Ritter v. Henning

Opotion by Oblady, J., The judgment which John Henning assigned to Ferdinand S. Ritter and the promissory note which Henning gave when he received the $840 from Ritter were concurrent and collateral securities for the same debt. The indorsements on the note showing that it was given to secure the payment of the judgment, did not change the relation of debtor and creditor. The original transaction contains no contract of suretyship or guaranty and the fact that the note accompanied the assignment of the judgment meant no more than an additional security for the money at that time paid by Ritter, who could avail himself of either so long as his debt remains unpaid: Ayres v. Wattson, 57 Pa. 360. It is the very nature of collateral security that it may be resorted to for a satisfaction of the principal debt, if its payment [463] shall not otherwise be obtained: Jones on Pledges, see. 591. The failure of Ritter to comply with Henning’s written notice, to collect the judgment from the defendant therein, did not change Ritter’s position from a creditor to that of a surety for him on the judgment, thereby relieving Henning from liability on his promissory note under the provisions of the Act of May 14, 1874, P. L. 157; which act contemplates that the person to be proceeded against shall be liable for a principal debt, common to the creditor and the person giving the notice. If Henning desired to enforce the payment of the judgment he should have paid his note and had the judgment reassigned to him to enforce its collection. Instead of following this course he secured an extension of time from his creditor' and renewed his note for another year. In Hartranft’s Estate, 153 Pa. 530, it was held that the bar of the statute of limitations to an action on a promissory note would not entitle the maker to a return of the collateral held by the payee, without payment of the debt, .... The holder of a note with whom collaterals have been deposited has, while the statute is running, two remedies, one against the maker by suit, the other against the collaterals. If he loses the first by lapse of time, he still has the second. He may not sue the maker but he may exhaust the securities he holds in pledge: Craven v. Harsh, 186 Pa. 132. The extension of time was a forbearance and was not an independent consideration as shown by the learned judge in the opinion filed. The judgment is affirmed.