Hefferlin v. Krieger

Pemberton, C. J. The evidence is not presented in the record. The judgment recites that the court overruled the plaintiff’s demurrer to the answer as’to the first defense contained therein, and sustained it as to all special defenses pleaded by defendants. It also recites that thereafter the court heard the evidence on the issues raised by the complaint and first defense contained in the answer, and rendered judgment thereon for the plaintiff in accordance with the terms of the note. In the issues triéd were involved the ownership of plaintiff of the note as alleged in the complaint; mother words under the issue joined as stated above, the plaintiff was required to prove the material allegations of his complaint in order to authorize a judgment, and, in the absence of the evidence, we must presume' that the evidence authorized the rendition of the judgment. This disposes of all the' material allegations of the complaint, and the denials thereof contained in [127] the answer, and leaves us the task of dealing with the special defenses contained in the answer. The answer alleges that McBride, the principal in the note, diverted the money raised on the note from the purpose for which he obtained it, and for which purpose appellants were induced to sign the note as his securities, and that plaintiff had knowledge thereof. The answer is uncertain and indefinite, in ’ that it does not state what McBride did with' the money. But suppose he did use it for a different purpose than that for which it was obtained.' How were the appellants injured thereby ? It is not shown. ' It is not alleged that the post office fixtures were not purchased and used by McBride in the building adjoining appellants’, where it seems they wanted the post office kept. 1 Daniel, Neg. Inst., 4th Ed., § 792, says: 1 £In order to constitute a misappropriation, there must be a fraudulent diversion from the original object and design; and it is now well settled that, where a note is indorsed for the accommodation of the maker, to be discounted at a particular bank, it is no fraudulent misappropriation of the note if it is discounted at another bank, or used in the payment of a debt-or otherwise for the credit of the maker.” See, also, Moreland's Assignee v. Bank, (Ky.) 30 S. W. 637, where this doctrine is treated elaborately. We think the allegations of the answer in this respect constitute no defense. The appellants also allege in their answer that the plaintiff was guilty of laches in presenting and undertaking to collect the note sued on as shown in the statement. This court, in Smith v. Freyler, 4 Mont. 489, 1 Pac. 214, Where this question is fully treated, and the authorities collated, says: ££It will not release a surety on a promissory note from his liability thereon, though the creditor fail or refuse to sue the principal debtor, after notice by the surety, even though at the time of such notice the principal debtor was good, and afterwards became insolvent. The surety’s remedy is to pay the note, and himself sue the principal debtor. ’ ’ In the case at bar no such laches are alleged on the part of the plaintiff as were shown to exist in Smith v. Freyler supra. In that [128] case the holder of the note refused to sue after notice to do so by the security when the principal debtor was solvent at the time, and, after notice, became insolvent. Mere delay and passivity of the creditor in presenting or collecting the debt does not discharge the surety. (2 Daniel, Neg. Inst., 4th Ed., § 1326.) We think Smith v. Freyler, supra, decisive of this question. These are the only errors assigned which appellants’ counsel ask us to consider. There are other assignments, but they are included in the questions treated above; and, if they were not, we think them so immaterial as not to require separate treatment. W e think the matters treated above cover substantially all the errors assigned in the record. We see no error in the action of the court in sustaining the demurrer to the special defenses contained in the answer of appellants, and which we. have discussed abov'e. The judgment appealed from is affirmed. Affirmed. Hunt and Buck, JJ., concur.