ERROR to the circuit court for the district of Georgia, in a chancery suit, in which Field, Hunt, Taylor and Robeson, were complainants, and Holland, Melton, Tigner, Smith, Cox and Dougherty, were defendants.
The decree of the court below dismissed the bill as to all the defendants.
The bill stated that, on the 21st of July, 1787, Micajah Williamson obtained from the state of Georgia a grant of 12,500 acres in Franklin county, in that state. On the 9th of July, 1788, Williamson conveyed to Sweepson, who, on the 23d of July, 1792, conveyed to Cox, who, on the 3d of September, 1794, conveyed to Naylor, who, on the 18th of December, 1794, conveyed to the complainant Field, and one Harland, as tenants in common, and that Harland afterwards conveyed his undivided interest to the other complainants.
That the defendants Melton, Tigner and Smith, claim title to the land in virtue of a sale made by the sheriff to the defendant Melton, upon two writs of fieri facias, founded upon judgments obtained by the defendant Holland against the defendant Cox; one in the year 1793, for 1,556l. the other in 1794, for 3,000l. which executions were levied, and sales made thereon in 1799. That the complainants were ignorant of those judgments at the time of their purchase. That the judgments, or the greater part thereof, were paid and discharged by Cox before the executions issued thereon; but the sheriff, well knowing the same, proceeded to levy and sell, &c.
That John Gibbons, the complainants' agent, exhibited to the sheriff an affidavit stating that the executions had issued illegally, on which it became the duty of the sheriff to return the same into court, and discontinue ministerial proceedings thereon until the judgment of the court whence the executions issued was first had and obtained in the premises, according to the provisions of the act in such case made and provided. The affidavit of Gibbon stated, that the executions were illegal because they had not been credited with a partial payment made by Cox.
The bill states that the sheriff's sale was fraudulently made with a view to get the land at a very low price; the sale being for 300 dollars; and the land worth 25,000. That the purchaser Melton, at the time of his purchase, knew of the complainants' title, and indemnified the sheriff for proceeding in the sale, and agreed that he should participate in its benefits.
MELTON's answer states, that in the year 1787, having land warrants, he surveyed three tracts of 920 acres each, on what he then supposed was vacant land, but which appears now to be within Williamson's elder grant, of which he had no intimation till the year 1797, when he had sold parts of his surveys. Finding that Naylor had Williamson's title, ahd being desirous of protecting the titles of so much of the land as he had sold, he purchased of Naylor 4,505 acres. That with the same view, he afterwards purchased a judgment against Naylor, which he discovered was prior to Naylor's deed to him; upon this judgment, he caused an execution to be issued, and levied upon the land which he bought in at a fair sale, under the execution, for 300 dollars. That afterwards, finding that the land had been sold for taxes, and purchased by George Taylor, he purchased Taylor's claim, and paid him 300 dollars for it. That in June, 1799, he first heard of the claim of the complainants, and made a verbal agreement with Gibbons, their agent, for the purchase thereof, at a dollar an acre; but finding Holland had a prior judgment against Cox which bound the land, and which he was about to enforce by an execution and sale of the land, and Gibbons having failed to compromise with Holland, or otherwise to stop the sale, he (Melton) agreed with Holland that he (Melton) should become the purchaser at the sale, and would pay Holland 1,500 dollars for the land without regard to the sum at which it might be struck off to him, which sum he has paid. That this was done without any fraudulent intention, and to secure his title; being fully satisfied that the lands were liable to the judgments.
The answer of Dougherty, the sheriff, denies all fraud, combination, and interest in the transaction, and avers, that be acted merely in the discharge of his official duty; and that the sale was fair and bona fide.
Smith's answer is immaterial, as it relates only to 75 acres of the land which he claimed under a title prior to the complainants.
Tigner answers merely as to 357 acres which he purchased of the defendant Melton, in the year 1797.
Holland's answer states, that subsequent to the two judgments, he made large advances to Cox in goods, and took his obligations.
It states sundry payments and negotiations made by Cox, particularly three drafts, or inland bills of exchange, given by Cox to Holland in February, 1795, and payable in May, June, and July following, for which Holland gave the following receipt: 'Washington, 21st February, 1795. Received from Zachariah Cox, Esq. three sets of bills of exchange, dated the 5th and 15th instant, for twenty thousand dollars, payable in Philadelphia, which when paid will be on account of my demand against said Cox.'
That in September, 1796, a settlement took place between Cox and Holland, of all their transactions distinct from, and independent of, the two judgments, and Holland took Cox's note for 18,000 dollars for the balance, and gave a receipt, with a stay of execution upon the two judgments for three years.
That the judgments 'never were dormant, but have been regularly kept alive and remain unsatisfied.'
That it was an established rule between Cox and Holland, that all payments made were to go to the discharge of running and liquidated accounts, independent of the judgments, and that mode of settlement was adopted on their last settlement in 1796.
The answer of Cox states, positively, that the judgments were paid and satisfied, as early as the 14th of September, 1796, by settlement of that date, when the parties passed receipts in full of all past transactions.
