Mitchell Hinsdill vs. Harvey Murray et al., 6 Vt. 136

The opinion of the court was pronounced by Phelps, J. — This bill alleges, in substance, that the orator and the respondent, Harvey Murray, were co-sureties for Allen and Warren Murray, at the Burlington Bank.— That A. and W. Murray, being in failing circumstances, on the 12th of July, 1827, assigned to the respondent, H. Murray, certain personal property for the joint benefit of Harvey and the orator, to secure them from their liability at the bank. — That the property was subsequently attached by Boynton and Hurlbut, who were also creditors of A. & W. Murray.

For this taking, Harvey brought his action of trespass, and secured a sum sufficient to indemnify himself and the orator against the bank note. — That the orator has since been compelled to pay of that note the sum of ‡538,99 ; and the bill prays, that the respondent, Murray, be decreed to reimburse the orator out of the sum pledged.

It further states, that the respondent, Murray, is insolvent, and that the judgment against the other respondents is unpaid; and Boynton and Hurlbut are made parties, and á temporary injunction against the payment of the judgment to Murray has been had, with a view to obtaining a decree for the payment of the same directly to the orator. The controversy between the parties originates in the denial, by the respondent, that the property was received upon the terms stated.. He insists, that it was assigned to indemnify him for certain several liabilities for A. & W. Murray, and not as a provision for the bank debt.

He endeavors to make title to it, first by virtue of an attachment by him on the same 12th of July, 1827, under color of which he took possession of it; and, secondly, by a subsequent sale and purchase, on the 14th of July, and the application of it to extinguish certain separate liabilities of his for Allen Murray. With respect to the attachment, it appears to have been made, in an action for money paid, grounded on certain liabilities as surety, which had not been discharged, and of course was premature.

The subsequent sale took place after the goods had been removed from Hinesburgh to Williston, the defendants’ place of residence; and in that arrangement, it appears, that the estimated value of the property was, by agreement between Allen Murray and the respondent, endorsed on a certain note from Allen to respondent, for the sum of $2600, which purports to have been executed on the 2d of October, 1826. This note is conceded to have been given merely as a means of obtaing security for outstanding liabilities, and to have no other consideration.

Of the existence of such note, previous to the 14th of July, 1827, we have however no satisfactory evidence; and in the absence of such evidence the presumption is, under the circumstances of the case, that it was fabricated for that occasion. The first question presented by the case, is the question of fact, whether the property in controversy was received by the respondent, either as security against the liability at the bank, or, as the means of discharging that debt.— On this point, we have, on the part of the plaintiff, the testimony of Asa Hall, J. Boynton, W. Hurlbut, Ira Burdick, Samuel Hurlbut, and IraE.

Sperry, six witnesses, all (with possibly one exception) 'unimpeached, and as we are bound to believe, unimpeachable — whose testimony to the positive declarations of the respondent of the truth of the allegation in the bill, is explicit, direct, and unequivocal. On the other hand, we have the respondent’s answer, and the testimony of Allen Murray; (for the other testimony for the respondent has so little bearing, on this point, that I lay it out of the case.) Giving -to this last testimony all the weight which is claimed for it, the preponderance of evidence isnumerically against it.

Still it must be admitted, that the weight of evidence is not always to be determined by this criterion.

Let us therefore examine this answer: • In the first place, the denial in the answer, if it be understood as a direct denial of the allegation in the bill, is directly and irreconcilably at war with the respondent’s own declarations to the six several witnesses mentioned above— declarations so often repeated, at various times and places, and vouched by the testimony of so many separate witnesses, all harmonizing with each other, that there is scarce a possibility left, of misapprehension of his meaning, or of intentional imposition on the part of the witness.

In the next place, there is something extremely suspicious in that part of the answer relating to the attachment by him, and the note for $2600. He alleges that note to have been executed on the 2d of October, 1826, yet in July following, he made the attachment in a form in which he was aware, as he says, upon reflection, it could not be supported. It is probable also, that he was so advised by his counsel. Why then was not that note made use of, as the basis of an attachment which could be .made effectual, instead of bringing an action for money paid, which he knew could not be sustained?

The pretence that the note was forgotten, on such an occasion, in an affair of this magnitude, and when his attention was called to the necessity of some such available security, is hardly credible.' There is also another view in which *h’s answer maybe regarded, and which may serve to reconcile the testimony. The transaction at Hinesburgh, at the time of the attachment, and that at Williston afterwards, may be kept distinct. The answer proceeds to state the agreement at Williston, when the amount of the property was endorsed on the note, and then follows the denial of the fact in controversy.

Now if we consider the denial as having refer'ence to that part of the transaction alone, (of which construction the phraseology of the answer admits) the evidence is readily reconciled, upon the |upposition, that, although the original understanding was such as the plaintiff insists, yet upon the consummation of the business at Williston, it was otherwise. Upon this

interpretation the answer evades the merits of the case. There is still another way in which the evidence may be reconciled. The answer denies that the property was secured by the respondent, for the benefit of the orator jointly with himself. Admit this to be true. The testimony of the several witnesses mentioned above, proves, that the respondent declared repeatedly at the time, that the orator was to be benefitted by the security. Take this also for truth; and what is the result? That the respondent practised an intentional deceit. The only assignable motive for this is to be learnt from the testimony of W.

