White v. Savage

Mr. Justice Hailey delivered the opinion of the court. 1. The facts alleged in the foregoing complaint are evidently intended to state a cause of suit to compel the creditor Savage to proceed against the estate of plaintiff’s wife as principal upon the notes in controversy, for. payment therefor, before coming against the plaintiff as surety thereon. This is not a ease where the plaintiff as surety claims to have been discharged in full or pro tanto by some act of the creditor detrimental to his rights as surety, as are the cases of Brown v. Rathburn, 10 Or. 158, and Hoffman v. Habighorst, 38 Or. 261 (63 Pac. 610). It is claimed that, the plaintiff being surety only upon the notes signed by himself and wife, and defendant Savage being aware of that fact, he cannot compel plaintiff to pay without first exhausting his remedies against the principal or her representatives. Section 4431, B. & C. Comp., provides as follows: “An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or endorser, without receiving value therefor, and with the purpose of lending his name to some other person. Such a person is liable on the instrument to the holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.” [608] Under this section it is clear that, so far as a holder for value is concerned, the question of notice does not affect the liability of the surety, and the complaint in this ease shows that Savage is a holder for value; for it expressly alleges that he advanced and loaned to the plaintiff’s wife money for which the notes were given. 2. It has been held by this court in Findley v. Hill, 8 Or. 248 (34 Am. Rep. 578), that the failure of the creditor to proceed against the principal debtor upon the request of the surety does not release the surety from liability; and in Rockwell v. Portland Sav. Bank, 39 Or. 241, 244 (64 Pac. 389), it is said: “In such case the surety may protect himself by paying the debt and being subrogated to the rights of the creditor.” In Bowen v. Clarke, 25 Or. 592, 595 (37 Pac. 75), Mr. Justice Bean said: “We understand the rule to be that where two or more persons execute an instrument at the same time, upon the same consideration, and for the same purpose, they are all, in legal effect, joint contractors or obligors, so far as their liability to the other contracting party is concerned, although one may be designated thereon as surety, and sign it as such.” And in Galloway v. Bartholomew, 44 Or. 75, 77 (74 Pac. 467), it was held that the word “surety,” written after the name of one of the makers of a note, would only show the relation of the makers to each other, and perhaps charge the holder with knowledge to that effect, but it would not affect their liability to him. 3. In Harman v. Harman, 62 Neb. 452 (87 N. W. 177), it íb held that a surety of a decedent who pays a claim against the estate of his principal is subrogated to the rights of the creditor. The rule is well established in this state that a surety who pays the debt of his principal is subrogated to the rights of the creditor: Keel v. Levy, 19 Or. 450-454 (24 Pac. 253); Denny v. Seeley, 34 Or. 364-369, 370 (55 Pac. 976); Hoffman v. Habighorst, 38 Or. 261-271 (63 Pac. 610). In Scantlin v. Kemp, 34 Tex. 338, a note was given to the plaintiff Scantlin, signed by defendants Kemp and another as surety, and by Slane, the principal maker, who died, and after an administrator had been appointed the holder sued the sureties, who answered and proved [609] upon trial that Slane was the principal and received the entire consideration of the note, and they were sureties only, and that Slane left a solvent estate and they had notified the holder to take the proper steps to collect his claim from the estate, and a judgment was thereupon entered in favor of the sureties, but the case was appealed and the supreme court in deciding it held that on the death of thé principal the sureties became primarily liable for the note, and that it was unnecessary to present the note to the administrator for allowance: Willis v. Chowning, 90 Tex. 621 (40 S. W. 395, 59 Am. St. Rep. 842); Vredenburgh v. Snyder, 6 Iowa, 39; Ray v. Brenner, 12 Kan. 105. In the ease at bar, however, it is not alleged or claimed that the plaintiff requested the defendant Savage to present his claim to the executors of his wife’s will for allowance, but that plaintiff presented his claim to the executors and requested them to protect him. We think, however, that he should have paid the notes to Savage and then presented his claims to the executor and executrix of his wife’s estate, and that he could have fully protected himself by so doing. Having, therefore, a complete remedy at law whereby he could protect his rights, the court had no jurisdiction of this case, and the demurrer should have been sustained. The decree is therefore reversed, and the case remanded for further procedings not inconsistent with this opinion. Reversed.