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Dec. 13,

WILSON v. WARD. (Court of Appeals of Kentucky. 1912.) APPEAL AND ERROR (§ 1022*) — REVIEW FINDINGS OF FACT.

Findings on conflicting evidence by a special commissioner, concurred in by the lower court, will not be disturbed; it being impossible to say from the record that there is a clear preponderance against them.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. 88 4015-4018; Dec. Dig. 1022.*]

Appeal from Circuit Court, Bell County. Action by H. L. Ward against E. M. Wilson. Judgment for plaintiff. Defendant appeals. Affirmed.

N. J. Weller, of Pineville, for appellant. Jas. H. Jeffries and N. R. Patterson, both of Pineville, for appellee.

TURNER, J. This is an action instituted by the appellee against appellant for a balance claimed to be due on an account current between them, growing principally out of a partnership or joint venture in logging. The defendant answered, and by way of counterclaim and set-off asserted certain claims against the plaintiff. By agreement between the parties the action was transferred to the equity docket, and A. G. Patterson, a prominent lawyer of the Bell county bar, was selected as special commissioner, and the cause was referred to him for an adjustment of the accounts between the parties. The transactions in dispute cover a period of some five or six years, and there are numerous contested items on each side. The special commissioner, after taking the evidence, prepared with great care and skill an unusually intelligent and comprehensive report. He even went so far as to give in his report a statement of the evidence on each contested item. To this report each party excepted, and the lower court overruled all the exceptions, and approved the report in full.

It would be unprofitable for us to enter into a discussion of the various items and the evidence relied upon to sustain or reject them. It is sufficient to say that there is a sharp conflict of evidence as to a number of the items; but these matters have been carefully considered and passed upon, both by the special commissioner and the lower court, and we are unable to say from the record that there is such a preponderance as to any one of the items as to justify us in differing from them on the facts. Those gentlemen were on the ground, and not only familiar with the evidence in the record, but with the persons who gave it; and, as there is nothing presented to us here for review, except a question of fact, the judgment is

affirmed.

FIDELITY & DEPOSIT CO. OF MARYLAND v. SOUSLEY et al.

(Court of Appeals of Kentucky. Dec. 5, 1912.) 1. SUBROGATION_(§ 31*)-RIGHTS OF SURETY AS AGAINST PRINCIPAL-SATISFACTION OF JUDGMENT.

Where a creditor obtains judgment against the principal in F. county, and by a suit thereon in J. county recovers the amount of the first judgment from the surety, it is only necessary that the surety, as a condition precedent to the action against the principal after satisfaction of the J. county judgment, should take from the creditor an assignment of the F. county judgment, and its taking of an assignment of the J. county judgment is immaterial.

[Ed. Note.-For other cases, see Subrogation, Cent. Dig. §§ 70-91; Dec. Dig. § 31.*] 2. SUBROGATION (§ 31*)-RIGHTS OF SURETY AS AGAINST PRINCIPAL.

A surety who pays a judgment against his principal, without taking an assignment of the judgment against the principal, can only recover from the principal upon the implied promise that the law raises in his behalf.

[Ed. Note.-For other cases, see Subrogation, Cent. Dig. §§ 70-91; Dec. Dig. § 31.*] 3. LIMITATION OF ACTIONS (§ 28*)-REIMBURSEMENT OF SURETY.

A surety who pays a debt against his principal without taking an assignment of the creditor's judgment, and who seeks relief against the principal upon the promise raised by law in his behalf, must proceed within five years from the time of paying such judgment.

[Ed. Note. For other cases, see Limitation of Actions, Cent. Dig. §§ 134, 135; Dec. Dig. § 28.*]

4. LIMITATION OF ACTIONS (§ 28*)—SUBROGATION (§ 31*)-REIMBURSEMENT OF SURETY— STATUTORY PROVISIONS.

Under Ky. St. § 4666, which entitles a surety, who pays the whole or part of a judgment, to an assignment in whole or part from the judgment creditor or his attorney, and provides that, when satisfied, such judgment shall give him the right to control the judgment for his own benefit, so far as to obtain satisfaction from the principal for the amount paid, does not require that the assignment of the judgment shall be in writing or be made a matter of record, or that it shall be entered in the record book in which a judgment is entered; and an assignment within five years gives the surety all the rights against the principal that he could acquire by an assignment of record, and extends the time in which he may prothat his right to recover against his principal ceed against his principal for reimbursement, so is not limited to an action on an implied promise, barred within five years, but extends for the same time that the right of the judgment creditor extends.