Hurl-but, who was acting in behalf of the orator in his temporary absence, and seeking security for him. It was doubtless to induce the orator and his agent to rest satisfied, upon the supposition that he was already secure, until -the respondent could appropriate the whole property to himself. Having thus ascertained the various results to which we may arrive upon the answer, let us examine the testimony of Allen Murray, which professes to sustain it. In his direct testimony, he states the note for $2600, to be an absolute debt.

He takes no notice of its having referred to other liabilities, or of its being intended to secure any contingent liability. The answer alleges, that the note “was given solely as an indemnity,” &c. And the note itself, which is produced, purports, on the face of it, to be given “ for debts for which he (H. M.) is holden for me.” In his answers to the cross interrogatories, the witness admits that the note was given as an indemnity, and he then attempts to state the various liabilities as follows: To Selah Murray a note for about $800 “ Calvin Morse, .... 500 “ C. Russell, ..... 500 “ H. & S.

Bradley, . . . 300. — $2100.00. And he says there might be some others. The respondent in his answer states only the debts due to Russel & Bradley, amounnting together to $800, although he alludes to a payment to Morse. The deponent also denies that the property was assigned for the purpose of securing the bank debt; but his deposition is liable to the same explanation as is given to the answer, viz : that deponent refers to the final contract at Williston. His answer to our interrogatory is, “ That when said property %oas turned out as aforesaid, (i. e. at Wil-liston) he did not agree,” &c.

It is somewhat singular, that neither the respondent nor the witness should have adverted to the distinction between the understanding at Hinesburgh and the after agreement at Williston, and it is strange, (if their consciences would permit them to do it,) that they did not negative the supposed original understanding. This may appear to be refining upon phraseology; but where testimony is apparently conflicting--, it is necessary to scrutinize it closely, and attend to its precise import; more especially where the testimony of the witness, as in this case, is inconsistent with his statements elsewhere.

It is sworn by Hall, Boynton, Hurlbut, and Burdick, that Allen Murray, the deponent, stated to them, that the property in question was turned out to them to secure the bank debt; and it is remarkable that three of these witnesses fix this declaration of the witness on the 12th day of July, the transaction at Williston having taken place on the 14th. If there be any reliance upon this testimony, the only explanation that can be given to that of A. Murray is, that he refers to the contract at Williston alone.

Boynton s«ays, that he understood, from both the respondent and Allen, “ that Harvey attached the property, to secure it for the benefit of said Harvey Murray and Mitchell Hins-dilland this on the 12th of July. William Hurlbut’s testimony is to the same purport. Besides, we have a letter addressed by Allen to Harvey, dated the 12th of July 1827, in which he states, “ it is my wish and expectation, that the property attached by you should go to pay the bank note of $750,” &c.

It is then placed beyond a question, either that the witness’ testimony is to be taken as restricted to the agreement at Williston, or he has stated an untruth. The result of this examination of the evidence in the case is most obviously this. Either the property was orig'inally placed in the hands of the respondent, for the benefit of the orator as well as himself, or he deceived the orator and his agents with that pretence, until he had placed the property beyond their reach and secured it himself. It is not important, to the decision of the cause, which supposition we adopt.

Upon the first, it certainly was not competent for the respondent, after Hinsdill or his agents had been advised of the proceeding, and had, relying on the security, omitted to take other security, to alter the destination of the property, even with the consent of the principal.

No rule of law is better settled than this, that if one of two co-sureties take a pledge from the principal, or receive property from him, as a means of indemnity against the joint liability, the other is entitled to the benefit of it, so far as respects an application of it to the debt; and if the latter is compelled to pay the debt, he is entitled to the fund. This results from his right to an indemnity as respects his principal, and the principle of contribution as regards the co-surety.

If we adopt the other supposition, the question is reduced to this, Will this court countenance falsehood, deception and bad faith, in business transactions, or lend their aid to consummate a most palpable fraud ? It is very obvious that, had Hins-dill not been deceived, he might have obtained security on the property in question. The defendant’s suit was premature and might have been defeated; and nothing further was necessary than to attach the property for the benefit of Hinsdill and defend the first suit.

He might perhaps have obtained other security; but he was diverted by pretences of the defendants which he now asserts to be false. We cannot prevent the party from alledging his own turpitude, if he choose so to do, but we can prevent him from protecting himself by his own fraud, or turning his turpitude to advantage. The orator is, without question, entitled to indemnity out of the fund, as against the respondent Murray. As to the other respondents, it is a matter of no interest what is the issue of the case.

Payment of the judgment against them having been suspended to await this determination, it is immaterial to them, to whom they pay the money. If the orator is entitled to the money as against Murray, and if he be insolvent, the court will not hesitate to follow the funds in the hands of third persons, if it can be done without injury to them. The decree will be, that the respondents, Boynton and Hurlbut, pay to the orator the amount due him on account of the bank note, with the costs of this suit, and the balance of the judgment, if any, to Murray; and upon such payment that Murray be perpetually enjoined, &c.