Court Opinion

ID: 4927794
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:59:15.271493+00
Date Added: 2024-06-11T08:13:31.760527
License: Public Domain

The opinion of the Court was drawn up by
Shepley J.
— The plaintiff has instituted this suit to recover one half of the amount of money, which he paid to the Strafford Bank, to satisfy a judgment recovered against him on a promissory note made on March 28, 1825, by Jesse Varney, as principal, and by the plaintiff and defendant as his sureties. *161It is contended in defence, that the plaintiff was in fact a principal on the note, although lie signed it as a surety. From the testimony of the cashier of that bank it appears, that prior to the year 1816, Crosby and Varney were partners in business in the town of Dover, N. II., the then place.of residence and of business of all the parties to the note; that on the twenty-fifth day of July of that year Crosby and Varney made their note to the bank as principals, with John Mann and Philemon Chandler as their sureties, for one thousand dollars ; and that note remained in the bank on May 25, 1823, having been reduced by payments in part to the sum of $619,24, when it " was taken up by a new note for $600, the balance having been paid in cash, signed by Varney as-principal and by Crosby and Philemon Chandler as sureties.. This last note remained in the bank on May 25, 1825, when it was taken up by the note first named. The character, in which the parties signed that note, is presumed to be correctly exhibited by it, until the contrary be proved. Are the facts, that the loan of 1816 was made to Varney and Crosby, and that they were then partners in business, sufficient to destroy that presumption, when considered in connexion with the other testimony in the case ? It appears, that part of the loan had been paid, and that Varney became the principal and Crosby a surety on a note to pay the residue as early as the year 1821 ; and that Crosby removed from Dover to the town of Atkinson in this State, in 3 820 or 1821, and that he has since continued to reside there. Varney therefore became principal for the residue of the loan about the time or soon after Crosby’s removal. When the last note was made, Crosby had been absent from Dover as a place of residence for four or five years. During that time Varney had paid the interest on the second note. If these facts would not be sufficient to authorize the inference, that the joint interest of Varney and Crosby in the original loan had -been extinguished, and that Varney had assumed the payment of the balance due before the defendant signed the last note as his surety, they would at least be sufficient to neutralize the influence of the facts before referred to, and to leave the case with*162out satisfactory proof, that the note did not exhibit the true relation of those who signed it. The testimony does not therefore rebut the presumption of law, and establish the fact, that Crosby was in fact a principal upon the last note.
It is further contended, that the defendant was discharged by the bank by its giving time to the principal; and also by the statute of limitations of that State. The only proof, that the bank gave time to the principal, arises from its permitting the note to remain uncollected, and from its having received payments of interest upon it according to the usages of the bank. These usages appear to have been well known to the defendant. Under such circumstances the defendant would hot be discharged, as the law appears to have been formerly administered in New Hampshire as well as in this State. In the case of Bank v. Woodward, 5 N. H. R. 99, the opinion says, “ the note was originally payable on demand, although probably interest was paid for sixty days in advance with an understanding between the parties, that the money was not to be demanded within that time, unless the safety of the debt, or the situation of the affairs of the bank, should make a demand necessary. And the interest might have been paid in advance at any subsequent period, on the same terms and with a like understanding, without doing any wrong to the surety, and without discharging him from his liability upon the note.” In a recent decision made between these parties in a case arising out of the same facts, the payment of the interest in advance was considered as prima facie evidence of a contract for the delay of payment of the principal during the period for which the interest was so paid. Crosby v. Wyatt, 10 N. H. R. 318. But such has never been admitted to be the effect here. If it had been, or their law should be considered as decisive, the long continued usage of the bank, well known to both the sureties, would seem to be as satisfactory evidence of an assent on their part to the agreement for delay, as the payment of interest in advance would be of such an agreement.
A payment of part of the debt by one of several joint debtors would not, as the law has been decided to be in New *163Hampshire, authorize the inference of a new promise by ail. Exeter Bank v. Sullivan, 6 N. H. R. 124. While it would have that effect in Massachusetts and in this State. Frye v. Barker, 4 Pick. 382; Getchell v. Heald, 7 Greenl. 26. But the defendant was not discharged by the statute of limitations of New Hampshire, when the suit was commenced by the bank against the plaintiff on February 3, 1830. If therefore the plaintiff had been tiien resident in New Hampshire, he could not have succeeded in a defence for himself or his fellow surety, founded upon the statute of limitations. As the bank did not recover judgment against him until the year 1832, and as he did not pay that judgment until the year 1833, it is contended, that he did not then relieve the defendant from any existing liability ; because he could then have interposed the statute of limitations with success; and that the plaintiff is not therefore entitled to recover. If this reasoning were admitted to be sound, the result would be, that one of two sureties might be compelled by law to pay the whole debt, and yet could have no legal claim for contribution upon the other, unless he could shew, that the creditor had a legal claim upon that other, not only, when the debt was contracted, but when it was paid. And such a doctrine would enable the creditor frequently to impose the whole burden upon one of the sureties by omitting to commence a suit against the other, until he could successfully interpose the statute of limitations. Such a course of reasoning arises out of an imperfect statement of the implied contract, between the two sureties. That contract is, that each surety will pay one half of the debt if the principal neglects to pay it, or will save his co-surety harmless from injury by his being obliged through the neglect of the other surety to pay more tharg his half of it. The obligation of one surety to repay to another, who has paid the whole debí, a moiety of it, does not arise solely out of the consideration, that he has thereby been relieved of a burden, but also from the consideration, that he engaged to indemnify him against loss arising from his own neglect to pay his own share, in case the principal should neglect to pay. It is no sufficient *164defence therefore for the defendant to show, that he could not have been compelled by law • to pay any part of that note, when it was paid by the plaintiff; for that would not show, • that he had not broken his implied contract with the plaintiff to save him from loss by his being compelled to pay that half of the note, which he ought himself to have paid. The plaintiff’s -right of action for the breach of that engagement first accrued upon payment of the whole debt to the bank in the year 1833. The defendant was then residing in New Hampshire. The testimony, which proves, that since that time he had often been a few miles within the limits of this State on business with attachable personal property, which was removed again from the State on his return to his own dwelling, without any proof that the plaintiff had any knowledge of it, is not sufficient to exclude the case from the exception contained in c. 62, § 9. Little v. Blunt, 16 Pick. 359. It is not perceived, that any of the points made in the defence can be successfully maintained.

Judgment on the default.