Case ID: kan_12/html/0088-01.html
Source: Caselaw Access Project
Author: {"author": "Brewer, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harvey Ray, Jr., v. Adam Brenner.
    
    July Term, 1873.
    1. Principal and Surety: Extinguishment of Obligation: Exception to Rule. While the general rule is that the obligation of a surety becomes extinct by the extinction of the obligation of the principal debtor, yet there is this exception, that, when the extinction of the principal’s obligation arises from causes, such as bankruptcy and certificate, which-originate with the law, and not in the voluntary acts of the creditor, then the obligation of the surety is not extinguished.
    2. -: Forbearance. However much the forbearance of the creditor towards the principal debtor may prejudice the surety, it will not discharge him from liability. [Ilalderman v. Woodward, 22 Kan. 741.]
    Error from Doniphan district court.
    The case is stated in the opinion.
    
      *S. Tennant and Price & Webb, for plaintiff in error.
    It was only necessary for an execution to issue, in order to make the surety Brenner liable in this ease on the judgment. Once liable, he would continue to so remain, until the statute of limitations would bar the judgment against him; and the reeord shows that several executions were issued.
    The death of Foreman would not set the statute in motion, as to the defendant Brenner, who was liable upon the judgment after execution issued, independent of Foreman; and nothing but payment would satisfy the judgment.
    If Brenner desired to have the judgment probated, he could have •paid it off, and been subrogated to Bay’s rights. ' Johnson v. Eldred, 13 Wis. 543.
    
      W. W. Guthrie, for defendant in error.
    In ease of principal and surety, the surety can only be held after the principal’s property has been exhausted. Comp. Laws, 202, ■Civil Code, § 461. There can be no waiver against defendant without also waiving against estate of Foreman; and this certainly cannot be done after.one year.
    But the judgment not having been proved up as a demand against the estate of Foreman during the three years of administration, it is barred against his estate, (Comp. Laws, 534, §§ 151, 152;) and by act of plaintiff, in not -proving up his demand, the estate of Foreman has been discharged hy Limitation. And if the principal is discharged, then, under section 461, (Code of 1862, supra-,) no proceeding can be had against defendant as surety. Without this (section 461) the surety would be discharged. State of Ohio v. Blake, 2 Ohio St. 148; Ide v. Churchill, 14 Ohio St. 883; Rose v. Williams, 5 Kan. *488.
    The surety is discharged whenever he is debarred from proceeding against his principal. This has occurred in this case through the negligence of the plaintiff. The estate was *solvent: how could Brenner know that the judgment was not paid, or that plaintiff would ever look to him for it ?
    
