Case ID: va_31/html/0998-01.html
Source: Caselaw Access Project
Author: {"author": "PER CURIAM.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Coiner v. Hansbarger.
    April, 1833.
    (Absent Brooke, J.)
    Bonds — Assignment—Insolvency of Obligor — Necessity for Bringing Suit against. — C. assigns to H. a bond of W. payable on demand; if the obligor is insolvent at the time of the assignment, it is not necessary that the assignee should bring suit on the bond against him, in order to entitle himself to recourse against the assignor.
    Same — Same—Same—Liability.—in such case, the assignor is immediately liable to the assignee upon the contract of assignment.
    Same — Same—Same—Agreement by Assignee Not to Bring Suit against Obligor — Waiver of Objection by Assignor. — A bond payable on demand is assigned by the holder to a third person; the obligor is insolvent at the time of the assignment, and so continues; the assignee forbears to bring suit against the obligor, and makes an arrangement with him, whereby he agrees to receive payment at a future day; the assignor being informed of the fact, though ignorant of the legal effect thereof to discharge him from liability, sanctions the arrangement, and promises payment of the debt to the assignee; Held, the assignor is bound by such his promise to pay.
    Assumpsit, by Hansbarger against Coiner, in the county court of Augusta. The declaration contained a special count, stating, that Coiner, being the holder of two bonds for 150 dollars each, payable on demand, executed by one White to a third person, by whom they had been assigned to Coiner, assigned the same bonds to Hansbarger for a valuable consideration, and that White had not paid the contents of the bonds to Hansbarger, but that on the contrary, he was, at the time of the assignment to Hans-barger, and yet, insolvent and unable to pay the same, so that suits against him on the bonds would not only have been unavailing, but by the direction of Coiner himself were not brought against him ; by reason of which Coiner became liable to pay Hansbarger the said two sums of 150 dollars each, and being so liable assumed to pay the same to him &c. There were also two money counts ; one, for money paid, laid out and expended ; and the other, for money had and received. Coiner pleaded the general issue.
    At the trial, the court, on the motion of Coiner’s counsel, instructed the jury, that, if they should find from the evidence, that Hansbarger, without authority from or consent *of Coiner, had made an arrangement with White, the obligor in the assigned bonds, whereby the payment of the money due thereon was postponed, as to part.for two months, and as to the residue for four months, and that White actually paid the part he agreed to pay at the end of the two months, in such case, Coiner was discharged from his liability to Hansbarger, as assignor of the bonds ; but the court left it to the jury to decide, upon the evidence, whether a direction given by Coiner to Hansbarger not to bring suit on the bonds till required by him, or any other circumstances proved in the cause, amounted to an authority or consent, on Coiner’s part, to the arrangement made by Hansbarger with White.
    And then, the court, on the motion of Hansbarger’s counsel, instructed the jury, 1. That if they should find, that at the time of Coiner’s assignment of the bonds to Hans-barger, White the obligor was insolvent, and that nothing could have been got from him by suit, in such case, Hansbarger, the as-signee, was not bound to bring asuit against the obligor, but had a right to recourse against Coiner, the assignor. 2. That if the jury should find, that White the obligor was insolvent at the date of Coiner’s assignment to Hansbarger, and continued insolvent till the commencement of this action,in such case, Coiner became immediately liable upon the assignment to Hansbarger; and a subsequent arrangement, made by Hansbarger with White, whereby Hansbarger agreed that upon the payment of half the debt within two months, he would give White four months time for the balance, with which agreement White failed to comply, — did not impair Hansbarger’s right to recover against Coiner, the assignor, in this action. And Coiner’s counsel, thereupon, moved the court to instruct the jury, that unless they should find that the money could not have been obtained from White, either with or without suit, at the time the arrangement was made between Hansbarger and him, then that arrangement did discharge Coiner •from his liability as assignor; but the court refused to give this instruction. 3. The court instructed the jury, that if they *should find, that, after the arrangement made by Hansbarger with White, whereby time was given him for the payment of the debt due on his bonds, Coiner was informed of that arrangement, and sanctioned it, and promised payment of the debt to Hansbarger, in such case, though Coiner was ignorant of the legal consequences of such arrangement between the assignee and obligor, his promise of payment to Hansbarger was binding on him. To these instructions of the court, Coiner’s counsel filed exceptions.
    There was a verdict and judgment for Hansbarger. Coiner appealed to the circuit court, which affirmed the judgment; and then he appealed to this court.
    Johnson, for the appellant.
    The second instruction given by the county court to the jury was wrong. There is a plain analogy between the situation of an assignor of a bond, who is bound to make good the debt to the assignee, if it cannot be collected from the obligor, arid the responsibility of a surety for his principal. It is not material, in the case of the assignor, that the obligor with whom the assignee makes a new contract, giving him time for the payment of the debt, is insolvent, any more than it is material, in the case of a surety, whether the principal, to whom the creditor by a new contract gives further time, is solvent or insolvent. In the first case, the assignor ought to be held to be absolutely discharged, by the new contract made by the assignee with the obligor, upon the same principle, that the surety is held to be discharged by the new contract made by the creditor with the principal. Norris v. Crummey, 2 Hand. 228 ; Hunter v. Jett, 4 Id. 104 ; M’Kenny v. Waller, 1 Heigh 434; M’Lemore v. Powell, 12 Wheat. 