Court Opinion

ID: 6580641
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:37:59.963948+00
Date Added: 2024-06-11T15:57:16.182580
License: Public Domain

The opinion of the court was delivered by
Redfield, J.
This action is assumpsit upon two promissory notes for $125 each. The first was the proper note of the Richardsons, and indorsed by the plaintiff and defendant and one McCarty. The Richardsons failed, and the plaintiff paid the note. The Richardsons compounded with their creditors, and plaintiff received his pro-rata proportion with the other creditors, and discharged the Richardsons from further liability. This was done by the advice and consent of defendant, and with his agreement that it should not affect his own liability.
The liability of the sureties to pay the debt had become fixed by the insolvency of the principals ; and when the plaintiff paid the debt, defendant became liable to the contribution of one moiety, the other indorser being insolvent. The defendant, having agreed with plaintiff to compromise with the principals and discharge them for a certain sum, which was applied in reducing this burden which was common to both, and that such discharge should not affect his liability, — is estopped from questioning the agreement which induced the discharge. It would be gross bad faith, and work a fraud upon the plaintiff.
II. The defendant refused to indorse said note unless McCarty would procure plaintiff and one Davis to indorse the note *491as cosureties with him, which he agreed to do. The plaintiff and defendant were therefore co-sureties for the Richardsons, and stood on equal footing. - McCarty agreed with the .plaintiff when he indorsed the note, that he would procure defendant to sign with him a note of like amouut, payable to the plaintiff, as security or indemnity for indorsing this note ; and on the 28d of the next November did so ; and that note is the one on which recovery was had in-the County Court. The second note was given without any new consideration, and the avowed purpose was to secure and indemnify the plaintiff for having indorsed the first note No reason is given in the statement of the case, why defendant should indemnify the plaintiff rather than plaintiff the defendant. Neither had been benefited by the note, and both were naked sureties. The giving of the second note was without benefit to the defendant, and discharged no existing obligation or duty. As between these parties, it was a naked promise, without moral or legal obligation. The plaintiff assumed no new duty, and his risk as indorser was not changed. We think the second note is wanting in an essential element that gives life and validity to a contract.
The judgment of the County Court is reversed, and judgment for the plaintiff for one half the sum paid by the plaintiff as indorser of the first-named note, less the sum secured from the Richard-sons, with interest and cost, to be computed by the clerk on notice.