Sublett v. McKinney , 19 Tex. 438 ( 1857 )

Wheeler, J.

The question is whether the action of the accommodation acceptor, who has paid the bill, is “ grounded upon any contract in writing,” within the Statute limiting the right of action to four years, upon contracts in writing. (Hart. Dig. Art. 2377.)

Whatever may be said of the action being upon the implied contract to indemnify, it is quite certain that without the request contained iu the writing, the plaintiff would not have any right of action upon payment of the money. One man cannot make another his debtor, by paying his debt without Ms request, unless he has come under obligation to some third person to make payment. It therefore is not the payment of the money, which gives the right of action; but it is founded, in part at least, upon the writing. The doctrine that the plaintiff must sue upon the implied contract, is, to say the least, quite technical; and is confined in its application to Courts which recognize the distinctions of forms of action. Our law does not recognize these distinctions ; but the plaintiff must sue upon his case ; and the writing certainly constitutes a very material and essential part of that case. The mere fact of payment does not raise a promise by implication. No promise to indemnify is implied, except it be upon request; and that request, in this case, is in writing : so the writing is the foundation of the promise ; and, discarding technical niceties, it may be said to be the ground of the action. It gives rise to the promise which, in compliance with the request, springs out of, and is grounded upon it.

An accommodation acceptor, who has been obliged to pay the bill, though primarily liable to the payee, as between himself and the drawer, is entitled to be regarded in the light of a surety, and has equal claims upon the aid of a Court of equity to enforce his rights against the maker, with any other surety who has paid the debt of his principal. It is the doctrine of the Civil Law, and it was the doctrine of the Court of Chancery in England in the time of Lord Hardwick, that the surety is entitled, upon payment of the debt of the principal, not only to have the full benefit of all the collateral securities, both of an equitable and legal nature, which the creditor has taken as additional pledge for his debt, but he is entitled to be substituted, as to the very debt itself, to the creditor, and to have it assigned to'him. This was the doctrine of the earlier English cases, (ex parte Crisp, 1 Alky. 133 ; Morgan v. Seymour, 1 Ch. R. 64 ; Parsons v. Briddock, 2 Vern. 608,) and it does not appear to have been questioned, prior to the cases of Copis v. Middleton, (1 Turner & Russ. 224,) and Hodgson v. Shaw, (3 Mylne & Rem. 183, 8 Eng. Ch. R. 338.) These latter cases, while they hold the general doctrine, tli at the surety is entitled to every remedy which the creditor has, and to have an assignment of all the securities in the hands of the creditors, yet deny him the right of complete substitution to the rights of the creditor, by having assigned to him the very obligation upon which he was surety, upon this technical idea, that the payment by the surety is an extinguishment of the obligation, and the assignment of it would transfer that which, being extinguished, is no longer any security. But this narrow technical view of the case has not received the approbation of Courts of equity generally in this country. The subject was examined with great learning, research and ability by the Supreme Court of Georgia in the case of Simpkin v. Mills, (4 Ga. R. 343,) and the doctrine of the two English cases last cited was discarded, as opposed to the great weight of authority, English and American, as unsound in principle, and unfit to have a place in the enlightened remedial justice of a Court of equity. The principle which supports the right of substitution to the rights and remedies of the creditor, applies equally to his right to have a transfer of the particular obliga* tion or contract, as to any other security. “ The substitution of the surety,” it is pertinently said, “ is not for the creditor as he stands related to thé principal after the payment, but as he stood related to him before the payment. He is subrogated to such rights as the creditor then had against the principal; one of which unquestionably was to enforce his bond against the principal.” (Id. 349.) This is certainly the correct deduction from the universally admitted right of substitution. For if the doctrine were sound, that the obligation on which the surety was bound, cannot be assigned, because it is extinguished by the payment, it would apply equally to every other security, and destroy the right of substitution altogether. For the payment of the debt operates as complete an extinguishment, in equity, of every collateral security, as it does of the obligation of the principal security. So it has been uniformly held by this Court in the case of mortgage and other securities. (Duty v. Graham, 12 Tex. R. 427.) The authorities upon the question of the right of substitution in such a case, are collected and reviewed with great research and ability by the counsel for the appellee in his printed brief in the case of Grayson v. Smith, which has been furnished the Court on the hearing of this case, and it is there also shown that there is a very great weight of authority in support of the doctrine of the surety’s right of complete subrogation .

In Jordan v. Hudson, (11 Tex. R. 82,) this Court held that a surety who has paid the debt of his principal, is entitled to be subrogated to all the rights of the creditor, whose demand he has paid. The rights to which he is entitled to be thus subrogated, are those which the creditor had while the obligation of the contract subsisted ; not such as- he has after the debt has been paid; for, by the payment the rights of the creditor are extinguished. The doctrine is that the payment entitles the surety to be subrogated to all the rights of the creditor. It was his right to sue upon the contract. The surety, upon payment, is subrogated to this right, and may in like manner maintain his action. The surety was entitled to have the security assigned to him. ' Equity considers that as done already, which ought to have been done; and so treating the assignment as having been made, maintains the right "of .the surety to sue upon the. contract.

The plaintiff in this case has brought his action upon the contract. This right of action accrued upon payment of the debt; and it results, from the view we have taken of the case, that the action was not barred by the Statute. The judgment is therefore affirmed.

Judgment affirmed.

Roberts, J., did not sit in this case.