First Nat. Bank v. Watt

• Decision Date: 19 February 1901
• Citation: 64 P. 223,7 Idaho 510
• Parties: FIRST NATIONAL BANK OF HAILEY v. WATT
• Court: Idaho Supreme Court

64 P. 223

7 Idaho 510

FIRST NATIONAL BANK OF HAILEY v. WATT

Supreme Court of Idaho

February 19, 1901

PLEADING-ANSWER-DEMURRER.-In pleading the existence of a record in courts of general jurisdiction, the allegations must be certain and specific it being insufficient to allege the same upon information and belief.

SAME-UNCERTAINTY.-The defenses set forth in an answer must be stated with sufficient certainty to enable the plaintiff to ascertain the facts which the defendant will attempt to prove at the trial.

SURETY-RELEASE OF SURETY.-The release of security for a certain debt, held by the creditor, releases a surety obligated for such debt to the extent of the value of the security so released, where the creditor releases such security without the consent express or implied, of the surety.

SEVERAL OBLIGATIONS-T. was indebted to plaintiff, and gave a joint note for the debt signed by himself and by W. and B. as sureties; afterward W. and B. gave a note for the same debt and T. gave another note for the same with P. as surety; thereafter the plaintiff sued T. and P. upon their note and obtained judgment; failing to collect, plaintiff sued W. and B. upon their note. Held, that the former action did not bar the latter, as the execution of the latter notes severed the obligation of the sureties, W. and B. from that of the principal debtor.

(Syllabus by the court.)

APPEAL from District Court, Blaine County.

Reversed and remanded, with instructions.

Dietrich, Chalmers & Stevens, for Appellant.

The maker upon the face of a promissory note, with whatever motive or purpose he may have signed it, is bound by the contract which he signed, according to the legal effect and meaning of the words. He cannot vary that meaning by parol. (Aud v. Magruder, 10 Cal. 282.) Such maker is a principal. (Shriver v. Lovejoy, 32 Cal. 575; Donan v. Pardow, 34 Cal. 280.) It would be strange if one could not waive his right to be treated as surety, and agree that he should be bound as upon his unconditional promise. (Harlan v. Ely, 55 Cal. 340; California Nat. Bank v. McGinty, 108 Cal. 148, 41 P. 38.) It is very doubtful whether even as between the bank and True, the release or receipt given by Buller, president of the bank, was competent. (Abbott's Trial Evidence, p. 520, par. 36, p. 633, par. 202.) If competent at all, it would be by reason of some feature of the law of estoppel. But as to Watt, there could be no element of estoppel. Watt did not act upon it, was misled by it, parted with nothing for it. (Boggs v. Merced 14 Cal. 366; Davis v. Davis, 26 Cal. 41, 85 Am. Dec. 15; Shaufe v. Griffiths, 4 Wash. 161, 31 Am. St. Rep. 910, 30 P. 93.) No other cause of action than the one sued on can merge in the judgment. Hence the successful prosecution of one action, on the original debt, will not impair the right to proceed on the security. (Freeman on Judgments, 3d ed., sec 229; 2 Black on Judgments, sec. 774.) The principal is as well settled as anything can be that the taking of a new note does not discharge the old one unless it is expressly agreed that it should do so. Nothing is payment except money, or something else accepted as such. (2 Daniels on Negotiable Instruments, sec. 1266; Jagger Iron Co. v. Wallin, 76 N.Y. 526; Cole v. Sackett, 1 Hill, 516; Elwood v. Diedevdorf, 5 Barb. 398; Winstead Bank v. Webb, 39 N.Y. 325; Davis v. Amable, 2 Hill, 339; Hawks v. Hinchcliff, 17 Barb. 492; Corn Exchange v. Babcock, 57 Barb. 231.)

Lyttleton Price, for Respondent.

