THIS was an appeal from the circuit court of the United States for the southern district of Alabama. The case is fully stated in the opinion of the court. It was argued by Mr. Phillips, for the appellant, and by Mr. Reverdy Johnson and Mr. Reverdy Johnson, Junior, for the appellees. There was also a brief filed by Mr. Hopkins for the appellant, and Mr. Chandler, for Hunter. The points which were made by the respective counsel can better be understood by giving them in connection with their own statements of the facts; and as these were short, they are inserted.
The opinion of the court was delivered by: Mr. Justice Daniel delivered the opinion of the court.
Mr. Phillips, for the appellant, stated the case thus:––
The complainant seeks to enjoin the defendant Hunter from issuing and levying an execution on a certain judgment recovered in the said circuit court, on the 10th April, 1839, by Moses Wanzer, founded upon a note signed by Thomas Long, George D. Fisher, and the complainant, Hinkle, who was a surety thereon.
The note, being the property of one John Fisher, was transferred by him, with very many others, to Gordon, Campbell, and Chandler, on the 13th May, 1837, for purposes thus stated in the receipt: 'The proceeds of all notes, as they may be collected, are to be appropriated by us in the payment of any demands which we may hold against said Fisher and Johnson, upon their own debts, and not upon indorsements or liabilities for others.'Mozes Wanzer, the defendant to this bill, being one of the creditors thus provided for, the attorneys aforesaid transferred to him the note above described, upon which the judgment was recovered.
It is admitted by the record, that after the recovery of the judgment, Wanzer was fully satisfied of his debt out of other assets, and that he no longer claims to have any interest in or control over said judgment; and that said Hunter, without any assignment or other transfer from said Wanzer, has issued an execution thereon, and threatens to levy the same on the property of the complainant, by the authority alone of the said attorneys.
These proceedings are justified by the defendant, Hunter, on the ground that they were had under the instructions of Fisher. 'At this time, says defendant, Fisher gave verbal as well as written instructions to the said firm, to protect this defendant from the payment of the debts aforesaid, from the papers mentioned in that receipt.' And again: 'The particular claim of this defendant on this note was derived from a letter written by Fisher, in Mobile, to the firm, at the instance of this defendant, to hold the balances in their hands after the payment of the debts particularly provided for, for the indemnity of this defendant.' Upon the same head, the deposition of the attorney states: 'Fisher gave verbal and written directions to deponent to protect Mr. Hunter any remainder there might be after the payment of the claims in the hands of deponent's law firm.'
There is no evidence to sustain the averment that the instructions given by Fisher to the attorneys, were at the instance of the defendant, Hunter, or by virtue of any agreement with him, or that the attorneys ever notified said Hunter of the instructions during the life of said Fisher, or that the said Hunter had become the creditor of said Fisher during his lifetime. Fisher died on the 9th February, 1838, and the complainant, Hinkle, was appointed administrator de bonis non of his estate, on 3d December, 1849.
Upon this statement the appellant will contend, that there was no assignment or appropriation of the note in question by Fisher to Hunter, nor any intention to make one. But on the contrary, the attorneys were at all times bound to hold the surplus funds that might accumulate in their hands at the free disposal of said Fisher, as well after the said 'verbal or written instructions' as before. Tiernan v. Jackson, 5 Pet. 595; Rogers v. Lindsey, 13 How. 441; Williams v. Everett, 14 East, 582; Grant v. Austin, 3 Price, 58; Hoyt v. Story, 3 Barb. S. C. 265; Cowperthwaite v. Sheffield, 3 Comstock, 243; Rogers v. Hosack's Exrs. 18 Wend. 319; Watson v. Duke of Wellington, 4 Cond. Eng. Chan. 573; 72 Law Library, 231; Scott v. Porcher, 3 Men. 662; Walwyn v. Coutts, Ib.
These instructions conferred a power upon the attorneys of a revocable character; but even if the power were irrevocable during life, it became extinct by the death of Fisher.
In those cases where the power is coupled with an interest, the rule is otherwise; but there it must be an interest in the thing itself. Hunt v. Rousmanier, 8 Wheat. 204; Houghtaling v. Marvin, 7 Barb. S. C. 412; Eastm. v. Morton, Ohio, June term, 1854, Amer. Law Reg., August, 1854.
The case, however, as the appellant contends, does not involve these considerations, because it appears that Long, one of the makers of the note, has paid the same to said Hunter.
The bill, which is sworn to, avers that the complainant, who was well acquainted with Hunter's handwriting, had seen the receipt or statement which Hunter had given to Long, in satisfaction of said judgment, and in 13th interrogatory, Hunter is specially required to answer whether he did not 'give or sign any receipt or statement showing the payment,' &c.
Hunter omits to give a separate answer to this interrogatory, but in answer to the 8th, 9th, 10th, 11th, and 12th interrogatories he says: 'This defendant has not released Long, nor received any settlement, payment, or satisfaction from him.'
