91 Mich. 653 | Mich. | 1892
This action was brought to recover the amount due on a promissory note, purporting to be ■signed by defendant, and payable to the order of one George Yan Wagner. The note bore date June 11, 1885, was due seven months from date, and was given for 1118, with interest.
The defendant denied the execution of the note under oath, and offered testimony tending to show that he had given a note for $18 to Yan Wagner, and that this note was given for Yan Wagner’s accommodation, and that the plaintiffs had notice that the note which he had in fact given to Yan Wagner was signed for his accommodation, and that the defendant was a surety. The* plaintiffs did not deny knowledge of the fact that the defendant was a surety of Yan Wagner, but did offer testimony tending to show that the note in suit was not a forgery, but was executed by defendant. The plaintiffs also had other notes, signed by different parties, and indorsed by Yan Wagner, in all amounting to $2,586.96.
On October 5, 1885, Mrs. Yan Wagner, wife of George Yan Wagner, executed a mortgage upon real estate belonging to her, to secure these notes, which mortgage was to become due one year from its date. Among the notes so secured was the one now in suit.
The court directed a verdict for the defendant, and plaintiffs bring error.
It will be seen that the two questions — First, whether the note was the note of the defendant; and, second, whether by the arrangement with Mrs. Van Wagner the note was paid — were disputed questions of fact; and if, upon the finding of these facts as the testimony of the plaintiffs would have warranted, they would have been entitled to recover, the case should have been sent to the jury. The defendant claimed, however, that, according to the "testimony of the plaintiffs, the defendant' was discharged.
According to the plaintiffs’ testimony, the mortgage was taken as collateral security for all the notes held by plaintiffs, including Murphy’s. It is well settled that where a creditor receives moneys from his debtor he may apply the same upon any one of the debts which he may ■select. The theory of the plaintiffs is that the security was given to cover all the notes in their hands, and that they subsequently, with the consent of the parties giving the security, applied the amount realized upon the security to the payment of other notes than that now in suit.
“ The surety was no party to this arrangement, and had no right to control its terms. His principals were dealing, not with his property, but their own. The-claims received by the creditor became, in his hands, a-, collateral security for the payment of the notes generally; and the surety has no right to ask that the creditor shall not be allowed the full ' benefit of his own vigilance.” Wood v. Callaghan, 61 Mich. 403.
But it is contended that by accepting a deed of these premises, and converting the property into money, the-plaintiffs cut off the surety's right to subrogation. This-right to subrogation is not one depending upon the contract, but upon equitable principles. In any case, where the contract between the surety and the creditor provides, for the retention of securities received either from the surety or the principal debtor, undoubtedly a, departure from the terms of such contract would release the-surety, whether shown to be to his detriment or not; but where the surety's right, as in this case, depends upon
The judgment should be reversed, and a new trial ordered.