Court Opinion

ID: 6501713
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:14:34.024098+00
Date Added: 2024-06-11T15:54:37.798771
License: Public Domain

ORMOND, J.
There is no equity in this bill so far as it relates to the holder of the bill of exchange, Knox & Co. The acceptor of the bill is certainly primarily liable, and the liabili*731ty of the other parties to the bill, as it regards the holder is conditioned upon his default. If at the maturity of the bill, the acceptor refuses to pay on demand, and the drawer and indor-sers are duly notified of the fact, each of them becomes absolutely responsible to the holder for the amount of the bill; and he may prosecute a suit for its recovery against one or all of them, at his election, although he can have butone satisfaction.
This, it appears, he was doing, when arrested by the injunctions awarded at the instance first of the first indorser, and secondly, at the instance of the acceptor of the bill. As between the parties to the bill themselves, in adjusting their several re-sponsilities, the acceptor is primarily responsible for its payment and answerable over to any party, subsequent to him on the bill, who may be compelled to pay it. It is for this reason, that every party to a bill, is in the nature of a surety, for all those whose liability on the bill is precedent to his; and therefore a valid agreement, entered into by the holder with such prior party for delay of payment, will be a discharge of the liability of all parties subsequent to him on the bill.
To produce this result, there must be an agreement, on sufficient consideration, by which the holder disables himself from suing or proceeding to collect the money; the mere omission to sue or failing to sue out execution, will not have this effect. But even this pretext does not exist in this case; the holders appear to have been actively pursuing all the parties on the bill. When they attempt to coerce payment from the first indorser he meets them with the objection that they must look to the acceptor ; that he is 'primarily responsible, and besides has a fund appropriated for the payment of the bill by the drawer; when they turn round to the acceptor, he informs them that he is a surety as well as the first indorser, and that the money must be made in equal portions from both. Without stopping now to inquire whether an accommodation acceptor can be considered in the light of a co-surety with an accommodation indorser, without an agreement between them to that effect, it is perfectly clear that the creditor is not obliged to exhaust his remedy against the principal debtor before he resorts to the surety, even in the case of a suretyship proper, which is not the fact here, so far as the holder of the bill is concerned. The case of Hayes v. Ward, 4 Johns. Chan. 123, cited to maintain *732the contrary doctrine, is not an authority that way, but was decided on the peculiar circumstances of the case, whilst the general rule is admitted to be as here laid down. The facts of that case were peculiar, and it is very clear from the reasoning of the Chancellor, that he felt he was treading on doubtful ground, as he distinctly admits that there was no such general rule as is here contended for, and puts the case explicitly on the fact, that the conduct of the creditor, was such as to justify the belief, that the contract he was seeking to enforce against the surety, was invalid from usury, and that if the surety was compelled to pay, he could not recover from his principal. The amount of the decision then is, that cases may possibly exist, in which a Court of Chancery will interfere, and compel a creditor to proceed against the principal debtor before he resorts to the surety. No such fact exists in this case, and there is therefore no warrant for the interference of a Court of Chancery
Much stress was laid in the argument on the fact, that the complainant requested the holders of the bill, to permit him to run the execution against the drawer, which they declined. In the answer, one of the parties denies all knowledge of the fact; the other admits -the request, and says, he offered to give the ebmplainant the control of the judgment, if he would discharge the debt by |he payment of the judgment against him, otherwise, he declined interferring with the matter in the hands of his attornies. This was all the complainant had a right to ask, •and all he could have obtained if he had filed a bill in chancery for that purpose.
The only fact charged in the bill, having the semblance of equity, is in the cross bill of Riddle, where it is charged that a -sum of money collected from him by garnisheeing one of his debtors, is not credited on the execution; but it is not stated that . any attempt is making to collect the money again, or that Knox & Co. refuse to allow the credit on the execution; or that any - application has been made for that purpose; and if it were conceded that the Court out of which the execution issued, could not afford a summary and cheap redress, there is no pretence for invoking the expensive and dilatory aid of a Court of Chan- ' eery, unless it appeared satisfactorily that Knox & Co. were ■ attempting a second time, to coerce payment. This is not *733shown, by the mere fact that the credit :is- not entered on the execution. It will be time enough to attribute such fraudulent conduct to the plaintiff at law, when they attempt a second time to make the money, or refuse, on application, to enter the credit on the execution.
Whatever may be the rights of these parties, as between each other, as-it regards the plaintiffs at law the bill is entirely destitute of equity, and the decree of the Chancellor, dissolving the injunction, is therefore affirmed.