2 Neb. 265 | Neb. | 1873
Ordering judgment on tbe pleadings was to adjudge that the facts contained in defendant’s answer constituted no defence. Plaintiff’s action was brought upon a note signed by Boj^er, the plaintiff in error, and two others. The defendant Boyer, after admitting the execution of the note, undertakes to interpose two defences.
The first, in substance, is, that he signed the note as surety for Mitchell, another of the defendants, — a fact well known to the plaintiff; and that, at the time of the making and delivering of the note, Mitchell executed a chattel mortgage to secure the payment of the same. Further, that the plaintiff neglected to have the mortgage filed for record, and did not enforce its collection; and that the mortgagor had squandered and disposed of the mortgaged property, which was ample to have secured the amount of the note, so that the same cannot now be made available in the payment and satisfaction thereof. It is further averred, on information and belief, that Mitchell did not have at the time of instituting this suit, nor has he since had, any property from which to satisfy a judgment for the amount of the note. For these reasons, Boyer claims to be released.
The second is, that Burr, by an agreement with Mitchell, extended the time of payment beyond that fixed in the note; and for that reason, also, he should, in law, be discharged.
As to the first of these : some criticism was made at the argument upon that portion of the answer that avers, that, by neglect to file the mortgage, the mortgaged property was “squandered and disposed of” to the injury of the defendant Boyer.
There can be no mistaking the purpose of the pleader. The destruction, secretion, or other disposition beside selling or transferring it to third parties, could in no way be. affected by the record of the mortgage; and it would be an unfair presumption to say, that, when used in the connection this language is, it may have been designed to express any other disposal of the property, such as would be influenced by the law relating to the recording mortgages. Sect. 121 of -the Code requires, that, “ in the construction of any pleading for the purpose of determining its effects, its allegations shall be liberally construed with a view to substantial .justice between the parties.” This will not dispense with the averment of any material fact; but where the fact is pleaded, but in an unskilful manner, the pleading-should not fall under demurrer. If the allegations are so indefinite or uncertain that the precise meaning is not apparent, the remedy of the other party is an application to the Court to have the pleading in that particular made more definite and certain. Code, sect. 125; Olcutt v. Carroll, 39 N. Y., 436.
And not only should the allegation here be held sufficient to include any sale of the mortgaged property to third persons, but the defendant should not be required to add that such sales were to parties ignorant of the existence of the mortgage. The law has provided what shall be notices to purchasers. When such notice has not been given, the presumption should obtain that such purchases were made without notice.
Upon paying the debt of his principal, he has an undoubted right to be substituted in the place of the creditor as to all securities held by the latter for the debt, and to have the same benefit he would have therein. Story’s Eq. Jur., sect. 327. Both the creditor and surety are interested in the preservation of the security, that it may be applied to the purpose for which it is given; and upon both is imposed the exercise of good faith with reference thereto. “ If the creditor,” says Justice Story (Eq. Jur., sect. 325), “does any act injurious to the surety, or inconsistent with his rights, or if he omits to do any act when required by the surety which his duty enjoins him to do, and the omission prove injurious to the suret3r, — in all such cases the latter will be discharged; and he ma3r set up such conduct as a defence to any suit brought against him, if not at law, at all events in equity.” Chancellor Kent, in Hayes v. Ward (4 Johns.
