Wiley v. Holmes ( 1859 )

Scott, Judge,

delivered the opinion of the court.

This suit is founded on a promissory note executed to the plaintiffs by the style of L. M. Wiley & Co., payable in Now York. The note was signed- “ Bloomer & Holmes” — a partnership composed of the defendant and Robert Bloomer — and dated “New York, March 19th, 1849.” The defence was that by the laws of New York the note was a joint one, and that by the law of that state a judgment recovered against one of the parties thereto was a merger and- extinguishment of the contract as to the other party, and that afterwards no action could be maintained upon it; that in an action on the said note in the state of Louisiana a judgment was rendered against the said Robert Bloomer, one of the parties thereto, and therefore the contract was extinguished as to both of them. There was a judgment for the plaintiffs.

It is well settled that the law of the place of the contract governs as to its nature, obligation and interpretation, and also that it determines whether a contract is joint and several, or several. It is equally clear that by the common law, which is shown to be the law of New York on this subject, the note sued on is a joint one, and that, if a creditor sues one debtor on a joint contract and recovers against him a judgment, the debt is merged in the judgment, and, in case the judgment is not satisfied, the creditor can not afterwards sue the other joint debtor or debtors. This was on the ground that the creditor by his own voluntary act had extinguished his debt as to one of the debtors, and a debt being extinguished as to one was extinguished as to all of the debtors. At common law, in case of joint contracts, the joint debtors, who could not be served with process, might be pros ecuted to outlawry; in which event, the estate of the outlaw falling into the hands of the crown, the creditor might, by an application to the king, obtain satisfaction of his demand.

At common law, if one of the joint debtors died, although no suit at law could be sustained against the representatives of the deceased debtor, the cause of action surviving only against the living debtor, yet courts of equity, in such cases, afforded relief, and permitted the debt to be recovered against the representatives of the deceased debtor. And so far was this carried, that the representatives of the deceased debtor might be sued before any action was instituted against the survivor. (Winter v. Innes, 4 Mylne & Craig, 109.) This must have been on the ground that the creditor in nowise contributed to the act which deprived him of his action at law; and it shows that, although technically at law the remedy against one of the joint debtors may be lost, yet, where the creditor does no act himself which affects his remedy, that in equity and substantial justice it will- be preserved for him. Thus it would seem that at the common law a destruction or taking away of the right of recovery in a suit at law against one of the joint debtors does not destroy all remedy against him and the surviving debtor, but that the right of recovery would remain as to all, but yet to be pursued in different forums. We are of the opinion too that it may be inferred from this that the act by which the creditor’s remedy is to be merged or extinguished must be a voluntary one on his part. It must be his own act. If the act of God will not extinguish the creditor’s right of recovery on a joint demand, can the debtor by his own act do it ? Can two debtors create a joint debt in a state where the common law prevails, and afterwards, even before the debt becomes due, by removing into different states, prevent a recovery of it, by setting up the defence, to an action against one of them, when only one can be sued, that by the law of the place where the contract was made it was a joint one, and the action on it must be joint and against both or it must fail. To a plea containing such a defence, would it not be a good replication that the defendant by his own act in removing to another state had prevented the institution of a joint action ?

We do not see how the international law as to the nature, obligation and interpretation of contracts can affect this question. If both the debtors had remained in New York and whilst there the debt had been merged as to one of them by the voluntary act of the creditor, there might be some propriety in holding that this action could not be maintained. But as the defendants by their own act prevented the law of the place from operating on the contract, on what principle can they claim the benefit of that law which they have abandoned and renounced? It is the law of New York and of all other civilized states that a debtor shall not, by his own voluntary, unauthorized act, defeat the claims of his creditors. It is no. answer to this to say that the parties must have contracted in contemplation of the possibility of such a state of things and should therefore have provided against it. Parties may contract in reference to a foreign law, or they may agree that the law of their residence shall accompany them wherever they may go ; but no system of jurisprudence would adopt it as a rule for the interpretation of contracts, in the absence of all stipulations on the subject, that the parr ties, at the time of making a contract in a place of which they were citizens, had in contemplation the possibility of their becoming residents of another country. Parties may be supposed to contract in reference to what may transpire or what may take under the laws of the country to which they are subject, but they can never be supposed to have in mind a state of things inimical to the interests of the state of which they are members.

The case of Dennett v. Chick, 2 Greenl. 191, is a stronger one than that under consideration. There Chick, one of two joint debtors in a promissory note, was sued in the state of Maine. The other joint debtor, Ham, not being found in that state and having no domicil there, no service was made on him. The defendant Chick appeared and pleaded in bar a judgment recovered in an action on the same note in the state of New Hampshire against Ham, .Chick having no domi- . cil or property in that state. A writ of execution was issued on the judgment and returned unsatisfied. To this plea there was a demurrer and the demurrer was sustained. The case of Condee & Scribner v. Clark & Brown, 2 Mich. 255, is unlike that before us. We understand that in this case the state of Michigan gave the law of the contract. The merger was caused by a recovery in the state of Ohio against one of the parties. Afterwards suit was brought against both of them in the state of Michigan. If this case decides that, under the circumstances, no action could be maintained on the note against either of the parties, it is opposed to the above cited case from Greenleaf. But if it only intended to maintain that a recovery could not be had in the action as brought, on the ground of variance between the declaration and evidence, (both parties being sued when the cause of action was merged as to one of them,) wo have nothing to say against it, as, by the common law, it was clear that the action could not be maintained. In that case, too, it appears that the joint debtors were residents of the state of Michigan, and that at the time of the commencement of the action in the state of Ohio against' Brown, one of the joint debtors, he was a citizen of the state of Michigan. So in fact the joint debtors by their act had not compelled the creditors to sue in the state of Ohio, and the suit was voluntary on their part, not induced by the conduct of the debtors.

Our statute by making all joint contracts joint or several and allowing a suit against one or more of the joint debtors, has altered the doctrine of the common law in relation to actions on joint demands.

The other judges concur ; affirmed. ^*

* A motion for a rehearing was filed in behalf of the plaintiffs in error in this case; it was overruled.