Case ID: mass_19/html/0616-01.html
Source: Caselaw Access Project
Author: {"author": "Wilde J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Peter Hunt, Executor, versus Samuel W. Bridgham et al.
    
    
      A partial payment made on a note by the principal promisor, will take the debt out of the statute of limitations as to the surety.
    Mere delay of the creditor to proceed against the principal, without some contract binding him not to proceed against him or a request by the surety that he would en force the demand, will not discharge the surety.
    Where upon a promissory note, payable on demand, signed by a principal and surety, with witnesses, payments were made by the principal from time to time for twenty years, during the last twelve of which he was reputed to be insolvent, and the holder always at his request allowed him further time, but not any fixed time, for making further payments, and the surety had received no notice, until just before the commencement of the suit, that the note had not been paid, the surety was nevertheless held liable, it being the business of the surety to see that the principal pays.
    Assumpsit upon a promissory note made on the 9th of December, 1802, signed by James Ellis, one of the defendants, as principal, and Bridgham, the other defendant, as surety, and attested by two witnesses, for 460 dollars, payable to the plaintiff’s testator on demand with interest.
    The defence was, that as twenty years had elapsed after the date of the note before the commencement of the action, the legal presumption was that it was paid. This presumption was supposed to be rebutted by the evidence of a payment of 50 dollars made and indorsed upon the note on the 15th of May, 1815. This and several antecedent payments were all made by Ellis.
    A further ground of defence taken in relation to the surety was, that the above evidence ought not to affect his legal discharge by lapse of time, there being no evidence that he had made any payment, or had known of the making of any by Ellis, or that any demand had been made upon himself, or any notice given to him that the note was not paid, from the making of the note until a short time before the commencement of the suit.
    It was further contended on the part of the surety, chat he ought to be discharged of the contract, on account of the negligence of the holder- of the note in not obtaining payment of Ellis, and not giving the surety any notice, nor making any demand upon him. Ellis, at the time of making the note, and until the year 1820, resided in Seekonk, about three miles and a half from Providence, the place of the surety’s residence, and the plaintiff, and such other persons as had possession of the note, lived within half a mile of Ellis. The surety owned a farm in the immediate neighbourhood and was frequently there. The agent of the plaintiff living in Seekonk, with whom the note was left, was not instructed to put it in suit, but he called from time to time on Ellis and received whatever it was convenient for him to pay, always at his request giving further time, without any fixed time, for further payment. The plaintiff always confided in the responsibility of the surety. In the winter of 1810 Ellis became embarrassed and his property was attached by his creditors. He was before that time in good credit, but afterwards was considered as insolvent, though some of his debts, not exceeding in amount 500 dollars, were paid in 1817 and 1818 by a levy on his estate ; after which he was considered as wholly insolvent. The embarrassed circumstances of Ellis were known to Bridgham, who had taken a conveyance of his real estate, at or near the time of his failure, as security for money advanced. The estate was not thus pledged to its full value.
    The defendants were defaulted; but if upon any plea or pleas the foregoing facts would constitute a good defence in regard to the surety, the default, as to him, was to be taken off, and he was to be discharged from the' action, or a new trial was to be granted, as the Court should order; otherwise judgment was to be rendered for the plaintiff.
    
      Cozzens and Merrick for the defendant Bridgham.
    
    If an obligee does an act to the injury of the surety, or varies the terms of the obligation, or enlarges the time of performance, without his consent, the surety will be discharged. Rathbone v. Warren, 10 Johns. R. 587 ; Ludlow v. Symond, 2 Caines’s Cas. in Er. 1 ; Rees v. Berrington, 2 Ves. jun. 540 ; Crain v. Colwell, 8 Johns. R. 299 ; Livingston v. Bartles, 4 Johns. R. 478 ; Lanuse v. Barker, 10 Johns. R. 327 ; Pain v. Packard, 13 Johns. R. 174 ; The People v. Jansen, 7 Johns. R. 337 ; King v. Baldwin, 17 Johns. R. 390 ; 
      Eddowes v. Niell, 4 Dallas, 134 ; Commissioners of Berks v. Ross, 3 Binney, 523 ; Commonwealth v. Wolbert, 6 Binney, 295 ; Laxton v. Peat, 2 Campb. 185 ; Collot v. Haigh, 3 Campb. 281. Gross negligence in securing the debt, by means of which the loss might be thrown upon the surety, will discharge him. Duval v. Trask, 12 Mass. R. 156 The rule is the same in a court of law as in a court of equity, 7 Johns. R. 337 ; 2 Ves. jun. 542 ; 17 Johns. R. 391 2 Caines’s Cas. in Er. 30. The action is barred as against the surety by the lapse of more than twenty years, and he cannot be affected by the payments or acknowledgments made by Ellis. From these principles it results, that the defend ant Bridgham is not liable to this action.
    
