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.
Page 46 U. S. 193
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
Page 46 U. S. 194
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
Page 46 U. S. 195
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.
Page 46 U. S. 204
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
Page 46 U. S. 205
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
Page 46 U. S. 206
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
Page 46 U. S. 207
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
Page 46 U. S. 208
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
Affirmed.
Order
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.
