Boughton v. Bank of Orleans , 2 Barb. Ch. 458 ( 1847 )

The Chancellor.

It is not necessary to examine the question, in this case, whether one of the defendants in an execution, who is a mere surety for his co-defendant, has any remedy in this court against a sheriff who has an execution against both, and who, with the full knowledge of the fact that one of the defendants in such execution is primarily and equitably liable for the whole debt, neglects to sell the property of such principal debtor, whereby the same is lost; and where such sheriff is subsequently proceeding upon the execution against the property of the surety. It is certain that in a case where the question of primary liability is doubtful, the sheriff is not bound, at his peril, to decide upon the conflicting claims of the defendants to equity as between themselves. For in such a case, if the defendant who claims to be the surety wishes to have the execution enforced against his co-defendant, who he insists is primarily liable for the payment of the judgment, he should apply to the equitable powers of the court out of which the execution issued, upon due notice to his co-defendant, for a direction to the sheriff to resort to the property of such co-defendant in the first place. But the principle of equity is well established that the property of the principal debtor is primarily liable, and should be first resorted to. And if the sheriff, with a full knowledge of the facts, wilfully violates the principle of equity in this respect, the surety certainly is not without reme* dy. For if he cannot recover in an action upon the case against the sheriff, this court ought, unquestionably, to grant him relief, upon a bill filed for that purpose.

In the case under consideration, however, the bill does not show that the complainants have become charged with the payment of this debt in consequence of the wrongful act of the sheriff. For it is not shown that the debt could have been collected out of the property of Darling, at the time the sheriff refused to proceed and sell the farm, in October, 1839.

It is indeed alleged that the value of the two pieces of land, of which the farm was composed, was sufficient to pay the judgment and mortgage at that time; and that the agent of the complainants offered to bid upon both pieces to the full amount of the execution, and to pay his bid. But the title to the 87 acre piece was not in the defendant Darling, and that part of the farm could only be sold, upon the execution, as the property of Rowell, one of the sureties. For by the express terms of the revised statutes, the interest of a person holding a contract for the purchase of lands, is not bound by the docketing of a judgment ; and his interest in the land, as the purchaser, cannot be sold by execution upon such judgment. (1 R. S. 744, § 4.) Property thus held under a contract now forms an exception to the general rule, that the interest of a defendant in lands of which he is in possession, may be sold on execution. (Griffin v. Spencer, 6 Hill’s Rep. 525. Talbot v. Chamberlin, 3 Paige’s Rep. 219.) It is true, the judgment was a lien upon the legal title of Rowell, one of the sureties in such judgment, and upon his interest in the land; which interest was equal to the amount of the purchase money still due to him. But the purchaser under the execution would have taken such legal title subject to the equitable right of Darling to the land, upon the payment of the balance of the purchase money due upon the contract; which equitable right of Darling would not have been divested by the sheriff’s sale. Nor would the purchaser have acquired the right to the possession of the land, as against Darling, by that sale, unless Rowell, the vendor in the contract, would have been entitled to the possession if no sale thereof' under the execution had been' made. No right whatever, as' against thfe principal debtor’s interest in the land; would have been acquired by the sale of the 87 acre lot under the execution. (Grosvenor v. Allen, 9 Paige's Rep. 74.) The appellant's, therefore,' cannót complain that the sheriff did not sell the interest of' one of them in that" part of' the farn. upon the execution! And I have not been able to find any allegation in the bill which shows that the 99 acre lot, at any time after the execution came into the hands of the "sheriff, was of sufficient'value to pay the amount of the judgment, or any part of it; in addition to the amount of the mortgage which was a prior lien upon that part of the farm of Darling.

There is indeed an allegation in' the' bill, that -at the time of the recovery of the judgment, Darling had sufficient' real and personal estáte' to' satisfy the judgment, if due diligence had been used in its" collection: And' perhaps it may be fairly inferred that suchheal and personal estate was in the county of ’Monroe ;' although that' is not expressly stated in the bill. ' But the sheriff is neither legally nor equitably liable to the' complainants for not levying upon and selling the property at that time. For. it is'not stated that any personal estate which was liable to levy and sale, was in the possession' of Darling at the time the execution came to the hands of the sheriff; which was séverál days after the judgment'was entered.

Again; the'bill show's that'the officers or agents of the bank made a valid and binding agreement with Darling to stay the proceedings upon the judgment" against him, for "a year; and that this was- done without the’knowledge or consent of'the complainant Rowell!' This, of" course, discharged Rowell, in equity, from any further liability to the bánk as onri of the sureties of-Darling." And if Boughton assented to that stay of proceedings, as I infer he did, he "thereby became' liable", "in equity, for the payment of -the whole judgment, as bétweén 'him arid Rbwéll his co-surety; if-it could not be collected of Da'rling, the principal debtor. And the sheriff could not be liable to' the complainant Rowell for any neglect to levy on arid' sell the property of Darling, during the time that' the bank had-stayéd the proceedings without Rowell’s knowledge or consent. Nor could the complainant Boughton complain that the sheriff acted upon the agreement between Darling and the bank, to which Boughton, as one of the sureties, had himself assented.

The two complainants, therefore, have separate and distinct rights and interests in this matter, upon the case attempted to be made by this bill; and they should not have joined in one suit. If the allegation in the bill is true, as to the agreement made by the bank, to stay the proceedings, about the time of the recovery of the judgment, Rowell has a right to file a separate bill against the bank to stay all further proceedings against him upon the judgment; upon the ground that such agreement was an equitable discharge of his liability as surety. But if Boughton assented to that stay of proceedings, he was not discharged thereby; and. he should not have joined with Rowell in a bill, against the bank, for relief on that ground. On the other hand, if Rowell was discharged from his liability by this act of the officers or agents of the bank, as the statements in the bill clearly show that he was, he has not been injured by any subsequent neglect of the sheriff to proceed and sell the farm of Darling, upon the execution. And he should not have joined with Boughton in a bill, against the sheriff, to obtain relief on that ground; as Boughton was the only person who had a legal right to complain of that act, or rather that omission of duty by the sheriff.

In any view which I have been able to take of this case, therefore, the bill of the complainants cannot be sustained against the respondents. And the decree appealed from must be affirmed, with,costs.