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3. Where the creditor gives time to, or releases, a co-surety.
As the discharge of the surety, has not the effect of a discharge of the principal (w), so neither will the discharge of one co-surety, have the effect of discharging another co-surety. The creditor may release, or compound with, or give time to, one cosurety, without prejudicing his right to proceed against the others: but he cannot recover from the other co-sureties more than the proportion they would have paid, supposing the co-surety released had contributed his share (x).
To this rule, however, there seems to be, at law, this exception, in relation to proceedings instituted by the creditor against a surety, for the recovery of the debt, which he and others are jointly and severally liable to pay; namely, that whatever operates to discharge one of two or more joint, or joint and several, debtors, is a discharge of all: thus, it was lately decided, in the case of Nicholson v. Revill (y), that a creditor who had taken the joint and several promissory note of his principal, and of two other persons as his sureties, as a security for the debt owing to the creditor, and had before the note became due, in consequence of some payment made to him by one of the sureties in satisfaction of the creditor's claim against such surety upon the note, discharged such surety, and erased his name from the note, the creditor had thereby lost his remedy against the co-surety (9).
(w) See ante, p. 176.
(x) Ex parte Gifford, 6 Ves. 805; Stirling v. Forrester, 3 Bli. 575; and see Dunn v. Slee, 1 J. B.
Moo. 2; S. C. Holt, N. P. C. 399.
(y) 4 Ad. & Ell. 675.
(9) In the judgment delivered by Lord Denman, C. J., in the case of Nicholson v. Revill, (supra), some doubt is thrown out by him upon the soundness of Lord Eldon's decision in the case of ex parte Gifford (6 Ves. 805); which decision, the learned Chief Justice thinks, militates against the rule of law above adverted to.
When a co-surety has, by the conduct of the creditor, been released from his liability (and the same
The circumstances in ex parte Gifford were as follow:-Marshall and Haigh, creditors of Bedford, upon a promissory note, requiring further security, Bedford, Niblock and Burgess, and Baylis, joined in a promissory note as a collateral security. Niblock and Burgess, and Bedford, became bankrupts. Marshall and Haigh proved the whole debt under each commission, and afterwards brought an action against Baylis, who entered into a composition with his creditors, under which, Marshall and Haigh received a dividend of four shillings in the pound. The dividend paid by the estate of Bedford was four shillings in the pound, and that by the estate of Niblock and Burgess, five shillings. A petition was then presented, praying that the proof against the estate of Niblock and Burgess might be expunged, which was dismissed.
Now it is established by a variety of cases and authorities, that if two are bound jointly (Com. Dig. Pleader, 2 W. 30), or jointly and severally (Com. Dig. Pleader, 2 W. 30; Hammon v. Roll, March, 202; Co. Litt. 232 a, n. (1); the judgment in Clayton v. Kynaston, 2 Salk. 573; the observation of Bailey, J., in Collins v. Prosser, 1 B. & Cress. 682; S. C. 3 Dowl. & Ry. 112; and see Cocks v. Nash, 9 Bing. 341; Garrett v. Jull, Selw. N. P. 377, 7th ed.), for the payment of an entire sum of money, a release to one may be pleaded at law in bar by both, and Lord Hardwicke lays it down, that such a release operates as a discharge in equity, as well as at law (Bower v. Swadlin, 1 Atk. 294); unless, therefore, this general rule is relaxed in cases arising out of the relation of principal and surety, the case of ex parte Gifford must have been determined by Lord Eldon upon this circumstance (from which only it is distinguishable from the case of Nicholson v. Revill), namely, that the composition entered into with Baylis was subsequent to the proof made by Marshall and Haigh under the commission of Niblock and Burgess. This distinction was taken by Lord Harcourt, in ex parte Smith (1 P. Wms. 237), in a case where the obligee in a bond, had released one of two principal debtors: the case of ex parte Smith does not, however, appear to have been referred to in ex parte Gifford. In delivering the judgment of the Court, in the case of Nicholson v. Revill, Lord Denman (though he admitted that the authority of Lord Eldon, as expressed in ex parte Gifford, clashed with the judgment in Nicholson v. Revill) expressly stated, that the Court, in pronouncing judgment in favour of the defendant the co-surety, did not proceed on any doctrine as to the relation of principal and surety, but gave its judgment on the principle laid down by L. C. J. Eyre, in Cheetham v. Ward (1 Bos. & P. 630), that where a personal action is once suspended, by the voluntary act of the party entitled to it, it is for ever gone and discharged.
Upon this last principle the Court of Common Pleas determined, that where the obligee in a joint and several bond, made one of two obligors with others his executors, the action on the bond as to both obligors was discharged: there being but one duty extending to both obligors, and a discharge of one, or satisfaction made by one, or the suspension of the right of action as to one, released and discharged the action as to both. Now, in equity, a debt due from an executor
acts are held to discharge the remaining sureties, quoad the share which such co-surety would otherwise have been held to contribute, as would, if done to the principal, have discharged the surety), (z) the remaining co-surety, or co-sureties, will, when it is ascertained what each of the co-sureties would, if no such release had been made, have contributed towards the debt of his principal, (for the co-sureties may be responsible in different amounts), (a) be held exonerated as to so much of the original debt as the co-surety discharged would (if he had not been discharged) have been compelled to pay; thus, if there are four sureties, each of them being answerable as amongst themselves for the debt of his principal in equal proportions, and the creditor, without the consent of one of the co-sureties, gives time to, or compounds with, the remaining three, the cosurety undischarged, being originally liable to make good only one-fourth part of the debt of his principal, will, upon payment of a sum equivalent to that proportion of the debt, be relieved from his responsibility as surety, and will be entitled to have credit given to him for all sums of money received, or receivable, in respect of the debt for which the cosurety became answerable, until the whole sum paid by the co-surety, has been repaid him (b).
