110 Mo. App. 286 | Mo. Ct. App. | 1905
— The undisputed facts in this case are that the defendant’s intestate, Samuel Jordan, executed his note with the plaintiff as surety thereon to the Missouri National Bank for $500; that said Jordan failing to pay the note at maturity, plaintiff — his surety —was compelled to pay it; that Jordan has since departed this life and defendant is administratrix of his estate. This is a suit in equity by which the plaintiff seeks to be decreed to be the equitable assignee and owner of said note and subrogated to all the rights and remedies of the payee thereunder. It is conceded that this suit was not brought until the lapse of more than five years after plaintiff had been compelled to pay the note, but it was brought within ten years from the date of the maturity of the note. There was a trial resulting in a decree for defendant, from which plaintiff appealed.
Two remedies at law were open to plaintiff upon payment of the note: an action at common law for money paid on his principal’s account; and an action under the provisions of sections 4504 and 4505, Revised Statutes 1899. The main question in the case is, did the plaintiff at the time of the payment of the note also
If tbe debt was extinguished, tbe creditor bolding no securities therefor, subrogation would not inure to tbe surety, and be would be thrown back upon bis remedies at law; but if by payment be became tbe equitable assignee and owner of the note, be necessarily was clothed with all of tbe creditor’s rights and could pursue, upon tbe note itself, in equity, tbe same course within tbe same time that tbe creditor could at law bad be remained tbe owner of tbe note. One of two propositions must be true; either tbe surety by payment stands in tbe creditor’s shoes possessed of all.bis rights and' remedies; or else, with respect to tbe obligation itself, be does not take tbe place of tbe creditor, has none of tbe creditor’s rights and remedies thereunder, and subrogation can aid him only with respect to any securities, etc., which tbe creditor may bold for tbe debt. Therefore, it will not do to say in a suit such as tbis, brought by tbe surety, that limitation will shut out tbe surety in a shorter period of time than it would tbe creditor in an action brought by him upon tbe nóte, bad payment not been made. Tbe surety either gets all of tbe creditor’s rights and remedies by constructive purchase, or be gets none. Conduct of tbe surety with respect to tbe time of bringing suit in equity will not constitute laches which, if tbe act of tbe creditor, would have been due diligence.
Nor does it affect tbe surety’s remedy in tbis action that limitation has run against an action at law.
Limitations being disposed of, we revert to the main question: Was the note extinguished or equitably assigned as the result of the surety’s payment? We must hold, under the following authorities, that the payment operated as an equitable assignment of the note, and that the surety thereby became possessed of all rights and remedies which the creditor had at that time. [George v. Somerville, 153 Mo. 7; Storts v. George, 150 Mo. 1; Hackett v. Watts, 138 Mo. 502; Benne v. Schnecko, 100 Mo. 250; Humphreys v. Milling Co., 98 Mo. 542; Blair v. Railway, 89 Mo. 383; Ferguson v. Carson, 86 Mo. 673; Hammons v. Renfrow, 84 Mo. 332; Butler v. Lawson, 72 Mo. 227; First Baptist Church v. Robberson, 71 Mo. 334; Berthold v. Berthold, 46 Mo. 557; Furnold v.. Bank, 44 Mo. 336; Arnot v. Woodburn, 35 Mo. 99; Miller v. Woodward, 8 Mo. 169; Arn v. Arn, 81 Mo. App. 133; Harper v. Kemble, 65 Mo. App. 514; Fisher v. B. & L. Assn,. 59 Mo. App. 430; Clark v. Bank, 57 Mo. App. 277-282; Coal Co. v. Slevin, 56 Mo. App. 107; Harper v. Rosenberger, 56 Mo. App. 388; Roberts v. Bartlett, 26 Mo. App. 617; 1 Brandt on Suretyship, sections 269, 270, 271; Bispham on Prin. Eq., sections 335-36; Sheldon on Subrogation, pp. 159, 165.]
In. England and in some of the States the rule is followed that payment by the surety extinguishes the debt, and the surety becomes subrogated only to such securities, etc., as the creditor may hold. But in this and many other States, as will appear from the authorities above cited, the rule is well settled that the debt itself is assigned without regard to securities. In Berthold v. Berthold, supra, the Supreme Court
The case of Burton v. Rutherford, 49 Mo'. 255, much relied upon by respondent, is not in conflict with the rule announced. That was an action at law brought by the surety who had elected to proceed not in equity as the owner of the debt but at law for money paid out by him for his principal. The court said, “this payment extinguished the note and gave the appellant a right to sue for money paid,” etc. It is not out of harmony with the views herein expressed to say that after the surety has chosen not to avail himself of his equitable assignment but to sue at law the debt might be treated as extinguished to enable him to maintain his action. Evidently, the court in that opinion entertained this view, for it neither overruled nor criticised Berthold v. Berthold nor Furnold v. Bank,
So with the other eases in this State to which our attention has been directed by respondent. Most of them may readily be reconciled with the cases herein referred to. Those which apparently lean to the position contended for by respondent are found not to present the issue here involved. It is enough to say that the recent decisions of the Supreme Court sustain the rule laid down in Berthold v. Berthold, supra. The decree of the circuit court will be reversed and the cause remanded.