Union Bank v. Hodges
Union Bank v. Hodges
Opinion of the Court
The three defendants pleaded that on the same note which, in this action, the plaintiff alleges to fyave been made jointly by them, the plaintiff had a former recovery against two of them, under an allegation that it was made by those two. The plea concluded with a common verification. The plaintiff replied that the former recovery without satisfaction, was no bar to this action: that is, in effect he demurred to the plea. He might have replied that Eobert Smith was a dormant partner with the other two, undiscovered by the plaintiff until the commencement of this suit, and that the other two defendants are insolvent, and the plaintiff has yet had no satisfaction. To this the defendants, although they might have traversed some of this new matter, would probably have demurred, thereby bringing to argument the sufficiency of the plea, even when' the new facts stated in the replication were admitted.
The case has been argued with the concession to the plaintiff of .every advantage, which any pleading, by way either of replication or new assignment, could give him; and however the pleadings subsequent to the plea may be framed, it must, if the facts be such as the plaintiff states, present at last this question: Does a judgment on a joint simple contract obtained against two of three joint contractors, without satisfaction, bar an action against the three on the same contract?
I say on the same contract, and here meet the second ground of appeal, which speaks of other counts in the declaration besides the one on the note. If the plea of former recovery concluded with a verification ly record, and that-was proper,
Eeturning then to the question which I have' stated, I proceed to set forth some grounds for the opinion that the former' judgment is a bar to this action, which I gave hastily on the circuit, and have since had opportunity carefully to reexamine. The grounds may all be resolved into submission to high authority; for the argument of the question has been exhausted by the repeated discussions which have been had of it. Our own cases, and some from North Carolina, which have been cited for the plaintiff, have not been elsewhere noticed, and I will endeavor to see whether they can be made to resist the array which the defendants present.
In Collyer’s Treatise on Partnership, Edition of 1848, by J. 0. Perkins, book 3, ch. 6, sect. 7, § 755-7, page 657, and notes 1, 2, 3, may be found a reference to most of the cases on the question in hand, and a valuable analysis of them. For the convenience of those who may choose to refer to the cases, I here bring together in support of the opinion that the former judgment is a bar, the following express decisions, which have been made by eminent judges, and are sustained by arguments that appear to me unanswerable.
Add the opinions of Judge Greer, United States vs. Price, 9 How. 93, of Judge Ruffin, Shear vs. Gillet, 1 Dev. Eq. 466, and of Judge Baldwin, 2 Rob. 559, and one might be led to suppose that if decisions in this State look the other way, decisions elsewhere are conflicting, or some special legislation controls the Courts here. In some of the United States there is special legislation affecting the question, such asan enactment that partnership liability shall be joint and several, or that upon joint contracts suits may be brought against some not all of the contractors; but in this State the question is altogether one of common law unaffected by any
Against the English case of King vs. Hoare, it was urged, in argument here, that it recognizes the same rule as to joint trespassers, which it establishes as to joint contractors; whilst with us it is well settled, that a recovery against one joint trespasser (distinguished from a joint tort feasor in trover, Bogan vs. Wilburne, 1 Spear, 182,) does not without satisfaction, bar an action against another; Smith vs. Singleton, 2 McM. 184. In answer, it must be admitted that we departed at a very early period (White vs. McNeely, 1784, 1 Bay, 11,) from the English practice as to joint trespassers; so did the Courts of New York, (Livingston vs. Bishop, 1 John. R 289 :) but neither here nor in New York, is any departure as to joint contractors professed, and the reasons which urged to it in cases of trespass, do not apply to those of contract.
On the side of the defendants familiar propositions conduct to a conclusion.
Where two or more persons were bound by an obligation, and one of them has been released by a voluntary act of the obligee, all are released; and this, whether the obligation was joint and several, or only joint, and whether the act of the obligee was done with the express intention of releasing, or was only such as has the legal effect of releasing, like the obligee’s marrying one of the obligors, or appointing one of them his executor.-
Taking a higher security extinguishes the right of action on a lower one for the same debt. A joint judgment against all the obligors, on a bond, bars further remedy on the bond; a separate judgment against one of two or more joint and several obligors, does not extinguish the bond as to any other one, for it does not bar the remedy by a separate action
The reason for making a recovery against others a defence for him, whose obligation maybe said not to be extinguished is thus seen to be technical; but still the defenceds founded on- principles of justice equal to those which require a plain-tiffin suing upon a joint and several obligation, to treat it
For the plaintiff it has been urged in argument here, that contracts by partners are joint and several. Lord Mansfield, in Rice v. Shute, (5 Burr. 2613,) said that.“ all contracts with partners are joint and severalbut he added, “ every partner is liable to pay the whole,” and this shows the effect which at law results from the several nature of a partnership contract. In actions ex contractu against partners, the omission of a person who might have been made a có-defendant, is not ground of nonsuit, but can be taken ■ advantage of 'only by plea in abatement, unless on the face'of the declaration or some other pleading of the plaintiff, ■ it appears that the person omitted contracted jointly with those who are made defendants, and is still living. Those who are sued are held to the consequences of a waiver of objection, when they fail to plead the omission of a co-contractor. Mutuality requires that the plaintiff, too, should be held to the consequences of his omission. He should not have judgment against two that he chose to sue in the first action, and again another judgment on the same contract against the same -two and a third, or another separate judgment against the third, who, (as he before said) was not a contractor.' If he should say, that the liability of the third was before unknown to him, it would appear that his recovery had been had against the persons to whom he gave credit, or with whom- he had actually dealt; and that by his own act he had put himself into a situation in which he could not properly ask a reconsideration as to either them or anybody else. As to the case in hand, it may be observed, that, if an unknown dormant partner would at all avail for the plaintiff, the pleadings and proof should on a new trial be different from those that are now presented.
