Opinion
04-09-1873
OULD & CARRINGTON v. MYERS & als. MYERS v. OULD & CARRINGTON & als.
Page & Maury, for Ould & Carrington. Lyons, A. A. Smith, and J. Alfred Jones, for Myers. E. Y. Cannon, Spilman and Scott, for the attaching creditors.
1. M. employs S. to build a house, and he is to pay for it in ten notes of $5,000 each, payable at different periods, to be delivered by M to S when R shall say he is entitled to them. One note to be first delivered, then two at the same time, when the work has advanced to a certain stage, & c. If S should fail to carry on the work to completion, any notes not delivered should be forfeited to M. The first note is properly issued. Before S is entitled to receive the next two, M, at the request of S, delivered him one of them; S having done more work than the amount of that note; and S soon after receiving the last note, abandons the work. HELD:
1. Though the note was given by M to S for his accommodation, before he was bound to deliver it, yet it is not an accommodation note in the legal sense, but is upon a valuable consideration; and M has no equity on this ground, either against S or the holder of the note for value, to have the note delivered up to him.
2. M not having alleged in his bill damage by the failure of S to complete the work by the time prescribed, he cannot have relief on that ground.
3. The parties in this case having provided in the contract the forfeiture of S for the failure to complete the work, quæ re if M is entitled to any other compensation.
2. M files his bill against S and his assignee of the second note delivered to S, and attaching creditors of S, who had served their attachments on M, to have the note delivered up to him, upon the ground that it was without consideration, and was procured by misrepresentation and fraudulent assurances; and the court holding that he has failed to sustain the grounds of relief he states, and that his bill should be dismissed, cannot go on to make a decree in the cause between the assignee and the attaching creditors.
3. There cannot be a decree between co-defendants, in a cause where there is no decree in favour of the plaintiff.
On the 6th of February 1866 Solomon A. Myers, of the city of Richmond, entered into a contract under seal with Samuel Strong, of Washington city, whereby Strong undertook to build for Myers, on a designated lot in Richmond, a house containing two tenements complete in all its parts, of the best materials, according to a specified plan, for the sum of fifty thousand dollars, said house to be fully completed and finished and the key to be given by said Strong to Myers, on or before the 1st of August 1866. The contract provided for an alteration of the plan at the instance of Myers, and the mode by which the consequence of such alterations should be adjusted. And it was agreed that in the payment of the said sum of $50,000, Myers should execute ten negotable notes of $5,000 each, payable to Strong or his order, respectively on the 1st day of August 1867, 68, 69, 70, 71, 72, 73, 74, 75 and 1876, and each note to bear six per cent. per annum interest from the 1st of August 1866; and Myers was to deliver the said notes to Strong in the manner and at the time specified as follows: the note due at the earliest period was first to be delivered to Strong; the note due at the longest period was the second to be delivered; and so on alternately till they were all delivered, in accordance with the conditions after expressed, viz: Myers shall deliver to Strong, the first note whenever in the opinion of Richard Reins of Richmond, he has done sufficient work upon the said building to have earned it; and Reins was thereby appointed by both parties to the agreement, to give the said opinion or decision; when the walls of the first or main story are up, the iron front and joists, & c., complete thereon, ready for the walls of the second story to go up, two others of the said notes shall be delivered to the said Strong; and as each succeeding story is up, and ready for the walls of the story above to be commenced, another of said notes shall be delivered; and in like manner others of them shall be delivered until the fourth or last story is up and the roof on and completed, so that by or at that time the said Strong shall have received six of the said notes, in value $30,000. And the other four notes were to be delivered at such times as Richard Reins should direct, looking to the progress of the work; so that on the completion of the building by Strong, there should not be more than two of the said notes to be delivered to Strong, and they to be delivered at the time when the said house was completed.
And it was further agreed, that if Strong should unreasonably delay the construction of said house, which fact was to be decided by arbitrators chosen as specified, whenever Myers should desire it; or should Strong, from any cause, fail or refuse to carry out his part of the agreement to the full and entire completion of the said house, then, and in either event, any notes that may not have been delivered to the said Strong, shall be forfeited by him to the said Myers, & c., & c. And in conclusion it was agreed that Myers should, when requested by Strong, from time to time, convey to two trustees the said lot, with the building thereon to be erected, to secure to Strong the payments of the said notes, as they should be respectively delivered to him, and become due and payable according to the stipulations of this agreement. This contract was duly admitted to record in the Hustings court of the city of Richmond.
