Rice v. Dorrian

• Decision Date: 22 April 1893
• Citation: 22 S.W. 213,57 Ark. 541
• Parties: RICE v. DORRIAN
• Court: Arkansas Supreme Court

22 S.W. 213

57 Ark. 541

RICE v. DORRIAN

Supreme Court of Arkansas

April 22, 1893

Appeal from Miller Circuit Court, RUFUS D. HEARN, Judge.

Cause remanded.

L. A Byrne for appellants.

1. An indorser is not a surety, and is not entitled to the remedy provided for a surety by secs. 6396-7, Mansf. Digest. See 31 Ark. 511; 53 id. 140; Rand. Com. Paper, vol. 2, secs. 896 898; 54 Ark. 524; 24 id. 511.

2. Dorrian was not the owner of the notes, and could not sue out an attachment based on them. He afterwards amended, but his lien would only date from the amendment. 53 Ark. 144.

J. D Cook for appellee.

A junior attaching creditor cannot dispute the grounds of attachment nor defeat the attachment for mere errors or irregularities in pleading or proceeding. 47 Ark. 31; Drake Att. 2d ed. sec. 273. See also 18 Cal. 152; 12 Ohio St. 158; 49 Ala. 575; 34 Ark. 712. This case is reduced to this question alone: Did the plaintiff or appellee, C. C. Dorrian, have a case in the court upon which, after proper amendments, a valid judgment could be rendered; if so, then the judgment rendered by the trial court dismissing appellant's intervention was proper. Appellant's counsel contends that 53 Ark. p. 140 is conclusive of this case. We confess to seeing nothing in that case changing the well established rights of interveners in the courts of Arkansas. In that case the court held that it required the ratification of Deere, Mansur & Co. to give the proceedings any legal force whatever, and for that reason the attachment was invalid until the acts of Wm. Reynold's attorney was ratified. Hardware Co. having had their attachment levied prior to this ratification, the court declared them entitled to the prior lien. There is no application to be made of that case to this. No intervening creditor can be heard to question the grounds of attachment, except for fraud or collision. 47 Ark. 31; 50 Ark. 444; 22 F. 61. The judgment of the lower court we submit was not error, and should be affirmed.

OPINION

BATTLE, J.

The facts which are necessary to state in order to understand the question presented by appellant's counsel for our consideration are as follows:

C. C. Dorrian was indorser on four promissory notes for $ 125 each. Two of them were dated February 14, 1891, and the other two bore date the 16th of March, 1891, and all of them were made payable sixty days after date. He was also indorser on three notes for $ 60 each, dated February 2, 1891, one of which was made payable 90 days, one four months, and the other five months, after date. J. J. McGrath was the maker of all of them. On the 8th of April, 1891, Dorrian commenced suit on these notes in the Miller circuit court, and sued out an order of attachment for the purpose of securing indemnity as indorser before the notes, or any of them, were due. Rice, Stix & Co. also brought an action against McGrath for $ 2,754.61 in the same court, and sued out an order of attachment. These orders were levied on the same stock of goods, the first in the morning and the latter in the evening of the same day. Rice, Stix & Co., by complaint filed in the first suit, denied the validity of Dorrian's attachment on the ground he was not owner of the notes sued on, and as indorser was not entitled to sue out an order of attachment, and asked that their attachment be first satisfied. The circuit court sustained both attachments, and rendered judgments in favor of the respective plaintiffs in both actions for the amounts severally sued for, and dismissed the complaint of Rice, Stix & Co., filed by them as interveners in the first suit, and thereby gave the first attachment priority.

From the order sustaining the first attachment and dismissing their complaint, Rice, Stix & Co. prosecute this appeal.

The statutes authorize a surety to maintain an action against his principal to obtain indemnity against the debt or liability for which he is bound, before it is due, whenever any grounds for attachment exist, and in such actions to obtain orders of attachment. Mansfield's Digest, secs. 6396, 6397. The question for us to decide is, is an indorser a surety within the meaning of the statutes?

There is in some respects a resemblance between endorsers and sureties. The great difference exists in the contracts into which they enter when they assume the relations which give to them their respective names. The surety is an original promisor, and is usually bound with his principal by the same instrument, executed by him at the same time and for the same consideration. The contract of the indorser is a new and subsequent one. The contracts are different. The indorser contracts with the indorsee and every subsequent holder as follows: "(1) That the instrument and antecedent signatures are genuine; (2) that he, the indorser, has a good title to the instrument; (3) that he is competent to bind himself in such a contract; (4) that the maker is competent to bind himself to the payment, and that he will, upon due presentment of the note, pay it at maturity; and (5) that if, when duly presented, it is not paid by the maker, he, the indorser, will, upon due and reasonable notice being given him of the dishonor, pay the same to the indorsee or other holder."

The obligations of the principal to the surety and indorser are different. To the indorser he assumes no obligation, except that contained in the original undertaking. As to that, when the liability of the indorser is fixed by demand and notice he has the right to pay the amount due on the contract to the holder, and to be subrogated to all the rights of the latter as against the maker. As to the surety in the strict technical sense the principal's obligation is not the same. In the absence of an express contract, the law implies a promise of indemnity to him on the part of the principal. When the debt is due, the surety can pay it and maintain an action on this promise and recover the amount paid. He is not compelled, like the indorser, to bring his action on the original contract to obtain relief against the principal. His right to relief rests on the promise to...