Hilliard v. . Newberry

*107 Hoke, J., after stating tbe ease. On the question presented the authorities are to the effect that when a collateral obligation is in strictness one of indemnity, an action at law will not lie unless and until some actual loss or damage has been suffered; but when the obligation amounts to a binding agreement to do or refrain from doing some definite, specific thing materially affecting the rights of the parties, an action will presently lie for breach of such an agreement and no damage need be shown. Even on a bond of strict indemnity, however, while an action at law would not lie until damage suffered, our own decisions under the old system were to the effect that a person could invoke the aid of the equity courts when the facts disposed that such action required for the preservation and maintenance of his rights under the contract. Burroughs v. McNeill, 22 N. C., p. 297. Kecurring to the principle first stated in 16 A. & E., p. 179, it is said: “Where the promisor has undertaken to do a particular act or make a specific payment as well as to indemnify the promisee the contract is broken and a recovery for such breach may be had as soon as the time for doing such act or making such payment has arrived and the promisor has failed to perform his obligations and in such case it is no defense that the promise has not been damnified.” And in Pingrey on Suretyship and Guaranty the author, in speaking to the question, sec. 182, says: “It is settled that no action can be maintained by the surety upon an implied promise, if the principal has made default, without first making payment of the debt, except where the principal has broken his promise to do or refrain from doing some particular act or thing or to save the surety from some charge or liability. Thus where the maker of a note agrees with the surety to pay the amount of the note to the payee on a given day, but makes default, the surety can recover from his principal without first making payment of the note. “In like manner, where a partnership is dissolved by one partner leaving the firm with the debts outstanding, and a new firm agrees with the outgoing partner to pay the debt of the old partnership and save him harmless from any costs, trouble or *108 liability on account o£ tbe same, upon default of tbe new firm, tbe partner wbo withdrew can recover against tbe new firm without first paying such debts. When an obligation to do a particular thing or to pay a debt for which the covenantee is liable, or to indemnify against liability, is broken, the right of action is complete upon the principal’s failure to do the particular thing he agreed to perform or to pay the debt or discharge the liability. “If the contract be one of indemnity simply, and nothing more, then damages must be shown before the party indemnified is entitled to recover; but if there be an affirmative contract to do a certain act or to pay a certain sum or sums of money, then the surety can sue the principal before paying the debt to the creditor.” And the authorities cited fully support this statement of the doctrine. Many of them being on facts very similar to those presented in the present case. Dorrington v. Minnick, 15 Nebraska, 397-403; Wilson v. Stillwell, 9 Ohio St., 467; Lathrop v. Atwood, 21 Conn., 117; Kohler, Extrix., v. Matlage, 72 N. Y., 259; Hall et al. v. Nash, 10 Mich., 303; Loose Moore v. Radford, 9 M. & W. Exchequer, 656. In Stillwell v. Wilson, supra, the digest appears in the official report as follows: “Where S., a retiring member of a firm, took from his late partner T. a bond, with W. as surety thereon, conditioned that T. would pay all the debts of the late firm, which condition was broken. Held, (1) That S., without having first paid any of said debts, or been otherwise specifically damnified, is entitled to recover on said bond' against the obligors therein, to the amount of such debts remaining unpaid. (2) In such action it is proper that the creditors of the firm should be made parties, and that the court should, in the judgment, authorize the application of the amount recovered to the payment of the debts of the firm in discharge of the judgment.” And in Loosemore v. Radford, the doctrine is stated in the headnote as follows: “The plaintiff and defendant, being joint makers of the promissory note, the defendant as principal and the plaintiff as surety, the defendant covenanted with plaintiff to pay the amount to the payee of the note on a given day, but *109 made default. “Held, in an action on tbe covenant, tbat the plaintiff was entitled, though he had not paid the note, to recover the full amount of it by way of damages.” ' In the present case while the note sued on was undoubtedly given to secure plaintiff’s intestate from any loss or liability by reason of the mortgage, it contained, further, the promise to pay a definite stun by a stated time, and we concur with the judge below in the opinion that under the authorities cited and the principle established and sustained by them, the plaintiff was entitled to judgment. And we agree with his Honor also in the position that no valid defense is set up in defendant’s answer, and no issue raised in bar of plaintiff’s demand. As heretofore stated, the obligation sued on is not in strictness one of indemnity simply, but contains in addition a positive promise to pay a definite sum, and at a specified time, and entitles the plaintiff to judgment according to the tenor of the bond. The claim that there was a contemporaneous oral agreement to the effect that the time could be further extended is in direct contradiction to the written stipulation of the agreement, and under several recent decisions of the Court such a position was not open to defendant. Woodson v. Beck, 151 N. C., p. 145; Walker v. Cooper, 150 N. C., p. 129; Walker v. Venters, 148 N. C., p. 388; Mudge v. Varner, 146 N. C., p. 147; Bank v. Moore, 138 N. C., 529. On the question of notice raised by defendant, it will be observed that there is no denial in the answer “that before bringing this suit plaintiff administrator demanded payment and settlement of the note and mortgage,” but the allegation is “that before bringing this suit, defendant had not been notified of any loss of damages suffered by plaintiff.” The position of defendant: in regard to the necessity of notice before action brought applies to collateral obligations strictly of indemnity, and has no bearing when the suit is on an obligation which contains in addition binding stipulations to do or refrain from doing specific things, and on breach of which, as we have endeavored to show, neither actual loss or the notice of it is required. An examination of the authorities relied on by defendant here, notably Cox v. Brown, 51 N. C., p. 100; Sherrod v. *110 Woodard, 15 N. C., p. 360, and others, will disclose too that even on bonds of indemnity strictly, the failure to give notice was held not to affect a plaintiff’s cause of action at all, but only bis right to presently sue without first making demand, and in cases of that character a demand is generally waived by an answer denying any and all liability on part of defendant. The doctrine last referred to was approved by this Court in a recent case, Smith v. French, 141 N. C., p. 1, and its application would in any event deprive defendant of defense on that ground. There is no error and the judgment below is Affirmed.