the debtor in this way, is equivalent to extending the time of payment until the note falls due. And an agreement to that effect will be presumed ;' so the taking of a new note by way of conditional payınent of an existing note, and the receipt of interest in advance upon it, amount to an extension of time and discharges the surety."

By entering into a contract with the maker of a note, or with the acceptor of a bill, extending the time of payment, the holder tacitly engages to give the same credit to all the parties who may be entitled to a remedy over against the maker or acceptor. To give his contract legitimate effect is to arrest the remedy of all the parties on the bill or note, and thus convert the contract of each into a different undertaking. The owner of the note holds in his hands several distinct contracts for the payment of the sum specified, and a payment by the party ultimately liable is a release of them all; and hence the indorser is said to be in the nature of a surety. So that when the holder enters into an agreement with the principal, founded on a good consideration, giving him time for payment, the contract operates as a release of the sureties. But to have this

1 Beard v. Root, 4 Hun, 356; Pomeroy v. Tanner, 70 N. Y., 547; Hubbard v. Gurney, 64 N. Y., 460: Bangs v. Mosher, 23 Barb., 478; Place v. McIlvain, 38 N. Y., 96; see Taylor v. Allen, 36 Barb., 294.

* First Nat. Bank v. Leavitt, 65 Mo., 562.

8 Story on Notes, § 414; Chitty on Bills, 408-410.

An agreement made by the holder of a bill, with a stranger, to give the acceptor time, the stranger agreeing to see it paid, and time being given, does not discharge the drawer. Frazer v. Jordan, 92 Eng. Com. Law, 303.

* Bailey v. Baldwin, 7 Wend., 290; Bank of Utica v. Ives, 17 Wend., 501; Gould v. Robson, 8 East R., 576; Philpot v. Briant, 4 Bing. R., 717. The acceptor died before the bill became due, and his executrix asked for time, and promised, verbally, in that case, to pay the bill out of her own income, and time was given without the knowledge or consent of the drawer, who was the defendant. BEST, C. J.: A creditor, by giving further time for payment, undertakes that he will not, during the time given, receive the debt from any surety of the debtor, for the instant that a surety paid the debt he would have a right to recover it against his principal. The creditor, therefore, by receiving his debt from the surety, would indirectly deprive the debtor of the advantage that he had stipulated to give him. If the creditor had received from his debtor a consideration for the engagement to give the stipulated delay of payment of the debt, it would be injustice to him to force him to pay it to any one before the day given. If, to prevent the surety from suing the principal, the creditor refuses to receive the debt from the surety until the time given to the debtor for payment, by the new agreement, the surety must be altogether discharged; otherwise he might be in a situation worse than he was in by his contract

effect there must be a valid agreement between the creditor and principal debtor,' entered into without the knowledge of the surety, founded upon a good consideration,' for an extension of time for a definite period,' whereby the creditor is prevented from proceeding against the debtor until the expiration of such time. The agreement for an extension of time must be made with the principal debtor; if it be made with a third

of suretyship. If he be allowed to pay the debt at the time when he undertook that it should be paid, the principal debtor might have the means of repaying him. Before the expiration of the extended period of payment, the principal debtor might have become insolvent. A creditor, by giving time to the principal debtor, in equity, destroys the obligation of the sureties; and a court of equity will grant an injunction to restrain a creditor, who has given further time to the principal, from bringing an action against the surety. This equitable doctrine courts of law have applied to cases arising on bills of exchange. The acceptor of a bill of exchange is considered as the principal debtor; all the other parties to the bill are sureties that the acceptor shall pay the bill, if duly presented to him on the day it becomes due, and if he does not then take it up, that they, on receiving notice of its non-payment, will pay it to the holder. If the holder gives the acceptor further time for payment, without the consent of the drawer or indorsers, he discharges them from all the liability that they contracted by becoming parties to the bill; but delay in suing the acceptor will not discharge the drawers or indorsers, because such delay does not prevent them from doing what, on receiving notice of non-payment by the acceptor, they ought to do, namely, pay the bill themselves. The time of payment must be given by a contract that is binding on the holder of the bill; a contract, without consideration, is not binding upon him; the delay in suing is, under such a contract, gratuitous; notwithstanding such contract, he may proceed against the acceptor when he pleases, or receive the amount of the bill from the drawer or indorsers. As the drawer and indorsers are not prevented from taking up the bill by such delay, their liability is not discharged by it; to hold them discharged under such circumstances, would be to absolve them from their engagements without any reason for so doing."

