Boyd v. Finnegan

39 How. Pr. 389 | New York Court of Common Pleas | 1870

By the Court. Loew, J.

Although the plaintiff testified on the trial, in the court below, that he took the note in suit in the regular course of business, it is obvious that at the time he paid the judgment, and the note was transferred to him, he knew that it had been given to and was held by the attorney of the judgment creditor as collateral security for the payment of the judgment. Mr. Johnston, the attorney, distinctly testified that he informed him of that fact, and the plaintiff failed to contradict him.

How in some respects there is, doubtless, considerable difference between an endorser and a surety, but still where one endorses a bill or note for the accommodation of another, he is to be regarded as standing in the character of a surety (Pitts v. Congdon, 2 N. Y. 354; Clason v. Morris, 10 Johns. 538; Wood v. Jefferson Co. Bank, 9 Cow. 206; Hayes v. Ward, 4 Johns. Ch. 126).

In the case at bar, the defendant, Finnegan, proved— as he had a right to do—(Carpenter v. King, 9 Met. 511; La Farge v. Herter, 11 Barb. 159)—that he endorsed the note for the accommodation of the defendant, McDonough. And although it does not clearly appear from the evidence returned to us that the plaintiff had notice of that fact, yet I am inclined to think that the facts and circumstances in this case justify us in inferring that he had such notice, and hence, considering the endorser as being entitled to all the rights and privileges of a surety for the maker of the note (Hayes v. Ward, supra).

*224Regarding Mm as sustaining that relation, I have no doubt that the judgment creditor could have recovered against him upon the maturity of the note; but I apprehend that in the-event of his paying the debt, he would in equity have been entitled to be subrogated to all the rights of the judgment creditor, not only in respect to the mortgage and any other independent collateral securities held by him, but also as regards the original judgment obtained by him against the principal debtor (3 Kent’s Com., 8th ed., page 169; Story’s Eq. Jur., 8th ed., § 499 and note; Goodyear v. Watson, 14 Barb. 481; Corey v. White, 3 Barb. 12; N. Y. State Bk. v. Fletcher, 5 Wend. 85; Matthews v. Aikin, 1 N. Y. 595; Hubbel v. Carpenter, 5 N. Y. 171; Clason v. Morris, supra; Flint v. Schomberg, 1 Hilt. 532). This right of subrogation is also recognized by courts of law, and any act impairing or interfering with it, which would relieve the surety from liability in equity, will also relieve him at law (Corey v. White, 3 Barb. 17; La Farge v. Herter, 11 Barb. 159; Storms v. Thorn, 3 Barb. 314; King v. Bahlwin, 2 Johns. Ch. 554). And as the plaintiff, with notice of the circumstances under which the note was given, did before maturity of the same, and without the knowledge or consent of the endorser, prejudice him by paying the judgment, and procuring the same to be satisfied, the latter, it seems to me, was discharged from all liability upon the note in question(La Farge v. Herter, supra; Wood v. Jefferson Co. Bk., 9 Cow. 206; Hayes v. Ward, supra). I therefore think that as to him the judgment should be reversed.

Judgment reversed.