Tooke v. Taylor

Lindsay, J. —Upon a common promissory note, payable one day after date, executed by one Calvin Haynes to David Tooke, the plaintiff in error, on the first day of January, 1861, and assigned or indorsed in blank by Tooke to J. L. Taylor, the defendant in error, suit was instituted by Taylor at the April term, 1861, of the district court of the county against Haynes and Tooke, the maker and [4] indorser. At the April term, 1867, (the case having remained on the docket by various continuances,), the plaintiff amended his petition, alleging, among other things,'that one J. E. Pearsal, a. stranger to the contract, apprehending that the holder or indorsee of the note would sue out an attachment upon it against the maker, who was about to move out of the county, deposited, as a pledge, with the indorsee sixteen bales of cotton, spmetime in the year 1861, to prevent him from suing out the attachment; that subsequently, in July, 1862, in consideration that the indorsee would release the sixteen bales of cotton, the said Pearsal executed and delivered to him the following instrument in writing, to wit: “ This is to certify, that I have become the security of Calvin Haynes on a note of $569 64, payable one day after date, to David Tooke or order, with ten per cent, interest, and indorsed to J. L. Taylor by said Tooke, for the payment of which I had pledged sixteen bales 'of cotton, now released by this instrument. Said note was due January 1,1861. j. E. Pearsal. “July 7, 1862.” By the amended petition, the plaintiff asked leave to make said Pearsal a party defendant; and for citation against him, which was accordingly granted; and after-wards the cause was tried and judgment rendered against the maker of the note, the indorser, and the guarantor, for the amount of the note sued on, together with the accrued interest. The record in the case exhibits the facts as above stated, with the additional fact of the value of the cotton on deposit while it was in the possession of the indorsee or holder of the note, By our statutes the maker, the surety, the indorser, and even the guarantor of a promissory note, may all be sued in the same action, and judgment had against the whole of them; which thereupon makes them all principals, and [5] equally bound to the plaintiff for the satisfaction of that judgment. A simple' recurrence to the principles of the law merchant, which determines the rights and liabilities of the parties to a promissory note that has been assigned, and to the nature of the respopsibilities which are assumed by a guarantor of the ultimate payment of such obligations, will afford a .ready solution of the principles involved in this case. The nature of the contract between the holder and the indorser of a promissory note -is, that the holder shall seek payment of the maker before resorting to the indorser. Our statute authorizes suit against the maker and the indorser at the same time; but it distinctly recognizes the nature of the contract, according to the law merchant, by interdicting judgment against the indorser unless judgment is rendered at the same time against the maker. So also as to sureties and guarantors. By the law merchant the liability of the indorser was fixed by protest and notice. By our statute this method of fixing the liability is superseded by requiring the holder to bring suit at the first term of the court after maturity, or to the second term, showing cause why it was not brought to the first term. The liability, therefore, of the plaintiff in error was fixed in this case by bringing suit to the first term of the court, and he could not be absolved from it except by a satisfaction of the demand. Did the acts of the guarantor, Pearsal, so operate as to produce that result? He was a stranger to the original contract, and whatever may have been the motives prompting him to make a pledge of property to secure the ultimate .payment of the note, or to assume the legal responsibility as guarantor of becoming liable for it upon the contingency of the failure of the maker and indorser, is wholly immaterial. The liability of the indorser once fixed by the statutory diligence of the holder of the note, he cannot escape it short of the actual satisfaction of the demand. It is readily conceded to be [6] the law, that where there is a positive agreement between the holder and the maker of the note, founded upon a valuable consideration for any delay, in the enforcement of the demand against the maker, that agreement would enure to the benefit of the indorser, whether he had notice of it or not. But such is not the state of the case here. A pledge of property was made by Pearsal, a stranger to the original contract; in redeeming that pledge he assumed the position of a guarantor, which only bound him to pay upon the contingency that the parties to the note failed to pay; and this volunteering, for what reasons need not be inquired into, on the part of Pearsal, worked no prejudice to the rights of the indorser, and he cannot avail himself of any advantage from it. The only effect of both the pledge and the guarantee was to strengthen and increase the security of the holder, without in any way impairing or affecting the rights or liabilities of the other parties to the instrument. Upon an actual pledge of property by the maker to the holder and his subsequent surrender of it the law is very different. Such a pledge would be for the benefit of the indorser as well as of the holder; and in surrendering it the holder would be bound to give the indorser credit for the value of the property so surrendered. We can discover no error in the judgment of the court below, and it is therefore Aeeirmed.