Frank v. Snow
| Decision Date | 19 November 1895 |
| Citation | 42 P. 484,6 Wyo. 42 |
| Parties | FRANK v. SNOW ET AL |
| Court | Wyoming Supreme Court |
Re-hearing Denied January 15, 1896, Reported at: 6 Wyo. 42 at 55.
Commenced in District Court November 2, 1889.
ERROR to the District Court for the county of Laramie, HON. RICHARD H. SCOTT, Judge.
Action by Hannah Frank against Edgar P. Snow, Elizabeth Snow, and Mary E. Stark for the recovery of a balance due upon a debt secured by mortgage, and a foreclosure of the mortgage. The mortgage and the promissory note which it secured were executed by Edgar P. Snow and Elizabeth Snow to Alexander H Swan and Thomas Swan, composing the firm of Swan Brothers. The note was indorsed and delivered to Hannah Frank, and the mortgage assigned to her. Mary E. Stark was the holder of a second mortgage covering a portion of the property described in the first mortgage. The assignment of the latter was not recorded until after the execution and recording of the second mortgage. The other material facts are stated in the opinion.
Decree Modified.
T. F Burke, for plaintiff in error.
There is no proof to show the knowledge of either the payees or endorsee of the fact of suretyship; on the contrary there is direct proof that Hannah Frank, the endorsee, had no knowledge thereof. This is, in itself, a sufficient response to the claim of Elizabeth Snow that she signed the note and executed the mortgage as surety for her husband. Many authorities hold that after a judgment upon the original contract the relation of principal and surety ceases to exist. (La Farge v. Herter, 3 Denio, 157; Findlay's Ex'rs v. U.S. 2 McLean, 44; Marshall v. Aiken, 25 Vt. 328; Denuham v Downer, 31 Vt. 249; Dougherty v. Richardson, 20 Ind. 412; Bay v. Talmadge, 5 Johns Ch., 305.) Mrs Snow signed the note and mortgage apparently as a principal. Whether the doctrine of the above cited cases is sound or otherwise another question follows: the partial release occurred prior to the suit in Iowa. In that suit she did not claim any relief as surety, but sought to obtain credit for the $ 3,000 claimed to have been paid at the time of the release. The judgment in that case is conclusive as to her right to claim any of the benefits of suretyship, and of all questions and defenses. (Graham v. Culver, 3 Wyo., 647; Ry. Co. v. R. R. Co., 55 F. 694; 62 N.H. 655, 10 S.E. 262.) That judgment held Mrs. Snow liable for the full amount of the debt. Being so liable, her mortgage securing that debt is also answerable therefor. The judgment represented the same debt and was still secured by the mortgage. The only change occurring was in the evidence of the debt. (Part v. Robins, 35 Iowa 208; State v. Lake, 17 Iowa 215; Jordan v. Smith, 30 Iowa 500; 2 Jones on Mort., Sec. 936; Torrey v. Cook, 116 Mass. 163; Ely v. Ely, 6 Gray, 439; Priest v. Wheelock, 58 Ill. 114; Darst v. Bates, 51 id., 367; Wayman v. Cochrane, 35 id., 152; Thornton v. Pigg, 24 Mo. 249; Riley v. McCord, 21 id., 285; Gibson v. Green's Adm'r, 89 Va. 524.) Such judgment may be relied on by either party. (Hanna v. Reid, 102 Ill. 596; 2 N.Y. Sup., 135.) So far as the debt is concerned the judgment may be allowed to establish the validity of note and mortgage. (Hosford v. Nichols, 1 Paige, 220; Morris v. Floyd, 5 Barb. 130; Batchelder v. Taylor, 11 N.Y. 129; Morgan v. Sherwood, 53 Ill. 171; Wayman v. Cochrane, 35 id., 154.) No defense interposed to the suit on the note, or which should have been interposed, can be asserted after judgment in a suit to foreclose the mortgage. (Morris v. Floyd, 5 Barb. 130; 21 P. 192; 102 Ill. 596; 4 N.Y. Sup., 185.) The question of suretyship could have been pleaded in the former suit. (Wilson v. Coolidge, 42 Mich. 112; Smith v. Dunning, 61 N.Y. 249; McCurdy v. Buchanan, 43 O. St., 78.) Knowledge of the creditor is just as essential as the fact itself of suretyship to entitle the surety to any of its benefits. (Orvis v. Newell, 17 Conn. 102; Gahn v. Niemcewicz, 11 Wend. 312; Lauman v. Nichols, 15 Iowa 161; Guild v. Butler, 127 Mass. 386; Harris v. Brooks, 21 Pick. 195; Sprigg v. Bank, etc., 10 id., 257; Edwards on Bills and N., 573.)
At common law, a promissory note was negotiable prior to the enactment of the statute of Anne (3 and 4 Anne). See note to Mandeville v. Riddle, 1 Crouch, 299; 1 Daniels Neg. Instr., Sec. 5; 1 Parsons N. and B., 10-13; Irwin v. Maury, 1 Mo. 194; Dun v. Adams, 1 Ala. 527; Tiedeman on Commercial Paper, Sec. 6. It has been the custom in Wyoming to transfer notes by indorsement, and for the holder to sue thereon. This had statutory authority. (Comp. L., 1876, p. 36, Sec. 23.) Our supreme court decisions have practically held such instruments negotiable. (Stamper v. Gay, 3 Wyo., 321; Regan v. Jones, 1 id., 210.) See also Revised Statutes, Sec. 3437.
