Merriken v. Godwin

Harrington, Chancellor. The original connection of the co mplainant with the debt for which the defen dants have judgment and execution was that of an indorser and surety to Chambers'; and I do not think this character changed by his subsequent execution of a bond, in connection with Chambers, to take up the note. He is still a surety merely; and is entitled to all the benefits of that relation in a court of equity, though the form of his obligation be changed from indorser of a note to co-obligor in a bond. He remains bound for the same debt, and one in which he had no other interest or participation than as surety of another. As such surety, his bill assumes that he had the right, under chapter 65 of the Revised Code, to have it assigned to him, on payment of the amount due; it alleges that such assignment was refused and insists that, as a consequence of such refusal, he is in equity released from the obligation of payment, without his being obliged to show how he could have indemnified himself and avoided loss by means of the assignment. I do not know that the question, as a legal principle, has been settled under our statute; but I am unable to distinguish between the right of a surety, founded on the general equitable doctrine of subrogation, to have an assignment of collateral securities, or to have them used for his protection, and the same right as secured by express legal enactment. If a creditor gives time to a principal debtor, so as to put it out of his power at any time to subrogate the surety on payment of the debt by him, he discharges him without any reference to the use he might be able to make [245] of the power, were it transferred. The question is as to the existence of the right and not as to the source whence it is derived; and it can have no less force whether granted by positive enactment or derived from general principles of equity. The statute is express, that when any persons are bound in any bond, &c, and the money due thereon, &c, shall be paid, or tendered, by a surety therein, the obligee shall be obliged to assign such bond, &c., to such surety. The principle on which the right, however derived, is founded is, that a surety, on paying the amount for which he is bound, shall be entitled to have all remedies against the real debtor placed under his control; and ifthe creditor, by agreement with the debtor, disables himself for any time to give the surety this power he discharges him. Without going into the evidence in detail, I think, a tender of the money due upon this bond by the complainant to Mr. Watson, one of the obligees, is proved; and that it thereupon became his duty to make an assignment under the statute promptly, or in such time as the circumstances would admit of. He could not, at the moment, transfer a paper which was not in his possession; but from the time of the tender actually made it became his duty, and that of his co-obligees, to receive the money and make the assignment. The previous interviews had with each of the other defendants, though looking towards this object and showing a degree of solicitude on the part of the complainant to make good his right of substitution, imposed no obligation to do the act until the money was tendered ; but from that time the duty became imperative and the consequence of not complying with it attached. But, it is said, that even if the complainant was a surety in this bond, and though generally a surety has the right to an assignment and to the use of the remedies which such assignment would give him against his principal, this is [246] not a case where any such equity exists, because the complainant agreed, when he became surety, that the original bond and judgment against Chambers should have a priority of lien before the bond in which he became bound. This brings up the question whether such agreement is proved, and what, if proved, would be its effect upon the surety’s right to an assignment of the bond. And first, as to the proof of it. The agreementis positively alleged in the answers (all of them,) and no doubt was in fact made; but the question I am to consider is, whether it is legally proved. A defendant’s answer is evidence' only where he is made a witness by the statements and interrogations of the bill; and when his answer states matternot averred by the bill, or beyond it,it is the statement of the defendant’s case as a party,and it must be established by other proof. How, the bill here states that Richard N. Merriken was a surety in this bond, and that, as such surety, he was entitled, on its payment, to a transfer of the security; that he tendered the money, which was refused, and demanded the transfer, which was not made. The answers, submitting' first that he was not a surety and denying the tender, sets up further that he is not entitled to the equity of a surety, because when he became such he made a certain agreement which would prevent him' in equity from using the transferred obligation of Chambers, for which he was surety, in the way he purposed to use it, that is, by obtaining a preference of lien on the .printing press and fixtures. This new phase, of the case, depending upon new facts, to which the complainant does not even allude, must be established in the regular way, by proof, or it must be rejected by the chancellor. However high the moral weight of the statements by which it is supported, it is of no legal weight in the scales of justice. But, in the next place, as to the effect of such agreement, were it proved—I do not see that because a right to the as [247] signment might be abused, or used against equity in the particular case, the defendants are justified in refusing it, on demand and payment of the money. Was it not clearly the legal course to award to the complainant his right to an assignment and afterward resist the illegal or inequitable use of it ? Or, if such inequitable purpose in demanding the assignment (and the purpose is avowed in the bill) would be a sufficient answer to the complainant’s case in a court of equity, the facts which show the purpose to be inequitable and in opposition to positive agreement must be proved in the case ; and the proof here fails, outside of the answers, which,on the principle stated, cannot be taken as evidence. It is, therefore, my opinion that the complainant is entitled to the relief asked for in his bill, and that the injunction heretofore granted must be continued. Let a decree be entered accordingly, with costs.