Creath's Administrator v. Sims - 46 U.S. 192 (1847)
U.S. Supreme Court
Creath's Administrator v. Sims, 46 U.S. 5 How. 192 192 (1847)
Creath's Administrator v. Sims
46 U.S. (5 How.) 192
APPEAL FROM A DECREE OF THE CIRCUIT COURT OF THE UNITED STATES
FOR THE 9TH CIRCUIT AND SOUTHERN DISTRICT OF MISSISSIPPI
The following principles of equity jurisprudence may be affirmed to be without exception -- namely that whosoever would seek admission into a court of equity must come with clean hands; that such a court will never interfere in opposition to conscience or good faith; that it will never be called into activity to remedy the consequences of laches or neglect, or the want of reasonable diligence.
Therefore, where a complainant prays to be relieved from the fulfillment of a contract, which was intentionally made in fraud of the law, the answer is that however unworthy may have been the conduct of his opponent, the parties are in pari delicto. The complainant cannot be admitted to plead his own demerits.
Nor is it any ground of interference when a complainant applies to be relieved from the payment of a promissory note given under the above circumstances, upon which judgment had been recovered at law. The consideration upon which the note was given was then open to inquiry, and it is a sufficient indulgence to have been permitted once to set up such a defense.
The cases examined, sowing how far and under what circumstances the liability of a surety becomes fixed upon him as a principal debtor.
Where the plaintiff in a suit voluntarily abstains from pressing the principal debtor, but receives no consideration for such indulgence, nor puts any limitation upon his right to proceed upon his execution, whenever it may be his pleasure to do so, this conduct furnishes no reason for the exemption of the surety from liability, and especially where the surety had united with his principal in a forthcoming bond.
The authorities upon this point examined.
The reporter finds the following statement of the case prefixed to the opinion of the Court, as delivered by MR. JUSTICE DANIEL.
This is an appeal from a decree of the Circuit Court of the United States for the 9th Circuit and Southern District of Mississippi. The facts of this case, so far as it is necessary to set them forth, are as follows:
On 25 June, 1838, A. G. Creath, together with William N. Pinkard (who signed himself as principal), John I. Guion, and Samuel Mason executed their promissory note to the appellee, as administrator of John C. Ridley, for the sum of $10,392 25/100 payable on 1 October following at the branch of the Planters' Bank at Vicksburg in Mississippi. Upon failure to pay this note, an action was instituted thereupon in the circuit court above mentioned; a judgment was recovered for the amount at the May term of the court, 1839, and upon a fieri facias sued out upon this judgment, the marshal having returned on 2 October that he had levied upon certain slaves enumerated in his return, the parties to the promissory note, the defendants in the judgment, together with a certain T. L. Arnold, on 2 October, 1839, executed to the plaintiff in the action a forthcoming or delivery bond, which has the force of a judgment, by virtue of which the property levied upon was released. The condition of this forthcoming bond not having been complied with, a fieri facias was, on 16 December, 1839, sued out thereupon, and on this process the marshal, on 24 March, made a return that it had been levied on several lots and parts of lots in the Town of Vicksburg, which were not sold by order of the plaintiff's attorney. A copy of the order referred to by the marshal is made a part of the record, and is in the following words:
"The marshal is authorized to levy on property enough of the defendants to pay the plaintiff's execution, and return the levy to court without selling or advertising for sale, unless other judgments younger than this are pressed to an amount to endanger this debt; if so, the property will have to be sold March 24, 1840."
On 21 May, 1840, a venditioni exponas was sued out, ordering the sale of the property which had been levied upon, and on that process there was a return that there had been no sale for the want of bidders. A second venditioni exponas was next sued in November, 1840, and on this the marshal returned that the property had been sold on 2 March, 1841, and the proceeds applied to the execution. The amount made by this sale does not appear by the return of the officer, but it is stated, in the answer of the respondent, to have been $101 only. In consequence of the insufficiency of the sale, under the last venditioni exponas, to satisfy the judgment, process of fieri facias, alias fieri facias, pluries and alias pluries fieri facias was sued out, until the autumn of the year 1842, when the marshal, having levied upon certain real and personal estate of the said A. G. Creath, as set forth in the return of that officer, and in his advertisement for the sale thereof, the complainant, on 25 November, 1842, obtained from the district judge
of the Southern District of Mississippi an injunction to stay all proceedings upon the judgment recovered against him and others at law. The grounds set forth in the bill, and on which relief is prayed, are the following:
1st. That the complainant, was a mere surety in the note on which the action was instituted, and that the indulgence granted by the direction to the marshal after judgment obtained was in fraud of defendant's rights as a surety; was in its operation, in fact, injurious to him, from the deterioration of the property of Pinkard the principal during the interval of that indulgence; was an infraction of the undertaking of the surety, and therefore absolved him from all responsibility.
