1. Indorser — Suit at First Term — Insolvency of Principal.
Without approving the ruling of the Court of Civil Appeals herein that suit on all of three notes, secured by vendor's lien and falling due at different dates, must have been brought on maturity of the first, in order to hold liable, without protest, an indorser upon one of the notes maturing at a later date, it is held that their conclusion that the indorser was released was correct, — suit having been brought on neither note at the first term after maturity and the insolvency of the principal, as an excuse for a failure to do so, not being established. (Pp. 36, 37.)
2. Same — Insolvency Defined.
Insolvency of the principal is made to excuse suit against him at the first term on the ground that such suit would result in no good (Revised Statutes, article 1204), and such insolvency is not established when any part of the debt can be made by execution against him, — the term as used in the statute not bearing the technical sense of inability to meet his obligations in the regular course of business. (Pp. 36, 37.)
3. Same — Vendor's Lien.
A principal debtor holding property against which a lien may be enforced to secure the note sued on, is not insolvent, within the meaning of the statute, so as to excuse suit at the first term in order to hold his indorser. (P. 37.)
GAINES, CHIEF JUSTICE.
We think the Court of Civil Appeals reached the correct result in this case, but we are not prepared to concur in the proposition announced in the opinion, that in order to hold the indorser liable upon the last two notes, suit must have been brought to foreclose the lien as to all the notes to the first term of court after the first fell due. But our statute provides: "The assignor, indorser, guarantor, and surety upon any contract, and the drawer of any bill which has been accepted, may be sued without the necessity of previously or at the same time suing the maker, acceptor, or other principal obligor, when he resides beyond the limits of the State, or in such part of the same that he can not be reached by the ordinary process of law, or when his residence is unknown and can not be ascertained by the use of reasonable diligence, or when he is dead, or actually or notoriously insolvent." * * * Rev. Stats., art. 1204. The reason for relieving the indorsee from the necessity of suing the principal debtor, in the excepted cases, was either that a suit against him was not practicable or that it would result in no good. Hence we think that it can not be said that a principal is insolvent within the meaning of that statute when any part of the debt can be made by execution against him. Such is the construction given to similar statutes by other courts. Violett v. Patton, 5 Cranch, 142; Herald v. Scott, 2 Ind. 55. The term insolvency has widely different meanings. When a trader is unable to meet his obligations in the regular course of business, he is technically said to be insolvent. Should we apply that meaning to our statute, the indorsee would, in some cases, be excused from suing the maker of the note although he might have ample property to satisfy an execution against him. It is in a case where the principal has property, but is not in a condition to meet his debts as they fall due, that the necessity is the more urgent to bring suit for the protection of the indorser. It can not be said that a debtor is insolvent within the meaning of our law as to his creditor when he holds property against which the creditor may enforce a lien for the payment of the debt.
The application for the writ of error is refused.
Writ of error refused.