7 Paige Ch. 451 | New York Court of Chancery | 1839
A general decree dismissing the bill was erroneous, even if Suydam was a necessary party; for such a decree is an absolute bar to another suit in which all the proper parties are brought before the court. The proper course, where there is a want of necessary parties, is either to order the cause to stand over, to enable the complainant to bring the necessary parties before the court; or the bill should be dismissed without prejudice, so that his right to bring a new suit, making all proper persons parties thereto, will not be barred by the decree. (Van Epps v. Van Deusen, 4 Paige’s Rep. 64. Thompson v. Clay and others, 3 Monro’s Rep. 362.) In the present case, however, I do not see any benefit either party could have from making Suydam a defendant in the suit. The complainant does not state a case entitling himself to any decree against him. He only seeks to restrain the plaintiff in the suit at law from enforcing the payment of the note against himself as surety of Suydam. If he does not prove the allegations in the bill, to entitle him to that relief, his bill must be dismissed of course; and he would not in that case be entitled to any decree in this suit against Suydam. On the contrary, if he succeeds in obtaining a decree discharging him from his liability as surety, he cannot, in that event, claim any decree against Suydam, even if Suydam is made a party.
If the equitable defence to the note which is set up here, was a defence in which the principal and surety were both interested, as in the case of Bailey v. Inglee, (2 Paige’s
The question then arises, whether upon the facts averred and proved, the complainant was entitled to relief in this court; for it is evident he had no defence which it was possible for him to have made at law without the aid of this court. It is distinctly averred in the bill, and proved by the witness, that the fact of the making of the agreements with the principal debtor, to extend the time of payment, was known only to McCan and Suydam, who were the parties to the same. As the former was the plaintiff, and the latter a defendant in the suit at law, neither of them could be examined in that suit as a witness, in favor of the surety, to sustain his defence there; and without such testimony it was impossible to prevent a recovery against the surety as well as the principal debtor. Since the decision of the court for the correction of errors, in the case of Rathbone v. Warren, (10 John. Rep. 597,) it can no longer be questioned that such an agreement as took place here, between the creditor and his principal debtor, without the knowledge and consent of the surety, is a discharge of the surety; even if there is no proof that he has sustained damage by the extension of the credit to the principal debtor. Here, however, it is averred and proved, that the principal failed and became insolvent during the
For these reasons, I think the complainant made out a case for equitable relief against the payment of this note. The vice-chancellor, therefore, instead of dismissing the bill, should have enjoined all proceedings against the complainant, upon the judgment which had been perfected since the commencement of this suit; but with liberty to the defendant to take out his execution and enforce the payment of the debt and costs against Suydam, or his property. The decree appealed from must be reversed, and the proper decree be entered; and the respondent must be charged with the costs, including the costs of this appeal.