U.S. Supreme Court Ellis v. Jones, 42 U.S. 1 How. 197 197 (1843)
Ellis v. Jones
42 U.S. (1 How.) 197
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF ALABAMA
The law of the State of Alabama, passed in 1821, c. 26, s. 5, which authorizes securities to require of the creditor forthwith to put the bond &c.;, in suit, against the principal, and absolves the security unless the creditor commences suit and uses due diligence to collect the debt from the principal, does not include a case where the parties (principal and security) unite in a joint and several sealed bill.
On 16 January, 1837, the plaintiffs in error executed the following bill.
"$5,000 Wilcox C. H., Ala. January, 16, 1837"
"Twelve months after date, we or either of us promise to pay Montraville D. Taylor, or bearer, the sum of five thousand dollars, value received of him, as witness our hands and seals."
"THOMAS E. ELLIS [L.S.]"
"JONATHAN M. HILL [L.S.]"
"D. ROPER [L.S.]"
"T. B. BETHEA [L.S.]"
At some time after the date and delivery of the above bill, Taylor, the obligee, died intestate and Thomas Jones, a citizen of the State of North Carolina, became his administrator.
In November, 1839, Jones brought suit against all the obligors in the Circuit Court of the United States for the Southern District of Alabama. The defendants were returned "not found," but the suit being renewed to March term, 1840, they were all served with process except Hill who was never reached.
Bethea and Roper severed in their pleas from Ellis. The latter pleaded usury, and that he had only received $4,000 for the bill. Bethea and Roper pleaded that they were only sureties, but their plea not being sustained, a jury was empanelled, who found a verdict against the whole three, for $4,000. As far as Ellis was concerned, there was no appeal, and the only question before this Court was upon the validity of the pleas of Bethea and Roper.
In order to understand these pleas, it is necessary to refer to the laws of Alabama.
The Act of 1821, c. 26, s. 5 (found in Aikin's Digest 2d ed., title "Securities," s. 6, 385), is as follows:
"When any person or persons shall become bound as security or securities, by bond, bill, or note, for the payment of money or any other article, and shall apprehend that his or their principal or principals is or are likely to become insolvent, or to migrate from this state without previously discharging any such bond, bill, or note, it shall be lawful for such security or securities in every such case (provided an action shall have accrued on such bond, bill, or note), to require, by notice in writing, of his or their creditor or creditors, forthwith to put the bond, bill, or note, by which he or they may be bound as security or securities, as aforesaid, in suit, and unless the creditor or creditors so required to put such bond, bill, or note in suit, shall in a reasonable time commence an action on such bond, bill, or note, and proceed with due diligence in the ordinary course of law, to recover judgment for, and by execution to make, the amount due by such bond, bill, or note, the creditor or creditors, so failing to comply with the requisition of such security or securities, shall thereby forfeit the right which he or they otherwise would have had, to demand and receive of such security or securities, the amount which may be due by such bond, bill, or note."
Bethea and Roper filed two pleas, the first of which alleged that they were sureties; that Ellis alone received the consideration for the bill; that the intestate knew this; that until the __
day of _____, 1839, Ellis was solvent, in good credit, and had property sufficient to pay the debt; that on the ___ day of July, 1838, in the lifetime of the intestate, they gave notice that he was required to institute suit against Ellis; that by reasonable diligence, he could have collected the debt from the principal; that the intestate did not and would not prosecute his demand within a reasonable time thereafter, but did not sue until the commencement of this suit; and that Ellis had become insolvent.
The second plea stated the same in substance, with the addition that the notice, given to the intestate requiring him to sue, was in writing.
To these pleas a replication was put in averring that in the single bill sealed with the seals of the defendants, Bethea and Roper did, jointly and severally with the said Ellis, promise to pay, and thereby admitted themselves as principals in the said note and that they ought not to be permitted to aver that they are sureties and not principals, nor that they had no interest in the consideration thereof, because of the admission and promise in the bill aforesaid.
To this replication there was a demurrer, and a joinder in demurrer.
The judgment of the court was that the replication was sufficient in law, and that the demurrer should be overruled, from which judgment Bethea and Roper brought the case up, by writ of error.
The Court being equally divided, the judgment of the court below was affirmed.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Southern District of Alabama and was argued by counsel. On consideration whereof it is now here ordered and adjudged by this Court that the judgment of the said circuit court it this cause be and the same is hereby affirmed with costs and damages at the rate of six percentum per annum.