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await the judgment of the court to know whether the security or contract taken is to be considered as plenary evidence of the waiver of such lien.
To avoid any inconveniences of this kind in regard to that species of lien which is contended for in this case; considering also that the accepting of a negotiable promissory note is an extinguishment of any implied contract, on the part of the maker, to pay the consideration for which the note was given, we are disposed to say that the accepting of a negotiable promissory note in payment of an account for labor bestowed on any article, is such a manifestation of the intention of the party taking the note to rely on the personal security of the maker of the note, as to be a waiver of any lien which he might have had on the articles on which the labor was bestowed, whether such note is payable on demand or at a future time, and whether negotiable or not; that the taking such note is of itself a waiver of any lien which the law gave as a charge upon the property on which the labor was bestowed; that the lien can not attach to the note and follow it into the hands of any one to whom it may be negotiated, and shall not attach to it, even in the hands
of the payee.
On the third question, which arises in this case, which is in some measure involved and has been considered in the other, our views are against the defendant. On the question whether receiving a promissory note shall be considered as payment of an antecedent account, different decisions have been had in different states. It will not be of any importance to examine them particularly here. The rule of law undoubtedly is, that a promissory note given and received in payment of an antecedent account is a bar to an action on that account, whether the note be paid or not; that if a person accept a note in satisfaction of his debt, he is paid by his own agreement, and can not sue for his original debt if there was no fraud or deception in giving the note: Harris v. Johnston, 3 Cranch, 308; Sheehy v. Mandeville et al., 6 Id. 253; Parker v. United States, Pet. C. C. 262. This is recognized as the law in New Hampshire: Wright v. The First Crockery Ware Co., 1 N. H. 281 [8 Am Dec. 68]; and would be fatal to the claim of the defendant in that state, where this contract was made, and where this right of lien is said to exist, even if a different rule of law had obtained in this siate.
The general received opinion in this state has been, that a note thus received was payment; and we are all agreed, that the receipt attached to this account was prima facie evidence of the payment of the account.
If there was any fraud or misrepresentation on the part of the person giving it, to induce the defendant to receive it in payment; or if there was an ignorance on the part of the person taking it that any other person was holden, whose name did not appear, and in consequence of this ignorance, the note of an insolvent partner, or joint contractor, was taken in payment of a demand against a firm who were responsible, the presumption arising from the receipt might be done away, and a recovery had against the persons originally liable on the account, but there is nothing of that in this case.
If the account of the defendant for sawing the lumber was paid, he could have had no further right of lien on the lumber for the sawing, especially against these plaintiffs, who had purchased the same of the original owners.
The judgment of the county court must therefore be affirmed.
Note GIVEN BY DEBTOR OR THIRD PERSON OPERATES AS PAYMENT, WHEN.-See Pateshall v. Apthorp, 1 Am. Dec. 3 and note; Murray v. Gouver. neur, 1 Id. 177; Apthorp v. Shepard, Id. 6; Holmes v. De Camp, 3 Id. 293; Thacher v. Dinsmore, 4 Id. 61 and note; Maneely v. McGee, Id. 105; Tobey v. Barber, Id. 326; Whitbeck v. Van Ness, 6 Id. 383; Johnson v. Il'eed, Id. 279; Wright v. Crockery Ware Co., 8 Id. 68 and note; Barrelli v. Brown, 10 Id. 683 and note; Varner v. Nobleborough, 11 Id. 48 and note; Ankeny v. Pierce, 12 Id. 174 and note; Muldon v. Whitlock, 13 Id. 533 and note; Pa. tapsco Ins. Co. v. Smith, 14 Id. 268; Hart v. Boller, 16 Id. 536 and note; Clopper v. Union Bank, Id. 294; Ainslie v. Wilson, 17 Id. 532 and note; Reeul v. Van Ostrand, 19 Id. 529 and note; Glenn v. Smith, 20 Id. 452 and note. In Risher v. The Frolic, 1 Woods U. S. C. C. 94, the principal case is referred to as an authority for the doctrine that the taking of a note for a pre-existing debt is decreed prima facie an absolute payment of such debt.
BANK OF MONTPELIER v. Dixon.
[4 VERMONT, 587.) DISMISSAL OF A SUIT AND RELEASE OF ATTACHMENT sued out by the payees
against the principal on a promissory note is not a discharge of the
surety. Giving TIME TO THE PRINCIPAL by a contract which is binding, discharges
the surety. DELAY OR NEGLECT TO SUE THE PRINCIPAL, although urgently requested
thereto by the surety, is not a discharge of the surety. Surety, on PAYING DEBT OF THE PRINCIPAL, is entitled to be put in the
place of the creditor and avail himself of all or any of the collateral securities, means, or remedies which the creditor has for enforcing pay ment against his principal.
ASSUMPSIT on a promissory note, payable to the bank of Montpelier, and signed by the defendant and four others. The defendant, Luther Dixon, and three of the others, were sureties, it was understood, and Gideon 0. Dixon was the principal. Two thousand dollars were paid by Gideon on the note within the ninety days when the note, being for four thousand dollars, was made payable. By the custom of the bank this payment gave the makers ninety days further time to pay the balance, unless the bank should think it expedient to enforce payment in the mean time. The bank deeming it expedient, did sue Gideon 0. Dixon, and attached a drove of cattle belonging to him; but made arrangements with him by taking a new note with other signers payable in twenty days. The bank then dismissed the action, and released the attachment. All this was done without the request or kuowledge of the defendant, who maintained that by reason of these acts he was discharged. The cashier of the bank testified that it was understood, when they took the new note, that it was not taken in payment, but merely as further security. After the release of the attachment, Gideon 0. Dixon caused his cattle to be driven to Boston, where he sold them, and then absconded.
