Coburn v. . Wheelock

34 N.Y. 440

Opinions

This case was correctly disposed of by the court below. The testimony shows, without dispute, that the makers of the note executed it for the accommodation of the corporation, at the request of its president, who, by the by-laws, was its general agent. Their position was, therefore, that of co-sureties for the company, and they were jointly and severally liable to pay the whole amount of the note to the payee, but, as between themselves, each was liable to pay one-fifth of the whole and no more. The former liability was created by the express terms of their contract; the latter is implied by law from the fact of their becoming bound together as sureties.

The counsel for the appellant insists, however, that this general implication of law is repelled by the peculiar circumstances of the present case, and that, as the makers of the note were themselves the only solvent and responsible stockholders of the corporation, their engagement was not one of suretyship, but was, in fact, an undertaking to pay a debt owing by themselves as a corporation, and it is, therefore, to be implied that they intended to be liable therefor in proportion to the amount of stock held by them respectively.

That position is untenable. It assumes that the makers of the note thereby undertook to increase their individual liability as stockholders, in proportion to the amount of stock held by them respectively; and not only that, but also that they assumed a further liability, in like proportion, to the extent of the stock held by Gillett, who was insolvent, and was not a party to the note. They did neither. They signed the note as individuals, and not as stockholders or trustees of the corporation.

The judgment should be affirmed.