[Ed. Note.-For other cases, see Limitation of Actions, Cent. Dig. §§ 134, 135; Dec. Dig. § 28;* Subrogation, Cent. Dig. 88 70-91; Dec. Dig. § 31.*]

5. SUBROGATION (§ 31*)-RIGHTS OF SURETY

AS AGAINST PRINCIPAL-NOTICE TO PRINCIPAL.

After a surety's right of action against his principal is barred, he should not be perlife without notice to the principal; but, when mitted, by an order of court, to restore it to his action is not barred, it is not necessary that he should give notice to his principal of his intention to obtain an assignment of the creditor's judgment, since, if the principal has a defense, such as that the party obtaining a statutory assignment of the judgment was not

•For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

[Ed. Note.-For other cases, see Subrogation, Cent. Dig. 88 70-91; Dec. Dig. § 31.*]

6. PRINCIPAL AND SURETY (§ 182*)-RIGHTS OF SURETY AS AGAINST PRINCIPALS INDI

VIDUALLY.

Where a surety for two persons as assignees satisfies a judgment against them, growing out of their failure to faithfully discharge their duties as assignees, he may, after satisfying such judgment, proceed against them individually.

[Ed. Note.-For other cases, see Principal and Surety, Dec. Dig. § 182.*]

7. SUBROGATON (§ 31*)-RIGHTS OF SURETY AS TO PRINCIPAL EXTINGUISHMENT OF PRINCIPAL'S LIABILITY.

Where a creditor, obtaining judgment against a principal in F. county, recovered thereon against the surety in J. county, the surety's payment of the J. county judgment and taking the creditor's assignment of the F. county judgment did not extinguish the liability of the principal under the F. county judgment.

in fact a surety, that his right to the assign- | pany for the same amount that judgment ment was barred by limitation, or that his had been rendered against Hart & Sousley. claim against the principal had been satisfied, In January, 1904, the appellant company satthe fact that the surety obtained an assignment without notice would not prevent the principal isfied this judgment, and also the judgment from making such defenses. in the Fleming circuit court, in favor of the Louisville National Banking Company, by paying the amount of the judgments, with interest and costs. Upon its payment of the Fleming county judgment, the Louisville Banking Company in 1904 assigned in writing to the appellant company the Fleming county judgment. The assignment, after setting out some preliminary facts, recites that "whereas, by virtue of the bond executed by said Hart & Sousley, as principals, and the Fidelity & Deposit Company of Maryland, as surety, to secure the faithful performance of their duties by said Hart & Sousley, as assignees of David Wilson, said Fidelity & Deposit Company became liable to said banking company for the amounts recovered by said judgment, and whereas said Fidelity & Deposit Company has paid the whole of said judgment, and said banking company has been fully satisfied with respect to all its rights under such judgment, now, therefore, said Louisville National Banking Company, in consideration of said payment of said judgment as aforesaid, hereby assigns to said Fidelity & Deposit Company of Maryland said judgment and all said bank's rights in, to, and under said judgment, without recourse against said Afterwards, and in bank in any event." December, 1911, the Louisville National Banking Company and Henry L. Stone each made written assignments of the Jefferson county judgment to the appellant company, and Stone also assigned to it his interest in the Fleming county judgment. In December, 1911, this suit was brought by the appellant against Hart & Sousley to recover from them the amount it had been compelled to pay as their surety in satisfaction of the judgment rendered against them as assignees in the Fleming circuit court.

[Ed. Note. For other cases, see Subrogation, Cent. Dig. §§ 70-91; Dec. Dig. § 31.*] 8. SUBROGATION (8 31*)-RIGHTS OF SURETY AS TO PRINCIPAL-PRESUMPTION.