      
       Collateral security, see Jones v. Scott, 10 Kan. *35, and note; contribution between, see Points v. Jacobia, ante, *50, and note; partners as principal and surety, Strong v. Baker, 25 Minn. 442. An agreement between the creditor and principal debtor for extending the time of payment, though made after the debt was •due, discharges the surety. The taking of the debtor’s note, payable at a future day, held to work such an extension. Wheaton v. Wheeler, 27 Minn. 464; S. C. 8 Ñ. W. Rep. 599. Judgment against surety on appeal from justice’s court, Libby v. Husby, 28 Minn. 40; S. C. 8 N. W. Rep. 903; Plaintiff, being beneficiary in a life insurance policy, assigned it as security for two notes of her husband, held that she was merely a surety for her husband, and an extension of the time of payment, without her consent, discharged her and released the policy. Allis v. Ware, 28 Minn. 166; S. C. 9 N. W. Rep. 666. Laches of the creditor, in dealing with collaterals, will discharge the surety to the extent of the resulting loss. Nelson v. Munch, 28 Minn. 314; S. C. 9 N. W. Rep. 863. A surety’s obligation is to be strictly construed, and not extended by implication. County of Scott v. Ring, 29 Minn. 398; S. C. 13 N. W. Rep. 181. A surety, signing a note with condition (not apparent thereon) that the principal shall not deliver it until another ■surety signs, is liable on the note to the payee who took it for value without notice of the condition. Ward v. Hackett, 30 Minn. 150; S. C. 14 N. W. Rep. 578. 'The statute places sureties for an insolvent debtor in the same position as creditors, as respects the validity of conveyances securing a preference. Weston v. Sumner, 31 Minn. 456; S. C. 18 N. W. Rep. 149. Creditor failing to sue principal debtor while solvent, as requested by surety, will not release surety when debtor becomes insolvent. Smith v. Freyler, 1 Pac. Rep. 214. Extension of time allowed debtor without knowledge of surety may discharge him; but an averment that the time was extended, and not stating for any definite period or upon any consideration, is not a sufficient defense to suit against surety. Smith v. Freyler, 1 Pac. Rep. 214. Joint maker of a promissory note may show that he signed as surety and that payee had knowledge thereof. Smith v. Freyler, 1 Pac. Rep. 214. Partner is principal when other partner becomes his surety for the payment of debts, (on dissolution,) and may recover from such principal. Barber v. Gillson, 1 Pac. Rep. 452. Agreement between bank and surety, indorsement of payment of old note and execution of new note, considered, and held that new note was not an acknowledgment of an existing indebtedness on the part of the surety for the first note, and was not a promise to pay that note. Gragg v. Barnes, 4 Pac. Rep. 276; S. C. 32 Kan. 301. Where the party, at the request of another, enters into a contract or assumes an obligation as surety for him, the law implies indemnity against any loss on account of obligation assumed. Cotton v. Alexander, 4 Pac. Rep. 259; S. C. 32 Kan. 339. Willingness, unaccompanied by an offer to pay a note, by a co-surety, before suit is commenced, is not sufficient to relieve such co-surety from liability for costs after a recovery of judgment. Van Winkle v. Johnson, 5 Pac. Rep. 922.
      Principal and surety — their relation, Ottenstein v. Alpaugh, 2 R. W. Rep. 219; Mitchell v. Chambers, 5 N. W. Rep. 57; surety not released by an invalid usurious extension of time of payment, St. Marie v. Polleys, 1 N. W. Rep. 389; sureties on certain sewing-machine contract are not liable beyond the terms of the contract, White Sewing Mach. Co. v. Mullins, 2 N. W. Rep. 196; rights and liabilities of sureües, Rounsavell v. Wolf & Payne, 2 N. W. Rep. 545; Meyers v. Farmer, Id. 572; on prior mortgage cannot be subrogated to rights of prior mortgagee without notice, Patton v. Eberhart, 2 N. W. Rep. 954; surety can make no defense on bond that his principal could not, Boone Co. v. Jones, 2 N. W. Rep. 987; surety on injunction bond may purchase the judgment, Davis v. Wilson, 3 N. W. Rep. 52; surety on non-negótiable paper signing on condition that the other persons should sign also, is not liable unless they sign, Daniels v. Gower, 3 N. W. Rep. 424; liability of surety on an attachment bond, Bunt v. Rheum, 3 N. W. Rep. 667; surety on infant’s note may take his chattel mortgage, Knaggs v. Green, 4 N. W. Rep. 760; on bond to stay execution, protects