Court Opinion

ID: 3654058
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:07:47.819678+00
Date Added: 2024-06-11T12:23:13.320133
License: Public Domain

The action was brought on the following undertaking, indorsed on a judgment rendered in favor of the plaintiff against one John B. Woodfin, to wit:
"I guaranty the within judgment in consideration of six months forbearance from 12 October, 1855.                B. M. EDNEY."
The judgment and the written agreement above set out were both made at the same time, to wit, 12 October, 1855. It was not paid by Woodfin, who died insolvent in Tennessee before the suit was brought against the defendant, and in fact was insolvent, at the date of the judgment; (407)  but no notice was proved to have been given the defendant of Woodfin's failure to pay previously to the suit's being brought. The insolvency of Woodfin was insisted on by the plaintiff's counsel, as an exception to the general rule as to notice in such cases. The court held the position well taken and instructed the jury accordingly, who found a verdict for the plaintiff. Defendant's counsel excepted. Judgment for plaintiff, and appeal by the defendant.
It is a general rule that one who undertakes collaterally to pay a debt is not liable to an action unless he has notice of the failure to pay by the party who is primarily liable, as in the case of a guarantor, or the maker of a bill of exchange, or the endorser of a bill or promissory note, or a surety in respect to a cosurety.
This rule is founded not merely on the consideration that the party thus secondarily liable is entitled to notice in order that he may take measures to indemnify or secure himself, but on the further ground that one ought not to be sued or subjected to the payment of costs unless he is in default by neglecting or refusing to pay a debt after he has received notice of the default of the party who was bound to pay in the first instance; for until notice he may reasonably presume that the debt has been paid, and consequently is not in default.
We are not aware of any authority for making an exception to this *Page 311 
rule where the party primarily liable is insolvent either at the date of the original transaction or becomes so afterwards, and it is clearly against principle and in conflict with one of the grounds on which the rule is founded. Indeed, in all of the cases the necessity of giving notice is treated as a condition precedent to the liability of the party who is to become bound in the second instance, which is in no case dispensed with except on the ground of fraud; as if one draws a bill without having funds in the hands of the drawer; Parsons on Contracts,        (408) 504; Spencer v. Carter, 49 N.C. 288.
This Court is of opinion that the plaintiff could not sustain his action without proof that he had given notice to the defendant of the default of John B. Woodfin, so as to have offered an opportunity to the defendant of paying the debt without cost and putting him in default by failing to do so.
PER CURIAM.                                             Error.