Rea v. Forrest

Mr. Chief Justice Scholfield delivered the opinion of the Court: Appellant insists that he should have been allowed a credit for $590, and interest thereon from 1869, paid by him on the judgment in favor of Millikin, against Forrest; and also that he should be allowed a credit of $250, and interest thereon from 1869—amount of judgment of Peddecord & Burrows against Forrest, which he paid. He claims that he paid these sums by the request of Forrest, and for his benefit. It appears, the way appellant paid these judgments was this : Execution had issued upon the Millikin judgment and been levied on certain lands of Forrest. The Peddecord & Burrows judgment was junior to that judgment. After the expiration of twelve months, and before the expiration of fifteen months from the date of the sale under the Millikin judgment, execution was issued on the Peddecord & Burrows judgment, appellant purchased that judgment, and, by virtue of the execution, redeemed from the former sale as a judgment creditor, bidding in his own name, in addition to the amount of the redemption money, the amount necessary to the satisfaction of the Peddecord & Burrows judgment, and the property was struck off and sold to him. By virtue of this purchase he obtained title to the property of Forrest which had been levied upon. Forrest denies that the purchase of the Peddecord & Burrows judgment, and the redemption thereunder, were made at his request or for his benefit; so, on this point, we may regard the evidence as equally balanced. We do not regard the circumstances as conclusive in favor of appellant. The only one of much significance, in his favor, is, Forrest, after the lien of the Millikin judgment had attached, had conveyed the property with covenants of warranty to St. John, and, after appellant obtained title, he claims to have released Forrest from those covenants. On the other hand, it would seem, that, if the purchase of the judgment and the redemption were for Forrest, either the certificate of purchase would have been assigned to him, or the property would have been, in some way, held and used for his benefit. But this is not pretended. It seems to be conceded that the title vested in appellant was absolute, and that he has held and disposed of the property without regard to Forrest, as best comported with his views of his own interests. It would, in no view, appear right to charge Forrest with the amount of these judgments, without showing that, otherwise, appellant must lose that amount. For aught that appears, the property may have been worth much more to appellant than it has cost him. If he may require Forrest to repay him what he has expended, Forrest is surely entitled to have him account for what he has received, and we have discovered nothing upon which a balance could be decreed appellant upon such an accounting. It is further claimed that appellant should have been allowed credit for the amount of a judgment purchased by appellant of one Thomas O. Smith against Forrest. We are of opinion that claim is without merit. As we understand the evidence, the facts in explanation of the nature of the claim, are, in brief, these: Forrest was indebted to J. R. Race & Co., and, to secure his indebtedness, deposited with them a note he held on St. John for $1000. St. John paid J. R. Race & Co. $600, for which they gave him a receipt but indorsed no credit on the note. Subsequently, St. John, it seems, applied to appellant for money, and an arrangement, in substance as follows, was effected: The $1000 note deposited with J. R. Race & Co. was taken up by Forrest, and the receipt for the $600 which St. John had paid on the note was returned to him. No credit was indorsed on the note, and it was treated by all the parties as if no payment had been made upon it. A loan of $300 was then made of Thomas O. Smith, on short time. Forrest’s note was given for the amount, and, to secure the payment of his note, he deposited with Smith the $1000 St. John note, agreeing that if his note should not be promptly paid, Smith should be entitled to that note. This all appears to have been at appellant’s instance, and he undertook to keep Forrest harmless against his $300 note by paying the same for him. It was also agreed that $271 of the balance of the amount which St. John had paid to J. R. Race & Co. should be credited on a judgment in favor of Forrest, against appellant and St. John. We are of opinion, also, that a fair conclusion from all the evidence is, that if appellant kept his agreement with Forrest and paid his note of $300 to Smith, so as to save him from loss on that account, the judgment was to be further credited with the sum of $300, making the credits to be allowed on the judgment in all $571, or, in other words, by this arrangement taking the $600 credit from the $1000 note, where it in the first instance belonged, and placing it on the judgment, less $29. Appellant did not pay the $300 note to Smith, nor was it paid by Forrest; and Smith, accordingly, after its maturity, but without canceling or surrendering it, proceeded to and did enforce collection of the $1000 note, realizing thereon some $700 or $800, so that Forrest entirely lost this note. Afterwards, Forrest obtained judgment against appellant, on account of his agreement to save him harmless in this ^.transaction, for the amount of $1000, which judgment is still held by Forrest and is one of those of which satisfaction is sought to be decreed in this suit. Afterwards, it appears, Smith had judgment entered by confession, on the note of Forrest to him for $300, by virtue of a power of attorney annexed, for some $2100, which judgment appellant purchased and had assigned to him, and this is the judgment which he claims the court erred in not allowing him the benefit of. It is too clear to admit of discussion, that Smith was not entitled to retain the collateral, reimburse himself, and more, from it, and then enforce payment of the note. Ho court of equity can tolerate such a proceeding as that. Appellant was, evidently, fully aware of the consideration for this judgment and the circumstances under which it was obtained. Forrest had no notice of the entry of the judgment, and, after he lost his collateral, had no reason to anticipate that judgment would be taken on the note. Without deeming it necessary to enter into any elaborate discussion of the facts and the legal principles applicable, we think it sufficient to simply declare as our conclusion, that, under the facts proved, the judgment was fraudulent and void as against Forrest, and, consequently, appellant as assignee, either with or without notice, is entitled to occupy no more favored position than Smith would occupy, were he attempting to enforce it through a' court of equity. The court, therefore, did not err in refusing to allow appellant the amount of the judgment. We agree with appellant, that he, having been made to respond to appellee in a judgment of $1000 for his default in paying the $300 note, is entitled to be credited on the judgment against himself and St. John with the balance of the $600—namely, $300—which he would have had, but for the giving of the $300 note. The judgment, presumptively, gives Forrest all he was entitled to, and, therefore, restores to him the $300 which he loaned at appellant’s request, and upon his guaranty to St. John, and leaves him, with reference to appellant, as if he had retained the whole $600 which St. John paid. But this was also the view of the court below, and, by its decree, he was allowed credit for this amount. The master in chancery, in his report, only allowed him credit for $271, on account of this transaction. This amount was increased by the decree of the circuit court adding thereto $300, thus increasing that item to $571, still leaving $29 to complete the $600 which it would seem should have been allowed to appellant, and we are not entirely clear but that, in justice, this should be added to the other allowances of appellant. Still, it appears, when the transaction occurred, Forrest gave St. John a receipt, instead of for $300, only for this $271, to be credited on the judgment, and probably the more reasonable conclusion is, that St. John or appellant, in some unexplained way, had this $29 from Forrest, so that in reality he has had only the benefit of the $571. The amount of this discrepancy is too small, in view of the uncertain character of the evidence relating to it, to alone justify a reversal of the decree. Decree affirmed.