Washburn v. Blundell

Whitfield, J., delivered the opinion of the court. On April 8, 1855, W. E. Pugh, as principal, and A. W. Washburn, as surety, executed a promissory note to one Hamer, trustee of the Yazoo county school fund, for $450, payable on January 1, 1856. Pugh kept the interest paid up to January 1, 1857, and on March 8, 1858, died intestate. On May 17, 1858, Washburn paid the note, and then, on May 18, 1858, probated it against Pugh’s estate, which was declared insolvent, but which has not yet been finally administered. At the time of Pugh’s death he owned a homestead in Yazoo City, and left a wife and three children, minors, surviving him. The widow occupied the homestead till her death. The youngest child has come of age. And this is an effort by the surety to subject to sale, for the satisfaction of his said claim, such homestead. The petition was demurred to, and the demurrer sustained. Under the law in force when the note was executed (acts of 1852, called session, p. 66), the homestead of a decedent descended to the widow and children during widowhood, and, after the widow’s death, to all children, share and share [273] alike, free from the debts of the husband, or of the widow during her widowhood. But the code of 1857, which went into effect November 1, 1857, limited the right of the widow and children to occupancy of the homestead until the death of the widow and the arrival at age of the youngest child, adding this provision: “Provided, That the laws now in force respecting the exemption of real estate from execution, shall apply to all contracts made and liabilities incurred before this act shall take effect.” Code of 1857, art. 281, p. 529. It is obvious, therefore, that if appellant’s rights are governed by the acts of 1852, supra, he should fail, otherwise he should not. And the sole question to be determined is, whether the liability of the principal, Pugh, to repay the surety the amount paid by him to the holder of the said note was incurred, within the meaning of the proviso to article 281 of the code of 1857, supra, when the said note was executed, or when the payment was made; or, to state the question a little differently, is the surety the creditor of the principal from the execution of the note, or from the date of payment by him of the note ? It is to be noted, in passing, that the petition does not show when the homestead was acquired, whether before or after the code of 1857, but we deem that immaterial. We understand this court to be committed to the doctrine, manifestly the correct one, that the surety is such creditor from the time of the execution of the note. It is so expressly stated in Pennington v. Seal, 49 Miss., 525, adopting Williams v. Bank, 11 Md., 242, and 1 Am. Lead. Cas., 57, both so holding. To the same effect are May v. Williams, 61 Miss., 133, and Loughridge v. Bowland, 52 Ib., 557. In Rice v. Southgate, 16 Gray, 142, a case like this, involving the application of the principle to an effort to subject a homestead, when the law had undergone change, the court say: “Upon well-settled principles it is clear that the contract of a principal with his surety to indemnify him for any payment which the latter may make to the creditor, in consequence of the liability assumed, takes effect from the time when the surety becomes [274] responsible for the debt of the principal. It is then that the law raises the implied contract, or promise of indemnity. No new contract is made when the money is paid by the surety, but the payment relates back to the time when the contract was entered into by which the liability to pay was incurred. The payment only fixes the amount of damages for which the principal is liable under his original agreement to indemnify the surety. ” We adopt this as an admirable statement of the law. The same principle, in language equally strong, is laid down by the learned Chancellor Cooper in 2 Tenn. Chy. Rep., 555, 556, the court saying: ‘‘The obligation created by the act of becoming surety subsists from the moment it is entered into, and the fact that the statute of limitations only begins to run between the parties from the payment of the security debt no more changes its character, or the date of its commencement, than the fact that the statute does not begin against a creditor who takes a note of the testator upon long time, till the debt falls due. . . . And obviously it is a mere play upon words to say that such a liability is not a debt or obligation created in the lifetime of the principal, since it originates in the execution of an instrument by the principal and surety, and flows from a principle of equity so universally acknowledged that, in the language of Lord Eldon, those who act under it ‘ may properly be said to act under the head of contract. ’ ” To the same effect are Miller v. Stout, 5 Del. Chy. Rep., 262, et seq.; Martin v. Ellerbe’s Adm'r, 70 Ala., 335; 24 Am. & Eng. Enc. L., 774, 775, with authorities, and 1 Brandt on Suretyship & Guaranty, sec. 207. The views of the learned chancellor below were in accord with these authorities, and the decree is Affirmed.