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Benson v. Paine

2 Hilt. 552 Court At Special Term, June 23, 1859. Decision date 1859-06-23 English

Delivered by Daly, First Judge.

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p. 552
George W. Benson v. Nicholas E. Paine and Edward E. Barrett.

Headnote

Where one of two partners gives his individual note for their joint debt, a judgment upon the note operates as an extinguishment or merger of their joint liability.
A recovery of a judgment against one of several joint debtors is a bar to an action thereafter against all or any of the debtors upon their joint indebtedness.
The judgment puts an end to the joint liability of the party against whom it is recovered, and the plaintiff, by thus proceeding against one, abandons his right to treat the others as jointly liable.
It seems, where an action is brought against any number of joint debtors less than the whole, objection must be taken by plea in abatement, or it will be deemed waived, and judgment will be given as upon an obligation only of the party sued.
If the obligation be joint and several, the creditor has the election to sue the debtors jointly, or each of them separately, and a judgment without satisfaction against one will be no bar to an action against another.
The case of Drake v. Mitchell (3 East. 251,) examined and disapproved.[1]
At Special Term, June 23, 1859.
Demurrer to a complaint. The complaint alleged that the defendants were engaged in business as copartners, and while so engaged, the plaintiff, at the instance and request of Barrett, loaned to him for the use of the partnership, at divers times between February and November, 1854, various sums of money, amounting to $5,000 and upwards; which the defendants failed to pay, but remain indebted to the plaintiff therefor. That as security for
p. 553
the moneys so advanced, Barrett gave his five promissory notes to the plaintiff, payable in two, three, and four months, for different sums, in the whole amounting to $4,050. That Barrett failing to pay the notes, the plaintiff commenced an action against him upon them in the Superior Court of the city of New York, and recovered judgment therein on September 2d, 1856, for $4,085.51, on which execution was issued and subsequently returned unsatisfied. That the defendants, by reason of the premises and for the moneys so advanced, are indebted to the plaintiff in $4,050, with interest from November, 1854. Further, it was alleged that subsequent to the advancing of the money, Barrett, in addition to the notes, gave the plaintiff, as security, 400 shares of stock of the American Hosiery Company, a note of C. Gr. Judson for $450, and a paper purporting to be a mortgage on property in Philadelphia, which, before commencement of this suit, he offered to give to the defendants on their paying him the $1,050, with interest. That he has always been, and still is, ready to give up such securities to them, and brings them into court to be given up when he is paid the amount so due from them. Judgment was demanded for the amount so due, with interest.
The defendant Paine demurred, and specified the following grounds of objection to the complaint:
I. That there is a defect of parties, because Edward E. Barrett, named therein, is made a party defendant in this action.
II. The complaint does not contain facts sufficient to constitute a cause of action against defendant.
IH. Because the debt set forth in the complaint became merged, extinguished, and barred in the judgment therein referred to, as well to the defendant Paine as to the defendant Barrett.
IV. Because the plaintiff elected to change the nature of his security from a partnership debt into a judgment against Barrett alone.
V. The taking of the notes and recovering a judgment thereon was a satisfaction of the original indebtedness.
p. 554
Jasper W. Gilbert and Charles B. Cromwell, for the defendant Paine.
I. The defendant Barrett is an improper party, judgment having been recovered against him upon the identical indebtedness set forth in the complaint.
II. The judgment against Barrett is a bar. 1. The debt stated in the complaint is a separate one against Barrett. Story on Part., § 134, etseq. 2. Whether joint or separate, it is merge' and barred in the judgment against Barrett. Peters v. Sandfora, 1 Denio, 224 ; Pierce v. Kearney, 5 Hill, 86 ; Moss v. McCullough, id. 135 ; Averill v. Loucks, 6 Barb. 19 ; Hawks v. Hinchcliff, 17 Barb. 501 . 3. The plaintiff, by electing to proceed against Barrett, has elected to change his security. Per Bitoirsopr, J., in Pierce v. Kearney, supra; Robertson v. Smith, 18 J. R. 459; Coll, on Part. (Perkins ed.) § 757, and cases cited in note (3) and note (1).
III. Nor has the plaintiff any title to relief in equity. Penny v. Martin, 4 J. C. R. 568.
IY. The former recovery need not have been pleaded. It is averred in the complaint, and the questions are properly raised by demurrer. Code (Yoorhies’ ed.) § 145, and notes.
Francis Howland, for the plaintiff.
I. There is no defect of parties, a. The defect of parties (Code, § 144, sub. 4,) is a nonjoinder, not a misjoinder. Pinkerton v. Wallace, 1 Abb. 82 . b. The misjoinder of a party defendant is no ground of demurrer by his co-defendant, but by him only and on the ground that the complaint does not state facts sufficient, &c. Brownson v. Gifford, 8 How. 390 ; N. Y. and N. H. RR. Co. v. Schuyler, 17 N. Y. Rep. 592 , 604. c. But Barrett is properly and necessarily a defendant. A demurrer would lie for his non-joinder. Robertson v. Smith, 18 Johns. 459 , 481.
II. The recovery of an unsatisfied judgment against Barrett, on his individual notes, is neither bar, waiver, merger, satisfac tion nor extinguishment of the claim an 1 action against Paine
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and Barrett for money lent the partnership, a. A judgment against one of two joint debtors, without satisfaction, is a bar to an action against the two upon the same identical cause of action only. Ward v. Johnson, 13 Mass. 148 ; King v. Hoare, 13 M. & Welsby, 494; Robertson v. Smith, 18 Johns. 459 ; contra, Shelby v. Mandeville, 6 Cranch, 253 . b. So a judgment against one of two joint debtors upon an individual or collateral cause of action, which results in a satisfaction, by one, of the joint cause of action, is, by extinguishing the debt, a bar to a suit against the other, or against both; in like manner a judgment and satisfaction against one of two joint trespassers is a bar to a suit against the other. Simonds v. Center, 6 Mass. 18 ; Livingston v. Bishop, 1 Johns. 291 ; Thomas v. Rumsey, 6 Johns. 26 ; Robertson v. Smith, 18 Johns. 459 , 473. c. But a judgment against one of two joint debtors upon a collateral or individual cause of action, though for the same moneys, is no bar, on the ground of merger or otherwise, to a subsequent action against the two upon the joint cause of action, unless it is accepted in satisfaction or actually satisfied. Drake v. Mitchell, 3 East, 251. Here Barrett is alleged to have been sued “ on the notes ” which were taken “ as security.” The two causes of action are different, and the evidence is different. Rice v. Ring, 7 Johns. 20 ; Johnson v. Smith, 8 Johns. 299 .
TTT- The fourth ground of demurrer, that the plaintiff elected to change his security from a partnership debt to a judgment against Barrett alone, is in direct opposition to the allegation in the complaint, that it was “ as security ” only.
IY. The fifth ground of demurrer, that the judgment was a satisfaction, is in direct opposition to the allegation that it remains unsatisfied. See cases supra.