This answer, as the appellant contends, is not of that character which requires two witnesses, or one witness and corroborative facts, to disprove it. It does not contain a 'clear and positive denial' of the charge in the bill. An answer deserves more or less credit, as it fairly meets all the inquiries contained in the bill. A general denial is not sufficient, but there must be an answer to sifting inquiries upon the general question. Welford, 366, 367, 369; Freeman v. Fairlie, 3 Mer. 41; Welford, 309, 310; 2 Eq. Ca. Abr. 67; Paxton's case, Sel. Ca. in ch. 53; 6 Vesey, 792; 1 Sims and Stu. 235; Hepburn v. Durand, 1 Br. Chan. ch. 436; Prout v. Underwood, 2 Cox Chan. 135; Daniel v. Mitchell, 1 Story, 188; Bk. Georgtown v. Geary, 5 Pet. 110; 9 Cranch, 160; 2 Daniel's Chan. 984; Hughes v. Garner, 2 Young and Call, 333; Parkman v. Welsh, 19 Pick. 234; Greeley Eq. 4.
The record, therefore, contains upon the subject of payment the precise statement of the bill sworn to; and the positive evidence of Mrs. Long, (p. 41,) opposed by the loose, indefinite, and evasive response of the answer. The oath of the complainant is a full offset to that of defendant. Garron v. Carpenter, 1 Port. 374; Searcy v. Pannell, 1 Cook's Rep. 110; 1 McLeod; Lendell and Gamon, 10 Humph. 164; Union Bank of Georgtown v. Geary, 5 Pet. 99.
The counsel for the appellees presented the following statement.
The bill in this case seeks to restrain the collection of an execution in favor of Wanzer, (but controlled by and belonging to Hunter,) against Long and the complainant, Hinkle. The judgment upon which its execution issued was upon a note for $1,520, held by the firm of Fisher and Johnson, made by Thomas Long, George D. Fisher, and Hinkle, the complainant, and on 17th April, 1837, placed by Fisher and Johnson, together with other notes, in the hands of attorneys for collection and to cover certain liabilities of Fisher and Johnson, as appears by the receipt of the attorneys. The proceedings in which the judgment was rendered were in the circuit court of the United States for the ninth circuit. The bill alleges, in the first place, that the judgment does not belong to Hunter, and he has no right to control it; in the second place, that Fisher, who owned the note on which the judgment was obtained, abundantly indemnified Hunter, his security; and that Hunter, out of the property transferred to him by Fisher, has been fully satisfied, and consequently, has no right to enforce this judgment; in the third place, if the judgment belongs to Hunter and he has not been fully indemnified out of Fisher's assets, yet he has collected this judgment out of Long, and has no right to enforce the execution against Hinkle, the complainant. It prays that the judgment be declared satisfied, or that complaint, as administrator of Fisher, be declared entitled to the judgment, and that Wanzer and Hunter be enjoined proceeding upon it, &c.
The answer of Hunter admits that Wanzer has now no interest in the judgment, and explains why suit was brought in his name. Fisher was indebted to Wanzer and others; Wanzer placed his claim in the hands of Gordon, Campbell, and Chandler, attorneys, for collection; Fisher's other creditors also placed notes in their hands. To settle these suits, Fisher placed with the attorneys a number of notes for collection, and among them was the note of Long, indorsed by Hinkle, the complainant. This note was sued in the name of Wanzer, with the intention to secure his claim. Wanzer's debt was paid out of other notes of Fisher.
The answer then states, that Hunter was the indorser of Fisher for a large amount, and he became so to enable Fisher to settle the debts for which he was sued by Gordon, Campbell, and Chandler. The arrangement made by Fisher with these attorneys is set out in the answer. The substance of it is, that Fisher was to give his notes, indorsed by Hunter, in payment of the notes of Fisher, who had been sued by Gordon and Co. These notes, indorsed by Hunter, were given, to the amount of nearly $18,000. Fisher gave instructions to the attorneys to save Hunter from the payment of these debts, by the paper mentioned in the receipt. In addition to these liabilities, Hunter states that he indorsed a note of Fisher, for $10,000, dated March 1, 1837, at sixty days, which was protested and paid by Hunter, party out of Fisher's property, and partly out of his own; and refers to a deed from Fisher to him, securing him against liability on this note. He further states, that he paid Nelson, Carleton, and Co. $3,472, on a bill of exchange drawn by Fisher, 8th March, 1837. Thus, upwards of $30,000 were paid by Hunter, on account of Fisher; and the extent of credits which the answer gives to Fisher's estate is but $16,558.28.
Hunter denies that the judgment in question was ever settled by Long, or that he ever released him.
The evidence of Campbell explains the whole transaction by which Hunter became security for Fisher.
Barney proves that Hunter, by 23d April, 1843, had paid on the four notes given under the agreement, which came into the hands of the United States Bank, $11,627.65, which included interest. On these notes, $4,336 had been paid in 1838, which about corresponds with the sums the answer states to have been collected from Fisher's estate, and paid on account of these four notes.
Campbell, also, proves that $4,818.27 were paid on account of a judgment by the Bank of Columbus against Hunter, on the note for $10,000, referred to in the answer and the deed. This amount corresponds with the first item in the credits given Fisher's estate; ...