United States v. Hodge (47 U.S. 279)

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the Eastern District of Louisiana.

It was an action brought against the defendants in error, as the securities upon the bond of the postmaster of the city of New Orleans. The facts of the case are sufficiently set forth in the opinion of the court.

It was argued by Mr. Clifford (Attorney-General), for the United States, and by Mr. May and Mr. Brent, for the defendants in error. Of the argument of the Attorney-General the reporter has no notes.

Mr. May and Mr. Brent, for the defendants in error, divided their argument into three heads, viz.:--

I. That the mortgage discharged the defendants from all liability on their bond to the plaintiffs.

II. That the exceptions were not properly taken.

III. That the action was erroneously brought.

Before entering upon the argument, the preliminary remark was made, that although the court below may have erred in refusing to instruct the jury, yet if the party was not prejudiced by it, this court would not reverse. 5 Peters, 135; 9 Gill & Johns. 439.

If in point of law the judgment ought to be affirmed, the court will affirm it, notwithstanding error. 8 Peters, 214.

I. The mortgage discharged the defendants from all liability on their bond.

This proposition involves three, viz.:--

1st. The facts attending the execution of the mortgage.

2d. The law authorizing it.

3d. The law applying to and expounding it.

With respect to the first subdivision, viz. the facts, the counsel examined the record, to show that the execution of the mortgage was concealed from the sureties; that it was exhibited to the Postmaster-General, and by him referred to the auditor, in whose office it was filed on the 19th November, 1839, and nothing further was done until the 7th January, 1840.

2d. The law authorizing it. (This branch of the argument is omitted, as the court did not appear to question it, inasmuch as the acceptance of the mortgage is considered to be the act of the United States.)

3d. The law applying to and expounding it. This is the important inquiry in the case. The defendants were sureties of Ker, who was the principal in the bond, on which this suit is brought. The United States agree with the principal, without the knowledge or consent of the sureties, in order to secure the payment of his debt, and agree for a large and valuable consideration to give him time for the payment of the debt. The United States receive from the principal a mortgage of valuable property to secure the whole of their debt. This discharges the sureties, because time for the payment of the debt is given, and it is a higher security for the debt.

It is a general rule of law, lying at the foundation of all these contracts, that 'a party taking a surety is bound to notice the nature of his engagement, and protect him.' Hence, the law on this subject is very strict. 7 Price, 132; Pitman on Princ. and Surety, 167, 170, 182, 183; 3 Merivale, 277; 1 Moore & Payne, 759; Holt's Nisi Prius Cases, 84; 2 McLean, 74; 10 Peters, 266, 268; 7 Johns. 337; 7 Taunt. 53; 2 Marsh, 363.

That time for the payment of the debt is given by this mortgage, the following authorities show. 12 Wheat. 554, 505; 5 Howard, 206; 3 Wash. C. C. R. 71; 3 Younge & Collyer, 188, 189; 7 Harr. & Johns. 103; 8 Bing. 156.

A creditor, by giving time of payment, undertakes that he will not during the time given receive the debt from any surety of the debtor; for the instant any surety paid it, he would have a right to demand and recover it from his principal. 4 Bing. 719.

If giving time might injure the surety, he is discharged. It is not necessary that in point of fact he is injured. The law is the same even if he is benefited. He is the judge of that. 7 Price, 225, 232, 234.

This mortgage was also a higher security for the debt. In Louisiana, it amounted to a judgment. Code of Practice, art. 732, 733; 6 Martin, N. S. 465; 15 Peters, 170.

A judgment is a security of a higher nature, and merges a bond. 1 Chitty, Pl. 49, 50; 1 Peters, C. C. R. 301; 18 Johns. 477; 11 Gill & Johns. 14, 15; 6 Cranch, 253; 2 Harr. & Johns. 474.

This mortgage is then a confession of judgment, with a stay of execution for six months, and will discharge the surety. 6 Munf. 6; 3 Call, 69; 6 Gill & Johns. 168.

III. The action was erroneously brought. (The counsel cited many cases from the English authorities and from other States, to show that all the obligors should have been sued, and the following authorities from Louisiana. Code of Practice, 330, note; 4 New Series, 435; 4 La. Rep. 107; 2 Robinson, 389.)

Mr. Justice McLEAN delivered the opinion of the court.