The legal presumption is and should be that the surety's payment of a judgment against the principal does not extinguish it, so as to deprive the surety of the right to an assignment of the judgment for his benefit against the principal.

[Ed. Note. For other cases, see Subrogation, Cent. Dig. §§ 70-91; Dec. Dig. § 31.*]

Appeal from Circuit Court, Fleming County.

Action by the Fidelity & Deposit Company of Maryland against R. H. Sousley and another. Judgment for defendants, and plaintiff appeals. Reversed, with directions.

R. J. Babbitt and J. H. Power, both of Flemingsburg, for appellant. B. S. Grannis and John P. McCartney, both of Flemingsburg, for appellees.

CARROLL, J. In 1896 R. H. Sousley and To this suit an answer was filed by Hart R. K. Hart qualified as assignees of David & Sousley, consisting of several paragraphs, Wilson, under a general deed of assign- but the substance of the defense was: (1) ment, with the appellant company as sure- That the judgment relied on by appellant ty. In May, 1902, the Louisville National as the basis of its action were extinguished Banking Company obtained a judgment in and satisfied in January, 1904, and, as the the Fleming circuit court against Hart & assignments of these judgments to it were Sousley, as assignee of Wilson, for $1,850, of no effect, its right to a recovery rested with interest from the date of the judgment entirely on the implied promise of Hart & until paid. Upon this judgment an execu- Sousley, its principals, to repay to it the tion, issued in July, 1902, and in September, amount it had paid for them as surety, and 1902, was returned "no property found." was barred by the five-year statute of limiAfter this the Louisville National Banking tation; (2) that the assignments of the judgCompany and Henry L. Stone, who it ap-ments were void because no notice was givpears had some interest in the judgment, en to Hart & Sousley that the judgment brought suit in the Jefferson circuit court plaintiff would be requested to make the asagainst the appellant company to recover signments, or that they had made the asfrom it, as surety of Hart & Sousley, the signments; (3) that, as the Fleming county amount of the Fleming county judgment judgment was rendered against Hart & against them, and in March, 1903, they ob- Sousley as assignees, the appellant acquired tained judgment against the appellant com- no right against them as individuals by vir

ise of the principals to repay the amount it was compelled as surety to pay for them, its claim is barred by the five-year statute of limitation.

[2, 3] A surety, who pays a judgment for his principal without taking an assignment of the judgment against the principal that he paid, can only recover from his principal upon the implied promise that the law raises in his behalf, and he must proceed to ob

tue of the assignment of that judgment; (4) | signment did not enlarge its rights as a surethat the assignment of the Fleming county ty, and they must rest on the implied promjudgment by the Louisville Banking Company was only operative as to one-half of the judgment, as Henry L. Stone was the owner of the remaining one-half; (5) that, as the Jefferson county judgment was based on the Fleming county judgment, the latter judgment was merged in the former, and the assignment of it passed nothing to appellant; (6) that the assignment of the Jefferson county judgment, which was made in 1911, more than five years after the judg-tain relief upon this implied promise within ment had been satisfied by the appellant, was of no effect, because the right of the appellant, if it had any, to recover on the judgment against Hart & Sousley was then barred by the five-year statute of limitation. In disposing of the case we will consider only in a general way these defenses, as it does not appear to be necessary that each of them should be taken up separately.

[1] The record shows that the Fleming county judgment was rendered in behalf of the Louisville Banking Company against Hart & Sousley as assignees. It was therefore only necessary that the appellant, when it satisfied this judgment, should procure from the banking company an assignment of it. If, however, Stone, by reason of some private arrangement between himself and the banking company, had an interest in the judgment, the assignment of the judgment by the banking company only passed to the assignee the interest that the banking company owned; and, as the surety only obtained within five years from the date of the Fleming county judgment an assignment from the banking company, and not from Stone, it is only substituted to the rights of the banking company in the Fleming county judgment. This Fleming county judgment was not satisfied by appellant until some two years after its rendition, when it satisfied the judgment rendered against it in the Jefferson circuit court; but this circumstance is of no material importance. The appellant did not suffer any loss by reason of its suretyship until it satisfied the judgment against its principals, and it was not entitled to an assignment of the judgment until it had satisfied it. It was not necessary that it should have obtained in 1904, or indeed at any time, an assignment of the Jefferson county judgment. There was no reason why it should take an assignment of a judgment against itself, and so the assignment of the Jefferson county judgment to it by the banking company and Stone do not add anything to the strength of appellant's case or take anything from it.

