Court Opinion

ID: 3609629
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:54:10.530818+00
Date Added: 2024-06-11T13:46:55.724301
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 183 
The defendant, by assignment, bearing date the 28th day of August, 1857, assigned to Orson Tousley a mortgage on real estate, in the State of Wisconsin, and the bond accompanying the same, executed by Frederick Root to Willard Herrick, and guaranteed the collection of the amount, secured thereby, as it became due, waiving all notice. *Page 184 
The bond and mortgage bear date the 18th day of August, 1857, and were given to secure the payment of the sum of three hundred dollars, with interest, in three equal annual payments of one hundred dollars each, with interest; the first of which was to be made on the 1st day of November, 1858. Indorsed on the bond, was a guaranty by G.H. Burgess, dated August 24, 1857, guaranteeing the payment thereof, and the said Willard Herrick, by an assignment of the last mentioned date, assigned the bond and mortgage to James Parkis, the defendant, or bearer, and also guaranteed the payment thereof. The said bond and mortgage, and all the right of Tousley in them, were afterwards assigned by him, on the 3d day of January, 1859, to A.L. Cady, and he assigned them, and all money due and to grow due thereon, as collateral security for a debt due from him to the plaintiff, by assignment dated February 1, of the same year.
On the fifth day of April following, the plaintiff commenced an action in the Supreme Court of this State against Herrick, on his guaranty, which was duly prosecuted to judgment, and an execution issued thereon, was returned wholly unsatisfied.
Subsequent to the return of the execution, and on the 15th day of November, 1859, a suit for the foreclosure of the mortgage was commenced in the Circuit Court of the State of Wisconsin against Frederick Root, in which a decree for the sale of the mortgaged premises, and for the payment of any deficiency, was entered, on the 10th day of May, 1860.
The property was sold on the 1st day of October, 1860, and the sum of one dollar, over and above the costs, was realized from such sale and credited on the decree.
An execution for the collection of the deficiency was issued, on the 4th day of December, 1860, and afterwards returned wholly unsatisfied. On the 4th day of May, 1861, an action was commenced by the plaintiff, in the Supreme Court of this State, against the said Burgess, on his guaranty, in which judgment was rendered on the 6th day of July thereafter, for the whole amount payable on the said bond, and on the 13th *Page 185 
day of the month of May, an action was commenced by the plaintiff, in the Supreme Court of this State, against Frederick Root, the mortgagor, in which judgment was also recovered, on the said 6th day of July, for the whole amount due. Executions on both of the last mentioned judgments were issued on the 9th of the same month, and were each returned wholly unsatisfied, before the commencement of the present action.
After these facts were proven, the plaintiff offered to prove that, at the time the first installment of the bond became due, November 1, 1858, the said Frederick Root, William Herrick and E.H. Burgess were and have ever since been, each of them, entirely and hopelessly insolvent, and that nothing could have been collected of them, by proceedings at law then or since.
The court excluded that evidence, and then, no further evidence being introduced, a nonsuit was ordered.
The motion for the nonsuit was based on three grounds;
1st. That the proofs did not show the guaranty in the suit to be owned by the plaintiff.
2d. That it did not appear, that the plaintiff had used due and proper diligence, in the prosecution of the principal debtor, and the several guarantors.
3d. That there were not sufficient facts stated in the complaint to constitute a cause of action.
The first ground for the nonsuit will be first considered. Although the guaranty of the defendant was not, in terms, assigned to the plaintiff, he became entitled to the benefit of it, under the assignment of the bond, and the money secured thereby. The transfer of the debt to him, carried with it, as an incident, all the securities for its payment. He, therefore, had a right to maintain the action.
The exception to the exclusion of the evidence offered, and the other grounds of the motion for a nonsuit, present, substantially, the same question, and that involves the construction of the defendant's contract.
He guaranteed the collection, and not the payment, of the *Page 186 
amount secured by the bond and mortgage, when it became due.
The mere fact of its non-payment, at that time, was, therefore, not sufficient to give the plaintiff the right of action. He was bound to take proper measures to collect the debt, within a reasonable time after the whole of it became payable, conceding, for the present, that such duty did not arise on the previous defaults.
His obligation will be first considered, on the assumption, that all of the parties liable were then able to pay, and that such ability continued for six months thereafter.
The last installment became payable on the 1st day of November, 1860, and legal proceedings could have been immediately taken against Root the obligor, on his bond, and against Burgess and Herrick, the previous guarantors, on their guaranty of payment. None were, however, taken, until in May, 1861, and then only against Root and Burgess.
A judgment had, previously, been recovered against Herrick for the penalty of the bond, after default was made in the payment of the first installment, and assuming that no further suit against him was necessary, that did not dispense with the necessity of issuing an execution, after the other installments became payable.
It also appears, by the case, that all of the debtors, at the time of the recovery of the judgment, and the issuing of the executions against them, resided in this State, and there is nothing to show, that either of them was, at any time, a non-resident, or that a suit could not have been commenced against them, by a personal service of the summons. A delay for upwards of six months was, under the assumption of the solvency of the parties, not the exercise of proper and due diligence.
Does their insolvency excuse that delay?
I see no principle upon which that can be claimed.
When a creditor agrees with a surety for his debtor, that he will commence a suit against such debtor within a reasonable time after the debts fall due, and, in default thereof, that the surety shall be released, it is a condition precedent to his right of *Page 187 
action against the guarantor, that such suit shall not only be so commenced, but that it shall be carried to consummation.
The plaintiff had no right to determine, on his own responsibility, whether the debt was collectible. That was a question which the defendant had made it incumbent on him to ascertain, by recourse to the ordinary rules provided by the law for the collection of debts.
If the debtor's insolvency is an excuse for the delay, at all, there is no reason why it should not be such, as long as the insolvency continues, and thus the liability of the surety would be, for an indefinite period, controlled by the opinion of witnesses, as to the ability of the principal to pay the debt, and not by the standard, or means, fixed by the parties themselves, for ascertaining that fact.
These views lead us to the conclusion, that the proof of the debtor's insolvency was properly rejected.
It follows, therefore, that the nonsuit was proper, and that the judgment should be affirmed, with costs.