Myres v. Yaple

Morse, J. The plaintiff brought replevin to recover possession of the buggy or carriage mentioned in the following contract: [342] “$90. Hart, September 4, 1882. “ On or before tlie fourth day of May, 1883, I promise to pay to Bailey & Cahill ninety dollars, with interest at the rate of ten percent, (payable monthly), ten dollars per mouth, (payable at Hart). In case the above note is not paid at maturity at the place the same is made payable, then and in such case, for and in consideration of the trouble and expense said Bailey & Cahill are put to by reason of their being obliged to force collection thereof, and taking the necessary steps therefor, together with their disappointment so occasioned by my delay, I hex-eby agree to pay thexn the sum of ten dollars, as stipulated damages occasioned by such neglect, with intex-est thereon from the maturity of said note at the rate of ten per cent, per annum. And it is further agx’eed that the title to the carnage of Scofield, for which this note is given, shall remain in said Bailey & Cahill until this note is fully paid. “I. C. Hulbert. [l. s.j “J. C. Mybes.” [l. s.] On appeal from justice’s court the suit was tried in the circuit court for the county of Oceana, and a verdict directed for the defendant. The plaintiff bi’ings error. The declaration was the ordinary one in actions of replevin; and the plea, general issue. The defendant did not offer or introduce any evidence. The plaintiff made substantially the following ease. He had no interest in the purchase of the property, but signed the note or agreement at the request and for the accommodation of Hulbert, and as his surety. There was paid, previous to August 27, 1883, $15.50 upon the instrument. On that day the holders of the note, Bailey & Cahill, who were copartnei’S, sold the cai’riage, with the consexxt of Hxxlbert, to defendant, Tapie, for $50, taking a note in payment of him, of the same form as the one given by Hulbert and Myres. They indorsed the $50 as a payment of that sum upon the first-note or agreement, and then called upon plaintiff for the payment of the balance. They put it in the hands of attorneys, who threatened to sue it, whereupon plaintiff paid it, and the note was delivered to him. At the date of this payment, Hulbert had left the State. After get [343] ting possession of the note, plaintiff went to Tapie, the defendant, and demanded the carriage, or payment of the amount he had paid to take up the note. Tapie is financially irresponsible. Plaintiff never consented to the transfer of the buggy to defendant, nor was he consulted in any way about it. He knew the buggy was sold to Tapie before he paid the balance upon the note, but was not informed of the manner or terms of the sale. He paid this balance upon the obligation he signed, by giving his individual note for the same. The plaintiff also put the defendant upon the stand, who testified as follows: “I am the defendant. I am acquainted with the plaintiff; also Bailey & Cahill. I know I. C. Hulbert. Hulbert wanted to sell me this buggy. I would not buy it of him, because I knew what kind of a note he had given. I had given one like it to Bailey & Cahill before, when I bought my platform wagon. I told him I would give fifty dollars for the buggy if he would deliver it to Bailey & Cahill, so I could buy it of them. The plaintiff did not know of the sale to me at the time it was made. I sent my boy to see them (Bailey & Cahill), and he brought it; and when I came to town I gave a note like this one (the note in evidence) in form for fifty dollars, and they indorsed it on this note (the one in evidence). This indorsement for $50 is for the note I gave them at that time. I knew about this note when I bought the buggy. That is why I would not buy it of Hulbert. I did not say anything to Myres about it, or consult him in any way until I had bought.” Plaintiff also introduced the note or agreement in evidence. There was no showing that plaintiff had paid the note he gave to Bailey & Cahill. The counsel for plaintiff claims that, by virtue of the payment of the balance upon this note or agreement, and by its delivery to him upon such payment, he acquired the same title to the property that Bailey & -Cahill had under it, and bases his right to recover upon that theory. The defendant’s counsel insist that plaintiff got no title to the property by this transaction, and that the note was delivered to him as evidence of payment only, and conferred upon [344] him no right, except to sue and recover from the maker, Hulbert, the money he had paid upon it. The record is silent as to the intent or purpose of Bailey & Cahill in delivering this note to plaintiff. Before the payment of the balance of this note or contract by the plaintiff, we have the ordinary case of a creditor (Bailey & Cahill) holding security for the payment of the debt of the principal debtor (Hulbert), to wit: the contract retaining title to the buggy, and also the further security of Myres as surety. Now, as between Bailey & Cahill and Myres, when the plaintiff, as such surety, was obliged to pay, and did pay, the debt of the principal, an equity arose in his favor, by which he was entitled to have all the securities which Bailey & Cahill held against the person or property of Hulbert transferred to him, and to enforce such securities as fully as Bailey & Cahill could have done ; and, for the purpose of obtaining indemnity from the principal, he must be considered as at once subrogated to all the rights, remedies, and securities of the original creditors.1 When the plaintiff paid the balance due upon the contract, Hulbert had absconded, besides being insolvent and financially worthless. It appears plainly enough from the record that, in making the payment, the plaintiff did not intend that the contractor obligation signed by himself and Hulbert should be discharged by such payment; but he did it relying upon the legal efficacy of the contract as evidence of title in the vendors, and as passing such title to him by an equitable assignment, on payment of the balance due thereon; and he proceeded at once to reclaim the property under and by virtue of the instrument. He had a right, by virtue of this equitable assignment, under our statute in relation to assignments of choses in action, to bring this suit to enforce his rights in his own [345] name: How. Stat. §7344. The action brought being replevin, it was not necessary for him to set out such assignment in his declaration, as claimed by defendant’s counsel. His declaration, being in the ordinary form in such action, was sufficient. When Hulbert consented that the possession and contingent title to the buggy might pass to the defendant, instead of to himself, and it was delivered to defendant, Yaple knew of the existence of the original contract, and the shape it was in, and that Myres was surety upon it. Bailey & Cahill did not cancel this original undertaking and contract as to the title or security. No change whatever was made in it, except the indorsement of the $50 upon it. The title remained in Bailey & Cahill, and was in them at the time Myres paid the balance upon the contract. Upon the payment of such balance the plaintiff became entitled to, and received, the security held by Bailey & Cahill, which was the legal title to the possession of the buggy. In default of payment of the balance he paid, and which he demanded before suit of the defendant, he was entitled to the possession of the buggy. The plaintiff’s equities are superior to the defendant’s because they are prior in time, and also because the defendant can occupy no more favorable position than Hulbert, who was really his vendor; and he had full notice of Myres’ position as surety, and the terms of the contract, when he gave his note for the buggj. As he is also insolvent, and has paid no money, there will be no great hardship in his relinquishing the buggy, if he cannot pay plaintiff’s just lien upon the property. The judgment of the court below is reversed, with costs, and a new tidal granted. The other Justices concurred. Footnotes [1] For a resumé of important Michigan decisions relating to the doctrine of subrogation, see note to case of Bush v. Wadsworth et al., 60 Mich. 255.