Viele v. Hoag

The opinion of the court was delivered by Isham, J. The general object of this bill is for discovery and relief from the payment of a note executed by the orator, as surety for B. & H. Boynton, and on which the defendant has commenced a suit at law. The ground upon which relief is sought, is an extension of the- time for the payment of the note for one year, granted by the payee to the principals, without the knowledge or consent of the surety. And that within that period, the Boyntons became insolvent. An objection has been urged against this proceeding, involving the jurisdiction of this court over its subject matter; and it is insisted that an ample remedy maybe had in the suit at law; and that a bill for relief cannot be sus [51] tained where that remedy exists. And as the orator in this case, has failed in his discovery, and jurisdiction cannot he entertained on that ground, it is claimed that the hill should he dismissed. The subject of equitable relief in behalf of sureties, is one of original jurisdiction in a court of chancery. The peculiar rights of a surety originated in, and are exclusively the growth of equity. Formerly it was held in several instances, that the remedy of the surety was only in equity, and could not be made available in courts of common law. But it is now held as a general rule, “ that the liability of sureties is governed by the same principles “ at law, as in equity.” And probably with few exceptions, the same considerations which are sufficient in equity to discharge the surety, Will be available for the same purpose at law. 2 Lead. Cases in Eq., 365, 386 in notes to Rees v. Berrington. But “ a court of equity will not send a party suing there, to a “ court of law for the discharge or relief to' which he is equally “ entitled in equity.” But will extend the same relief and exercise the same powers in .behalf of sureties, that were exercised before jurisdiction of this subject was entertained at law. 2 Lead. Cases in Eq., pt. 2, 365. Samuel v. Howorth, 3 Mr. 278. Mayhew v. Cricket, 2 Swans. 185, and 529. Eyre v. Everett, 2 Russ. 382. 3 Hare, 567. Justice Story remarks, Eq. Juris. Sec. 64, (i) “ That the juris- “ diction of courts of equity is not changed or affected by the “ courts of law now entertaining jurisdiction in cases where they “formerly rejected it. They cannot enlarge or restrain the pow- “ ers of a court of equity at their pleasure; for their jurisdiction “ is of a permanent and fixed character, and being once legiti- “ mately vested, it must remain until the Legislature shall abolish “ or limit it.” So in Kemp v. Pryor, 7 Ves. 249, Lord Eldon says, “ I cannot hold that the jurisdiction of courts of equity is gone “ merely because the courts of law have exercised an equitable “jurisdiction.” In all such cases the party may seek his relief at the hands of either. Neither is it in the power of a creditor, by first commencing proceedings at law, to deprive the surety from seeking his relief in chancery. And where there has been no delay or negligence in seeking relief in equity, a court of chancery will exercise a controling power over the parties in their proceedings at law. The jurisdiction, therefore, of this court, in [52] the case under consideration, does not depend upon the fact that this bill is framed for discovery as well as relief. For it would be entertained for relief if no discovery had been asked, as being a matter within its original jurisdiction. If this had been a bill for discovery, merely in aid of proceedings at law, if the discovery failed, the bill would be dismissed. But as this bill is for relief as well as discovery, and the prayer of the bill is for that relief which is within the original powers of a court of equity, though the discovery has failed, yet the bill will be entertained for relief. 1 Story Eq. Sec. 73, 74. Russell v. Clark, 7 Cranch. R. 69. Welf. Eq. plea, 132. We see no reason for dismissing this bill for the want of a proper jui’isdiction in this court over its subject matter. The case is then resolved into those questions that arise upon its merits. It is not deemed important to recapitulate the facts stated in the bill and answei1, nor the depositions of the witnesses, nor to enter into an investigation of the answer, to see whether it is as full as the stating or interrogating part of the bill requires, as there is not that contradiction in the testimony that rendei’s it difficult to an-ive at a proper result. The original note was executed June 24, 1846, by B. & II. Boynton as principals, and Jedediah Boynton and the plaintiff, as sureties. Its consideration was money lent and wool sold by the defendant to the Boyntons to the amount of one thousand dollars. When the note was execxxted, it was at first contemplated to take the same payable in one year, if certain security was obtained. As that could not be effected, the present note with the plaintiff as surety, was taken on demand. The object for taking the note payable in that manner is explained in the testimony of Bial Boynton. He testifies that when the note was given, it was agreed that the defendant should wait one year, at least, and probably longer, and that this note was made payable on demand at his suggestion, so that if the defendant became dissatisfied with the security, they