Spilman v. Smith , 54 Ky. 123 ( 1854 )

Judge Crenshaw

delivered the opinion of the Court—

By virtue of a decree in a suit of Ison and wife against Gaines’ heirs, several slaves were sold by the commissioner appointed in said decree, and James Bates-became tbe purchaser of one .of the slaves at the price of $508. The slaves were sold upon a credit of twelve months, and Bates, -with J. B. Smith and S. A. Gaines, as sureties, executed a bond to the commissioner for the payment of said sum of $508. Smith refused to enter into the bond as surety, unless Bates would indemnify him. Bates agreed to do so, and Smith took the slave into his possession, which Bates had purchased, and held him in possession until a bond of indemnity was given to him by Bates, with Spilman and Duff as sureties. This bond is as follows:

“Whereas, James W. Bates has executed his note to George Doneghy, commissioner, for the sum of $508, due in twelve months from date, with interest from date, and Jeremiah B. Smith has become my security for the same. We, the undersigned, promise to secure the said Smith against all harm in the pamenl of the said note, but if the said Bates should pay said note, then this obligation to be null and void, or else to remain in full force as a replevy bond.

J. W. Bates,

James H. Spilman,

January 1st, 1849. William W. Durr.”

According to the directions of said decree, the bond executed by Bates, with Spilman and Gaines as sureties, for the payment of the price of the slave, was to have the force and effect of a replevin bond, and, accordingly, it was so taken.

After the sale bond was reported to court, the said commissioner was appointed to collect the same.

But its collection was not coerced, and no execution was ever issued upon it, and more than twelve months expired after it became due before anything was done towards satisfying and discharging it. But some months after the lapse of twelve months from and after it became due, Smith executed his own note in discharge thereof, which was received by the commissioner as cash and in payment. Smith then instituted suit upon said bond of indemnity, against Spilman and Duff, the sureties therein, and recovered judgment againt them for the amount he had paid with interest and costs of suit. The court refused to grant a new trial, and Spilman and Duff have brought the case to this court for revision.

The principal ground relied upon for a reversal is, that the sale bond had the force and effect of a judgment, and no execution having issued thereon for more than twelve months after it became due, the sureties therein were released by operation of law, and Smith having paid it, or executed his note in payment after such release, he did so when he was not bound to pay, or if bound, it was by his own wrong, and the payment was in his own wrong, and therefore, that he cannot hold the sureties in the bond of indemnity responsible.

It is contended however, that although the Chancellor had a right to direct the sale bond to be taken so as to have the force and effect of a replevin bond, yet, that it is a character of bond not contemplated by the Legislature when they, passed the act of 1828, to amend and reduce into one the execution laws of this state, (1 Stat. Laws, 631;) and that the 19th section of said act has no application to this case. But the mischief intended to be guarded against exists alike in all replevin bonds having the force of judgments, whether taken in the ordinary way, or by the order of the Chancellor. The sale bond in this case has, by .virtue of the Chancellor’s direction, the foi*ce and effect of a judgment, and comes within the reason and spirit of said section. If, therefore, the failure to issue execution upon the bond within twelve months after it became due, was the only fact to be taken into consideration in determining the responsibility of Smith upon the sale bond, we would say that such failure released him, and that he ought not, and could not, after his release and exoneration, pay the debt, and then look to the bond of indemnity for remuneration. ' Such payment, under such a state of case, would be in his own wrong, and he ought not to be suffered to take advantage of it, and hold the obligors in the bond of indemnity responsible for the sum which he had thus paid.

1. A surety in a bond taken upon the sale of property sold by order of the Chancellor for the . purpose of distributing the proceeds, who asks and obtains indulgénce, in consequence of which no execution issues for more than 12 months, is not discharged from liability under the 19th section of the act of 1828. 2. A bond of indemnity was given to save the obligee “against all harm in the payment of a note” in which the obligee had become the surety of the obligor, which was given upon a sale of property ordered by the Chancellor, for purposes of distribution, and by the decree was to have the force and effect of replevy bond. The surety asked and obtained indulgence for more than 12 months after the bond fell due. Held — that the surety, having asked indulgence before and after the bond fell due, was not exonerated under the 19th section of the act of 1828; and the obligor having failed to pay the bond when due, was bound to reimburse the surety upon his discharging the bond even after the lapse of 12 months from the time it fell due.