On the 23d of April 1866 Samuel Strong assigned and transferred to his brother Jacob Strong, of New York, all his rights and interest under the contract with Myers, and authorized him to perform all the acts, and secure all the benefits, which Samuel Strong was or might be entitled to under the same. And on the 25th of June following, Myers gave notice through the mail, to both Samuel and Jacob Strong, that the contract was not assignable; and that he would not permit Jacob Strong to do the work. He, therefore, considered the contract as abandoned by Samuel Strong.
In May 1867 Solomon Myers filed his bill in the Circuit court of the city of Richmond, in which he set out the contract between himself and Samuel Strong, the assignment by the latter to Jacob Strong, and his own notes of them; and said that the first note was delivered by him to Strong, when the same became due and payable under the contract; and a deed of trust to secure the same was executed and delivered to B. R. Wellford and Robert Ould, trustees, and was on record in the clerk's office of the Hustings court of the city of Richmond. What disposition has been made of that note by said Strong, plaintiff does not know, but from circumstances, he believes and charges that it is still held by Strong, or some fraudulent assignee from him, who, when discovered, he prays may be made a party defendant.
He refers to the provision of the contract which provides, that upon the failure or refusal of Strong to carry out his part of the agreement to the full and entire completion of the said house, any notes that may not have been delivered to Strong shall be forfeited by him to Myers; and says, that before Strong, under his contract, was entitled to demand of him any other note than the one above referred to, he voluntarily abandoned his said contract by a formal assignment thereof to Jacob Strong, on the 23d of April 1866; which was recorded on the 16th of May following: That said assignment was made without consultation with him, and he had no knowledge thereof until sometime after it was recorded: That Jacob Strong has never, to his knowledge, assumed to act thereunder, or attempted to prosecute said work: That on or about the 28th of May 1866 all work upon the said building ceased, as plaintiff then understood and believed, in consequence of action had by the creditors of Samuel Strong against him, attaching all his property known to be accessible in the city of Richmond, and all supposed debtors of said Strong, the plaintiff among others; and plaintiff, by notice to said Strong, declared the said contract to be abandoned.
He further says, that prior to these occurrences, or plaintiff's knowledge of them, to wit: on the 11th day of April 1866, Strong applied to him to deliver to him his note for a second instalment of the money covenanted to be paid for the said buildings, to enable him, as was alleged, to raise money to assist in said work. Plaintiff was confessedly under no obligation to give such note, but believing that Strong designed in good faith to carry on the work, the plaintiff gave a note for the sum of $8,000, being $5,000 and ten years' interest thereon, at the rate of six per cent. per annum, payable on the 1st of August 1876; and to secure the same, executed another deed on the premises to the said Wellford and Ould, as trustees,which has been admitted to record in the Hustings court of Richmond. But this note was executed and delivered to Samuel Strong, and accepted by him, purely as a matter of accommodation, upon the promise and agreement that the work required under his contract, which was the only consideration therefor, should be thereafter faithfully executed; as will fully appear from the recitals in the deed of trust. And he further says, that Strong has not prosecuted the work upon the said building so far as to entitle him, under his contract, to any other than the first note; and that the second note was obtained from the plaintiff by misrepresentation and upon false assurances; that plaintiff has not received any legal consideration therefor; and that he is not bound to pay the same to Strong or any other parties holding it, unless they can show that they paid for the same a valuable consideration, and had no notice of the circumstances above recited. He is informed that the second note was deposited by Strong with the First National Bank of Richmond, as collateral security for certain liabilities which have been since satisfied; and that the bank holds said note, not as proprietor thereof, but to satisfy the claims of certain creditors of Strong, who have served their attachments upon the said bank as a debtor of Strong: these are Bartlett & Robins and Catharine Thomas, administratrix of Archibald Thomas; and a claim of Robert Ould & Isaac H. Carrington, lawyers and partners under the firm of Ould & Carrington, who, as plaintiff is informed, claim as assignees of said Samuel Strong, a right to the said note, as a security for a debt due them by Strong, and have given notice of that assignment to the bank.
