Price v. Price

R. K. Price was treasurer of the City of Dunbar, with G. N. Price, W. S. Thurston and L. E. Parsons, sureties on his official bond. R. K. made collections on certain paving certificates which he failed to pay to the parties entitled thereto. Their claims exceeded the bond. One of such claimants, G. T. Fogle Company (hereinafter called Fogle), sued R. K. Price, Thurston, and Parsons, in Kanawha County, on the bond, and November 19, 1933, recovered a judgment, which was docketed and an execution thereon issued the same day. (The execution was returned no property found.) November 22, 1933, Fogle instituted an action against G. N. Price, in Roane County, on the bond; and November 24, and December 5, 1933, respectively, two other claimants brought actions in Kanawha County against all the parties responsible on the bond. In March, 1934, and before the three later actions came on for final hearing, G. N. Price brought a suit in chancery asking that further prosecution of those actions, as well as other threatened actions on the bond be enjoined. No mention was made in the bill or the other pleadings in the suit, of the Fogle judgment recovered and docketed on November 19, 1933. The circuit court granted an injunction in the following terms: "It is further adjudged, * * * that all persons, firms or corporations having claims or rights of action upon the bond aforesaid, in which the plaintiff, G. N. Price, is surety, be enjoined and. restrained from instituting or prosecuting any action at law upon such claim or demand, and as well from instituting or prosecuting any suit in equity thereon, except it be to join in and be made party to this suit."

Upon appeal, we affirmed the circuit court, holding,inter alia: "Unless inhibited by statute, equity treats as equal all non-lien claimants of a common fund. Equality is equity." Price v. Price et al., 118 W. Va. 48, 188 S.E. 770,771.

Thurston died in March, 1934, possessed of personal property and real estate insufficient to satisfy the judgment of Fogle, much less other claims against him. In a suit by his administrator to settle the estate, Fogle as a defendant, proved its judgment, and payments thereon were directed. Whereupon, commencing in September, 1937, several non-lien claimants against the Thurston estate, under the Price bond, assailed for the first time Fogle's judgment against Thurston, and sought to participate with Fogle in what was realized upon it. They were denied by the circuit court.

Counsel for appellants contend that the steps taken by Fogle in furtherance of its judgment violated the injunction. We are of opinion that this contention is not well taken. The injunction inhibited only the prosecution of an action at law or a cause in equity on a claim or demand upon the bond, except in the instant suit. Fogle's cause of action upon the bond had been merged in the judgment, prior to the injunction. When so merged the original cause of action ceased to exist. Randerson v. McKay, 77 Okla. 238, 188 P. 323, 42 A.L.R. 464; Noell v.Rd. Co., 335 Mo. 687, 74 S.W.2d 7, 94 A.L.R. 684;Mutual Benefit Life Ins. Co. v. Bachtenkircher, 209 Ind. 106,198 N.E. 81, 104 A.L.R. 1135. Hence, what Fogle did after the injunction, was on the judgment, not the bond, and did not violate the injunction.

Counsel invoke again the maxim equality is equity. But "equity is not the chancellor's sense of moral right, or his sense of what is just and equal. It is a complex system of established law. * * * The maxim that equality is equity can only be applied according to established rules." Savings Inst. v. Makin, 23 Me. 360, 366. It must be read in connection with the maxim equity aids the vigilant. Snower v. Hope,2 F. Supp. 931. And whenever the rights of parties are clearly defined and established by law "equity follows the law * * * despite the rule that equality is equity." Clinchfield Fuel Co. v. Titus, 226 F. 574, 581. Accord: Mathews v. Ins. Co.,75 Ala. 85; Magniac v. Thomson, 15 Howard (U.S.) 281, 299, 14 L. Ed. 696.

