Court Opinion

ID: 7967989
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:25.47949+00
Date Added: 2024-06-11T16:34:41.933844
License: Public Domain

Mitchell, J.
This action was upon a promissory note executed' to plaintiff by one Hill, the allegation of the complaint being that before the delivery of the note, and for the purpose of giving credit to the same, defendant indorsed as follows: “I hereby waive demand, protest, and notice of nonpayment, and for value received guaranty payment of the within note.” The answer admits the execution of the note and. of the guaranty indorsed thereon, but denies knowledge or information sufficient to form a belief as to how much has been paid on it. The answer then alleges that either about the date of the maturity of the note or a year afterwards Hill-notified defendant that he was on his way to see the plaintiff “for the purpose of fixing up and taking care of said note;” that soon afterwards defendant saw plaintiff, and, after stating to him what Hill had said, asked him if the latter “had taken care” of the note, to which plaintiff replied that “Hill had called upon him, and taken care of said note;” that from that time (October, 1886 or 1887) until the commencement of this action (in 1892) the defendant never saw Hill or plaintiff, or either of them, or had any notice or information from either of them, or from any other source, that the note had not been “fully cared for and paid;” but, on the contrary, relying upon the statement of plaintiff, as before alleged, he supposed and believed that the note had been paid and canceled; that from the time of the execution of the note until Sep*176tember, 1889, Hill was perfectly solvent, and during all that time the full amount could have been collected by the exercise of ordinary diligence, but that since the date last named Hill has been, and still is, insolvent, and no part of the note collectible from him; that plaintiff has never used any diligence whatever to collect the note from Hill, although he knew that defendant was not the principal debtor, but only guarantor for Hill; that by reason of this lack of diligence on the part of plaintiff, and by reason of plaintiff’s informing him that Hill had taken care of the note, defendant was deceived, and led to believe that the note had been paid, and by reason thereof did not proceed to collect the note or secure himself against his liability of guarantor, but, upon the contrary, believing the note had been paid, did nothing towards collecting it while Hill was solvent; that, if compelled to pay the note, he would now be unable to indemnify himself by recourse against Hill.
The trial court ordered judgment for plaintiff on the pleadings. The correctness of the ruling, of course, depends on the question whether the answer states facts sufficient to constitute a defense. Counsel have «pent some time discussing the question whether the defendant was a guarani or or joint maker. While we have no doubt he was the former it makes no practical difference which he was. In either case it sufficiently appears from the answer that, as between defendant and Hill, the latter was the principal debtor, and the former a mere surety, and that plaintiff knew that fact. Something is also said as to the negligence of plaintiff in delaying to attempt collection from Hill. This, of itself, would constitute no defense. Mere passive delay to collect the note from the principal debtor would not release the surety. Benedict v. Olson, 37 Minn. 431, (35 N. W. Rep. 10.) The case, therefore, comes down to the question whether the facts set out in the answer are sufficient to constitute an estoppel in pais; and this mainly depends upon the effect to be given to the allegation that plaintiff informed defendant that Hill had “taken care” of the note. Had the allegation been that plaintiff informed defendant that Hill had paid the note, there could hardly have been any doubt that this, with the other allegations as to subsequent acts and events, would have constituted a good defense. But it is contended by plaintiff that the statement that the note had been “taken care of” was an am*177biguous expression, that did not necessarily mean either that the note had been paid, or that an extension of time of payment had been given; that defendant had no right to rely on such a statement as meaning that either of these things had been done, but should have gone further, and ascertained from plaintiff whether either of these two facts existed; and, further, that it was at most a mere evidential fact, and not an ultimate one, which alone should be pleaded. In some respects the answer is somewhat peculiar, but we cannot agree with plaintiff’s counsel as to the meaning and construction to be given to the expression “taking care of the nóte.” We think that in the language of street and office, and as understood among business men, to “take care of” matured paper means to take it up either by paying or renewing it, or at least to secure an, extension of the time of payment, and that defendant was justified in so understanding it, and, if he did, and acted on the faith of it to his damage, the plaintiff is now estopped to allege a different state of facts. For this reason we think the court erred in ordering judgment on the pleadings.
(Opinion published 55 N. W. Rep. 957.)
Order reversed.