That the three bills of exchange, amounting to 20,000 dollars, were by him delivered to Holland on account of the two judgments, and that the bills have been duly paid and discharged.
That the settlement of the 14th of September, 1796, was a final settlement of all accounts prior to that day, including judgments, bonds, notes, and all demands whatever up to that time, and particularly the judgments in question. That they exchanged receipts in full, ('which receipt the defendant has lost or mislaid.') That, upon the settlement being made, Holland promised and verbally engaged to enter up satisfaction upon the said judgments.
The evidence on the subject of the payment of the judgments consisted principally of Mr. Vaughan's deposition, and the letters and receipt of Holland for the bills for 20,000 dollars.
Mr. Vaughan stated, that although he had no particular knowledge how Holland and Cox settled, yet when a new advance was made by Holland to Cox, after the 14th of September, 1796, he understood the old concern was settled. In a letter from Holland to Vaughan of the 18th of April, 1795, enclosing the bills for 20,000 dollars, he says, 'you will oblige me much by procuring the payment of these bills. I have delayed the execution and sale of Mr. Cox's property to the great injury of my own affairs, and I request you may assure him that should the bills not be paid immediately, the consequence must be an assignment of the judgment against him, the result of which will be an immediate sale of his property, which I will not be able to prevent, unless his punctuality in this instance steps forward.' 'The late stoppage of Mr. Morris and Nicholson, I am fearful may affect them, but as they, together with Mr. Greenleaf, are concerned with Mr. Cox, in the valuable property which my execution is upon, I expect they will for their own sakes see me satisfied, and these drafts paid, to prevent worse consequences.' He afterwards says, 'I have not security by judgment to the extent of my debt against him.' He also urges Mr. Vaughan to obtain security from Cox in case the bills should not be paid. In a letter of May 29, 1795, Holland again says, 'I hope you will be able to make some arrangement for the payment of the 18,000 dollars, as I feel a reluctance in pushing the execution I have against the property of Mr. Cox, although by doing so I would make some thousands.'
It appeared from Mr. Vaughan's account with Cox, as stated in his deposition, that the bills for 20,000 dollars, and also a draft on I. Nicholson for 2,570 dollars, and 10 per cent. damages on the 20,000 dollars, excepting a balance of about 1,500 dollars, had been paid before the 6th of February, 1796; and Mr. Vaughan had given up to Cox his drafts of 18,000 dollars, and 1,000, and 3,000 dollars, all of which had been given to Holland on account of prior claims. On the 23d of December, 1803, it was agreed by the parties to this suit, that W. W., I. W., and J. C., or any two of them be appointed auditors, with power to examine all papers and documents relative to payments made by Zacharian Cox, in satisfaction of judgments obtained by Holland against him, and charged in the bill to be satisfied.
On the 21st of April, 1804, the auditors reported that they were of opinion, from the papers laid before them by both parties, that the judgments had been satisfied by payments made prior to February, 1796.
Upon exceptions being taken to this report, it was set aside on the 14th of May, 1804, and G. A., I. P. W., and E. S. were appointed auditors by the court, to report whether the judgments were really satisfied; and that they report a statement of the payments made on the judgments.
On the 7th of December, 1804, those auditors reported that they were of opinion that no payments appear to have been made on the judgments, no vouchers having been produced to that effect.
To this report exceptions were filed on the 14th of December, 1804. It does not appear upon the record that nay order was taken either respecting the report or the exceptions to it.
On the 17th of May, 1805, the court decreed, that the bill should be dismissed with costs as to Melton, Dougherty, Smith and Tigner; and that Holland should bring an action of debt upon the judgments against Cox, who was to appear by attorney and plead payment, upon the trial of which issue, the bill, answers, exhibits, and testimony in this cause was to be considered as evidence.
No other notice is taken of the order for an issue at law, and on the 15th of May, 1807, the court passed the following decree.
'This cause is involved in much obscurity, but, upon mature deliberation, we are of opinion that there is sufficient ground for us to decree upon. The defendant Holland is in possession of a judgment against Cox, which the latter contends is satisfied, and one of the objects of this bill is to have satisfaction entered of record upon the said judgment. The only difficulty arises upon the application of sundry payments which the complainants contend extinguished the judgment, but which the defendant Holland replies were applicable to other demands. The principle on which the court has determined to decree is this; that all payments shall be applied to debts existing when they were made, and as it appears that there were sundry demands of Holland's on Cox which were not secured by judgment, that those sums shall be first extinguished, and the balance only applied to the judgments.
'This application of those payments is supported by general principles, as well as the particular circumstances of the case.
'1. The payer had a right at the time of payment to have applied it to which debt he pleased where a number existed, but if he neglects to do so, generally, it rests in the option of the receiver to make the application. In this case Cox takes his receipts generally. Even when the large payment of 20,000 dollars was made, he takes a receipt on account.
'2. It appears that the application of those payments has actually been made in the manner we adjudge; for from a letter of Mr. Vaughan, through whom most of the payments were made, he intimates that he had given up the evidences of several debts to Cox, because they had been satisfied. Such an act could only have been sanctioned by a ...