his own property by pointing out property of his principal, Barnes v. Cavanaugh, 3 N. W. Rep. 801; surety must act only on request of the principal, Mitchell v. Chambers, 5 N. W. Rep. 57; all the facts in the case must be disclosed to the surety, Remington Sewing Mach. Co. v. Kezertee, 5 N. W. Rep. 809; liability extends only to official acts of coroner, White v. East Saginaw, 6 N. W. Rep. 86; when note is surrendered through fraud, sureties may be proceeded against, Kirby v. Landis, 6 N. W. Rep. 173; bond given by agent of life insurance company does not cover acts of cashier, Equitable Life Assurance Soc. v. Coats, 6 N. W. Rep. 648; principal on a bond cannot bind his sureties by declaration of such sureties, Root v. Caldwell, 6 N. W. Rep. 695; joint maker or surety on a note may maintain action against the principal, McClatchie v. Durham, 7 N. W. Rep. 16; no recovery can be had against sureties on certain bond for jail limits, Gunn v. Geary, 7 N. W. Rep. 235; mortgage security discharged by taking new notes for old ones, Jaffrey v. Crane, 7 N. W. Rep. 300; recovery of judgment against surety is conclusive .as to the existence of certain indebtedness, Hellyer v. Briggs, 7 N. W. Rep. 490; surety has a right to reimbursement by action for money paid for principal, Kimmel v. Lowe, 9 N. W. Rep. 764; guarantor Las a right to notice of the amount of his liability, Singer Manuf’g Co. v. Littler, 9 N. W. Rep. 905.
      Release of surety. A surety is discharged by a subsequent material change, Nichols v. Palmer, 4 N. W. Rep. 137; retention of former note does not work an injury, when, National Bank v. Ketchum, 4 N. W. Rep. 801; extending time for payment of past due note discharges the indorser, Hamilton v. Prouty, 7 N. W. Rep. 659; discharged by payment of note past due by principal maker with a new one, Greening v. Patten, 8 N. W. Rep. 107; for faithful conduct of an agent is not discharged from liability on account of agent’s former dishonesty, Home Ins. Co. v. Holway, 8 N. W. Rep. 457; an agreement made without consent of sureties discharges them, Wheaton v. Wheeler, 8 N. W. Rep. 599; mere failure of creditor to institute action against the principal at time debt became due will not discharge the surety, Sheldon v. Williams, 9 N. W, Rep. 86; procuring an additional surety without the consent of first surety will discharge the first surety, when, Berryman v. Manker, 9 N. W. Rep. 103; fraudulent alteration to release surety need not be proved beyond a reasonable doubt, Lewis v. Garretson, 9 N. W. Rep. 214; if a surety only surrenders certain collateral securities under misrepresentations, he is discharged only to the extent of such property, Rowley v. Jewett, 9 N. W. Rep. 353; surety is discharged by laches in the case of collateral' security. Nelson v. Munch, 9 N. W. Rep. 863; giving of mortgage that does not. extend time of payment definitely will not discharge sureties, Meguiar v. Groves, 1 Fed. Rep. 279; liability of surety under additional bond of guardian, Douglass-v. Kessler, 10 N. W. Rep. 313; sureties on appeal bond cannot attack judgment, for fraud — striking out bad pleading, Krall v. Libbey, 10 N. W. Rep. 386; liability of sureties on constable’s bond for an unlawful levy, Noble v. Himoe, 10 N. W. Rep. 499; liability of surety on sheriff’s bond for an unlawful arrest, Kopplekom v. Huffman, 10 N. W. Rep. 577; execution sale of surety’s property to surety on a stay bond was without right of redemption, Chase v. Welty, 10 N. W. Rep. 648; release of sureties by extension of time, Wendling v. Taylor, 10 N. W. Rep. 675; liability under condition to pay whole amount of certain claim, Jones v. Fields, 10 N. W. Rep. 747; defendant may show that he assigned all his property in consideration of being exonerated, Lange v. Perley, 11 N. W. Rep. 193; creditor who knows that his debtor is only a surety is bound to take no steps that, will change liability without surety’s consent, Bank of Commerce v. Coumbe, 11 N. W. Rep. 196; surety, on paying debt of principal, has right to be subrogatedi to all rights of an original creditor, Searing v. Berry, 11 N. W. Rep. 708; extension of time, and not mere forbearance to collect debt, discharges surety, Michigan State Ins. Co. v. Soule, 16 N. W. Rep. 662; judgment against principal and! surety (under Code) considered, State v. McGlothlin, 16 N. W. Rep. 137; mortgage of indemnity given surety by maker of note will not render him liable after extension of