Bank of the United States v. Weisiger - 27 U.S. 331 (1829)
U.S. Supreme Court
Bank of the United States v. Weisiger, 27 U.S. 2 Pet. 331 331 (1829)
Bank of the United States v. Weisiger
27 U.S. (2 Pet.) 331
This Court has decided that a suit could be maintained in equity by the holier of an endorsed note, against a remote endorser, and upon grounds perfectly familiar to courts exercising equity jurisdiction.
It has been decided in Kentucky that a suit at law could not be maintained in that state by the endorsee against a remote endorser. The conclusion then results from our own decisions that he must be let into equity, for an endorsement is certainly no release to the previous endorsers, and the ultimate assignee alone is entitled to the benefit of their liability. And this we understand to be consistent with the received opinions and practice in Kentucky.
The law in Kentucky is settled, as it is in Virginia and in this Court, that upon Virginia contracts by endorsement of promissory notes, very reasonable effort must be made to recover of the drawer by suit, before the assignee can have recourse against the assignor or endorser.
It is upon the question what constitutes such diligence that all the difficulties arise in suits upon these contracts. And certainly this Court cannot be called upon to carry the obligations imposed upon assignees on this point further than the state courts have already extended them.
What will be considered a sufficient compliance with the requisitions of the laws of Kentucky imposing diligence in the prosecution of a suit against the drawer of a note by the endorsee in order to charge a prior endorser.
The discharge of an insolvent under the statutes is the most satisfactory evidence of insolvency. After such discharge, it is not required that process of execution shall be issued against the party in order to conform to the injunction of diligence.
The 2d, 3d, and 4th sections of the Act of January 6, 1806, entitled "An act for the relief of persons imprisoned for debts," make provision for the discharge of persons confined under execution, and the 5th section extends "the privileges and relief" of that act to persons in confinement, against whom judgment is obtained but no execution issued. Under the provisions in favor of persons charged in execution, on the day of arrest, a notice may be served upon the person at whose suit they are confined, and at the end of thirty days, they may be discharged. By the 5th section it is enacted
"That any person imprisoned upon process issuing from any court of the United States, except at the suit of the United States in any civil action against whom judgment has been or shall be recovered shall be entitled to the privileges and relief provided by this act after the expiration of thirty days from the time such judgment has been or shall be recovered, though the creditor should not within that time sue out his execution and charge the debtor therewith."
It has been argued that under this section the defendant must remain in prison thirty days after judgment before he can sue out his notice to the plaintiff, thus requiring him to remain sixty days in confinement in the cases which come under this section, whereas he remains but thirty days when confined under execution.
There can be no reason for this distinction, and in favor of liberty, and with a
view to consistency, the construction should be otherwise. If such were the true construction, the relief would not be the same as is extended to debtors of the other class. The day of entering judgment under the 5th section is the day that corresponds to the day of arrest, under the previous provisions of the law, and therefore in thirty days after the judgment, the defendant maybe discharged, complying with the other requisitions of the law.
Where the agent of the plaintiff agreed in writing to dispense with the imprisonment required by law, to entitle the defendant to be discharged under the insolvent law of the United States, and the defendant who was in confinement was discharged without having been imprisoned thirty days, this was not such a proceeding as would bar the assignee of the note to recover against a subsequent assignor. The object of the imprisonment is to give the plaintiff an opportunity to ascertain the situation of the defendant, and if he does not require this, it may be waived without prejudice to his claims on others.
A discharge under the insolvent laws of the United States is confined in its effects altogether to the particular cause, and even as to that does not exempt the debtor's present effects or future acquisitions from the process of the law. Nor is his person exempt from confinement for the same debt should he be detected in a fraud upon the creditor.
The complainants' bill, filed in the Circuit Court of Kentucky, on 22 November, 1822, stated that on 25 July, 1821, Peter G. Voorhees made his promissory note for $2,560, payable sixty days after date, to Daniel Weisiger; that Weisiger assigned to John H. Hanna, and Hanna to the complainants, who discounted the note. That they duly instituted a suit against Voorhees on the common law side of the court, recovered judgment, and prosecuted him to insolvency. It prayed that the defendant may be decreed to pay the amount, with interest and costs.
Annexed to the bill is a copy of the record of the proceedings against Voorhees, from which it appears that the declaration was filed on 2 October, 1821, and on the same day a writ of capias ad respondendum was issued, with this memorandum: "This is an action of debt; bail required." The marshal made return to the writ, as follows -- "Executed 6 October, 1821, and committed defendant to jail of Franklin County; receipt hereon." The jailor's receipt bears date 5 November, 1821.
