Hubbard v. Harrison

38 Ind. 323
CourtIndiana Supreme Court
DecidedNovember 15, 1871
StatusPublished
Cited by20 cases

This text of 38 Ind. 323 (Hubbard v. Harrison) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hubbard v. Harrison, 38 Ind. 323 (Ind. 1871).

Opinion

Downey, J.

The appellees sued John W. Canan and the appellants, who are executors of the will of George W. Clippinger, deceased, on two promissory notes made by Canan to Clippinger, dated November 20th, 1869, one at sixty and the other at ninety days, payable at Harrison’s Bank, with interest and attorneys’ fees, if suit should be instituted on them, and which notes were indorsed by Clippinger to the appellees. A separate action had been commenced on each note, but as they were consolidated by agreement, and a [326]*326new complaint filed on both notes, no further notice need be taken of this circumstance.

Canan made default. The executors of Clippinger answered, first, the general denial; second, that their testator indorsed the notes for the accommodation of Canan, as renewals of certain other promissory notes of Canan, before that time held by the plaintiffs; that at the time said notes were so indorsed by the deceased to the plaintiffs, they held a mortgage from Canan as security for the payment of said other promissory notes and any renewals thereof; that the plaintiffs agreed with their testator, before or at the time of said indorsement, that if he would so indorse said notes, they would hold said mortgage, and it should stand as an indemnity to him against liability as such indorser; that he indorsed said notes on the faith of said agreement, and in consideration thereof; that said mortgage has, by the wilful and gross neglect and misfeasance of the plaintiffs, without the fault or privity of their testator, or of them, ceased to be of any value as a security in the hands of the plaintiffs, or as an indemnity to the testator, or to them; that said Canan has become insolvent; by reason of which their testator and they are discharged, etc.; third, that said notes were made by Canan as renewals of certain promissory notes held by the plaintiffs for money loaned by them to Canan on his individual credit; that the plaintiffs held a mortgage of personal property from Canan, as security for the payment of said last named notes and any renewals thereof, the mortgage bearing date, and having been executed and acknowledged on the 2d day of January, 1869, and has ever since remained in the possession of the plaintiffs, the property mentioned in the mortgage having been left by the plaintiffs in the possession of Canan; that the mortgage was recorded January 15th, 1869, and that a copy of it is filed with the complaint; that on the 20th day of November, 1869, plaintiffs and Canan procured and induced their testator to indorse said notes in suit, for the accommodation of Canan, by means of him,, said Canan, and [327]*327in consideration that their testator would so indorse said notes, with the knowledge and consent of the plaintiffs, entering upon the back of said mortgage a memorandum in writing, as follows:

“I hereby acknowledge that George W. Clippinger has this day become an accommodation indorser for me upon two notes for three thousand dollars each, dated November 20th, 1869, due respectively sixty and ninety days after date, given by me to A. and J. C. S. Harrison, in renewal of six thousand dollars of the original debt secured' by this mortgage. Dated November 20th, 1869.

“J. W. Canan.”

And by-means of them, the said plaintiffs, in consideration of such indorsements, entering upon the back of said mortgage a memorandum in writing, as follows:

“We hereby acknowledge that this mortgage stands as ah indemnity, so far as the same is now a subsisting security, to George W. Clippinger, for his indorsement to us of two notes made by J. W. Canan for three thousand dollars each, dated November 20th, 1869, due respectively sixty and ninety days after date, subject, however, to any priority, if such there be in law, to any other parties who may have become bound on any ¡renewals of any part of the original debt secured by said mortgage, or to the ratable interest, if any, of such parties in said mortgage. Dated this 20th of November, 1869. A. & J. C. S. Harrison.”

That the plaintiffs did, then and there, with an intent to defraud and take an undue advantage of said testator, withhold from him their knowledge of the fact that they had not had said mortgage recorded in the recorder’s office of Marion county, Indiana, within ten days after it had been executed to them by said Canan, and did then and there permit their testator to rest in and act upon the belief that said mortgage would be an indemnity to him in any event whatever against the liability he was about to assume upon the faith and credit thereof, and upon the faith and credit of the memorandum which they had entered upon the back thereof, and [328]*328permitted said Canan to enter upon the back thereof, as security to them on the notes in renewal of those, the payment of which was secured by said mortgage; that the notes sued on in this action are the notes mentioned in the said memorandums so entered upon the back of said mortgage; and' that their testator so indorsed said notes after said memorandums had been so entered upon the back of said mortgage, and without any other consideration than that the indemnity thus provided was to be an indemnity to him so far as the same was to them then a subsisting security, subject to any priority or ratable interest in such mortgage to such parties as were mentioned in said memorandum, and upon . no other conditions and to no further extent; that after said indorsement Canan paid to the plaintiffs the sum of one hundred and fifty-six dollars, in consideration of the extension of credit given to him by the plaintiffs on the receipt of said two notes; that by reason of the premises, the plaintiffs became the holders of said mortgage as trustees of a pledge or fund for the indemnity of their testator and such other parties as were referred to in said memorandums; and that the notes, due in sixty days, matured, and Canan did not and would not pay the same, their testator believing, and as they aver the facts to be, that said mortgage was an original ,, security in the hands of the plaintiffs for the debt of Canan, more than sufficient to pay said two notes mentioned in the complaint, as well as the balance of the debt for which the plaintiffs held said mortgage, and that the plaintiffs were at liberty to resort, and could resort, to the same, and make the same available as assets of said Canan, as well for the payment of said notes as for the payment of the other debts secured by said mortgage, and for the indemnity of the testator, as well as for the indemnity of the other persons whose claims under the mortgage were adverse to the claims of the testator,'and that the plaintiffs had every means, of making their claim effectual under said mortgage, and so making the same enure to the benefit of the testator as an indemnity, so far as the same was a subsisting security to them, [329]*329and that the plaintiffs held the same as a pledge, or

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Bluebook (online)
38 Ind. 323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hubbard-v-harrison-ind-1871.