The bill further states, that at the time Strong abandoned the work on the building he left on the premises certain materials he had provided for said building, a list of which is filed, the entire value of which did not exceed a few hundred dollars: That plaintiff is a defendant as surety of Strong, in a suit brought against them and one Wm. Webster, by How, Knox & Co., claiming several thousand dollars: that many of the creditors of Strong had instituted suits against him, and some had recovered judgments; and in some of said suits the plaintiff has been charged to be liable as a debtor of Strong, and he has been summoned to appear as garnishee in the Circuit court of the city of Richmond, to disclose all his indebtedness to the said Strong. And, in consequence of the premises, he is subject to harassment and expense, and subjected to hazard of great pecuniary loss, unless protected by the peculiar powers of a court of equity. He claims to be entitled to retain in his possession the property before mentioned, until his liability as surety for Strong in the pending suit of How, Knox & Co. shall be determined; and he also claims, that if the first note herein referred to, be now held by Strong, it shall be retained in the power of the court, and not pass into the hands of any other party until the said liability shall be determined. And making Samuel Strong, the First National Bank of Richmond, Ould & Carrington, and the creditors of Strong who had attached the second note in the bank, and those who had summoned the plaintiff as garnishee, and Wellford & Ould, the trustees in the deed to secure it, parties defendants, he prayed that the bank should be restrained from delivering the note then in their custody to any other party; that Strong should be required to produce the first note, or disclose to the court in whose possession it is, and whether it is held for his benefit in any particular; and if so, that it be retained to await the determination of the suit of How, Knox & Co. in the Hustings court against the plaintiff and others; that the trustees, Wellford & Ould, be ordered to execute a release of the deed of trust aforesaid; and that the other defendants be restrained and enjoined from prosecuting any claim against the plaintiff as an alleged debtor of said Strong; and for general relief.
Ould answered the bill. He says that he and his partner, Isaac H. Carrington, are the holders and proprietors of the note for $8,000, in the bill mentioned, subject to the rights of the First National Bank of Richmond, which holds, or did hold, it as a pledge for the payment of a certain debt; and that Ould & Carrington are bona fide holders of the said note for value; that they obtained the said note from Samuel Strong on the 8th of June 1866; that said Strong was at the time the holder of the note, subject to the rights of the bank; that Ould & Carrington accepted said note in payment and satisfaction of a debt of $2,300 due from Strong to them; that at the time they received the note from Strong it was endorsed in blank; and the defendant, and he believes the said Carrington, was wholly ignorant of any failure of consideration or any other defence or equity, as between the plaintiff and Strong, which would have invalidated the note or any part thereof, in the hands of Strong, or even that the said note was given to Strong by way of accommodation or anticipation. He denies that he, or as he believes Carrington, had any reason to believe that Strong had not done all that was necessary to entitle him to the note; denies all knowledge of the contents of the deed of trust given to secure it, and that in fact it had never been delivered to or seen by him, at the time the said note was transferred by the said Strong.
The defendant further says, that as to the matter of inadequacy or failure of consideration for the said note, he has been informed by Richard Reins, to whose decision Myers and Strong submitted themselves by the contract, that Strong has expended both labor and materials upon the said building, in addition to such as were to be expended before he should demand the first of said notes, to the value of the note of which Ould & Carrington are the holders; and that he has expended further work, labour and materials sufficient to entitle him to demand the third note which the plaintiff covenanted to deliver; all which defendant believes to be the facts.
The defendant further says, that on the 8th of June 1866 he gave notice to the bank, of the transfer of the note to himself and his partner, and delivered to the said bank the written order of Strong to deliver the note to the defendant. And he was informed by the president of the bank that the market value of the note was about $2,000; and the defendant for himself and the said Carrington proffers to relinquish all his interest in the said note, and to surrender the same for the said sum of $2,300.
And he further says, that although he was aware that suits had been instituted and attachments sued out against Strong, at the time he became one of the holders of the note, yet that he had no actual knowledge at that time, that any attachment had been laid in the hands of the plaintiff, the maker of said note, or that any attachment had been served on the said bank for the purpose of affecting said note; and the note being negotiable and current at the time he became a holder thereof, actual notice of said attachments, if any had at that time been served upon the plaintiff and said bank, would not have invalidated the title of the defendant.
He says Carrington does not join with him in his answer, because he is in a distant part of the State. In February 1867 Carrington filed his answer; which agrees substantially with that of Mr. Ould.
Bartlett & Robins and Thomas' adm'x answered the bill. Bartlett and Robins say, that on the 26th of May 1866 they sued out an attachment on their claim against Strong, and on the 31st it was served on Myers, and he was summoned as garnishee; and they afterwards obtained a judgment against Strong in said suit for $3,200, with interest and costs. They insist that at the time of the service of their attachment, Myers was indebted to Strong to the amount of the note in the bill mentioned. And they say that Ould and Carrington were counsel and law agents of Strong, and well knew the claim, and of the proceedings of these respondents, and examined the papers on which these proceedings were taken before the time of the alleged assignment to them of the said note of Myers; and they cannot claim to be assignees without notice. On the 13th of June they served their attachment on the First National Bank of Richmond. And they insist that said note and the debt by it represented were then subject to their liens.