time, Fay v. Tower, 16 N. W. Rep. 558; promissory note of principal debtor on bond taken, payable at fixed future time, will not discharge surely if right of immediate action on bond is reserved, Jones v. Sarchett, 16 N. W. Rep. 589; usurious note, given as consideration for extension of time of payment of another note, without knowledge of surety on such note, will release surety, Fay v. Tower, 16 N. W. Rep. 558; change of venue at request of principal will entitle surety to change also, Sweet v. Wright, 17 N. W. Rep. 468; cqmposition with creditors operates as an extension of time to the debtor, and will discharge a surety on his promissory note, Lambert v. Shitter, 17 N. W. Rep. 187; judgment creditor may make amount due out of any one of several defendants, but if one defendant is a surety for the other, a release of property taken under execution against the principal debtor will relieve the surety, as such release will operate-as an extension of time to the principal debtor, Hyde v. Rodgers, 17 N. W. Rep. 137; interest on the amount of the penalty, and in excess thereof, may be recovered from the surety where damages resulting from a breach of a bond exceed the penalty, etc., Clark v. Wilkinson, 18 N. W. Rep. 481.
      Mortgage conditioned to save harmless mortgagee from payment of a debt for which he was surety will not sustain an action until mortgagee has been compelled to pay the debt, or some part of it, Forbes v. McCoy, 20 N. W. Rep. 17; notice of surety to creditors to bring suit, held not sufficient under Code, §§ 2108, 2109, Moore v. Peterson, 20 N. W. Rep. 744; payment of debt releases its securities, George v. Wamsley, 20 N. W. Rep. 1; promissory note, payable on the performance by the payee of a written contract of even date, is not so altered as-to release a surety thereon by indorsement by the maker on the note that the payee has performed his agreement, Jackson v. Boyles. 20 N. W. Rep. 746; duty of creditor to inform surety of condition of principal debtor, Bank of Monroe v. Anderson Bros. Min. & R. Co., 22 N. W. Rep. 929; where, by the express language-of a bond, the guaranty only extends to goods consigned to the principal therein named, as per terms of a written contract referred to therein, which forbids any shipments in excess of a certain amount before returns of all previous shipments have been made, there can be no liability on the part of the sureties for shipments-made in violation of the contract thus imported into the bond by way of recital, W. W. Kimball Co. v. Baker, 22 N. W. Rep. 730; an undertaking in attachment, signed by the attachment plaintiff as principal and a firm or partnership as surety, is prima facie good, Tessier v. Crowley, 22 N. W. Rep. 422; discharge of indorser, Willis v. Davis, 3 Minn. 17, (Gil. 1;) wife may be surety for husband, Wolf v. Banning, 3 Minn. 202, (Gil. 133;) levy — release of — as discharge of surety, Willis v. Davis, 3 Minn. 17, (Gil. 1;) Moss v. Pettingill, 3 Minn. 217, (Gil. 145;) discharge of surety, Allen v. Jones, 8 Minn. 202, (Gil. 172;) misconduct of creditor as discharge of surety, Huey v. Pinney, 5 Minn. 310, (Gil. 246;) extending time for payment, acceptance, Agnew v. Merritt, 10 Minn. 308, (Gil. 242;) extending time of payment to principal will not operate to discharge surety, unless notice of the relation of principal and surety is communicated to the creditor, Agnew v. Merritt, 10 Minn. 308, (Gil. 242;) duty to obtain payment from principal, Huey v. Pinney, 5 Minn. 310, (Gil. 246;) compelling creditor to sue principal, Huey v. Pinney, 5 Minn, 310, (Gil. 246;) delay will not discharge surety, Huey v. Pinney, 5 Minn. 310, (Gil. 246;) usurious interest paid by principal, Allen v. Jones,. 8 Minn. 202, (Gil. 172;) wife as surety — subrogation, Agnew v. Merritt, 10 Minn. 310, (Gil. 242;) payment by surety — subrogation, McArthur v. Martin, 23 Minn. 74; mortgage — subrogation, Felton v. Bissel, 25 Minn. 15; appeal bond — surety on, Davidson v. Farrell, 8 Minn. 258, (Gil. 225,) and First Nat. Bank of Hastings v. Rogers, 15 Minn. 381, (Gil. 305;) release of collateral security, Pence v. Gale, 20 Minn. 257, (Gil. 231;) replevin bond — amendment of judgment, Berthold v. Fox, 21 Minn. 51; security on property of debtor and surety — compelling exhaustion of principal’s property, Northwestern Life Ins. Co. v. Allis, 23 Minn. 337; see, also, Rose v. Williams, 5 Kan. 292, and note; Turner v. Hale, 8 Kan. 86, and note.
    
