James Lynch v. Reynolds

16 Johns. 41 | N.Y. Sup. Ct. | 1819

Per Curiam.

The single point in this case is, whether D. Lynch, the elder, after becoming a petitioning creditor, for the discharge of the defendant under the insolvent act, and making an affidavit that the defendant was indebted to jjjmj as for s0 much paid for the use of the defendant, could afterwards resort to the plaintiff, and compel him, legally, Pay the money advanced to take up the note drawn by the defendant ? We are of opinion, that the payment made by the plaintiff to D. Lynch, senior, was made in the plaintiff’s own wrong, and that it could not have been enforced at law; and, therefore, cannot be the basis of a suit against the defendant.

It is a settled principle, that if the holder of a bill or note, compounds with the acceptor or the maker, without the assent of the other parties to it, he thereby releases them from their liability. Taking a sum of money in part payment of the debt, and accepting a dividend, would not produce the same effect; for these acts are advantageous to the other parties. The principle, in short, is, that an act beneficial to the other parties may be done with the maker of a note or acceptor of a bill, provided due notice has been given, without impairing the right of the holder of the note ; but no act can take place, between the holder and the maker, prejudicial to, and destructive of, the rights of the parties to the bill, without discharging them. Here the holder of the bill took upon himself, in effect, to discharge the maker of the note from his liability to pay the debt; and we have a right to intend, that the defendant could not have obtained a discharge under the insolvent act, unless D. Lynch, senior, had united in his petition. It will be recollected, that a discharge under the act exonerated the defendant for ever from the payment of any debt then contracted, so that D. Lynch, senior, by his own act, discharged the defendant from the payment of the note, and lie never could have been sued upon that paper by any of the parties, This is equivalent to taking a bond in satisfaction of the bill, without the assent of the other party; and it is manifest that D. Lynch, senior, must have considered himself as having no further claim upon the other party, for • he swears that the money was paid in taking up the bill for the use of the defendant. The holder of a dishonoured note may be passive, after having fixed the several parties by a regular demand and notice, and he may receive.partial payment, without affecting his remedy against all the parties ; but if he does an act which takes away and destroys the remedy of the other parties against the maker, upon the very bill, he forfeits his right to call on the prior endorsers. This principle will be found to be supported by the case, ex parte Wilson, (11 Vez. 410.) and it is a salutary rule.

Judgment for the defendant.