1 Lawrence v. Johnson, 64 Ill., 351.

2 Brown v. Prophet, 53 Miss., 649; Remsen v. Graves, 41 N. Y., 471; Rich v. Isham, 4 Abb. App Dec., 37; Wright v. Storrs, 32 N. Y., 691; Berry v. Pullen, 69 Me., 101; Adams v. Way, 32 Conn., 160.

3 Hogshead v. Williams, 55 Ind., 145; Oberndorf v. Union Bank of Baltimore, 31 Md., 126; S. C., 1 Am. R., 31; Rose v. Williams, 5 Kans., 483; Cranford v. Gaulden, 33 Ga., 173; Roberts v. Stewart, 31 Miss., 664; Galbraith v. Fullerton, 53 Ill., 126; Buckalew v. Smith, 44 Ala., 638; Davis v. Graham, 29 Iowa, 511; Nichols v. Douglas, 8 Mo., 49; Farmers' Bank v. Reynolds, 13 Ohio, 84.

4 Barry v. Pullen, 67 Me., 101; Wynne v. Colorado Spr. Co., 3 Col., 155; Deal v. Cochrane, 66 N. C., 269.

5 McKeckuie v. Ward, 58 N. Y., 541; McCune v. Belt, 38 Mo., 281; Wright v. Watt, 52 Miss., 634; Hosea v. Rowley, 57 Mo., 357; Byers v Hussey, 4 Col., 515.

party it will not affect the sureties' rights,' thus one merely employed to collect a note cannot extend the time of payment, and thus discharge the sureties thereon."

8771. But a contract not *based upon a valid con- *568 sideration, does not have the effect of a release; for delay under such a contract is, in the eye of the law, merely gratuitous. There must be a good consideration to support the agreement; thus, a note given for the payment of interest in advance is a good consideration for an extension of time; or the payment of interest in advance; so payment of interest to date and a written agreement indorsed on the note to pay interest on the same, has been held to be a good consideration for an agreement for forbearance; so with an agreement to pay interest at an increased rate; or part payment of the debt before it is due; or the pledging of exempt property for the payment of the debt; or giving a note for a specific sum of money will be a sufficient consideration for an agreement for forbearance.

It has been held there must be, not only a sufficient, but a new consideration to support the agreement for extension of time, which will discharge the surety." Hence an agreement based upon a consideration which the law would enforce, without snch agreement, will not be sufficient to support such agreement. Thus, an agreement to pay interest during forbearance;12 or a part payment of the debt after it had all

1 Frazer v. Jordan, 8 El. & Bl., 303. Lawrence v. Johnson, 64 Ill., 351.

3 Philpot v. Briant, 4 Bing. R., 717; McLemore v. Powell, 12 Wheat. R., 554: 1 Bos. & Pull.. 652; Walsh v. Bailie, 10 John. R., 180.

Robinson v. Miller, 2 Bush (Ky.), 179; see Gahn v. Numcewicz, 11 Wend., 312.

'Limerock Bank v. Mallett, 34 Me., 547; Hunt v. Postlewait, 28 Iowa, 427; Dunham v. Downer, 31 Vt., 249; Dubaisson v. Folkes, 30 Miss., 342; Randolph v. Fleming, 59 Ga., 776; but see Hosea v. Biglow, 57 Mo., 357. Chute v. Pattee, 37 Me., 102.

Huff v. Cole, 45 Ind., 300; but see Leeper v. McGuire, 57 Mo., 360.

8 Austin v. Dorwin, 21 Vt., 38; Newsam v. Finch, 25 Barb., 175.

9

Semple v. Atkinson, 64 Mo., 504.

10 McComb v. Kittridge, 14 Ohio, 348.

11 Abel v. Alexander, 45 Ind., 523; S. C., 15 Am. R., 270; Menifee v. Clark, 35 Ind. 304; Clark Co. v. Covington, 26 Miss., 470.

12

Reynolds v. Ward, 5 Wend., 501; but see Fowler v. Brooks, 13 N. H., 240.

become due and payable,' will not support an agreement for an extension of time, and thereby discharge the surety. The question whether an agreement for forbearance, based upon an usurious consideration, is such a valid agreement as will discharge the surety has given rise to conflicting decisions; but the weight of authority is undoubtedly to the effect that, if such usurious consideration be actually paid, it will be a suffi cient consideration to support the agreement, and the surety will be discharged.' The authorities are, however, generally united in holding that an executory agreement to pay an usurious consideration will not operate to discharge the surety."

