| Pa. | Mar 20, 1882
delivered the opinion of the court, March 20th 1882.
That this is a contract of guaranty is settled by abundant authority: Bank v. Haynes, 8 Pick 423 ; Curtis v. Brown, 2 Barb. 55 ; Isett v. Hoge, 2 Watts 128" court="Pa." date_filed="1833-10-15" href="https://app.midpage.ai/document/isett-v-hoge-6311183?utm_source=webapp" opinion_id="6311183">2 Watts 128; Johnston v. Chapman, 3 Penna. R. 18; Hoffman v. Bechtel, 2. P. F. S. 190; Woods v. Sherman, 21 Id. 100. It is equally clear that such contract imposes upon the plaintiff the duty of exercising due diligence to enforce payment from the principal before resort can be had to the guarantor. Campbell v. Baker, 10 Wright 243 ; Reigart v. White, 2. P. F. S. 439 ; Hoffman v. Bechtel, Ibid. 190. 'What is due diligence ? There are many cases upon this point, and the general tenor of them appears to be that the contract for due diligence requires that a suit be brought within a reasonable time after the maturity of the claim and be duly prosecuted to judgment and execution before an action can be sustained against the guarantor, unless it appears that such proceedings
Upon the trial below, the learned judge negatived the plaintiff’s second and third points, which was practically instructing the jury that it was not enough for the plaintiff to exhaust liis remedies against the bank, but must proceed against the stockholders to enforce their individual liability to depositors under the charter of the bank.
Noire of the authorities cited sustains this ruling. It may be, as was suggested in Johnston v. Chapman, supra, that where the creditor held a collateral security, as a mortgage, due diligence would require that he should exhaust the collateral before coming upon the guarantor. We have no such question here. The creditor held no collateral. Under the charter of the bank the stockholders were liable to depositors in double the amount of the stock, but their liability is not that of sureties, but is special and sub modo only. Craig’s Appeal, 11 Norris, 398. It is therefore, secondary and not primary, collateral, and in the nature of a guaranty. Hence it does not accrue until the assets of the bank are exhausted. This bank had made an assignment for the benefit of its creditors. It is not necessary to consider the question whether the plaintiff could have sustained a suit against the stockholders in his own name wdthout the intervention of the assignee, for the reason that as the liability of the stockholders was but secondary they could be sued only for the balance due to the plaintiff after the assets belonging to the bank had been distributed, or at least ascertained. A creditor in order to hold a guarantor may be obliged to exhaust all the property and securities immediately within his grasp, even to such as may be held as collateral, but we do not think he is obliged to pursue every claim which his debtor may have,
The plaintiff’s second and third points should have been affirmed. What has been said sufficiently covers the remaining assignments.
Judgment reversed and a venire facias de novo awarded.