2dly. That the instrument on which the judgment was obtained was one of several notes given for the purchase of a number of slaves sold by the intestate of the plaintiff to Pinkard, several of whom were unsound, although, as the plaintiff charges, they were (as he believes) warranted to be sound and healthy.
3dly. That although the slaves for which the notes were given were delivered in the State of Tennessee, yet the contract for them was in fact made at Vicksburg, in Mississippi, and was designed to be, and was in reality, a fraud upon the Constitution and laws of Mississippi, forbidding the introduction of slaves, as merchandise, within that state.
The respondent denies that the complainant, Creath, could properly be regarded as a surety, either in the note on which the action at law was instituted, or in the forthcoming bond executed posterior to the judgment; but insists that in both the complainant must, with respect to the respondent, be considered as a principal, equally with the other makers of the note, or obligors in the forthcoming bond. But even could Creath be viewed as a surety, it is further insisted that he could have no just cause of complaint, because, in the short space of five weeks, during which the execution was held up, there could be no material depreciation in property of any intrinsic value; and because, moreover, the forbearance was merely voluntary on the part of counsel of the respondent, was wholly without consideration, and without any agreement for delay with either of the parties, and might have been terminated at any moment, at the will of the respondent, or at the request of either of the defendants, had this been desired by them. The allegations in the bill of a warranty of the soundness of the said slaves, and of the making of the contract of sale within the State of Mississippi, and in fraud of the Constitution and laws of that state, are, in the first instance, directly denied; and it is next insisted by the respondent, that these are objections which, if they ever had any validity, should have been urged as grounds of defense to the action at law. A copy of the bill of sale from Ridley of Pinkard and others, conveying the slaves, is made an exhibit in the cause, and upon the face of that instrument there is no warranty of anything except of the title to the property conveyed. Several depositions were taken on
behalf of the complainant, and some exhibits filed by the respondent, but as these are deemed immaterial to the questions on which the decision of this cause properly depends, they will not be made subjects of comment. Upon a final hearing before the circuit judge, on 15 May, 1844, it was decreed, that the injunction awarded by the district judge on the 25th of October, 1842, should be dissolved, and the bill of the complainant dismissed with costs.
From this decree a appeal was taken to this Court.
MR. JUSTICE DANIEL, after having read the statement of the case prefixed to this report, proceeded to deliver the opinion of the Court.
In reviewing the grounds relied on by the complainant as the foundation of his claim to relief, the second and third, being coincident with the order and progress of the transactions between the parties as stated in the bill, and evincing especially the circumstances and the attitude under which this approach to a court of equity has been made, will be first considered, and this examination will be premised by stating the following principles of equity jurisprudence, which may be affirmed to be without exception -- that whosoever would seek admission into a court of equity must come with clean hands; that such a court will never interfere in opposition to conscience or good faith; and again, and in intimate connection with the principles just stated, that it will never be called into activity to remedy the consequences of laches or neglect, or the want of reasonable diligence. Whenever, therefore, a competent remedy or defense shall have existed at law, the party who may have neglected to use it will never be permitted here to supply the omission, to the encouragement of useless and expensive litigation, and perhaps to the subversion of justice. The effect of these principles upon the statements of the complainant is obvious upon the slightest inspection. The complainant alleges that the obligation to which he had voluntarily become a party was intentionally made in fraud of the law, and for this reason he prays to be relieved from its fulfillment. This prayer too is preferred to a court of conscience, to a court which touches nothing that is impure. The condign and appropriate answer to such a prayer from such a tribunal is this -- that however unworthy may have been the conduct of your opponent, you are confessedly in pari delicto; you cannot be admitted here to plead your own demerits; precisely, therefore, in the position in which you have placed yourself, in that position we must leave you. And so with respect to the omission by the complainant
to set up at law either the failure or the illegality of the consideration for which the note was given; no reason is perceived why such a defense should not have been made or attempted. The action at law was founded upon a simple promissory note, a parol contract in legal intendment, and not upon a specialty; the consideration was fully open to investigation, and it was surely a sufficient indulgence to the payees of that note to have been permitted once to set up a defense by which payment may have been resisted, whilst the whole consideration received by them for their undertaking would have been withheld, and absolutely possessed and enjoyed by them. But these payees of the note did not stop even here. After the first judgment recovered against them, and after the levy of an execution sued out on that judgment, they voluntarily go forward, the complainant amongst them, execute to the respondent their forthcoming bond, equivalent in effect to a confession of a second judgment, and after these repeated and conclusive recognitions of their liability, they invoke the aid of a court which repels whatever is unfair, or even illiberal, to declare that these proceedings, thus solemnly had and evidenced of record, shall be utterly null; that the respondent shall be stripped of his property without the promised equivalent, and that property be secured, if not to the complainant, to one with whom he was associated in effecting its relinquishment by the owner.
