Court Opinion

ID: 8047015
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:00:29.080783+00
Date Added: 2024-06-11T16:37:32.384087
License: Public Domain

Nesmith, J.
The relation established between the parties to this suit appears to he strictly that of indorsee and indorser, with the individual liabilities affixed by law to such relation. The defendant was original payee of the note, and before its maturity he negotiated it to the plaintiffs for value received. He indorsed the note, waiving demand and notice. The defendant then, having received his full consideration directly of the plaintiffs, was, of course, bound to restore it to them upon due demand, unless some new contract has intervened, which may operate to discharge him from his legal liability to pay it. The defendant says, that in consequence of having shown certain property to the officer who held the writ in favor of the plaintiffs against Edgerly, another indorser on the note, and having shown that this property was actually attached in this suit, and because such proceedings have been had under said attachment, and in another suit testing the title to that property, whereby the attorney to the plaintiffs has realized money enough of the property of Edgerly to satisfy their claim, he, the defendant, is now discharged, notwithstanding the bank claims to hold another demand against said Edgerly, upon which they assert the right to apply the same funds.
It appears to us the defendant offers an insufficient defense. His claim is now premature. The right appropriation of the funds in the hands of the attorney of the bank may be very material to him, but under the present issue he can not set up the refusal of the bank to apply these funds. This may he the proper subject of inquiry at a future day. It now does not appear here, that even if the bank were successful in obtaining sufficient property of Edgerly to satisfy the note in suit, they are under any obligation to suspend their suits against the defendant, or any one else. To save them costs, and to avoid the payment of costs, they may proceed to judgment, and obtain their executions. Nor are the plaintiffs obliged'to encounter the risks incidental to the trial of the title to Edgerly’s property, with*506out suitable indemnity from those more interested than they are. So far as relates to the bank, both the signer or drawer of the note and its indorsers are all principals, and to be treated accordingly.
If a new bargain were made, by virtue of which the defendant, as indorser or conditional surety, could be discharged from his contract, it must be presumed to be founded on some just consideration, so as to operate as a mutual contract. The bargain, or risks of it, must not be entirely for the defendant’s advantage.
It is only the performance of a collateral agreement, if one existed, which makes out a complete defense to a note or bill. If the agreement be still executory in its character, it must be enforced in a new suit. The court here is in no situation .to enforce such an agreement as the defendant now sets up; much more to test the truth of its existence. The subsequent or collateral contract must not be doubtful or inferential in its terms. Allen v. Kimball, 23 Pick. 473 ; Cushing v. Wyman, 44 Me. 121; Payne v. Ladue, 1 Hill 116 ; Woodman v. Eastman, 10 N. H. 359. The indorser of a bill or note, though standing in the place of a surety, is answerable upon his independent contract, and it is his duty to take up the bill when dishonored. Kemble v. Thorn, 16 Johns. 152; Davis v. Higgins, 3 N. H. 231; Mahurin v. Pearson, 8 N. H. 539; Bellows v. Lovell, 5 Pick. 307; Hogeboom v. Herrick, 4 Vt. 136. It makes no difference if the surety offers indemnity; Adams Bank v. Anthony, 18 Pick. 255; nor does a refusal to prosecute a suit against the principal, which has been already commenced, discharge the surety. Bellows v. Lovell, ante. Pothier’s rule is, “ Let the surety, if he would escape liability on the note, pay the debt, and sue the principal himself, or come in and prosecute the suit pending in the name of the creditor, but at his own cost and risk. The surety refusing to do this, the creditor may abandon his suit against the principal, and sue the surety.” Evans’ Pothier on Obligations 261. There are some exceptions to the aforesaid general rules, where it has been held that a parol declaration to the surety, by the holder, that he would exonerate him and look to the principal alone, would be a good defense, on the ground that it lulls the party into security and prevents him from obtaining his indemnity. It would be a fraud on the part of the holder afterward, contrary to such assurance, to call upon the surety. Parsons on Notes 503; Harris v. Brooks, 21 Pick. 195 ; Ayer v. Tilton, 42 N. H. 407.
Upon the evidence, as stated in the case, we do not see that the defendant has brought himself within the principle of the aforesaid exceptions. It will be soon enough for the plaintiffs to elect how or where the avails of the Edgerly house may be applied when they obtain their judgment in these cases, and deliver their executions, with their instructions, to the officer. It is for the plaintiffs then to take their election ; nor can the defendant insist upon an earlier appropriation of the funds in dispute. It is soon enough for the defendant to complain of a misappropriation or misapplication of the funds in the plaintiffs’ hands, after he has given them proper opportunity to apply the test.
The ruling of the court was, therefore, proper, and there must be

Judgment on the finding of the court.