Court Opinion

ID: 7965426
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:50:09.670506+00
Date Added: 2024-06-11T16:34:37.745520
License: Public Domain

Mitchell, J.,
(dissenting.) I am unable to concur in the proposition that the plaintiff owed no duty to O’Brien to take steps, at the maturity of the note, to fix the liability of Gage, the indorser. It does not seem to me that the fact that O’Brien’s guaranty of payment was unconditional and absolute is at all decisive of the question. As between the parties to this action, O’Brien occupied the position .of surety, who, in ease he had to pay the note, would have recourse against Gage, the indorser, provided steps were taken to fix the liability of the latter. The question, therefore, is to be determined by the equitable principles which govern the relative rights and duties of creditor and surety.
It is a well-settled rule of equity that any laches by the creditor in the care or management of collateral remedies or securities, if loss ensues, will discharge the surety pro tanto. Nelson v. Munch, 28 Minn. 314, 322, (9 N. W. Rep. 863.) As a surety, on payment of the debt, is entitled to all the securities of the creditor, if, through the negligence of the creditor who has them in his possession and under his control, a security, to the benefit of which the surety is entitled, is lost or not properly perfected, the surety, to the extent of such security, will be discharged. Wulff v. Jay, L. R. 7 Q. B. 756. And we can see no difference in this respect whether the security is chattel or personal. This is not a case of mere passiveness by the creditor in not taking steps to enforce collection of the debt at maturity, but an omission to take steps to perfect and fix the liability of the in-dorser, which amounted to positive negligence. He had possession and control of the note on the day of its maturity, and consequently was the only person who could present it for payment, or who' would know whether or not it was paid, and hence was the only person in position to give notice to the indorser in ease of its non-payment. To require him to do this, would, I think, be both good business morals and good law.