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JULY 1829.

Ellis

v.

Bibb.

R. 532.

most likely, be in conformity to the orginal intention of the parties to the contract, and in him the moral and legal obligation would concur, and he would be bound to the performance. This argument cannot be applied to the security; he is not supposed to be cognizant of the original consideration, nor of the intention of the parties to the contract. This view of the different character of the obligations imposed, distinguishes this case from Standifer v. M' Whorter. a The confirmation set up in that case was, that the al Stewart's. subsequent promise had been made by the original party, and not by a security. If Ellis had been principal and made the subsequent promise, it would have been analogous to the case above referred to; or if Pettus had made a subsequent note to Bibb, for a greater amount than could have been collected from him on the original note, and Ellis had gone security on the last, they would both have been held liable for the whole amount; on the ground, that it was a confirmation of the original undertaking. But if Ellis, a security, has given his own note for a greater amount than could have been collected from his principal, the excess is not supported by a good consideration; and a Court of Chancery ought to relieve him pro tanto. A Court of law would have found some difficulty in scaling the contract, as it was only a part failure of consideration; the consideration was good, commensurate with the liabili ty of Pettus; but that difficulty is not encountered in Chancery. It is urged that the deed of trust from Pettus to Coleman for the benefit of Bibb, and tranferred by Bibb to Ellis at the time the subsequent promise was made, is of itself sufficient to support the promise as a valuable consideration. This argument would have had much force in a Court of law, and would perhaps have been unanswerable; and this may be an additional reason why the complainant should be heard in chancery in preference to driving him to his defence at law. A Court of law would have felt itself confined to the fact of the transfer of the deed at the time the subsequent promise of Ellis was made, and might have felt bound to call it a sufficient consideration in law to support the promise; but a Court of Chancery is not restrained to such narrow limits in its inquiry; it can probe the intention of the parties, and ascertain from the whole transaction, whether the note was given by Ellis in payment for the purchase of the deed from Bibb or not. No one can believe for a moment, after a full examination of the facts, that the deed was sold by Bibb to Ellis; it was

3

Ellis

V

Bibb.

JULY 1829. only given up by Bibb as a kind of forlorn security, out of which Ellis might possibly re-imburse himself for the money he had paid for Pettus, on the revival of the original liability. The Chancellor could not possibly believe that Ellis made his subsequent promise in consideration of the assignment of this deed; and when it is recollected that the negroes named in that deed as sold and conveyed, had been at that time run to parts unknown, beyond the jurisdiction of the United States; the idea that Ellis should have bought them, knowing all the circumstances, is altogether preposterous; and not reconcileable with the ordinary motives of human action. I am of the opinion, that the deed of trust cannot be held to be the consideration of Ellis' promise, but that the prior liability was the moving consideration; and that consequently, Bibb cannot recover more from Ellis than he was originally bound for; and that Chancery should perpetually enjoin the excess. That the decree must be reversed and rendered at complainants cost.

@ 1 Atk. 128. 1 Vesey 331. 1 Ves.jr. 424. 2 Stra. 733.

By JUDGE COLLIER. Leisure has not permitted me to bestow that reflection which was desirable, upon the many questions brought to the view of the Court by the arguments, as well for the appellant as the appellee. I shall therefore forbear an expression of opinion upon many of them, and content myself with considering such points as are deemed decisive of the case, uninfluenced by the operation of others.

It would be a profitless expenditure of language to point out the vast multitude of cases in which Chancery interposes its aid. The jurisdiction of that tribunal is extraordinary, and can only be invoked when Courts of law, by reason of their manner and principles of procedure, cannot administer full, adequate and complete relief; or where if their powers are adequate, the remedy is not well ascertained, or difficult to be made available at law." It is enough to shew that it would have been difficult for the appellant to have defended himself at law; without instistuting an inquiry into the powers of such a Court, predicated upon the facts which the records exhibits.

Had the appellant have alledged in his defence at law against the action of the appellee, that the notes given by him to the appellee on the adjustment of his supposed liability as the security of Pettus, were made without consideration, he would have been met with the transfer of the note of his principal, and the deed securing its payment.

to the appellee, as a consideration for his notes; and he would have found it difficult, if not impracticable, successfully to have counteracted them: even supposing the powers of the law Court adequate to an extension of the inquiry in every shape the defence might assume. Besides, the weight of opinion being against a defence at law for a partial failure of consideration, unless he had have shewn an entire failure, which I am of opinion he could not have done, his defence at law would, most probably, not have been entertained. Without therefore expressing an opinion upon the legal questions presented by this topic of the argument, I have no hesitation in concluding that such defence was, to say the least, doubtful or difficult at law; and hence conclude that chancery should lend its ear.

