Day v. Ramey & Co.
Day v. Ramey & Co.
Opinion of the Court
Ramey & Company, the defendants in error, in September, 1877, recovered judgment upon default in the court of common pleas of Putnam county, against Oliver Day and Hiram Day the plaintiff in error, on a promissory note by them jointly signed, and made to one N. W. Ogan, by whom it was sold and transferred to the defendants in error. On the 7th of March, 1879, an execution was issued on the judgment, and on the same day was levied on the real estate of Hiram Day, described in the petition of the plaintiff below. The land levied upon being included in a mortgage to the Michigan Mutual Life Insurance Company, Ramey & Company commenced an action
It is a well settled rule, that if the creditor recovers a judgment against principal and surety, and execution thereon is levied upon the property of the principal, and such property is released from the levy and lost as a security by the act of the creditor, the surety will be discharged, to the extent of his injury thereby. Dixon et al. v. Ewing's Adm'rs., 3 Ohio, 280; Curan v. Colbert, 3 Geo., 239; Brown v. Ex'rs of Riggins, Id. 405; Mulford v. Estudillo, 23 Cal., 94; People v. Chisholm, 8 Id., 29; Hubbell v. Carpenter, 5 Barb., 520.
If the creditor has the means of satisfaction in his hands, and chooses not to retain them, he cannot complain. The rights of sureties are largely creations of equity, and courts of chancery will not hold them liable, where the risk is increased by the act of the party for whose benefit the suretyship is intended to inure; and, if by the act of the creditor, the surety is injured or exposed to injury, that act may be laid hold of for the surety’s relief. Rathbone v. Warren, 10 Johns., 591; Cooper Arrington v. Wilcox, 2 Dev. & Bat. Eq., 90.
It is urged, that Hiram Day did not avail himself of the statutory provision, and at the rendition of judgment on the promissory note, secure the proper entry by the clerk, certifying which of the defendants was principal debtor and, which surety. The statute was designed to enlarge the legal rights of the surety, and although by such omission, Hiram Day lost the right of compelling the creditor to. first exhaust the property of the principal debtor, before his property could be taken in execution, he did not thereby lose any of his equitable rights as surety. The contract of the surety is with the creditor, and not with the debtor, and the creditor who accepts a surety is none the less bound to notice the nature of his engagement, because he is required to first proceed against the goods or lands of the principal.
After judgment was rendered against Hiram Day, the
If the mortgage of indemnity on “ Inlot 34,” made to Hiram, Day, had remained in force, the property might have been released from the levy thereon without discharging the. surety, as he would not have been thereby injured. But, Hiram Day having cancelled his mortgage, another execution was levied upon “ Inlot 34,” while thus free from the incumbrance, and this levy was released without the surety’s consent, and, as alleged in the amended answer “ at the request ahd procurement of defendants in error ” — ■ Ramey & Company. From these words we cannot infer judicial action, or that the release was made by order of the court, upon motion and hearing, and the existence of such facts as would authorize a release of the levy without discharging the surety. For aught that appears, the
In our view, therefore, Ramey & Company by dismissing their second levy upon the property of Oliver Day, the principal debtor, and releasing the property levied on, discharged the surety, Hiram Day, to the extent of the value of the property so released.
It follows, that the judgment of the district court sustaining the demurrer of the plaintiffs to the amended answer of Hiram Day, must be reversed, and the cause remanded to the district court for further proceedings.
Judgment accordingly.
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