Public-domain · open source
OpenJurist

3 Rob. 299

Calliham v. Tanner

Supreme Court of Louisiana

Decided October 15, 1842

Supreme Court of Louisiana · decided 1842-10-15

<p>Discharging, or giving time to any of the parties to a note or bill, is a discharge of every other party who, upon paying it, would be entitled to sue the party to whom such discharge or indulgence has been granted.</p> <p>A prolongation of the term granted to the principal debtor, without the consent of the surety, will release the latter. C. C. 3032.</p> <p>The holder of a protested note, having presented it for payment to the administrator of the succession of the payee and first endorser, it was allowed by the latter, and placed on the tableau of distribution filed by him. Subsequently to the homologation of the tableau, the holder obtained a judgment, by confession, against the second endorser, and, in consideration of a higher rate of interest, granted him time at the expiration of which the latter paid the amount due on the note. In an action by the second endorser against the administrator of the first, to recover the amount thus paid: Held, that the first endorser, who would have been entitled, on payment of the note to the holder, to require its delivery, that he might exercise his rights against the maker, was discharged by the indulgence ; and that the insolvency of the maker, at the time of the indulgence, cannot affect the question of his discharge.</p> <p>A surety, who pays the debt of his principal, is entitled to all the rights of the creditor against the latter ; for, however desperate his situation may be at any particular time, it may improve, and offer him ultimately complete indemnity.</p>

Cited by 2 later decisions — most recently February 1806

2 state decisions

Relies on Huie v. Bailey · Buckner, Stanton & Co. v. Watt

Good law ✅— No negative treatment on recordhow we know

Decided 1842-10-15

View the full empirical analysis of this case →

Morphy, J.

¶1The principle has long since been settled, that the discharging or giving time to any of the parties to a note or bill, is a discharge of every other party who, upon paying the same, would be entitled to sue the party to whom such discharge or time has been given. In the present case it is clear that, had the administrator of Pearce’s estate paid to Dunwoodie the amount of the note endorsed by the deceased, the latter could only have subrogated him to such rights as he had against Stafford, the maker of the note, under his contract with him and the other endorsers. For the prolongation of time thus granted to the maker, Dunwoodie had received a valid consideration, to wit, interest at ten per cent per annum, instead of five per cent, which the debt originally bore. From the moment that he became bound by this agreement, and was precluded from collecting his whole debt from Stafford in due course of law, he lost all claim agaipst Pearce. No person claiming under Dunwoodie can have greater rights than he had. The rule is, that the surety is discharged by a prolongation of time granted to the principal debtor, without the consent of the surety. Civ. Code. art. 3032. 3 Mart. N. S. 598. 16 La. 218. 19 La. 211. 6 Peters, 250. Bailey on Bills, see note (a), p. 358.

¶2It is urged that the distinction between principal and surety, or maker and endorser, ceased after the judgment against the surety *302resulting from the decree of homologation rendered on the 2d of May, 1838; that the endorser became a co-debtor absolutely bound, whose obligation could be discharged only in some one of the ways laid down in article 2126 of the Civil Code. Had the endorser, in a case like the present, suffered judgment to be rendered against him, without urging in his defence this indulgence to the maker, he would probably be concluded, and could not set it up when called upon to satisfy the judgment; but, in the instance before us, the indulgence was granted to the maker after the judgment had been obtained against the endorser. The latter could not be placed by his creditor in duriori casu, without his consent. On paying the judgment, he had the right of requiring from Dunwoodie the note on which it had been rendered, in order to exercise his rights against the maker. Although by a judgment a surety becomes absolutely bound for the debt of his principal, the creditor can do no act by which the rights or recourse of the surety against the debtor may be destroyed or impaired; if he does, he releases the surety in the same manner as if no judgment had been obtained. As to the insolvency of the maker, Stafford, which is relied on to show that the estate of Pearce was not injured by the indulgence granted to him, admitting it to have existed at the time of the agreement entered into between him, Dunwoodie, and the other endorsers, it cannot affect the question before us; the surety who pays the debt of his principal, is entitled to all the rights of the creditor against the latter, however desperate his situation may appear at any particular time, for it may improve, and offer ultimately a complete indemnity.

¶3 Judgment affirmed.

/3/rob/299 · .json · Public domain