Thomas' adm'x says, that on the 31st of May 1866 she sued out of the clerk's office of the Hustings court of the City of Richmond, a capias ad respondendum against Strong for a debt of $1,575, upon which she had since obtained a judgment; and all of it is still due except $575; that Strong was arrested under said capias on the same day, and was discharged from custody by surrendering to this respondent, all his estate of every sort and description; among other things the note of $8,000 mentioned in the bill, although not expressly named in the schedule; and not named as she believes, because he had, whilst in custody as aforesaid, executed to his counsel, Ould & Carrington, an assignment of the said note; which assignment she is advised is void in law: That on the 13th of June she sued out an attachment in her suit, and had it served on the First National Bank of Richmond, on that day; and she was then informed by H. G. Fant, the president of the bank, that he held the said note of $8,000 as the property of Strong; and that he knew of no lien upon it of any sort, or of no assignment of the same, except a small claim of about $400, which must be paid the bank before the note could be surrendered. She insists the note still was the property of Strong, and was so at the date of her capias and attachment, and that under these she had a lien upon it from the date of their service.
The bank answered by its president, H. G. Fant. He said the note for $8,000 was endorsed in blank by Strong to the bank as a security for $4,000 advanced to him by the bank. That on the 8th of June 1866, Messrs. Ould & Carrington presented to the bank an order from Strong, directing the delivery of the note to them; that about the time of the receipt of this order divers attachments were served upon the bank, at the instance of creditors of Strong; and respondent, not knowing his legal duty in the premises, with the advice and consent of Messrs. Ould & Carrington, retained, and still retains possession of said note; though, unless otherwise ordered by the court, he will deliver the note to them. Respondent admits the debt for which the note was pledged is now extinguished. He denies all notice of the equities set up by the plaintiff in his bill, and avers he was a bona fide holder thereof for value.
There were answers of other attaching creditors, showing the dates of the service of their attachments.
Strong, in his answer, insists that by the terms and intent of the contract, he could be held only to forfeit compensation for the labour and material expended on said building, for which Myers had not executed his negotiable notes. He admits that the second note was delivered to him a short time before he could have demanded the same under the letter of said contract; but he denies, as utterly false, the allegation that the said note was executed by Myers or accepted by respondent purely as a matter of accommodation, or that it was obtained by misrepresentation or false assurances on his part. He avers that Myers received the fullest consideration for both the notes he had executed and delivered under the contract, and that respondent had expended labour and material on said building at least sufficient to entitle him to demand, under the strict letter of the contract, a third note from complainant. He admits he pledged the note to the bank as security for $4,000 he then borrowed from the bank. He denies that Ould & Carrington took the note as collateral security for their demand against him for professional services; and avers that the same was given and received by them in absolute payment of the debt due them, amounting to $2,300. Respondent does not know who is the holder of the first note delivered to him by Myers; nor, as he is advised, is it material for him to know, as plaintiff, in his bill, admits that your respondent was entitled to said note under their contract.
The answers of Ould, Carrington, Bartlett & Robins, and Thomas' adm'x were filed before the judge acted on the motion for an injunction; and it was granted on the 11th of May 1867.
In the progress of the cause, though it does not appear when, Myers filed an amended and supplemental bill. In it, after purporting to set out the averments of the original bill, he says, that at the time of filing it, he was not aware of the exact nature and extent of the claim set up by Ould & Carrington to the note for $8,000, but supposed they claimed it as collateral security for their account against Strong; but he is now informed that they claim to be the owners of the note. In their answer to the plaintiff's original bill, they claim that the said note was transferred to and accepted by them as satisfaction of a professional account against Strong for services rendered as counsel, amounting to not more than $2,500. And he charges that their claim, as set forth by themselves in their said answer, grows out of a contract between themselves and Strong, which was palpably usurious, and therefore null and void. In legal effect it was a loan or forbearance by Ould & Carrington, of not more than $2,500, for less than ten years, in consideration of a certain return of the principal and $5,500 of interest. For the forbearance of their claim of $2,500 they obtained plaintiff's note, with Strong as endorser, for $8,000, a discount of twenty-two per cent. per annum.
Plaintiff further charges, that Ould & Carrington, at the time they accepted an assignment of the note from Strong, had full knowledge of facts set forth in this and the original bill, which had intercepted Strong's control of the note; and also of attachments which had been sued out against the estate of Strong, and duly served upon the plaintiff.
