Norton v. Soule , 2 Me. 341 ( 1823 )

Mellen C. J.

delivered the judgment of the Court at the eh suing term in Penobscot, as follows.

On the ground of equity and justice the demandant, upon the facts before us, seems clearly entitled to judgment. — He is a mere surety for the tenant, seeking to obtain indemnity by means of an arrangement made for the very purpose of securing it to him; and his claim is resisted by the man who has been befriended by him, and upon the principle that the above-mentioned arrangement ought to have and must have, according to strict law, an operation directly contrary to that which Was intended.

As Norton was only the surety of Soule on the note made to Abbot, it is reasonable to presume that he the more readily became such in consequence of the collateral security given to Abbot by the mortgage deed of Soule; because, as Norton was no party to that instrument, he probably contemplated, what •was afterwards effected, that is, an assignment of the mortgage to him by Abbot for his eventual indemnity; and if Abbot, at the same time, had assigned to him the personal security also, no case has been shewn which decides that such a mode of indemnity would have been ineffectual.

In England questions relating to suretyship and to rights growing out of it, were formerly settled in the Court of Chancery ; and for many purposes it is now necessary to resort to "that Court for effectual security to a surety; such as to obtain an assignment of judgments, liens, &c. — The same course of proceeding is pursued in the Court of Chancery in New-York.— See Clason & al. v. Morris, 10 Johns. 524. — It has however, for a long time been the practice in England for one surety to resort to the Courts of common law, to compel a co-surety to contribute ; and this is done by an action of assumpsit. Such also is the law with us; and as we have no Court of Chancery, rye certainly should not be rigid in the application of common law principles, when such application will produce manifest injustice 5 but rather give effect to equitable principles, where the common law does not clearly forbid it. — in the abovementioned case of Clason & al. v. Morris & al. which was a chancery proceeding, the facts were these: — Clason and Stanly indorsed a note, (given by Sands and. payable to them or order) to Low. — In thus indorsing the note, Clason and Stanly acted merely as the friends and sureties of'.Sands'. — Low obtained a judgment against Sands, and afterwards another judgment against Clason and Stanly, who paid the amount of the debt to Low and took tin assignment of the judgment against Sands; and it was held that they stood in the place of Imw, and might avail themselves of the judgment to recover the money paid by fhem for Sands.

The defence in the present action is that the debt, to secure ■which the mortgage deed declared on was given, has been paid. —The condition of the deed is that the debt shall be paid by Soule; but it appears that he has only paid a part of it; and that the residue has been paid by Norton, the demandant, to ■Bond, to whom Abbot had previously indorsed the note ; and this was after the condition of the mortgage was broken. — Still it is contended that the pajnnent thus made by Norton, was in due season, inasmuch as there has never been any entry to foreclose, made either by Abbot or the demandant as assignee óf the mortgage; and that such payment must be considered, as having satisfied and extinguished the original debt, and of course extinguished the mortgage and completely defeated the ¿state now claimed in virtue of it.

