The endorser of a promissory note, who has been charged by due
notice of the default of the maker is not entitled to the
protection of a court of equity as a surety; the holder may proceed
against either party at his pleasure, and does not discharge the
endorser by not issuing or by countermanding an execution against
the maker.
By the statute of Maryland of 1763, ch. 23, s. 8, which is
perhaps only declaratory of the common law, an endorser has a right
to pay the amount of the note or bill to the holder, and to be
subrogated to all his rights by obtaining an assignment of the
holder's judgment against the maker.
The answer of a defendant in chancery, though he may be
interested to the whole amount in controversy, is conclusive
evidence if uncontradicted by the testimony of any witness in the
cause.
The facts of this case were as follows:
William Prout, the plaintiff in the court below, on 29 July,
1812, endorsed without any consideration a promissory note made by
Lewis Deblois in his favor for $4,400 payable in thirty days after
date. This note was discounted by the defendants as trustees for
the late Bank of the United States for the accommodation and use of
the maker, and not being paid, an action was brought against him
and another against the endorser in the name of the trustees, and
judgment rendered therein in the same circuit court in the term of
December, 1813.
In the April following, Prout, fearful of Deblois'
Page 16 U. S. 521
failure, called on the defendant Davidson, who was agent of the
other defendants, and requested him to issue a
fieri
facias on the judgment against Deblois, promising to show the
marshal property on which to levy. On 16 April or thereabouts,
Davidson directed an execution of that kind to issue, and Prout, on
being apprised thereof, offered to point out to the marshal
property of the defendant and to indemnify him for taking and
selling the same. But before anything further was done, Davidson
countermanded this execution, and on 2 May, 1814 or thereabouts a
ca. sa. was issued against Deblois by the clerk through
mistake, and without any order of Davidson or the other defendants.
This was served on Deblois on 10 May, who afterwards took the
benefit of the insolvent laws in force within the District of
Columbia, the effect of which was to divide all his property among
his creditors, whose demands were very considerable. It appears
from the evidence probable that if the
fieri facias had
been prosecuted to effect, a great part of the money due on the
judgment against Deblois, which had been recovered on the note
endorsed by Prout, would have been raised, and the latter, in that
case, would have had to pay but a small sum on the one against him.
But as matters stood, little or nothing was expected from the
estate of Deblois, and of course no part of the judgment against
Prout could be satisfied in that way, but the whole still remained
due and unpaid.
The
fieri facias appears to have been countermanded
Page 16 U. S. 522
the day after it was received by the marshal, of which Prout had
notice soon after.
On these facts, the circuit court decreed that the appellants
should be perpetually enjoined from proceeding at law on the
judgment which they had obtained against Prout, and that they
should also pay him his costs of suit to be taxed. From this decree
the defendants below appealed to this Court.
Page 16 U. S. 525
MR. JUSTICE LIVINGSTON delivered the opinion of the Court, and
after stating the facts, proceeded as follows:
The only ground on which this decree can be sustained is that
the countermand by Davidson of the
fieri facias which had
issued on the judgment against Deblois absolved the complainant
from all liability on the one which had been recovered against him
on the same note, and this has been likened to certain cases
between principals and sureties, but it does not fall within any of
the rules which it has been thought proper to adopt for the
protection of the latter. Although the original undertaking of an
endorser of a promissory note be contingent, and he cannot be
charged without timely notice of nonpayment by the maker, yet, when
the holder has taken this precaution and has proceeded to judgment
against both of them, he is at liberty to issue an execution or
not, as he pleases, on the judgment against the maker, without
affording any cause of complaint to the endorser, or if he issues
an execution, he is at liberty to make choice of the one which he
thinks will be
Page 16 U. S. 526
most beneficial to himself, without any consultation whatever
with the endorser on the subject; nor ought he to be restrained by
any fear of exonerating the endorser, from countermanding the
service of any execution which he may have issued, and proceeding
immediately, if he chooses, on the judgment against the endorser.
And the reason is obvious, for by the judgment, they have both
become principal debtors, and if the endorser suffers any injury by
the negligence of the judgment creditor, it is clearly his own
fault, it being his duty to pay the money, in which case, he may
take under his own direction the judgment obtained against the
maker. By an act of Maryland, it seems expressly provided, which
is, perhaps, only declaratory of the common law, that an endorser
may tender to a plaintiff the amount of a judgment which he has
recovered against the maker of a note and obtain an assignment of
it.
But it is alleged that in this case there was a positive
agreement on the part of Mr. Davidson with Mr. Prout to issue a
fieri facias and proceed therein, and that by not doing
so, the latter was thrown off his guard and lost the opportunity of
an indemnity out of the estate of Deblois. Without deciding what
might have been the effect of such an agreement, it is sufficient
to say that there is no evidence of it. Mr. Davidson expressly
denies that he agreed with the complainant or even promised him to
issue a
fieri facias against the estate of Deblois, and
that he went no further than to say that he would consult his
lawyer. Not being able immediately to find his lawyer,
Page 16 U. S. 527
and not knowing whether some advantage might not be taken if he
refused to comply with the complainant's request, he directed a
fieri facias to be issued, which, for reasons assigned by
him, was afterwards recalled. To this answer of Mr. Davidson it is
supposed by the claimant's counsel no credit is due, because his
commission on the sum in question gave him an interest in the
controversy, and he might be answerable over to his principal for
his conduct in this business,
non constat that he would be
entitled to any commission on this sum. It is quite as probable he
was acting under a fixed salary which would not be affected by the
event of the suit, and as to his responsibility, none could exist
if he had acted within the scope of his authority, and if he had
transcended his power as agent, it would hardly be fair that his
constituents should suffer by his act. But admitting both
objections, and they will not effect the verity of his answer, for
if he had a direct interest in the event of the suit, and to the
extent of the whole sum in controversy, still his denial of a fact
directly alleged in the bill would be entitled to full credit,
according to the rules of a court of equity, where not a single
witness has been produced to disprove it and where the
circumstances of the case and his own conduct render his account a
very probable one. If he had not been made a defendant, which was
not a very correct course, he might have been examined as a witness
for the other defendant or for the complainant, but having been
made a defendant, and being the only one acquainted with the
transaction, the Court is of
Page 16 U. S. 528
opinion that his answer, uncontradicted as it is, is proof
against the complainant of the nonexistence of any such agreement
as he alleges was made between them in relation to the issuing of
the
fieri facias.
Nor would Mr. Prout have suffered by the withdrawing of the
fieri facias, which is the burden of his complaint, if he
had done what he might and ought to have done. He had sufficient
notice of this fact before the
ca. sa. was served, to have
called and paid the judgment against him, and thus have obtained a
control over the one which had been recovered against Deblois. If
he had done this, instead of censuring the conduct of Davidson, he
might have issued a
fieri facias himself, and secured a
property, which if it has not been applied towards his relief, is
owing more to his own neglect in not paying in time a debt justly
due from himself than to any other cause whatever.
A person so regardless of his interest, as well as duty, as Mr.
Prout has been, who has not only refused to pay a note endorsed by
him when due, but has put the holders to the trouble, delay, and
expense of proceeding to judgment against him, has but little right
to be dissatisfied, if a court of equity shall not think itself
bound by any extraordinary exertions of its powers, to extricate
him from a difficulty and loss which he might so easily have
avoided.
The decree of the circuit court is reversed, and the
complainant's bill must be dismissed, with the costs of that court,
to be paid by the complainant to the defendant.
Decree reversed.