Ould & Carrington are the only parties made to the amended bill; and they are called upon to answer, except as to the charge of usury, which plaintiff proposes to prove independent of an answer from them. And the prayer of the bill is for the relief prayed in the original bill, and for general relief.
Ould & Carrington answered the amended bill. They deny that the transfer by Strong to them, of the note for $8,000, was usurious, or that Strong's endorsement on the note was intended to make him liable to them. It was put there when deposited with the bank, with the sole purpose, it is believed, of conveying the legal title to whosoever might become the bearer thereof. They deny, as wilfully false, the allegation that they had full information, or any information whatever, that would induce them to believe that Strong had no legal right to transfer to them the said negotiable note of the complainant, or that they had any notice of any equitable defences that said Myers pretends to have against said note. At the time they accepted the transfer of the note they believed said Myers had received full consideration therefor, and they are now satisfied that such is the fact. They say they knew that the creditors of Strong were seeking to obtain satisfaction of their demands by attachment; but they deny as false the charge that they had knowledge at the time, or before the transfer to them of said note, that attachments had been served upon the complainant or any particular debtor of Strong, except of one which Strong informed them had been served upon the firm of Betz, Youngaling & Co., of this city, the validity of which he requested them to litigate. But they submit that if the facts as to notice of the attachment were as plaintiff falsely charges it to be, no benefit or advantage would thereby accrue to him, nor would their position as bona fide holders for value of said note, be in any respect impaired or weakened.
Richard Reins was examined as a witness. He says that when the second note was given Strong had finished about $11,000 worth of work upon the building; and that the probable value of all the work done upon it by him, was about $13,500. The second note was delivered at the request of Strong, and for his accommodation, before Strong was entitled to it under the contract. He was also examined to show that Myers had sustained large loss in rents by the failure to complete the house in August 1866.
There were some facts agreed, intended to bear on the question of usury, but it is unnecessary to state them.
The cause came on to be heard on the 17th of November, 1868, when the court referred it to a commissioner, with directions to enquire and report:
1st. Whether the negotiable note of complainant described in his bill was an accommodation note, or procured by fraud and misrepresentation of the defendant, Samuel Strong, or given for a good and valuable consideration.
2d. Whether the defendants, Ould & Carrington, are bona fide holders of said note; and if so, at what time they acquired title thereto.
3d. Whether the contract between the defendants, Ould & Carrington, and their co-defendant, Samuel Strong, under which they claim title to said note, is usurious.
4th. Whether any attachments have been levied upon said note, or upon the debt of which it is evidence, by the creditors of Samuel Strong, defendants in this suit; if any, their respective dates and times of taking effect as levies, and amounts, and whether the said attachments are now pending and unsatisfied; and which of said attachments, if any, are prior in law to the claim of Ould & Carrington to said note or the debt of which it is evidence.
On the 30th of November 1868 commissioner Evans returned his report. Upon the questions referred to him he reports:
1st. That the negotiable note was not an accommodation note, and was not procured by the fraud or misrepresentation of Samuel Strong; and was given for a good and valuable consideration.
2d. That Ould & Carrington are bona fide holders of the said note; and that they acquired title thereto on the 8th of June 1866.
3d. That the contract between Ould & Carrington and Strong, under which they claim title to said note, is not usurious.
4th. Upon the fourth question the commissioner gives a list of attachments issued at the instance of the creditors of Strong, with the amounts, the dates of their service, and upon whom served. Some of these attachments were served on the First National Bank of Richmond, and some on Solomon Myers, and some on both; and some of them were served before the 8th of June 1866, and they are still pending. The commissioner says: I do not think that any of these attachments are prior in lien to the claims of Ould & Carrington to said note, or to the debt of which it is evidence.
Bartlett & Robins and How, Knox & Co., two of the attaching creditors, whose attachments had been served on Myers on the 31st of May, excepted to the report upon the fourth question; and Myers excepted to the report upon the first three questions.
On the 13th of March 1869 the cause came on again to be heard upon the papers formerly read, and the report of commissioner Evans, with the exceptions thereto, when the court approved and confirmed so much of said report as ascertains that the negotiable note of Myers for $8,000 was given for a good and valuable consideration, and that the contract of assignment of said note from Samuel Strong to Ould & Carrington was not usurious. But the court being of opinion that such creditors of Samuel Strong as levied attachments on his estate by service of copies on Myers and on the First National Bank of Richmond, as garnishees prior to the 8th day of June 1866, at which date the assignment by Strong to Ould & Carrington was made, acquired liens on the debt represented by the said note from the time of such service; but not deciding whether the levy of the attachment on Myers alone was sufficient, sustained the exceptions to so much of the report as expresses the opinion of the commissioner that none of the attachments are prior in lien to the claim of Ould & Carrington. And the First National Bank of Richmond was directed to deliver the note to the clerk of the court, & c., and the court reserved the distribution of the fund represented by the note for further decree herein. From this decree Ould & Carrington and Myers applied for, and obtained separate appeals to this court.
