclose. Thereupon the commissioner to whom the cause had been referred to take an account of the balances due on the bonds of the 15th November, 1866, having in the meanwhile reported that about $7,000 would remain unpaid thereon after deducting all credits, said Glasgow filed an amended and supplemental bill, in which, after setting forth the facts that judgment had been obtained upon the first bond given at the sale made on the 24th October, 1871, and that execution had issued thereon and been returned “no property found,” &c., and that this large balance of $7,000 would remain after the proceeds of the last sale were applied to the payment of what was due under the first sale, to be charged on property other than the “Forks Farm,” he prays that such proceedings may be had against all — 21 — of the sureties to the first and second sales who were defendants to the bill as might ensure payment of the balances that may remain of the debts set up in the said original bill. And on the 23d April, 1877, the court entered a decree recommitting the carrse to a commissioner to ascertain and report the balances remaining of those debts after deducting all proper credits and providing for the application thereto of all other funds, properly applicable thereto, but which may not have been yet applied, so that it may appear for what amount decree should be taken against the lands of said Womack. On the 18th June, 1885, the court, pursuant to the finding of its commissioner, decreed that unless Womack should within sixty days from 5th June, 1885, pay off the balances remaining on these debts, which aggregated the sum of $5,407 90, as of June 12, 1885, and which were liens upon his land, that those lands should be sold and the proceeds applied to that purpose. And it is from this decree that Womack has appealed, and the first and great error which he assigns is that the action of the court in ordering a sale of “ Eorles Farm,” in the decree of February 3, 1872, upon terms differing from the terms of sale prescribed by the deed of trust, entirely discharged him as surety for the debt secured by that deed, or if it did not entirely discharge and release him from the burden of the contract, “ that it did at least discharge him” to the full extent of the net proceeds of the sale of “Forks Farm,” made under that decree, though part of those proceeds were never collected. In other words, his contention is, to nse the language of the brief, that although he did not and does not object to the sale on the altered terms if the creditor desired it, nevertheless he is entitled to the benefit of the alteration, the effect of which is to discharge him entirely, or at least to the extent of the net proceeds of the sale of “Forks Farm,” made on the 24th October, 1872. But, after a careful consideration of the subject, we can discover no foundation either in the principles of law applicable — 22 — to the contract of suretyship or in reason to justify either of .these pretensions. It is undoubtedly well settled that the undertaking of a surety being one strictissimi juris, he cannot, either at law or in equity, be hound farther or otherwise than by the very terms of his contract. And this mile, as was said by Kent, C. J., in Ludlow v. Simond, 2 Caines Cas. in Error, 1, is founded upon the most cogent and salutary principles of public policy and justice. In the complicated transactions of' civil life, the aid of one friend to another in the character of surety or bail, becomes requisite at every step. Without these constant acts of mutual kindness and assistance, the course of business and commerce would be prodigiously impeded and disturbed. It becomes, then, excessively important to have the-rule established that a surety is never to he implicated beyond his specific agreement. Accordingly it has become almost, axiomatic that whenever the principal debtor and the creditor-enter into any agreement, without the consent of the surety, which varies essentially the terms of the contract or materially affects the rights and remedies of the surety, the surety is. thereby released. But it is also well settled that the surety will not be discharged by the lawful act of the creditor or by the-decrees of the court which the creditor cannot control. “The-act of the creditor which injures the surety, or increases his-risk or exposes him to greater liability, which will operate as a. discharge, must be in the doing of something which the law prohibits or in the omission to do something which the law requires. But, in this case, it was the duty of the surety to-see that the debt was paid either by his principal or himself. The contract of the surety, as well as of the principal, was, that the debt should be paid; and to this contract the deed of trust was. a mere incident—a mere security for the enforcement of the debt. And the contract cannot be said to be in any proper sense altered or varied by the mere alteration in the terms of sale of this security. The surety has in no way been deprived of the full benefit of his security, but on the contrary, and as — 23 — the consequence of his own conduct in failing to pay upon the default of his principal, has had the security sold upon better terms than those prescribed by the deed of trust, and as a further consequence has had the benefit of the proceeds of sales, which in all probability could not have been effected without this alteration of the terms of sales. The surety therefore, and not the creditors or the executor, must be regarded as responsible for the sale and the necessary change of terms. But apart from all this, the surety must be held to have waived any right which he might have had to complain of the alteration in the terms of sale from those prescribed in the deed of trust, if the objection had been made in time. The bill fully disclosed the fact that one of the principal objects, which its framer had in vieAV Avas to bring to the attention of the surety, Avho Avas made a defendant, along with others, that he thought a change of terms was absolutely necessary in order to a sale. Then Avas the time for the appellant to have made his objection, if he had any, and by failing to do so he has forfeited that right. For AAdiatever may be the rule between man and man, Avhen a surety is called upon in a court of justice to-answer, he must make his objection then or stand foreArer concluded. Upon the second branch of this objection it is necessary to' say but little. As Ave have seen, the appellant is a surety to the bond for $22,025 00, and as Ave have further seen, that he Avas not discharged by the change of the terms of sale, it follows that he can only be discharged from his engagement, which is that, in the default of his principal to pay, that he will pay the Avhole of the debt. That engagement, except'to the extent that the debt has been already extinguished by actual payments, and the abatement for the etfror in giving the number of acres of bottom land, still exists, and cannot be blotted out by charging the court or its commissioner AAÚth laches and negligence in failing to realize the whole purchase — 24 — money upon the second sale to Circle, for the charge is wholly unsustained by proof. This disposes of the first assignment of error. The next assignment of error we shall notice, is the action of the court in allowing W. A. Glasgow, the commissioner, commissions upon the whole $14,000, for which the “ Fork Farm” was sold at the first judicial sale, when only $1,400 thereof was ever collected, and its action also in allowing the same commissioner two sums, one of $50, and the other of $100 as extra compensation for his extraordinary efforts to sell this land. This objection is well taken, for however meritorious may have been the claims of the commissioner, we are concluded in this respect by the express terms of the statute which provides that for services of commissioners, or officers under any decree or order for a sale, including the collection and paying over the proceeds, there shall not be allowed any greater commission than five per centum on the first three hundred dollars received by them, and two per centum on all above that, and if a sale be made by one commissioner or officer, and the proceeds collected by another, or not collected at all, “ the court under whose decree or order they acted shall apportion the commission between them as may be just.” Code 1873, ch. 174, § 6. As to the expenses for advertising, crier’s fee, and surveying the land, they were all properly allowed. Hogan v. Duke, 20 Gratt. 244. The next assignment of error which we shall notice, and it is the only other assignment which is well taken, is that the lands of the appellant, Womack, should not have been charged with the judgment of Scott & Co. v. Bradley & Womack until proper efforts had first been made to subject the property of the principal debtor. This was clearly against the rule laid down in Horton v. Bond, 28 Gratt. 815, and is therefore erroneous. For the errors indicated above the decree must be reversed, — 25 — and the cause be remanded to the circuit court with instructions to render a decree in conformity with the views herein expressed. Decree reversed.