Court Opinion

ID: 6583460
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:40:24.215582+00
Date Added: 2024-06-11T15:57:22.531325
License: Public Domain

Andrews, C. J.
The plaintiff is the only living partner of the late firm of E. Eising & Co. The defendant is the sole surviving executor of the will of Thomas F. Fa3r, late of Danbuty, deceased. In his lifetime Fa}^ had become obligated in a bond as surety for one Thomas F. Rowan, as principal, for which he bound himself, his heirs, executois and administrators, jointly and severally with the said Rowan, in the penal sum of two thousand dollars to the said E. Eising & Co., conditioned that the sai^ Rowan, who had been employed by the said firm as salesman and collector, “ shall well and faithfully discharge his duties as such collector and *62agent, and shall also account for all moneys, property and other things which may come into his possession or control by reason of his appointment and employment as such agent and collector.” Fay died on the 25th day of June, 1892. On the fifth day of July next thereafter, the Court of Probate for the District of Danbury limited and allowed six months from said date for the presentation of claims against his estate. After Fay’s death, and between June 25th, 1892, and August 26th, 1893, Rowan received as such collector and agent from the customers of E. Eising & Co. more than two thousand dollars of money which belonged to the plaintiff, but which he appropriated to his own use — of which amount the sum of $739.41 was misappropriated by Rowan after May 26th, 1893. This defalcation of Rowan was by him fraudulently concealed from the plaintiff, and was not discovered by the plaintiff until the first day of September, 1893. He then made demand of Rowan that he should account for and pay over to the plaintiff the said amount which he had misappropriated, but Rowan has at all times neglected and refused so to do. He was then and at all times since continues to be wholl}'- insolvent.
The plaintiff notified the defendant of such defalcation on the 26th day of September, 1893, and presented to him, as such executor, the claim of said partnership on said bond; and on the 18th day of November, 1893, made demand on him for the amount of the said bond, but the defendant refused to pay it. This suit was brought on the 21st day of November, 1893.
The defendant claimed as matter of law, that upon these facts the plaintiff was barred by the statute of limitations from recovering in this action for any sums of money misappropriated by Rowan prior to May 26th, 1893. And that the fraudulent concealment by Rowan of his misappropriation did not prevent the statute of limitations from running in favor of the defendant, nor postpone the time of the arising of the cause of action upon the bond until the plaintiff discovered the misappropriation. The court did not so hold, but rendered judgment for the plaintiff for the amount oí *63the bond with interest from the date of the demand. The defendant appealed to this court.
The bond on which this suit is brought contains two conditions : first, that Rowan should faithfully discharge his duty as agent and collector for the said co-partnership ; and second, that he should account for all moneys, property, or other thing that should come into his hands, possession, or control, by reason of his employment as such agent and collector. A breach of each of these conditions is alleged in the complaint, and the facts found by the court show that each had been broken by Rowan.
Section 581 of the General Statutes — being a statute concerning the estates of deceased persons — provides that “ when a right of action shall accrue after the death of the deceased, it shall be exhibited within four months after such right of action shall accrue ” ; and that unless exhibited within such time the creditor shall be forever debarred of all right to recover the claim.
The breach of the second condition named in the bond took place, and the right of action thereon accrued, not earlier than the first of September, 1893, and within four months next before the claim was exhibited to the defendant. The Superior Court might well have rendered its judgment entirely on the breach of that condition in the bond. McKim v. Glover, 161 Mass., 418. And there is nothing in the case to show that it did not. Counsel for the defendant does not dwell on this part of the case.
Under the statute above recited the defendant admits that the plaintiff is entitled to recover the sum of $739.41, that being the amount of money misappropriated by Rowan within the four months next before the claim was exhibited to him. And he insists that because of that statute the plaintiff cannot recover for any moneys wrongfully appropriated by Rowan prior to the said four months. If that statute stood alone it is more than likely that this action would never have been contested. It is another statute which causes the dispute. Section 1389 enacts that: “ If any person, liable to an action by another, shall fraudulently *64conceal from him the existence of the cause of such action, said cause of action shall be deemed to accrue against said person so liable therefor, at the time when the person entitled to sue thereon shall first discover its existence.” Applied to a cause of action, the term to accrue means to arrive; to commence; to come into existence; to become a present enforcible demand. And the true meaning of this statute is, that in cases to which it is applicable, the cause of action does not come into existence until it is discovered by the person entitled to sue thereon. The effect of'this statute upon the present case is that no cause of action came into existence by reason of Rowan’s defalcation until it was discovered by the plaintiff.
