183 Pa. 462 | Pa. | 1898
Opinion by
The verdict in this case was directed by the court as against the appellant bank and Rachel R. Pollard. Upon a motion for a new trial this verdict was set aside as to Rachel Pollard and a new trial granted, but the motion was refused so far as appellant was concerned and judgment entered on the verdict. Our question is not whether the defendants stood on substantially the same ground, but whether the reasons for directing judgment on the verdict are tenable. The facts are these: W. W. O’Neil was engaged in the manufacture and sale of lumber in Clarion county and was in possession of a considerable amount of property. On the 18th day of April, 1893, his' affairs were not in a prosperous condition, and he was very sick in the city of Pittsburg. His principal creditors and those whom he desired particularly to secure were his mother-in-law, Mrs. Pollard, and the First National Bank of Clarion. He was indebted to
The other question remains. Was the note rendered invalid by the circumstance that it was made large enough to cover, or nearly so, the contingent liabilities of O’Neil to the bank, growing out of his indorsements ? It is not alleged that the giving of the note was the result of a conference between the parties. It was the act of O’Neil done in view of liis financial condition at the time. There is no reason for imputing to him therefore a fraudulent motive in making the note, nor for imputing such motive to the officers of the bank in accepting and using it. The question is, did the fact that the amount inserted in the note was intended to be large enough to cover both his actual and his contingent liabilities to the bank render it void in toto ? In questions of distribution of assigned estates it often becomes necessary to inquire when the right of action in a claimant vested, or when his debt became an absolute indebtedness of the assignor or insolvent, but that question does not arise here. The question comes down to this : Can a debtor secure his friend against a contingent liability? We answer this question in the affirmative. This has been held as to bail: Davis v. Charles, 8 Pa. 82. I am not aware that the question has arisen upon just the circumstances presented in this case, but the general proposition that an indorser is contingently liable to the holder of the note, and that he may secure the holder by the delivery of collaterals or by a confession of judgment is recognized in many cases. The holder is not entitled to collect his debt from the indorser who is primarily liable to him, and then collect it over again from the maker. The payment by either extinguishes the debt. If the maker pays, the indorser’s liability to the bank is correspondingly reduced, and the judgment so far satisfied.
On a consideration of the several assignments of error we sustain the second, third and fourth. We incline also to sustain the first, as we see no evidence in the case that should justify the jury in finding fraud in fact, and as the circumstances did not amount to fraud in law. There was therefore really nothing to submit to the jury upon this question.
The judgment is reversed and a venire de novo awarded.