The plaintiff’s case, as set out in his complaint, may be briefly stated. He loaned the defendants, Paine and Barrett, five thousand dollars, and, after the loan, took from the defendant Barrett his five promissory notes for $4,050, payable at different periods, as security for the loan. Barrett having

p. 556
failed to pay the notes, the plaintiff brought an action upon them, and recovered judgment. He now sues Paine and Barrett, as jointly'indebted to him in the sum of $4,050, the amount of the notes, and demands judgment against them for that amount, with interest. The defendants demur, and I think the demurrer is well taken.

It is well settled, that the recovery of a judgment against one of several joint debtors, though nothing is obtained upon it, is a bar to any future action thereafter, either against all the debtors or against any of them. Robertson v. Smith, 18 Johns. 459 ; King v. Hoare, 12 M. & Welsb. 494. It cannot be maintained against any number less than the whole; for, as the obligation is joint, an answer setting up the non-joinder of any one of the parties to the contract will abate the action. Ascue v. Hollingsworth, Croke Eliz. 494, 355; Cabel v. Vaughan, 1 Wms. Saund. 291. And it cannot be maintained against all, for a judgment having been previously recovered against one, he cannot, as long as it stands, be again charged in judgment for the same debt. Higgins' Case, 6 Coke R. 541; Lilly v. Hodges, 8 Mod. 541. If the action is brought against any number less than the whole, and no objection is taken by plea in abatement, the defendant will be deemed to have waived it, and the court will give judgment upon it as the obligation only of the party or parties sued. Germon v. Frederick, and Dixon v. Bowman, cited in note 4 to Cabel v. Vaughan, 1 Wms. Saund. 291; Rees v. Abbott, Comp. 832; Lilly v. Hodges, 1 Str. 533; 8 Mod. 166.

But if the contract or obligation be several as well as joint, as in a bond where the obligors bind themselves jointly and severally, the plaintiff has his election to sue all the parties jointly, or each of them separately. He may, in such a case, bring distinct actions against each of them ; and a judgment without satisfaction against one, will be no bar to an action against another; but, though he may maintain distinct actions against each, he cannot unite two in one action, or any number short of the whole. He must either sue them all together, or each of them

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separately. Streatfield v. Halliday, 3 T. R. 782; 10 Year Book, 27 H. VIII, 6 Pl. 26; note to Cabel v. Vaughan, supra.

This case is not strictly analogous to that of a joint and sev eral obligation, in which all the parties to the contract bind themselves both severally and jointly, but a case in which one of two joint debtors gives, in addition, his individual obligation for the debt; and, in support of the plaintiff’s right, after recovering a judgment upon the individual obligation, to maintain an action against both debtors for the debt due by them jointly, I am referred to Drake v. Mitchell, 3 East. 251. The case is certainly in point. One of three parties, who were jointly bound upon a covenant, gave his promissory note to the plaintiff in payment of his liability upon the covenant, and the note not being paid at maturity, the plaintiff recovered judgment against him. The plaintiff then sued all the parties to the covenant, and they plead the judgment against one of them in bar, but the plea was held bad. Lord Ellenborough declared, that he understood the principle, transit in rem judiaatum, to apply only to the cause of action on which the judgment was rendered; thus distinguishing the note as constituting a distinct and different cause of action from that on the covenant; and Grose, J., said that, not having been received in satisfaction, it could operate only as collateral security; that though judgment was recovered upon it, it had not produced satisfaction in fact, and that the plaintiff, therefore, might still resort to his original remedy upon the covenant. I do not consider the reasoning of the court in this case satisfactory, or think that it is reconcilable with the principle recognized and acted upon afterwards in the cases of Robertson v. Smith and King v. Hoare, before referred to. It is true, that in those cases the judgment was recovered against one joint debtor, in an action upon the original contract, but, as will appear from the authorities already cited, the effect of bringing the action against him solely, and of the absence of any plea of non-joinder, is treating it as his contract alone, and as such, judgment is given upon it. The principle upon which the cases of Robertson v. Smith and King v. Hoare rest is, that, after judg

