Crump v. McMurtry

• Decision Date: 31 January 1844
• Citation: 8 Mo. 408
• Parties: CRUMP ET AL. v. MCMURTRY.
• Court: Missouri Supreme Court

8 Mo. 408

CRUMP ET AL.

v.MCMURTRY.

Supreme Court of Missouri.

January Term, 1844.

APPEAL FROM CALLAWAY CIRCUIT COURT.

LEONARD and ANSELL, for Appellants. I. By the agreement of June, 1838, between McMurtry and McClelland, the $1,000 bond of January, 1838, became and was collateral security for a similar amount of the $1,920 note payable in 1837. And although the sureties uponthe $1,000 bond were not parties to the agreement of June, 1838, yet, by the rules of equity, they are as fully entitled to every benefit under it as if they had actually executed it themselves. 1 Story's Eq. 320, 321; Hayes v. Ward, 4 Johns. Ch. R 123; Mayhen v. Crocket, 2 Swonst. R. 186. Assuming these two propositions to be true, the complainants take three positions, and insist, that under either of them they are entitled to relief.

[ a] 1. The satisfaction of the judgment of October, 1838, effected by the proceedings of the sheriff of Callaway county, extinguished the $1,000 bond. 2. And this extinguishment of the judgment of October, 1838, is not annulled by the proceedings of the Callaway Circuit Court quashing a part of the sheriff's return on the execution. Schober v. Dedman, 2 Littell's R. 116; Trigg v. Lewis' Executors, 3 Littell's R. 132, 133.

[ b] 1. The judgment of October, 1838, was a lien on the land sold, and therefore entitled to payment in preference to the judgment of November, 1839.2. The sureties on the $1,000 bond had a right to be substituted in relation to this lien, in the place of McMurtry, the judgment creditor. Watson and others v. Kenney, 3 Leigh's R. 272; Classon v. Morris, 10 Johns. R. 539; Theobald on Principal and Security, 186; Parsons v. Briddock, 608. 3. And McMurtry having, by the sale under execution, discharged the land from the lien, thereby released the securities. 1 Story's Eq. 322, 480, Cheeseborough v. Millard, 1 Johne. R. 413; Theobald on Principal and Security, 95, (this book is marked of the back, Principal and Agent).

[ c] 1. By the express terms of the agreement of June, 1838, an equitable lien upon the land was created for the security of the two notes, upon which the judgment of October, 1838, was recovered. 2. The sureties on the $1,000 bond had a right to be substituted in relation to this equitable lien in the place of the creditor. McMurtry. 3. And McMurtry having, by his execution sale, discharged the land from this lien, thereby exonerated the sureties.

II. Admitting the $1,000 bond not to be collateral security for a portion of the $1,290 note payable in 1837, but altogether an independent obligation, yet the counsel for the complainants insist, that they are entitled to relief upon the following grounds. 1st. The judgment of July, 1839, upon the $1,000 bond, was a lien on the land sold, and entitled to payment before the judgment of November, 1839. 2nd. The complainants, who are admitted to be McClelland's securities on the $1,000 bond, have a right to be substituted in relation to this lien, in the place of McMurtry, the judgment creditor. 3rd. And McMurtry having, by the execution sale made at his instance, discharged the land from this lien, thereby released the securities.TODD and SHEELEY, for Appellee. 1. The note in controversy was given upon consideration of releasing the attachment, and surrendering part of the attached property, and forbearing the debt; such consideration is legal, and the contract an absolute, original undertaking, not conditional, nor collateral. 2. The contract, for its being a payment for and to be credited upon a note held by defendant, upon the principal obligor, for a different consideration, is a discharge of that sum; and will be considered as done in equity; and such contract will not be impaired, or varied by parol proof or declarations, after its execution. 3. The fact of the sheriff, against the consent and instructions of the plaintiff in the execution upon the judgment for the larger note, upon which the credit was to be indorsed, out of money made upon other executions between the same parties, and to which he was directed to apply the money, will not, in equity, cancel the contract of the application of the payment of the small note, nor discharge the obligor of such note. 4. The court out of which the execution issued having quashed the return of satisfaction, is obligatory upon the parties to the execution, and the record of such fact cannot be impeached by circumstantial evidence, by a record in another case, or by any extrinsic, written, or parol evidence, and by none but parties or privies to it. 5. No decree can be given for complainants: that they are discharged from the note in controversy, by reasons of any contract made by obligee with principal obligor of the note in controversy, to delay payment of the principal note, or the note for future installment, because there is no allegation of the contract alleged, being without the consent of the securities, nor proof of any such facts, neither is there any allegation or charge of any facts constituting a delay. 6. Neither can a decree be rendered for complainants, substituting them to any equitable lien of the defendant for the purchase-money on the original contract; because they do not allege, charge or prove that they paid the note they profess to have given as collateral security to the note in the original contract. 7. If the original note was to be credited by the note with personal security, or if it be a note as collateral security for it, it operates as a discharge pro tanto of the purchase-money, and releases the lien of vendor upon the land, and no lien can be remitted to the complainants. The complainants were not collateral securities to the original note for the purchase-money, or any part, nor privies thereto; having made no contract to guarantee or assume the payment of it, or any part, but for its extinction. 8. If the contract of June, 1838, of McMurtry and McClelland, revived the extinguished lien for the purchase-money, then the complainants, claiming a substitution thereto under that contract, must take it subject to all the terms. If, under any consideration, they be entitled to substitution, they have no equity to take precedence or equality with vendor, but must be postponed; for the vendor enforced the payment of his lien fairly, and without prejudice to complainants.

