Court Opinion

ID: 6406472
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:49:21.572417+00
Date Added: 2024-06-11T15:51:13.624648
License: Public Domain

Putnam J.
delivered the opinion of the Court. We are all satisfied that there was evidence at the trial, of a legal consideration for the note given by the defendant to the plaintiff. In many particulars the case resembles Cushing v. Gore, 15 Mass. R. 73. We think the fair deduction from the pimples laid down in that case is, that an outstanding liability as surety or indorser for another, together with a contract or *429promise, express or implied, by -such surety or indorser to the principal, that he will make the debt his own, and pay it and so indemnify the principal, is a good consideration for an express promise to pay an equal amount on demand.
ft was understood in the case cited, that the plaintiff was to pay the notes he had indorsed. There was no direct evidence of this, but the jury rightfully inferred the fact. The Court said that it might be inferred from the mere fact of a note having been given with a view to cover those indorsements. But the testimony of Jonathan Shove put that part of the case at bar, beyond any question ; for he proved the acknowledgment of the defendant, that the note for 10,000 dollars was upon an agreement that his father should indemnify him for the notes which the father had indorsed. If there was a legal consideration, then the nonsuit must be taken off, and a new trial must be granted to ascertain the damages. If the transaction were fair, the plaintiff would have a right to recover damages to the full amount which he had paid at or before the trial, upon the notes which he had indorsed or signed as surety for the defendant. But the parties admitted that the plaintiff, at the last trial, had not paid or taken up any of the notes which he had indorsed or subscribed as surety for the defendant. If the same state of things should continue at the new trial, it would be of no use to the plaintiff, for we all think he cannot recover any thing, unless he has paid something. It is to that extent only that the note for collateral security can avail the plaintiff.
Being upon good consideration and given without fraud, payable upon- demand, it would enable the promisee to make an immediate attachment of the property of the maker, not? withstanding the notes indorsed or subscribed as surety by the promisee should not fall due until some future day. It would be in the power of the promisee to sue and attach before he had paid, and if between the attachment and the trial, he should have actually paid, then the preference which the debtor intended to give, would be carried into effect. And we do not perceive any greater objection to a security thus to be enforced, than to an assignment or mortgage of real or nersonal properly as collateral security.
*430If the construction were, that the payee should recover' for the whole amount, when he had not paid, and when he had become a bankrupt and never could pay the debts which he had assumed, it would operate most unjustly and contrary to the intent of the parties ; for the creditors of the original debtor would get nothing, and the creditors of the indorser or surety would or might get the whole. Such a transaction would be a fraud upon the creditors of the original debtor. It would be directly contrary to the agreement, express or implied, that the holder of the note for collateral security should apply the funds to the payment of the debts of the maker.
Whether or not the order which the plaintiff has given in favor of the creditors of the maker of the notes indorsed, upon the officer, and accepted by him, to pay the proceeds of the property attached, shall operate as a payment pro tanto by the plaintiff, so as to enable him to recover in this suit for their benefit, will be an open question. It is sufficient now for the Court to decide, that the nonsuit shall be taken off and a new trial granted ; and that the plaintiff may recover as much as he shall prove that he shall then have paid : leaving the case open as to what may then be considered as a payment, within the intent and meaning of the parties and of this decision.
JVhie trial granted.