Case ID: mass_21/html/0159-01.html
Source: Caselaw Access Project
Author: {"author": "Parker C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Asahel Bellows et al. versus Cyrus Lovell.
    In assumpsit upon a promissory note, a plea,—that the note was made to A, by ths defendant and B, jointly and severally, for the proper debt of B; that A com» menced an action upon it against B and attached his property to an amount sufficient to respond the. judgment which might be rendered | that while that action was pending, B became insolvent, and A, knowing all the above facts, negotiated the note to the plaintiff and discontinued his action, for the purpose of discharging the attachment and compelling the defendant to pay the note j and that the plaintiff, knowing the same facts, purchased the note for the same purpose,—was held bad on demurrer.
    This was assumpsit upon a promissory note made by the defendant to C. Wheeler, and by him indorsed to the plaintiffs.
    The defendant pleaded, first, the general issue ; and secondly, that the note was made by the defendant and Joseph Lovell, jointly and severally, and was delivered to Wheeler for the proper debt of Joseph, the defendant becoming surety for the same, and that on the 5th of April, 1825, Wheeler, not having negotiated the note, sued out a writ of attachment upon it against Joseph, by virtue of which a large amount of real and personal estate belonging to Joseph, of each kind more than sufficient to respond the judgment which might be recovered, was attached; that that suit was entered in the Court of Common Pleas and was pending at the time of the commencement of this action against the defendant; that before this action was brought, and before the note was negotiated to the plaintiff, Joseph became insolvent; that Wheeler, well knowing that the note was given for the proper debt of Joseph, and that the amount which might be due upon it, with all costs, was fully secured by the attachment before mentioned, and that Joseph had, since the attachment was made, become wholly insolvent, for the purpose of discharging the property of Joseph from the payment of any part of the sum due on the note and compelling the defendant to pay the same, negotiated the note to the plaintiffs and neglected to prosecute further his suit against Joseph ; and that the plaintiffs procured the note to be negotiated to them’ for the like purpose, they well knowing all the facts above set forth. To this plea there was a general demurrer.
    
      Oct. 5th.
    
    
      J. Davis and Allen,
    being called on by the Court to maintajn tjle p]e3) gai,^ any act on the part of the holder of a note, varying the terms of the contract, or injurious to the Buitíty, vr any attempt to throw the debt upon him by collusion, discharges the surety. Rees v. Berrington, 2 Ves. jun. (Am. ed.) 540, and note, Hunt v. Bridgham, 2 Pick. 581. In the case first cited the Court say, the surety is only bound to make up a deficiency on the part of the principal. Here there was no deficiency; the holder of the note had acquired a lien on a sufficient amount of property of the principal. Relinquishing the lien, and with the collusion of the plaintiff, was a fraud which in equity would discharge the defendant, and the same rule will govern at law. The fraud being apparent on the face of the record, the Court will take notice of it without the intervention of a jury. Harris v. Sumner, 2 Pick. .129.
    
      
      April term 1827.
    
      Jl. Benny, in support of the demurrer.
    Unless the facts stated show fraud, the intention alleged is immaterial. Paine v. Fox, 16 Mass. R. 133. Most of the cases in which a surety has been relieved, proceed on the ground that time is given to the principal, by contract, without the consent of the surety ; but here the contract has not been varied. Rees v. Berrington, 2 Ves. jun. 540; Boultbee v. Stubbs, 18 Ves. 20; Ludlow v. Simond, 2 Caines’s Cas. in Err. 1; The People v. Jansen, 7 Johns. R. 332, cited in 2 Johns. Ch. R 562; Rathbone v. Warren, 10 Johns. R. 587. Merely delaying to prosecute the principal does not discharge the surety. His proper course is to pay the debt himself, and then pursue his remedy against the principal. King v. Baldwin, 17 Johns. R. 384, questioning the case of Pain v. Packard, 13 Johns. R. 174; Fulton v. Matthews, 15 Johns. R. 433, Hunt v. Bridgham, 2 Pick. 581; Trent Nav. Co. v. Harley, 10 East, 34; Wright v. Simpson, 6 Ves. 734. Wheeler might have sued the surety in preference to the principal, or he might have sued them both at the same time, in one or several actions, and have levied his execution on the surety alone. Lenox v. Prout, 3 Wheat. 520. This last case shows that the plea generally is bad.
    
      
       See 2 Pick. (2d ed.) 585, n. 1, and the cases there collected; Boston Hat Manufactory v. Messinger, 2 Pick. (2d ed.) 235, n. 2.
    
    
      
       See also Bellows v. Lovell, 5 Pick. 307.
    
   Parker C. J.

delivered the opinion of the Court. The plea in bar which is brought before us on general demurrer, is of quite a new impression, and therefore is to be looked at cautiously. The substance of it is, that the defendant signed the note which is in suit, as a surety to Joseph Lovell, to secure the proper debt of Joseph ; that the payee of the note had sued Joseph alone, the note being joint and several, and had attached property, real and personal, much beyond the amount of the note; that afterwards, and while that action was pending, the payee negotiated the note to the piesent plaintiffs, for the purpose of relinquishing the attachment, and that the plaintiffs, with the same purpose, purchased the note, they knowing the views and purposes of the payee, and knowing also the fact that Joseph Lovell was wholly insolvent and unable to pay his just debts.

It is not denied, and therefore must be taken to be admitted, that the plaintiffs gave a valuable consideration for the note, and that as between them and the payee they are bona jide indorsees. Taking these facts as true, do they form a bar to the action, and is a conspiracy to defraud or injure the defendant necessarily to be inferred ? We think such an inference cannot be made by us, whatever might be done by a jury. It is quite as reasonable an inference, that the whole transaction was honest and fair; for the payee might have preferred to receive his debt at once by a transfer of the note, to incurring the chances of a sale of the property attached, or a levy of execution upon the real estate, and therefore might lawfully relinquish his attachment. And the plaintiffs might have purchased the note to aid in this relinquishment, in order that the estate of Joseph Lovell might be relieved from incumbrances, so that all his creditors might avail themselves of it to satisfy their debts. It is not averred that this was fraudulently done, nor that the defendant was thereby prevented from obtaining security; nor that there were other succeeding attachments which swept off the property so that the surety could not, if he had paid the note, have made an attachment to save himself. If these facts all exist, they should have been pleaded. As the plea now stands, it is no bar. If upon the general issue the facts contained in the plea should be proved, together with such other facts as will justify a jury in finding a fraudulent conspiracy, the question, as to its legal effect upon the plaintiffs’ claim to recover on the note, will be better presented than under this plea.

Special plea adjudged, bad. 
      
       See Bellows v. Lovell, 5 Pick. 307