Park v. Ensign

The opinion of the court was delivered by Btlrch, J. :

The fact that one of the sureties, as an attorney at law, conducted the defense of his principals contributed nothing to the effect of the judgment as an estoppel against either himself or his cosureties. So far as he was concerned he might have been limited in making such defense by instructions, or he might have been discharged at any stage of the trial, and, in any event, he was not subject, in the practice of his profession, to the hazai’d of being personally bound by a judgment against his clients. The rules under which one not a party to the record may be held to> have submitted his interest in the litigation are thus; summarized in Black on Judgments : •

“But in order that this result may be brought about, it is necessary that three conditions be fulfilled. In the first place, the person so intervening in the 'suit must come in for the assertion or protection of some claim or interest of his own. He must not be a mere intermeddler. . . . Secondly, he must have defended the action avowedly and with notice to the op-* posite party, and not upon a secret understanding. And thirdly, his interposition must have been so complete that he was practically substituted for the defendant in the management and control of the case. That he employed the attorney who appeared for the defendant of record.; that he himself testified as a witness ; that he was present and aided in the conduct of the trial; that he cross-examined the witnesses ; that *54 he lent assistance in money or services to the defendant ; that he joins in taking an appeal; — none of these circumstances alone is sufficient to make him a party to the judgment.” (Yol. 2, §540.)

Since the attorney did not preclude himself from resisting the plaintiff’s suit, much less could it be said that, by accepting professional employment, he staked the fate of his cosureties upon a proceeding to which they were not parties, and which they could not defend.

It is claimed, however, that all the facts presented by the record disclose notice to the sureties of the suit against their principals and an opportunity to appear 'there and urge their defenses, or, at least, an opportunity to move for a consolidation of the actions, and that, failing to avail themselves of these privileges, they are bound by the judgment. In Graves v. Bulkley, 25 Kan. 249, 255 , 37 Am. Rep. 249 , it was said :

‘‘To our mind the better opinion, however, is, that except in cases where, upon the fair construction of the contract, the surety may be held to have undertaken to be responsible for the result of a suit (Kennedy v. Brown, 21 Kan. 171 ), or when he is made privy to the suit by notice, and the opportunity is given him to defend it, a judgment against the principal is not conclusive against the surety.”

But this allusion to privity by notice and opportunity to defend can only refer to a practice which does not obtain in this state. The contract of suretyship imposed no duty upon the sureties to defend their principals, gave the principals no right to represent the sureties, and gave one surety no authority, in any capacity,-to charge his fellows by either his knowledge or his conduct. In McConnell v. Poor, 113 Iowa, 133 , 84 N. W. 968 , 52 L. R. A. 312, it was said:

‘‘Privity, says Greenleaf, denotes mutual or sue *55 cessive relationship to the same right of property. Privity in law involves the right of representation, and certainly the principal, in an action against himself alone, may not represent the surety. As was said in Giltinan v. Strong, supra : ‘ The privity of the surety with his principal is in the contract alone, and not in the action.’ For the acts or omissions of the principal to which the surety pledges himself in his contract he is bound, and it is only in this respect the principal represents the surety.”

There was, therefore, no privity between the principals and sureties with reference to the suit against the principals, and the sureties could not be concluded by its result upon any other notice than process duly served. (Fletcher et al. v. Jackson et al. 23 Vt. 581, 592 , 56 Am. Dec. 98 ; Jackson v. Griswold, 4 Hill [N. Y.] 522.) Nor were the sureties under any obligation to move for a consolidation of the actions after the plaintiff had eliminated the matter originally necessitating the severance. They could abide the status of the case made necessary by the plaintiff’s own pleading. It follows that under the decisions of Graves v. Bulkley, supra, and Fay v. Edmiston, 25 Kan. 439 , the judgment against the-principals was only prima facie evidence against the sureties in the suit against the latter.

Plaintiffs in error insist that in actions against sureties upon promissory notes a judgment against the principals is not even prima facie evidence against the sureties, and have an abundance of well-reasoned authority to sustain them. In the cases last referred to surety contracts are distinguished into but two classes — those in which the surety obligates himself to be responsible for the result of the suit, and those in which he does not, and the decisions were made upon contracts of the latter character. Long time *56 and earnest consideration were given the subject when these opinions were rendered. They have remained the law for twenty-one years, and the question will not now be reexamined or the rule there announced be disturbed.

That which is designated as finding of fact No. 15 is not a finding of fact at all, but a conclusion of law as to the effect of the demurrer in the original action, and as such is erroneous. The defendants below did not decline to litigate ‘ ‘ any question! ’ which might arise upon the lease ; they only declined to litigate a liability which could not in any event fall upon them. As simple sureties upon'the note they could not, in addition, be bound to respond in damages for the conduct of their principals under the lease. They assumed no such obligation, and had the right to be severed from such contest. The demurrer extended no further, and they could not be concluded beyond its terms. They were still at perfect liberty, in the separate action against them, to plead any fact which the principals might plead to defeat the plaintiff’s demand, and their assertion of a claim for damages in favor of the principals for that purpose was nowise inconsistent with their refusal to be implicated in a suit for damages against the principals which was foreign to their undertaking.

Upon the issues made by the pleadings the defendants below were entitled to open and close the case. The execution of the note being admitted, judgment must have gone for the plaintiff had no evidence been introduced, and hence the defendants had the right to proceed first in removing the liability appearing against them on the face of the pleadings. While the question could not be of importance upon the evidence as it finally stood, still, as a matter of practice, *57 the defendants should have been allowed the privilege of the rule upon request.

Since the uncontroverted evidence introduced by the sureties was ■ sufficient to overthrow the prima facie case made by the judgment against their principals, the judgment of the district court is reversed, with direction to grant a new trial.

All the Justices concurring.