Hard v. Mingle

• Decision Date: 01 October 1912
• Citation: 206 N.Y. 179,99 N.E. 542
• Parties: HARD v. MINGLE.
• Court: New York Court of Appeals Court of Appeals

206 N.Y. 179

99 N.E. 542

HARD

v.MINGLE.

Court of Appeals of New York.

Oct. 1, 1912.

Appeal from Supreme Court, Appellate Division, First Department.

Action by George M. Hard against Rosa Mingle, as executrix of Sampson Q. Mingle, deceased. Judgment for defendant was reversed by the Appellate Division, First Department (141 App. Div. 170,126 N. Y. Supp. 51), and defendant appeals. Affirmed.

W. H. Van Benschoten, of New York City, for appellant.

Harold Otis, of New York City, for respondent.

HAIGHT, J.

On the 20th day of July, 1899, the plaintiff, George M. Hard, one Edward Thompson, and the decedent's testator, Sampson Q. Mingle, executed and delivered to the Chatham National Bank the following instrument: ‘For value received and for the purpose of giving the Realty Corporation of North America credit at the Chatham National Bank of New York, we hereby jointly and severally guarantee the payment at maturity of all checks, drafts and promissory notes upon which said Realty Corporation of North America is now or hereafter shall be liable, to said bank, as maker, indorser, drawer or acceptor, to an amount not exceeding $15,000, hereby waiving demand and notice of non-payment thereof, this to be a continuing guaranty.’ On the 13th day of July, 1903, the Realty Corporation executed and delivered its promissory note for $15,000, payable in three months from date, to one Gilbert, who indorsed and delivered the same before maturity for value, to the Chatham National Bank. On September 15, 1903, and before said note became due, Mingle died, leaving a last will and testament which has been admitted to probate, whereby he appointed his widow, the defendant, sole executrix, to whom the Chatham National Bank, in due time, presented a claim against the estate of her testator for the principal and interest accrued upon the note, above referred to, which claim was rejected by the executrix, and, inasmuch as no action was brought by the bank within the time specified by section 1822 of the Code of Civil Procedure, the claim became barred by that provision of the statute. Thereafter and on or about the 14th day of February, 1906, the defendant caused a written notice to be served upon the plaintiff advising him that the statute of limitations had run as against the claim presented by the bank; that the estate had thereby been relieved from liability upon the note, and that, if the plaintiff paid it, he did so at his own peril and on his own liability, without right of contribution by the estate. The plaintiff, however, did on the 20th day of October thereafter pay the bank the amount of the note with interest accrued thereon, and then brought this action to recover the sum of $5,603.89, one-third of the amount so paid by the plaintiff. The Realty Corporation became insolvent upon the maturing of the note, and no part of the same had been paid to the bank until the payment made by the plaintiff. The learned Special Term found as conclusions of law that the claim of the bank against the estate of Mingle, deceased, was barred by the short statute of limitations, and that the statute operated to discharge the other guarantors from liability claimed by the bank, to the amount of one-third thereof; and that, therefore, the plaintiff was only liable to the bank for the remaining two-thirds of its claim, and, further, that the estate of Mingle having been discharged from liability, by reason of the statute of limitations, it is no longer liable for contributions to his coguarantors.

[1] We have had some doubts as to the disposition that should be made of this case, owing to an omission in both the allegations of the complaint and the findings of fact. In neither is the date given of the discount of the note by the Chatham National Bank. In each it is stated that the note was delivered before maturity, but the maturity of the note occurred nearly a month after the death of Mingle. If the note was discounted by the bank before the death of Mingle, his estate undoubtedly would be liable, under section 758 of the Code of Civil Procedure. But if the note was purchased after his death, especially if the bank had notice of such death, we do not understand that his estate would be liable. National Eagle Bank v. Hunt, 16 R. I. 148-153, 13 Atl. 115;Jordan v. Dobbins, 122 Mass. 168-170,23 Am. Rep. 305; Coulthart v. Clementson, L. R. (5 Q. B. Div.) 42-46; Pratt v. Trustees, 93 Ill. 475, 34 Am. Rep . 187. This question, however, does not appear to have been raised upon the trial nor in the Appellate Division. The parties apparentlyassumed that the note was transferred to the bank before the death of Mingle, and we have therefore concluded to dispose of the case upon that assumption.

[2] It is not our purpose to enter upon an extended digest of the cases bearing upon the question involved, for that has been done fully by Justice Clarke, who wrote the opinion adopted by the Appellate Division. We do not understand that a cosurety or coguarantor can step in and pay a claim upon which he has been discharged of liability, by reason of the running of the statute of limitations, and then compel contribution by his cosurety or coguarantor. But, so long as he is legally liable upon his guaranty, he may pay the claim, and may then seek contribution from his coguarantors. The statute, as to him, does not commence to run until he has paid the claim. Then, and not until such payment, has he the right to exact contributions. This right is founded upon the general principles of equity, that sureties in aequali jure must bear the common burden equally, under which the law implies a contract between them to contribute ratably toward discharging any liability which they may incur in behalf of their principal. So long, therefore, as one of their cosureties remains liable for the principal debt, their liability to contribute continues.

[3] It must be borne in mind that, while the creditor has nothing to do with the right of the sureties for contribution among themselves, he must not affirmatively do any act tending to impair it. In other words, he must not by his action destroy or impair the rights of sureties as between themselves. If he does, to the extent that the impairs the rights of any one surety, to that extent he diminishes the amount of his recovery against him. But the mere delay to prosecute sureties in the absence of any request to do so does not discharge the surety who may subsequently find himself prejudiced by such delay.

It may be true that the plaintiff, as the president of the Chatham National Bank, gave directions to have the claim prosecuted against...