Burdine's Ex'rs v. Maltbie , 3 Stew. & P. 417 ( 1833 )

Lipscomb, C. J.

This cause' is brought before us, for the purpose of reversing the decree of the court of chancery, for the county of Madison, rendered by 'Judge Perry, on a bill filed by the present defendant, as complainant, against the plaintiffs in error,

The material facts, as collected from the bill, answer and testimony, are these — That one John H. Lewis, having in his hands for collection, a bill drawn by.the complainant, -for about eleven hundred dollars, which had been protested, the complainant, for the purpose of securing the payment of the bill, procured one John W. Tilford, who was then greatly indebted to complainant, to place sundry notes due to him, Tilford, in the hands of Lewis, with instructions to the said Lewis, to apply the proceeds, when, collected, towards the discharge of the bill: that, among others,, was one on Wm. II. Chunn, one of the defendants; that Lewis caused suit to be brought on the note against Chunn, in the name of Tilford, and and proceeded to judgment against him: that the executors óf Burdine, to whom Tilford was indebted, sued out a summons of garnishment against Chunn, to answer, on oath, as to his indebtedness to Tilford. Chunn, on the return of the garnishment, answered, that he was indebted the amount of the judgment; that, in a conversation with Tilford, he was told that the note had been placed in the hands of one Lewis, with others, and that, he would make an arrangement about it. This was after the commencement of suit, and before the garnishment. On this return, the Circuit court awarded a judgment of condemnation of the debt, to the use of the executors of Bur-dine. Lewis admits, in his testimony, that he was in court when the judgment was rendered. Tilford is insolvent. This bill .was filed to enjoin the executors of Burdine, from collecting the amount of the judgment of condemnation, .in their favor, against Chunn ; and an injunction was granted. It was subsequently dissolved, after the coming in of the an-. swer of the executors, and they collected the money, on filing a refunding bond, as required by statute. On the final hearing, the chancellor rendered a decree in favor of the complainant, against the executors of Burdine, for the amount they had collected, and decreed that they should pay cost.

This decree, is now sought to be reversed.

It is argued that the complainant has shown no superior equity, to entitle him to callón the court of chancery, to deprive Burdine’s executors of an advantage they had acquired at law.

On the part of the complainant it is urged, that it would be defeating the object of the', trust if the money due from Chunn, should it be appropriated to any other purpose than the payment of the complainant; that the complainant’s equity was complete in the fund, from the time the note was placed in Lewis’s hands for collection, with directions to apply it to the credit of the complainant.

It is not disputed that Tilford had a right to prefer one creditor to another; and if he had made an assignment of the debt due from Chunn, to Maltbie, suit could have been maintained in the name of the assignee, and there never would have been a question raised as to’ whose credit the proceeds of the note should be applied. Both Maltbie, the complainant, and Burdine’s executors had equity against a fund due from.Tilford’s debtor, and if there had been no preference, it would have been awarded to the party who exercised the most diligence in the pursuit of his rights. If Maltbie had interposed his equity, or made, it known, at any time before the legal right of Burdine’s executors had been fixed on the fund, by the judgment of condemnation, his right would have .been preferred, and the object for which, the note had been, placed in the hands of Lewis, would not have been defeated. But, although it was known to Lewis, he did not interpose, as he ought to have done. He should have protected the interest of Maltbie, and, if the court of law was inadequate to grant him relief, he should have resorted to chancery. We must consider'Maltbie as affected by the notice of Lewis; but I am not prepared to say, that, if he had not have had notice,-neither positive nor constructive, that it would have changed the result, after the final auction of the court of law,, on the fund in the hands of Churm; hut his having notice, makes the case stronger against him.

In Eaton vs. Patterson and Hunchman, the equity was asserted and the aid of the court of chancery invoked to enforce it, before the final action of the court of law, on the garnislimeut. That case can, therefore, be no authority in support of the doctrine in this case. As little aid can be drawn from Lucas v. Atwood et al.^a In that ca~e Lucas was the first to resort to the only tribunal that could di~pose of an equitable fund; for the satisfaction of his debt, it was ruled by the court, that his ~uperior diligence entitled him to the preference.

In this case, after a judgment in their favor, both equity and law was in favor of the executors of Bur-dine; they hád used superior diligence, whilst Malt-bie was faulty in not making known and asserting his equity. We believe, therefore, that chancery should leave the advantage where the law had placed it, and not take the right from the plaintiffs in error, after it had been matured into a judgrnentatlavv.

• ’ The decree, for these reasons, must be reversed and bill dismissed, at the cost of the complainant.

a 2Stew378