26 N.Y.S. 1016 | N.Y. Sup. Ct. | 1894
This action was brought to recover the amount due ■on promissory note made by the defendant M. Fillmore Brown, indorsed by the defendant Libbie T. Brown, and discounted by the plaintiff. The defendant Libbie T. Brown did not appear or answer. The defendant M. Fillmore Brown answered, setting up a •counterclaim in which he alleged that the plaintiff, in discounting this and other notes, had unlawfully and wrongfully compelled him to pay, for the use of the money, a greater sum than the rate of
We do not understand that the relief asked for under the motion was discretionary with the special term, and it therefore had no right to impose the condition embraced in the order. But the defendants have not appealed. Therefore, the order may be permitted to stand, if they were entitled to the modification of the judgment asked for. It appears that the defendant Libbie T. Brown was the indorser, and as such became surety for the defendant M. Fillmore Brown, who was the maker of the note, and primarily liable for its payment. If she is compelled to pay the amount of the note, she has a right to recover the amount so paid from the principal. But her principal has agreed with the plaintiff that the amount of his claim for unlawful interest collected from him by the plaintiff should be deducted from the amount of the note, and that judgment taken against him should be only for the balance due. If she is therefore compelled to pay the full amount of the note, and he to reimburse her for the amount so paid, he is thus deprived of the benefit of his agreement, and of his right of action against the plaintiff. We do not understand that this can be done. It is quite possible that l^is counterclaim, as pleaded, could not have been allowed in that action, for the reason that his claim was in the nature of a penalty. But the plaintiff, by allowing it, and accepting his offer, in effect credited that amount upon its claim upon the note, thereby reducing it to the amount for which judgment was entered against him. We understand the rule to be that, when the principal and surety are sued together, a successful recoupment by the principal inures to the benefit of the surety, even though the surety could not, if sued alone, avail himself or herself of the defense. Springer v. Dwyer, 50 N. Y. 19-22; Gillespie v. Torrance, 25 N. Y. 306. It follows that the defendants were entitled to the relief asked for in their motion, and that therefore the order should be affirmed, with $10 costs and disbursements. All concur.
