Court Opinion

ID: 7037177
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:46:41.113559+00
Date Added: 2024-06-11T16:11:12.103555
License: Public Domain

Gregory, G. J.,
dissenting.—The Bank of the. State sued McGollem, the acceptor, Lofton, the drawer, and Lacy, the indorser, of a bill of exchange. Process was returned “not found” as to McGollem. The ,action proceeded against Lofton and Lacy. Lofton answered that he executed said bill of exchange for the accommodation of Lacy and McCollem, and for their sole use and benefit, and as their surety; that they negotiated it, and received the proceeds thereof; wherefore he prays that the question of suretyship between him and said defendants be tried, on or before the trial of this cause.” Lacy answered that he executed the bill solely for the accommodation of McCollem. The cause was submitted to the court for trial, and judgment was rendered against Lofton and Lacy, and the record thereupon recites that “It is agreed between the plaintiff and said defendant, that no execution shall issue on said judgment for twelve months from its rendition. It is further agreed that the defendants, Lacy and Lofton, may have their cross-action in this case, between themselves, to try the question which is surety of the other, upon their respective pleadings, already filed; and the plaintiff withdraws the demurrer to said cross-pleadings, and the questions and issues on said cross-pleadings are continued.”
Afterwards Lofton took a rule on Lacy to answer his cross-complaint. Lacy answered by a general denial. The issue between Lacy and Lofton was tried by a jury. The verdict is as follows: “Did Sample Lofton sign the bill in evidence before you as surety of John Lacy and James McCollem? Answer, yes.”
Lacy moved for a new trial, which motion was overruled and judgment was thereupon entered that the plaintiff' exhaust the property of Lacy, before proceeding *328to levy any execution issued on the judgment in favor of the Bank upon the property of Lofton.
The code provides that “when any action is brought against two or more defendants upon a contract, any one or more of the defendants being surety for the others, the surety may, upon a written complaint to the court, cause the question of suretyship to be tried and determined, upon the issue made by the parties at the trial of the cause, or at any time before or after the trial, or at a subsequent term; but such proceedings shall not affect the proceedings of the plaintiff.” 2 G. & H. § 674, p. 308.
Is the drawer of a bill of exchange the surety of the payee and indorser, when the bill has been dx-awn by the former for the accommodation of the latter*, within the meaning of this statute? To constitute the relation of principal and surety there must be one primarily liable. Principal and surety are correlative terms. Thex*e can be no surety where thex*e is xxo principal. A surety is one who is hound for another who is primarily liable, and who is called the principal. Lofton, as the drawer of the bill, was the principal, and Lciey, the payee and indox’sex*, was his surety. Lofton was not bound for Lacy on the contract ixx suit, but Lacy was bound for Lofton. The acceptor*, McCollem, was the only principal to Lofton, the drawer.
The statute only applies where “ one or more of the defendants is surety for the others.” In the case of a joint note, where both ax*e primarily liable, it is competent to show that one is the surety for the other, because there is a primary liability. But, in the case in judgment, an attempt is made to reverse the order, and to show by parol that the principal in the obligation is only the surety of the in-^ dorser, a direct contradiction of the instrument itself. I think this cannot be done.
In Gordon et al. v. The Southern Bank of Kentucky, 19 Ind. 192, this court held that the “ accommodation indorsers of a promissory note, governed by the law merchant, do not stand in the relation of sureties for the maker, for whose *329accommodation they became indorsers, within the meaning of the statute in relation' to the remedies of sureties against their principals.” Whether that is a correct exposition of the law or not, I am clear that the drawer of a bill of exchange cannot sustain the relation of surety to the indorser.
J. T. Dye and'A. C. Harris, for appellant.
A. Gr. Porter, B. Harrison and W. P. Fishback, for appellee.
I think the court below erred in overruling the motion for a new trial, and I therefore dissent from the opinion of the court.
The judgment is affirmed, with costs.