Superior Court of Delaware, 1862

Christian & Curran v. Naudain's Administrator

Superior Court of Delaware · Decided July 5, 1862 · Gilpin

7 Del. 515

Counsel

Rodney, for the defendant, contended that the simple contract debt of Elias S. Naudain on the promissory note signed by him to the plaintiffs under the facts proved, was merged in the judgment bond executed and delivered by Jacob V. Naudain to them, to cover that, as well as all other indebtedness of every kind then due them from the late firm of Naudain Murphy, and was in contemplation of law extinguished by it; and that such defence might be given in evidence under the plea of non-assumpsit in the present action upon the note. Com. Dig. Plead 2 G. 12. Pitm. on Princ. and Surety, 40 Law 328. Gordon, for the plaintiffs: The doctrine of merger and extinguishment of a lower in a higher grade of security given for a debt, did not apply in this case, because the judgment bond given by Jacob V. Naudain to the plaintiffs, was only a collateral security for the payment of the note in question and the preceding indebtedness of the firm of Naudain Murphy to them, and it was expressly understood and intended so to be by the parties to it when it was given and taken by them; and in the next place, because the bond was not between the same parties, as the parties to the promissory note, but different parties; and to extinguish a security of a lower by a higher grade of security for the same debt, two things at least, were necessary; in the first place, it could not and should not be a collateral security merely for the indebtedness, and in the next place they should both be for the same debt between the same, and not different parties. 1 Ch. Pl. 94. Drake v. Mitchell, 3 East 251.

Opinion of the Court

The Court,

Gilpin, C. J.,

charged the jury, that where there was mutuality between the parties, as where the security of the higher and of the lower grade were between the same parties and for the same debt, or one person gives another his promissory note and afterward his bond, or other instrument under seal, to the same person for the absolute payment of a sum of money, the law would presume the bond, or other instrument under seal to have been in satisfaction of all pre-existing indebtedness on the part of the former to the latter up to the time, when such second security was given by him, and the previous security of a lower grade would, upon that presumption, be merged in and extinguished by the latter security of a higher nature in contemplation of law. *518 That, however, was but a legal presumption where the two securities were between the same parties, which might be rebutted by evidence to the contrary. Where, therefore, it appeared from the evidence in any case, that the parties to the two securities were not the same, or that the subsequent security of a higher nature was given and taken as collateral, or additional security only for the former and for the same indebtedness, and was not intended to supersede or extinguish the former security of a lower grade, the lower would not be presumed to be merged in the security of a higher grade, and would consequently not be extinguished, superseded, or affected by it; but both would continue valid and subsisting securities for the purposes for which they were given; and if the jury were satisfied from the evidence which they had heard in the case that the judgment bond executed and delivered by Jacob Y. Eaudain to the plaintiffs for the sum of eight thousand dollars, was only a collateral or general security for whatever indebtedness existed on the part of the late firm of Eaudain & Murphy to the plaintiffs, including the indebtedness for which the promissory note in question was made by them and signed by Elias S. Eaudain as their surety, the action would lie against his administrator, and their verdict should be for the plaintiffs, provided they were also satisfied from the evidence, that the indebtedness on their part for which the promissory note was given to the plaintiffs had not been paid.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.