Page & Maury, for Ould & Carrington.
Lyons, A. A. Smith, and J. Alfred Jones, for Myers.
E. Y. Cannon, Spilman and Scott, for the attaching creditors.
BOULDIN, J.
Without repeating the facts of this case, I propose to consider, in the first place, whether the appellee, Myers, on the pleadings and proofs in the cause, has made a case, as between himself and Strong, for the interposition in his behalf of a court of equity.
In his original bill, he claimed relief against the second note mentioned therein--the note for $8,000--upon the ground, first: That it was purely an accommodation note without consideration, and that nothing was due thereon to Strong. Secondly: That it was obtained by misrepresentation and false assurances, and was therefore fraudulent and void. And, on these grounds alone, he claimed that this note should be restored to him, to be cancelled. Both allegations are flatly denied by Strong in his answer; and neither is sustained by the proofs in the cause.
The note, it is true, was executed and delivered to Strong in advance of the period when, by the terms of the contract between himself and Myers, he was entitled to demand it; and in that aspect the delivery of the note to Strong may be regarded a favor or matter of accommodation, to the same extent precisely that the anticipation of the payment of any other debt payable at a future day might be considered a favor or matter of accommodation to the creditor. But, it is not true that it was, in any sense of the word, an accommodation note, as understood by the law merchant, or without consideration. On the contrary, when that note was executed Strong had expended on the building in progress of construction for Myers, one thousand dollars more in labor and material than the principal of the two notes delivered to Strong; and this work and material constituted the consideration of the note in question; a consideration valid and sufficient in law to support the note even inter partes. The anticipation of the time merely, when the delivery of the note could be demanded, cannot make the note itself accommodation paper, when at the time of delivery the work already done by Strong was, as we have seen, more than the value of the note.
My opinion, then, is, that the note was not accommodation paper, nor without consideration, but was strictly business paper in the hands of Strong, executed on valid and sufficient consideration. Nor is there any evidence in the record to establish the charge of fraud and misrepresentation. It is flatly denied by Strong, and wholly unsupported by proof.
These are the only grounds on which Myers, in his original bill, based his claim to equitable relief against the note for $8,000. He did not claim that an enquiry should be made into the amount of damages sustained by him in consequence of Strong's failure to complete the building, and that he should be allowed such damages as a set-off against the note in the hands of Strong and his assignees. Without alleging the existence even of any such damage, or asking for such enquiry, he merely claimed that the note itself was not business paper, was without consideration, was obtained by misrepresentation and false assurances, and should therefore be delivered to him, to be cancelled; allegations denied by the answer of Strong, as we have seen, and not sustained by the evidence.
So far, then, as the note for $8,000 is concerned, my opinion is, that Myers has made by his original bill, and the proofs thereon, no case for the interposition in his behalf of a court of equity. He has made no case which would entitle him to relief, even were his claim against Strong alone, and the note still in the hands of the latter.
But an amended bill appears to have been filed, at what date the record does not show. And I will now enquire, whether any claim for damages, by reason of the abandonment of the work, or any other equity against Strong, not alleged in the original bill, is properly made in that bill. It was evidently intended to introduce, as against Ould & Carrington, a new equity--the charge of usury, between them and Strong; and to state rather more minutely the character of their claim to the note; but not to make a new issue with Strong: and this is the more manifest when we see that Ould & Carrington are the only persons made defendants to the amended bill; and no others are required to answer it. It is true that the following recital of what is charged to appear in the original bill is made, viz: " And your orator showed unto your honor, that by reason of the said Strong's violation of his contract aforesaid, your orator had been subjected to great and serious detriment and pecuniary injury; which injury, it is now more apparent than it was at the time of his filing said bill, will vastly exceed the amount of both the said notes given as aforesaid by your orator to said Strong." But, in fact, the original bill showed nothing of the kind; no such charge or allegation is made in that bill; nor any damage or pecuniary loss even alluded to, except the harrassment and expense which he charged would grow out of the attachments, & c. & c., of Strong's creditors. Myers, when he filed that bill, was evidently content to rest upon the excess of $4,000 work and material over and above the two notes, which was forfeited to him by the terms of the contract, and was amply sufficient to cover all apparent damage. He asked no account of damages for breach of contract, in his original bill, and no such account in his amended bill. The special relief prayed for in the amended bill was not against Strong, by reason of any equities between Strong and Myers, but was againt Ould & Carrington alone, on a state of facts applicable to them only; and as we have seen, they alone were made defendants to, and required to answer, this bill; and the general prayer was only for " the relief prayed for in his original bill," and for general relief. It will thus be seen, that neither in the original nor amended bill was the claim for damages, so earnestly argued at the bar, presented as a ground of equity or set-off against the notes which had been delivered to Strong. No inquiry into that matter was asked, either in the bills or before the commissioner. The appellee, Myers, seemed content with the forfeiture he had already realized, and has not attempted to show by evidence in the cause, that it was not ample to cover any real or even speculative loss arising from the breach of the contract. The fact in relation to that matter has not been put in issue in the pleadings; but so far as the record shows, the forfeiture is ample indemnity to cover all losses.
