Norton v. Hall , 41 Vt. 471 ( 1868 )

The opinion of the court was delivered by

WilsoN, J.

This is an action of assumpsit, by which .the plaintiff seeks to recover for money paid by him to the Mechanics’ Bank, Concord, N. H., on the defendant’s note, on which the plaintiff says he was liable as suretjr for the defendant. The defendant pleaded the general issue and the statute of limitations. The plaintiff replied to the plea of the statute of limitations, that the cause of action did accrue within six years.

I. The defendant claims that the liability of the plaintiff on the note was not that of surety, but that he was liable as an‘original promisor or guarantor of the note, and that he incurred that liability not by the request of the defendant. This proposition of the defendant is not warranted by the facts in the case. It appears that when this note was given, Ira Foster, the payee, and the defendant, Dudley B. Hall, were interested together in an unsettled partnership. Foster was accustomed to send notes to Hall and he would sign or indorse them, and the funds would be obtained at some bank, and be used in the company business or in the private business of either one, as might be agreed, and it was understood between them that the matter of these funds was to be left to be settled in the final adjustment of the partnership. The case states that the note in question was written at Concord, and sent to Vermont, to Hall, who signed and returned it to Ira Foster, who procured the plaintiff and Albert Foster, without compensation and as an accommodation, to indorse it, and the bank purchased and became the owner of the note. The finding of the court below leaves no doubt that the note ivas given for the accommodation and benefit of the defendant as well as for Ira Foster, and that the liability incurred by the defendant to the plaintiff, by reason of the plaintiff’s liability to the bank on the note, is precisely the same as it would be if the note had been executed and indorsed in the presence and at the request of both Ira Foster and the defendant, at the time it was given. Upon the facts of this case, it is quite clear that the liability of the plaintiff to the bank was that of surety for the defendant. It is insisted by the defendant’s counsel that a recovery on the note against him, at the time the plaintiff made' the payment, was barred by the statute of limitations, because it was more than six years from the time the note became due to the time of such payment by the plaintiff, and the defendant not having made any acknowledgement or promise within that time to pay the note. The note became due December 1, 1855, the defendant neglected to pay it, the plaintiff was unable to meet the note, and the bank demanded of him additional security, and accordingly the plaintiff assigned to them as collateral, certain notes for $1800, on five years, secured by mortgage, and those.securities wore held by the bank as collateral until December 19, 1861, when the plaintiff took them up with the note on paying the $980.21 for which this suit is brought. The county court foimd that the plaintiff had remained liable to the bank up to the time he paid the note, that the bank regarded him responsible, and never allowed matters to get into such a situation that he could plead the statute of limitations. The plaintiff’s right of action at law, as surety for the defendant, accrued on payment of the note to the bank, which was within six years next before the commencement of this suit. Bishop v. Day et al., 13 Vt., 81; Exr. of Baker v. Marshall et al., 16 Vt., 522. It is further insisted by the defendant that the note, having been kept on foot, by an arrangement between him and the bank, for more than six years after it fell due, was not a subsisting debt against the defendant at the time the payment was made by the plaintiff; and therefore the defendant claims it should be treated. as a voluntary payment by the plaintiff, for which he ought not to recover of the defendant. But this position of the defendant is not sustained by the authorities cited by him. The case does not show that the delay of the plaintiff to pay the note was in fraud of the rights of the defendant, or that he was thereby in any manner prejudiced. It is not a case where the surety revived his own liability after it was barred by the statute of limitations. The defendant as principal and the plaintiff as surety were, on the 1st day of December, 1855, when the note became due, liable to pay it. . The defendant should have paid the note and saved the plaintiff harmless. It was the duty of the defendant, at all times so long as the plaintiff remained 'surety by force of the liability incurred by signing or indorsing the note, to indemnify the plaintiff by paying the note. The neglect of the defendant to pay the note when .it became due, compelled the plaintiff to give the bank additional security and to request further time of payment. All this was done while both plaintiff and defendant were liable to pay the note. The arrangement made between the bank and the plaintiff, as surety for the defendant, was one that could be • properly made, and it is consistent with the original obligations and rights of the parties and with the relation of the plaintiff as surety for the defendant. The law will treat the arrangement so made by the plaintiff with the bank, in respect to said note and its payment, as having received the sanction of the defendant. The defendant, by his neglect to pay the note, left the matter of its payment to be arranged and made by the plaintiff, but the arrangement made between the plaintiff and the bank did not prevent the defendant from making payment to the bank at any time. It is clear, we think, that where the liability of the surety has, in good faith, continued more than sis years from the time the note became due, and payment of the note is ' made by him, such continued liability of the surety carries with it the relation of principal and surety, and the liability of the principal to reimburse the surety for the money so paid by Mm. The defendant’s liability to his surety, the plaintiff,' was not barred by the statute of limitations at the time the plaintiff paid the note, but as between these parties, the statute began to run on the plaintiff’s claim when he paid the note, December 19, 1861.

The judgment of the county court is reversed, and judgment for the plaintiff to recover the sum of 1980.21 and interest since December 19, 1861, and his costs.