Recurring now to the first ground for relief set up in the bill, being that on which greatest stress is laid -- viz., the suretyship of the complainant, and the wrong alleged to have been done him by a change of his position and responsibility, by the indulgence extended to his codefendant Pinkard -- let us test this ground, first, by the proofs upon the record, and next, by trying the accuracy of the deductions attempted to be drawn from them. The promissory note, on which the action at law was founded, is made an exhibit, and it appears that to the name of Pinkard, the first signer of that note, there is added the word "principal," and to the name of each of the other makers is added the word "surety." It is insisted by the respondent, that these designations upon the note had no effect upon the obligations of these parties to him, however it might be supposed to operate upon their relations with each other; that with respect to the respondent all the makers of the note were from the beginning principals, but that at any rate, after their liability was fixed by judgment upon the note, and still more after their uniting in the forthcoming bond, in the nature of a second judgment, their equal responsibility as principals was irrevocably settled. In connection with this view of the case it may not be irrelevant here to remark, that by the statute of the State of Mississippi, promissory notes, though it be not so expressed upon the face of them, are declared in their legal effect to be joint and several. See Howard & Hutchinson's Statutes of Miss. 578. The proposition contended
for by the respondent, were it necessary here to pass upon it, would not be found without support from decided cases.
Thus, for instance, it was ruled by Chancellor Kent in Bay v. Tallmadge, 5 Johns.Ch. 305, that where bail become fixed with the payment of the debt of the defendant, their character of bail ceases; that after judgment and execution against bail and sureties, there is an end of the relation of principal and surety and the bail cannot claim any advantage against the creditor on the ground of want of diligence in prosecuting the principal debtor. In Prout v. Lennox, 3 Wheat. 520, it is laid down by Livingston, Justice, in delivering the opinion of the Court, that "the endorser of a note, who has been charged by due notice of the maker's default, is not entitled to the aid of a court of equity as a surety." But without pushing further an investigation which is unnecessary to the decision of the case before us, let it be conceded that the complainant was strictly a surety in the note on which the judgment was obtained at law; have any of his rights been impaired, or have any new rights grown up to him, springing from the conduct of the respondent or his agents in reference to that judgment and the proceedings had thereupon? The directions given by the attorney for the plaintiff in the judgment have been set out in extenso. These directions express upon their face no consideration received or promised for the forbearance -- no limitation upon the right of the plaintiff at law to proceed upon his execution -- no condition or stipulation of any kind; nor is there a tittle of proof as to the existence of any such consideration, limitation, or agreement, expressed or understood. We see nothing in the case but a voluntary forbearance, which the plaintiff was at perfect liberty to terminate at his pleasure. What say the authorities in relation to a proceeding of this character? In the case of Rees v. Berrington, 2 Ves., cited and pressed in the argument, the interposition of the chancellor was founded upon the ground of an actual and substantive change of the relation and responsibility of the surety, and in such a case his lordship very justly observed, that he would not undertake to calculate the degree of injury which might have flowed from it; that if the situation had in fact been changed, that was sufficient to release the surety altogether, for it was an attempt to impose on him a responsibility he had never assumed; but in the case before us was there any such change wrought by a mere voluntary forbearance, creating no obligation anywhere -- contracting with nothing, nor with any person? A few of the numerous cases, both at law and in equity, which are applicable to this question will be adduced.
