75 Ky. 155 | Ky. Ct. App. | 1876
delivered the opinion oe the court.
The appellant Hurst being the holder and payee of a note executed to him by Moses Spencer, Nicholas Spencer, Joseph Spencer, John D. Spencer, John W. Spencer, and John R. Chambers, for a valuable consideration sold and assigned it on the 25th of March, 1867, to the appellee Elisha Chambers, the note having matured on the 7th of August, 1866. On the 14th of April, 1869, the appellee Chambers instituted an action upon it in tlio Wolfe Circuit Court, and obtained a judgment against all the obligors except John D. Spencer, Nicholas Spencer, and John R. Chambers. The two Spencers, John and Nicholas, obtained a verdict in their favor upon a plea of non est faobum, and John R. Chambers, who was a surety only, was released from liability by reason of the failure of the assignee to sue after notice had been given him by the surety as authorized by statute; or rather the appellee waived a written notice, and agreed to sue at the first term succeeding the verbal notice. This he failed to do, and the court below instructed the jury in effect to find for the surety.
After three obligors had been released from all liability on the note, and a return of “ no property ” found on executions issued on the judgment rendered against the others, the assignee Chambers instituted this action against Hurst, alleging the above facts; that he had prosecuted the action with proper diligence and could have made the debt out of the obligors who had been released, they having ample estate with which to satisfy it subject to execution. He further alleges that the appellant practiced a fraud upon him by selling him a note not genuine, and therefore asks for a judgment for the amount paid by him for the note, as well as all the costs, ordinary and extraordinary, expended by him in the prosecution of the action on the note.
The petition is rather a singular pleading. The diligence used in the effort to collect the note is not such as would
The evidence conduces to show that all the parties to the note were insolvent except the appellant John Chambers, and that he either signed the names of the parties who were released upon the plea of non est factum, or was present when it was done. The appellee held the note from March, 1867, until April, 1869, and then instituted an action upon it that was pending until November, 1872. Nearly six years had elapsed from the date of the assignment until the judgment was rendered. No notice is alleged or seems to have been given the appellee of the pendency of the action, and the proof establishes the fact that both the appellant and John Chambers, the surety, notified the appellee to bring the action long prior to the time at which it was instituted. There is no fraud shown upon the part of the appellant, and the only
The appellant' when he assigned the note undertook and agreed with the assignee that the latter could enforce it against the parties whose names were signed to it, or at least that a legal obligation existed upon the part of the obligors to pay it; and upon a failure to make the money out of the obligors, by reason of some legal defense existing at the time of the assignment, the assignee is not, only entitled to recover the amount paid for the note, with its interest, but all the costs and expenses incurred in the prosecution of the action to enforce its collection. If the assignment had been fraudulent and with a knowledge of the want of validity in the paper, the assignee might, without suing the obligors, have recovered the money back that he had advanced for it; but in this case there is no pretense of fraud, nor can the case be considered on its merits without regarding it as an action upon the warranty.
Upon the facts of this case as now presented the appellee was not entitled to recover. The surety John Chambers was the only solvent obligor in the note at the time it was assigned. He had notified the appellee that he was only a surety in the obligation, and the latter should have instituted his action as was required that he should do by the surety. This he declined to do; and when he finally brings the action this surety, relying upon this notice to appellee to sue, is released from all liability.
Whether the answer of the surety in that action constituted a valid defense or not, can not now be made the subject of inquiry. That record and the proof shows that this surety, the only solvent obligor to the instrument, was released from
The judgment is reversed and cause remanded, with directions to award the appellant a new trial, and for further proceedings consistent with this opinion.