Doub v. Barnes , 4 Gill 1 ( 1846 )

Magruder, J.,

delivered his opinion, as follows :

It is my opinion, that the order of the Chancellor dissolving the injunction in this case, ought to be affirmed, and that Mrs. Mason, (as well as the defendants, Irynch and Craft,) ought to be at liberty to issue executions on the judgments assigned to her. Some of the grounds of that opinion I will proceed to state.

In the course of the argument it was conceded, and indeed could not be denied, that the defendant, Mrs. Mason, was the bona fide owner of the judgments entered for her use, having paid for them a valuable consideration, and without knowledge of the now supposed equity of the complainant. It is moreover not to be questioned, that not one cent of these judgments has been satisfied. It is also unquestionable, that if the complainant has any equity, the whole of it existed long before the judgments at law were revived. ■

Upon what then can the complainant ground his claim to relief in equity ?

It appears that after the original judgments were rendered, the defendants at law executed a deed of trust, conveying to the trustees, with other property, the land afterwards purchased by the complainant. The creditors were not parties to that deed, and did not assent to its execution. But it is alleged, that “the complainant was induced to purchase as aforesaid, and to make payment of the purchase money to the said trustees, from his belief, (which he avers to be well founded by the conduct of the creditors,) that the creditors would look to said trustees for payment of their claims out of the proceeds of sales to be made, as aforesaid.” It is also alleged, that the creditors “acquiesced in the assumption by the trustees, of control of said property, and by other acts,” (nowhere specified,) “indicative of their intention, to look for payment of their claims to the proceeds of sale, which should be made by the trustees, gave credit to the said trustees, and enabled them to make sales more eligible to the creditors than could otherwise be effected.” Now, with respect to those other acts, unless they were mentioned, of course they cannot be denied, and for obvious reasons allegations of this description can furnish no ground for an injunction. This, it is believed, is the whole equity of the complainant’s case. There is something, indeed, said about the creditors having notice of the deed after its execution, but this furnishes the complainant with no title to relief. The defendants at law had a right to sell the land, and could authorise any person to sell it for them. To this the creditors, if apprized of the deed, or of the intention to execute it, could not object. It was the business of the purchaser to look to the provisions of that deed, and to ascertain what liens there were upon this land before he paid the purchase money, and to see to the application of the purchase money. No expression to be found in the deed of trust could mislead the complainant. The creditors never expressly agreed to surrender their remedy at law, and look to the trustees for the amount of their claim. This the complainant chose to infer from the conduct of the creditors, — and what was that conduct ? He speaks indeed of “other acts,” which he supposed would warrant his belief, but such expressions are to be disregarded, and the only circumstance mentioned in the bill is, that the judgment creditors “suspended all proceedings on their judgments,” and this it seems led the complainant to believe, that they had in fact agreed to release their judgments, as judgments, and only to regard them as evidence of the amount of their claims, to be collected without having recourse to execution.

It surely cannot be in the power of the court of chancery to grant the relief which is sought in this case, when the claim to relief is founded on such a circumstance. A creditor may, if he thinks proper, forbear to execute his debtor as long as the law authorises him, without giving to third persons a right to infer that the claim is paid, or its payment is not to be enforced by execution. It is the purchaser’s fault that he trusted the trustees, and did not enquire of the creditors whether they were disposed to trust them.

Dates, however, furnish an answer to all this. The judgments were obtained in October 1839, and much of the land was sold to the complainant early in the year 1840. Surely the creditors here were guilty of no laches, from which any individual had a right to infer, or “believe,” that they designed to waive any remedy which the law afforded them.

The judgment creditors were not bound to take notice of the deed of trust, but the purchaser was. He claims under it, and the deed told him that the several judgments here in controversy, were each of them a lien on the land. It was then the obvious duty of the purchaser to enquire of these judgment creditors whether, if he purchased the land and paid the purchase money to the trustees, their deed would give him a valid title. Failing to do this, he cannot now ask that the judgment creditors should be deprived of the lien which their judgments gave them upon the land, and which it is nowhere asserted they afterwards agreed to release. The maxim: Vigilantibus non dormientibus leges subserviunt, is applicable to debtors and purchasers, as well as to creditors. To afford relief to the complainant in this case, even if there was no other ground on which it ought to be refused, would be to allow him to take advantage of his own laches, when none can be imputed to the creditors.

There are other grounds for dissolving this injunction, some of which will be noticed.

The execution of the judgment obtained by lynch and Graft is no longer to be stayed, and this, because in their answer to the bill, they deny that they ever saw or assented to the deed, or agreed to waive their lien on the land. The answer of Mrs. Mason, (which alone is to be considered here,) cannot in positive terms deny this knowledge and assent by the original creditors, (the persons who assigned the judgments to her,) and simply for this reason, the injunction, though it no longer is to restrain Lynch and Craft from suing out their executions, is to prevent all proceedings at law upon the j udgments which have been assigned to Mrs. Mason.

