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In the following pages it is proposed to consider, what acts done, or omitted to be done, by the creditor, will wholly, or in part, discharge the surety: and what acts a creditor may do, or omit to do, without prejudicing his rights as against the surety.

1. Where the creditor gives time for payment to the principal.

If the creditor, without the consent of the surety, gives time to the principal (h), or enters into any contract with the principal, which in its consequences may have the effect of giving time to him (i), by so doing, the surety is released from his engagement; that is, if time is given as an extension of the original contract (j), by virtue of a subsequent valid contract between the creditor and the principal (k), (not where the creditor is merely inactive (1),) by which the creditor deprives himself by something obligatory of the power of suing the principal (m). And in equity, an act agreed to be done, being considered as done, an agreement to give time will entitle the surety to be discharged (n). And the creditor, if he has by any act assented to the agreement, will be bound by the agreement, although he may not have signed it ().

But in all these cases, time so given must be by

(h) Samuell v. Howarth, 3 Meriv. 156; Rees v. Berrington, 2 Ves. 272; Nisbet v. Smith, 2 Bro. C. C. Jun. 540; Nisbet v. Smith, supra ; 579; Clarke v. Henty, 3 You. & Skip v. Huey, supra. Coll. 187; Rees v. Berrington, 2 (k) Samuell v. Howarth, supra. Ves. Jun. 540; Oakeley v. Pa- (1) See infra. sheller, 10 Bli. N. S. 548; Bows- (m) See the judgment of Gibbs, field v. Turner, 4 Taunt. 456; C. J., in Orme v. Young, Holt, English v. Darley, 2 Bos. & P. N.P. C. 84. 61; S. C. 3 Esp. 49; Skip v. Huey, (n) See Hawkshaw v. Parkins, 2 9 Mod. 438; S. C. 3 Atk. 91; and Swanst. 539; and Blake v. White, see Eyre v. Bartrop, 3 Madd. 221; 1 You. & Coll. 420. and the observations of Lord El- (0) See ex parte Sadler and Jackdon, C., in Hawkshaw v. Parkins, son, 15 Ves. 52 ; Jolly v. Wallis, 2 Swanst. 539.

3 Esp. 228; Butler v. Rhodes, i (i) Bowmaker v. Moore, 7 Price, Esp. 236; and Ball v. Dunster223.

ville, 4 T. R. 313. (j) Combe v. Woolf, 8 Bing.

a contract that is binding, and must therefore be for a sufficient consideration, as a contract without consideration is void (p); thus, where the principal applied to the creditor for indulgence for some months, and the creditor informed him he would give him the time he required ; as no fresh security was taken from the principal, the agreement of the creditor to wait was without consideration, and gratuitous, and as under such a contract the creditor was not precluded from proceeding against the principal, the surety was held not discharged (q)(9).

(p) Philpot v. Briant, 4 Bing. Wilson, 3 Mees & W. Bad717; The Arundel Bank v. Goble, nall v. Samuel, 3 Price, 521. Chit. on Bills, 296; approved in (9) The Arundel Bank v. Goble, Philpot v. Briant ; Brickwood v. Chit on Bills, 296; and see PhilAnnis, 5 Taunt. 614; S. C. 1 pot v. Briant, 4 Bing. 707 ; S. C. Marsh. 250; and see Clarke v. 1 Moo. & P. 754.

208;

(9) In Heath v. Key (1 You. & J. 434), a suit was instituted by a surety in a bond, to be relieved from his liability on the ground that the creditors had without the knowledge or consent of the surety given time to the principal. It appeared that the creditors (the persons claiming under the obligees in the bond), had, on the application of the principal, and with the acquiescence of the plaintiff, agreed to extend the time of payment for the space of six months, beyond the time when the money would have become due under the bond, and it was alleged by the plaintiff, that shortly previous to the expiration of the six months, the principal had applied to, and obtained from, the creditors, without the knowledge of the plaintiff

, a further extension of six months, in respect of this latter indulgence, the plaintiff claimed to be relieved from his liability.

