United States v. Price (50 U.S. 83)

THESE two cases were brought up, by appeal, from the Circuit Court of the United States for East Pennsylvania, sitting as a court of equity.

The United States filed a bill on the equity side of the court at October term, 1843, against the executors of Joseph Archer, deceased, claiming to recover from the estate of said Archer the amount of certain duty bonds, or part thereof. The two cases were alike, except that in one the bonds were signed by Mifflin and Archer, and in the other by Mifflin, Archer, and one Foster. This made some difference in the argument of the cases; but the point upon which the court rested its decision was common to both cases, and renders it unnecessary to notice this difference further.

There was no controversy about the facts in the case, which were these.

In 1828, James L. Mifflin was the owner and importer of three invoices of goods by the ship Nassua, from Canton, to the port of Philadelphia, and said Mifflin duly entered them in the custom-house. Bonds to the United States for the payment of the duties, under the then existing law, were executed by the said James L. Mifflin, the owner and importer, as the principal debtor, and William Foster and Joseph Archer as sureties. The bonds were joint and several, and in the usual form.

In 1829, the United States obtained judgments against all the obligors (Mifflin, Foster, and Archer, then living) in these bonds, upon their joint responsibility, in a suit at law in the District Court of the United States for the Eastern District of Pennsylvania. The judgments were against them jointly, and no process issued against them severally at any time.

In 1840, William Foster, a co-defendant in the judgments and a co-security in the original bonds, after his release by the United States (1833), died insolvent.

On September 28, 1841, Joseph Archer, the co-defendent in these judgments and a co-security in the original bonds, died, and his executor is the defendant in this proceeding in equity.

James L. Mifflin, a co-defendent in these judgments and the principal in the original bonds, was surviving at the date of the filing of this bill and the decree.

The bill, after setting forth the execution of the bonds by Mifflin and Archer, and the recovery of the judgments against them, charges that Mifflin, at the time, and long before the death of Archer, was utterly insolvent and unable to pay his debts; that he had been discharged as an insolvent debtor under the insolvent acts of Pennsylvania, before the death of Archer, and since that event he had been discharged as a bankrupt, under the act of Congress passed in 1841, to establish a uniform system of bankruptcy throughout the United States. The bill further charges that Archer, in his lifetime, and at the time of his decease, being seized of real estate and possessed of a very considerable personal estate, made his last will, and departed this life on the 24th of September, 1841, leaving the same unrevoked, and appointing the defendant his executor, as set forth in the bill. And the complainants aver that the whole of the principal sums, with arrears of interest, and costs of the said bonds and judgments, are still due and payable to the United States, and that by law and equity they are entitled to be paid out of the assets of Archer's estate, in preference to all other creditors, legatees, or devisees, and charge that the executor has been selling and disposing of the estate, and wasting the same, to their injury and loss, and in derogation of their rights. After certain interrogatories, the United States therefore pray, that an account may be taken of the amount due them for principal, interest, and costs; and also an account of the personal estate of the testator, which came to the hands of Price and Bispham, as executors, and to the hands of Price since the discharge of Bispham as executor; and that they shall be decreed to pay to the United States what shall appear to be due and owing to them out of the testator's personal estate, in a due course of administration. And in case the same shall be insufficient for the purpose, then, out of the real estate of which the testator died seized, to make good any such deficiency; and that the right of the United States to a preference in payment out of the said assets, estate, and effects, and the proceeds thereof, may be decreed and established, and for further relief.

The answer admitted the execution of the bonds, and averred that Mifflin was principal and Archer surety. It admitted also the sufficiency of assets and the facts stated above, submitting the case to the judgment of the court upon them.

In October, 1846, the cause came on to be heard upon bill, answer, and exhibits, when the Circuit Court dismissed both bills.

An appeal from this decree brought the cases up to this court.

They were argued by Mr. Johnson (Attorney-General), for the appellants, and by Mr. Miles, for the appellee.

Mr. Johnson, for the United States, made several points, but as the decision of the court turned upon a single one, it is only necessary to notice that one, viz.:--

II. That the bonds were several as well as joint, and each obligor was therefore responsible for the whole debt; and that the joint judgments upon the bonds did not, for the purposes of the present cases, take from the United States the right to consider the estate of Archer as responsible for the whole debt, which they could have done before judgment. United States v. Cushman, 2 Sumner, 434, and cases therein cited; Jackson v. Thorpe, 2 Younge & Collyer, 562.

Mr. Miles, for the appellee, made the following points:--

1. The judgment having been obtained against the obligors jointly, the severalty of the original obligation is determined by the act of the plaintiffs, and the bond is merged in the judgment. If two or more are bound jointly and severally, the obligee may elect to sue on either the joint or several obligation, and if he elects the former, and proceeds to judgment, he cannot afterwards proceed on the latter.

'It is at the election of the obligee to consider such a bond either as a joint or several one.'

Pitman on Principal and Surety, 85; Higgens's case, 6 Coke, 44; Putt v. Rawsterne, Poll. 641; Brown v. Wootten, 2 Vent. 348; Minor v. Mechanics' Bank, 1 Pet. 73; Downey v. Bank, 13 S. & R. 288; Walter v. Ginrich, 2 Watts, 204; Reed v. Garvin's Ex., 7 S. & R. 355; McFall v. Williams, 2 S. & R. 280; Stoner v. Strornan, 9 Watts & S. 88; U. States v. Thompson, 1 Gilpin, 622 (case of duty bonds); Kennedy v. Carpenter, 2 Wharton, 364; U. States v. Cushman, 2 Sum. 310; 1 Saund. 291, note; Cro. Jac. 73; 1 Chit. Pl. 35; Com. Dig., Action, K. 4; 5 Bac. Abr., Obligation, D. 4; 3 T. R. 782; Hurlstone on Bonds, 98; 2 Lev. 228; 1 Ves. & B. 65.

Per C. J. Tilghman:-'A joint and several obligation may be proceeded on either as a joint or several contract, at the choice of the obligee. Having treated is as joint, he cannot afterwards consider it several.' This, although but one be served, and judgment against him only.

Per Kennedy, J.:-'It cannot be questioned that the judgment obtained against the obligors, in an action brought against them jointly, merged the bond, so that no subsequent action against the obligors, either jointly or severally, could be maintained thereon.'

This doctrine is impliedly admitted by Mr. Justice Story, in the proceeding at law before him.