Brokaw v. Collett
Brokaw v. Collett
Opinion of the Court
Charles Brokaw, J. G. Staggs, H. W. Deborde, and Bascom Lynn brought this suit against A. F. Collett, and stated their cause of action as follows:
“That heretofore, to wit, on the 13th day of July, 1915,. the defendant, A. F. Collett, for a valuable consideration had and received, duly made, executed, and delivered to the First National Bank of San Angelo, Tex., his certain promissory note for the sum of $400, dated July 13, 1915, payable on August 20, 1915, to the order of the First National Bank of San Angelo, Tex., at its banking house • situated in San Angelo, Tex., with interest at the rate of 10 per cent, per annum from maturity until paid, and providing that failure to pay said note promptly at maturity shall add TO per cent, to the amount thereof, principal and interest, as attorney’s fees, if placed in the hands of an attorney for collection, which said note was duly delivered by the defendant to the said First National Bank of San Angelo, Tex., and defendant thereby became liable and bound to pay to said First National Bank and to any lawful holder of said note and promised to pay said bank or any lawful ‘ holder of said note the amount of said note in accordance with the face and tenor, effect, and reading thereof, including all principal and interest and attorney’s fees due thereon.
“II. That your plaintiffs also executed said note as sureties thereon for the accommodation of the defendant.
“III. That thereafter, on September 4, 1915, your plaintiffs duly purchased and bought, for a valuable consideration paid, said note from the said First National Bank of San Angelo, Tex., the payee thereof, and which bank was then and there the lawful holder of said note, the said note at that time and no part thereof or interest thereon being paid, and said note was thereupon duly transferred and delivered to your plaintiffs by said bank by proper in-dorsement thereon, and your plaintiffs there-, upon became and are the lawful holders and owners of said note, and became and are entitled to collect the same and enforce payment thereon according to the face and tenor thereof, and the defendant thereby became liable and bound to pay plaintiffs the full amount of said note, principal and interest, and attorney’s fees in accordance with the face, tenor, effect, and reading thereof.
“IV. That said note is now past due and unpaid. That though often so requested to do defendant has wholly refused and still refuses to pay said note or any part thereof, and plaintiffs have been compelled to place the same in the hands of attorneys for collection, and have contracted and agreed to pay such attorneys the attorney’s fees stipulated for in said note, the same being a reasonable attorney’s fee, all to plaintiffs’ damage in the sum of $400, with interest thereon at 10 per cent, per annum from August 20, 1915, and 10 per cent, of said principal and interest as attorney’s fees.
“Wherefore, defendant having duly answered herein, the plaintiffs pray that on final hearing they have judgment for, their debt $400, as the principal of said note, with interest thereon at 10 per cent, per annum from August 20, 1915, and 10 per cent, as attorney’s fees on the principal and interest of said note, for costs of suit, and for such other and further relief, special and general, as they may be entitled to under the facts and as in duty bound will eter pray.”
The trial court sustained a general demurrer to the petition, and, the plaintiffs having declined to amend, the suit was dismissed. The plaintiffs’ have appealed, and have assigned as error the action of the court in sustaining the general demurrer.
It will be noted that the plaintiffs did not allege the amount paid by them for the note, and do not seek to recover such amount. Their cause of action is based upon the note itself, together with allegations that they had purchased the same from the original payee.
In Faires v. Cockerell, 88 Tex. 428, 31 S. W. 190, 639, 28 L. R. A. 528, our Supreme Court held that when a surety or co-obligor pays off or discharges the debt his right to reimbursement or contribution rests upon an implied promise of the principal or co< obligor, and that he cannot maintain an ac *791 tion upon the original note, or other written obligation.
In McCavick v. McBride, 189 S. W. 795, where the surety was compelled to pay the note, he took an assignment from the creditor, but the appellate court held that the case was similar to Faires v. Cockerell, supra, and that the surety’s right of action was not based upon the written note, but upon an implied promise to pay, and was therefore barred by the two-year statute of limitation.
These two cases are relied on by counsel for appellee as sustaining the ruling of the trial court. Attention is called to the fact that in both of these cases the plaintiff’s petition alleged that the plaintiff, as surety, had paid off and discharged the original debt, and it was held that when that result was accomplished no suit could be maintained upon the note, which was mere evidence of the existence of a debt which had been paid, and that the surety’s cause of action was based upon an implied promise to reimburse the surety. In the case at bar the petition does not allege that the sureties had paid off and discharged the note, but it is alleged that they had bought it from the original payee, and that it had been assigned to them. They, in effect, concede that, if they are not entitled to maintain an action upon the note itself, their petition states no cause of action, and the general demurrer was properly sustained. But counsel in their behalf, in effect, assert the proposition that an accommodation surety may purchase and become the owner of the obligation which he’ has signed as surety, and maintain an action thereon against the principal; counsel-for appellee controvert the soundness of that proposition; and that is the sole question involved in this case. <- (
In Lidderdale’s Executors v. Executor of Robinson, 12 Wheat. 594, 6 L. Ed. 740, that court said:
“That a surety who discharges the debt of the principal, shall, in general, succeed to the rights of the creditor, as well direct as incidental, is strongly exemplified in those cases in which the surety is permitted to succeed to those rights, even against bail, who are themselves in many respects regarded as sureties. 2 Vero. 608; 11 Vesey, 22. That such would be the effect of an actual assignment made by the creditor to the surety, or to some third parson for his benefit, no one can doubt. But, in the cases last cited, we find the court of equity lending its aid to compel the creditor to assign the cause of action, and thus *to make an actual substitution of the sureties, so as to perfect their claim at law. This fully affirms the right to succeed to the legal standing of their principal; and after establishing that principle, it is going but one step farther to consider that as done which the surety has a right to have done in his favor, and thus to sustain the substitution without an actual assignment.”
In the petition under consideration, it is not alleged that the plaintiffs paid to the bank the full amount that was due on the note, and it may be that because of the supposed insolvency of the makers, or for some other satisfactory reason, the bank was willing to sell the note for less than its face talue, and that the plaintiffs purchased and acquired title" to it for a sum less than, tjie entire debt referred to therein; and we can see no satisfactory reason why they could not do so. Their purchasing from the creditor the debt against the principal could work no injury to the latter. By the terms of the note, he had obligated himself to pay the amount therein specified, and it is immaterial to him whether Such payment be made to the bank, the original payee, or to any other person who has acquired from the bank the right to collect the debt.
Reversed and remanded.
<g=>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
Addendum
Although not prepared to dissent, I am unwilling, at this time, to give my concurrence in the above opinion and the conclusions announced therein. It is my desire to more maturely consider the question whether there is any real distinction between the purchase of a note by the surety from the payee and the payment of the obligation by him to the payee and the obtaining of a formal assignment of the paper.
Reference
- Full Case Name
- BROKAW Et Al. v. COLLETT
- Cited By
- 3 cases
- Status
- Published