Under such a state of pleadings and proof, I am of opinion that the appellee, Myers, has made no case of equity against the note for $8,000, even against Strong himself, were he still the holder thereof. Were it necessary to decide the question, however, I would be prepared to hold that the question of damages was not left open by the contract of the parties; but that the amount thereof was limited to the value of work and material, for which no notes had been issued at the time the work was abandoned. This was the measure of damages agreed on by the parties themselves; and we think, in a case of this character, in which the damages must be of necessity to a great extent conjectural, the measure agreed on by the parties should govern the court. I agree with Best. C. J., when in the case of Crisdee v. Bolton, 3 Car. & Payne 240, he said: " The law relative to liquidated damages has always been in a state of great uncertainty. This has been occasioned by judges endeavoring to make better contracts for parties than they have made for themselves. I think that the parties to contracts, from knowing exactly their own situations and objects, can better appreciate the consequences of their failing to obtain those objects than either judges or juries. Whether a contract be under seal or not, if it clearly states what shall be paid by the party who breaks it to the party to whose prejudice it is broken, the verdict in an action for the breach of it, should be for the stipulated sum. A court of justice has no more authority to put a different construction on the part of an instrument, ascertaining the amount of damages, than it has to decide contrary to any other of its clauses. Our office is to ascertain the intent of the parties, and if it be not contrary to law, to carry their intent into execution. In the present case, no evidence has been adduced of the amount of damage sustained by the plaintiff," & c. & c. I should be inclined to apply these words of the learned Ch. Justice to this case, were it necessary to decide the question; but I have shown, I think, that not being presented in the pleadings, it is not before us. Having made, then, no case even against Strong, were he the only defendant, it would seem to be a necessary consequence that there can be no case against Strong's assignees, as it is clearly not a case of interpleader.
The charge of usury between Strong and Ould & Carrington, made for the first time in the amended bill, even if sustained by the evidence, on which we do not propose to intimate an opinion, would constitute no equity in favor of Myers; for he does not pretend that usury exists in the note. He would not be relieved from one dollar of the debt by establishing usury between endorser and endorsee; but would still be compelled to pay it all. In this case, then, in which he has come to be relieved from the payment of the entire note, and has shown no equity to be relieved from any part of it, my opinion is, that he had no right to raise questions between other parties not affecting his own liability. Such questions might well be raised on a bill of interpleader, but not in this case.
I think the bill, so far as it sought to establish an equity as to the $8,000 note against Strong and his assignees, and attaching creditors, should have been dismissed; leaving those parties to litigate among themselves as to their respective rights in the tribunal already selected by them.
