Jones v. Hays, 38 N.C. 502, 3 Ired. Eq. 502 (1845)

June 1845 · Supreme Court of North Carolina

38 N.C. 502, 3 Ired. Eq. 502

WILLIAM D. JONES vs. CHARLES HAYS & AL.

A defendant cannot be examined as a witness in a cause, without the previorder of the court.

Where a guardian gives several successive bonds for the faithful discharge of his trust, the sureties on each bond stand in the relation of co-sureties to the sureties on every other bond; the only qualification to the rule being, that the sureties are bound to contribution only according to the amount of the. penalty of the bond, in which each class is bound.

The cases of Lewis r. Oivcns, 1 Dev. & Eq. 290. Bell v. Jasper, 2 Ired. Eq. 597. Oats v. Bryan, 3 Dev. 451, and Faye v. Bell, 1 Dev. & Bat. 475, cited and approved.

Cause transmitted from the Court of Equity of Bunco'mbe County, at the Fall Term, 1844.

The bill was filed in April, 1837, against William Hawkins, Charles Hays, and Mallory B. Patton, and the case is as follows : In 1827, William Hawkins was appointed the guardian of Benjamin Hawkins, an infant, and gave a bond in the sum of $3,000, with Charles Hays as his surety. In 1831, the guardian renewed his bond in the penalty of $1,000 with the plaintiff, William D. Jones, as his surety. In 1834, Hawkins was removed from the guardianship, and the defendant, Patton, wasappointod in his stead. Hawkins was then insolvent, and, at their request, he conveyed to Hays and Jones a tract of land in October, 1834, by a deed absolute upon its face, and expressed to be in consideration of the price of $800, but (as admitted by all parties) as a security to them or either of them against loss by their having been his sureties.

Soon after his appointment, Patton instituted a suit on the bond given by W. Hawkins and Jones, and reference was made in it to audit the guardian’s accounts and report the balance. It was found that the sum due to the ward was $1,121,-20, which exceeded the penalty of the bond then sued on, by the sum of $121 20. Expecting such a result, Patton had before sued out a writ on the bond given by Hawkins and Hays, for the purpose of recovering that excess of $121 20. Hays, as well as Jones and Patton, was present when the ditor ascertained the sum due, and thou insisted that he was not liable for the excess aforesaid, or for any thing'Whatever, upon the ground that he had been discharged by the renewal of the guardian’s bond ; and upon being told by Patton that he should hold him responsible, and had ordered a suit against him, he told Patton, that he need not sue him for that, he would consult counsel, and if he should be advised that he was liable for the excess of $121 2,0, he would pay it without suit. Afterwards, Hawkins discharged that sum of $121 20, by assigning to Patton a bond which had been given for rent of the ward’s land, and which he had on hand ; and the suit against Hays was discontinued. In the suit brought against Hawkins and Jones, however, there was a report and a judgment thereon for the penalty óí $1,000, by confession.

The bill charges, that the default of W. Hawkins occurred chiefly before the plaintiff became his surety, and while Hays was bound for him; and that he discovered that such was the fact in the taking of the accounts before the commissioner, and there insisted that he was not liable for the devastavit before his time, but that Hays was, or, at all events, that Hays and he were responsible as sureties for the whole; and that he informed both Patton and Hays, that he would resist the recovery against him alone, except for such sum-or a due proportion as he might be legally and equitably liable for. And the bill further states, that Hays then proposed that the plaintiff should allow the judgment to be entered for the sum due the ward, as far as the penalty of the bond would cover it, and that if he, Hays; was liable for any part of it, he would pay it, and that it should be referred to two respectable counsel to determine the question of his liability, and of the extent of it.

And that Patton joined Hays im urging the adoption of that course; and that the plaintiff, induced thereby, suffered the judgment to be taken against him.

The bill then states, that Hays has refused to agree to any reference to' counsel or to pay any part of the debt, and that the plaintiff has been compelled to pay, and has paid, the whole debt, excePt ^le sum °f $377 — for which latter sum, he gave his bond to Patton, who recovered judgment thereon, and threatens to raise the money on execution.

The prayer is,' that the necessary accounts may be taken in order to ascertain the severed period's of the principal’s devas? tavits, and that Hays may be decreed to. make good those of his own time, or the liabilities of the respective sureties may be declared according to Equity, and Hays decreed to reimburse the plaintiff as may be found right, and that in the mean time, Patton may be enjoined from proceeding at law.

' The answer of Hays denies all knowledge of a default by Hawkins before the plaintiff became his surety, and states his belief that the whole occurred afterwards. Thereupon he insists, that he is not liable for any part of the deficiency ; at least, within the penalty of the new bond. He denies any proposal or agreement between him and the plaintiff, of the nature stated in the bill, for a reference to counsel to determine the question of his liability to the plaintiff or for any part of the sum of $1,000; and states that his only agreement was with Patton in respect of the excess of $121 20, and that only, and avers, that, as to all besides tliis last sum, he posilively denied his liability to any person, or in any form.