I am next brought to consider the consideration for making the appellants notes. Surely it was not the transfer of the note and deed of Pettus by the appellee. The appellee does not in his answer pretend that the moving cause with the appellant to make his notes, was that transfer. It is against the course of human dealing to suppose that he would have exchanged his own paper for that of an individual who had fled his country, leaving nothing from which his creditors could coerce a collection of their demands; an individual too, who had just given a striking manifestation of an indisposition to comply with his engagements; an individual who evinced a destitution of a correct sense of moral duty, by a failure to provide an indemnity for his security here, and had fixed his residence in a country, where, if history is to be accredited, justice then had no forum, and strict right few advocates. No, the true consideration of the appellants notes was a compromise of, his supposed liability to pay the note which he had before underwritten for Pettus; and though an application of the principles of law, as administered in such a Court, might consider the transfer of the note and deed of Pettus as a consideration; chancery, without relaxing the rules of law which obtain there, can view the facts as they really exist, and administer justice upon a more enlarged system. In its comprehensive grasp it looks beyond the letter of the contract, to ascertain if practicable, as the most unerring rule by which a correct understanding may be attained, the true state of fact, and the intention of the parties. What are the facts? The appellee held a note on William Pettus and Freeman Pettus, and the appellant as his security; in March, 1821, he gave day to the principal, on his making

JULY 1829.

Ellis

v.

Bibb.

JULY 1829.

Ellis

V.

Bibb

& Comegys & Pershonse v.

a conveyance of personal property, in trust, for its payment twelve months thereafter. This arrangement between the appellee and the principal debtor, was made without the assent of the appellant. Some few months afterwards, when be was advised by the appellee of the arrangement, he seemed to be pleased, said his responsibility was diminished, but did not further consent or object to a continuance of his liability; about six months after this advice to the appellant, his principal left this State, taking with him to Texas, one of the Mexican States, the property conveyed for the security of the debt; and there, he himself has since resided. So soon as these latter facts were known to the appellee, he endeavoured to adjust with the appellant the note of his principal; and as an inducement to him to renew or acknowledge his liability, agreed to remit a portion of the excessive interest; and upon perfecting the compromise, did actually make such remission.

I am of opinion, that the indulgence given by the appellee to Pettus, discharged the appellant from all liability as his security; that the giving of time was a new contract, to which he was not a party, and therefore could not be obliged for its performance by Pettus. That the liability even of the principal himself on the original contract, was merged in the contract giving further time, or the remedy upon it thereby suspended until the expiration of the time fixed for its payment by the modified contract. As the appellee voluntarily renounced, without the appellants consent previously or simultaneously given, the right to coerce payment of the note from his principal for a time, it must, as it respects the security, be gone forever. To determine otherwise, would be to create a liability Cox& Harris. without the consent of him on whom it is imposed. I say 1 Stewart's to create a liability, for as it has been said, the pre-existing McLemore v. liability was entirely extinguished by the act of the appellee; and this rule is founded upon wise reasons. If the creditor were to permit the contract first entered into to remain unsuspended in its force, he might perhaps, before the day when the modified contract was to be performed, obtain a compliance with the original, either with or without a resort to legal coercion; or if the creditor was about leaving the country, he might cause process to be executed, which would insure the amenability of his person, and consequently his property. On this point it is needless to go more into detail, the case of Comegys and Pershouse v. Cox and Harris, is considered as decisive.

R. 262.

Powell.

[12 Wheaton.

The appellant being discharged by the indulgence to Pettus, what consideration was there for his notes to the appellee? If Pettus had removed himself and property beyond the reach of legal process without an effort on the part of the appellee to restrain him, the appellant would have been under no moral obligation to indemnify him to the extent of his original liability. This I say would have been the case, if this feature of the cause could be divested of all other circumstances calculated to exercise an influence on it; but the circumstance of the appellants not objecting, but rather professing, when advised by the appellee, to be pleased with the agreement with Pettus, though not constituting a promise in itself, because too equivocal in its import, is from the sense in which the appellee must have understood it, to be considered as imposing a moral obligation upon him, to the extent of his original liability; and the notes executed by him to the appellee upon the compromise are, pro tanto, recoverable.

JULY 1829.

Ellis

V.

Bibb.

A security unless discharged in the manner mentioned, or in some other way, is to be considered as continuing under a moral obligation to pay the debt of his principal; but this obligation only extends to perform the contract so far as his principal and himself were responsible upon it. The undertaking of the security is, that his principal shall perform his contract according to law. This Court having decided in June 1824, in the case of Henry and Winston v. Thompson, a that on such a note as the one underwritten by the appellant, the excessive interest was only recoverable up to Rep. 335. its maturity, and that after that time, it drew the statute rate; I am of opinion that the appellant's liability should be graduated by that rule.

I take pleasure in remarking, that this cause has been argued with distinguished ability; but while with the ut most sincerity, I make this declaration, I must be permitted to say, that many of the conclusions of the learned counsel for the appellee were founded on false hypothesis, and generated by a neglect to distinguish between the case of a principal and his security.

I concur in the conclusion of the opinion of the Court, but express no opinion on any point not embraced by this opinion.

Decree reversed and rendered.

Judge CRENSHAW presided below and did not sit.
SHORTRIDGE and GAYLE, for plaintiff in error.

HOPKINS and M'CLUNG, for defendant.

a Minor's Ala

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