Court Opinion

ID: 6684724
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:31:51.52698+00
Date Added: 2024-06-11T16:00:56.030931
License: Public Domain

Fuller, J.
(dissenting). Respondents Buell and Price admit in their answer, and maintain in their argument before this court, that they are guarantors of payment, and upon that theory alone the case was tried in the court below, Without any intimation that the contract by which they are bound is one of suretyship. At the conclusion of all the testimony, appellant moved the court to direct the jury to return a verdict in its favor for the full amount claimed, for the reason that there was “no evidence in the case of any positive act on the part of the plaintiff by which the rights of the guarantors were injured in any way.” This motion being denied, the ruling of the court thereon is assigned as error. The written guaranty of respondents was placed on the back of these notes for the benefit of the maker, and amounts to an unconditional undertaking upon their part to pay, without demand or notice, the amount due thereon, immediately upon default of the principal. Comp. Laws, §§ 4283, 4284. The reciprocal rights, duties, and obligations of the parties before us are not such as are created by the relation of creditor and surety, and it is immaterial under the statute whether respondents, or either of them, did in fact request appellant to proceed against the defendant Seward, or resort to any other remedy within its power which they, as guarantors, could not pursue. Says Mr. Daniel, in his treatise on the Law of Negotiable Instruments: A guarantor is a species of surety, and will be discharged by any act of a creditor that would discharge a surety.” 2 Daniel, Neg. Inst. 817. Again: “Mere delay and passivity of the creditor does not discharge a drawer or indorser, or other surety, even when the delay and subsequent insolvency of the principal deprives him of all means of reimbursement; and unless authorized so to do by statute, he cannot, by request or notice, compel the creditor to sue the principal debtor.” Id. 344. It seems to be well settled, both upon principle and authority, that the status of guarantors of payment and sureties with reference to the right to require and the duty of the creditor upon demand to proceed *335against the maker of a promissory note, is, in the absence of express statutory authority, identical, and neither is discharged from liability by reason of the delay or'negligence of the creditor in the collection of the debt by suit or by the sale of property pledged as collateral security, although he has been requested to thus proceed. Mr. Brandt, in stating his views, employs the following language: “The great majority of cases on the subject hold, in the absence of any statutory provision, that if, after the debt is due, the surety request the creditor to sue the principal, who is then insolvent, and the creditor fails to do so, and the principal afterwards becomes insolvent, the surety is not thereby discharged. The ground upon which these decisions rest is that the principal and surety are both equally bound to the creditor, who may have taken a surety in order that he might not have to sue the principal. If the surety desires a suit brought against the principal, he may himself pay the debt, and immediately sue the principal. The contrary doctrine is an innovation, and was unknown to the common law.” Brandt, Sur. § 208. One who has guarantied the payment of a promissory note in the manner and under the circumstances disclosed by the record before us is not exonerated unless there be some act upon the part of the creditor by which the original obligation of the principal is, without the guarantor’s consent, altered, or the remedies or rights of the creditor against the principal impaired or suspended. Comp. Laws, § 4290. Obviously there has been no act or omission on the part of the creditor by which the original obligation has been changed in any manner, and all the legal rights and remedies that ever existed in favor of appellant against the defendant Seward have continued without interruption, and have remained unimpaired. Respondent’s liability being fixed, upon the maturity of the notes it was their duty to pay the debt as requested, and it was not within their power to thus convert appellant’s right to proceed against the principal obligor into a like duty upon its part, which, upon failure of immediate per*336formance, would relieve them from the obligation into which they had entered. Sec. 4294 of the Compiled Laws provides that “mere delay on the part of a creditor to proceed against the principal, or to enforce any other remedy, does not exonerate a guarantor;” and, while Sec. 4304 gives to a surety all the rights of a guarantor, there is no statutory provision conferring upon a guarantor of payment the right of a surety, under Sec. 4305, to require a creditor to proceed against his principal; and the common law rule that delay after demand will exonerate neither, though once alike applicable to both, now prevails only as to the guarantor. Without some affirmative act or omission of duty on the part of a crtditor, a guarantor is not exonerated by the discharge of his principal, even by operation of law. Comp. Laws, § 4296. The execution, delivery, and nonpayment of the notes being conceded, and the making of the guaranty being admitted, it seems clear to me that no defense was alleged in the answer or offered at the trial tending to exonerate respondents. Without departing from the theory upon which the case was tried, or holding that a guarantor of payment has in this state authority to compel a creditor to proceed against the principal debtor, and that me^e delay will exonerate a guarantor, the majority opinion cannot, in my judgment, be justified. The case should be remanded, with the direction that judgment in circuit court be entered in favor of the plaintiff for the amount found to be due upon the notes.