10 Mich. 303 | Mich. | 1862
This is a bill to foreclose a mortgage collateral to a bond conditioned to pay, within thirty days from maturity, certain notes signed by complainants jointly and severally with Martin A. Nash and Hiram T. Barstow, who were principal debtors — complainants being sureties. The bill shows a default in payment. The defense rests' upon two grounds — first, that complainants have received from other securities and property belonging to Nash & Barstow, the full amount; and second, that the bond is one of indemnity merely, and no damage is alleged.
The first defense is, in substance, that Nash & Bar-stow gave complainants an instrument whereby they were empowered to take possession of a stock of goods, and to
The bond is not a bond of indemnity, but is one conditioned to make payment of the notes within thirty days from their maturity. Such instruments have been so frequently construed and enforced that their effect is not art open question any where. They give an immediate right of action upon a breach, and the design seems to be to enable the surety to collect of the principal enough to pay the obligation. The latter can always avoid liability to the surety by paying the principal debt, and it would often be extremely unjust to leave a surety exposed to the change of circumstances of a principal for an indefinite period. The creditor can usually wait his own convenience, while the surety may be greatly embarassed by continued liabilities which he ought .to .be relieved from by the real debtor.
There is some force in the suggestion that the Court ought to see the money applied. But we find no authorities which establish such a rule. The debtor has distinctly agreed with his surety, and the latter can not, unless perhaps for special equitable reasons shown, be prevented
The decree must be affirmed, with costs.
The bond is not one of indemnity merely. It is for the payment by Nash & Barstow of their own notes, on which Hall and Page were sureties, within thirty days after they should severally become due. The difference between such a bond and one of indemnity is, that the surety may pay the debt if it is not paid by his principal, and proceed to enforce the security to' reimburse himself, without waiting till he is forced to pay it by the creditor, which he would have to do if the bond was one of indemnity only. The failure of the principal to pay at the day is a broach of the bond; but what are the damages of the surety for such breach ? Are they, if he has not paid the debt, nominal merely? or are they the amount of the debt the principal is owing? It seems to me they are nominal and
I concur with my brother Ckmpbelu on the other point made in the case, and I think the decree should be affirmed.