Sheehan v. Taft
Sheehan v. Taft
Opinion of the Court
Upon the facts disclosed, this bill as against the defendant Taft cannot be maintained. The plaintiff and Carrol! were sureties for Michael Bergen on a note payable to Benjamin Dupar & Company or order. Taft took this note before maturity for value, with knowledge of the relation which existed between the makers, and that Bergen, at the time the note was made, had given a mortgage to Carroll on a stock of goods which he had purchased that day of John Cosgrove, conditioned to secure Carroll against his liability on the note. Taft was a creditor of Cosgrove at the time of the sale to Bergen, and afterwards, with other creditors of his, attached and levied on those goods as the property of Cosgrove, and they were applied in satisfaction of the several debts. He then brought an action on the Bergen note against the plaintiff and Carroll, obtained judgment against them, and is now proceeding to collect the balance of an execution upon this judgment from the plaintiff’s property. The prayer of the bill in respect to Taft is that he may be enjoined from collecting this execution from the plaintiff.
The plaintiff now insists that Taft’s attachment of the mortgaged property, and application of it to the payment of Cosgrove’s debt, destroyed the security which the principal debtor had provided for the payment of the note; that this security was held by Carroll for the benefit of all the parties to whom Bergen was liable, and constituted a fund to which all the parties who were sureties, or to whom the principal debtor was liable, had in equity the right to resort for the payment of the debt; and that the familiar rule is to be applied, that when the creditor does an act injurious to the surety, or inconsistent with his rights, the surety will be discharged, and may set up such conduct as a defence to any suit brought against him, if not at law, at all events in equity. 1 Story Eq. § 325.
It is not necessary to consider whether this defence should not have been made in Taft’s suit on the note, for the real difficulty with the plaintiff’s position is that, within the meaning of the rule, Taft has done nothing inconsistent with his rights at law or in equity, as a creditor, or with his relations to the plaintiff as surety for Bergen. His knowledge that Carroll and the plaintiff
The bill further alleges that an action is now pending in favoi of Carroll against Hayward, the officer who attached the goods as the property of Cosgrove, to recover for the conversion of the goods mortgaged to him; and that an agreement has been made by the parties to that suit, that if Carroll would discontinue and discharge the mortgage, Hayward would pay a part of the judgment recovered by Taft against him and the plaintiff, and would collect the balance of the plaintiff, and save Carroll harmless. Carroll and Hayward are parties to this bill. The plaintiff asks that Carroll may be enjoined from discharging the mortgage and discontinuing the suit, and that he may be permitted to prosecute it against Hayward in his own behalf upon giving such bond as the court may order. The bill has been taken for confessed against Carroll and Hayward. Upon the principles above stated, whatever security the mortgage affords enures to the benefit of the plaintiff. The avails must go to pay the debt for which he is surety, and which it was given to secure. Eastman v. Foster, 8 Met. 19. New Bedford Institution for Savings v. Fairhaven Bank, 9 Allen, 175. Adams Eq. 106, note.
The plaintiff is entitled to the relief he asks against the two last named defendants.
Decree for the plaintiff accordingly, and bill dismissed as to Taft.
Reference
- Full Case Name
- William Sheehan v. Amariah A. Taft & others
- Status
- Published