   Brewer, J.

In March, 1862, plaintiff recovered judgment in the district court against Austin R. Foreman as principal, and Adam Brenner as surety. On this judgment executions were issued, the-last being of date August 3, 1864. They were returned unsatisfied. Foreman died in November, 1864, and his estate was administered in the probate court of that county, and final settlement, after a lapse-of three years, made in January, 1868. The estate was solvent, and if this judgment had been presented for allowance it could have been collected; but it was not presented to the administrator, nor the court. In 1872 the plaintiff sought to revive the judgment as against Brenner, it having become dormant by lapse of time. The district court refused to order a revivor, and of this the plaintiff here complains.

We think the court below erred in its rulings. They seem to have-been based upon the idea, that because the principal debtor’s obligation had been discharged, that of the surety must also be; that the judgment could have been presented for allowance, and if presented, would have been paid; that the plaintiff was guilty of laches in not presenting it, and therefore the surety is released from further liability. The true rule is thus laid down by Thiebold in his work on Principal and Surety, p. 114: “The obligation of the surety, also, in general becomes extinct by the extinction of the obligation of the principal debtor. An exception to this rule takes place whenever the extinction of the obligation of the principal arises from causes, such as bankruptcy and certificate, which originate with the law, and not with the voluntary acts of the creditor.” In Pain v. Packard, 2 Amer. Lead. Cas. 402, it is said that “the better opinion would seem to be that he (the •creditor) is not responsible for suffering a judgment to expire, or abandoning a lien acquired by an attachment, or execution, unless the execution of the writ has gone far enough to *operate as a virtual payment or satisfaction of the debt.” In U. S. v. Simpson, 3 Pen. & W. 437, the surety was held liable, although .a judgment against the principal had been allowed to expire, and the land which it bound was sold under executions issued by other persons. Mundorff v. Singer, 5 Watts, 172; Farmers’ Bank v. Raynolds, 13 Ohio, 85. These eases are much stronger than the one at bar. Liens were lost, while here no lien ever existed. All that can be said is, that the creditor omitted to proceed. No act of his extinguished the obligation of the principal debtor. That resulted through operation of law. The obligation to see that the debt was paid rested on the principal and surety, and not on the creditor. If the surety wished it collected from the principal, he should have paid the judgment, been subrogated to the rights of the creditor, and then himself presented the judgment for allowance against the estate of the principal. If he failed to do this in time to realize anything from the ■estate, he must suffer the consequences. Pain v. Packard, 2 Amer. Lead. Cas. 388; Phillips v. Solomon, 42 Ga. 192; Hollingsworth v. Tanner, 44 Ga. 11; Davis v. Graham, 29 Iowa, 514; Buckalew v. Smith, 44 Ala. 638; Crawford v. Gaulden, 33 Ga. 173.

The order of the district court will be reversed, and the case remanded for further proceedings in accordance with the views herein ■expressed.

(All the justices concurring.)