The answer further states, that, afterwards, the plaintiff came to a settlement with Hawkins, upon the footing that the plaintiff was solely liable as his surety, and therein took the mortgaged land as an absolute purchase at the sum of $700; and that for a balance, then found due, pf something more than $400, the plaintiff took the note of Hawkins payable to himself and made Hawkins a promise not to sue him within five years, and to allow him to remove from the State. Hawkins’s insolvency is admitted.

Hawkins’answer admits his default as found by the commissioner, and says that it all occurred after he gave his last bond, when by misfortunes he became insolvent. He admits Chat the plaintiff has satisfied the judgment by payments, and by giving his bond to the ward after he came of age. And he states, that he transferred to the plaintiff a bond for $135, as a payment to him and also conveyed to him the land absolutely at $700, and that he and the plaintiff then came to a settlement, and he gave the plaintiff his note for a balance due to him, exceeding $400 a little, which the plaintiff still held and had sued on.

Patton’s answer denies all collusion with Hays, and all-knowledge of any agreement of Hays to pay any part of the debt, or to refer the question to counsel ;• and denies also any persuasion of the plaintiff on his part to suffer judgment to-go against him. He says, Hays denied his liability altogether.He further states, that at the time of taking, the accounts, the ward, JB.- F. Hawkins, was nearly of age, and was present and allowed by this defendant to act for himself in the premises ; that, after the sum due was ascertained, the plaintiff requested indulgence, and the young man, B. F. Hawkins replied, that he should want a small part of the money upon coming of age, but that he would not need the residue, and that if the plaintiff would then give him a new bond with sureties, he would indulge until he should need the money; that the judgment was taken on the report, because every one believed-the plaintiff liable for it; and that, within a few weeks, the ward came of age, and the plaintiff made the required pay-ment to the ward, and then gave a new bond with surety to B. F. Hawkins himself for about $800; and that, on that-bond, said Hawkins has recovered judgment by confession, and received a payment of about $500, from the plaintiff; and that he, Patton, has no interest in the matter, but has long ago settled with his former ward, and that the balance is due from the plaintiff on the judgmentin the name of B. F. Hawkins, rendered on the bond given to the said Hawkins himself.-

Upon the coming in of the answer of Patton, the' injunction was dissolved, which had been granted on the bill. Replication was taken to the answers, and the parties proceeded to take testimony!'and the cause was transferred to this court for hearing.

No counsel for the plaintiff.

Francis for the defendants.

fiUF:piNj q_ j

The bill must, of course, be dismissed with costs as to the defendant, Patton, who has no interest, real or nominal, in the judgment, and against whom nothing has-been proved.

The other two defendants, Hawkins and Hays, allege as one point of defence, that the plaintiff, after discharging the judgment against Hawkins and himself, came to an account with Hawkins and took from him a note in satisfaction of the balance due to him; and therefore they insist that the present suit cannot be sustained ; not against Hawkins, because from him the plaintiff has taken a new and substantive legal security in satisfaction of the former demand, and not against Hays, because the plaintiff has given- up his remedy against the principal, and thereby discharged the surety.

Plow far the taking of a promissory note from the principal might operate as a satisfaction of the previous debt of the principal or discharge a co-surety, if agreed to be a satisfaction, we need not decide, for although the question is raised in the answers, the defendants have failed to establish the fact by evidence. Two depositions have been taken in reference to this part of the case. The one is that of William Hawkins-himself. But he is incompetent to prove a fact, which, if it operate at all, must operate to his own discharge in this suit, as Well as that of the other defendant. Besides, there was no order for his examination ; and without that, a party cannot be a witness for another. Lewis v. Owen, 1 Dev. Eq. 290. Bell v. Jasper, 2 Ired. Eq. 597. The other witness is G. W. Candler, who states, that Jones and Hawkins made a settlement,- shortly-before this suit was brought,' in relation to the matter in which, the former was' surety for the latter’s guardianship ;'and that"he, the witness,thinks that in the settlement Hawkins -gavte Jones a note for the balance between them, and that receipts were passed between them; but that he cannot recollect the amount of the note, and he does not know the nature of the receipts given. He states, that it was his understanding of the settlement, that Jones was to have Hawkins’ land, but at what value he is unable to and that Jones claimed that he had before purchased it at a sale made for other debts, but at what price the witness does not know. No order has been moved on the plaintiff to bring in the note or receipts alleged to have been given to him, nor any notice to him to produce-them before the witness ; and the defendants have declined or omitted to offer the receipts given by Jones to Hawkins, as pretended by them. It would be exceedingly loose to proceed on evidence, of the uncertain character of this witness’ testimony, in respect to the contents of written instruments ; some of which are in the possession of the defendants themselves, or one of them, and the others accessible to them by proper means. It may be, that, in the very receipts given by the plaintiff to Hawkins, it is expressed, that the note of the latter was intended as an adjustment of the accounts and striking a balance, and was not taken in satisfaction of the precedent debt; and that supposition is the less improbable, as the present suit was brought almost immediately afterwards. Certainly, if it should appear hereafter, that the plaintiff actually holds the note of Hawkins in the premises, and should entitle himself to a decree against Hays as a co-surety, Hays would be entitled to participate in the benefit of that security. But at present, as. a bar to the bill, the defendants have failed 'to establish by proper proof that the plaintiff took Hawkins’ note in satisfaction, and not as a collateral security for the benefit of himself and his co-surety equally, or indeed, that he took the note at all; and therefore, the plaintiff’s case depends upon his original equity.

