113 N.Y.S. 882 | N.Y. Sup. Ct. | 1908
This case is submitted to the court for de-
cision upon stipulated facts which are substantially as follows:
The principal facts are that, on or about the 12th day of May, 1900, at Jamestown, FT. Y., the defendant made his certain promissory note in writing whereby, in three months after said date, he promised to pay to the order of Flint Blanchard, at Chautauqua County Trust Company of Jamestown, FT. Y., the sum of $1,100.15; that the said note thus made was indorsed by the said Flint Blanchard by writing his name on the back thereof, and delivered to one Daniel Griswold, who then became the owner and holder thereof, and that the said Griswold advanced to the said defendant the said sum of $1,100.15 on account of said note; that the indorsement of the said Flint Blanchard was wholly for the accommodation of said defendant Amos F. Blanchard; that, on or about the 9th day of July, 1900, the said Flint Blanchard made and executed an indorsement on the back of said note in the words and figures following:
The complaint bases the action, not upon the note in question, but for money paid, laid out and expended for the use and benefit of the defendant by reason of the liability created by the indorsement of the note in question.
The defendant contends that, inasmuch as the note itself was outlawed and could not have been enforced by the holder against the maker, this action cannot be maintained in favor of the indorser who made payments thereon.
On the other hand, the plaintiff contends that the action
We are of the opinion that the plaintiff’s contention is correct.
When the plaintiff’s intestate indorsed the note in question for the accommodation of the defendant, the law implied a contract between them that the maker would reimburse the indorser for any moneys he might be compelled to pay by reason of such indorsement. But the indorser could maintain no action against the maker until he had in fact made payment on the note by reason of his liability as indorser. As against a principal debtor, by a surety who has paid the debt, the Statute of Limitations runs, not from the time when the debt was due, but from the time when the surety paid it. Thayer v. Daniels, 110 Mass. 345; Appleton v. Bascom, 3 Met. (Mass.) 169; Hall v. Thayer, 12 id. 130; 27 Am. & Eng. Ency. of Law, 481, and cases cited.
This action was brought October 8, 1907, and, therefore, was begun before the expiration of six years from the making of any of the payments by the plaintiff or her intestate upon the note in question. It follows that the Statute of Limitations constitutes no defense in this action, provided the action can be maintained for moneys paid and expended for the use and benefit of the defendant.
That this may be done we think is fundamental. The law implies a promise on the part of the principal to indemnify the surety, and to pay him all the money he might be compelled, in consequence of his liability as surety, to pay the creditor. Thayer v. Daniels, 110 Mass. 346; Konitzky v. Meyer, 49 N. Y. 572; Stearns Suretyship, § 296.
It is the rule that a payment by a surety or guarantor for the account of a principal is presumed to be at the request of the latter, which raises an implied promise of reimbursement. Stearns Suretyship, § 296.
The action in this case is, in form, based on the implied
The right of recovery has been upheld in a number of well considered cases.
In the case of Butler v. Wright, 20 Johns. 367, the defendant being the payee of a promissory note for $1,500 indorsed it to the plaintiff who, in turn, indorsed and delivered it to a bank. The note was protested for nonpayment, and the plaintiff afterward paid $800- in part, and promised to pay the balance. The bank subsequently sued the plaintiff and recovered judgment for the unpaid balance due on the note. The plaintiff afterward paid $380 to the bank. The balance of the note was unpaid, and the bank continued to hold the note. The plaintiff brought an action and declared against the defendant as indorser of the note, in the usual form, and also for money paid for the defendant. It was held that, though the plaintiff could not maintain an action on the note, as it was not fully paid and was still held by the bank, he might maintain an action against the defendant on the count for money paid, laid out and expended for the defendant, at his request.
In the case of Norton v. Hall, 41 Vt. 471, the plaintiff was an accommodation indorser upon a promissory note. When the note fell' due, the plaintiff being unable to pay it, the bank holding it demanded additional security which the plaintiff gave and the bank held until the plaintiff finally paid the note, which was more than six years after it became due. The court held that, the maker having failed to pay the note when due, the plaintiff had the right to make the arrangement with the bank, and that the maker could not avail himself of the Statute of Limitations as a defense in a suit by the plaintiff against him, brought within six years from the time the plaintiff paid the note.
The court held that the plaintiff’s right of action at law, as surety for the defendant, accrued on the payment of the note to the bank, citing Bishop v. Day, 13 Vt. 81; Baker v. Marshall, 16 id. 522.
The defendant’s counsel rely on the reported case of Woodruff v. Moore, 8 Barb. 171.
In that case, an indorser and payee of a note, having paid the same, declared and sought to recover upon the note itself, and did not sue for moneys paid and expended. It was held no recovery could be had, because the instrument itself had been outlawed. A different result would have undoubtedly been reached had a timely action been brought for moneys paid and expended for the defendant’s benefit.
For these reasons, we conclude the plaintiff is entitled to recover.
Judgment directed accordingly.