Reynolds v. Ward, 5 Wend. 501. It was ruled, that an agreement without consideration, enlarging the time of payment, was not a discharge of the surety to the note. So held on demurrer to a plea by surety, averring that at the time when the note became due the principal was able to pay, and would have paid had not the
time been extended, and that after the note fell due the principal became insolvent. Held also, in that case, that a promise to pay interest during the time of forbearance was no consideration for such agreement.
Bank of Utica v. Ives, 17 Wend. 501. Indulgence to the maker of a note, on receiving securities from him, does not discharge the endorser, where there is no valid agreement for giving time of payment for a definite period; and per Nelson, Chief Justice, in this case --
"Mere indulgence at the will of the creditor, extended to the debtor, in no way discharges the obligation of the surety; if it did, it would be a most inconvenient and oppressive rule, as then suits must immediately follow the maturity of paper. It is a settled rule, that there must be a valid common law agreement to give time, founded of course on a good consideration, to have this effect."
Norris v. Crummie, 2 Rand. 328. It is ruled, that indulgence granted by a creditor to the principal debtor will not discharge the sureties of such debtor, unless the creditor shall have bound himself in law or in equity not to pursue his remedy against the principal for a definite length of time.
Hunter's Administrators v. Jett, 4 Rand. 104. A surety will not be discharged by indulgence granted by the creditor to the principal debtor, unless such indulgence ties up the hands of the creditor from pursuing the debtor at law; nor will the surety be discharged even then, if the indulgence shall have been given with his knowledge and assent.
McKinney's Executors v. Waller, 1 Leigh 434. A mere indulgence to a principal debtor by a creditor, not binding him to suspend his proceedings for any time, though such indulgence be given at the very time the sheriff is about to levy execution on the property of the principal, and although in consequence of that indulgence the principal debtor has been enabled to remove his property out property out of the reach of future process, was not, even in equity, a discharge of the surety.
Alcock v. Hill, 4 Leigh 622. A creditor suspends execution on a forthcoming bond for several years, but he does so without consideration, and he no wise binds himself to suspend execution for any definite time; the principal and all the sureties but one become insolvent; and then the creditor sues out execution against the solvent surety. Held that the surety is not entitled to relief in equity. The requisites in that case stated as indispensable for absolving the surety are, first, a consideration; second, a promise to indulge; third, the definite nature of such a promise; and, fourth, the absence of assent by the surety.
The last case which will be cited on this point is that of McLemore v. Powell, 13 Wheat. 554, in which it was ruled by this Court that an agreement between a creditor and the principal
debtor for delay or otherwise changing the nature of the contract in order to discharge the surety must be an agreement having a sufficient consideration to support it and be binding upon the parties. There is not one of the authorities above cited which does not more than cover the predicament presented by the case under consideration. Those authorities furnish examples of agreements -- arrangements between creditor and debtor -- situations from which something like hardship might possibly spring. In the present case there is neither contract, arrangement, nor even a scintilla of right on which either law or equity can lay hold. The complainant, after permitting a judgment on the note without attempting a defense at law and after execution was levied upon the judgment, voluntarily united in withdrawing the effects of his associate from the operation of that process, and by this very act bound himself with the force of a second judgment for the validity and for the satisfaction of the demand. After this course of conduct, he addresses himself to a court of equity, praying that court to undo all that he has voluntarily and deliberately performed, and in order to accomplish this end, he seeks to stamp his own acts with illegality from their very inception. For such purposes he surely would have no standing and receive no countenance in a court of equity upon any of its known principles. We hold the decree, therefore, of the circuit court, dissolving the injunction awarded the complainant below and dismissing his bill with costs, to be correct; and that decree is accordingly
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Southern District of Mississippi, and was argued by counsel. On consideration whereof, it is now here ordered and decreed by this Court that the decree of the said circuit court in this cause be and the same is hereby affirmed with costs.