On April 5, 1870, A., in order to secure B. as his endorser,
made a mortgage of certain property. This mortgage the latter, on
the thirteenth of that month, assigned to C., to secure a debt due
him. Oct. 4, A. made a second mortgage of the same and additional
property to D. for $4,000, which sum D. paid to B. as the agent of
A., whereupon B. paid certain notes of A. upon which he as well as
D. was liable as endorser. On the 12th of October, A. sold the
entire property covered by both mortgages to E. for $6,000, and
received the tatter's notes in payment. Of them, $2,444.40 was
delivered to C., and $3,555.60 to D., who thereupon released their
respective mortgages. Proceedings in bankruptcy were commenced
against A. Nov. 2,1870, and he was duly adjudicated a bankrupt. His
assignees then sued D. for the value of the property covered by his
mortgage, and obtained, by a compromise, a judgment for $34,000,
which he satisfied. They subsequently sued him for the amount paid
on the said notes
whereon he was liable as endorser. This suit was compromised by
his paying $2,000. The assignees thereupon released all claims and
demands against him, and brought the present action to recover from
C., who was note a creditor of A., the $2,444.40, on the ground
that it was, in fraud of the Bankrupt Act, and within six months
before the filing of the petition in bankruptcy, paid to him to
secure him as endorser for B., he having reasonable cause for
believing A. to be insolvent, and that he thereby prevented the
property from coming to the assignees for distribution, and sought
to impede the operation and evade the provisions of that act.
1. That it was incumbent upon C. to show that B. took up the
notes to secure the payment of which the mortgage to the latter had
2. That, in the absence of such proof, the amount received by C.
was clearly a preference by way of indemnity.
3. That the action was not barred by the satisfaction of the
judgment against D.
4. That the court having charged that, if the assignees had
received from D. full satisfaction for the proceeds of the sale,
there could be no recovery in this action, the verdict in favor of
the assignees is upon that point conclusive against C.
5. That the inquiry whether C. had paid any thing for A. was
properly submitted to the jury.
The facts are fully stated, and the assignment of errors is set
forth in the opinion of the Court.
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Even without satisfaction, a judgment against one of two joint
contractors is a bar to an action against the other, within the
maxim transit in rem judicatam,
the cause of action
Page 95 U. S. 348
changed into matter of record, which has the effect to merge the
inferior remedy in the higher. King v. Hoare,
& W. 504.
Judgment in such a case is a bar to a subsequent action against
the other joint contractor, because, the contract being merely
joint, there can be but one recovery, and consequently the
plaintiff, if he proceeds against one only of two joint promisors,
loses his security against the other, the rule being that by the
recovery of the judgment the contract is merged and a higher
security substituted for the debt. Robertson v. Smith,
Johns. (N.Y.) 477; Ward v. Johnson,
13 Mass. 149;
Cowley v. Patch,
138; Mason v.
6 Wall. 231.
But the rule is otherwise where the contract or obligation is
joint and several, to the extent that the promisee or obligee may
elect to sue the promisors or obligors jointly or severally: but
even in that case the rule is subject to the limitation, that, if
the plaintiff obtains a joint judgment, he cannot afterwards sue
them separately, for the reason that the contract or bond is merged
in the judgment; nor can he maintain a joint action after he has
recovered judgment against one of the parties in a separate action,
as the prior judgment is a waiver of his right to pursue a joint
Different modifications of the rule also arise where the
controversy grows out of the tortious acts of the defendants. Where
a trespass is committed by several persons, the party injured may
sue any or all of the wrongdoers, but he can have but one
satisfaction for the same injury, any more than in an action of
assumpsit for a breach of contract.
Courts everywhere in this country agree that the injured party
in such a case may proceed against all the wrongdoers jointly, or
he may sue them all or any one of them separately, but if he sues
them all jointly, and has judgment, he cannot afterwards sue any
one of them separately, or, if he sues any one of them separately,
and has judgment, he cannot afterwards seek his remedy in a joint
action, because the prior judgment against one is, in contemplation
of law, an election on his part to pursue his several remedy.
Where the injury is tortious, the remedy may be joint or
several; but the rule in this country is that a judgment
Page 95 U. S. 349
one without satisfaction is no bar to an action against any one
of the other wrongdoers. Lovejoy v.
3 Wall. 1; s.c.,
2 Cliff. 196;
Livingston v. Bishop,
1 Johns. (N.Y.) 290; Drake v.
3 East. 258.
Sufficient appears to show that the bankrupts, Kane, Sprague,
& Co., on April 5, 1870, mortgaged their stock, tools,
fixtures, and machinery to W. W. Sprague, to secure him as their
endorser; that the mortgagee, on the 13th of the same month,
assigned the mortgage to the defendant below as security for a debt
due from the mortgagee to the assignee of the mortgage. On the 4th
of October following, the bankrupts made a second mortgage,
including the property described in the first mortgage, together
with other property, to E. A. Goodnow, for $4,000, which sum the
mortgagee paid to the mortgagee of the first mortgage, as the agent
of the bankrupts, and which he, the agent, used in part to pay
three notes given by the bankrupts, upon which the mortgagees in
both mortgages were endorsers. Eight days later, the bankrupts sold
to Nichols and Johnson the whole property covered by the mortgages,
and received in payment their notes and those of Henry W. Snow, to
the amount of $6,000, which they divided as follows: $2,444.40 to
the assignee of the first mortgagee, and $3,555.60 to the second
mortgagee, who thereupon released their respective mortgages.
