10 Colo. App. 390 | Colo. Ct. App. | 1897
delivered the opinion of the court.
On the 21st day of August, 1893, the Bessemer Ditch Company executed and delivered to Hope and Mulnix three promissory notes, one for $696.34, payable ninety days from 'date, one for $175, payable ninety days from date, and one for $559, payable sixty days from date. There were paid on the first note, October 20, 1893, $160.40, and November 18, 1893, $25.00. On the second note there were two payments of $50.00 each, one made on August 23, 1893, and the other on August 25, 1893. Nothing was paid on the third note. On November 27, 1893, Hope and Mulnix, for a valuable consideration, indorsed these several notes to Spratlin and Anderson. On the 28th day of November, 1893, Spratlin and Anderson commenced their action against Hope and Mulnix in the county court of Pueblo county, alleging the execution and delivery of the notes by the ditch company to the defendants, the payments made, the indorsement to the plaintiffs, and the insolvency of the ditch company, and demanded judgment against the defendants for the amount due on the notes. For some reason which does not appear, no answer was made to the complaint until December 7, 1894. On that day, however, the defendants answered admitting the execution and indorsement of the notes and the insolvency of the ditch company, and alleging that after the insti
The notes were made and payable in this state, and indorsed in this state. The remedy of the indorsees is therefore governed by the laws of this state. By the act concerning bills, bonds and promissory notes (General Statutes, sec. 107), an indorsee may maintain an action against his indorser if he has used due diligence by the institution and prosecution of a suit upon the note against the maker, or, without such suit, if its institution would have been unavailing. It is agreed on both sides that at the time of the indorsements the ditch company was, and continued to be, irremediably insolvent. The right therefore, of the plaintiffs to judgment was indisputable, unless by virtue of the contract into which they entered with the representatives of the bondholders, the right was lost. At the time the plaintiffs commenced their action, the liability of the defendants was complete; and the main question in the case is whether what the plaintiffs subsequently did operated to extinguish the liability. Whether it so operated or not depends upon the effect to be given to the contract; and to reach a satisfactory solution of the question, the contract, its purposes, and the circumstances under which it was made, must receive something more than a merely general examination.
On the 14th day of November, 1889, the ditch company executed a deed of all its property, assets and franchises,
In Teirnan’s Executors v. Woodruff, 5 McLean, 350, it was held that where the maker of a note was a discharged bankrupt, an agreement between him and the holder for two months’ delay, although on a valid consideration, did not discharge the indorser, because the latter could not, by making payment, have recourse against him. In that case there was no concurrence in the agreement by the indorser, hut he was held nevertheless liable, because the agreement did not operate in any way to his prejudice. Here the act of the plaintiffs was not only not to the prejudice of the defendants, hut was to the very contrary. The defendants had no recourse against the maker, because they surrendered it, and surrendered it for a consideration of which they would receive the direct benefit. The plaintiffs were already secured by the defendants’ indorsements; they had a suit pending to enforce the defendants’ liability; as they were the holders of the notes their signatures to the contract were necessary to enable the defendants to avail themselves of the proposition of the bondholders, which afforded the only opportunity for a creditor of the company to realize anything on his debt, and to all appearances their act in signing the contract was solely for the purpose of lightening the burden of the defendants. Of course the latter are entitled to credit for all that has been, or may be, made out of the delinquent assessments, but under the circumstances of the case we do not regard the fact that the plaintiffs signed the contract as a valid defense to the action upon the indorsements.
Some time after the action was commenced, the plaintiffs sued out a writ of attachment and instituted proceedings in garnishment. The garnishee answered that he was in possession of a sum of money which had been paid to him for the defendants, and also stated that a notice had been served upon him that the defendants had assigned the money to one E. T. Mulnix. The answer of the garnishee contains the only mention of an assignment to he found in the entire record.
There was no proof of an assignment to E. T. Mulnix. No question is made upon the effect of the notice to the garnishee. It is not alluded to in any assignment of error, and counsel for the defendants makes no point upon it in his argument. Therefore we cannot do otherwise than ignore it. There is no error in the record, and the judgment will be affirmed.
Affirmed.