A bill for an injunction was filed, alleging that the parties
who had obtained a judgment at law for the amount of a bill of
exchange, of which the complainant was endorser, had, before the
suit was instituted, obtained payment of the bill from a subsequent
endorser, out of funds of the drawer of the bill, obtained, by the
subsequent endorser, from one of the drawers. It was held that it
was not necessary to make the subsequent endorser, who was alleged
to have made the payment, a party to the injunction bill.
In such a bill an allegation that the amount due on the bill of
exchange was paid, is sufficient without stating the value or
nature of the effects out of which the payment was made.
If there be any one ground upon which a court of equity affords
relief, it is an allegation of fraud, proved or admitted.
On 24 June, 1834, Cain and Lusk, merchants of Alabama, drew a
bill of exchange for two thousand four hundred and five dollars on
Martin Pleasants and Company, of New Orleans, in favor of the
appellant, James Atkins. This bill was endorsed by James Atkins to
Parham N. Booker, and was afterwards endorsed to N. & J. Dick &
Company, the appellees. The bill was protested, and the appellees
brought a suit against James Atkins, in the Circuit Court of the
United States for the District of Mississippi, to May term, 1838,
and recovered a judgment for thirty-two hundred and twenty-five
dollars.
Execution was issued on the judgment, and a levy was made on the
property of James Atkins, who, in redemption of the same, gave a
forthcoming bond, with sureties, for the delivery of the property
to the marshal on the day of sale. The property not having been
delivered according to the provisions of the bond, the marshal
returned the bond as forfeited, whereby, according to the laws of
the State of Mississippi, it became, in force and effect, a
judgment against the obligor and his sureties.
The appellant, in order to stay execution on the bond against
himself, and the sureties, filed a bill on the equity side of the
court, and obtained an injunction against the obligors in the
bond.
The bill states that since the giving of the forthcoming bond by
the appellant and his sureties, he has ascertained, and does verily
believe, that N. & J. Dick & Company had been paid the money
mentioned in the bill of exchange, before the institution of the
suit on the same, but that he had no knowledge of this on the
giving of the forthcoming bond and its forfeiture; that he is
advised and believes that the bill of exchange was paid to N. & J.
Dick & Company by Parham N. Booker before the action was brought
against him on the bill, and that the same was paid because of
Page 39 U. S.
115
effects placed in the hands of Booker by Lusk, one of the
drawers of the bill. That he is advised and believes that he would
have had a good and meritorious defense against Booker, on account
of the effects placed in the hands of Booker by Lusk, had Booker
brought an action against him in his own name, and he charges that
the names of N. & J. Dick & Company have been used to defeat him in
such a defense.
The defendant, the appellees demurred to the bill, and alleged
the following causes of demurrer:
1. It is alleged in the bill as a substantive, and the original
ground for injunction of the statutory judgment therein named, that
one Parham N. Booker, is the actual, and not the nominal plaintiff
in said judgment; that as endorser of the bill of exchange (the
basis of the judgment) next after the complainant as the first
endorser, having paid the amount of the bill to the holders,
received certain effects of the drawers, whose amount ought to be
credited to complainant, and yet the said Booker is not impleaded
as a defendant.
2. Nor is the amount or value or nature of the effects so
charged to have been paid to the second endorser, specified in said
bill; nor what part or portion was discharged, or whether any of
such effects proved productive.
3. The said bill contains no matter or grounds whereon the court
can grant the relief prayed therein.
The court ordered, adjudged, and decreed that the demurrer to
the bill be sustained and that the complainant have leave to amend
his bill. It was further ordered, adjudged, and decreed that the
injunction be dissolved, and the complainant in the bill declined
making any amendment to the bill, and put the cause down for a
further hearing upon the bill and demurrer, and, after argument
heard, it appearing to the satisfaction of the court that Parham N.
Booker was materially interested in the issue of said cause, and
that the said Booker had not been made a party to the same, it was,
therefore, ordered, adjudged, and decreed, that the said bill be
dismissed for want of proper parties to the same, &c.
Page 39 U. S.
118
MR. JUSTICE BARBOUR delivered the opinion of the Court.
The appellant was the payee of a bill of exchange drawn by Cain
and Lusk, which he endorsed to Parham N. Booker, who endorsed it to
N. & J. Dick & Company.
The bill having been dishonored, Dick & Company brought suit
thereon, and recovered a judgment against Atkins, the first
endorser.
Upon this judgment an execution was issued, a forthcoming bond
was taken and forfeited, by reason whereof the bond, according to a
statute of Mississippi, had the force of a judgment, on which
execution was issued.
Atkins thereupon filed his bill in equity, in which he alleged
that he had ascertained, and verily believed, that Dick & Company
had been paid the amount of the bill of exchange before the
institution of their suit against him, but that he had no knowledge
of it at the time of the giving and forfeiture of the forthcoming
bond. That he was advised, and verily believed that the bill of
exchange was paid to Dick & Company by Parham N. Booker before the
suit was brought, and that it was paid because of effects placed in
the hands of said Booker by Lusk, one of the drawers of the bill of
exchange. That he was advised and believed that he would have had a
good defense against Booker on account of said effects received by
him from Lusk with which to pay the bill in case said Booker had
sued in his own name thereon. That the names of Dick & Company were
used with the intent to defeat him of that defense in case he
became advised that said effects had been placed in the hands of
Booker by Lusk with which to pay and satisfy the bill. The bill
charged that in these proceedings the appellant had been most
palpably defrauded and that in order to consummate the fraud, Dick
& Company had caused execution to issue on the judgment created by
the forfeited forthcoming bond, which was then in the hands of the
marshal, and it prayed an injunction, a perpetuation thereof, and
for general relief. An injunction was granted. The defendants
demurred
Page 39 U. S.