It is admitted by the defendant that this is the effect of the statute, if limited to Rowan himself. But the defendant says that the fraudulent concealment by Rowan does not prevent the accruing of a cause of action against him, the defendant. He says that fraudulent concealment of a cause of action prevents the running of the statute of limitations only in favor of the very party who commits the fraudulent concealment. He cites Wood on Limitations (2d Ed.), page 139, and the eases there referred to, as authority. Stated in somewhat different language the claim of the defendant is, that although the accruing of a cause of action was by reason of the last quoted statute suspended, as against Rowan, until the defalcation was discovered, yet the accruing of a cause of action was not suspended against this defendant; that as against him, this defendant, the cause of action arose when Rowan committed the defalcation; and as it appears by the case that all of the defalcation, except the sum of §739.41, was committed more than four months before the claim was exhibited to him, he cannot be made liable for that part.
It seems to us that there is a fallacy — or rather it is a fatal error — in this argument. It conflicts with the most essential feature of the law relating to surety and principal. The plaintiff seeks to recover damages on account of the defalcation of Rowan. The argument of the defendant. *65assumes that a eause of action for such defalcation could exist against him before any cause of action therefor against Rowan had accrued. But the law relating to principal and surety forbids this.' The rule is that a cause of action cannot exist against a surety, as such, unless a cause of action exists against his principal. Ordinarily the liability of such a surety is measured precisely by the liability of the principal. Brandt on Suretyship, §121; Seaver v. Young, 16 Vt., 658; Boone County v. Jones, 54 Iowa, 709; Patterson's Appeal, 48 Pa. St., 345; McCabe v. Raney, 32 Ind., 309. So long as no cause of action existed against Rowan, the principal, no cause of action existed against the defendant or his surety. And the statute of limitations does not begin to run in favor of any person, until there is a cause of action. The obligation of a surety is an obligation accessory to that of a principal debtor, and it is of the essence of this obligation that there should be a valid obligation of some principal. Thus, where one agrees to become responsible for another the former incurs no obligation as surety, if no valid claim ever arises against the principal. Chitty on Contracts (11th Ed.), 788. If the principal is not holden, neither is the surety; for there can be no accessory if there is no principal. De Colyar on Principal and Surety, Amer. Ed., 39; Addison on Contracts, § 1111. The existence of a principal debtor is a condition precedent to the operation of the contract of a surety. Hazard v. Irwin, 18 Pick., 95; Swift v. Beers, 3 Denio, 70; Mountstephen v. Lakeman, L. R. 7 Q. B., 202; Mallet v. Bateman, L. R. 1 C. P., 163. This is only in accordance with the general law of contracts, which prevents a contract from becoming operative unless and until all conditions precedent are fulfilled. Brandt on Suretyship, § 214; Farmers and Mechanics' Bank v. Kingsley, 2 Doug. (Mich.), 379. So too, whatever discharges the principal debtor discharges the surety. liability of a surety on a claim
which is good as against the principal, ceases as soon as the claim is extinguished against the principal^) The nature of the undertaking of a surety is such that there can be no obligation on his part, unless there is an obligation on the part *66of the principal. “ It is correctly laid down, in Chitty on Contracts, that the contract of a surety is a collateral engagement for another, as distinguished from an original and direct agreement for the party’s own act; and, as stated in Theobald on Principal and Surety, * * * it is a corollary from the very definition of the contract of suretyship, that the obligation of the surety, being accessory to the obligation of the principal debtor or obligor, it is of its essence that there should be a valid obligation of such a principal, and that the nullity of the principal obligation necessarily induces the nullity of the accessory. Without a principal, there can be no accessory. Nor can the obligation of the surety, as such, exceed that of the principal. * * * It would be most unjust and incongruous to hold the surety liable, where the principal is not bound.” Storrs, J., in Ferry v. Burchard, 21 Conn., 603. The same general doctrine is held in many other cases in this State. Willey v. Paulk, 6 Conn., 74; DeForest v. Strong, 8 id., 522; Bull v. Allen, 19 id., 101, 106; Glazier v. Douglass, 32 id., 393; Candee v. Skinner, 40 id., 464.
It follows, then, that the fraudulent concealment by Ro wan, the principal, as it prevented the statute of limitations from running in his favor, also stopped it from running in favor of the defendant, his surety. Bradford v. McCormick, 71 Iowa, 129; Boone County v. Jones, 54 id., 669; Charles v. Hoskins, 14 id., 471.
There is no error.
In this opinion the other judges concurred.