The plaintiff has also endeavored to force into his service expressions, which have been used in cases in equity, expla
The rules concerning the admissibility of judgments in evidence have also been appealed to. It is said that the defendant who was not before sued, cannot now plead or produce the judgment to which he was not a party; indeed, that none of the defendants can do so ; for the parties are not the same in the two cases, and a plea bad for one defendant is bad for all. In this the distinction is overlooked, which subsists between offering a judgment for the purpose of proving the truth of the matter adjudged and of facts therein involved, and offering it for the purpose of proving its own existence and the legal consequences thence deducible. 'Eor the latter purpose the record of a judgment is admissible between
Tbe plaintiff’s great authority is Sheehy v. Mandeville and Jamesson, (6 Cranch, 253.) IJpon tbat alone rest all tbe cases in this State and elsewhere, wbicb although falling short, as tbat does, of what is now held, bave carried this Court to tbe present decision. Tbat case has given occasion for many explanations, excuses and strictures, wbicb may be seen in tbe cases before cited; but no exposition of it has maintained its sufficiency to establish what has now been inferred from it. Perhaps, in no view that could be taken of it, would all its observation and argument appear correct, even if its ruling should be approved. Tbe reputation of Chief Justice Marshall can safely endure proof of bis fallibility, and tbe slight inaccuracies of tbe great sometimes lead to serious errors. Tbe Chief Justice seems himself to have attributed great importance to tbe form of tbe plea filed in tbat case by Mande-ville ; for be expressed doubt as to what would have been tbe fate of tbe plea on general demurrer, whilst be held it bad on special demurrer. Commentators bave suggested that that case may be reconciled with others, by attention to tbe circumstance tbat there tbe note of Jamesson was in fact, as it
The question as to the effect of a judgment against one of several joint obligors, when the original declaration was on a joint covenant, (contract,) was thought by Judge Marshall not to arise in the case he was considering, “ in which the declaration in the first suit was on a sole contract;” and the question as to the sufficiency of a plea, in which both de
The case of Collins vs. Lee & Lemastres, 1 Bail. 348, is the earliest in the reports of this State which contains any discussion of the question now before us. There the President of a Court of three was absent, and by the two remaining members of the Court the order of a Circuit Judge, overruling the plaintiff’s demurrer to the plea, was reversed. Of the two, JohnsoN, J., in a few pithy remarks, distinctly recognizes the proposition, that a judgment against one joint ob-ligor is a bar to an action against another, as a modification or corollary of the larger rule, that an action will not lie against one of several joint obligors; but believing that the bar in favor of the obligor then for the first time sued, was only an incident of the protection, which might be claimed by the obligor against whom the former recovery had been had, and perceiving that the latter waived the protection, he thought that the former was not entitled to it. If both had joined in the plea, he must have considered it good. His opinion, then, is an authority for the defendants in this case.
The other member of the Court, Colcook, J., in pronouncing the leading opinion, uses expressions adverse to these
Special attention should be given to these matters in Judge Colcook’s opinion, viz.: If he had been compelled to say that the former judgment was a bar, he would still have been in favor of the plaintiff’s motion on his second ground of appeal, for he says: “ I should' have no hesitation in setting aside the judgment when both parties to it request that it may be done.” Every thing else that he said might then be regarded in the nature of obiter dictum; and obiter dicta are most frequent and dangerous when they are used to maintain propositions favoring a decision, yet not indispensable to it, for behind them is something stronger that would suffice if' they should fail:—
He argues that a judgment can be a bar only as to the joint obligor before sued, and waives the examination of its effect even as to him, but can “ discover no principle upon which it can be allowed to avail Lee (the one not before sued) when his co-defendant does not choose to set it up as a defence.” The main argument might be erroneous, and yet the decision be sustained by this special circumstance:—
Because Lee was a stranger to the former judgment, he conceives that “ certainly, however it cannot avail as a de-fence” for him:—
He is evidently disposed, if not restrained by authority, to overcome mere technical reasoning unsupported by any sound principle of policy,” and upon the question’ before him, -which necessarily depended upon inferences from technical rules, no case besides those cited by Mr. Ohitty (1 Oh. PI. 29) was brought to his view:—
[Respecting the case of Brown vs. Wootton, and the passage
The distinction between an obligation only joint and one joint and several, so essential in every branch of this subject, he regards as immaterial; thinking it sufficient that a judgment does not always extinguish the original debt:—
When in default of a plea in abatement there has been a recovery against some, not all, of joint contractors, he dwells upon the defendants in that action having “ dispensed with the rule” that all joint contractors must be sued together, and having “permitted” a recovery against themselves; but does not notice that the plaintiff chose to make an omission, and that the defendants, by waiving their right to object in the proper mode, only sanctioned the plaintiff’s act, which bad made the case, as to him, just as it would have been if the defendants had really been the only contractors:—
The anomaly of two judgments upon the same contract against one person, he dismisses by treating that person’s risk of being made to pay the same debt twice “as ideal, or the result of his own neglect”:—
He thinks that the former recovery, which was involved in Sheey vs. Mandehville, was had on a joint liability, and that what was said in that case about the original assumpsit of Jamesson cannot affect the question.