As far as the plaintiff rests his equity on the special agreement of Hays to assume the default of the guardian in his time, or any aliquot.part of the deficit, or to refer it to counsel to adjust the respective liabilities of the parties, the plaintiff must fail, as the whole allegation is denied in the answer, and there is no evidence to overrule the denial. ,

We hold, however, that independent of any agreement upon the subject, the plaintiff and the defendant Hays stand in the relation of co-sureties for Hawkins, and liable to contribute to each other for any sums paid by one of them on account of defaults of the guardian, no matter when such defaults occur- ** red, whether wholly before Jones became the surety, or after that event. The office of guardian is not for a definite period of three years, or temporary at all, that is to say, within the ■nonage of the ward. The Act of Assembly, Rev. St. c. 54, in the first section, authorises a father to appoint a guardian ■for his child, for such time as he or they shall remain under 21 years of age, or for any less time. The second section confers on the courts of law the power to appoint guardians, where the father has not, and requires them to take good security from the. guardian “for the estate of the orphan by them committed.” Under the act of 1762, the guardian was only required to give bond once for all, at his appointment, unless under the power thereby specially conferred, to make rules from time to time for the better ordering and securing the orphan’s estate, the court should require the guardian to give other and further security, or, unless at tne instance of the sureties of a guardian, the court should compel him to give sufficient other or counter security, or appoint some other guardian. It was, therefore, in its creation, one office for the whole minority of the ward, unless it was expressly for a shorter period, or unless subsequently shortened by an order of removal. The, sureties, given at first, continued through the term, and could be relieved only by the removal of the guardian, or getting counter securities from him, by way of indemnity. But very often the sureties became insolvent, and therefore had no interest in the conduct of their principal, and •took no steps against him, though he was wasting the estate and becoming insolvent. To correct this evil and protect the interest of wards, the act was passed in 1820, “further pointing out the duty of guardians which makes it the duty of guardians to “ renew their bonds every three years during their continuance of the guardianship,” and making it the •duty of the courts to remove from office such guardian as may fail so to do, and appoint a successor to him. The case of a guardian and of his successive bonds, is therefore ly like that of clerks and their bonds ; as to which"it has been held, that the office was not annual, though the bond be given annually, but that all the bonds', given through the several years for which the office continues, are cumulative securities for the performance of the duties of the office, and particularly for the payment of money received at any time before or after the giving a new bond. Oats v. Bryan, 3 Dev. 451. This is expressly the doctrine laid down as to guardian bonds in Bell v. Jasper, 2 Ired. Eq. 597. That case came first before the court in the name of Foye v. Bell, at law, 1 Dev. & Bat. 475, in which we held that the first sureties were liable to the ward, although, as between the different sets of sureties, the latter might be bound to contribute orto exonerate the former. Whether the one set would be so bound to the other, was not then to be determined. But Bell was compelled to pay the recovery against him at law, and then filed his bill against his co-sureties in the bond, to which he was a party, and also against the posterior sureties in the second bond, for contribution ; and by the whole court it was held, that all the bonds were but securities for the same thing, and, therefore, that there must be a contribution between the different sureties. Each was held bound for the entire guardianship; the only" difference between them being, (upon the authority of Deering v. Winchelsea, 1 Cox, 318) that the liability of each was not equal, but in proportion to the penalties of the several bonds, in which the respective sureties bound themselves. Consequently, in this case, the sum for which the defendant Hays is liable, when compared to that the plaintiff ought to pay of the deficit of the insolvent principal, is as $3,000 is to $1,000, and so it must be declared. And it must be referred to the Master to inquire, what sum the plaintiff has been compelled to pay as surety for William Hawkins in the premises, and what payments on account thereof he has received from Hawkins, what balance is due to" the plaintiff in respect thereof, and how the same is secured. And the Master will also inquire, whether Hawkins continues to be insolvent, or is able to pay tiie balance that may be found due to the plaintiff, or any part of it, and how much, and where he resides.

Per Curiam, Ordered accordingly.