Laval v. Rowley

DAVISON; J. Rowley brought this action against Laved’ and Mann, alleging, in his complaint, these facts: On September 0, 1855, John F. Staeer recovered a judgment, in the Yanderburg Common Pleas, against one Peter Kuhlman, and the plaintiff, Nathan Rowley, for $181, in an action founded upon a note given by Kuhlman, as principal, and Rowley, as surety, and dated July 27, 1854. On August 8, 1857, Rowley paid the judgment, interest thereon, and costs. While Rowley was such surety, on said note, viz., on March % 1855, Kuhlman and his wife, with intent to hinder, delay and defraud Ms creditors, conveyed, by deed in fee simple, a part of lot 109, in tbe original plat of Evansville, (describing it,) to Sarah Mann, wbo received and accepted tbe conveyance for the same fraudulent purpose. And she, Sarah, on August 24, in the last named year, conveyed the same real estate to John Laval, who, at the time he accepted the convéyance, had full notice of the fraudulent purpose with which the premises had been conveyed to Sarah Mann. On July 9, 1857, an execution, for the use of Nathan Rowley, was issued on said judgment, by virtue of which tbe sheriff levied upon the above described real estate, and duly exposed tbe same to sale as the property of Peter Kuhlman. At this sale, Nathan Rowley became the purchaser, and, in pursuance of Ms purchase, received a sheriff’s deed for the premises, dated August 8, 1857. 'The relief prayed is, that [37] the several conveyances to Sarah Mann, and John Laval, be decreed null and void, and that the title of Nathan Rowley, to the premises, be quieted, and for general relief, &c. The defendant, Laval, answered: 1. By a general traverse. 2. That he purchased the premises described, &c., in good faith, and for a valuable consideration; that at the time of the purchase, he paid Sarah Mann $945, as part of the purchase money, and for the residue gave two notes, each for $472, the first payable at one year from the date of the sale, and the second at two years; that when said money was paid, and notes given, she executed to him a deed, in fee simple, for the property, which was on that day duly recorded, &c. And the defendant avers that, at the time of the execution of the deed, he had no notice or knowledge of any of the matters, with the notiee of which he is charged in the complaint; that in pursuance of the purchase, the defendant immediately thereafter took possession of the premises, and made lasting and valuable improvements thereon, worth $4,000; that while these improvements were being made, Rowley stood by, and saw them in progress, without intimating to defendant that he had a elaim against LLulilman, or against the property. That Rowley, after the making of the improvements, caused the premises to be sold by the sheriff, as the property of Kuhlman, for $200, upon an execution issued on said judgment, which sum, at the time of the sale was less than the thirtieth part of the cash value of the premises; and that the rents and profits thereof, for one year, were worth more than the amount of the judgment, interest thereon, and costs. Wherefore, defendant says that he is a bona fide purchaser without notice, and, as such, ought to be protected, &c. A demurrer to this defense was sustained, and the defendant excepted. Sarah Mann, the other defendant, answered by a general denial. The issues were submitted to a jury, who, in answer to certain questions propounded to them, at the instance of the defendant, found specially as follows: 1. Rowley paid the judgment before the execution issued. 2. Prior to the time the execution was issued, no judicial proceedings [38] were had to determine whether Rowley was, or was not, _ surety for Kuhlman. 3. No order of the Court was made awarding execution for Rowley's benefit, or declaring Mm to be defendant’s surety in the judgment. 4. The deed from Peter Kuhlman to Sarah Mann, was made by him, and accepted by her, with intent to hinder and delay the creditors of Kuhlman. 5. Laval, before h’e purchased, had notice of the fraudulent character of the deed from Kuhlman to Mann. The jury also found a general verdict for the plaintiff. At the proper time, the defendants moved that judgment be given in their favor, upon the si>ecial finding of the jury; but the Court denied their motion, and they excepted. They then moved for a new trial, and in arrest, which motions were overruled. And thereupon, they moved for a new trial, under § 601 of the Practice Act; but this motion was also overruled, and they excepted. Einal judgment was given for the plaintiff. For a reversal, the defendants rely upon three grounds: 1. The execution, upon which the plaintiff bases his title, was void. 2. The action of the Court in sustaining the demurrer to the second defense. 3. The refusal to grant a new trial, under § 601 of the Practice Act. As has been seen, the judgment under which the plaintiff claims title, was a joint recovery against himself and KuTilman. There is nothing in the record of the proceedings in which it was rendered, tending to show that he was surety for KuMman; but the evidence in this case proves the fact, that he really was a mere surety in the judgment, and that, having paid it, he caused the execution thereon to be issued for his own use. The general rule is, if a judgment be satisfied, the power to sell under it ceases; and should a sale take place in virtue of an execution upon such satisfied judgment, even a Iona fide purchaser, without notice, would acquire no title 2 Hill, 566; 5 Barbour’s S. C. Rep. 565; 18 Johns. 