The plaintiff, in support of his case, and with the view of showing that such second enlargement had been granted to the principal although denied in the answer, relied upon a correspondence which had taken place between the parties, and among which, was a letter from a clerk of the creditors to the plaintiff, as follows:-“We beg leave to remind you that the bond we hold of yours for 500l. will fall due on the 27th instant, and that we intend to call upon you on that day for payment of the principal and six months' interest,” and accounted for the delay in not having applied to him before that time, by the embarrassment of their own affairs.

The 27th instant referred to in the clerk's letter, was exactly one year after the date, at which, by the condition, the bond was payable ; thereby showing, according to the plaintiff's statement, that unless the time had been enlarged, as alleged in the plaintiff's bill, the bond could not have been due at the time mentioned in the letter.

Upon the coming in of the creditor's answer, the plaintiff moved, upon the equity confessed in it, for an injunction, to restrain the de

So in a case where a creditor told his principal debtor he would accept a composition, if his other creditors would come into it, and he would give him three weeks time to consult them, during which time, the creditors promised not to take any proceedings: it was held, that the agreement was without consideration, and not binding on the creditor, and therefore the surety was not discharged (r). So if the agreement to give time is conditional, depending upon the performance of some act to be done by the principal in fulfilment of it, which the latter neglects to do, the agreement thereby becomes inoperative, and leaves the parties in the same situation they were in at the time when they entered into it (s) (1).

(r) Brickwood v. Annis, 5 Taunt. & W. 316; and see Badnall v. 614; S. C. 1 Marsh. 250.

Samuel, 3 Price, 521. (s) Vernon v. Turley, 1 Mees.

fendants (the creditors), from proceeding at law against the plaintiff upon the bond; which motion was refused with costs.

In giving judgment, Alexander, C. B., said, “The whole case turns upon the effect of the letter written by a clerk, during the time the defendants were in embarrassed circumstances, and although he had the opportunity, the plaintiff has not asked whether that letter was seen by either of the defendants before it was transmitted to him. This is not in my opinion a case in which the Court should interfere.” And Hullock, B., said, “ I am of the same opinion, but confess I feel some difficulty from the letter which I cannot clearly reconcile with the defendant's statement. The clerk however might have mistaken the date of the bond, or the year, but at all events the inference to be drawn from the letter, is not sufficiently strong, under the circumstances, when opposed by the unequivocal denial of the defendants, to warrant the interposition of the Court.”

It must not be inferred from this case, that it is not necessary that there should be a consideration for giving time so as to discharge the surety, and I apprehend that even if the creditors had themselves admitted that they had given time to the principal, still it would have been open to them to show, that there was not any consideration for the agreement to give time: the question in Heath v. Key having been, whether the letter of the clerk amounted to an admission, or evidence, against the creditors, that time had been given, and no question as to the want of consideration having been raised.

(1) So an agreement by the creditor to take from the principal, less than the sum that is due to him, accompanied with a promise to

The surety, where time has been given, is held to be discharged for these reasons; that it is his right, upon payment of the debt, to go into a court of equity to demand to sue in the name of the creditor, and if the creditor has given time to the principal, he has put it out of the power of the surety to use the creditor's name with effect, and to enforce immediate payment from the principal, which the

give the principal time for payment of the residue, is nudum pactum, and not binding for want of a consideration (Pinnels case, 5 Rep. 117; Fitch v. Sutton, 5 East, 230; and see Steinman v. Magnus, 11 East, 390 ; and the judgment of Holroyd, J., in Lewis v. Jones, 4 B. & Cress. 506; and see Cumber v. Wane, 1 Stra. 426; Heathcote v. Crookshanks, 2 T. R. 24; and Badnall v. Samuel, 3 Price, 521); for the creditor is in no better situation after the agreement was made, than he was before. But if, at the time of the agreement, the debt is not then due to the creditor, and the creditor agrees to take part at an earlier day, and to give the principal time to pay the remainder (Pinnel's case, supra); or if, when the debt is due, the creditor agrees to accept the security of a third party, for the payment of the debt, or of any part of it (Steinman v. Magnus, supra ; Lewis v. Jones, supra : and see Bradley v. Gregory, 2 Camp. 383; Soward v. Palmer, 2 J. B. Moo. 274); or, to accept a warrant of attorney from the principal, when the debt was originally secured to the creditor, by the bond of the principal and surety, and which therefore would give the creditor a debt of a higher nature (see Davey v. Prendergrass, 5 B. & Ad. 187); or, where when the terms of the agreement are, that the princi. pal should assign over certain of his effects to a trustee, in part payment of the debt (see Heathcote v. Crookshanks, 2 T. R. 24): in these cases, there is a sufficient consideration to sustain a promise of forbearance by the creditor; provided the agreement is executed on the part of the principal (see Cranley v. Hillary, 2 M. & Sel. 120; Bradley v. Gregory, 2 Camp. 383); that is, if all has been done by the principal on his part that he engaged to do.

