Court Opinion

ID: 6144773
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:59:17.785438+00
Date Added: 2024-06-11T08:54:49.023294
License: Public Domain

Van Hoesen, J.
The defendant utterly failed to bring his case within the rule under which a surety is relieved by the neglect of the creditor to prosecute the collection of his demand against the principal debtor. There was no legal evidence that the principal debtor was solvent when the surety requested the creditor to sue, and that he was insolvent after-wards. The case in the court below seemed to turn upon a supposititious case of affairs, rather than upon the case made by the evidence. In Huffman agt. Hurlburt (13 Wend., 377), it was decided that in order to release the surety, it must appear that the debt was collectible by due course of law, out of the property of the principal, and not merely that, if hard pressed, the principal might have paid, had he chosen to do so. In Herring agt. Borst (4 Hill, 650), it was said that the mere probable solvency of the principal in reference to the debt in question, at the time of the notice to prosecute, would not suffice to release the surety. The defense is not to be encouraged (4 Hill, 456). How, in this case, the defendant, upon whom the burden devolved of showing the solvency of Moran, the principal debtor, at the time of the request to prosecute, refrained from any attempt to prove what Moran’s pecuniary'condition was at that time. He went no further than to say, that he told Maier that there was money enough to pay him. It is strange that he omitted to make any reference to the all-important subject of Moran’s pecuniary condition at the time of the dissolution of firm. Had Moran any property subject to execution at that time? Was he able to pay his debts as they fell due? Were there past due-claims . against him, which he had not paid? Was he not just as solvent at the time of the trial before judge McAdam as he was at the time Oanavan told Maier to go and get his money ? These are matters about which the defendant’s counsel did not ask any questions, nor ask any proof. It will be seen that there was no evidence at all that Moran was solvent when Oanavan informed Maier of the dissolution.
But there was very slight evidence, if, indeed, there was *507any, that Horan subsequently became insolvent. Canavan swore that he did not know whether Horan was insolvent or not; he had recovered a judgment against Horan, but it did not appear that any execution was ever issued, and it may be that proceedings had been stayed by appeal, or by an order of the court. Insolvency is not to be shown by such testimony as that. Upon exactly the same evidence, men of great wealth in unincumbered land in this city could be proved insolvent. It was further proved that the claim in suit had not been paid, but that fact would not establish the defense; it was necessary to show that other just claims, which were past due, had not been paid.
I think, moreover, that judge HcAdam properly decided that the words, “ Go and get your money, there is enough to pay you,” did not amount to a notice that Canavan required Haier to sue Horan. The notice must be clear and unambiguous, and not one likely to be misapprehended by the creditor. It must apprise him that a resort to legal process is required of him by the surety. A collection of cases upon the subject maybe found in volume 3, Wait’s Law of Actions and Defenses (pages 235 and 236). Thus it has been held, that is to say: “ I hope the note may be put in train for collection” is not enough, nor is a notice saying : “I wish you to collect the debt from the principal,” sufficient. In our own state it has been decided that a request to “ push and keep pushing ” the principal did not impart a request to bring an action against liini (Singer agt. Trautman, 49 Barb., 182); of course, the words, “ go and get your money,” could not have conveyed to Haier’s mind the idea that he was required to sue Horan without delay. The surety is bound to make his meaning understood by using words that to a man of corn-man understanding convey a request to sue. The defense failed in this respect.
It is said, however, that Haier accepted notes payable at a future day, and thus suspended his right of action against Horan. If the right of action was suspended against Horan *508for an hour, Canavan is released. The law of New York is not settled as to whether the taking of a note payable at a future day, operates as a suspension of a right to sue on the original cause of action. In the court of appeals, as in the supreme court, there is no difficulty in finding decisions to sustain any view of the law that a suitor may wish to see prevail. Pait agt. Coman (37 N. Y.) and Place agt. McIlvain (38 N. Y.), hold that accepting a note payable in future, suspends the right of action on the original debt. Cary agt. White (52 N. Y.) holds that it does not. In Hubbard agt. Gunney (64 N. Y., .467) the chief judge says that there must be an agreement, either express or inrplied, that the original debt shall not be sued upon until the note matures, in order to effect such a suspension of the right to sue as will discharge a surety. The difficulty is, to determine from what circumstance such an agreement will be implied. In Hart agt. Hudson (6 Duer, 304), Duer, J., said: “Taking anote payable at a future' day, was proof conclusive of an agreement to extend credit, and would discharge the surety.” In Elwood agt. Deifendorf (5 Barb., 409), Paige, J., said, that taking from the principal debtor for an old debt past due, a new note payable at a future day, without an agreement to extend the time of payment,, does not discharge the surety. It is somewhat singular that judges DüEB'and Paige agree in this, that the law is perfectly well settled. There was nothing proved in this case on the subject of the notes, except that Moran gave them after the dissolution. Are we to adopt the views of judge Dube and the views of judge Geovee, in Place agt. McIlvain, or the views of judge Paige and of judge Allebi, in Carry agt. White ? My own notion is, that we should adhere to the views which this court announced when the case of Place agt. McIlvain was before it in 1863. The decision is reported in 1 Daly, 266. I am prepared to adopt the language of chief justice Daly : “ Where all that appears is, that a creditor, after a note becomes due, takes from the maker a new note payable at a future day, the conclusion must be that the parties *509have agreed to extend the time of credit until the suppletory instrument becomes payable, and if such an agreement is founded upon a sufficient consideration, it is binding. Giving a note for an open account is a good consideration for an extension.” It may appear, however, either by direct testimony, or from the circumstances, that the new note was taken by the creditor, with the understanding that it was only collateral security and that he might, at pleasure, sue upon the original debt. If this does not appear from the evidence of the defendant, it devolves upon the creditor to prove it, and if he fails to do so, the inference will be that the right of action on the old debt was suspended. Such being then my opinion of the law the question is, did the notes which Horan gave to the plaintiff suspend his right to enforce the payment of the claim % The notes were for portions of the entire demand which Horan and Oanavan owed the Maiers; they 'have been paid and are out of the way. If there were any thing in the ■ evidence to make it doubtful whether or not an agreement existed for an extension of the time for the payr ment of such parts of the debt as were represented by the note, it would have heen for the jury to determine as to its existence or non-existence, but the testimony of the plaintiff and his brother showed that they retained the notes credited them in the account and struck a balance after deducting them. In the absence of opposing testimony, it was, I think, for the court to say that the notes suspended the right to sue the defendant, Horan, for so much of the ■ demand as was embraced in the notes. If this be so, the defendant was discharged, because Haier, whilst the notes were maturing could not have conveyed to Oanavan an immediate right to prosecute Horan. Oanavan, if he applied to Haier for a transfer of the latter claim against Horan, could only have obtained what Haier had — a right to sue Horan when the notes arrived at maturity. As to the residue of the claim, of course, Haier might have given an immediate right to prosecute it, Oanavan could not have been called to accept such *510an assignment, and lie is, therefore, discharged (Ducker agt. Rapp, 67 N. Y., 472 ; Croyden Gas Co. agt. Dickinson, 4 Weekly Digest, 381).
There was but one contract, and that without any provision for the payment by installments, and the suspension of the right to sue immediately for any part of the money, destroyed the claim against the surety.
The judgment and order appealed from should be affirmed, with costs, and judgment absolute rendered for the defendant.