Connely v. Bourg

| La. | Feb 15, 1861

Land J.

The holder of a promissory note obtained judgment on the same against the maker, and against G. F. Connely, the payee, and /. B. Robinson, as endorsers; and issued execution on his judgment against Robinson, the second endorser, who paid the principal and interest together with costs of suit into the hands of the sheriff.

Subsequently, Robinson caused an alias writ of fieri facias to issue on the judgment obtained by the holder of the note, against G. F. Connely, the first endorser, for the whole amount of the principal, interest and costs which ho had paid to the sheriff.

Thereupon Connely, the first endorser of the note, sued out an injunction to arrest the execution of the writ on the following grounds.

First. That no judgment existed on which any execution could have issued, the payment by said Robinson, one of the obligors, having extinguished the same.

Secondly. That all the endorsers of commercial paper, under the laws of Louisiana, arej as between themselves, joint sureties, and therefore, under no circumstances was said Robinson entitled to claim more than half of said judgment.

Thirdly. That there was a conventional agreement that in case of loss by the endorsement, said loss should be jointly borne by the endorsers.

And Fourthly. That even if Robinson had a right to issue execution for the ■whole amount of the debt and interest, he had no right to collect from his co-obligor the costs he had himself incurred in resisting the payment of his debt.

The first ground relied on for maintaining the injunction is not tenable. It has been held by this Court that a surety who pays a judgment, and is thereby subrogated to the rights of the creditor against the principal debtor, may issue execution on the judgment, in the name of the creditor, for the recovery of the amount which as surety he has paid. Sprigg v. Beamen, 6 L. 63.

Consequently, by the act of payment every right of the judgment creditor, including the right to issue execution, passed to Robinson by virtue of a legal subrogation both against the maker and first endorser of the note. We say against the maker and first endorser, because the latter endorsed the note for the accommodation of the maker, and is viewed as a surety against whom the rights of the creditor were transferred by the effect of the legal subrogation, as fully as they were against the principal debtor himself. C. C. Arts. 2157, 2158. It results from this doctrine that the payment made by Robinson, who was also an accommodation endorser of the note, and as such is likewise viewed as a surety of the maker, did not extinguish the judgment, but the payment is considered in law as a sale to him of all the rights and actions of the judgment creditor. Scott v. Featherston, 5 A. 313.

The second ground relied on for the injunction is also untenable, for it has been held by this Court that where a drawer gives two endorsers as co-sureties, the one that endorses first is liable to the other for the whole debt. Stone v. Vincent, 6 N. S. 518. The well settled doctrine is that accommodation paper is governed by the same rules as other paper; and that the first accommodation endorser is liable to the second and subsequent endorsers, and the second to the third, and so on to the end of the endorsements.

In relation to the third ground for the injunction, the testimony establishes that Robinson agreed to endorse the note for the accommodation of the maker, provided that Connely would do the same ; and that afterwards Robinson wrote the note payable to the order of Connely, and having endorsed it, delivered it to the maker for his signature, and for the endorsement of the payee. Those facts do not prove an express agreement on the part of Robinson to bear jointly with Connely, any part of the loss that might result from the endorsement of the note for the accommodation of the maker. On the contrary, the facts that the note was written payable to the order of Connely, and was made to bear his first endorsement, are strong circumstances in favor of the understanding of Robinson that Connely should become, as his endorsement shows, the first endorser of the note, and should incur the liabilities incident to that relation, although- Robinson had first in point of time endorsed the note, even before it had been signed by the maker.

Strong evidence is required to vary the legal liability of endorsers as fixed by the lex mercatoria, for the effect of such evidence is to modify the rights and obligations of the endorsers in derogation of the law of their written contract, and such evidence has not been adduced by the plaintiff in this case. The fourth ground for the injunction is likewise untenable. The costs which had been incurred in prosecuting the suit on the note to judgment, formed a part of the debt which the first endorser, considered as a surety, was bound to pay to the judgment creditor, and the right to recover the costs as well as the principal and interest of the debt, was transferred to Robinson by the effect of the legal subrogation which resulted from his payment to the judgment creditor. The judgment was, besides, in solido, and as such, was for the whole amount of costs against each of the defendants.

It is, therefore, ordered, adjudged and decreed, that the judgment of the Court below be avoided and reversed; and it is now ordered, adjudged and decreed, that the injunction sued out in this case be dissolved with five per cent, damages on the amount of the judgment enjoined, and that this suit be dismissed at plaintiff’s costs in both courts.