Howard National Bank v. Arbuckle

92 Vt. 84 | Vt. | 1917

Powers, J.

In this action, the plaintiff seeks to recover on a promissory note for the sum of $2,500, signed by the Arbuckle Company, a corporation, and indorsed by the defendant. This note was not paid when it fell due, and was protested, and due notice was given the defendant. The facts were found by the court below, and. therein it is stated that on May 4, 1916, the plaintiff brought a suit against the Arbuekle Company predicated upon this and other notes. It is difficult to see how this note could have been covered by that suit, as it was not then due; but the date of the bringing of the suit may have been inadvertently misstated, and we accept the statement as correct. On May 11, 1916, the plaintiff joined in a petition to have the Arbuekle Company adjudged a bankrupt, and in due course the adjudication was made, and the attachment, which covered property enough to pay the plaintiff in full, was thereby dissolved. The defendant had nothing to do with any of these legal proceedings and knew nothing about them. The only question submitted to us is: Did this action of the plaintiff whereby the attachment was released, discharge the defendant from liability under her indorsement ?

Though it may be otherwise in some jurisdictions, it is the settled law of this State that a creditor who, without request of the surety, has commenced an action against the principal upon a note may, acting in good faith, discontinue it without prejudice to his rights against such surety, though property of the principal was attached thereunder. This is the unmistakable doctrine of Bank of Montpelier v. Dixon, 4 Vt. 587, 24 Am. Dec. 640, and Baker’s Ex’rs v. Marshall, 16 Vt. 522, 42 Am. Dec. 528, and has never been departed from by this Court. The same thing is held in Barney v. Clark, 46 N. H. 514; Lawson v. Snyder, 1 Md. 71; Page v. Webster, 15 Me. 249, 33 Am. Dec. 608. See, also, Fulton v. Matthews, 15 Johns. (N. Y.) 433, 8 Am. Dec. 261; Bellows v. Lowell, 5 Pick. (Mass.) at p. 311.

That the effect of the plaintiff’s action was to enable the general creditors to participate in the avails of the property attached does not distinguish this from the cases referred to. Counsel make no reference to the Negotiable Instruments Act No. 99, Acts 1912, in this connection, so we give it no attention.

Judgment affirmed.