Court Opinion

ID: 6419717
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:58:50.057286+00
Date Added: 2024-06-11T15:51:44.077498
License: Public Domain

Gray, C. J.
It is well settled that in equity a surety is entitled to the benefit of any property or collateral securities- received by the creditor from the principal debtor, and that if the creditor, knowing the relation between the debtors, surrenders such property or securities, in whole or in part, without the consent of the surety, he exonerates the surety to the amount so surrendered. Baker v. Briggs, 8 Pick. 122. American Bank v. Baker, 4 Met. 164. The fact that one debtor is a surety for the other is no part of the contract with the creditor, but is a collateral fact showing the relation between the debtors, and, if it does not appear on the face of the instrument, this fact and notice of it to the creditor may be proved by extrinsic evidence. Harris v. Brooks, 21 Pick. 195. Carpenter v. King, 9 Met. 511. Wilson v. Foot, 11 Met. 285. Horne v. Bodwell, 5 Gray, 457. As the right of the surety does not depend upon the contract, but upon the equities arising out of the circumstances of the case, the creditor is affected by knowledge of the true relation of the debtors, acquired at any time before he does the act which alters the position of the surety; and one who makes a promissory note for the accommodation of another is a surety, within the rule. Bradford v. Hubbard, 8 Pick. 155. Harris v. Brooks, *390above cited. Pooley v. Harradine, 7 E. & B. 431. Greenough v. McClelland, 2 El. & El. 424. Bailey v. Edwards, 4 B. & S. 761. Ewin v. Lancaster, 6 B. & S. 571. Oriental Financial Corporation v. Overend, L. R. 7 Ch. 142, and L. R. 7 H. L. 348. Swire v. Redman, 1 Q. B. D. 536, 542. In this Commonwealth, the surety may avail himself of this equity in defence of an action at law against him. Baker v. Briggs, Harris v. Brooks, Carpenter v. King, and Horne v. Bodwell, above cited.
At the trial of the present case, it appeared that Robert W. Dresser & Co. borrowed of the plaintiff the sum of $3000, and gave him their promissory note therefor, and at the same time delivered to him as collateral security a promissory note of Hamlin & Co. for $1826, as well as two promissory notes of the defendant for $975 each, one of which is the note in suit, and both of which were really accommodation notes; but the plaintiff did not know this when he took them, and only became aware of it after the first of them matured.
The bill of exceptions does not show that the plaintiff objected to the admission of the evidence offered to prove, or denied the fact; that he had received from Dresser & Co. $500 in part payment of their debt.
The evidence of the discharge in writing, though not under seal, of Hamlin & Co., from their note, upon the payment of half the amount thereof by the check of a third person, was competent to show an accord and satisfaction of their liability. Brooks v. White, 2 Met. 283.
The letter from the defendant to the president of the bank, with evidence that the plaintiff received it, was rightly admitted for the purpose of showing his knowledge, before his discharge of Hamlin & Co., that the defendant’s notes were accommodation notes.
The jury could not properly have been instructed, as to burden of proof and presumption of fact, in the terms requested by the plaintiff. The technical burden of proof, resting on the defendant, would be prima facie supported by evidence of the discharge of the note of Hamlin & Co. for half its amount. And the instructions given to the jury as to the evidence required of the plaintiff to control this were in exact accordance with the judgment of this court in the analogous case of American Bank v. Baker, above cited. Exceptions overruled.