President &c. of Mechanics' & Farmers' Bank v. Capron

Per Curiam. The only question in this case is, whether the defendant’s discharge under the insolvent act, exonerates him from his liability as endorser of the note on which this suit is brought. The note was drawn by J. J. & H Lansing dated the 27th of October, 1813, and payable four years after date. It fell due, and was protested, on the 30th of October, 1817, and the defendant was discharged under the insolvent act on the 6th of May, 1817. In the case of Frost v. Carter, (1 Johns. Cas. 73.) it was held, that a discharge under the insolvent act extended only, to such debts as were due at the time of the assignment of the insolvent’s estate,and to debts contracted for before that time, though payable afterwards. The same principle has been repeatedly recognized in subsequent cases; and it seems to be a general and well-settled rule, that if the creditor, at the time of [469] the assignment by the insolvent debtor, has not a certain debt due or owing to which he can attest by oath, so as to entitle him to a dividend of the insolvent’s effects, he will not be barred by the discharge. In the case before us, the defendant, at the time of his discharge, was not liable as endorser, and his eventual responsibility was altogether contingent. The circumstance, that this note was left as collateral security for other notes which had become due at the time of the assignment, does not prevent the application of this principle. It was analogous to personal security, where no liability existed at ¡he time of the discharge.(a) Every thing upon which the defendant’s liability rested, occurred after his discharge. There was no debt existing against the defendant on this endorsement, upon which the plaintiffs could have claimed a dividend. The claim on him was conditional, until the demand was made on the drawers. The plaintiffs are, accordingly, entitled to judgment for 872 dollars and 83 cents, according to the stipulation in the case. Judgment for the plaintiffs. Footnotes [(a)] So, if a surety, or the defendant’s bail, pays the debt after his discharge, it ie no bar; for until payment by the surety, no debt accrues in his favour against the principal, (Buel v. Gordon, 6 Johns. Rep. 126. Page v. Bussel, 2 Maule & Selw. 551. Welsh v. Welsh and another, 4 Maule & Selw. 333.) So, if tne endorser of a note pay it after the discharge of the maker, he may, notwithstanding, recover from the maker. (Frost v. Carter, 1 Johns. Cas. 73. S. C. 2 Caines' Cas. in Error, 310. Macdonald v. Bovington, 4 Term Rep. 825. And see Mayor v. Steward, Burr. Rep. 2439. Lucas v. Winton, 2 Campb. 443.)