So where the creditor (being one of several creditors) agrees to give the principal time, provided the rest of the creditors would do the same, is a sufficient consideration to support the agreement if subscribed by the other creditors; for the consideration to each creditor is the forbearance of the rest, each party giving the rest reason to believe, that in consequence of such engagement his demand will not be enforced (Boothbey v. Sowden, 3 Camp. 174; Good v. Cheesman, 2 B. & Ad. 328 ; and see Cooling v. Noyes, 6 T. R. 263; Heathcote v. Crookshanks, supra). So where the creditor agrees with the principal to receive interest on his debt by anticipation for a limited period, and to grant the principal time for payment of the principal money, there is a sufficient consideration to support the agreement (Blake v. White, 1 You. & Coll. 420).

surety has a right to require him to do (t); and by postponement, the remedy of the surety against the principal may become more uncertain (u).

And the surety will be held discharged, although it be proved that time was given, in consequence of the principal's inability to pay (v), or that no injury had accrued (w), or even that it was manifestly for the surety's advantage (r) (2): the surety himself being the proper judge of, and he alone has the right to determine, what is or is not for his benefit; thus if one be surety by bond for the debt of another payable at a given day, and the obligee take promissory notes payable at a subsequent period (y), or a bond conditioned for paying the same debt by instalments (), he thereby discharges the surety.

Upon the above principle, if a guarantee be given (t) Samuell v. Howarth, 3 Me- vation of Richards, C. B., in riv. 272; Melvill v. Glendining, 7 Bowmaker v. Moore, 7 Price, 223, Taunt. 126; and see the obser- (2) See Boultbee v. Stubbs, 18 vations of Lord Eldon, C., in The Ves. 20; ex parte Glendinning, Bank of Ireland v. Beresford, 6 Buck, 517; Samuell v. Howarth, Dow, 233; of Gibbs, C. J., in

supra; ex parte Wilson, 11 Ves. Orme v. Young, Holt, N. P. C. 410; and the observations of Sir 84; and of Sir John Leach, M. R., Anthony Hart, L. C., in Lord in Oakeley v. Pasheller, 10 Bli. Harberton v. Bennett, 1 Beat. 386 ; N. S. 576.in n.

of Lord Langdale, M. R., in Cal(u) See the judgment of Tindal, vert v. The London Dock Company, C. J., in Browne v. Carr, 7 Bing. 2 Keen. 638; and of Lord Eldon, 508; and see Combe y. Woolf, 8 C., in ex parte Gifford, 6 Ves. Bing. 156; and the observations 805. of Sir John Leach, M. R., in (y) Rees v. Berrington, 2 Ves. Oakeley v. Pasheller, supra. Jun. 540 ; Nisbet v. Smith, 2 Bro.

(v) Samuell v. Howarth, 3 Meriv. C. C. 579; Skip v. Huey, 3 Atk. 272.

91; S. C. 9 Mod. 438. (w) See Whitaker v. Hall, 8 () Clarke v. Henty, 3 You. & Dowl. & Ry. 22; and the obser- Coll. 187.

(2) In ex parte Gifford, Lord Eldon observes—“Where it is stated in some cases, that it is for the interest of the surety that the compromise should be made, the answer is, those for whose benefit it is alleged to be made, are the proper judges whether it is for their benefit, and it is not to be forced upon them.” And again in ex parte Glendinning, “It may be said, the surety is not injured by the creditor's arrangement with the debtor, and in many cases the compromise may happen to be extremely advantageous to him: but this is no answer to a surety, who stands upon his contract.”

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