Bank of the United States v. Tyler - 29 U.S. 366 (1830)
U.S. Supreme Court
Bank of the United States v. Tyler, 29 U.S. 4 Pet. 366 366 (1830)
Bank of the United States v. Tyler
29 U.S. (4 Pet.) 366
Action by the endorsees against the endorser of a promissory note, drawn and endorsed in the State of Kentucky.
The statute of Kentucky authorizing the assignment of notes is silent as to the duties of the assignee or the nature of the contract created by the assignment. It only declares such assignments valid, and the assignee capable of suing in his own name. But the courts of that state have clearly defined his rights, duties, and obligations resulting from the assignment. The assignee cannot maintain an action on the mere nonpayment of the note and notice thereof until the holder of the note has made use of all due and legal diligence to recover the money from the drawer, whose engagement is held to be that he will pay the amount if after due and diligent pursuit the maker is found insolvent.
The principles of the law of Kentucky relative to the liability of endorsees of promissory notes and proceedings to establish the same, as settled by the decisions of the courts of Kentucky.
A judgment does not bind lands in the State of Kentucky. The lien attaches only from the delivery of the execution to the sheriff. It then binds real and personal property held by legal title. An execution, returned, is no lien on any property not levied on, and no new lien can be acquired until a new execution is put into the hands of the sheriff, and none can issue while a former levy is in force. Any delay then by the assignee enables the debtor to alienate his property in the interval between judgment and the execution reaching the sheriff, as well as between the return of one and the lien acquired by a new execution.
By the law of Kentucky, no equitable interest in real or personal property, unless it is held by mortgage, deed of trust, or other encumbrance, can be taken in execution. A capias ad satisfaciendum is the only mode by which the equitable estate of a debtor or his choses in action can be in any way reached by any legal process. It may be the means of coercing the payment of the debt, and it must therefore be used. The return of nulla bona to an execution is in that state the only evidence of there being no property of the debtor on which a levy can be made. It is not evidence of there being no equitable interest which is beyond the reach of such process, or of his not having that kind of property on which a levy can be made.
After judgment obtained in the circuit court of the United States against the drawer of the note, a capias ad satisfaciendum was issued against him by the holder, and he was put in prison. Two justices of the peace ordered his discharge, claiming to proceed according to the law of Kentucky in the case of insolvent debtors, and the jailer permitted him to leave the prison. The jailer made himself and his securities liable for an escape by permitting the prisoner to leave the prison. Held that the neglect of the holder of the note to proceed against the jailer and his securities prevents his making of the endorser liable for the amount of the note.
The Court finds no express decision of the courts of Kentucky enjoining a plaintiff who has sued the drawer of a promissory note and intends to charge the endorser to proceed against a jailer and his sureties when the defendant has been suffered to escape, yet by the spirit of all the decisions he is bound
to do so. The general principle of all the cases is that a plaintiff must pursue with legal diligence all his means and remedies, direct, immediate, or collateral, to recover the amount of his debt from the drawer of the note or of anyone else who has put himself or has by operation of law been put in his place.
The decision of this Court in the case of Bank of the United States v. Weisiger examined and confirmed.
This was an action by the Bank of the United States against Levi Tyler upon two promissory notes, one for $3,900, dated 2 May, 1821, and payable sixty days after date, drawn by Anderson Miller, in favor of John T. Gray. It was negotiable, and payable, without defalcation, at the office of discount and deposit of the Bank of the United States at Louisville, Kentucky, for value received. John T. Gray assigned the note to Levi Tyler, and Levi Tyler assigned it to the bank.
The other note was of the same date, for $3,800, payable to Samuel Vance, assigned by said Vance and by the defendant. In all other respects, it was like the note above stated.
On 24 September, 1821, suit was brought by the bank against the drawer, Anderson Miller, in the Circuit Court of the United States for the District of Kentucky, for the first mentioned note, and judgment was obtained at the November term, 1821.
On this judgment a fieri facias issued bearing date 29 December, 1821, returnable on the first Monday of March, being the 4th day of the month following, which was in the hands of the marshal on 19 January, 1822, and the plaintiffs introduced as a witness the clerk of the court, who stated that it had been his uniform habit, before and since the obtention of the said judgment, to issue executions on all judgments obtained at the last preceding term and place them in a window of his office, from whence it was the habit and custom of the marshal to take them. That it generally required from twelve to sixteen days after the
rising of the court to prepare and issue the executions of the preceding term. That at the November term of the court, at which the before-mentioned judgment was obtained, the court adjourned on 17 December.
To this fieri facias the marshal returned a levy, and that he had not time to sell before the return day. The return was filed 28 March, 1822. On 3 April, 1822, a venditioni exponas issued, returnable the first Monday in June. It was returned on 17 of June, "unsold for want of bidders," and the sale was postponed, and alias venditioni exponas issued, tested 17 June, returnable on the first Monday in September, returned on the 13th. The sales, amounting to $10.50, were credited to another execution.
26 September, 1822, another fieri facias issued, which was levied on slaves and sale made. It was returned 9 December, 1822. The proceeds of the sale were $1,300.
19 December, 1822, another fieri facias issued, and returned "levied on property mentioned, and not sold for want of time." This was returned on the first Monday in March, 1823.
20 March, 1823, a venditioni exponas issued and was returned "unsold, for want of bidders." The return was filed 30 June, returnable the first Monday in June.
1 July, 1823, another venditioni exponas issued, and was returned "unsold, for want of bidders." The return was filed 12 September, 1823.
19 September, 1823, another venditioni exponas issued, and the property was sold. The proceeds amounted to $4.50. It was returned 19 December, 1823.
19 December, 1823, another fieri facias issued, to March 1824, and was returned "no property found to satisfy the execution, or any part thereof." Returned 16 March, 1824.
16 March, 1824, a capias ad satisfaciendum issued under which the defendant was committed, and so
returned on 26 April, 1824. The commitment was to March, 1824.
The proceedings in the suit against Anderson Miller on the other note were also given in evidence. They also terminated in his committal to prison.
On 27 March, 1824, two justices of Kentucky discharged Anderson Miller from prison.
Upon this evidence, the court instructed the jury to find for the defendant, and the jury found accordingly. The plaintiffs excepted, and the judge signed a bill of exceptions.
The plaintiffs offered witnesses to prove that Anderson Miller was notoriously insolvent when the note fell due, and had so continued ever since. The court rejected the evidence, and the plaintiffs excepted. This exception is stated in the bill.
The plaintiffs contend, that the court erred in charging the jury to find for the defendant because they say it was fully proved that due diligence was used against the drawer, and the remedies afforded by the law were exhausted without obtaining the money, and therefore they were entitled to recover from the endorser.
They contend also that under the circumstances of this case, the evidence offered of Miller's insolvency ought to have been received.