Hartman v. Burlingame & Latham

Terry, C. J., delivered the opinion of the Court—Burnett, J., concurring. Defendant insists : 1. That Latham was, in fact, liable as surety only, and was entitled to notice of demand and non-payment. 2. That the failure of plaintiff to sue wdien requested by surety, operated to discharge his liability. The first point is settled by the case of Humphreys v. Tale, (5 Cal., 173.) The second we do not think sustained by authority. The doctrine of the English Courts is, that a security can not be discharged by the mere neglect of the holder to sue; if he desires to protect himself, he must pay the debt, and proceed against the principal; or, he may apply to a Court of Equity, to compel the holder to proceed against the principal. A different rule was asserted in New York, in Payne v. Pack [562] ard, (13 John.,) and King v. Baldwin, (17 John.,) where it was held that the neglect of the holder of a note to sue when requested, discharged the surety; but this doctrine was expressly overruled in Barst v. Henrick, (4 Hill;) and repudiated as authority by this Court in Humphreys v. Yale. In Barst v. Henrick, the Court held that a neglect to sue after request, would discharge the surety, provided the principal was solvent at the time of the request, and became insolvent after-wards, and before the institution of the suit. We are inclined to doubt the correctness of the rule here laid down, but if we admit the authority of the case, we do not think the facts disclosed by the record bring this case within the rule. The finding of insolvency of the principal, at the time of instituting the suit, is inconsistent with the other findings of the Court, and the premises in which the finding is based, do not sustain the conclusion. The party was solvent on the thirteenth. It does not appear that he afterwards met with any loss. Ho debt is incurred, no attachment or execution is levied on his property. The fact on which the finding is based, is that Burlingame, after the thirteenth, sold property for a consideration of $2,000. How the sale of property for a valuable consideration, should, in so short a period, cause the insolvency of the party, the record does not disclose, and we are unable to discover. Judgment affirmed, with.ten per cent, damages and costs.