Morgan v. Francklyn

55 How. Pr. 244

• Court: New York Supreme Court
• Decided: January 15, 1878
• Status: Published

Opinion

Barrett, J.

(1) Hoyt’s guaranty was to secure an “ ascertained ” balance. Such balance has not yet been ascertained nor can it be in this suit. The reason is obvious. The Hnited States court in bankruptcy has jurisdiction, and is now administering the estate, of The Atlantic De Laine Company. There is no charge of fraud or negligence against the bankruptcy trustee, and it is only when “ all the property ” of this company shall “ have been applied in payment of its debts ” that, within the terms of the guaranty, the balance becomes “ ascertained.”

(2) But were the balance ascertained, the action would not lie. Hoyt was, in no just sense, a principal. The only principal was The Atlantic De Laine Company. Hoyt, Sprague & Co. were sureties. If the company had furnished the firm with security, the familiar rule contended for by the plaintiffs would be applicable. But a private arrangement as to the liability of the swrethes between themsel/oes comes neither within the rule nor the principle upon which it rests. 1STotliing was set apart by the principal (nor even by Hoyt) upon which a trust could be impressed; and clearly Hoyt’s agreement with his firm was not intended to provide for the payment or protection of the plaintiffs’ claim nor to increase the security.

(3) So far as the complaint rests upon the judgment against Hoyt, Spragues & Co., and the execution returned unsatisfied, the cause of action is vested in the receiver.

There must be judgment for the defendants, with costs.