Fletcher v. Edson

The opinion of the court was delivered by Royce, J. As a mere promise to indemnify against an outstanding demand does not furnish a cause of action to the promisee, upon his simply becoming liable to a suit on such demand, and as it did not appear in this instance that the plaintiff had paid the debt or any part of it, his right of recovery might depend on the peculiar terms in which the present contract of indemnity was framed. The contract consists of the note for $1150, payable on demand, controlled and qualified by the stipulation endorsed upon it. Taken together they amount to an undertaking to pay into the [300] plaintiff’s hands, for his security, the whole amount for which he stood responsible for the defendant, whenever he should be called on for payment by the creditor, or whenever he should have reason to doubt the defendant’s ultimate responsibility to save him harmless, We discover no sufficient ground for doubting the validity of such a contract. The plaintiff had a right to prescribe the terms on which he would incur a responsibility for the defendant’s debt; and his assuming that liability was a sufficient consideration for the defendant’s engagement to him. Whatever he receives under this contract, he may be compelled to pay on the foreign dejnand. To the extent of his means thus acquired, he will have exchanged situations with the defendant — becoming, in effect, the principal, and the defendant a surety. And should the plaintiff be otherwise indemnified and discharged from the foreign debt, he must refund the fruits of this action. The record will at all times exhibit the nature of the claim now asserted by him, and the purpose for which it is sustained. It is insisted that the rights of the defendant’s other creditors should control the plaintiff’s remedy under this agreement. But to allow this would be to expose the plaintiff to a heavy loss, by depriving him of that security without which he probably would not have made himself accountable : it would be to abrogate the most important part of his contract. The statute has enabled these creditors to urge every legal defence to the action — every defence of which the defendant, if disposed to contest the right.of recovery, could avail himself, either for his own benefit, or that of his Other creditors. T his is the only privilege conferred by the statute, and with this the creditors must be satisfied. Judgment of county court affirmed.