Bankruptcy proceedings against the mortgagors in the two
mortgages were commenced on the 2d of November in the same year,
and the plaintiffs were duly appointed assignees of the bankrupts'
estate. Subsequently they sued the mortgagee in the second mortgage
to recover the value of the property covered by his mortgage, and
judgment was, by agreement, entered in their favor for $4,000,
interest and costs, and the evidence shows that the judgment was
satisfied by the judgment debtor. They, the assignees, also brought
another suit against the same party to recover for the preference
he obtained when the agent of the bankrupts paid three of their
notes upon which the defendant in the last-named suit was endorser,
which suit was settled by the payment of $2,000 and a release given
by the assignees of all their claims against the defendant in that
Beyond doubt, the first mortgage was valid, but it was given to
secure the mortgagee as endorser for the mortgagors, and
Page 95 U. S. 350
inasmuch as the defendant failed to prove that the mortgagee had
taken up any paper on which he was so liable, it is evident that
the defendant derived no right to the proceeds of the property paid
to him by virtue of that mortgage. Nothing having been paid by the
defendant as endorser for the bankrupts, the money paid him for the
release of his mortgage was plainly a preference by the way of
indemnity. Proceedings in bankruptcy were commenced within four
months thereafter; and the assignees brought the present suit in
the district court against the defendant to recover back the
proceeds of so much of these notes given to the defendant for the
release of his mortgage from the bankrupt debtors, the claim being
that the amount was paid to secure the defendant for his
endorsements for the insolvent debtors, he having reasonable cause
to believe that they were insolvent, and that the payment was made
to prevent the property from coming to the assignees for
distribution, and to impede and evade the provisions of the
Service was made, and the defendants appeared and pleaded the
general issue, and that the plaintiffs previously recovered
judgment against E. A. Goodnow for the value of the same property,
and that the said judgment has been fully paid and satisfied.
Issue being thus raised, the parties went to trial, and the
verdict and judgment were for the plaintiffs in the sum of
$2,786.56 and costs of suit. Exceptions were filed by the
defendant, and he removed the cause into the circuit court, where
the parties were again heard, and the circuit court affirmed the
judgment, and the defendant removed the cause into this court.
Five errors are assigned, to the effect following:
1. Because the district court did not instruct the jury that the
action is not maintainable, the assignees having disaffirmed the
sale of the goods and received the value of the property.
2. Because the district court did not instruct the jury that the
plaintiffs were estopped by their previous proceedings from
maintaining the suit.
3. Because the district court did not instruct the jury that the
plaintiffs could only have judgment for the value of the property,
deducting the amount previously
Page 95 U. S. 351
4. Because the district court did not instruct the jury that the
plaintiffs could not recover the proceeds of the property in the
hands of the mortgagee so long as any contingent liability
5. Because the issue submitted to the jury, whether the
defendant had paid any thing for the bankrupts, was an immaterial
one, if there was any outstanding and undischarged endorsement of
the defendant for which he was liable.
Separate mortgage were held by the defendant and the other
mortgagee, of different dates, and it appears that they were given
for entirely different considerations. Of course, the respective
mortgagees held the property subject to an equity of redemption in
the mortgagors, and the case shows that the mortgagors sold the
respective equities of redemption, and distributed the proceeds of
the sale between the respective mortgagees. Throughout, the
relations of the mortgagees to the insolvent debtors were entirely
separate. They never held any joint claim against the insolvent
mortgagors, nor did the mortgagees ever receive any joint security
from the insolvent debtors for their separate claims. Instead of
that, the respective equities of redemption remained in the
mortgagors, and the conceded facts show that they sold the equities
and distributed the proceeds between the respective mortgagees,
showing to a demonstration that there never was any joint contract
relation between the mortgagees and the insolvent debtors.
Even the proceeds of the sale of the equities of redemption, as
distributed between the respective mortgagees, were entirely
separate; nor would it make any difference if the mortgagees, in
receiving their respective portions of those proceeds, had acted
jointly, as it is well settled law that where the tort is joint the
injured party may have a joint or several remedy, the rule being
that a judgment against one wrongdoer without satisfaction is no
bar to an action against any one of the other joint tortfeasors.
Lovejoy v. Murray, supra.
