Court Opinion

ID: 6571457
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:29:43.022707+00
Date Added: 2024-06-11T15:56:55.364290
License: Public Domain

Williams, J.
The only question presented in this case is, whether the dissolution of the attachment made by the plaintiffs on the property of Gideon O. Dixon was a discharge of the other signers to the note on which this suit is brought ? The county court so decided ; and if their decision is correct, the plaintiffs have no further claim on the defendant. If it was not, there must be a new trial, as there are no other facts established which will entitle the defendant to retain the verdict. This presents the inquiry as to the rights and duties of a plaintiff or creditor, in a case similar to the present. The first and most natural view of the case would be, that as the plaintiffs parted with their money on the credit of all and each of the signers of the note, they might look to each for satisfaction, and would not lose their claim against any, until they were fully repaid the amount advanced, and that they ought not to be compelled to recognise the defendants, in the relation oi principal and surety ; but might in any of their negociaiions treat all the signers as principals. We are inclined, however, to waive the consideration of this question at this time on account of the sickness of one of our brethren, and the absence of another, as we are all agreed on another point, that there must be a new trial.
Considering Gideon O. Dixon as the principal to the note on which the suit is brought, and the defendant and other signers as sureties, we are to enquire whether the surety has been discharged from his liability. Certain principles borrowed from the civil law, and from the courts of equity, have been adopted by the courts of common law, as to the duties of the creditor towards the surety, and as to those acts of the creditor, and transactions between him and the principal which will discharge the surety. These principles we should endeavour to draw from the points decided in the cases. The opinions expressed by judges or chancellors in deciding a case, and expressions falling from them in elucidating their views, are frequently cited by elementary writers as the law which was established in those cases, or the principle to be drawn therefrom ; and many of these expressions and opinions have been cited in this argument. I apprehend, however, that it is easier to reconcile the several decisions which have been made, than it is to establish a system founded on those opinions and expressions. Most of the authorities which have been read *599in this case, were read and examined in the case of Hubbard vs. Davis, 1 Aikens, 296 ; and some of them, at least, were overruled. The case of Rees vs. Berrington, 2 Vesey, jr. 540, the cases cited in the marginal notes to that case, and the case of English vs. Darling, 2 Boss. & Pull. 61, certainly establish this principle ; That, when the creditor, without consent of the surety, gives time to the principal by a contract which, in the language of Gibbs, C. J., in Orms vs. Young, Holt, 84, ties up his hands, the surety is discharged, and this for two reasons. 1st. It is varying the terms of the contract, by extending the time for its fulfilment; and no surety is ever charged beyond the terms of his contract. A surety might be willing to be holden for a limited time, but unwilling to be holden for a longer period. 2d. Because the surety may in a court of equity compel the creditor to sue the principal debtor at law, under such regulations as the court shall make, so as not to impair his security or delay his debt, which the creditor cannot do, if he makes a contract with the principal for delay. We think it is equally well established, that a delay or neglect of the creditor to sue the principal, though urgently requested thereto by the surety, is not a discharge of the surety. The surety may pay the debt, and pursue the principal for his own benefit. Further, the surety, on paying the debt of the principal, is entitled to be'put in the place of the creditor, and may avail himself of all, or any, of the collateral securities, means, or remedies, which the creditor has for enforcing payment against the principal, and may have them assigned to him, under such terms as a court of chancery may order. And further, as to any other collateral securities, which the'creditor may have at the time the surety entered into the obligation, and which may have had an influence in inducing the surety to become obligated, the creditor must act with good faith, and not discharge them to the prejudice of the surety.
But inasmuch as the creditor is not compelled to institute a suit at the request of the surety, so he may discontinue any suit hy him instituted for bis own benefit, and without any such request, if he acts with good faith, and with a view to his own interest. And, although it is commenced by attachment, with a view of enforcing a more speedy payment, yet, if it was commenced without the request or knowledge of the surety, so it may be discontinued, or other security may be received, as a substitute for the attachment, without consulting the surety, if the creditor acts with good faith. The cases of Fulton vs. Mathews and Wedge, 15 Johns. 433, and *600Bellows vs. Lovel, 5 Pickering, 307, countenance this opin- . ion.
We have no opportunity of seeing the cases decided in Kentucky, Jones vs. Bullock, 2 Bibb, 467, and Baird vs. Rice, 1 Call ; 18, nor the case in Pennsylvania, Commonwealth vs. Vanderslice and others, 8 Serg. & Rawle, 452, except what we find in the note to Starkie’s Evidence, 3 Pol. 1390; and it would be unsafe to rely on them, unless we could learn, from the reports themselves, under what circumstances the cases appeared to the court, and what was the point decided. In the case Nisbit vs. Smith, 2 Brown, 579, the creditor had commenced a suit at the urgent request of the surety, and then had compromised the suit, and given a time to the principal of three years beyond the originally stipulated time; and under these circumstances the surety was released.
In the case of Law vs. East India Company, 4 Vesey, jr. 824, nothing was determined ; but the question, as to the liability of the surety, was left to be settled in a suit directed to be brought thereafter. We find nothing there, nor in any ol the cases which have been read, which militates against the opinion we have formed in this case. We are all of opinion that the dissolving the attachment made by the plaintiffs on the property of Dixon, was no discharge of the sureties of Dixon. The attachment was commenced for their own benefit, and not at the request of the defendant and the other signers. If that suit had been pursued, they might have attached the personal property of either of the other signers, and collected their debt of them ; and would not have been compelled in chancery to pursue the attachment against G. O. Dixon, unless at the request of the defendants, and on being fully indemnified for any costs or liabilities, if there were any doubt as to the ownership of the property, and in such a manner that they should not be delayed in the collection of their debt. It was discontinued in good, faith, and under such circumstances as might reasonably have been expected at the time would have ensured a more speedy payment from G. O. Dixon, and thus have relieved the sureties altogether. It was not transacting the business of the surety, as has been said in the argument ; but was managing their own business, for their own benefit, not at the request of the surety. It was commencing and discontinuing a suit in a manner which the plaintiffs might reasonably suppose would coerce the payment of the debt by G. O. Dixon. If the defendant or the other signers were dissatisfied, they might have paid the note, and *601sued G. O. Dixon, and attached the same property, or have ■quested and received of the plaintiSs the benefits of that attachment on giving them such indemnity, as might have been ble
In considering this question in this view, it cannot have escaped the attention, how very embarrassing it is to Compel the holder of ■ajoinl and several note, more particularly a bank, to recognise the relation of principal and surety in the signers of the note ; and there are some authorities which tend to establish the principle, that they are not. But the case does not require of us to consider this question ; and for the reasons already suggested it is left open for a decision when a case is presented which requires it-.
The judgement of the county court is reversed and a
New trial granted-.