Watson v. Reed
Watson v. Reed
Opinion of the Court
delivered the opinion of the Court.
The bill and amended bill taken together, allege in substance, that, on the 23d May, 1860, D. Z. Reed & Bro. recovered judgment against Washington Barrow before a Justice of the peace. ■ That the complainant became security for stay of execution. On the 9th of July, 1861, execution was issued, and levied upon the land of Barrow; that Shultz, after Cartwright, to whom the judgment had been assigned, or who claimed to own it, agreed with Barrow, upon the latter’s promise to pay the debt in a short time, to hold up the levy, and accordingly did so, this without the knowledge or consent of complainant. That no further steps were ever taken, and the Justice’s papers were subsequently lost. That the land was subsequently taken by other creditors of Barrow, who has since died insolvent. The question is, do these facts release Watson, the stay or? The arguments submitted furnish ample reasons and authority for deciding this question either way, but we must, of necessity, determine the question in favor of the one view or the other. It is clear, from the authorities, that this does not release the stayor, upon the ground: “ that it is a contract or agreement for delay without his assent,” because it is after judgment, and besides was only a voluntary promise, not founded upon any consideration, and not binding upon the creditor; Peay v. Poston, 10 Yerg., 111; 4 Heisk., 656; 3 Leading cases in Equity, 559.
But it is argued that he is discharged, upon the ground that the creditor has, by his voluntary act, re
Numerous authorities establish that the creditor is not bound to take active measures to enforce payment of his debt; mere indulgence will not release the surety although the principal become insolvent. A creditor after having instituted proceedings, may fail to prosecute them, but “ he is not entitled to relinquish any hold which he has actually acquired upon the property or estate of the principal, and which might have been made effectual for the payment of the debts. This is a necessary result of the rule that a creditor shall not arbitrarily shift the burden of the debt from the property of the party primarily liable for its payment, and impose it upon another, whose liability is secondary.” It has consequently been decided, that, where the property of the principal has been taken in execution by the creditor, the lien thus acquired cannot be relinquished without discharging the surety to an extent corresponding with its value. See 3 Leading cases in Equity, 552, where the authorities are digested.
And the same authority says, “it may be laid down as a general principle, that the creditor is bound not to relinquish any right or security which can conduce to the safety or indemnity of the surety, and will be responsible either for refusing to receive or giving up that, which, if accepted or retained, would have been performance or payment; see page 552, also Johnson &
It seems that the weight of American authorities hold, that, if the creditor direct a return of the fi. fa. before actual levy, it will not discharge the surety, although the fi. fa. was a lien upon goods of the principal, afterwards taken by other creditors; but the English authorities are said to be otherwise; 3 Leading cases in Equity, 551, 536. So this Court held, in Miller v. Porter, 5 Hum., 294, that the surety was not discharged by the fact that the creditor directed a return of the fi. fa. before a levy. The opinion puts the case upon the ground that there was no valid and definite agreement for delay, even if this would have discharged a surety after judgment. It is argued that the facts show that the result in that case was that the statutory lien of the judgment upon the principal’s land, was lost by the return of the fi. fa. Ho such question was made. It does not appear whether the
In this case, the bill alleges in substance, the loss of the lien by the active interference of the creditor. We are of opinion that the decree overruling the demurrer is correct, and affirm it, with the costs of this Court.
Reference
- Full Case Name
- Samuel Watson v. D. Z. Reeds.
- Status
- Published