Joint wrongdoers may be sued separately; and the plaintiff may
prosecute the same until the amount of the damages is ascertained
by verdict, but the injured party can have only one satisfaction,
the rule being that he may make his election de melioribus
which, when made, is conclusive in all subsequent
Page 95 U. S. 352
proceedings. Heydon's Case,
11 Co. 50; White v.
5 Greenl. 147; Knickerbocker v. Colver,
Cow. (N.Y.) 111; O'Shea v. Kirker,
4 Bosw. (N.Y.) 120.
Without more, these remarks are sufficient to show that the
theory of estoppel cannot be maintained, and that the first two
errors assigned must be overruled, for two reasons:
1. Because the relation of joint contractors never subsisted
between the insolvent debtors and the mortgagees, to whom the
proceeds of the equities of redemption were distributed by the
2. Because the mortgagees acted separately in accepting certain
portions of the proceeds of that sale; nor would it have made any
difference if they had acted jointly, as it is settled by all the
authorities that when several persons have been jointly concerned
in the commission of a wrongful act they may all be charged jointly
as principals, or the plaintiff may sue any one of the parties
separately, torts being in their nature several, even when the
wrongful act was jointly committed. Ad. Torts (3d ed.) 939.
Suppose that is so, still it is insisted by the defendant that
the plaintiff cannot, in any proper view of the facts, recover more
than the difference between the amount paid by the other mortgagee
and the value of the property distributed. What the plaintiffs
claim is the amount the defendant received from the insolvent
debtors as part of the proceeds of the sale of the equities of
redemption. Abundant proof is exhibited that he received $2,444.40,
and it is conceded that the whole of that amount remains in the
hands of the defendant.
Two sums, amounting in the whole to $6,000, were received by the
plaintiffs of the second mortgagee before the present suit was
instituted. $4,000 of the amount was recovered by judgment in favor
of the plaintiffs. They also instituted a second suit against the
same party, to recover the amount received by him in payment of the
notes upon which he was liable as endorser; which action was
compromised by the payment to the assignees of $2,000, as appears
by the agreed statement of facts. Such payment being made, the
assignees executed a release to the defendant in that suit of all
claims and demands which they, as such assignees, had against him
on that account.
Page 95 U. S. 353
Judgments bind parties and privies, but they do not bind
strangers, and it is clear that the present defendant was neither a
party nor privy to the action in the first suit, nor had he any
thing to do with the compromise of the second suit between those
Enough appears in the evidence to establish that theory, but if
any possible doubt could otherwise arise in respect to the
conclusion, the matter is set entirely at rest by the verdict of
the jury. They were told by the court that if the plaintiffs had
once received full satisfaction for the proceeds of the sale from
the other mortgagee, "then they can recover nothing from the
defendant;" and it follows from the verdict that they did not
recover in the suits against the other mortgagee any thing for the
portion of notes taken for the sale of the equities which was
distributed to the defendant in the present suit. All that he
received remains in his hands; and inasmuch as the assignees are
not estopped by the proceedings against the second mortgagee from
prosecuting their claim against the defendant for the portion of
the proceeds of the equities of redemption which was distributed to
him by the insolvent debtors, it follows that the assignee may
recover the whole amount of that portion without regard to the
antecedent proceedings against the second mortgagee, which is all
that need be said in response to the third assignment of error.
Both parties agree that the first mortgagee was not a creditor
of the mortgagors, and that the mortgage was given merely to secure
future advances or future liabilities to be incurred by endorsing
the paper of the mortgagors. Nothing had been paid by the
mortgagee; but the defendant insists that the portion of the notes
distributed to him cannot be recovered back if any outstanding
undischarged contingent liability of the kind remains.
Grave doubts arise whether that proposition is well founded in
law, for two reasons:
1. Because it was the equities of redemption which the
mortgagors sold, and the notes distributed represented the proceeds
of that sale.
2. Because it does not distinctly appear that any such
contingent liability remained at the time of the trial.
But it is unnecessary to decide that question, because the
Page 95 U. S. 354
bill of exceptions does not show that the district judge gave
any instruction contrary to that construction of the mortgage to
the defendant, nor does the record show what, if any, instructions
he gave in that regard. Unsustained by the record, as the fourth
assignment of error is, it must be overruled as inapplicable to the
questions presented for decision.
Evidence to show that the defendant had paid any paper which he
had endorsed for the insolvent debtors, so far as appears, was
entirely wanting; nor does the transcript show that any was
introduced to prove that any endorsement made by the defendant was
outstanding and undischarged. Assume the facts to be so, and it
would be clear that the mortgage could not avail the defendant as a
defense to the claim of the assignees; and it is equally clear
that, if there were no such outstanding endorsements, then it was
important for the defendant to prove that he had advanced moneys to
discharge such liability.
Viewed in that light, it is impossible to sustain the fifth
assignment of error, for the reason that it is shown that the
inquiry whether the defendant had made any payment for the
insolvent debtors was an important inquiry, and one that was
properly submitted to the jury. Proper instructions, it must be
assumed, were given to the jury in respect to all the issues in the
case not made the subject of complaint in the bill of exceptions,
and that all questions involved in the pleadings, except those
presented by the assignment of errors, are correctly settled by the
verdict, from which it follows that there is no error in the