German-American Bank v. Denmire

12 N.W. 237, 58 Iowa 137

Opinion

Seevers, Oh. J.

1. PROMISSORY note : surety when discharged. The note was given to the plaintiff by Brown as collateral security, but the debt it had been given to secure bad been discharged, and the court found the note belonged to Brown, and that he was the proper pers0p 0!1 whom the notice to sue should be served. •Prior to March 23,1881, the plaintiff being in possession of the note, wrote a letter to a justice of the peace, intend ing to inclose the note therein for collection, but, by oversight, failed to do sol The defendant wrote the plaintiff, desiring to pay the note, and was informed it was in the hands of the justice. Thereupon the defendant called on the justice for the purpose of paying it, but did not do so because of the absence of the note. On the same day the defendant, without the permission of Brown or the plaintiff, and without having served any notice on them as provided by statute, caused the justice to commence an action on the note, by issuing the usual notice. On March 24th, 1881, the defendant was advised by counsel he should get leave from Brown to sue, and should serve him with the statutory notice. Such a notice was served on Brown on said day, and at the same time the defendant wrote the justice not to bring suit in his behalf, but said if the plaintiff desires to do so, “ tell them to bring it whenever they like.” When the notice was served on Brown, the note having been mislaid, the plaintiff prepared a bond of indemnity, forwarded the same to the justice, and directed him to bring suit on the lost note, but the justice failed to bring the suit within ten days thereafter.

The question certified by the Circuit Court, upon which it is said to be desirable to haye the opinion of the Supreme Court, is whether, under the circumstances above stated, the defendant is discharged from liability.

It is provided by statute that a surety may, by the service of a written notice on the creditor, require him to bring suit or permit the surety to do so in the creditor’s name, at the surety’s cost. If the creditor refuses or neglects to do so, the surety is discharged. Code, § § 2108, 2109.

The plaintiff, without doubt, used due diligence in directing the justice to bring suit, but we think he is chargeable with the neglect of the justice in failing to obey the directions given. It is not sufficient to direct the institution of a suit, but the creditor must see it is actually commenced within the time fixed by statute. This case is in principle much like First National Bank v. Smith, 25 Iowa, 210.

It is said the defendant, by writing the justice not to bring suit in Ms behalf, prevented the justice from obeying the direction given by the plaintiff. The facts found do not warrant this conclusion. At most it is a mere inference, and it is said the defendant should have informed the justice he had served a notice requiring suit to be brought.

The suit brought by the defendant was without authority of the holder or owner of the note, and .in no way controls the question under consideration. The defendant complied with the statute and could therefore securely wait the action of the creditor. He was not bound to inform the justice what he had done, but the duty was cast on the creditor to comply with the statute, in order to prevent the defendant’s discharge.

Reversed.