Taylor v. Beck

Treat, C. J. First, Did the court err in sustaining the demurrer to the second and third pleas of Taylor l These pleas raise the question, whether the creditor is bound to make use of active diligence against the principal debtor, on the mere request of the surety. The 97th chapter of the Revised Statutes has no application to the contract in question. That statute only relates to bonds, bills, and notes, for the direct payment of money or property; and does not extend to contracts for the performance of other acts, or to agreements containing mutual covenants. It embraces only such obligations as are transferable by indorsement, so as to vest the legal interest in the assignee. Unless, therefore, the pleas are good at common law, they must be held insufficient. It is clear that the third plea presents no defence to the action. It does not show that the surety has been damnified, by the failure of the creditor to prosecute the principal. Indeed, it was conceded on the argument, that this plea was bad, unless the contract should be held to be within the statute. There is no rule of. the common law, nor principle of equity, that will enable a surety to relieve himself from liability, by a simple request to the creditor to proceed against the principal. The English cases uniformly agree, that mere passiveness on the part of the creditor will neither exonerate the surety at law nor in equity. And, independent of decisions based upon particular statutes, such is decidedly the weight of authority in this country. The notion, that the surety can compel the creditor to active diligence against the principal, at the hazard of releasing the surety, is expressly repudiated in the following cases: Bellows v. Lovell, 5 Pick. 307; Leavitt v. Savage, 16 Maine, 72; Bull v. Allen, 19 Conn. 101; Executors of Baker v. Marshall, 16 Vt. 522; Davis v. Huggins, 3 N. Hamp. 231; Croughton v. Duvall, 3 Call, 69; Manning v. Shotwell, 2 South. 585; Cass v. Howard, 8 Blackf. 190; Executors of Dennis v. Rider, 2 McLean, 451. It was decided in Pain v. Rickard, 13 Johns. 174, that, if the creditor is requested by the surety to collect the debt from the principal, who is then solvent, and the creditor neglects to proceed against the principal until he becomes insolvent, the surety is thereby discharged, and may avail himself of the discharge at law. The same doctrine was afterwards asserted, in the case of Cope v. Smith, 8 Serg. & R. 110. But the courts in New York and Pennsylvania, although they still adhere to the rule established in Pain v. Packard, are evidently not satisfied with the reasons upon which it was founded. In Kenrick v. Borst, 4 Hill, 650, Cowen, Justice, said: “ What principle such a defence should ever have been found to stand upon, in any court, it is difficult to see. It introduces a new term into the creditor’s contract. It came into this court without precedent; was after-wards repudiated even by the Court of Chancery, as it always has been both at law and equity, in England; but was restored on a tie in the Court of Errors, turned by the casting vote of a layman. I do not deny that the error has become inveterate; though it has never been treated with much favor.” See also Gardner v. Ferree, 15 Serg. & R. 28; and Erie Bank v. Gibson, 1 Watts, 143. There is no sound reason for permitting a surety to discharge himself, by requesting the creditor to proceed against the principal. The undertaking of a surety is absolute in its terms; and not conditional, as is the engagement of an indorser. He is directly, and not contingently liable to the creditor. The latter has a direct remedy against both principal and surety. If the obligation is joint and several, he has an undoubted right to proceed against the surety alone. It is no part of his contract, that he will take active measures to collect the debt. The duty to act rests with the debtors. All that the surety has the right to require of the creditor is, that no affirmative act shall be done, that will operate to his prejudice; such as an extension of the time of payment by a binding arrangement with the principal, or the giving up of other securities for the payment of the same debt. The law affords the surety a sufficient protection. He can pay the debt the moment it falls due, which is doing no more than he agreed to do; and immediately resort to the principal for reimbursement. Upon payment of the debt, he may, in equity, be subrogated to all the rights of the creditor. He may also, in the first instance, go into equity to compel the specific performance of the contract by the principal. On this subject, it is said, in Story’s Equity Jurisprudence, in § 639 : “ If the debt is due, and the creditor does not choose to call upon the debtor for payment, the surety may come into equity by a bill against the creditor and the debtor, and compel the latter to make payment of the debt, so as to exonerate the surety from his responsibility. In cases of this sort, there is not, however, any duty of active diligence incumbent on the creditor. It is for the surety to move in the matter.” The pleas presented no valid defence to the action, and were properly adjudged insufficient by the Circuit Court. Second. The opinion of the witness upon the question, whether the non-delivery of a portion of the brush, was a matter of any importance to Freeman, was improperly received. The true question was, had the plaintiff complied with his contract to deliver the whole of the brush, and not whether Freeman was injured by his failure to deliver a part. On the principle of the admission of this testimony, if it may be called such, a party may excuse himself from performing his engagement altogether, if he can show that the other party would not derive any actual benefit from its performance. Such is not the law. Contracts are not to be thus mutilated by the mere opinions of witnesses. Parties have the right to make their own agreements ; and it is the duty of the courts to enforce them, and not to encourage their violation. Third. Did the court err in giving the first and third instructions asked by the plaintiff? The first instruction was erroneous, and well calculated to mislead the jury. It should have been more definite, in reference to the performance of the contract. It gave the jury too wide a discretion in this particular. The contract was made to be performed in full; and it is not to be enforced in fragments. A party has the right to insist upon a strict fulfilment of his contract. An agreement to deliver a thousand bushels of wheat, would not be legally performed by the delivery of nine hundred bushels only. The contract in this case, to deliver an “ entire lot of broom brush,” would not be properly complied with by the delivery of nine tenths of the crop. And yet, in either case, a jury very likely would, under the generality of this instruction, come to the conclusion that the contract had been sufficiently executed. The law, it is true, does not regard trifles ; and, it may be, that, on this principle, the failure of the plaintiff to deliver an inconsiderable quantity of the brush, would not affect his right to recover upon the contract. So in the case of the contract to deliver wheat, a trivial deficiency in quantity would not be regarded. But the case should have been put to the jury on this ground; and not upon the ground, whether there had been, in the opinion of the jury, a substantial performance of the contract. The third instruction was clearly erroneous. The plaintiff declared on the contract, and alleged full performance thereof on his part. He rested his right to recover solely on the ground, that he was in no default. There was no count upon a quantum meruit. In order to recover, therefore, he was bound to prove that he had fully performed the contract. In an action against Freeman, he might, perhaps, under the common counts, be entitied to recover upon a part performance. Whether he could recover against Taylor, except upon a complete performance, would present a more serious question. The judgment is reversed, and the cause remanded. Judgment reversed.