
    Stephens v. Greene County Iron Co.
    1. Bepdevy Bond. Estoppel. A party'obtainiug a replevy of property attached, is estopped to deny the validity of the bond or proceedings under which he gets the possession. Code, secs. 773-4.
    2. Same. Want of Title no Defense. A defendant in attachment, having the option to give replevy bond for the return of the property or the payment of the debt in the event of decree against him, if he give bond to pay the debt, can not prevent a decree on the bond by showing that he did not have title to the property.
    3. Mortgage and Deed of Trust. Suit for Debt mthout Deference to. The fact that property has been conveyed by mortgage or deed of trust to secure a debt, does not preclude the creditor from suing on the debt and collecting it through execution; nor, should he fail to get satisfaction through the execution, will he be precluded from afterwards filing a bill to enforce the mortgage or deed of trust lien.
    EEOM GEEENE.
    Appeal from decree of the Chancery Court at Greeneville, May Term, 1872. - H. C. Smith, Ch.
    McKee, for complainant, said:
    This is an attachment bill against a non-resident corporation. It sets up an indebtedness by the respondent to the complainant in several sums, amounting in the aggregate to upwards of $2,500, or thereabouts; prays for attachment, publication and decree for the amount of the indebtedness. Attachment accordingly issued, under a fiat by the master, as authorized by sec. 3463 of the Code, and by the sheriff was levied on 104 tons of pig metal, at the depot in Green eville, on the 18th December, 1871, as the return shows • and it also shows that, on the 14th March, 1872, the respondent, together with Gleason, Sevier and Reaves as sureties, executed “a bond,” which was “payable to the complainant, in the sum of $5,000, conditioned to pay to complainant the full amount of his demands against the said company should the cause be determined in favor of complainant.” The return then recites that “ by direction of complainant, said bond is hereby returned as a delivery bond, and made a part of this return” (p. 19). The bond, which is styled • a “ delivery bond ” (pp. '30, 31), is conditioned that it is “ to be void . on condition that if the above bounden Greene County Iron Company, principal, and Wilbur F. Gleason, Charles L. Sevier and James' G. Reaves, sureties, shall well and truly pay to the said Samuel L. Stephens the just and full sum of two thousand four hundred and seventy-five dollars, and the lawful interest thereon, and costs in the court, if the attachment suit now pending in the Chancery Court of said county of Greene, and State of Tennessee, for the collection of said sum of $2,475, wherein the said Samuel L. Stephens is complainant and the said Greene County Iron Company is defendant, should, at the final hearing , thereof, be determined in favor of the said complainant.” The return shows that the iron was “levied on as the property of the Greene County Iron Company.”
    The answer expressly admits the several sums of indebtedness set up in the bill (the evidences of which are filed as exhibits to the bill, p. 20. The answer also asserts that on the 14th of August, 1871, it sold to Blake all its personal effects in Greene county, including the property attached in the cause, and that the same was afterwards sold by the latter to Gleason. It is then insisted in the answer, according to its language, “that said property having been legitimately sold and transferred, it was not liable for complainant’s debt, and that said attachment is therefore void.” These conveyances are exhibited with the answer. The answer next sets forth that, about June or July, 1871, a “deed of trust” was made by the respondent to complainant to secure the indebtedness claimed in the bill, covering cord wood, ore and charcoal, the value being greater than complainant’s debts; and that it was provided in the “deed of trust” that if any of the property conveyed by it was used by the defendant it was to “be supplied”; that, as respondent remembers, the deed of trust was to run six months — the bill was filed December 18, 1871, — and if the debts were not paid at the end of that time, “complainant was to take possession of said property or sell the same,” and that “defendant was to retain possession,” etc.; that the deed of trust was accepted by the complainant, and then insists that the complainant was bound by the deed of trust; and, in the language of the answer, “complainant could not revoke it.”
    The cause was heard on bill and answer without proofs, and a decree pronounced dismissing the bill, from which complainant appealed to this court.
    