119
to the bill, assigning three causes of demurrer, to-wit:
1. That Booker was not made a party.
2. That neither the amount, nor the value, nor the nature of the
effects, charged in the bill to have been paid to the second
endorser, was specified, and that it was not stated what part or
portion was discharged, nor whether any of such effects proved to
be productive.
3. That the bill contained no matter or grounds on which the
court could grant the relief prayed for.
The court sustained the demurrer and gave the plaintiff leave to
amend his bill, and he declining to make any amendment, they
dissolved the injunction, and dismissed the bill for want of proper
parties.
From that decree this appeal was taken. The defendants, having
demurred to the bill, in the consideration of the case, we are to
take all its allegations to be true.
The bill is somewhat inartificially drawn, but it substantially
alleges that before the institution of the suit at law against the
plaintiff, the amount of the bill of exchange in question had been
paid to Dick & Company, by means of effects furnished by one of the
drawers. The particular language of the allegation is that it was
paid to them because of effects placed in the hands of Parham N.
Booker, by Lusk, one of the drawers. Now we understand the import
of this to be that these effects constituted the means by which the
payment was effected; whether Booker sold the effects and paid the
bill out of the proceeds of the sale or detained them himself, and
in their stead advanced their value in money is an inquiry of no
moment, because in either aspect of the case, the effect would be
that the bill was paid by means furnished by one of the drawers.
And upon this state of facts it is clear that the same operation
which satisfied the claim of Dick & Company at the same time
extinguished all the rights as well as liabilities growing out of
the bill of exchange, because they, being the last endorsers, were
the persons entitled to receive the amount of the bill, and the
drawers being liable to every other party, and the funds by which
the payment was effected being furnished by them, there was no
longer any person who could have a claim against any other, founded
upon a bill thus paid.
Upon this view of the subject, the question is whether a party
who has received payment of his debt shall be permitted by a court
of equity to avail himself of a judgment at law to enforce a second
payment, and that too against a party who did not know of that
payment until after the judgment was obtained. To state such a
proposition is to answer it.
The bill further charges the defendants with fraud, and this too
is admitted by the demurrer. If there be any one ground upon which
a court of equity affords relief with more unvarying uniformity
than on any other, it is an allegation of fraud, whether proven or
admitted. Whilst, therefore, a case stands before us upon such a
bill and demurrer, we cannot hesitate to say it must be considered
as entitling the party to the aid of a court of equity.
Page 39 U. S.
120
It is contended that Booker ought to have been made a party. And
the ground taken is (and this is the first cause of demurrer
assigned) that every person ought to be made a party who has an
interest in the subject of controversy, and it is said that Booker
is in that situation. We think that he has no interest in the
object of this suit -- in other words, that he is not interested in
the question between these parties. The ground of equity is that
Dick & Company, the plaintiffs in the judgment at law, received
payment of the amount recovered by them before they brought their
suit. Now if he were made a party at all, it must be as defendant.
But the plaintiff neither sought nor could he obtain any decree
against him. He only asked a perpetual injunction against Dick &
Company on the ground of an equity attaching upon them personally.
If the plaintiff should prevail against them, it would be upon the
ground that the amount of the bill had been paid to them by the
drawers; supposing that to be the case, then Booker would not be
liable to them as endorser. If, on the contrary, the plaintiff
should fail, Booker's rights would in nowise be concluded or
affected; but if, as endorser, he should be made liable to Dick &
Company, then, as endorser, he could recover against the plaintiff,
Atkins, as endorsee to him. But again, Booker's right and liability
upon the bill are at law. We cannot, therefore, perceive any ground
upon which, in a contest between two parties to a bill founded upon
an allegation of equity attaching personally to one of them, a
third party can be brought into a court of equity to mingle in that
litigation when the attitude in which he stands is purely legal. If
the equity attached to him, then he ought to be made a party: but
as it does not, a court of equity is not the forum in which to
discuss or to decide either his right or liability. A very familiar
case will illustrate this principle. Suppose an obligee to assign a
bond on which the assignee recovers a judgment, where, by statute,
he may sue in his own name, and that the obligor thereupon files
his bill in equity, praying for a perpetual injunction on the
ground of some equity attaching upon the obligee before the
assignment. In such a case, the assignor must be made a party,
because he is directly interested in discussing the equity alleged
to exist against him. But if, on the contrary, the bill were filed
upon the ground of some equity not existing against the assignor,
but arising between the obligor and assignee after the assignment,
then there would be no pretense for saying that the assignor ought
to be a party, plainly because in that particular question he has
no interest whatsoever. Whichever way that question may be decided,
the relation between the assignor and assignee and the liability of
the former to the latter growing out of the assignment are purely
questions of law, wholly unaffected by the decision of the case in
equity.
The second ground of demurrer is that neither the amount nor
value nor nature of the effects charged to have been paid is
specified, nor is it stated what portion of the debt was
discharged, nor whether any of such effects proved to be
productive. This cause
Page 39 U. S.
121
of demurrer we consider altogether untenable. The allegation in
the bill is that the money mentioned in the bill of exchange was
paid to Dick & Company. This allegation covers the whole equity of
the case, because it asserts that there was a payment, and that a
payment of the money mentioned in the bill -- that is, the whole
amount of the bill.
The third cause of demurrer, that there is no ground laid in the
bill for relief, has been already discussed, and we have shown that
the bill does contain sufficient allegations to entitle the
complainant to the aid of a court of equity.
We are of opinion that the circuit court, instead of sustaining
the demurrer, ought to have overruled it and ordered the defendants
to answer.
The decree is therefore reversed and the cause remanded to
the circuit court, to be proceeded in in conformity with this
opinion and as to equity and justice shall pertain.