Now, without stopping to enquire whether this equity, denied in the answer of L. and C., is any where explicitly charged in the bill, it really does strike me, that there is veiy much less of equity in the case so far as Mrs. Mason is concerned in it, than is to be found in it, so far as it is a case between the complainant and Lynch and Craft, and depending upon their answer. All my reflection upon the subject brings me to the conclusion, that even admitting there were matters charged in the bill, which possibly might entitle the complainant to relief against Lynch and Craft, still, there can be found in them no ground whatever for interposing any delay, to the execution of the judgments which had become the property of Mrs. Mason.

We are often told, that the assignee of a bond or judgment, takes it subject to all equities which exist against the assignor. This, as a general rule, is correct; but then, circumstances may place the assignee in a better situation than the assignor would have been in, if he had remained the owner of the judgment. Of this we have happy illustrations in the case of Kemp's executrix against McPherson, 7 H. & J., 320, and in some of the cases there referred to; and also in the case before us. If in this case, the complainant could obtain relief, then he would be permitted to practice a deceit upon Mrs. Mason.

The complainant purchased most of the land in 1840, and yet took no steps in regard to the judgments, either to have the purchase money applied to their satisfaction, or to obtain from the then owner of the judgments, an acknowledgment that they were no longer a lien on the land.

In 1844, sci. fas. were issued to revive those judgments, and issued against him as terre-tenant of this land. Of course he was called upon to show cause, not simply why the judgments should not be revived, but also why fi. fas. issued upon those judgments should not be levied upon this land. Assuming then, that of any part of his supposed defence in equity he could not avail himself at law, yet it must be admitted, that whatever defence he now has in equity, has been equally so ever since the complainant paid the purchase money. To .conceal that supposed equity, was to practice a fraud upon any person who might have become, or at any time afterwards became, a bona fide purchaser of the original judgment. It was his duty to make known that equity, in order to prevent others from being sufferers by the concealment of it. A sci. fa. was issued, and yet nothing was said of this latent equity. Instead of disputing the case any where, he consented to give a judgment against him, and thereby acknowledged upon the record that the whole debt is due, and that this land is answerable for the amount of it, and will be liable to be sold therefor, if the money be not paid before the expiration of the time, during which, by agreement, the execution is to be stayed. Surely this was declaring to Mrs. Mason, and all others who might be disposed to purchase these judgments, that if they had any doubts before, they might dismiss them; that the claim was undoubtedly good, at all events, so far as the land, when sold, would pay it; and he had agreed upon the record, that the land should be sold for the purpose, if the debt was not paid before the expiration of the eight months: — and is this a case in which the appellee is entitled to relief against the subsequent assignee of the judgment? Impossible.

If the complainant had any equity whatever, the whole of that equity existed when Mrs. Mason acquired an interest in these judgments, and had existed several years previously thereto; and the defendant was bound to know, that any person had a right to purchase those judgments. The charge in fact is, that the original plaintiff sold to Mrs. Mason, as judgments in full force, judgments which, by his own acts or omissions, had ceased to be of any value as judgments. If this was so, then the complainant, in forbearing to set up his defence, either at law or in equity, in omitting to file his bill, at all events, so soon as the sci. fas. were issued, is himself to be regarded as guilty of the fraud which his neglect enabled, and was calculated to enable, the plaintiff at law to practise upon others. Moreover if this be so, then unquestionably the plaintiff at law is bound to refund to Mrs. Mason the money which she paid for the judgments. Surely, then, the decree of the court, which gives to this complainant the relief which he now asks, if it did not also give to Mrs. Mason relief against the assignors, ought to be evidence against him, in any proceeding which Mrs. Mason might be forced to institute against them, in order to recover back the money thus obtained from her by false pretences. But the decree in this case would be no evidence against the assignors, because they are no parties to the suit. They would then be at liberty to dispute her claim, founded upon the decree, and might insist, that if they had been parties to the suit, they would have filed answers, like that of Lynch and Craft, and thereby have secured to Mrs. Mason her money.

It was then a conclusive objection to the granting or continuing of this injunction, (so far as it restrained all legal proceedings upon Mrs. Mason’s judgments,) that her assignors were not made parties to this suit, and that the complainant, by omitting to make them parties, deprived Mrs. M. of the answers, which, if given, we have a right to assume would have contained as explicit a denial of the charges, as are to be found in the answers of L. and C.

It is true, that when objections of this kind arise, we are often reminded, that in some of the books of equity practice, we are told of cases in which though the assignor may be, yet he need not be, made a party. It will be difficult to find a book of equity practice of any reputation, which gives the slightest ground for the notion, that in any case like this, the assignor is not an indispensable party to the suit. I forbear to notice what the books of practice, to which we are referred, say upon the subject, because no foreign treatise of equity practice lately published, could influence my opinion on this question: and I choose here to say, why 1 thus express myself.

