Case ID: ind_2/html/0600-01.html
Source: Caselaw Access Project
Author: {"author": "Perions, J. \n      Per Curiam—\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dugan v. Sprague and Others.
    The taking of collateral security does not bar a suit upon the principal debt.
    If a debtor give his creditor notes as collateral • security, he cannot obtain credit therefor in a suit upon the principal debt, unless he can show that the notes constituting that security had been, or could have been, collected.
    ERROR to the Hendricks Circuit Court.
    
      Tuesday, June 3.
   Perions, J.

Assumpsit. Plea — the general issue. Judgment for the plaintiff below. The plaintiff’s claim was established by the following instrument:

“ The within account shows the state of all claims received by me for the use of A. and W. Sprague and Co., except those against Dodd and Dickerson and Joel Riff. These claims, though the receipts are not now on hand, were exchanged with B. Sprague, jun., agent for A. and W. Sprague and Co., for a judgment against Hamilton, transferred by me to them. The note against W. Davis, for which they hold my receipt, and the 20 dollar counterfeit Ky. bank bill, for which they hold that of C. C. Nave, was included in the exchange either for the judgment or for a note transferred by me to them at the same time. The account shows due, at this time, to A. and W. Sprague and Co., after deducting the Dickerson and Dodd, and Joel lliff claims, four hundred and twenty-five dollars and twenty-nine cents, ($425 29-100) which will draw interest from this date. The claims just settled are as follows : Hanna, Brittain,” &c. “ Danville, Jan. 29, 1848. James Dugan." The defendant below relied, for reducing the plaintiff’s claim, on the following receipt:

J. L. Ketcham and H. Brown, for the plaintiff.

C. C. Nave, for the defendants.

“ Received, Danville, Jan. 20, 1849, of J. Dugan, Esq., one note for 100 dollars by J. F. and W. Lemons, dated Oct. 2, 1848, payable with interest, twelve months from date. Also, one note by J. A. Graham, for 35 dollars, dated Nov. 6, 1848, and payable one hundred and fifty days from date, which notes are to be held by us as collateral security on claims in our favor in the hands of said Dugan, and to be credited by us when collected.
“A. and W. Sprague and Co."

There was no evidence tending to show that these notes had been, or could have been, collected. The taking of collateral security does not bar a suit upon the principal debt. Mendenhall v. Lenwell, 5 Blackf. 125. Nor could the Court, in this case, apply the collateral security taken, towards payment of the principal debt, as it was not shown that the notes constituting that security had been, or could have been, collected. Kiser v. Ruddick, 8 id. 382. Two other receipts, acknowledging the reception of notes for collection by a member of the firm, were also relied on; but they stood upon no different footing from that set out above.

Per Curiam—

The judgment is affirmed with 5 per cent, damages and costs.