Court Opinion

ID: 7102502
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:17:13.464927+00
Date Added: 2024-06-11T16:13:27.507407
License: Public Domain

Reed, J.,
dissenting.- — The facts upon which the question in this case arises are as follows: The promissory note in suit was executed in the state of Illinois, where all of the parties to the contract then resided. Leipold was the principal debtor, and the defendant was surety, although this is not shown by any recital of the note. After the maturity of the note, but before the right of action upon it was barred by the statutes of Illinois, defendant removed to this state. Leipold is still a citizen of Illinois, but the right of action on the note against him is now fully barred by the statute of limitations of that state. The holding of the majority is that the defendant is discharged from liability on the note by-reason of the fact that the right of action thereon against the principal debtor is barred. I do not concur in that holding. In my opinion, he is still liable on the contract, although it cannot now be enforced against the principal. The right of action against Leipold is barred, not because there is any conclusive presumption that the contract has been performed, but because there has been such lapse of time since the right accrued that the law will not now render its aid in enforcing it. The principal debtor is released from liability on the contract solely by operation of law, and I regard it as well *646settled that the release of the principal by act of law does not discharge the surety. See Brandt, Sur., § 126, and authorities cited in note 1.
I think this follows necessarily from the nature of the contract between the parties. The undertaking of the surety is that he will pay the debt. His agreement is with the creditor, and it is an absolute undertaking that he will perform the contract. It is not collateral to that of the principal, but is distinct from it. He does not undertake for the principal, but for himself, and the creditor may rely exclusively on his agreement, and may look to it alone for his security; and, when a cause of action accrues on the contract, the creditor may pursue his remedy against him alone. He is under no obligation to enforce the contract against the principal unless requested by the surety to do so in the manner prescribed by the statute. The security has the right to be indemnified if the contract is enforced against him, but that right arises out of his relations to the principal; and not out of his contract with the creditor, and the latter is under no obligation to do anything for the protection of that right except in cases where the notice prescribed by the statute is given him.
It is said in the majority opinion that defendant, if he is compelled to pay the debt, would be without a remedy against the principal, but I think there is no foundation for this assumption. The obligation of the principal to indemnify the surety does not arise out of his contract with the creditor, but is implied by the law from his relation to the surety, and it continues until the liability of the surety is terminated. Hollinsbee v. Ritchey, 49 Ind., 261. His liability to the surety arises when the latter has performed the contract. Lamb v. Withrow, 31 Iowa, 164.
I think, therefore, that the ruling of the circuit court is correct, and that the judgment should be
AFFIRMED.