At November term, 1821, judgment was entered for the plaintiffs by default, for $2,560, with interest from 26 February (September), 1821, and costs. Afterwards, on
14 December, 1821, the jailor of Franklin County surrendered the body of Voorhees into court.
On 29 December, 1821 a fieri facias issued, which was placed in the hands of the marshal on 19 January, and the marshal returned "No estate found."
On 11 April, 1822, a writ of capias ad satisfaciendum issued, to which the marshal returned "Not found."
To this bill the defendant Weisiger moved the court for leave to file a demurrer, alleging for cause, that the bill did not aver the prosecution of any suit against Hanna, the immediate assignee of the complainant, and that Hanna was not made a party defendant; that the bill contained no case of equitable jurisdiction, nor for a decree against Weisiger, and was altogether void of equity.
Afterwards, in the same term, the defendant Hanna appeared and waived all objection to a decree on account of the want of service of process upon him, and Weisiger waived the demurrer so far as respected the want of proper parties.
And at the following term, the court overruled the demurrer.
At May term, 1826, the defendants failing to answer according to rule, the bill was taken for confessed, and the cause came on for hearing on the bill and exhibits, whereupon the court decreed that the complainants should recover from the defendant Weisiger the sum of $3,278.17 and costs unless, &c., which decree was afterwards set aside on Weisiger's motion, and leave given him to file an answer.
The answer of Weisiger, protesting against the jurisdiction of the court, relies and insists, by way of plea in bar to the relief claimed, that the matters contained in the bill, if true, do not constitute a case for the interposition of a court of equity, but are cognizable at law and relies upon the 16th section of the Judiciary Act of 1789. It admits that he may have put his name on the note, but denies that he ever received any consideration for the same, or that it was ever passed or negotiated by him or for his use or benefit. He answers further that he did not of his own knowledge know
of the discount of the note, although he was informed that such discount had been made, and for a long time believed that it had been fully satisfied by Voorhees; that he is advised that the proper measures were not adopted in due season to enforce the payment; and that the proceedings had were not such as to authorize a recovery against him, inasmuch as the return of the marshal shows that Voorhees was committed to jail, and it does not appear that he had ever been discharged or escaped, and there does not appear to have been any order to charge him in execution; nor is there any return that he had no property or estate on which the fieri facias might have been levied. He does not admit that Voorhees was insolvent at the time the judgment was obtained against him, but believes he then had estate within the district sufficient to satisfy the same in whole or in part.
The complainants' amended bill states, that before the rendition of the judgment against Voorhees; he was brought before the district judge, took the oath required by the act of Congress, and was discharged as an insolvent from the custody of the jailor. Shortly after, and before the return of the fieri facias, he left the state, and has ever since remained out of it, leaving no estate upon which the amount could be levied, or any part of it; all of which is averred to be personally known to Weisiger, as is also the fact that he endorsed the note for the accommodation of Voorhees, and to give him credit, and with the view and expectation that it would be discounted by the bank.
The exhibit referred to in the amended bill states the proceedings to discharge Voorhees from imprisonment, in three suits of the bank of the United States, entitled as follows:
The president, directors, and company of the Bank of the United States, plaintiffs v. Peter G. Voorhees, defendant.
The Same v. The Same.
The Same v. George M. Bibb, Charles S. Todd, and Peter G. Voorhees.
The judge's order to discharge, dated 14 December, 1821, states that Voorhees was imprisoned in the jail of Franklin County by process in these suits; that judgment
had been rendered in the suits, and he had petitioned to have the oath administered to him; that a citation had been served upon Henry Clay, Esq. agent, &c., that they appeared, and no good cause being shown, the oath was administered, and he was discharged.
The citation bears date 14 December, 1821, and requires appearance on 7 January following. And then there is a paper of which the following is a copy:
"I agree, on behalf of the Bank of the United States, to waive the previous imprisonment by law to entitle the defendant to take the oath of an insolvent debtor, and that the said oath may be now administered, with the same effect as if that imprisonment had taken place. 14 December, 1821."
"[Signed] H. CLAY"
"Counsel of the B.U.S."
Upon the bills, answer, and exhibits above set forth, the court, at May term, 1827, decreed the complainants' bill to be dismissed with costs.