would be obligated to exchange it. > The defendant states in his answer, that the note was executed in that manner by the suggestion of Boynton, so that if he was dissatisfied about the safety of the money, he might secure himself at any time, and that if he should not need the money, or become dissatisfied with the secdrity, it might lie one, two, or more years. [53] Tills difference in phraseology cannot create much doubt as to the real intention of the parties at the time of the execution of that note. The conviction arising from the manner in which the business was done, and the object they had in view in making the note payable on demand, cannot well be overcome, — that it was so made, for the purpose, and with the right expressly reserved, to enable the defendant, as payee of the note, to call upon the makers for the money at any time he saw fit. There was unquestionably an expectation and understanding between them, that the note should lie for one year, and longer in case the defendant did not become dissatisfied with the security; but subject to the right, however, to call for the money, and prosecute the note at any moment he chose. This mutual understanding, and this right of the defendant, is to be inferred from a fair construction of the testimony of Bial Boynton, which was put into the case on the part of the orator. The defendant did permit the matter to lie during that year, and no complaint has been, or is now made of any matter arising out of that arrangement. At or about the expiration of the first year, we have from the testimony in the case, that the defendant notified the Boyntons that he should want a j>ayment on that note, of six hundred dollars for his personal use. An arrangement was finally effected, that if the Boyntons would pay the interest on the note, four hundred dollars on the principal, and pay him for his wool of that year, amounting to over two hundred dollars, the note might lie another year; as by that arrangement he would be possessed of means necessary for his use. This arrangement as stated by the parties and witnesses, bears the impress of a mutual effort to satisfy the wants of the defendant with as small a draft as possible on the principal of the note, and to carry into effect the understanding of the parties at the time the note was originally given. For thereby the defendant would be accommodated in the money • he wanted, and the Boyntons, in obtaining time on the balance of the note as was contemplated, besides obtaining the wool which they wanted in their business. And in that negotiation we can only draw the inference that the parties intended that the balance of that note should remain another year, under the same arrangement and understanding that existed the year before. The defendant was to retain the same note payable on demand, with the [54] right of calling for the same at any time during the year, that he saw propel-. "What was said in relation to the delay for another year, was in view of the previous arrangement the year before, and to carry that understanding into effect, that the note might lie for one, two or more years, unless he became dissatisfied with the security, or wanted the money for his own use. In that event the right was reserved to call for and collect the amount due, whenever he deemed it necessary or important. Under this view of the facts in the case, there is nothing in that arrangement of which the surety has reason to complain, or which entitles him to the relief he has sought. The right of the creditor has been reserved to collect at any time. The right of the surety also has been preserved; for had he felt insecure, he might have paid the note, and proceeded in his own name, to secure the debt, or petitioned the court of chancery for an order upon the defendant to proceed in the collection of the debt, of the principals; and the defendant, as holder of the note, might have complied with such requirement and order, if made without violating any contract or even conscientious obligations. Sureties on a note are not discharged where time has been given, if there has been a reservation of the right to call for payment, or a right to proceed against the surety. 2 Lead. Cases in Eq. 360, 379, in notes to Rees v. Berrington. The case of Nichols v. Norris, 3 Barn. & Ad. R. 41, was a deed of composition which the creditor signed and thereby agreed to extend the time of payment, and receive payment by installments. But as he had expressly reserved his right to proceed at any time against the surety, the surety was held not discharged. In the case of Melville v. Glendining, 7 Taunt. R. 126, the plaintiff received bills of exchange from a defendant under an agreement’.that he should not be precluded from prosecuting while the bills were running. It •was held, the surety was not thereby discharged. The same doctrine is sustained by the case of Blackstone Bank v. Hill, 10 Pick. R. 132. Oxford Bank v. Lewis, 8 Pick. R. 458. Claggett v. Salmon, 5 Gill and John. 314. Bangs v. Strong, 10 Paige, 11. 2 Lead. Cases in Eq., 360, 379, in notes to the case of Sees v. Berrington. We think, therefore, the plaintiff in this case has failed in showing such a contract as entitles him to the relief for which he has prayed. The decree of the chancellor must be affirmed, with costs.