      A. Cushman, for the plaintiff,
    cited Hunt v. Adams, 5 Mass. R. 358, and 6 Mass. R. 519 ; Whitcomb v. Whiting, 2 Doug. 652 ; Johnson v. Beardslee, 15 Johns. R. 3 ; Dean v. Pitts, 10 Johns. R. 35 ; Smith v. Ludlow, 6 Johns. R. 267 ; Jackson v. Fairbank, 2 H. Bl. 340 ; Powell v. Waters, 17 Johns. R. 176 ; Roseboom v. Billington, ibid. 182 ; Searle v. Barrington, 2 Str. 826.
    The opinion of the Court was delivered at April term 1825, at Taunton, by
    
      
       See Pittam v. Foster, 2 Dowling & Ryland, 363.
    
   Wilde J.

The first ground of defence in this action is the presumption of payment arising from lapse of time. But this presumption is effectually rebutted by the partial payments made by Ellis, one as late as the year 1815, which are equivalent to an express acknowledgment of an existing debt. As to the legal effect of these payments the two defendants stand on the same footing; The contract being proved, the admission of one is the admission of both. If one of several joint promisors acknowledges the debt within six years, it will take the case out of the statute of limitations as to the other promisors. Whitcomb v. Whiting, 2 Doug. 652 ; Jackson v. Fairbank, 2 H. Bl. 340 ; Smith v. Ludlow, 6 Johns. R. 267. A fortiori will a like admission, whether express or implied, be sufficient to repel a mere presumption. If there were any proof of collusion between the creditor and the principal, to throw the debt on the surety and to deprive him of his indemnity, without doubt he wr* d be entitled to relief, but nothing of this is pretended ; and is very clear, therefore, that on this ground the defence cannot be maintained.

Another ground of defence, and that upon which the surety principally relies, is the long delay of the creditor to proceed against the principal, until he became insolvent. This prolongation of credit, it has been argued, has been the means of depriving the surety of his indemnity, and ought therefore to absolve him from his liability. And the cases of Pain v. Packard, 13 Johns. R. 174, and King v. Baldwin, 17 Johns. R. 384, have been cited in support of this position. It should not escape remark, that the Court of Errors, in the latter case, were nearly equally divided. Nevertheless, admitting the principle on which that case and the case of Pain v. Packard were decided, it does not follow that this action cannot be maintained. In both those cases the creditor was requested by the surety to proceed against the principal, and opinion of the court was placed wholly on that fact. And it is expressly admitted, that without such request the surety would have been bound by his contract. The principle which is laid down in all the cases is recognised, that the mere delay of the creditor to proceed against the principal is not sufficient to discharge the surety. The same doctrine is laid down in the case of Fulton v. Matthews, 15 Johns. R. 433. “ The holder of a note,” says Spencer C. J., “ ought to be fairly and fully apprized by the surety that he is required to prosecute the principal. A delay to sue, or even a discontinuance of a suit brought, cannot absolve the surety from his liability, if he is passive and takes no measures indicating to the holder of a note, that he insists on his proceeding against the principal.” The like doctrine was adhered to in the case of Powell v. Waters, 17 Johns. R. 176. So in the cases of Wright v. Simpson, 6 Ves. 734; The Trent Navigation Company v. Harley, 10 East, 34. And in Peel v. Tatlock, 1 Bos. & Pul. 419, and in Dehuff v. Turbstt’s Ex’rs, 3 Yeates, 160, and in Hunt v. United States, 1 Gallison, 35, and in Ludlow v. Simond, 2 Gaines’s Cas. in Er. 30, the same doctrine is recognised. It seems therefore to be a well established principle, and too plain to admit of doubt, that mere delay, unaccompanied with fraud or an agreement not to prosecute the principal, does not discharge the responsibility of the surety. And such an agreement not to prosecute as will discharge the surety must be, as Chief Justice Gibbs remarks in the case of Orme v. Young, 1 Holt’s N. P. Cas. 87, binding on the cred itor, “ depriving himself of the power of suing by something obligatory, which prevents the surety from coming into a court of equity for relief; because the principal having tied his own hands the surety cannot release them.” If there is no such obligatory agreement not to prosecute, the surety cannot be absolved from his liability without applying to a court of equity, or at least without requesting the creditor to proceed against the principal. The surety is a guarantee, and therefore it is his business to see that the principal pays. If he lies by, and the insolvency of the principal intervenes, he must abide by the loss and cannot throw it upon the creditor. The only semblance of authority for a contrary doctrine is to be found in a loose note in Tothill, 279, temp. Jac. 1, but as Chancellor Kent remarks in the case of King v. Baldwin et al. 2 Johns. Ch. R. 554, it “is so very im^/cifect, and so destitute of facts and circumstances, as to be altogether unfit to serve as a guide, and unworthy to be cited as authority.”

