Puterbaugh v. Hammond

Citations

• 106 Ill. 257
• 1883 Ill. LEXIS 166

Syllabus

<p>1. Assignee with notice—measure of recovery on a note given as an indemnity. A principal maker of a note gave to his surety thereon a note for $2000, secured by a second mortgage on land, to indemnify him against loss in respect to his suretyship, upon which the surety indorsed, “This note is made to secure me against any and all loss that I may sustain from having signed notes, as security, with said principal, ” and signed his name thereto. The surety, after judgment against him and his principal, indorsed such indemnifying note, before maturity, to a prior mortgagee, who paid to the creditor in the judgment $1600, and the surety paid the balance of the judgment against him and his principal: Held, in a suit by the assignee against the maker of the indemnifying note, that the former, having notice from the memorandum on the note that it was given only to secure the payee for all moneys he might pay for the maker, could only recover the amount paid by the assignor as surety, with the right first to retain the $1600 advanced by him on the judgment, and interest thereon, and hold the residue of the collection to make the assignor whole for the balance of the payment made by him as surety of the maker of the note.</p> <p>2. Principal and surety—assignment by the latter of collateral paper held as indemnity—right of action in the former. In such case the maker of the note so assigned is not damaged by the assignment when he has not paid the note, and can not be damaged thereby, for the reason that on payment of the sum advanced by the assignee, and to the assignor the money paid by him as surety in discharge of the judgment, the note given as indemnity would be satisfied, notwithstanding its assignment.</p>