When the opinion of Judge Colcock is carefully examined, it will not, as I conceive, be found an authority against these defendants, upon important points in this case, which were not involved in the one he was discussing.
The case of the Treasurers vs. Bates, 2 Bailey, 362, has also been pressed into the service of the plaintiff here. That case settled important questions in reference to the complicated liability of a Sheriff and his sureties, under the peculiar official bond which our Acts of Assembly then required. Incidentally and unnecessarily an opinion was expressed upon
Our case of Watson, Crews & Co. vs. Owens & Co. (1 Rich. 111,) is put upon the ground, that the note of Owens was not accepted in satisfaction, but was only collateral security, like the note of any third person. It can stand on no other ground; and in reference to that, as in it recovery was had on the original partnership contract and not on the note, it is advantageously distinguished from Sheehy vs. Mandeville. Eeference in it is made to Robertson vs. Wilkinson, (3 Price, 538; 1 Exch. R. 44,) where it was held, that a creditor’s acceptance of bills drawn by the ostensible partner with whom he dealt, was no discharge of an unknown dormant partner; but too literal an exposition is given to the words used by Baron Graham, when he said, “ In general, a release of one partner is a release of all, but a party has always a right against a concealed partner of whom he has previously had no knowledge, as soon as he discovers him, unless that ignorance was his own fault, as if he had not used due diligence in finding him.” It is true, that the acts of an ostensible partner during the concealment of the dormant one shall not discharge the liability of the latter to pay a partnership debt; and against a technical release under seal
Not one of the cases cited from North Carolina contains a decision in favor of the plaintiff. Spear vs. Gillet, 1 Dev. Eq., (an equity case, in which relief was refused to a creditor, who had in Virginia ignorantly taken the bond of one partner, and afterwards discovered a dormant partner,) there are the plain expression of Judge RuffiN’s opinion in favor of these defendants, and some doubtful remarks of Chief Justice HeN-
In Horton vs. Child, 4 Dev. Law, 460, Judge Daniel, deciding nothing pertinent to this case, considers it to have-been settled, that a bond given by one partner does not extinguish the original debt as to the other partners. In Shuster v. Perkins, 2 Jones, 217, the familiar doctrine is reaffirmed, that a judgment against one of the obligors on a joint and several bond, is no bar to an action against'another obligor, and cannot in a joint action against all the obligors be pleaded as a former recovery against all.
In our State are two cases in régard to bonds given for partnership debts, that are worthy of attention now. In Fleming, Ross & Co. vs. Van Lawhon & Co. Dud., 360, a bond was executed by Lawhon, without the assent of his partner, and the name ‘‘ V. A. Lawhon & Co.” was signed. It was held that the plaintiffs could recover on the original contract for goods sold, upon one of two grounds; first, that the bond bound no.body; or, second, that it was mere collateral security — the original contract remaining of force in either view.
In the later case of Jacobs vs. McBee & Alexander, 2 McM. 348, the bond of Alexander was taken by a creditor, (in. ignorance that McBee was a dormant partner,) and because the bond bound Alexander, and was taken in discharge of the debt, the simple contract of the partnership, (if one existed,) was held to have been extinguished.
Is a bond to have a stronger effect in merging or extinguishing a simple contract than a judgment? The absurdity would not be imputed to any Court, of holding that the same simple contract, which was merged or extinguished by a bond, was restored to efficiency by a judgment on that bond; yet it is hard to see where the difference is, between a judgment on a bond of two out of three partners given for a simple contract of the partnership, and a judgment against
I conclude that no case has been brought to tbe view of this Court, that decides against these defendants’ several points, either of which held in their favor would protect them; and that the reasons in support of the opinion, which has been given by a majority of the Court, are not such as I can venture to act upon, when so many strong authorities are in direct opposition.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.