If a negotiable note secured by mortgage is transferred for value, before maturity, in good faith, the purchaser takes also the mortgage freed from all equities the same as the note. (Graham v. Blinn, 3 Wyo., 746; Carpenter v. Longan, 16 Wall., 271; 1 Jones on Mort., Sec. 834-837 and cases cited in notes.)
Plaintiff had the right to pay the taxes to preserve her security although no provision therefor is made in the mortgage. (2 Jones on Mort., Sec. 1134; Davis v. Bean, 114 Mass. 360; 1 Jones, 358.)
The second mortgagee can not litigate the amount due. She also is bound by the judgment as to that matter. (Wells on stare decisis, 177; Candee v. Lord, 2 Comst., 274.)
Baird and Churchill, for defendant in error Elizabeth Snow.
The relation of principal and surety continues after judgment against the surety, and the latter is entitled to the same rights both in law and in equity as before judgment. To constitute an estoppel by judgment upon any matter in a subsequent suit, there must be a concurrence of four conditions: 1. Identity of subject-matter. 2. Identity of cause of action. 3. Identity of the parties. 4. Identity of the quality of the persons, for or against whom the claim is made. (Benz v. Hines, 3 Kan. 397; Slocum v. De Lizardi, 21 La. Ann., 355; State v. Jumel, 30 id., 861; Freeman on Judg., 253; Cromwell v. C. of Sac., 94 U.S. 351; Davis v. Brown, 94 id., 423; Russell v. Place, id., 606; Sewall v. Robbins, 139 Mass. 164; Doonan v. Glynn, 28 W.Va. 715; Stannard v. Hubbel, 123 N.Y. 520; McKinney v. Curtis, 60 Mich. 611; Cavanagh v. Buehler, 120 Pa. 441; Trimble v. Farris, 78 Ala. 260; Kidd v. Laird, 15 Cal. 161; Nesbitt v. Ind. Dist., etc., 144 U.S. 610; Skinner v. Franklin Co., 6 C. C. A., 118; Ihmsen v. Ormsby, 32 Pa. 198; Des Moines Bank v. Harding, 86 Iowa 153; Faires v. McLellan, 24 S.W. 365; Linne v. Stout, 46 N.W. 319; Lathrop v. Cheney, 45 id., 617; Hoag v. Town etc., 30 N.E. 842; Dulin v. Prince, 29 Ill.App. 209; Wilson v. Brown, 28 N.Y.S. 978; Fessenden v. Barrett, 50 F. 690; Sloan v. Price, 10 S.E. 601.)
The issue of suretyship was not litigated in Iowa case. That suit was upon a mortgage securing the same debt here in controversy, but given on Iowa lands, and a different mortgage from the one now in controversy. In this case the lands are claimed to be a homestead. It would not have availed her to set up the defense in Iowa except as against a personal judgment. In this suit it can avail to prevent foreclosure and sale of her lands. The subject-matter and causes of action are different in the two suits.
It should appear that the engagement was made with reference to and upon the faith and credit of, the estate of Mrs. Snow, she being a married woman. (C. L., 1876, ch. 82; Harris' Cont, M. W., 253; Willard v. Eastman, 81 Mass. 328; Moore v. McMullen, 22 Ind. 78; Young v. Miller, 10 O., 91; Owen v. Cowly, 42 Barb. 105; Hunt v. Rosmanier, 8 Wheat., 174; Rogers v. Ward, 8 Allen, 387; Phillips v. Graves, 20 O. St., 371; Manchester v. Salter, 47 Barb. 155; Worthington v. Young, 6 O., 314; Stewart v. Jenkins, 6 Allen, 300; 23 Miss. 280; 60 Mo. 61; 66 Ky. 584; 9 M's., 516; 22 How. Pr., 240; 13 N.J. Eq. 232; 32 Pa. 432; 36 How. Pr., 425; 33 N.Y. 371; 6 Ala. 737; 5 Jones Eq., 175; 16 La. Ann., 309; 21 Barb. 551; 3 Whart., 309; 15 Me. 304; 2 Hill, 477.) A married woman can not charge her separate estate by a contract of suretyship, unless in consideration of a benefit to herself or her estate. (Perkins v. Elliott, 23 N.J. Eq. 526; Athol, etc., v. Fuller, 107 Mass. 437; Huff v. Wright, 39 Ga. 41; Saulsbury v. Weaver, 59 Ga. 254; Williams v. Haygood, 115 Mass. 532; Davidson v. Lenoir, 51 Ala. 321; Wilkinson v. Cheatham, 43 id., 337; 47 id., 612; 48 id., 451; Emroy v. Lord, 26 Mich. 431; 28 id., 464; 22 id., 255; 11 id., 457; 14 id., 97; 15 id., 447.) Notice to an agent even before employment is notice to the principal. The assignment of a mortgage, securing a negotiable promissory note, does not impart to the mortgage the negotiable character of the note. The plaintiff took the mortgage bound by all subsisting equities between the original parties. (Johnson v. Carpenter, 7 Minn. 176; Hosteller v. Alexander, 22 id., 559; Bouligny v. Fartier, 17 La. Ann. , 121; Medley v. Elliott, 62 Ill. 532; White v. Sutherland, 64 id., 181; Bryant v. Vix, 83 id., 11; Bailey v. Smith, 14 O. St., 396; Longan &...
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