The rights of the parties are to be judged by the effect of the judgment in the Fleming circuit court, and the assignment of this judgment to appellant. If appellant is entitled to recover, its right to do so must rest on the effectiveness of the assignment of the

five years from the date of the payment. Bowman v. Wright, 7 Bush, 375; Robinson v. Jennings, 7 Bush, 630; Duke v. Pigman, 110 Ky. 756, 62 S. W. 867, 23 Ky. Law Rep. 209.

[4] But the rights of a surety, who satisfies a judgment, have been enlarged by the statute, and, when a surety takes a statutory assignment of a judgment against his principal within five years from its rendition, he steps into the shoes of the judgment plaintiff, and has all the rights against his principal that the judgment plaintiff would have. Joyce v. Joyce, 1 Bush, 474. Among other rights that the surety acquires by obtaining within the five years a statutory assignment is the one extending the time in which he may proceed against his principal for reimbursement. His right to recover against his principal is not limited to an action on the implied promise and barred within five years if no action be taken, but extends for the same period of time that the right of the judgment plaintiff would extend. Therefore, if the assignment of the Fleming county judgment was made in the manner provided in the statute, the five-year statute of limitation relied on by appellee constitutes no defense. This statute, which is section 4666 of the Kentucky Statutes, reads as follows: "If the surety pays the whole or part of a judgment he shall have a right to an assignment thereof from the plaintiff or the plaintiff's attorney, in whole or in part; and when the plaintiff has been fully satisfied, such assignment shall give him the right to sue out or use any existing execution, or otherwise control the judgment for his own benefit against other defendants, so far as to obtain satisfaction from the principal for the whole amount so paid by the surety with interest, or from any cosurety his proper part of such payment according to the principles of the last section. Such assignment shall also transfer to the sureties so paying the benefit of any lien existing under or by virtue of such judgment; and the right to the assignment shall exist, though the money was made or secured by sale of the property of the surety under execution." Under this statute the appellant, when it satisfied the judgment, had a right to an assignment thereof, and this assignment it obtained. The statute does not require that the assign

made a matter of record, or that the assign- | restore it to life without notice to the prinment shall be entered on the record book in cipal; but, when his right of action is not which the judgment is entered. An assign- barred, it is not necessary that he should ment within five years will give to the sure- give notice to his principal of his intention ty all the rights against his principal that he to obtain an assignment of the judgment. A could acquire by an assignment of record. surety who satisfied a judgment is entitled, Patton v. Smith, 130 Ky. 819, 114 S. W. 315, as a matter of right, to an assignment of it 23 L. R. A. (N. S.) 1124; Brown & Bro. v. within the five years, and this right the prinLapp, 89 S. W. 304, 28 Ky. Law Rep. 409; cipal debtor cannot obstruct or defeat if the Freeman on Judgments, vol. 2, § 422. judgment was in fact paid by the surety.

