Austin v. Belknap

The opinion of the court was delivered by Veazey, J. The declaration contains a special count on a promissory note, and the common counts. The defendant Bel [497] knap answered by plea, to which the plaintiff filed a general demurrer. The objection to the plea urged in argument is that it does not show that therts was any consideration moving between the parties to the agreement to discharge Belknap. The plea alleges in substance that the plaintiff is not and never was the owner of the note in question, but that it is now and always has been the property of one Whitney, to whom it was given and made payable ; that the note was first given to Whitney by the defendant Ford for the sole debt of Ford ; that afterwards, at the request of Whitney, this defendant Belknap signed the note as surety for Ford ; that, afterwards, Whitney, in consideration that certain property which Ford had delivered to Whitney, and which it had been agreed by all the parties was to be applied in payment of the note, should be applied in payment of a book account which Whitney had against Ford, agreed to and did release and discharge Belknap on the note. This is not a case of an agreement to discharge upon part payment of a debt. We understand the substance of the allegation of the plea to be that Ford had put sufficient property into Whitney’s hands to pay the note. Under the existing agreement that it should be so applied, the note was practically paid. If a creditor has collateral security of the principal, the surety is entitled to the benefit of it; and if the creditor surrenders it voluntarily, this discharges the surety. Chit. on Con. 583, 10th Am. Ed. and note i.; 2 Am. Lead. Cas. 380. Belknap had a legal right to have the property applied in payment of the note. In consideration of Belknap’s consent that it might be applied on the other debt, Whitney agreed to discharge him on the note. It was not a past and executed consideration ; because, although the property was then in the possession of Whitney, the agreement was to change its application ; and it was that change that injured Belknap by losing the benefit of the application on the debt for which he was holden. The plea is argumentative; but such pleading is aided on general demurrer. Gould PI. ch. 10, sec. 30 ; and numerous cases [498] in our reports. The plea as it stands is a full answer of the defendant Belknap to the declaration; but as the cause was passed to the Supreme Court upon the demurrer to the plea, under the Act approved Nov. 11, 1876, the cause, upon motion, is remanded to be proceeded with by the County Court. Judgment pro forma reversed, and cause remanded.