The appellee, Myers, not having shown himself entitled to a decree against Strong, or any other party in the cause, so far as the note for $8,000 is concerned, but it being proper that his bill should be dismissed as to all parties claiming that note, my opinion is, that there is no foundation for any decree between the defendants, in relation to that matter. In the latest case in this court on the subject, Glenn v. Clark, 21 Gratt. 35, Judge Staples delivering the opinion of the court, said: " The practice of decreeing between co-defendants is not much favored by the courts. There is an increasing indisposition to extend that practice further than it has already been carried. " Ibid. p. 39. In Hubbard v. Goodwin, 3 Leigh 492, 522-3, Judge Tucker, speaking of decreeing between co-defendants, said: " I think it has been done in no case where the plaintiff was not entitled to a decree against both or either. The practice should not be extended further. " A defendant who answers the plaintiff's bill, does not always go on to state his own case as between him and his co-defendant. There is no issue made up, nor any provision for taking their testimony in reference to the peculiar matters in difference between them; and hence in many cases the contest between them cannot come fairly before the court." This language of Judge Tucker was quoted with approval by Judge Allen, delivering the opininion of the court, in Blair v. Thompson, & c., 11 Gratt. 441, 452; and it applies with peculiar force to this case. The contest here, on the pleadings, has been almost exclusively with Myers. The gist of the controversy was his right to the note for $8,000; and being of opinion that his bill should be dismissed, it would be carrying the doctrine of decrees between co-defendants beyond any reported case which has come to my knowledge, to go on under such circumstances, and enter a decree between the co-defendants. I believe, with J. Tucker, that no case can be found in which there was a decree between co-defendants, when there was none for the plaintiff. I have, with a good deal of diligence, looked over the reported cases on the subject in England and America, and have found not one in which there was a decree between co-defendants, in the absence of a decree for the plaintiffs. Indeed, in almost all the cases, the decree between the co-defendants was a necessary result of the decree for the plaintiff. The rule laid down in the leading English case, Chamley v. Lord Dunsany, 2 Sch. & Lef. R. 690, as applied in the more recent case of Cottingham v. Earl of Shrewsbury, 3 Hare's R. 627, is thus stated by Vice Chancellor Wigram: " If a plaintiff cannot get at his right without trying and deciding a case between co-defendants, the court will try and decide that case, and the co-defendants will be bound. But if the relief given to the plaintiff does not require or involve a decision of any case between co-defendants, the co-defendants will not be bound by any proceeding which may be necessary only to the decree the plaintiff obtains." Ibid. p. 637. A fortiori, then would it be improper to bind co-defendants by a decree inter sese, when no decree at all is entered for the plaintiff. Such, as we have seen, seems to be the opinions of the judges of this court; and such was the direct decision of the High court of Errors and Appeals for the State of Mississippi, in the case of Arnold v. Miller ex'or & als. ; 26 Miss. R. 152. The court held that " those equities arising from the relief decreed, in the first instance, to the complainant, are proper to be adjusted between all the parties to the suit whose interests are involved in the subject matter of it, upon the principle of preventing multiplicity of suits." Citing 1 Paige C. R. 268; 2 McCord Ch. R. 470; They go on to say: " The reason of this is manifest. But where the claim of one co-defendant against another does not result from the recovery of the demand of the complainant against one or both of them, we cannot see on what principle the right of one co-defendant to a decree against his co-defendant, in that suit can be justified. Here the complainant's bill was in effect dismissed; and the answer did not assume the character of a cross bill: It was a simple denial of the complainant's equity," & c., & c. Ibid. p. 155-6. And a decree between co-defendants in that case, which in some of its aspects will be found to be very similar to the present, was reversed. My opinion is, that in this case there should have been no decree between the defendants in relation to the note for $8,000.
There is more difficulty as to the equity claimed by Myers against the note for $5,000 first issued to Strong, and his right to a lien on the lumber of Strong which came to his possession, growing out of his contingent liability as surety for Strong to How, Knox & Co. Myers, in his bills, has prayed indemnity for this liability out of the lumber aforesaid and the note of $5,000 alone; and he calls on Strong to state where that note now is. Strong's answer, as to this note, is evasive. He does not say that he had endorsed the note to another, and is no longer the holder thereof; but merely says that he does not know where the note is. This may be true, and he may still be the owner of the note; or he may have transferred it after maturity, subject, of course, to the equities of Myers. On these subjects we are wholly in the dark; and we are equally uninformed as to the existence or amount of any fixed liability of Myers for Strong. These matters, we think, should have been subjects of enquiry before a commissioner in the Chancery court, if desired by the counsel of the parties. Something has been said, however, at the bar, about an adjudication in another forum of the questions in relation to the note of $5,000. Such adjudication, if already made, may render any further litigation on that subject unnecessary; but nothing of the sort appears in this record; and we can only deal with what is before us. My opinion is, that the decree of the Chancery court should be reversed, with costs to the appellants, so far as it undertakes to adjust the rights of the appellants and the attaching creditors, as between themselves; and that so much of the bill as seeks to have the $8,000 note of Myers to Strong surrendered to Myers, to be cancelled, should be dismissed, with costs to the defendants, in the Chancery court; and, in relation to the other matters in controversy, that a further decree should be entered in accordance with the principles above declared.
The other judges concurred in the opinion of Bouldin, J.
DECREE REVERSED.