Dillon v. Russell

Lake, Ch. J. I. The action in the court below was upon a promissory note signed by the plaintiff in error and one Cornell as joint makers. To the petition Dillon answered that he was in reality only a surety for Cornell, whp was the real principal, he having received the entire consideration for which the note was given, and that this was well known to the plaintiffs at the time they received it. Of this allegation there was no denial in the reply, and, therefore, for all the purposes of the action it must be taken as true. Under the rules of pleading, as they stood prior to the code amendments of February 26, 1873, no reply was necessary to an answer, except to allegations constituting a counter-claim or set-off. McCann v. McLennan, 2 Neb., 286. By those amendments, however, a reply must be made to all material allegations of new matter contained in the answer, or they will be taken as admitted. [489] Tliis is a statutory rule which the courts cannot disregard when the condition of the pleadings is such as to render it applicable. For these reasons we must hold that the court erred in refusing to give to the jury the first instruction tendered on behalf of the plaintiffs in error which embodied substantially the above proposition of law. But in view of the fact that, even although his surety-ship were fully admitted, there is nothing in the record tending to show that this error could possibly have prejudiced the plaintiff in error, it furnishes no ground for a reversal of the judgment. Chase v. Washburn, 1 Ohio State, 244. In order to justify the reversal of a judgment, the record must show affirmatively not only that error has intervened, but that it was prejudicial to the party seeking to take advantage of it. Ohio Life Insurance and Trust Co. v. Goodin, 10 Ohio State, 557. In order to have made the admission that Dillon was a mere surety available as a defense, it was necessary also to establish by evidence that Russell and Holmes actually extended the time of payment on the note. This was attempted by the testimony of the defendant Cornell; but giving full credit to all that he says, it falls very far s'hort of showing that they made such an extension as would have barred an action brought by them at any time after the note matured. Unless the extension be of this character, it does not prejudice a surety, nor will it operate to release him from his obligation to pay the demand. Farmers’ Bank v. Reynolds, 13 Ohio, 84. II. But in the refusal to give the defendants’ second instruction, we see no error. The first proposition which it contained being to the effect that the plaintiffs were obliged, at their peril, to bring suit against the principal, at the mere request of the surety, is not sustained by the authorities. The better and almost universal rule [490] seems to be that in addition to the demand that the holder of the instrument shall proceed against the principal, there must, even in equity, be an offer of indemnity against costs and expenses in case the litigation should prove fruitless. Wright v. Simpson, 6 Ves., 734. Bellows v. Lovell, 5 Pick., 307. Mahurin v. Pearson et al., 8 N. H., 539. Page v. Webster, 15 Me., 249. And another proposition contained therein, viz: that a mere postponement of payment, to no definite time, and for no new consideration, will have the effect to release the surety, is equally untenable. As before observed, in order to have this effect, there must be such an agreement as will bind the holder of the note, and bar his action against the principal for some definite time beyond its maturity. A mere voluntary forbearance on the part of the creditor enlarging the time of payment without consideration, will not work a discharge of the surety. Leavitt v. Savage, 16 Me., 72. Waters v. Simpson, 2 Gilman, 570. Bailey v. Adams, 10 N. H., 162. The defendants’ third instruction, and also those tendered on behalf of the plaintiffs, and which were given to the jury, stated the law of the case correctly. As to the pretended extension, Cornell was the only witness called upon to establish it. He says on this point: “ I called on plaintiff Russell and made an agreement with him with reference to the payment of said note, which was as follows: that if he would extend the time of the payment of the note sixty days, or thereabouts, I would allow him fifteen per cent, which was agreed upon. This agreement was in March, 1875.” Now, conceding all that can possibly be claimed from this testimony, yet it does not show that any extension was mutually and definitely agreed upon. The witness does not swear that Russell agreed to extend the time of payment for sixty days, or for any other definite time. If no definite time be fixed upon, there can be no bind [491] ing extension. Waters v. Simpson, 2 Gilman, 570. McGee v. Metcalf, 12 S. & M., 535. There being no error disclosed that could possibly have prejudiced the plaintiff in error, the judgment of the court below must be affirmed. Judgment affirmed.