It is the practice to cite as authorities in the courts of Maryland every new book, the author of which has any reputation at home, and every decision of any court, with a report of which we are furnished. This is a sore grievance, and ought to be corrected. At fire period of the revolution our courts had adopted for the administration of justice by them, rules, (some of them borrowed, and some not borrowed, from the courts of England,) deemed to be “applicable to our local and other circumstances;” and ever since the revolution, our General Assembly has claimed and exercised the right to regulate the practice, and enlarge or abridge the jurisdiction of the chancery court. Our chancery practice then, rightfully consists of what it was at the lime of the revolution, and what it has since been, made by our own legislation To understand what it really is, its own decisions are authority, and these will show, that we have some equity, as we have some common law, for which we are not indebted, either to our own statute book, or to any description of law existing in England, at the time when we ought to have ceased to borrow law from her courts, or her legislature.

It is to an occasional forgetfulness of this, that we have decisions which can never be reconciled, and our system of equity, as settled, by our forefathers, has been altered by decisions elsewhere, which, whatever be their merit elsewhere, ought not to be received as authority in the courts of Maryland.

It is as well settled in this State, and perhaps has been settled as long, and in the same way, that the assignor of a bond or judgment is an indispensable party to a suit in equity, to annul or to enforce it, as that the courts of common law may, at the appearance term, grant to the defendant a writ of retorno kabendo, in an action of replevin. Oases which make an assignor an indispensable party, and in which, for the want of such parties, decrees have been reversed, and the bill dismissed, it has not been thought necessaiy to report, if nothing else was decided in them. The legislature may make the law otherwise ; the courts must not.

I deem it to be unnecessary to dwell upon another ground on which relief is sought, to wit: that there are other lands also liable, and other terre-tenants, who ought to have been made parties to the proceeding at law by sci.fa. This was unquestionably a good defence at law, but furnishes none in equity. It is a defence which the complainant chose to abandon, with other defences, when he entered a fiat, and in consideration of it obtained a stay for eight months.

I have all along spoken of Mrs. M., as a bona fide purchaser for valuable consideration, of the j udgments. Something which would seem to mean otherwise, is to be found in the bill of complaint; but besides being disproved by the answer, it was abandoned in the argument.

I cannot agree with the court, that Mrs. Mason ought not to have execution of her judgments,

Archer, C. J.,

delivered the opinion of this court.

The equity of the bill consists in the facts alleged, that after the rendition of the judgments against Abraham Barnes, M. Mason and J. T. Mason, a conveyance was executed by them for all their real estate in Washington county, and a large personal estate, to trustees, in trust, to pay their debts according to their legal priority; that such deed was made to Messrs. Yost and Price, who were attorneys of the judgment creditors, on the 11th of October 1839; that said deed of trust was made known to the judgment creditors shortly after its execution; that they acquiesced in the assumption by the trustees of control over the property conveyed; that they suspended all proceedings on their judgments; that by acts, indicative of their intention to look for payment of their claims to the proceeds of sales which should be made by the trustees, they gave credit to the trustees, and enabled the trustees to make more eligible sales for the creditors than could otherwise be effected 5 that the complainant was persuaded to purchase and make payments, from a belief well founded in the conduct of the creditors, that they would look to the trustees, and only to the trustees, for payment of their claims out of the proceeds of sale to be made by them.

If the judgment creditors assented to the deed of trust, and by their conduct induced the complainant and others to become the purchaser of the lands bound by their judgments, and to believe that they would look to the trustees for the payment of their claims, and not to the liens created by their judgments, we cannot but believe that such conduct would furnish a valid equitable defence. To allow the judgment creditors, after-such a course of conduct, to enforce their judgments against the purchasers, would be to permit them to perpetrate a fraud upon the purchasers. The obvious consequence of such a procedure on the part of the judgment creditors, would be to lull the purchasers into a false security, and to induce them to believe that a title would follow the payment of the purchase money. Upon the state of facts alleged, it would not be necessary for the purchasers to see to the application of the purchase money, credit being given to the trustees, and they being known to be alone looked to for the payment of the judgments by the proceeds of sale.

Such a defence could, however, be oidy available on the ground of fraud; it could not be relied upon as a payment, a surrender or release, and pleadable as such in a court of law. It is true, fraud is as well cognizable in a court of law as a court of equity; and it is contended, that if this be a defence, it should have been made available at law. The character of the defence is not such as that thereby, the judgments are vacated, but equity would prevent their enforcement, on the ground that to allow the judgment creditor, under the circumstances, to enforce the lien of their judgments, would be to enable them to perpetrate injustice on the purchasers.