As to the first proposition it would seem that, if the payment by Norton to Bond of the amount of his judgment against Soule, was an effectual satisfaction and extinguishment of the debt, it was made in due season, and amounts toa good defence In this action; according to the opinion intimated in the case of Winship v. Pomeroy, 12 Mass. 514. and yet this principle appears to be in some maimer overruled by the case of Parsons v. Welles, 17 Mass. 419. though in this last, case, the mortgájjée fiad entered and taken possession. — The only question, then remaining, is, whether the payment of Bond’s judgment agaipst Soule, in the peculiar circumstances of this case, has extinguished the debt secured originally by the joint and several note of Norton and Soule, and by Soule’s mortgage. — The cases which have been .cited in support of the affirmative of the question, differ, 'in some particulars which we deem important, from the case under consideration, — In Hammett v. Wyman, the debt was due from Hammett and Jones: They were both principal debt» ors. Again, in that case they were both judgment debtors; Peterson, the creditor, having obtained judgment and execution, against them both. — Tuckerman v. Newhall, has no immediate bearing on the present case ; it only decides on the effect of a release to one of two joint and several debtors, — In Brackett v. Winslow a joint judgment had been recovered against 'two debtors; they appear to have both been principals; neither was surety for the other. In the present case it appears that Norton was never sued by Bond ; he was not a purchaser of a judgment against himself; (as in Hammett v. Wyman and Bracket v. Winslow was virtually the case:) but a judgment against Soule mly. A part of the judgment so assigned by Bond to Norton consisted of the costs of the action; and for these costs Bond had no claim on Norton. Indeed no case has been cited or found which goes the length of establishing the principle that a payment by a surety, in circumstances like those before us, must necessarily have the effect to extinguish the original demand, when the arrangement was made for the express purpose of affording protection to the demandant from all danger in consequence of his suretyship. It is by no means a new principle, that a contract may receive a construction, by means of which it may have a legal operation, though in a form different from that which the parties expressed. Thus a deed which cannot take effect as a conveyance of one kind, may be valid and effectual as one of another kind. This is a common principle, adopted for the purpose of giving substantial effect-to the intentions of all concerned. In the case of Allen v. Holden, cited by the demandant’s counsel the Court seem to have gone, in some measure, on this ground. Mien obtained judg-. ment against Holden; — sued execution and delivered it to Wyman a deputy under Bridge the' sheriff. Wyman, by his omission to collect the contents of the execution, became liable to Allen for his "neglect. Allen sued'the sheriff — and thereupon Wyman stepped forward and paid to Allen the aipount of kk judgment against Holden, and took an assignment of it, and then sued Holden in an action of debt on this satisfied judgment in Allen’s name. The Court sustained the action. It is true that in giving the opinion, the Chief Justice considers the sum paid by Wyman as damages for his neglect; but, in truth he paid neither more nor less than the full amount of the judgment. The Court, by considering the sum paid as damages, and looking to the object of Wyman and Allen in that transaction, decided that, for the purpose of maintaining the action for the benefit of Wyman, the judgment might be thus viewed as unsatisfied. This seems to be a fair inference from the facts in that case. Surely if such an action was maintainable in favour or rather for the express use of a person who had been guilty of official neglect, it would seem that a fair and innocent surety — who has done no wrong — should find equal protection in a Court of common law, when we have no Court of chancery which can furnish specific guards and securities, as is done in England and in those of the United States where such a Court exists.

The case of Popkin v. Bumstead, 8 Mass. 491. is a strong one to shew how far a Court will go in giving a construction to the' acts of parties, so as to effectuate their fair intentions and preserve their rights. Mary Poplcin commenced her action of Dower against Bumstead. fty the pleadings in the case it appeared that the demandant’s husband had mortgaged the estate, whereof Dower was claimed, to Capen; and the demandant by the deed of mortgage released 'to Capen her 'Dower in the premises — after the husband’s death, his administrator sold the equity of redemption and the tenant purchased it; and then paid to Capen the whole sum due on the mortgage; and he thereupon acknowledged satisfaction on the margin of the record of‘said, mortgage deed. On these facts it was contended by the demandant, that though her release barred her as respected the mortgage, and so long as the mortgage deed remained in force ; yet as the conveyance by her husband was conditional, so was the release of her Dowerand as the debt was fully paid, and the mortgage discharged, such discharge restored all concerned to their original rights and of course. restored her to her right of Dower. But the Court were of a different opinion, and said — “ It would be singular if, when the “ tenant paid the money due on the mortgage, and supposed “ that he had thus perfected his’title by extinguishing the only “ incúmbrance he knew to exist upon it, he should by that very “ act revive the claim of the demandant, which she had before “ solemnly renounced under hand and seal. When the tenant “ purchased the equity of redemption, it belonged to him to H pay the money due on the mortgage, and thus rid the estate “ of incumbrance. Having all the equitable interest in him- “ self, when he paid the;money due.on the mortgage* the legal “ estate followed the equitable interest and he became seized of “ the whole in fee simple. If this were not the plain legal ope- “ ration of the transaction, the law would 'construe the discharge w of the mortgage by the mortgagee, to be a release of the legal “ estate by him to the tenant, rather than süch a mischief should “ follow.”

By the condition of the deed, Soule was bound to pay the whole note. He has never done it. In strictness he has broken the condition of the mortgage and stands liable to the usual conditional judgment in cases of mortgage ; — and as we do not find any decided case which forbids our giving to the payment of Bond’s .judgment by Norton the intended effect of it, for the indemnity.of an honest surety; and considering also the liberality of construction in the cases on which we have been commenting, we are disposed to give it that effect. Accordingly there must be judgment for the demandant for possession of the demanded premises, unless within two months, the tenant pay the sum of eighty-five dollars and interest thereon from the time of entering up this judgment.