p. 558
ment against one, another action cannot be brought upon the joint contract, as the effect of it would be to render two judgments against the same party for the same debt; and such was the result in Drake v. Mitchell, by giving judgment against all the parties to the covenant after judgment was rendered against one of them upon a note given for the debt due by the covenant. Such is the case here. The notes given by Barrett were for the debt for which he is now jointly sued with Paine, and if judgment is given for the plaintiff here, there will be two judgments against him for the same debt. It cannot be, as Lord Ellenborough and the other judges in Drake v. Mitchell supposed, that actual satisfaction is the test, and that because the plaintiff has taken an individual obligation from one of the joint debtors, he can have two judgments in his favor for the same debt—one upon the joint, and another upon the individual obligation. If satisfaction was the test, and could alone constitute a bar, it would be a complete answer to the objection of the previous recovery of a judgment against one, in an action against joint debtors, that it had not, in the language of the court in Drake v. Mitchell, produced the fruit of a judgment—actual satisfaction. But it was deemed no answer in Robertson v. Smith, which settled the law in this state, and the recovery of the judgment alone was held to be a bar, because it changed an indebtedness upon contract to a debt of record, and for the reason more fully given by Mr. Justice Park, in King v. Hoare, that one of two joint contractors cannot be twice troubled for the same cause; that there could not be two separate judgments for the same debt; and that where judgment has been obtained for a debt, the right given by the record merges the inferior remedy by action for the same debt Nor do I think that the distinction taken by Lord Ellenborough, that the covenant and the note constituted distinct causes of action, was a substantial one. The judgment upon the note was for the same debt, and to render another judgment against the same party upon the covenant, was contravening the principle referred to. The fact is, that the law upon this subject was not well understood, and
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had not been very distinctly defined, when Drake v. Mitchell was decided. When the point came up for consideration in this state, in Robertson v. Smith, that a judgment against one joint debtor was an extinguishment of the right of action against the rest, there was a determination of the Supreme Court of the United States directly the other way, (Sheehy v. Mandeville, 6 Cranch, 253 ), and yet that decision, supported as it was by the weighty authority of Chief Justice Marshall, was, after full examination, deliberately disregarded; and when King v. Boare was decided in England, so late as 1844, the dicta of numerous judges was cited against the proposition contended for, and the point was found to be so unsettled and doubtful upon the authorities, as to draw from Baron Parke, in delivering the judgment of the court, the observation that it was remarkable that the question had never been actually decided in England. If the law, then, was so obscure or unsettled upon this point, it may serve to explain why the judges, in Drake v. Mitchell, thought, in the case before them, that nothing short of actual satisfaction would be a bar.

Separate judgments might be had against the maker and indorser of a promissory note, and against each of the parties to an instrument, where they had bound themselves severally as well as jointly ; but though each judgment is for the same debt, it is against a separate person, and does not present what Chief Justice Spencer, in Robertson v. Smith, declared would be an anomaly in the law, and inconsistent with the notion of a correct and regular judicial proceeding,—twojudgments rendered against the same party for the same debt.

I have gone into this examination of the authorities—though there has been a recent decision in this state which is exactly in point (Peters v. Sandford, 1 Denio, 224 ,)—because the case of Drake v. Mitchell is relied upon here, and does not appear to have been considered, or to have been referred to in the decision of that case. One of two partners purchased a quantity of wool from the plaintiff, for which he gave his promisory note. The plaintiff indorsed the note and passed it away, and not being

p. 560
paid at maturity, he and the maker were sued upon it, and judgment having been recovered, the plaintiff paid the judgment. He then sued both partners for the price of the wool, as purchased upon their joint account. But the court held, assuming that the defendants were partners, and were jointly liable in the purchase of the wool, that the judgment upon the promissory note given by one of them, worked an extinguishment or merger of their liability upon the joint contract. That to extinguish the joint contract it was not necessary that satisfaction should follow the judgment, for the judgment performed that office. This decision is in direct conflict writh Drake v. Mitchell. It was a legitimate and logical deduction from the principle established by Robertson v. Smith, and is decisive of the point in question. I might have given judgment for the defendants upon the authority of this case alone, but as it is in conflict with Drake v. Mitchell, and as the law was assumed by the court without adverting to the opposite ruling in that case, I felt called upon to give the question a more full and extended examination.

Judgment for the defendant upon the demurrer.

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