Court Opinion

ID: 8185035
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:23.74266+00
Date Added: 2024-06-11T16:40:23.084971
License: Public Domain

NewMabt, J.
The plaintiff realized from the sale of the mortgaged property more than sufficient to satisfy all the claims which it held against Sweeney at the time when the mortgages were taken, including the note on which defendant was indorser. It applied the money so received, under Sweeney’s directions and without the defendant’s kno wledge, in part to the payment of claims against Sweeney, and to his use, arising subsequently to the execution of the mortgages. It is settled law that where a creditor has the means of satisfaction in his hands, or within his control as security, and does not use it for that purpose, but relinquishes to his debtor, or misapplies it to the payment of unsecured claims against his debtor, a surety for his debt will be discharged. Hutchinson v. Woodwell, 107 Pa. St. 509, 520; City Bank v. Young, 43 N. H. 457; Burr v. Boyer, 2 Neb. 265; Guild v. Butler, 127 Mass. 386; Hall v. Hoxsey, 84 Ill. 616. An indorser on a promissory note is a surety within this rule. Batavian Bank v. McDonald, 77 Wis. 486.
So far, then, as concerns the defendant, the debt for which he was liable on his indorsement was discharged, and he was released from further liability on account of it. At the time when he indorsed the renewal note, which is the note *661in suit, be bad no knowledge of tbe transactions betwreen tbe plaintiff and Sweeney, whereby be bad been released, but supposed that be was still liable upon bis indorsement and that tbe plaintiff still beld tbe security for bis indemnity. Tbe procuring of tbe renewal indorsement, in bis ignorance of tbe real situation, operated as a fraud upon bim. lie was under no legal or moral obligation to pay tbe debt or to renew tbe indorsement. . His subsequent express promise to pay it, made in sucb ignorance of tbe facts, was without consideration and is not binding upon bim. Gamage v. Hutchins, 23 Me. 565; Van Derveer v. Wright, 6 Barb. 547. Nor was be estopped by that promise to deny further liability for tbe debt. Fay v. Tower, 58 Wis. 286.
Tbe facts are undisputed. Tbe judgment is right.
By the Gourt.— Tbe judgment of tbe circuit court is affirmed.