National Cash-Register Co. v. Brown

Pemberton, C. J. The appellant contends that by the terms of the dissolution of the partnership firm of J. A. Brown & Co., as set out in his separaté answer, he became a surety for the payment of the firm’s debts, and that he was entitled to the rights of such surety from the creditors of the firm having actual notice of the terms of the dissolution; and, further, that the plaintiff, having brought suit by attachment against the firm, and having attached sufficient property in the hands of Brown, the principal, to satisfy its demand, and subsequently, without the consent and against the protest of the surety, having released the attachment and dismissed the suit, thereby released appellant, the surety, from all liability on the notes sued on. The questions raised by the contention of the appellant were fully discussed in Rawson v. Taylor, 30 Ohio St. 389, and the conclusion reached that ‘ ‘a retiring partner remains liable for all the existing debts of the firm, to the same extent as if he had not retired. An agreement between him and the remaining partners, or with the new firm that succeeds, that-they will assume and pay all such debts, while valid as between the partners, has no effect upon the creditors of the old firm, unless they become parties thereto. ’ ’ In Fensler v. Prather, 43 Ind. 119, a case involving the question under discussion, it was said : ‘ ‘ Two partners, owing debts and having assets, dissolve partnership; and, by agreement, one partner was to retain all the assets, and pay all the debts, and manage and *204 close up the business. The partner who had withdrawn from the management of the business, desiring a discharge from further personal liability on a certain note made by said firm, and held by. one of the creditors thereof, acquainted such creditor with the facts of the partnership arrangement, and proposed to pay him one-half the amount of said note, the creditor to relieve him from further liability, and look to the effects in the hands of the former partner and to.such partner personally for the other half, which proposition the creditor accepted, and one-half the amount of said note was then paid accordingly. Held, that such part payment was not a sufficient consideration for the promise to release the party making it as to the remainder.” In Shriver v. Lovejoy, 32 Cal. 575, a case almost exactly like the one at bar, the court said : “The plaintiff sued Lovejoy (the surviving partner of Lovejoy & Co.) and Grandvoimt upon a joint and several promissory note made by Lovejoy & Co. Grandvoinet relied for a defense mainly on the fact that Lovejoy & Co. were the principal debtors; that he ivas only their surety; and that the plaintiff, after having commenced this action and attached sufficient property of Lovejoy to satisfy the demand, released the property from the attachment, and the same was attached by other creditors of Lovejoy. The court gave judgment for the plaintiff. All the makers of a joint and several promissory note, whatever may be their true relation between themselves, stand, as to the payee, as principals. . The promise of each is an absolute and primary promise, not a conditional or secondary promise. The creditor is not interested in knowing the relation of the makers with each other. In a suit on the note, he ought not to be delayed by an investigation into matters which do not concern him. ’ ’ And it was held that the facts alleged constituted no defense. (Johnson v. Emerick, 70 Mich. 215, 38 N. W. 223.) This court in Smith v. Freyler, 4 Mont. 489, 1 Pac. 214, fully discusses the questions here presented, and collates the authorities. In that case we said : ‘ ‘ When a surety signs a promissory note, his promise is absolute and unconditional to pay the same when it becomes due; *205 and there is no escape from this promise unless the payee or holder releases him. He does not promise that he will pay if the payee or holder fails to collect the note by an action against the principal. The payee or holder does not receive the note with an implied promise that he will exhaust his remedy against the principal before proceeding against the surety. The obligation of the surety is to pay according to the terms of his promise, and he may protect himself by paying, and then proceeding against the principal, and that is his remedy. * * * The authorities are decidedly in favor of the proposition, in absence of any statutory provision controlling it, that if, after the debt is due, the surety request the creditor to sue the principal, who is then solvent, and the creditor fails to do so, and the principal afterwards becomes insolvent, the surety is not thereby discharged. And if there were no authorities on the subject, considering the nature of the obligation of a surety, we do not well see how the contrary could be maintained. The contract of the surety to pay is as absolute as that of the principal, and he cannot change his absolute promise into a conditional one to pay, providing the creditor cannot collect from the principal. The averment in the answer that the plaintiff theretofore agreed to, and did, release the defendant from all liability on the note, is the averment of a legal conclusion; and the further averment that the plaintiff then and there told the defendant to rest easy, that he would not look to him for the payment of the note, but that the principal was good enough for him, and that he would trust him for the payment thereof, is a promise without a consideration, and would not have prevented the plaintiff, the payee, from at once commencing action against the surety to collect the note. ” We are aware that there are some authorities which hold with appellant’s contention; but recent authorities draw a marked distinction “between cases where the relation of principal and surety existed inter se at the time the obligation was entered into, of which the creditor had knowledge, and a case of joint principals inter se at the date of the obligation, • and a subsequent agreement between the joint *206 debtors by which, as between themselves, one becomes a surety for the other, of which subsequent arrangement the creditor had knowledge. ” (Rawson v. Taylor, supra; Swire v. Redman, 1 Q. B. Div. 536.) We are firmly of the opinion that one obligor cannot change his relation to his creditor by any agreement with his joint obligor without the creditor.’s-consent. In view of the.foregoing authorities, we are of the opinion that the answer of appellant did not state facts sufficient to constitute a defense, and that there was no error in the action of the court in sustaining the demurrer thereto. The judgment appealed from is affirmed. Affirmed. Hunt and Buck, J J., concur.