Leggett v. Humphreys
THIS was an appeal from the Circuit Court of the United States for the southern district of Mississippi.
In some of its connections it had twice before been before this court, (as reported in 2 Howard, 28, and 9 Howard, 297.)
The history of the case is given in the opinion of the court, and need not be repeated.
It was argued by Mr. Bradley and Mr. Johnson for the appellants, and by Mr. Carlisle, upon a brief filed by Mr. Badger and Mr. Carlisle, for the defendant.
The principal point upon which the decision of the court turned was the following, as stated by the counsel for the appellants:
Can the aid of a court of equity be had to protect a surety from payment of the penalty of an official bond, on the ground that he has once paid the full amount, when, before payment by the surety, the principal had placed in his hands money or property exceeding the amount of the penalty?
In other words, would not the surety wrongfully escape in this case, if it clearly appears that the payment he seeks to set up was made, or, which is the same thing, reimbursed to him out of the property of the sheriff?
The counsel for the appellants contended that a payment by the surety under such circumstances would not exonerate him, because the object of the bond was to afford a security additional to the property of the sheriff. The very property conveyed to indemnify the surety would have been primarily liable for the safety of judgment creditors, who would have had the responsibility of the surety as additional security; and, moreover, a larger amount of property has been conveyed than was sufficient to indemnify the surety.
With regard to this point, the counsel for the appellee observed:
A principal is bound fully to indemify his surety against all loss resulting from his suretyship, including therein all reasonable expenses to which he may have been put.
Heyden v. Cabot, 17 Mass., 172.
A surety, as such, is deemed a creditor in equity, and, both at law and in equity, an assignment for his indemnity is valid, though the liability be future and contingent.
Williams v. Washington, 1 Dev. Eq. R., 137.
Stevens v. Bell, 6 Mass., 339.
Hendricks v. Robinson, 2 Johns. Ch. R., 283, 306.
Halsey v. Fairbanks, 4 Mason, 207.
Miller v. Howry, 3 Plen. and W., 374.
Consequently, the appellee cannot be bound to pay to other creditors of Bland moneys received by him of Bland for his own indemnity, and necessary for and applied to such indemnity.
But if the appellee had, of the funds assigned to him by Bland, a surplus, after fully indemnifying himself, upon what principle can the appellant charge the appellee with such surplus in this suit, or in any way use it to repel his equity?
Such a surplus would belong to Bland or his representatives, both as a resulting trust and by the express provision of the conveyance; for it the appellee would stand accountable to him or them. Could he discharge himself by paying it to the appellants? Would such payment be an answer to a suit by Bland or his representatives? These questions, it is conceived, must be answered in the negative. But to charge the appellee with the payment of the judgment at law, or any part of it, because he had moneys in his hands belonging to Bland, would be exactly equivalent to compelling him to pay these moneys to the appellant, at the same time leaving him responsible to Bland or his representatives therefor.
It is true, if the appellants were judgment creditors of Bland, they might by some proper proceeding attach such surplus in the hands of the appellees, (4 John. Ch., 670, 687,) but surely not in this suit, and even in such proceeding Bland or his representative would seem to be a necessary party.
But the appellants are not in any way creditors of Bland. In the action at law, final judgment was rendered in the Circuit Court for Bland against the appellants, and that judgment is in full force, the writ of error having been abated as to him.
Wherefore it is conceived, that even if there were funds in the hands of the appellee, after indemnifying him, that fact would not affect, in whole or in part, his right to relief against the judgment.
Mr. Justice DANIEL delivered the opinion of the court.