Upon the whole, it seems to be well settled, and as we think, on the soundest principles of law and equity, that the delay of the creditor to proceed against the principal, without some binding contract to that effect, will not discharge the surety unless the creditor is requested to proceed against the principal and he neglects or refuses so to do ; which, according to the cases of Pain v. Packard and King v. Baldwin, will be sufficient to discharge the surety. Most certainly this is going far enough in favor of sureties. If they will neglect to take any step for their own security, and the principal fails, they cannot complain of the creditor or of the law, if they suffer by their negligence.1 *

Judgment for the plaintiff. 
      
      
        Frye v. Barker, 4 Pick. 384, 385 ; Bound v. Lathrop, 4 Connect. 336 ; Ward v. Howell, 5 Harr. & Johns. 60 ; Pernam v. Raynall, 9 Moore, 566 Hopkins v. Banks, 7 Cowen, 653 ; Shelton v. Cocke, 3 Munf. 191 ; White v 
        Hale, 3 Pick. 291 ; Hathaway v. Haskell, 9 Pick. 42 ; Getchell v. Heald, 7 Greenl. 26 ; Burleigh v. Stott, 2 Manning & Ryland, 93 ; Patterson v. Choate, 7 Wendell, 441 ; Coit v. Tracy, 9 Connect. R. 1 ; Austin v. Bostwick, id. 496. But see Bell v. Morrison, 1 Peters, 373 ; Levy v. Cadet, 17 Serg. & Rawle, 126 ; Searight v. Craighead, 1 Pennsylvania R. 135; in which cases it is held, that the acknowledgment of a debt barred by the statute of limitations is not the mere continuation of the original promise, but a new contract springing out of, and supported by the original consideration. And Mr. Justice Wilde, in Cady v. Shepherd, 11 Pick. 408, admits, that if this principle is conceded, the conclusion drawn from it is just.
      See further on this subject, Atkins v. Tredgold, 2 Barn. & Cress. 23, Slater v. Lawson, 1 Barn. & Adol. 396 ; Bland v. Haselrig, 2 Ventr. 151 ; Pittam v. Foster, 1 Barn. & Cress. 248 ; 3 Kent’s Comm. (2d ed.) 50, 51 ; Wylde v. Porter, 3 Neville & Man. 586.
      It is held in Gardiner v. Hutting, 5 Greenl. 140, that an acknowledgment of the debt, or a new promise, by the maker of a promissory note, takes it out of the statute of limitations only so far as he is concerned; and does not affect the rights or obligations of collateral parties. See also Theobald on Principal and Surety, 112,113, (1 Law Libr. 67); Revised Stat. c. 120, §14.
      1 See Sailly v. Elmore, 2 Paige, 497 ; Ramsay v. Westmorland, 2 Pennsylvania R. 203 ; Baker v. Briggs, 8 Pick. 130 ; Hall v. Wilcox, 2 Moody & Malk. 58 ; Dixon v. Ewing, 3 Ohio R. 802 ; Bellows v. Lovell, 4 Pick. 155.
     
      
       See Kennebec Bank v. Tuckerman, 5 Greenl. 130 ; Gahn v. Niemcewicz, 11 Wendell, 317, 318 ; Reynolds v. Ward, 5 Wendell, 501 ; Oxford Bank v. Lends, 8 Pick. 458 ; Blackstone Bank v. Hill, 10 Pick. 129 ; McKenney v. Waller, 1 Leigh, 434 ; Braman v. Howk, 1 Blackford, 392 ; Clagett v. Salmon 5 Gill & Johns. 314.
     