Counsel place much dependence on National Surety Co. v.Graves, 211 Ala. 533, 101 So. 190; Illinois Surety Co. v.Mattone, 138 A.D. 173, 122 N.Y.S. 928, and Guffanti v. Surety Co., 133 A.D. 610, 118 N.Y.S. 207. The Alabama case dealt only with threatened and pending law suits, not yet reduced to judgment. So it is not applicable here. TheMattone case held that upon default of an agency to account for moneys received for transmission to foreign countries, the creditors of the agency could sue on its bond only in equity and should share ratably in the sum recovered. That holding was based on Musco v. Surety Co., 132 A.D. 300, 117 N.Y.S. 21, and the Guffanti case, both of which related to a statute requiring one engaged in the business of receiving deposits for transmission to foreign countries to execute a bond conditioned upon faithful performance of the undertaking. The Musco case merely upheld the constitutionality of the statute. TheGuffanti case construed the statute as intending the bond to provide a fund for the benefit of all defrauded depositors and as confining every such depositor to a suit in equity on behalf of himself and the others. Since our statute and the procedure under it are different from the New York statute, we consider these New York decisions inapplicable. Except as controlled by statute, the New York court, like every other authority, has uniformly held "that the vigilant creditor will not be deprived by a court of equity of any advantage or right which he honestly gained by pursuing the remedies which the law places at his disposal before the subject-matter affected has comeunder control of the court." Myers v. Myers, 18 Misc. 663,43 N.Y.S. 737. Accord: McDermutt v. Strong, 4 Johnson, N.Y. Chy. Repts. 687, 691; Purdy v. Doyle, 1 Paige, N.Y. Chy. Repts. 558; Meech v. Allen, 17 N.Y. 300, 72 Am. Dec. 465; StateBank v. Marsh, 1 N.J. Eq. 288; Ross v. Titsworth, 37 N.J. Eq. 333,337; Newell v. Morgan, 2 Harr. (Del.) 225; In re Lord Polk Ch. Co., 7 Del. Ch. 248, 44 A. 775; Mikels v.Stone Co., 34 Ohio App. 442, 171 N.E. 251; Roseboom v.Whittaker, 132 Ill. 81, 23 N.E. 339; Atwater v. Bank, 152 Ill. 605,38 N.E. 1017; Wilson v. Randleman, 116 N.C. 647,21 S.E. 431, 432; Friedman Savings Trust Co. v. Earle,110 U.S. 710, 716 et seq., 4 S. Ct. 226, 28 L. Ed. 301; Smith Eq. Rem. of Creditors, sec. 25 par. 9; Lawrence Eq. Juris., sec. 62.

The charter of the City of Dunbar prescribes that the bond of a municipal officer should be subject to the same enforcement proceedings as the bond of a collector of county levies. Regarding such a bond, Code, 6-2-17, provides that a suit may be prosecuted for the benefit of any person injured by a breach of the condition of the bond. The words of the statute are so plain that no construction would seem necessary. However, in 1866 the Virginia Court made this obvious comment upon the predecessor of our statute: "The statute expressly gives the right to bring separate actions for separate causes of action; and it seems eminently proper that such should be the case. The breaches are wholly distinct causes of action, in favor, generally, of wholly distinct persons and there is no reason or propriety of confounding them in one action." Sangster v.Commonwealth, 17 Gratt. 124, 136, 58 Va. 124, 136. There was no privity between the other creditors of Price and Fogle. Each claim was founded upon a separate breach of the bond. Consequently, we are of opinion that Fogle had the right, under the statute, to bring a separate action.

But it is further contended that conceding a claimant may sue at law and recover a valid judgment on this bond, nevertheless, equity will regard him as having done so as a trustee for himself and all other claimants against the bond, on the theory that the bond was intended to provide a fund for the benefit of all. The lien of a judgment is purely a statutory creation circumscribed by statutory conditions for the preservation or the destruction of its integrity. Lamon v. Gold, 72 W. Va. 618,621, 79 S.E. 728, 51 L.R.A. (N.S.) 883. If the judgment is not assailed within the period fixed by statute (and Fogle's judgment was not so assailed), the lien becomes an "accrued right" of the judgment creditor, "not intended" by the Legislature "to be impaired or destroyed." Caldwell's Exr. v.Prindle's Admr., 19 W. Va. 604, 663. In 1736, Lord Chancellor Talbot held "where a particular remedy is given by law, and that remedy bounded and circumscribed by particular rules, it would be very improper for this Court (chancery) to take it up where the law leaves it, and extend it farther than the law allows." Heard v. Stanford, Cases T. Talbot 173. That impropriety is still recognized. Story Eq. Juris. (14 Ed.) sec. 61; Pomeroy Eq. Juris. (4 Ed.) sec. 425Janney v. Buell, 55 Ala. 408, 411. The Supreme Court of the United States is more emphatic, propounding as a "legal truism admitting of no dispute * * * that wherever the rights or the situation of parties are clearly defined and established by law, equity has no power to change or unsettle those rights or that situation * * *." Magniac v. Thompson, supra. That legal truism is recognized in our own case of Lewis v. Fisher,114 W. Va. 151, 155, 171 S.E. 106, 107, wherein Judge Kenna, speaking for the Court, said of a judgment lien: "Being a purely statutory lien, the jurisdiction of a court of equity, whether it be inherent or whether it be conferred by statute, is, in any event, based upon the statute, and the court of equity taking jurisdiction * * * may not extend it to cases not provided for in the statute itself." In addition to the authorities there cited the following are also accordant: Upham v. Wyman, 7 Allen 499, 502, 503, 89 Mass. 499, 502-3; Disbrell v. Carlisle, 48 Miss. 691, 705; Scott v.Brewing Co., 256 Pa. 158, 100 A. 591, 592; 19 Am. Juris. Eq. Sec. 454. Therefore, it would seem that after a judgment has become unassailable under the statute, a court of chancery has no power whatever, under an equitable trust doctrine, to impair the personal advantage conferred by the statute on a diligent judgment creditor.

The decree is affirmed.

Affirmed.