(z) See ante, p. 167, et seq. (a) See ante, p. 149.
(b) Stirling v. Forrester, 3 Bli. 575; and see ex parte Gifford,
6 Ves. 805; Mayhew v. Crickett, 2 Swanst. 185; S. C. 1 Wils. C.C., 418.
to his testator, is assets in the hands of the executor for payment of the testator's debts, and as it would seem, for payment also of his legacies; for though the action at law is gone, the duty remains; and Lord Eldon, in the case decided by him in Bankruptcy, may possibly have considered, that cases arising out of the relation of principal and surety are not within the rule of law as laid down in the case of Nicholson v. Revill; and that until Niblock and Burgess had paid eight shillings in the pound upon the debt, for the payment of which they, together with Baylis, had become sureties, they had no equitable claim to be relieved from their liability. Such seems to have been the view taken by Baron Parke of Lord Eldon's decision, from the observation made by the former learned judge, in Smith v. Winter, 4 Mees. & W. p. 465.
Upon the above principle, if a sheriff take a replevin bond from one surety only, and is sued by the person making cognizance, for having taken insufficient pledges, and the party distraining recover damages and costs in such action, the sheriff will not be entitled to recover against the surety on the bond, more than a moiety of the sum composed of the rent which the party distraining established in the replevin suit to be due, and the costs of that replevin suit; for if the sheriff had, as he ought to have done according to the statute of 11 Geo. 2, c. 19, taken a bond with two sureties, the surety who executed the bond would have been entitled to contribution from his co-surety, and consequently would have paid but a moiety of the debt; and as the single surety is, by the sheriff's conduct, deprived of his right of calling upon his co-surety, the surety executing ought only to pay one-half (c).
If A. and B. are sureties for C., and D. give A. an indemnity, and A. pays the whole debt for which he together with B. became surety, and afterwards, without the concurrence of D., releases B. from his liability, A. will not be allowed to recover from D. under the indemnity, more than a moiety of the money paid by him; for as between A. and D., A. is the principal, and D. the surety, and as A. would, if no release had been given by him, have been entitled to call upon B. for contribution, so D. upon payment of the whole debt, had the same right which by the release given by A. to B. is gone (d). But if the creditor, when he accepts such composition, expressly reserve his remedies against the other co-sureties, he is not precluded from proceeding against them for the remainder of his debt, leaving the co-sureties to their remedy for
(c) See Austin v. Howard, 7 Taunt. 327; S. C. 1 J. B. Moo. 68; S. C. 2 Marsh. 352.
(d) Hodgson v. Hodgson, 2 Keen, 704.
contribution against the co-surety compounded with (e).
4. Where the creditor delays suing the principal, and neglects to give notice to the surety, that the principal has made default.
The passive conduct of the creditor in not suing the principal for the debt, which the surety together with the principal has engaged to pay, will not of itself, operate as a discharge to the surety (ƒ),
(e) See Lord Eldon's judgment in ex parte Gifford, 6 Ves. 805 (1). (f) Eyre v. Everett, 2 Russ. 381; Brickwood v. Annis, 5 Taunt. 614; S. C. 1 Marsh. 250; Orme v. Young, Holt, N. P. C. 84; Perfect v. Musgrave, 6 Price, 111; The Trent Navigation Company v. Harley, 10 East, 34; Peel v. Tatlock, 1 Bos. & P. 419; Lysaght v. Walker, 5 Bli. N. S. 1; The London Assurance Company v.
Buckle, 4 J. B. Moo. 153; Shepherd v. Beecher, 2 P. Wms. 288; and see Langdale v. Parry, 2 Dowl. & Ry. 337; and the observations of Lord Eldon in Wright v. Simpson, 6 Ves. 734; and English v. Darley, 2 Bos. & P. 61; of Lord Alvanley, C. J., in Clark v. Devlin, 3 Bos. & P. 363; and of Tindal, C. J., in Goring v. Edmonds, 6 Bing. 94.
(1) Lord Eldon, in his judgment in ex parte Gifford, observes, that in some cases it may be a beneficial contract for the co-surety to make in compromising with the creditor, to consent to the reservation of the creditor's rights to go against the other co-sureties, where the creditor insists upon such a stipulation, and thus leave the co-surety who compounds, to his chance as to his ultimate liability between him and his co-sureties; for though any one of the co-sureties who has not compounded, may pay more than the co-surety who has compounded, non constat he may pay more than the proportion of the debt of his principal to which he was originally liable, and until he does do so, he cannot bring an assumpsit against the co-surety who has compounded. But it seems to be doubtful, whether a reservation of this kind would be operative at law, where the party released is one of two or more joint, or joint and several, obligors. In delivering the judgment of the court, in the case of Nicholson v. Revill (above adverted to), Lord Denman, C. J., says, "For some of the expressions employed" (by Lord Eldon in his judgment in ex parte Gifford) "would seem to lay it down, that a joint debtee might release one of his debtors, and yet by using some language of reservation in the agreement between himself and such debtor, keep his remedy entire against the others, even without consulting them. If Lord Eldon used any language which could be so interpreted, we must conclude that he either did not guard himself so cautiously as he intended, or that he did not lend that degree of attention to the legal doctrine connected with the case before him, which he was accustomed to afford." In support of Lord Denman's opinion as to the inutility of such a reservation at law, the case of Everard v. Herne (Lit. 190) may be referred to, where it is laid