[5] It is, however, earnestly insisted by counsel for appellee that the assignment of a judgment, to be effective, must be made after notice to the principal debtor, and that, unless the principal debtor is given notice of the fact that an assignment will be requested or that an assignment has been made, so that he may, if he desires, contest the right of the surety to the assignment, he will not be affected by it. In support of this proposition, our attention is called to Veach v. Wickersham, 11 Bush, 261. In that case it appears from the opinion that in April, 1855, McDowell and Young recovered judgments against Veach, Cornish, and Wickersham; the latter two being the sureties of Veach, and as such sureties they were compelled to and did satisfy the judgment in 1855. In 1869, 14 years after the satisfaction of the judgment by the sureties, Wickersham, without notice to Veach, procured an order from the court in which the judgment was rendered, indorsing one-half of the judgment for his benefit, and empowering him to sue out execution thereon. Execution having been issued in favor of Wickersham, Veach contested his right to collect the execution, and his contention was sustained by the court. It will be observed that in that case the surety did not seek to secure an assignment of the judgment until after the expiration of five years from its rendition, or until after his right of action upon the implied promise of Veach had been barred by limitation. At the time Wickersham obtained the assignment, he had no enforceable demand against Veach, and the court, under this state of facts, said that it was necessary to the validity of the order of the court making the assignment that Veach should have had notice of the application for the order and opportunity to defend and show cause against it. That case does not hold that, within five years after the rendition of the judgment, the surety may not obtain, without notice to his principal, an assignment of the judgment from the judgment plaintiff. Of course when the surety's right of action is barred by limitation, and he undertakes to revive his cause of action by obtaining, through an order of court, an assignment of the judgment, he must give notice to his principal, so that the principal, if he desires, may defeat his right to the assignment upon the ground that his claim is barred by limitation.

It can readily be seen that, after the surety's right of action is barred, he should not

The case of Plummer v. Talbott, 50 S. W. 1097, 21 Ky. Law Rep. 30, is also relied on by appellee. In that case it appears that in 1894 Plummer, who was a member of a partnership, bought out the other members and executed his note for the purchase price of the partnership stock. Failing to meet these notes, Plummer in 1895 returned what he had bought to his partners, and a contract was then entered into by which his partners agreed to pay off the firm debts and save Plummer harmless therefrom. After this contract was made, a creditor of the old firm obtained judgment against Plummer in the quarterly court; the other partners defeating in that court a recovery against them. From the judgment refusing him relief against the other members of the firm, the creditor appealed to the circuit court, and in that court obtained a judgment against the other members of the firm. The result of this was that the creditor had a judgment in the quarterly court against Plummer and a judgment for the same debt in the circuit court against the other members of the firm. After this the other members of the firm obtained from the creditor, without notice to Plummer, an assignment of the quarterly court judgment against Plummer, and sought to collect it. Plummer, after setting up the facts before stated, sought to enjoin the collection of the execution, but the lower court dismissed his petition. In reversing the case this court said that under the facts stated in the petition of Plummer seeking to enjoin the collection of the execution, he did not owe any part of the debt, and therefore the other members of the firm were not entitled to an assignment of the quarterly court judgment without notice to him. The court further said: "If the debt is the debt of Plummer alone, he is not hurt by the assignment; but if it is a firm debt, and he owes only a part of it, or if it is a debt against which he is to be saved harmless under the contract, then the injunction is to be perpetuated." The difference between that case and this is apparent. In that case, according to the averments of Plummer's petition, he did not owe the judgment, and the other members of the firm had no right to an assignment, or to collect it from him. In this case it is not denied, and we take it could not be, that Hart & Sousley, as assignees, should have paid the Fleming county judgment against them; but, failing to pay it, the appellant, as their surety, was compelled to satisfy it, and

the surety to recover against them the part | right to have an assignment of the Fleming of that judgment owned by the banking company are purely technical. They have no meritorious defense as Plummer had or as Veach had.

If Hart & Sousley had a defense, the fact that the appellant obtained an assignment without notice to them would not prevent them from making the defense in this action. For example, if a person who obtains an assignment of a judgment under the statute was not in fact a surety, or if his right to the assignment was barred by limitation, or if his claim against his principal had been satisfied, or for any other reason should not be paid, the principal can make his defenses when it is sought to collect the judgment debt under the assignment, unless the assignment was made by an order of court after due notice to the principal and opportunity to resist in court the assignment.

[6] There is no merit in the contention that, as the Fleming county judgment was against Hart & Sousley as assignees, the appellant, who as surety satisfied that judgment, cannot proceed against them as individuals. The judgment against them in the Fleming circuit court was caused by their failure to faithfully discharge their duties as assignees, as may be seen by an examination of Stone v. Hart, 66 S. W. 191, 23 Ky. Law Rep. 1777, and Wilson v. Louisville Nat. Banking Co., 76 S. W. 1095, 25 Ky. Law Rep. 1065.

