Puterbaugh v. Hammond
Puterbaugh v. Hammond
Opinion of the Court
delivered the opinion of the Court:
It is contended by counsel for appellant, that, inasmuch as this note of Puterbaugh, given to Hammond, was sold and assigned to Treat before maturity, Puterbaugh is liable to pay to Treat the entire amount of the face of that note, and interest, and as Hammond had no authority to sacrifice the note by a sale for less than its face, Puterbaugh had the right, in this action, to recoup or set-off against Hammond the difference between the sum’of $1600 received of Trqat, and the amount of the note, and accrued interest at the time of the sale to Treat by Hammond. We do not see how this position can be sustained. It is true the note was not due when it was assigned to Treat, but it is equally true that there was a memorandum on the back of the note, signed by Hammond, which gave Treat notice that the note was not given for an existing debt, but merely to secure Hammond for all moneys he might pay for Puterbaugh, as his security on notes signed with Puterbaugh, by Hammond. Under these circumstances, the only amount which could, in any event, be recovered from Puterbaugh on this $2000 note, would be the amount paid by Hammond as such security, and not refunded by Puterbaugh; and the only effect of the assignment of the note to Treat by Hammond was, to enable that amount to be recovered upon the note in the name of' Treat, and to give Treat a preference, authorizing him to apply the first moneys arising from collection on that note to repayment to him of the $1600 advanced by him, and interest thereon, and requiring him to apply the residue of such collections to making Hammond whole for payments made by him other than the $1600. Puterbaugh has paid nothing on this note, and has not been damaged by its assignment to Treat, and it is not perceived that he can hereafter be damaged. Should he pay to Treat the $1600 advanced by him when this note was assigned to him, and pay to Hammond, with interest, the other moneys paid by him in payment of these judgments, it will operate as a full satisfaction of this note held by Treat.
We find no cause to disturb the judgment of the Appellate Court, and it is therefore affirmed.
Judgment affirmed.
Reference
- Full Case Name
- David Puterbaugh v. Charles Hammond
- Status
- Published
- Syllabus
- 1. Assignee with notice—measure of recovery on a note given as an indemnity. A principal maker of a note gave to his surety thereon a note for $2000, secured by a second mortgage on land, to indemnify him against loss in respect to his suretyship, upon which the surety indorsed, “This note is made to secure me against any and all loss that I may sustain from having signed notes, as security, with said principal, ” and signed his name thereto. The surety, after judgment against him and his principal, indorsed such indemnifying note, before maturity, to a prior mortgagee, who paid to the creditor in the judgment $1600, and the surety paid the balance of the judgment against him and his principal: Held, in a suit by the assignee against the maker of the indemnifying note, that the former, having notice from the memorandum on the note that it was given only to secure the payee for all moneys he might pay for the maker, could only recover the amount paid by the assignor as surety, with the right first to retain the $1600 advanced by him on the judgment, and interest thereon, and hold the residue of the collection to make the assignor whole for the balance of the payment made by him as surety of the maker of the note. 2. Principal and surety—assignment by the latter of collateral paper held as indemnity—right of action in the former. In such case the maker of the note so assigned is not damaged by the assignment when he has not paid the note, and can not be damaged thereby, for the reason that on payment of the sum advanced by the assignee, and to the assignor the money paid by him as surety in discharge of the judgment, the note given as indemnity would be satisfied, notwithstanding its assignment.