The security taken by Burr from Mitchell, the principal debtor; was a mortgage of personal property. By statute, where there is no immediate delivery of the property mortgaged, the mortgage shall be absolutely void against the creditors of the mortgagor, and so against subsequent purchasers in good faith, unless the mortgage, or a true copy thereof, shall be filed and recorded as directed by law. Revised Statutes, chap, xliii. sect. 73. The chief value, then, of the security taken here, depended on the fact whether the mortgage was filed or not. With the principal debtor so irresponsible in the eye of the creditor, that, for the payment of a hundred and forty-seven dollars in thirty days, he must give two additional names and a chattel mortgage as security, can the creditor be said to have acted fairly in omitting to do the very act that was likely to give any indemnity to the sureties? Had the principal debtor pledged to the creditor his gold watch, and the creditor afterwards allowed the debtor the use of it, and the latter had sold it to an innocent third party, there can be no question but that a surety could avail himself of such wrongful treatment of the pledge by the creditor. Capel v. Butler, & Sim. & Stu., 457; Smith v. Turner, 1 McCord, 443 ; Sumner's Notes to Rees v. Berrington, 2 Ves., 540. Wherein does the case before us differ from the illustration just made ? In the latter case, the wrong consists
The answer avers that Mitchell alone was indebted to Burr, and that Boyer signed the note as surety; and, at the same time of giving the note, Mitchell executed a chattel mortgage upon seven hundred dollars’ worth of property in favor of Burr, which mortgage he delivered to him. There was property sufficient to protect the creditor and sureties. The property was liable at any hour to be disposed of in a way that would render the security worthless. The simplest act on the part of the mortgagee and custodian of the paper could save the surety harmless by reason of his friendly act for the benefit of the plaintiff. Can it be called an act of good faith for the plaintiff to omit so small a matter when of so great consequence to the defendant ? Can it be contended that the defendant must have first interested himself in the matter of filing and recording the mortgage ? This would have been unusual. The plaintiff, and not the sureties on the note, took the mortgage. The very taking of it carries with it the idea that it was given for a purpose. That purpose should only be effectual by the further act of filing it. Can he who has taken the security stop short, and omit to do that which makes it chiefly valuable, under the excuse that others did not urge him to file it, or furnish the pittance necessary to pay the recorder? Were we considering soiree fixed and inflexible rule of law, as in case of tendér or the like, we might feel constrained to insist upon every formal requisite being complied with; but we are applying a principle based on an equitable foundation, requiring good faith and fair dealing from the several parties interested, having reference to the relation they bear to the transaction. The case of Capel v. Butler, 2 Sim. &
Mr. Justice Harris, in the case of Schroeppel v. Shaw, in commenting on that of Capel v. Butler, says, “ For the defendant (creditor) to omit an act necessary to render the assignment effectual was equivalent to a surrender of the security to the principal debtor. It was like the case of a creditor talcing a mortgage upon personal property, and neglecting to file it; or the omission of a creditor to protest a note held by him as collateral security, so as to charge the indorser. In these and in similar cases, surety, whose means of indemnity had been impaired by the neglect of the creditor to do what was necessary to protect the security, might well insist upon his right to be discharged to the extent of the loss sustained by reason of such neglect.” In the same case, when before the New-York Supreme Court, a similar comment was made on Capel v. Butler. It was there said, “ The nature of the security required something to be done at once by the creditor to make it a valid security; and hence the law should, as it doubtless did, imply an agreement on his part to perform that act, without which the security was invalid. An omission to do this would be gross neglect in an agent, bailor, or trustee, and would be a breach of good faith on the part of the creditor towards the surety.” 5 Barb., 580. So, without dwelling longer on this point, I am of the opinion, that to omit to file the mortgage on the part of Burr is such a breach of that trust imposed on him by the law to make effectual and to preserve the indemnity upon which the defendant Boyer had a right to rely, as to make him, in the first instance, liable. This brings me to the further consideration, whether there is still enough alleged to constitute a defence.
From what has been said, it will be understood that any liability which might fall upon the plaintiff in the premises would result from his omission to file the mortgage, rather than from any failure to satisfy his claims out of the mortgaged property. This latter he was not bound to do upon his own motion. Story, Eq. Jur., sect. 501. His duty, in the first instance, was to make effectual the security given, and preserve it to await the maturity of the note. Then the duty of the defendant, Boyer, arose. It was for him then to pay the note, unless the conduct of Burr had destroyed the security on which he was entitled to rely. But, from all that appears here at that time, the property may have been all intact and in possession of Mitchell. It is claimed now, nearly one year after the defendant Boyer’s obligation arose, that the property is disposed of. It does not follow, nor is it at all probable, that such was the case at the time when he, under the letter of his contract, should have paid the note. If it is the fact, it was the
As to the second: it is not enough that the creditor shall have agreed with the principal debtor to allow an extension of time for the payment of the debt. Such agreement must be for a sufficient consideration, and without the consent of the surety. The answer is insufficient in alleging want of consent. Green v. Blandon Walker (Miss.), 375 ; 5 U. S. Dig., 821.
The judgment of the Court below must be affirmed.
Judgment affirmed.