When a fiduciary, by his wrongdoing or faithless performance of his trust, causes his surety to suffer a loss, the surety may proceed against him individually to recover what he has been compelled to pay. If this were not so, a faithless fiduciary could put the burden of his wrongdoing upon his surety and escape liability for loss occasioned by his breach of duty.

[7] Nor did the payment of the Jefferson county judgment by the surety have the effect of extinguishing the liability of Hart & Sousley under the Fleming county judgment. When the surety paid off the Jefferson county judgment against it and took an assignment of the Fleming county judgment, this act plainly showed that it was not intended, in satisfying this judgment, to extinguish its right to reimbursement against the principal. Roberts v. Bruce, 91 Ky. 379, 15 S. W. 872, 12 Ky. Law Rep. 932.

[8] Aside from this, the legal presumption is, and should be, that the payment of a judgment by a surety does not extinguish it so as to deprive the surety of the right to an assignment of the judgment for his benefit against the principal. The judgment creditor had a right to bring this suit against the surety alone in Jefferson county, and, when the surety satisfied the judgment against it, it was entitled to be substituted to all the rights the judgment plaintiff had against Hart & Sousley, and among these was the

county judgment, and by virtue of this assignment it acquired all rights against Hart & Sousley that the Louisville Banking Company had, but was not substituted by the assignment to any interest that Stone may have had in the Fleming county judgment, because it did not obtain, within five years from the rendition of this judgment, an assignment by Stone of his interest in it.

Wherefore the judgment is reversed, with directions to enter a judgment in favor of appellant for the sum the record, in this case and the cases out of which this litigation grows, shows the Louisville Banking Company was entitled to in the Fleming county judgment, with interest thereon from the date of that judgment, and a proportionate part of the cost of that judgment.

SHIRLEY v. RENICK.

(Court of Appeals of Kentucky. Dec. 4, 1912.) 1. APPEAL AND ERROR (§ 1046*)—RIGHT TO OPEN AND CLOSE-REVERSIBLE ERROR.

Under Civ. Code Prac. § 317, subsec. 6, providing that the party having the burden of proof shall have the conclusion of the argument, the denial of that right to the party having the burden is reversible error.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. 88 4128-4134; Dec. Dig. § 1046.*]

2. PLEADING (§§ 2, 133*)-CODE PLEADING"COLOR"-"SON ASSAULT DEMESNE."

A plea of "son assault demesne," which is in the nature of a confession of the assault charged, and an avoidance thereof, by showing that the plaintiff first assaulted the defendant, and that the injuries grew out of his assault, must, even under the Code, give "color," which, as a term of pleading, signifies an apparent or prima facie right in the plaintiff; the Code, while having abolished forms, not having changed the substance of various pleas.

[Ed. Note.-For other cases, see Pleading, Cent. Dig. §§ 3, 4, 280; Dec. Dig. §§ 2, 133.* For other definitions, see Words and Phrases, vol. 2, p. 1262; vol. 7, p. 6552.] 3. PLEADING (§ 133*)-ANSWER-CONFESSION AND AVOIDANCE-COLOR.

In an action for damages for willful and malicious assault, the first paragraph of the answer traversed the allegations of malice, ant attempted to assist the constable in makand the second paragraph alleged that defending an arrest, whereupon plaintiff attempted to restrain defendant, who to protect himself pressly admitting the assault on plaintiff, destruck plaintiff. Held that, while not fendant's answer, taken as a whole, was good plea in confession and avoidance, impliedly confessing the assault.

ex

a

Cent. Dig. § 280; Dec. Dig. § 133.*] [Ed. Note. For other cases, see Pleading, 4. TRIAL (8 25*)-RIGHT TO OPEN AND CLOSE. Under Civ. Code Prac. § 526, providing that the burden of proof in the whole action lies on the party who would be defeated if no evidence were given, a defendant in an action sion and avoidance that he struck plaintiff in for malicious assault who pleaded in confesrepelling plaintiff's assault, though traversing

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