Court Opinion

ID: 8270753
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:32:07.767758+00
Date Added: 2024-06-11T16:43:30.387688
License: Public Domain

The opinion of the court was delivered by
Scudder, J.
One of the requirements of the statute directing the mode of entering judgment on bonds with warrants ■of attorney to confess judgment, is, that the affidavit shall set forth that the debt or demand, for which the judgment is confessed, is justly and honestly due and owing to the person or persons to whom the judgment is confessed. The position taken by the counsel for the plaintiff is, that the assumption to pay and satisfy the notes when they become due, made in writing at the time of executing the bond by the obligee, constituted a present indebtedness for which an action might be immediately brought against him; and, therefore, there was a ■debt due and owing when, later in the same day, a judgment was entered on the bond with warrant of attorney to confess judgment. In other words, because of the promise of Sterling to pay the notes of Petter & Simpson, on which he was ■endorser, as they became due in bank at future dates, they were instantly indebted to him as if he had already paid the notes, and thereby discharged them from all liability to the bank to make payment to it at maturity. But the uniform *655practice and construction of the statute has been to regard it .as essential that the bank, or person holding the note, shall be a party to this substitution of the endorser for the maker, and that there shall be a discharge of the latter from his liability to pay the note, with the consent of the holder.
It is a kind of novation by the intervention of a new ■debtor, where another person becomes a debtor instead of a former debtor, and is accepted by the creditor, who thereupon •discharges the first debtor, as defined in Bouvier’s Law Dictionary. The outstanding obligation must be paid, or the new debtor substituted by such consent. • In this way a present indebtedness of the maker to the endorser results, and he may make the oath required by the statute. This construction has, also, the sanction of judicial decision in Warwick, v. Petty, 15 Vroom 543. In that case there was a note in bank made by the obligor, and endorsed by the obligee, riot yet'due, which was assumed by the latter when the bond was made, by an agreement in writing. It was also, as in this case, an accommodation note. It was not charged up to the endorser until it matured. The notes in dispute in this case were not paid until' they were due. In both cases payment was made after the judgment was entered on the bond. The court said there was no debt due by Petty to Warwick for this note until it was paid by the latter, and the amount was stricken out of the judgment on the motion of a subsequent judgment creditor. Iri that case the court examined the cases of Clapp v. Ely, 3 Dutcher 555; Sayre v. Hewes, 5 Stew. Eq. 652; Hoag v. Sayre, 6 Id. 552, which are in agreement with it on this point. See, also, Blackwell v. Rankin, 3 Halst. Ch. 152.
Any other construction would lead to the substitution of •a promise for a debt, the word used in the statute, ánd make the fraudulent preference of contingent creditors, over those whose claims are actually due, a frequent occurrence. The •object óf requiring the affidavit in the form used, is to prevent the preference of contingent'daims and future advances, •and make a present indebtedness the prerequisite for a coniessed judgment on bond with warrant of attorney.
The order and judgment of the court will be affirmed.
*656For affirmance—The Chancellor, Chief Justice, Garrison, Magie, Scudder, Van Syckel, Brown, Clement, Cole, McGregor, Smith, Whitaker. 12. •
For reversal—Dixon. 1.