Court Opinion

ID: 6579627
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:37:13.931295+00
Date Added: 2024-06-11T15:57:13.789517
License: Public Domain

The opinion of the court was delivered by
Peck, J.
The case stands upon bill, answer, traverse, and testimony. By reference to the bill and answer, it will be seen that the facts in dispute, and on which the relative rights of the parties depend, are few. It appears that at the time the promissory note in question was executed, the orators were severally sureties for one Mills, and that Mills has since failed, without fully indemnifying the orators, and that the defendant, Post, was at the same time surety for Mills upon an $800 note to the Commercial Bank, then overdue. There is no dispute but that the second note, the one in question, was signed with the understanding that it was a substitute for the first, which was never used, but given up to Flanagan soon after the second note was executed and delivered to Post; so that the principal question of fact in dispute affecting the ultimate rights of the parties, is, whether Post agreed to sign the note as principal, as between him and the orators, or either of them, or merely as surety for Mills, and co-surety with the orators. It is agreed on all hands, that Mills is the real principal, and the one who ought to pay the note. The bill alleges that Post procured the orator, Flanagan, to sign the note as his surety, representing that he wanted to use it. to raise 'money to pay the $800 note at the Commercial Bank, on which he, Post, was surety for Mills, It appears from the testimony, that Mills applied to, and procured the orators to sign the note, and that so far as Mills, Flanagan, and Post were concerned, it was understood that the note was to be used to procure money of Buttles, to pay the $800 note to the Commercial Bank, on which Post was the sole surety for Mills. Prima facie, therefore, Post, by signing the note in question, would stand as surety for Mills, and co-surety with the orators. This result follows from the relation of the parties. The burden is therefore upon the orators to show some agreement on the part of Post, by which he assumed the relation of principal to the orators, or one of them at least. Without going into *252details of the evidence, it is sufficient to say that we all agree that the proof does not show any agreement or mutual understanding that Post should stand as to either of the orators, as principal, or that ho should indemnify either of them against the note ; but, on the contrary, we find that his agreement was that he should sign the note as co-surety with the orators. Post was to take the note and sign it as co-surety, and pay the Commercial Bank note, and obtain the money of Buttles upon the note in question for his indemnity for so doing. The testimony on this point is somewhat conflicting, but taking the defendant’s answer and the evidence in the case, the balance of proof is with the defendant. It appears that at that time, all the parties regarded the responsibility of Mills as doubtful, and it is with some force urged on the part of the orators, that it is not probable that the orators would have signed the note, had they supposed they were increasing their liaability for Mills without any indemnify. But, on the other hand, it appears that Mills was going along with his usual business, and, as he then represented, was about entering upon a job, out of which he expected to realize something to pay upon the debts upon which the orators were already liable for him; that he had some property, sufficient to secure a considerable portion of the defendant’s liability for him; that the defendant had applied to him for security, and he proposed to turn out his property to the defendant, but finally, learning that the money could be obtained of Buttles on a good note, proposed to get the orators to sign the note, as already stated, and which the defendant agreed to take. Under these circumstances, it is as probable that the orators would sign the note as co-surety with the defendant, as that the defendant would forbear to take the proffered security on the property, and take the note in question, payable in a year, agreeing to indemnify the orators against it, and thus put it out of his power to secure himself until the note should become payable. The orators may have thought it more for their interest to increase their liability to the amount of two thirds of the note, than to have the defendant secure himself on the property of Mills, and break up his business. If so, the event shows that they may not have misjudged, as Mills afterwards paid 1700 on the orator’s li*253abilities, and turned out to Flanagan somé^of the property on which the defendant might have secured himself, and mortgaged another portion of it to Meech, to secure a note,on which Adams was co-surety with Meech for Mills. This mortgage would enure to the benefit of Adams equally withiMeech ;j as»a security from the principal to one surety, enures by operation of law equally to the benefit of his co-suiety. The orator, Flanagan, cannot complain of any wrongful use of the note or its avails, as it appears that before this suit was commenced, the defendant paid the Commercial Bank note, and passed the note to Buttles, the payee, for its amount in money; so that that the note, with its proceeds, has been used for the purpose for which the bill alleges, and the proof shows, it was executed.
The orator, Adams, cannot say that he signed the note on the faith that the defendant was to stand as principal as to him upon the note, as the bill alleges that the note in question was executed as a substitute for the first note, and that when Mills procured Adams’ signature to the first note, he represented to him that the defendant would sign it as cosurety; and Adams’ testimony is to the same effect, although not so explicit as the allegation in the bill.
The bill alleges that Mills, when he procured Adams to sign the note, represented to him that the avails of it should be used in payment of Adams’ existing liabilities for Mills. This furnishes no ground of relief, as there is no allegation in the bill, and no proof, that the defendant had any knowledge that any such representation was made ; and without such knowledge, the defendant ■cannot be affected by it, even if the representation was made as alleged. The testimony of Adams and of Mills is in conflict on this point, and leaves it in doubt whether any such representation was made, and it is not material which is correct.
As to the allegation in the bill, that the defendant, after he received the note, offered to sell it without signing it, and refused to sign it, we do not find it sustained by proof. The alleged offer to sell the note to Bradley without signing it, appears to have been nothing more than a casual conversation in relation to giving Bradley fifty or one hundred dollars to take his place and clear him from his liability for Mills, and not an offer to sell the note *254as a valid note to the full amount against the orators, unaffected by the defendant’s agreement to sign it as co-surety with them. But if he did offer to sell it without signing it, and endeavor to get Buttles to take it without his signature, still, it appears that before this suit was commenced, he signed the note, and. passed it to Buttles and received the consideration for it; so that the orators have not been injured by any such purpose or attempt. If the orators had such reason to apprehend that a wrongful use was about to be made of the note to their prejudice, as to warrant the bringing of the bill, they should have abandoned it when the answer came in, admitting that the defendant agreed to sign, and had signed, the note as co-surety with them, and used it in the manner the proof shows it was agreed it should be used.
The allegation in the bill, that the orators, on the 11th January, 1861, demanded of the defendant to sign the note as principal, and use it according to the understanding or agreement, or to cancel or surrender it, cannot avail the orators as a ground of relief. The defendant was not bound to sign it as principal, for that was not the agreement. He was not bound to cancel or surrender it, as he had then, out of his own funds, on the faith of it, paid the $800 note to the Commercial Bank; not having been able to obtain the money of Buttles as soon as he expected, or as soon as Buttles had promised he should have.it. It is doubtful whether, at any time after the note was delivered to the defendant, the orators could have recalled it. But if they might have recalled it immediately after it was deliveied to the defendant, and before he had advanced any thing upon the faith of it, or lost any security by relying upon it, which otherwise he might have obtained, it is very clear that the defendant, having thus advanced money upon the faith of the note, and forborne to obtain other security, the rights of the parties had become fixed.
The result is, that the defendant, and the orators severally, are co-sureties upon the note in question, and bound equally to contribute to the payment of it, and that the defendant has been guilty of no such wrongful act in relation to the note, as will sustain the orator’s bill. Decree of the court of chancery dismissing the bill with costs, is affirmed, and case remanded.