It is proved, however, that Smith, both before and after the expiration of twelve months from the maturity of the sale bond, promised to pay it; that the delay to issue execution, and coerce the payment of the bond was produced at the instance and request of Smith. Smith, therefore, could not claim to be released and exonerated from the payment of the sale bond in consequence of the delay to sue out execution thereon for twelve months after it became due, when that delay was the result of his .own act, and was occasioned at his own instance and request. He, consequently, remained under a legal obligation to pay off and discharge the bond. But, it is contended that, although he remained bound upon the bond after the expiration of twelve months from its maturity, this being the result of his own act, he cannot hold the sureties in the bond of indemnity liable to him for having paid the sale bond.

If the conduct of Smith was wrong, (the sureties in the bond of indemnity not having been consulted,) and it can be said to have prejudiced their rights, it may be that they are exonerated from responsibility upon their bond. But, was his conduct wrong, and can he be properly chargeable with having prejudiced their rights? According to the construction which we place upon the bond of indemnity, its obligation is substantially this: That Bates should pay the sale bond at maturity, and if he failed to do so, and Smith should pay it for him, they were to save him from all harm in doing so. The words of the bond, in the obligatory part thereof, are: “We, the undersigned, promise to secure the said Smith against all harm in the payment of the said note, (the sale bond,) but if the said Bates should pay said note, then this obligation to be null and void, else to remain in full force as a replevin bond.” Bates was bound to pay the sale bond at maturity; if he failed to do so, and Smith should pay it for him, thebond of indemnity was to be in full force, and they were to save him from all harm for doing so. The sale bond became due, and Bates failed to pay it, as he had bound himself to do. Bates having failed to make payment, Smith, as joint obligor with him, was bound, forthwith, to pay the bond. And had he done so, it is not denied but that the sureties in the bond of indemnity would have been responsible. But because it was not convenient for Smith to pay, and he asked indulgence which was extended to him, and extended for more than twelve months after the maturity of the sale bond, it is insisted that the sureties in the bond of indemnity are released, because, by the indulgence, thus procured, their risk was increased, and they were thereby prejudiced. But Smith made no binding contract with the obligee in the sale bond; he only craved indulgence, and indulgence was granted, but the obligee could have sued out execution at any moment, and coerced payment, notwithstanding the prayer of Smith to be indulged. The fact that Smith begged indulgence did not necessarily produce the delay of execution until more than twelve months had elapsed from the falling due of the sale bond. True, it was at his instance that the delay was produced, and hence he could not claim to be released by operation of law. And he, continuing to be bound, paid the debt of his principal, upon the happening of which contingency, the sureties in the indemnity bond were to save him harmless. They made an absolute undertaking to pay Smith, if he Smith should pay the debt of his principal, Bates. It formed no part of the contract that Smith, if unprepared to meet the sale bond, when due, and Bates should not pay it, was to ask no indulgence, but to pay instanter. There was nothing to prohibit him from begging and procuring indulgence, and it cannot be said with propriety that Smith did any thing which he had not a right to do, or that he acted in bad faith towards those who had undertaken to indemnify him, and hence, they cannot, with propriety, charge Smith with enlarging their obligation, and increasing their responsibility. Their bond bound them to pay, if Smith should pay, and their hazard had already been incurred by their own absolute stipulation without any restrictions upon Smith. The case is not to be assimilated to that of ordinary sureties in a joint bond for the same principal; and even in that case, no mere indulgence to the principal, though at his instance, will release the sureties. For such indulgénce to release a surety, a binding agreement must have been made between the obligee and the principal obligor. In this case, Spilman and Duff, the sureties in the bond of indemnity, are not the sureties of Smith, but the sureties of Bates. They undertake, substantially, that Bates will pay, and if he does not, and Smith should pay, they will pay him. When the sale bond became due, they ought to have seen to it, that Bates complied with the terms of the sale bond; and, in his default, to have taken whatever steps were in their power to have indemnified themselves against ultimate responsibility to Smith. They trusted Bates— Smith was unwilling to trust him — and refused to go into the sale bond with him, unless indemnified. They promised to pay if Bates did not, and Smith should have to pay for him. Smith had it to do, and did it without a moral or legal fault; and it is the opinion of a majority of the court, Judge Simpson dissenting, that they should save him from harm as they undertook to do. If Bates failed to pay, their bond was to remain in full force, and they would be responsible to Smith for nominal damages, even if Smith had not paid off the sale b%nd.

Judgment affirmed.