The court charged that the defendant was discharged from liability by reason of the release of the property attached. Plaintiffs excepted. Verdict and judgment for the defendant. Motion for a new trial.
Smith and Peck, for the plaintiffs. Mere delay to sue, or giving time to the principal, unless accompanied by a binding contract, does not discharge the surety: 5 Pick. 307; 2 Id. 581; 10 East, 34; 1 Bos. & Pul. 419; 3 Yeates, 160; 2 Johns. Ch. 554; 15 Johns. 433.
Merrill and Upham, contra. A creditor can do no act to invalidate or discharge the security he has taken of the principal debtor, to the prejudice of the rights of the surety, without discharging him: Hayes v. Ward, 4 Johns. Ch. 130 (8 Am. Dec.
[ 554]; Jones v. Bullock, 2 Bibb, 467; Rathbone v. Warren, 10 Johns. 587; Baird v. Rice, 1 Call, 18 (1 Am. Dec. 497]; Law v. East India Co., 4 Ves. jun. 824; Commonwealth v. Vanderslice, 8 Serg. & R. 452; Nisbil v. Smith, 2 Bro. C. C. 579; Baker v. Briggs, 8 Pick. 122 [20 Am. Dec. 311).
WILLIAMS, J. The only question presented in this case is whether the dissolution of the attachment made by the plaintiffs, on the property of Gideon 0. Dixon, was a discharge of the
Ax. DEC. VOL. XXIV-41
other signers to the note on wbich this suit is brought? The county court so decided; and if their decision is correct, the plaivtiffs have no further claim on the defendant. If it was not, there must be a new trial, as there are no other facts es. tablished which will entitle the defendant to retain the verdict. This presents the inquiry as to the rights and duties of a plaintiff or creditor, in a case similar to the present. The first and most naturul view of the case would be, that as the plaintiffs parted with their money on the credit of all and each of the signers of the note, they might look to each for satisfaction, and would not lose their claim against any until they were fully repaid the amount advanced, and that they ought not to be compelled to recognize the defendants, in the relation of principal and surety; but might in any of their negotiations treat all the signers -as principals. We are inclinel, however, to waive the consideration of this question at this time on account of the sickness of one of our brethren, and the absence of another, as we are all agreed on another point, that there must be a new trial.
Considering Gideon 0. Dixon as the principal to the note on which the suit is brought, and the defendant and other signers as sureties, we are to inquire whether the surety has been dis. charged from his liability. Certain principles borrowed from the civil law and from the courts of equity have been adopted by the courts of common law, as to the duties of the creditor towards the surety, and as to those acts of the creditor and transactions between him and the principal wbich will discharge the surety. These principles we should endeavor to draw from the points decided in the cases. The opinions expressed by judges or chancellors in deciding a case, and expressions falling from them in elucidating their views, are frequently cited by elementary writers as the law which was established in those cases, or the principle to be drawn therefrom; and many of these expressions and opinions have been cited in this argument. I apprehend, however, that it is easier to reconcile the several decisions which have been made than it is to establish a system founded on those opinions and expressions. Most of the au- . thorities which bave been read in this case were read and exam. ined in the case of Hubbard v. Davis, 1 Aik. 296; and some of them, at least, were overruled. The case of Rees v. Berrington, 2 Ves. jun. 540, and the cases cited in the marginal notes to that case, and the case of English v. Darley, 2 Bos. & Pul. 61, certainly establish this principle: that when the creditor, without
consent of the surety, gives time to the principal by a contract which, in the language of Gibbs, C. J., in Orms v. Young, Holt, 84, ties up his hands, the surety is discharged, and this for two reasons: 1. It is varying the terms of the contract, by extending the time for its fulfillment; and no surety is ever charged beyond the terms of his contract. A surety might be willing to be holden for a limited time, but unwilling to be holden for a longer period. 2. Because the surety may in a court of equity compel the creditor to sue the principal debtor at law, under such regulations as the court shall make, so as not to impair his security or delay his debt, which the creditor can not do, if he make a contract with the principal for delay.
We think it is equally well established that a delay or neglect of the creditor to sue the principal, though urgently requested thereto by the surety, is not a discharge of the surety. The surety may pay the debt and pursue the principal for his own benefit. Further, the surety, on paying the debt of the principul, is entitled to be put in the place of the creditor, and may avail himself of all or any of the collateral securities, means, or remedies, which the creditor has for enforcing payment against the principal, and may have them assigned to him under such terms as a court of chancery may order. And further, as to any other collateral securities which the creditor may bave at the time the surety entered into the obligation, and which may have had an influence in inducing the surety to become obligated, the creditor must act with good faith, and not discharge them to the prejudice of the surety.
But inasmuch as the creditor is not compelled to institute a suit at the request of the surety, so he may discontinue any suit by him instituted for his own benefit, and without any such request, if he acts with good faith and with a view to his own interest. And although it is commenced by attachment, with a view of enforcing a piore speedy payment, yet, if it was commenced without the request or kuowledge of the surety, so it may be discontinued, or other security may be received as a substitute for the attachment, without consulting the surety, if the creditor acts with good faith. The cases of Fulton v. Mathews and Wedge, 15 Johns. 433 [8 Am. Dec. 261), and Bellows v. Lovel, 5 Pick. 307, countenance this opinion.
We have had no opportunity of seeing the cases decided in Kentucky, Jones v. Bullock, 3 Bibb, 467, and Baird v. Rice, 1
, Call, 18 (1 Am. Dec. 497), nor the case in Pennsylvania, Com. monwealth v. Vanderslice and others, 8 Serg. & R. 452, except