SCOTT, J.

This was a bill in chancery filed by T. Crump, N. E. Branham, and others, securities in a bond executed by them, together with J. M. McClelland and Compton, to Levi McMurtry. McClelland, the principal in the bond, and Compton, one of the securities, were made defendants, together with McMurtry. The facts, as stated in the bill, are as follows: McMurtry sold a tract of land to McClelland for $5,760, to be paid by three equal installments of $1,920 each, on the 25th October, 1836, 1837, and 1838. These installments were secured by the notes of McClelland. Most of the first installment was paid, and in January, 1838, McMurtry commenced suit by attachment for the recovery of the balance of the first installment and the second installment. The attachment was levied on nine horses and other personal property of McClelland. It was afterwards agreed between McMurtry and McClelland, that if McClelland would secure a thousand dollars of the note for the payment of the second installment then in suit, with personal security bearing ten per cent. interest, McMurtry would accept the same in lieu of, and as collateral security for, an equal amount of said note, and would release the horses from the attachment. Accordingly, afterwards, on the 4th January, McClelland, as principal, and the complainants, together with the defendant Compton, as securities, executed their bond to McMurtry, due twelve months after date, with ten per cent. interest. This bond was delivered to McMurtry, who released the horses from the attachment. After, in June, 1838, it was agreed between McMurtry and McClelland, that the latter should withdraw his plea in abatement of the attachment, and plead to the merits, and that McMurtry should pay all the costs incurred by the attachment; that, at the ensuing term of the court, McMurtry should have judgment for the balance due on the two notes, after allowing all credits to which McClelland, on settlement, was entitled; that the property then subject to the attachmen should be sold, and the proceeds applied to the satisfaction of the judgment to be rendered at the ensuing term; that, if the bond for $1,000, of the 4th January, 1838, should be paid, the amount should be credited on the judgment to be taken, and that the said bond was collateral security for so much of the second installment; that the judgment to be taken, when satisfied, would operate as an extinguishment of said bond, and that the land sold was bound in equity for the two notes then in suit, but should not be sold under execution upon the judgment to be obtained in the suit then pending. In pursuance of this agreement at the October term, 1838, judgment was rendered against McClelland for $1,994 95, besides costs. At the July term, 1839, judgment was obtained on the bond for $1,000, against McClelland and his securities; and at the November term of the same year, a recovery was had on the note for the last installment. The proceeds of the sale of the personal property taken under the attachment, amounting to $480, was applied in part satisfaction of the judgment of the October term, 1838. In April, 1840, McMurtry sued out executions on the three judgments, by virtue of which the land sold by McMurtry to McClelland was levied upon, and at the July term, sold for $2,400. This sum was, by the sheriff, first applied in satisfaction of the judgment of October, 1838, the execution on which was returned satisfied, and the residue, amounting to $607, was applied to the judgment on the note for the last installment. The prayer of the bill is, that the judgment on the bond for $1,000 be declared to be extinguished, and the...