Court Opinion

ID: 6501775
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:14:36.702519+00
Date Added: 2024-06-11T15:54:37.959138
License: Public Domain

ORMOND, J.
The plaintiffs in error were doubtless discharged by the time given the principal debtor by the defendants in error, without their consent, unless the fact that they are fully indemnified by the principal debtor will prevent their availing themselves of it, and in our opinion it must have that effect.
The taking by the sureties of a deed of trust or mortgage from the principal debtor to secure them against liability, and ample for that purpose, is in effect an appropriation by them of that portion of the effects of the principal to the payment of this debt, and they will not therefore be permitted to urge that they are not responsible. The cases cited by the counsel for the defendant in error that the taking by an indorser of an assignment of the effects of the maker as indemnity against loss upon the indorsement, is a waiver of demand and notice, oran admission of notice, are in principle quite analagous to this case. The case of Moore v. Paine, [12th Wendell, 123,] is in point There the sureties were discharged by the act of the creditor, but being fully indemnified by the debtor, were held liable to the creditor. The Court say, “The discharge of Freer, (the debtor,) could in no possible way interfere' with their rights or liabilities so long as they held in their hands a complete indemnity against the bond and he is not accountable to them if they are obliged to pay it.”
The same principle was affirmed in the case of Bradford v. Hubbard, [8th Mass. 155.] An accommodation indorser who was fully indemnified by the drawer, sued the acceptor of a bill of exchange, the bill having been accepted for the accommodation of the drawer. The Court recognized the principle that an accommodation acceptor was responsible to a bona fide holder of a bill, although he knew the acceptance was for the accommodation of the drawer; but the Court refused to permit him to recover of the acceptor, on the ground that he was fully indemnified. The language of the Court is, “we consider the appropriation of the proceeds of the effects of John R. Bradford, (the drawer,) to the payment of the plaintiff as iudorser of this bill in the same light as if the money was in *225his own hands. It is so appropriated by the assignment, and the money is át the command of the plaintiff whenever he chooses to receive it.”
These case.s are decisive of the principle contended for by the defendants in error, and as they command onr approbation the judgment of the Court below must be affirmed.