441. In this case, however, the plaintiff when he purchased, having himself paid the judgment, had, of course, notice that it was satisfied, and is not entitled to the relief sought, unless such payment gave Mm the right, as surety, to order the execution. [39] Evidently, the rules of the common law allowed no such right. Does it exist by statute? Both parties rely upon an act which relates to “Kemedies of sureties against their principals,” and which contains these provisions: “Sec. 674. When any action is brought against two or more defendants upon a contract, any one or more of the defendants being surety for the others, the surety may, upon a written complaint to the Court, cause the question of suretyship to be tried and determined, upon the issue made by the parties, at the trial of the cause, or at any time before or after the trial, or at a subsequent term; but such proceedings shall not 'affect the proceedings of the plaintiff. “Sec. 675. If the finding upon such issue be in favor of the surety, the Court shall make an order directing the sheriff to levy the execution first upon, and exhaust, the property of the principal, before a levy shall be made upon the property of the surety, &c. “Sec. 676. When any defendant, surety in a judgment, or special bail, or replevin bail____has been or shall be compelled to pay any judgment, or any part thereof, or shall make any payment which is applied on such judgment, by reason of such suretyship____the judgment shall not be discharged by such payment, but shall remain in force for the use of the bail, surety, or other person making such payment, and after the plaintiff is paid, so much of the judgment as remains unsatisfied may be prosecuted to execution for his use. “Sec. 677. Any one of several judgment defendants, and any one of several replevin bail, having paid and satisfied the plaintiff, shall have the remedy provided in the last section against the co-defendants, or co-sureties, to collect of them the rateable proportion each is equitably bound to pay.” 2 R. S. pp., 186, 187. These, sections, it must be conceded, very distinctly point out the remedy of a defendant, surety in a judgment. Having paid it, the judgment remains in force for his use, and for his benefit it may be “prosecuted to execution.” But it is argued that the remedy thus prescribed can not be made [40] available, until the question of suretyship has been “ tried and determined,” in a judicial proceeding. This may not be required in the case of replevin or special bail, because the contract of such bail, on its face, always shows that the party is bound, alone, in the character of a surety. But where the judgment is joint, against two defendants, both are regarded as principals, unless, by proof aliunde, one of them is shown to be a surety. And this leads to the inquiry whether, under the enactments to which we have referred, a party defendant to such joint judgment can assert the rights of a surety, until he is declared such, by the order of a competent court? Section 676, which declares the judgment in force for the use of the surety who pays it, provides no mode in which the question of suretyship may be determined. But § 674 says, that any defendant, being a surety, may, upon written complaint, “ cause that question” to be tried, “upon the issue made by the parties at the trial of the cause, or at any time before or after the trial, or at a subsequent term.” It is, however, insisted that that section, as also the one that immediately succeeds it, applies solely to the execution issued for the use of the judgment plaintiff; “the object being to compel him to resort, first, to the property of the principal, and save the surety from the inconvenience of first paying the plaintiff, and then collecting the money from the principal.” This is, doubtless, one prominent object of these sections, but we perceive no reason why they may not, also, intend to enable the surety to place himself in a position to enforce his rights, under other sections of the statute. Indeed, it is not easy to see how a judgment defendant can be recognized as a defendant surety, entitled 'to an execution, under § 676, until he has been adj udged to be such, in the manner prescribed in § 674. Unless the record shows him to bo a defendant surety, the clerk is not, upon his demand, authorized to issue an execution; because, in the absence of record evidence of that fact, he must be deemed a principal in the judgment. And the result is, the plaintiff in this case having satisfied the judgment, without any judicial determination of his suretyship, the execution under which the premises were sold must- be held a nullity. Conrad Baker and J. IF. Foster, for the appellants. J. C. Jones, James E. Blythe, and M. S. Johnson, for the appellee. • As this conclusion defeats the plaintiff’s action in the Court below, other points made in argument will not be noticed. Per Curiam. — The judgment is reversed, with costs. Cause remanded, &c.