      1. Did the Chancellor err in dismissing the bill? The respondent relies upon two grounds of defense, namely: the iron attached did not belong to it, and that complainant, under the pretended deed of trust, liad security for his debts, which he did not seek to apply to their satisfaction, but disregarded it and brought suit. It is not even asserted in the answer that complainant, previous to bringing his suit, had never surrendered his surety, in whatever form he may have held it.
    As to the first ground, it may be said that the question of the title to the property attached can have nothing to do with the question of respondent’s liability to complainant. The respondent appears and answers, and makes no objection whatever to the jurisdiction of the court; and without this, the Chancellor properly heard the cause, even if no attachment had been levied at all.
    And as to the next — that is, that complainant held security for his debt, which he did not apply to his debt before bringing suit, — it is insisted that this, whatever it might avail as a defense if properly presented, is in no way responsive to the bill, and, moreover, is presented in the answer of a corporation which can not be upon oath, although the answer in this case is sworn to by Gleason as “agent- for the Greene County Iron Company,” and no testimony whatever was taken. But the answer itself shows that the respondent retained actual possession of the property embraced in the pretended deed of trust, and had the privilege of using it, and all was consumable in the use (pp. 22, 23). Nor is it stated in the answer that complainant ever was offered or had actual possession of the property. It is therefore insisted that the decree is clearly erroneous. .
    2. Is the bond which was returned by the sheriff with the attachment, and which is expressly made a part of his return, a replevy bond in its essentials, so that decree can be pronounced on it by this court for the amount of the debt due from respondent? And although it does not refer to the attachment, or the levy of it on the metal, in itself, yet, as a part of the sheriff’s return of the attachment, its connection is completely identified; and, under the construction authorized by statute — Code, sec. 3512 — by the reference there made to secs. 773 and 774, it is insisted that it has the effect in every sense of a re-plevy bond, and as such, its makers are liable for complainant’s demand by decree in this cause.
    Reeve, for defendant, said:
    1. In this case, the bill alleges certain indebtedness, and seeks to satisfy the same • by attaching the personalty of the defendant as a non-resident.
    2. The answer admits the indebtedness is just. Among other things the answer states, that to secure said liability, a deed of trust was made about the last of June, 1871, conveying to complainant a large amount of cord-wood, three or four hundred tons of ore, and about twenty thousand bushels of charcoal, the value of which being largely in excess of the said debt. The said instrument was to run six months from date, and then, if said debt remained unpaid, the complainant was to take possession of the said property, or sell the same. The defendant states that the identical articles conveyed in trust were held till after the six months had expired. The defendant further states, and insists, that said deed of trust is still in force and has never been revoked or annulled, and that after accepting the same, the complainant could not revoke it, but is bound by its terms; and that if the defendant is guilty of a breach of the same, the complainant’s remedy is clearly defined by the law to be for breach of trust: Hill on Trustees, side p. 518, et seq. The property was conveyed directly to the creditor, and possession was retained by the debtor, who was, in law, a trustee: 1 Col., 155.
    3. The deed of trust was assented to and accepted by the complainant, and is irrevocable: 2 Kent’s Com., 533; 7 Hum., 304; 3 Yerg., 267, 270; 10 Yerg., 146, 168; Ang. on Ap., 17, 35, 168, 173; 4 Cold., 626.
    4. Hence, as the said deed of trust is still subsisting between these parties, and as no step has been taken to cancel or revoke the same, the decree of the Chancellor dismissing the said bill must be affirmed.
   Feeemaít, J.,

delivered the opinion of the court.

This is an attachment bill filed to collect an indebtedness due complainant by defendant, a non-resident corporation.

An attachment issued, and was levied by tbe sheriff of Greene county on a lot of pig-iron as the property of defendant.

The defendant appears and files an answer, making several defenses to the bill, and the case was heard on bill and answer and exhibits, without any proof being taken.

The Chancellor dismissed the bill, and complainant appeals to this court.