554. The third instruction of the court to the jury, was also erroneous. If, by reason of the new contract of the assignee with the obligor, giving him indulgence for the debt, without the consent of the assignor, the assignor was discharged from liability on his contract of assignment, then his promise to pay the debt himself, was a promise without any consideration to support *it, and therefore not binding on him. In the case of mercantile paper, indeed, where the holder has not used due diligence, the promise of the drawer or indorser to pay the money to the holder, made with full knowledge of the fact of negligence, has been held to preclude him from relying on such negligence, in his defence against an action on the bill or note. Goodall v. Dolley, 1T. R. 712 ; Hopes v. Alder, 6 Hast 16, in notes; Hundie v. Robertson, 7 Hast 231; Stephens v. Lynch, 12 Hast 38 ; Potter v. Rayworth, 13 East 417. This, however, is not because the promise is considered binding per se, but because it is considered as an acknowledgment that due diligence has been used (such as giving due notice of dishonor) which dispenses with proof of such diligence; or as an admission, that the defendant is, in all events, the proper person to pay the debt. So, in Potter v. Ray-worth, lord Ellenborough said, that the defendant’s promise to pay, was evidence that he was conscious of his liability to pay the note, which must be because he had due notice of dishonor; and Bailey, J., considered the promise, either as an acknowledgment that he had due notice of the dishonor, or that without such notice, he was the proper person to pay the note, as the party for whose use it was drawn. The truth is, a very rigid measure of diligence is required of the holder of mercantile paper; and negligence, in many particulars, often not at all affecting the substantial justice of the claim, is fatal. Hence, the promise of the defendant has been taken, not as binding per se, but as a waiver of objection to negligence, or as equivalent with proof of diligence, or as dispensing with such proof. But, in the case of assignor and assignee of a bond, where no such rigid rules are prescribed for the conduct of the assignee, and where the measure of diligence required varies according to circumstances, the subsequent promise of the assignor to pay, after the assignee has by his negligence lost his recourse against him, must be held binding per se, or not at all; and binding per se it cannot be, unless it is founded on some consideration ; on some legal *or moral duty to pay the debt. Here, there was no consideration whatever to support the promise.
    Leigh, for the appellee.
    The only diligence required of the assignee of a bond, in order to entitle him to recourse against the assignor, is, that he shall promptly bring and prosecute suit against the obligor ; and. if the obligor be insolvent at the time of the assignment, so that a suit against him would be wholly unavailing, it is unnecessary for him to bring the suit. Brown v. Ross, 6 Munf. 391. In the present case, then, immediately upon Coiner’s assignment to Hansbar-ger of the bonds of White, who was at the time insolvent, Hansbarger’s right of action against Coiner accrued. Any effort that he made afterwards, to get the money of White, without a suit, was a voluntary effort made for Coiner’s benefit, which, certainly, could not exonerate him from his liability, already complete and absolute, to make good the debt. These considerations alone suffice to shew the propriety of the first and second instructions. The appellant’s counsel regards the third instruction, as wholly independent of the second, and indeed, as proceeding on the supposition that the second was erroneous. Take it so. The instruction was, that if Coiner was informed of the arrangement made by Hansbarger with White, giving him indulgence for the debt, and sanctioned it, and promised payment, the promise was binding. His express sanction of the arrangement shewe'd, that he knew it was beneficial to himself ; that it was the best, perhaps the only, method of getting any thing from the obligor, and so of preventing the necessity of recourse to him. His sauc-tioii of the arrangement made it his own ; such sanction was equivalent with the giving of previous authority to Hansbarger to make it. His promise to pay the debt, was an acknowledgment, that he was conscious of his liability for it ; an acknowledgment, that what had been done by Hansbarger, had been rightly done ; so done as to preserve Hansbarget’s recourse against him. There is, therefore, no question about the consideration to support the promise. The principle of the cases, in *which the holder of a bill of exchange or note, has omitted what due diligence required, and. yet a subsequent promise of the drawer or indorser to pay it, he being aware of the negligence, has been held binding on him for the debt, seems applicable, a fortiori, to the case at bar: the cases on the subject are all collected in 4 Petersd. Abr. Bills and Notes, p. 480. The only question upon the last instruction was, in truth, whether Coiner’s ignorance of the legal effect of Hansbarger’s proceedings (supposing the legal effect would have been to discharge him from liability as assignor) destroys the effect of his sanction of those proceedings, and of his promise to pay the debt. But this is no longer a questionable point. Bilbie v. Lumley, 2 East 469; Std-vens v. Lynch, 12 East 38; Brisbane v. Dacres, 5 Taunt. 144 ; 1 Eng. C. L. Rep. 43 ; Stuart v. Lee, 2 Leigh 77 ; Taylor v. Chown-ing, 3 Leigh 654.
    
      
      Bonds — Assignment—Due Diligence — Waiver.—The use of due diligence by suit or otherwise, may be waived by the assignor, and the consideration paid by the assignee is a sufficient consideration to support the assignor’s promise to pay, either express or implied. Walker v. Henry, 36 W. Va. 106, 14 S. E. Rep. 442, citing Coiner v. Hansbarger, 4 Leigh 452. The principal case is also cited in foot-note to Barksdale v. Fenwick, 4 Call 492, on the question of due diligence.
      See monographic note on “Bonds” appended to Ward v. Churn, 18 Gratt. 801, and monographic note on “Assignments” appended to Ragsdale v. Hagy, 9 Gratt. 409.
    
   PER CURIAM.

There is no error in the instructions óf the county court to the jury. Judgment affirmed.