Fuller v. Tomlinson Bros.

58 Iowa 111 | Iowa | 1882

Adams, J.

1. SURETY : when not discharged. The defendants claim that the plaintiffs had what was equivalent to a lien upon the machines for which the notes were given. This, the plaintiffs deny. ±>ut tor the purposes ox the opinion, this may be conceded. The first question presented, then is, whether the failure of the plaintiffs to take possession of the machines, and subject them to the payment of their debt, until it was too late to do so, constitutes any defense. In support of the defendants’ proposition, that it does, our attention is called to the “ familiar doctrine, that the surrender of any security by a creditor, held at the time a third person becomes surety for, or guarantor of, the debt will effect a jpro tanto discharge of the surety or guarantor.” 2 Daniel on Negotiable Instruments, Sec. 1789; 1 Parsons on Bills and Notes, 242. Where such a surety or guarantor pays a debt, he is entitled to be subrogated to all the securities which the creditor had in his hands. A surrender of securities, therefore, is a direct impairment of the surety’s or guarantor’s rights. But the case before us is not one of the surrender of securities. The plaintiffs are charged, simply with negligence, and in our opinion the defendants’ position is not tenable. It may be conceded that if the plaintifis had taken the machines into their possession, and while charged with responsibility for their proper custody and disposition, they had negligently allowed the machines to become impaired or destroyed, such negligence would have had the effect to discharge the defendants joro tanto. Day v. Elmore, 4 Wis., 214. But such case is not before us. We have a case where the holder of paper, who has a lien upon personal property for security, but is charged with no responsibility for its custody or care, fails to enforce his lien and the security is lost. We have seen no case which goes to the extent of holding that such failure can be set up in defense by a surety or guarantor, nor do we think that such is the law. If the surety or guarantor apprehends that the security will be lost, it is his privilege to pay the debt and enforce the lien himself.

We ought to remark that no question arises in this case as to a want of demand and notice, as demand and notice were expressly waived. Neither does any question properly arise as to the mere failure to obtain judgment against, or want of prosecution of, the makers of the notes. The guaranty is a guaranty of payment, as well as of collection. In our opinion the demurrer to the defendants’ answer was properly sustained.

Affirmed.