McConnell v. Poor

52 L.R.A. 312, 113 Iowa 133
CourtSupreme Court of Iowa
DecidedJanuary 24, 1901
StatusPublished
Cited by24 cases

This text of 52 L.R.A. 312 (McConnell v. Poor) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McConnell v. Poor, 52 L.R.A. 312, 113 Iowa 133 (iowa 1901).

Opinion

Ladd, J.

1 How far will a surety on a bond be bound by a judgment against his principal-. alone ? There is no little confusion in the language of the courts on this subject, and entire harmony does not.nrevail in the deeisions. This has resulted sometimes in treating such a • judgment, as res adjudicata in an action ■against the surety, rather than passing on the .character of the contract, and simply holding him to its performance. It is a fundamental principle .in jurisprudence that every man shall .have his day in court, and shall be ■' heard in his own defense, and of this right he may not, under the laws and constitution- of this, state be deprived. '■Por this reason, judgment against the principal mgy never '■■foreclose investigation-of the surety’s liability, unjess,- ;by - virtue of the latter’s undertaking,- he bas obligated himself -directly or by-implication to be. bound .thereby. 1 Where, hs the terms of the bond, the surety is to be bound by the liti- • gation to which he is 'not a party,, the -courts decide, not tjiat the judgment, is an adjudication, because of the connection, but. that he must perform the-.contract as it is, written, Bank v. Read, 86 Iowa, 136. The only ground on which sureties on official bonds generally may -be regarded as boixnd by the judgments against their principals, is that the sureties by the terms of their bond .agree, expressly or impliedly, to abide the result of litigation against their principals. This principle is well stated in Stephens v. Shafer, 48 Wis. 54 (3 N. W. Rep., 835) : “The nature of the contract in official bonds is that, of a bond of indemnity to those who may suffer damages by reason of the neglect, fraud, or misconduct of the officer. The bond is made with full knowledge and understanding that in many cases such damages [136]*136must be ascertained, and liquidated by an action against tbe officer, for whose acts the sureties make themselves liable, and the fair construction of the contract of the sureties is-that they will pay all damages so ascertained and liquidated in an action against their principal.” See also, Masser v. Strickland, 17 Am. Dec. 668. This court lield in Charles v. Hoskins, 14 Iowa, 471, that judgment against a sheriff might be received in evidence as fixing, prima facia, the liability of the surety. True, other reasons for so holding than here suggested were assigned. But the doctrine of stare decisis has no application to the reasons given for reaching the conclusion; it is limited to the very point decided. The fallacy in the reasoning of that case, as well as City of Lowell v. Parker, 10 Metc. (Mass.) 309 (43 Am. Dec. 436), on which it was based, lies in supposing that, because the surety may claim the benefit of a judgment in favor of his principal, it follows that he is concluded by one against him. But the surety is discharged by a finding for his principal, not owing to the creditor being estoppel, but for that it establishes the absence of liability of the principal; and, -if he is not liable, the surety cannot be, as his obligation is merely incidental to that of the principal. Besides, the discharge of the principal does not always release the surety. If the former be an infant when executing an instrument, and is discharged on that ground, the surety may yet be held. Bank v. Hall, 106 Iowa, 540. To the point is this language, found in Jackson v. Griswold, 4 Hill, 528: “No doubt * * * a decision against the debt would discharge him [the surety]. That view is not on the ground that he is a party, but because the judgment or decree extinguished the debt; and, the principal thing being destroyed, the incident — the obligation of the surety — is destroyed with it. The effect is the same as a release by the creditor or a payment by the debtor.”

It is sometimes urged that, as the surety has become responsible for the debt or good conduct of the principal, [137]*137judgment establishes the fact on which the surety’s liability rests. A complete answer to this is that the fact has not been established against the surely, because he has been afforded no opportunity to litigate the question. •' Under the civil law, the surety was permitted to defend, and even allowed to prosecute an appeal from the judgment against the principal, though not a party to the judgment. As he was-given his day in court, there appears no serious objection to binding him by the litigation. Much of the confusion in the decisions seems to have resulted from the attempt to apply the rule of the civil law, binding the surety by the-litigation against the principal, without allowing the former-the participation there accorded. We have called attention to the inapplicability of the doctrine of estoppel in such-cases as the appellant, with much propriety, has insisted that, if applicable at all, logically it must extend to bonds in private transactions. The better opinion and the voice of authority is the other way, and a judgment against' the-principal is entitled to no consideration as against the surety, unless by the terms of the contract the surety is to-be bound thereby. Giltinan v. Strong, 64 Pa. St. 244; Fletcher v. Jackson, 23 Vt. 581; Arrington v. Potter, 47 Ala. 714; Douglas v. Rowland, 24 Wend. 34; De Grief v.. Wilson, 30 N. J. Eq. 437; Insurance Co. v. McMillan, 29 Ala. 146; Johnson v. Griswold, 4 Hill, 528; 2 Van Fleet,. Eormer Adjudication, section 567; 2 Black, Judments, section 592. In Fletcher v. Jackson, supra, the court, speaking through Bedfield, J, said: “The general rule undoubtedly is that, in a collateral undertaking by way of guaranty, where a suit is necessary to fix the liability of the-guarantor, the first judgment is prima facie evidence of the-default. But, where the guarantor is liable without suit against the principal, the judgment against him is regarded as strictly inter alios. The jirdgment of eviction, in order-to show a breach of the covenants of warranty, is a case off the first class. The judgment of eviction is a necessary-[138]*138•step in making ojit, fbe,liability,;of .dbe,.kwayra,ntor.; that is, the casus /oeáe7tis,„jiSo,,top,pgene]fgllyí ,1 apprehended, when •any one ixndertakep, to indemnify qgginst the, ..consequences of a suit, or that,.a suit if,,]p¡o;ught ¡shall be effectual, the .judgment ixx eithers cage,, .being, fhe. casus foederis, i,s prima facie evidence of the, liability.,, j.i^pcl^.on. the .other hand, .where the sxxit ma/^in the first instance,,,be. brought directly ■ against the guarantor,, the judgment against the principal, without notice to the guarantor, is. not evidence; and so, too, if the guarantor liaye notice of suit against .the priiicipal, he is not obliged to.coxicern himself in its defense, bixt ■may await a sxxit against himself, ,axxd then insist xipon the right to contest the whole groiipd.” . .

The defendant in the case at bar was not. a party to the ■contract, nor coxxld he have insisted on being made, a party 'to the actioii between Evans, and IVIcConnell thereon. The latter might have brought suif against, both., principal and ■surety on the bond, bpt jhp chose, as was his right,,,to base his action on the contract-alone., Even .if these might have beeix regarded, for spine...purposes,., as qne instrument, t the appellant elected to treat, them as distinct..,anch separate by basing his suit against Evans solely on. the contract, ■ and that against Poor on.tjie bond. The-surety.may require the ■principal.to defend, for this is his duty; but the surety ow,es mo such dpty to tlie principal, and is under,no obligation to ■defend hini.

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Bluebook (online)
52 L.R.A. 312, 113 Iowa 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcconnell-v-poor-iowa-1901.