Walters v. Farmers' Bank of Virginia

• Decision Date: 08 December 1881
• Citation: 76 Va. 12
• Parties: WALTERS v. FARMERS BANK OF VIRGINIA.
• Court: Virginia Supreme Court

76 Va. 12

WALTERS v. FARMERS BANK OF VIRGINIA.

Supreme Court of Appeals of Virginia.

December 8, 1881

Appeal from decrees of chancery court of Richmond city pronounced 21st November, 1878, and 17th December, 1878, in the suit of the Farmers Bank of Virginia against Neal and wife, and A. G Walters and others.

In January, 1861, Louisianna F. Neal, by her husband and agent Thomas D. Neal, made a negotiable note for $800, payable sixty days after date, and endorsed by said Walters. It was discounted by said bank. It was not paid at maturity, and notice of the protest thereof was duly given.

In June, 1867, the bank instituted suit in chancery against Mrs Neal, her husband, Treadway, her trustee, and Walters, her endorser, alleging that she was a married woman having a separate estate; that Treadway was her trustee, and T. D Neal her agent; that by her agent she made the $800 note, got Walters to endorse and the bank to discount it, and prayed that the separate estate might be subjected to pay it, or that same might be paid by her or by her endorser.

In March, 1872, P. W. Ferrell, in his own right and as administrator of his alienee, Bird L. Ferrell, deceased, and others, filed their petitions stating that in 1866 P. W. Ferrell became complete purchaser of said separate estate for value without notice.

The plaintiff then filed amended bill charging that the conveyances from Mrs. Neal, her husband and her trustee to P. W. Ferrell, and from P. W. Ferrell to Bird L. Ferrell were fraudulent or voluntary, and prayed that they be set aside and the estate subjected to the debt.

The defendants filed demurrers and answers to the bills, and Ferrell plead the statute of limitations. Numerous depositions were taken.

The said chancery court, to which the cause had been removed from the circuit court of Danville, by its first decree overruled the demurrers and the plea of the statute of limitations, dismissed the bill as to the Ferrells, who were complete purchasers of the separate estate for value without notice, and referred the cause to a master to ascertain whether or not there was any such separate estate of L. F. Neal as could be subjected to pay the debt. The master having reported that there was none such, by its second decree the chancery court adjudged that the bank recover of A. G. Walters the debt, interest and costs. From these decrees the said Walters obtained an appeal and supersedeas.

Guy & Gilliam, for the appellant.

The demurrer of the appellant should have been sustained, because--

1. The bill in making him a party was multifarious. Adams' Eq. 310; Swift v. Paige, 6 Paige 28; Jackson v. Leggett, 2 Barb. Ch. Rep. 581; Silcox v. Nelson, 1 Geo. Decis. 24; Johnson v. Brown, 2 Hump. 327.

2. Equity has no jurisdiction of the legal right founded on the endorser's liability. Daniel v. Morrison, 6 Dana 186; Bassett v. Cunningham, 7 Leigh 402. The endorser has a right to have a jury pass on his case.

3. The plaintiff's remedy against the appellant was full, adequate, and complete at law, and such being the case, Code 1873, ch. 141, § 11 and § 19 applies, the latter declaring that " A court of equity shall not have jurisdiction of a suit upon a bond, note, or writing, by an assignee or holder thereof, unless it appear that the plaintiff had not an adequate remedy thereon at law."

5. The statement in the bill that the maker of the note, Mrs. Neal, had separate estate, whereby alone jurisdiction was acquired, was untrue. That estate had been sold and conveyed away nearly a year before the institution of the suit by deed duly recorded to a purchaser for value, without notice of the suit. So, plaintiff got into equity by a fiction--and had no locus standi there. See Jones v. Bradshaw, 16 Grat. 355, 358, 362.

W. W. Gordon, F. W. Christian, for the appellees.

The objections that plaintiff had no jurisdiction in equity against Walters, and that it was multifarious to join him in a suit against the maker of the note, are unfounded. The claim against the maker, a married woman, could only be asserted in equity. It was proper, if not necessary, to join the endorser, so that according to one of the favorite maxims of equity, full and complete relief could be administered in one proceeding. He was an accommodation endorser. It was proper to exhaust the maker's estate before going against him. Upon a decree against him, he was entitled to a decree over against his principal. So, he was interested in the whole scope of the suit. Adams Eq. p. 310, and notes.

STAPLES J.

It is conceded in this case that the appellees, as creditors of Mrs. Neal, had the right to resort to a court of equity for the purpose of charging her separate estate, if any she had, with the payment of her debts. The law is well established that a chancery court is the appropriate tribunal for the enforcement of the remedy in such case, inasmuch as no judgment in personam can be rendered against a married woman for liabilities incurred during the coverture.

The court having thus properly acquired jurisdiction as respects Mrs. Neal, and her separate estate, the question arises, Was it competent to make the appellant also a party to the suit, with the view to enforce his liability as endorser upon the negotiable note executed by Mrs. Neal?

It is very true an action at law might have been brought against the appellant, judgment obtained, and the money made by the sale of his property. But it does not follow that a court of chancery would not have jurisdiction to enforce the same liability if the pursuit of Mrs. Neale's separate estate proved unavailing. The note in question not being paid at its maturity, and due notice of protest and non-payment being given the appellant, his liability as endorser became fixed, and thereafter he stood in the attitude of surety for the debt, not merely collaterally, but personally bound for its payment. As such surety the appellant was directly interested in the application of Mrs. Neal's separate estate to the payment of the note, and in every suit or other proceeding looking to that object. He certainly cannot complain that the appellees, instead of compelling him to pay in the first instance and leaving him to his recovery against Mrs. Neal, took upon themselves the burden of exhausting the separate estate for his relief and benefit. It does not appear, it is not even pretended, that the appellant had made any defence to the note. He could not, therefore, derive any advantage from a trial at law, or the verdict of a jury.

The rule is, that all persons concerned in the subject matter of the suit may properly be joined as defendants; nor is it essential that all the parties shall have an interest in all the matters contained in the suit. It is sufficient if each party is concerned in some of the matters involved in it, and they are connected with the others.--Story E. P., sec. 271, a.

The surety is directly interested in the question of the principal's liability and every effort to enforce that liability. It is for his benefit he shall be brought in along with his principal. The creditor may be careless or indifferent in pursuing the estate of the principal, knowing that the surety is ultimately responsible. The surety being before the court, as he has the...