The holder, says the court, has the dominion of the bill at the time; he may make what arrangements he pleases with

the acceptor; but he does that at his peril; and if he 569* *thereby alter the situation of any other person on the

bill to the prejudice of that person, he cannot afterwards proceed against him. As to the taking part payment, no person can object to it, because it is in aid of all the others who are liable upon the bill; but here the holder did something more: he took a new bill from the acceptor, and was to keep the original bill until the other was paid. This is an agreement that in the meantime the original bill should not be enforced such is at least the effect of the agreement; and therefore I think time was given. The agreement for forbearance

1 Roberts v. Stewart, 31 Miss., 644. See Discharge of Indorser.

301;

Brown v. Prophet, 53 Miss., 649; Wittmer v. Ellison, 72 I., Danforth v. Semple, 73 Ill., 170; Cross v. Ward, 30 Ind., 378; Abel v. Alexander, 45 id., 523; Camp v. Howell, 37 Ga., 312; Draper v. Trescott, 29 Barb., 401; Billington v. Waggoner, 33 N. Y., 31; La Farge v. Herter, 9 id., 241; Nat. Bank of Gloversville v. Place, 15 Hun, 564; Church v. Maloy, 70 N. Y., 63; Armiştead v. Ward, 2 P. & H. (Va.), 504; Patton v. Shanklin, 14 B. Mon., 15; Kyle v. Bostick, 10 Ala., 589; Limerock Bank v. Mallett, 34 Me., 547; Wright v. Bartlett, 43 N. H., 548; Coville v. Allen, 13 Iowa, 289; Contra, Meiswinkle v. Jung, 30 Wis., 361; Howell v. Sevier, 1 Lea (Tenn.), 360; S. C., 27 Am. R., 771.

4 Burgess v. Dewey, 33 Vt., 618; Bank of Middlebury v. Bingham, id., 621; Payne v. Powell, 14 Tex., 600; Patton v. Shanklin, 14 B. Mon., 17; Smith v. Hyde, 31 Vt., 618: Gilder v. Jetter, 11 Ala., 256; La Farge v. Herter, 9 N. Y., 241; Billington v. Waggoner, 33 id., 31; Nat. Bank of Gloversville v. Place, 15 Hun, 564.

5 Gould v. Robson, supra; Hill v. Bostick, 10 Yerg., 410; 5 Hill, 463. The payee and first indorser of a note, at its maturity gave his own note in renewal, indorsed and secured by a pledge of stock, to obtain an extension of time, and the acceptance of the new security extending the

need not be in any particular form of words nor in express language, it may be inferred or implied from acts, declarations and circumstances, and in such case it is for the jury to determine what the actual intent of the parties was.' The agreement must be absolute, for if it be based upon a condition that is uncomplied with it is not binding. So an offer that is unaccepted is ineffectual, as it gives no rights as against the other party. The agreement for the extension of time must not be indefinite, but yet the specific time need not be stated; if the agreement be actually entered into and the time be not left entirely indefinite so that no agreement can be said to have been made, it will discharge the surety; it does not matter what the length of time agreed upon may be, if the creditor's right of action be suspended for a single day, it is a violation of the sureties' rights and will operate to discharge him.*

8772. The agreement to give time has the same effect, whether made before or after the drawer or indorser has been charged with notice of non-payment. But most of the cases presenting the question, have been decided in reference to contracts extending the time of payment made after the bill or note became due. It is manifest, however, that the principle

time of payment was held to discharge the second indorser. Kelty v. Jenkins, 1 Hilt., 73; Platt v. Stark, 2 Hilt., 399. Giving time to one of two sureties does not discharge the other; but quere if it does not, where, as here, time is given to the maker, the other being an indorser of the note. Draper v. Wild, 13 Gray, 580.

323.

521.

1 Brooks v. Wright, 13 Allen, 72; ante, 567.

2 Hausberger v. Geiger, 3 Gratt., 144; Norris v. Cumming, 2 Rand.,

Hewitt v. Goodrich, 2 Car. & P., 468; Badnall v. Samuel, 3 Price,

4 Place v. McIlvain, 38 N. Y., 99; Bangs v. Strong, 7 Hill, 250. 'Hubbly v. Brown, 16 John. R., 70, presented a case where the agree ment was made after the maturity of the note. Myers v. Wells, was the same, 5 Hill, 463; Smith v. Beckett, 13 East, 186. In this case the note was drawn payable on demand, and indorsed by the defendant for the maker's accommodation; and the maker placed it in the hands of the plaintiff, his banker, as security for advances, and at the end of six months the plaintiff renewed his advances on the note without the knowledge or consent of the defendant, and the defendant was held discharged. See Story on Notes, § 413.

See the authorities above cited; 16 John. R., 70; 9 Cowen, 190; Noble v. his creditors, 19 Martin, 9; Bank of United States v. Hatch, 6 Peters, 250; 7 Pick., 291; Mottram v. Mills, 2 Sand. R., 189.