Court Opinion

ID: 4007137
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:07:53.836485+00
Date Added: 2024-06-11T13:56:59.853652
License: Public Domain

I am unable to agree with the conclusions of the majority in this case, and my dissent rests on two points:
First: I think the notice given by the defendant, Cornwell, to the General Receiver of the Circuit Court of Hampshire County, dated December 7, 1935, was a substantial compliance with the requirements of Code 45-1-1, and that, assuming the solvency of Zimmerman, the principal debtor, the failure of the receiver to proceed by suit, within a reasonable time thereafter, to collect the note in question, served to release Cornwell from liability thereon under the provisions of Code,45-1-2. Action on *Page 467 
the note was not instituted until August, 1940, long after the reasonable time contemplated by the statute for the institution of such action had expired.
It will be noted that the statute provides that a surety "may * * * require" the holder of a note on which he is surety "forthwith to institute suit thereon", and that notwithstanding anything the surety may do, the holder of the note may still hold the surety to strict liability, if suit is instituted within a reasonable time after requirement to sue is communicated to the holder by written notice. No particular form of notice is required. In my opinion a notice to collect involves all necessary proceedings, including suit or action, to effectuate that purpose, and this is especially true where the notice served, as here, plainly shows on its face that the object and purpose of the surety was to bring about, either the collection of the note from the principal, or to be otherwise released from liability thereon. The object of the statute being to protect sureties, its provisions should be liberally construed in his favor. This works no injustice to the holder of the note, because if he proceeds to collect the note, and goes so far as to institute suit within a reasonable time, he retains his rights against the surety unimpaired, despite the notice to collect or to sue. Giving the statute a liberal construction, any written notice by a surety, which clearly advises the holder to collect should be interpreted as notice to sue, if that method of collection should be necessary. Reading Code, 45-1-1 and 2, together, I attach little importance to the word "forthwith" used in the first section, because the second section only requires a suit to be instituted within a reasonable time, and then only if the principal debtor is not insolvent. As I understand the majority opinion, the theory of a liberal construction of the statute is accepted, and likewise that only a substantial compliance therewith is required. In my opinion, such holding requires a further step, that is, a holding that the notice given was sufficient to place the receiver under the duty of proceeding under Code, 45-1-2, to collect the note in question by suit instituted within a reasonable *Page 468 
time thereafter, provided only the principal debtor was not at that time insolvent.
Second: I agree that, despite the notice given, the general receiver was under no duty to institute an action on the note in question, if the principal thereof was insolvent at the date of the notice, or within the reasonable time given for the institution of such action. Remage v. Marple, 76 W. Va. 379,85 S.E. 663. I also agree that the evidence tending to show the solvency of Zimmerman at the date of the notice, December 7, 1935, and for a reasonable time thereafter, is meager and unsatisfactory, and, had the trial court directed a verdict against Cornwell on that ground, this Court would not be justified in reversing its action as plainly wrong. But the trial court did not pursue that course. It submitted the question of Zimmerman's solvency to the jury under an instruction, and the jury found in favor of Cornwell on that point. The question of whether a given person is solvent or insolvent at a particular time is a difficult one to determine. Generally speaking, a person is insolvent when his property is not of sufficient value to pay his debts, but that does not always mean that a judgment may not be collected from a person who is, in fact, insolvent. The statute must refer to a known insolvent. Zimmerman was in active business in December, 1935, and no suits had been instituted against him. He was apparently meeting his obligations, and it is not unreasonable to say that he could have met this one, had the general receiver proceeded so far as to institute suit, when Cornwell notified him to collect the note on which he was surety. Whether or not Zimmerman was solvent at that time in the sense that the note in question could have been collected, is a question upon which there might be disagreement among reasonable men. At least a proceeding to collect, if carried into judgment, would have established a lien on Zimmerman's real estate, and, if execution issued, his personalty as well. I do not think it can be said that the verdict of the jury was plainly wrong under the evidence. Furthermore, I think the verdict of the jury added something *Page 469 
to the showing made by the evidence, and that the trial court did not have the same freedom with respect to weighing the evidence on the point of solvency that it had prior to the submission of that question to the jury. Having submitted the question, it was under some obligation to respect the jury finding. Neither the action of the court in refusing to direct a verdict on the question of insolvency, and submitting that question to the jury, nor the verdict of the jury, can be said to be plainly wrong. I am, therefore, of the opinion that the court erred in setting aside the jury verdict.
Believing that the notice of December 7, 1935, was sufficient, and that the verdict of the jury on the question submitted to it can not be held to be plainly wrong, I would reinstate the verdict and enter judgment here in favor of the defendant Cornwell.