The subject of suretyship is best considered and discussed by the courts in dealing with the principle involved in its application to the statute of frauds. The principle as stated above has been affirmed in innumerable decisions; those of highest authority are: Leonard v. Vredenburgh, 8 Johns, 29, 5 Am. Dec. 317; Nelson v. Boynton, 3 Met. 396, 400, 37 Am. Dec. 148; De Wolf v. Rabaud, 1 Pet. 476; Mallory v. Gillett, 21 N.Y. 412; Farley v. Cleveland, 4 Cow. 432, 439, 15 Am. Dec. 387; Meech v. Smith, 7 Wend. 315; Roe v. Barker, 82 N.Y. 436; Ames v. Foster, 106 Mass. 400, 8 Am. Rep. 343; Smith v. Freyler, 4 Mont. 492, 47 Am. Rep. 358; 1 P. 214; Stovall v. Adair, 9 Okla. 620, 60 P. 282, and cases there cited. Respondent was released as surety by appellant's election in accepting and putting into judgment the note of True and Pettit. If True's assent could not be established in an action by Watt against him, then Watt is not bound here. (Snider v. Greathouse, 16 Ark. 72, 63 Am. Dec. 56; Ward v. Henry, 5 Conn. 595, 13 Am. Dec. 119, and note.) All notes are joint notes in terms. (Barnett v. Juday, 38 Ind. 86; Humphreys v. Guillow, 13 N.H. 385, 38 Am. Dec. 499; Yorks v. Peck, 14 Barb. (N. Y.) 644; Hunt v. Adams, 5 Mass. 358, 4 Am. Dec. 68; Story's Promissory Notes, par. 57; Childs v. Wyman, 44 Me. 433; Riley v. Gerrish, 9 Cush. 104; Carr v. Rowland, 14 Tex. 275; Schneider v. Schiffman, 20 Mo. 571.) A creditor who acquires a lien on the property of his debtor as security for his debt is a trustee for the surety; and if by his willful act the lien is lost the surety is discharged, and the burden of proof is on the creditor to show that the surety was not injured thereby. (Allen v. O'Donald, 23 F. 573; Rawson v. Gregory, 59 Ga. 733; First Nat. Bank v. Rogers, 13 Minn. 407, 97 Am. Dec. 239; Mulford v. Estudillo, 23 Cal. 94, approved in Day v. Ramey, 40 Ohio, St. 449; Hyde v. Rogers, 59 Wis. 160, 17 N.W. 127.) If judgment is taken against one of the joint obligors, this discharges all of the joint obligors from all suits by the same plaintiff. (Barnett v. Juday, supra; Freeman on Judgments, par. 227a.) Wherever several are jointly liable, by taking judgment against one, the creditor merges the cause of action as to that one, and puts it out of his power to maintain any further suit either against the others severally, or against all combined. (Freeman on Judgments, par. 231, 232; Mason v. Eldred, 6 Wall. 231, denying Sheehy v. Mandeville, 6 Cranch, 253; Sessions v. Johnson, 96 U.S. 347, 24 L. ed. 596; Ferrall v. Bradford, 2 Fla. 508, 50 Am. Dec. 293; Robertson v. Smith, 18 Johns. 477, 9 Am. Dec. 227; Smith v. Black, 9 Serg. & R. 142, 11 Am. Dec. 686; Lauer v. Bandow, 48 Wis. 638, 4 N.W. 774; Suydam v. Barber, 18 N.Y. 468, 75 Am. Dec. 254; Smith & Osborne v. Kibbe, 31 Hun, 391; Candee v. Smith, 93 N.Y. 352; Shuman v. Strauss, 52 N.Y. 407.)

QUARLES, C. J. Sullivan, J., concurs. Stockslager, J., took no part in the decision of this case.

OPINION

QUARLES, C. J.

Prior to December, 1893, one E. B. True, purchased an undivided interest in some mining property from one A. T. Huffaker paying part cash therefor, and executed one or more notes for the balance of the purchase price. Upon these notes one W. H. Pettit was surety. Thereafter suit was brought upon the last of these notes, it being overdue and unpaid; and certain property in the town of Hailey, owned by said True, was attached to secure the said debt to the said Huffaker. Thereafter, and to satisfy the debt sued upon, and to secure the release of the attachment upon the Hailey property, an arrangement was made between the parties whereby said True executed to the plaintiff bank a note for the sum of $ 1,000, dated December 22, 1893, due November 1, 1894, which note was also executed by the defendants, W. H. Watt and G. V. Bryan, as sureties. Upon the maturity of this note, the same being unpaid, the said defendants executed a new note to the plaintiff, dated November 1, 1894, for the sum of $ 1,085.80, due ninety days after date. This note was not signed by the principal debtor, the said True. On May 1, 1895, the last-named note being unpaid, a new note was executed to the plaintiff by said defendants, W. H. Watt and G. V. Bryan, for the principal and interest then due, namely, $ 1,150.90, due ninety days after date, drawing interest at one and one-half per cent per month, after date, until paid; the same being the note sued upon in this action. The defendant Watt at the date of the execution of this last-named note was dissatisfied, and complained that the note was not executed by the principal debtor, the said True. Another note for the same amount and for the same debt was drawn and sent by mail by the plaintiff to the said True, the principal debtor, at Warrens, in Idaho county, who signed said note and forwarded it to the said W. H. Pettit, who also signed it and sent it to the plaintiff. After the maturity of both of these notes, which were for the same debt, the plaintiff commenced an action in the district court in and for Blaine county against said True and W. H. Pettit to recover upon the note last executed by them. In this action an attachment was issued and levied upon certain interests in some mining property owned by the defendant True, in Idaho county. This action proceeded to judgment, and the defendant True made no defense thereto. On the thirtieth day of September, 1896, this last-named attachment, and levy thereof upon said interest in said mining property, was released by the plaintiff by writing, which, after entitling court and cause, is as follows: "In consideration of the assignment to the said bank, as collateral security for the debt sued on herein, of five thousand two hundred and fifty shares of the capital stock of the Secesh Mining Company--being all of the interest represented to be owned by the said True in the Secesh placer mining claims near Warrens, Idaho--the attachment heretofore levied upon the interest of the said E. B. True, therein is hereby released. Dated this thirtieth day of September, 1896. R. F. Buller, Attorney for Plaintiff." To the complaint in this action the defendant answered. The plaintiff demurred to said answer upon different grounds. The demurrer was sustained by the court. By leave of c...