      
       See Crane v. Newell, post, 614, n. (1).
     
      
       The doctrine, that a mere delay of a creditor to sue the principal does not discharge a surety, is recognised in the following cases. Locke v. The United States, 3 Mason, 446 ; Oxford Bank v. Lewis, 8 Pick. 458 ; Blackstone Bank v. Hill, 10 Pick. 129 ; Fullam v. Valentine, 11 Pick. 156 ; Archer v. Hale, 4 Bingh. 464 ; Bank of Ireland v. Beresford, 6 Dow, 238 ; Eyre v. Everett, 2 Russell, 381 ; Heath v. Key, 1 Young & Jerv. 434 ; Nares v. Rowles, 14 East, 514 ; Lond. Ass. Co. v. Buckle, 4 B. Moore, 153 ; Goring v. Edwards, 6 Bingh. 94 ; S. C. 3 Moore & P. 259 ; Combe v. Woolf, 8 Bingh. 156 ; Howell v. Jones, 1 Crompton, Mees. & Rosc. 97 ; United States v. Kirkpatrick, 9 Wheat. 737 ; Dox v. Postmaster General, 1 Peters ; 326 ; Buchanan v. Bordley, 4 Harr. & M‘Hen. 41 ; Hunt v. United States, 1 Gallison, 32 ; Burn v. Poaug, 3 Desaus. 604 ; Dehuff v. Turbett, 3 Yeates, 157 ; Thursby v. Gray, 4 Yeates, 518 ; Cope v. Smith, 8 Serg. & Rawle, 110 ; Commonwealth v. Wolbert, 6 Binn. 292 ; Fulton v. Matthews, 15 Johns. R. 433 ; Powell v. Waters, 17 Johns. R. 176 ; The People v. Russell, 4 Wendell, 570 ; Townsend v. Riddle, 2 N. Hamp. R. 448, Lenox v. Prout, 3 Wheat. 524 ; McKenney v. Waller, 1 Leigh, 434 ; Wayne v. Kirby, 2 Bailey, 551 ; Treasurers v. Johnson, 4 M'Cord, 458 ; Shu
        
        brick v. Russel, 1 Desaus. 315 ; Braman v. Howk, 1 Blackford, 392 ; Strafford Bank v. Crosby, 8 Greenl. 191.
      And it is no defence at law to an action on a bond against a surety, that by a parol agreement time has been given to the principal; Davy v. Prendergrass, 5 Barn. & Ald. 187 ; Bulteel v. Jarrold, 8 Price, 467 ; Lond. Ass. Co. v. Buckle, 4 Moore, 153 ; Nares v. Knowles, 14 East, 510 ; Blennerhasset v. Pierson, 2 Lev. 234 ; Hough v. Warr, 1 Carr. & P. 151 ; Calvert v. Gordon, 1 Manning & Ryl. 497 ; S. P. Blackstone Bank v. Hill, 10 Pick. 129 ; Farley v. Thompson, 15 Mass. R. 18 ; Sewall v. Sparrow, 16 Mass. R. 24 ; Fullam v. Valentine, 11 Pick. 156; though that circumstance might induce a court of equity to interfere. Archer v. Hale, 1 Moore & P. 285 ; 3 Moore & Scott, 527 ; Bulteel v. Jarrold, 8 Price, 467.
      For cases where an agreement by the creditor to give time to the principal debtor has been held to discharge the surety, see Butler v. Hamilton, 2 Desaus. 226 ; Ludlow v. Simond, 2 Caines’s Cas. in Err. 1 ; Hill v. Bull, Gilmer, 149 ; Jones v. Bullock, 2 Bibb, 467 ; Baird v. Rice, 1 Call, 18 ; Commonwealth v. Vanderslice, 8 Serg. & Rawle, 452 ; G. Bank v. Woodward, 5 N Hamp. R. 99; Bank of Steubenville v. Hoge, 6 Ohio R. 17.
      For cases where change in the risk of surety will discharge him, see Craig v. Cox, 2 Bibb, 309 ; Boston Hat Manufacturing Co. v Messinger, ante, 235 n. 2.