We do not deem it necessary to notice but one of these defenses as set up in the answer.

It is insisted in the answer that complainant is precluded from bringing this suit, by the fact alleged that defendant had sometime before conveyed a considerable amount of property, by deed of trust, to secure this debt, said property, however, remaining in the possession of defendant. This can be no defense to any suit prosecuted either at law or equity for the recovery of the debt. If the debt is recovered in this proceeding, or is paid by defendant, the property is discharged from the trust, and defendants have their property free from the encumbrance. It is well settled that a mortgage, or deed of trust, is but a security for the debt, and a creditor, by note or other legal evidence of debt, may, at his election, bring his action on the note, or legal liability, or proceed upon his mortgage or trust security; and a judgment on the note, without satisfaction, is no bar to a proceeding in equity to foreclose the mortgage: Hilliard on Trust, vol. 1, p. 97, vol. 2, p. 83; Vansant v. Alman, 23 Ill., 33; Addison on Cont., 307. There is, therefore, nothing in this defense; and the Chancellor’s decree dismissing the bill on this ground was clearly erroneous.

The only question presenting any difficulty in this case arises out of the following state of facts: The sheriff returns that he levied the attachment on 104 tons of pig iron, as the property of Greene County Iron Company, on the 18th of December, 1871, and that on the 14th of March, 1872, the company executed a bond, with W. F. Gleason, C. L. Sevier and J. G. Reaves, as securities, payable to complainant, in the sum of $5,000, conditioned to pay to complainant the full sum of his demand against said company should the cause be determined in favor of complainant at the final hearing; and he returns the same as a delivery bond.” We take it he means a replevy bond, under sec. 3509 of the Code. We find a bond in the record corresponding precisely with this return. The bond, however, does not recite the levy of the attachment upon the property, makes no reference to the property whatever, but is simply a promise to pay $5,000, — to be void on condition that the parties to it “shall well and truly pay to Sam’l L. Stephens the sum of $2,475, and the lawful interest on that sum, and costs, in the event that the attachment suit now pending in the Chancery Court of said county of Greene, for the collection of said sum, wherein the said Stephens is complainant and the said Greene County Iron Company is defendant, should, at the final hearing thereof, be determined in favor of said complainant; otherwise to remain in full force and virtue.”

Taking this bond with the return of the sheriff, both of which are made part of the record by sec. 3573 of the Code, it must be taken to be a bond for the replevy of the property, under sec. 3509, which authorizes a bond to be given, at defendant’s option, in double the amount of plaintiff’s demand, conditioned to pay the debt, interest and costs.”

The question, then, is as to the liability of the parties, principal and sureties, to a decree on this bond for the debt, interest and costs. By sec. 3512, “replevy bonds are subject to the rules prescribed in secs. 773 and 774 of the Code.” This last section is as follows: “ So, also, if any officer or any other person, as hereinafter provided, who is required by law, or in the course of judicial proceedings, to give bond for the performance of an act or the discharge of a duty, receives money or property upon the faith of such bond, he and his sureties are estopped to deny the validity of the bond or the legality of the proceedings under which the money or property was obtained.” Now, if this bond is' valid, and the proceedings under which the property was obtained legal, and this the party is estopped to deny by the words of the section, we can not see how the parties can escape from liability to decree on the bond. If the bond is valid, it must be as a legal obligation to pay the debt, interest and costs, for these are the terms of the contract, — provided the attachment suit, in which it was taken, should at final hearing be determined in favor of complainant.

The fact that the defendant in this case has asserted in his answer, which is not disproved, that the iron levied on by the attachment was not his property, can make no difference, as he has given a bond, by which it has been returned to his possession, and bound himself to pay the debt of complainant on condition the decree, on final hearing, should be in favor of complainant, and the validity of this bond the defendant .is estopped by the statute to deny.

The result is, that the Chancellor’s decree will be reversed, and a decree entered here for complainant’s debt against defendant and against the sureties on the replevy bond. The costs of this and court below will be paid by defendant.  