The answer of the defendants, Jjynch and Craft, explicitly denies all the equity as above referred to in the bill. They deny that they ever assented to the deed of trust, or in any way expressly or impliedly consented or agreed in any manner to waive their liens, which were secured to them by their judgments ; and again, they deny that they ever acquiesced or assented to the assumption of the trust by Yost and Price, or that they ever did any act, or intended to do any act by which they agreed or indicated an intention to look for the payment of their claims to the proceeds of sales, which should be made by the said trustees. They further deny that the complainant was persuaded or induced to purchase said property, and to make payments therefor to said trustees, from a belief, either well or ill founded from their conduct, that they intended to look to said trustees, and only to said trustees, for payment of their claims out of the proceeds of sale to be made by said trustees.

There would exist therefore, only two facts upon which the equity of the complainant is founded, which are not explicitly denied by the answer of Lynch and Craft: but the existence of these facts cannot affect the question under consideration. The facts referred to are, that Mr. Price was the attorney of Lynch and Craft, and that Lynch and Craft had suspended execution on their judgments. As attorney, Mr. Price had no authority to accept for his client the deed of trust in the record, and the suspension of procedings on the judgment could work no injury to Lynch and Craft, if it be true that they always looked to their judgments, and not to the deed of trust, for satisfaction.

The answer of Mr. Mason is subject to different considerations. He stands in the character of assignee of several of the judgments, and in his answer professes to have no personal knowledge of the averments, above adverted to, as constituting the equity of the complaint, and he denies the facts relied upon, only upon the information which he had obtained. We cannot, on this account, give to the answer the effect of dissolving the injunction. No case has been cited which would sanction such a result. The complainant is entitled to his equity, unless it shall be removed by positive averments in the answer, and not hearsay.

It is contended on the part of the appellant, that independent of any question of assent or acquiescence on the part of the creditors, the appellant is entitled on general principles of equity to insist, that the creditors shall proceed first, against the land yet remaining unsold and liable to execution, and next against the lands sold by the trustees, after the sales made to him in the reverse order of those sales, and that the lands so purchased by him shall not be made to contribute to the payment of said judgments, until after the funds before mentioned shall have been applied to that purpose.

The judgments having become dormant, were revived by sci.fa. against the original defendants and the terre-tenants. The proceedings before us do not show who were made terretenants ,• but as the judgments, filed as exhibits, show that these judgments were revived against the terre-tenants, we infer that all the vendees of the land, as well as the trustees, were returned terre-tenants.

The effect of such a judgment in England, where lands are extended and not sold, would be to give to any party defendant the right to coerce the plaintiff to take out execution against the lands of all the terre-tenants, by which means he would have the benefit of contribution, and if he took out execution against only one terre-tenant, relief would be granted by an audita querela. It is upon the ground of contribution that all the terre-tenants are required to be made parties, and any one tenant who is made a party, may plead in abatement, that there are other terre-tenants not made parties. If he fail to do this, he cannot afterwards have contribution.

The contribution thus secured by extending all the lands of the terre-tenants upon which the judgments were liens, operated upon each according to the value of the property of which he was tenant, so that the contribution was equal, and had no reference to the dates of the conveyances from the judgment debtor, by which they had become terre-tenants. 1 Leigh., 144. Departures from this doctrine appear to have taken place in New York. We do not believe that they are consistent with the established law in the English courts. The most, therefore, that the complainant could claim, would be contribution from the vendees of the land, in proportion to the value of the land conveyed to each respectively.

As lands are sold for the payment of judgments under executions in this State, instead of being extended, the debtor has not, as in England, the right to compel the levy and execution of the writ upon all the lands. The seizure and sale of all would be unnecessary and oppressive, because not necessary in many cases to satisfy the plaintiff’s judgment. The judgment against the terre-tenants gives the plaintiff a right to sell as much of the land as may be necessary to satisfy his claim, and if any one of the terre-tenants is injured, he would have a right to go into equity to compel all with whom he stood in equali jure, to contribute.

We do not think that the plaintiff who has obtained a judgment at law, should be compelled to suspend his execution, until the question of contribution shall be settled as between the various defendants in the judgment. This principle appears to have been held by this court in the case of McCormick and Gibson, 10 Gill & John., 65.

If there be lands not sold by the trustees, the defendants cannot be driven to resort for satisfaction to such lands. It is obvious that such a proceeding would greatly delay satisfaction of their judgments, involve them in litigation, without a certainty of making such lands to the full extent available as a fund to meet the judgments. Elder judgment creditors might intervene. To compel the respondents to resort to these lands, the court ought clearly to see, that his resort to them would not be attended with difficulty, embarrassment, or delay.

The decree of the chancellor in so far as it dissolves the injunction against Lynch and Craft, is affirmed, and in so far as it dissolves the injunction against J. T. Mason, is reversed.

DECREE AFFIRMED IN PART, AND REVERSED IN PART.