Εικόνες σελίδας
PDF
Ηλεκτρ. έκδοση

though the creditor suffer three (g), or even five years (h), to elapse, without taking any means to obtain payment of his debt: and though the principal should in the meantime become bankrupt(i), or insolvent (j); since it is the duty of the surety to

go and inquire as to the state of the transaction, and to see whether the principal has paid the debt, which the surety engaged he should pay.

Neither is a surety in a bond released from his liability, who guarantees the faithful discharge of duty by another person, for a limited period (X), or during such time as he should be employed in the service of the party secured (O), and the party secured fails in properly examining the accounts of the

person in his employment, for a period of eight or nine years, and then not calling upon the surety for payment of the sums in arrear, and not accounted for (m) :or, after he discovers that the person in his employment has been guilty of embezzling his money, neglects to give notice of such embezzlement to the surety (n) :-or, having given notice to the surety of the defalcation of the principal, and having been repaid by the surety the sums so embezzled by the principal, and been desired by the surety not to place further confidence and trust in the principal, nevertheless gives further credit to the party originally guilty (0) : provided there has been no industrious concealment of the transaction by the party secured, which, on general principles of law, will amount to fraud (p). (9) Peel v. Tatlock, supra.

(m) The Trent Navigation Com(h) Eyre v. Everett, supra. pany v. Harley, supra.

(1) The London Assurance Com- (ñ) Peel v. Tatlock, supra. pany v. Buckle, supra.

(0) Peel v. Tatlock, supra ; () Eyre v. Everett, supra. Shepherd v. Beecher, supra. (k) Shepherd v. Beecher, 2 P. () Peel v. Tatlock, supra ; and Wms. 288.

see the observations of Tindal, (1) The Trent Navigation Com- C. J., in Goring‘v. Edmonds, 6 pany v. Harley, supra.

Bing. 94. down and agreed to by the whole court, that if an obligee release one of two obligors, with a proviso that the other shall have no benefit from the release, such a proviso is void. (See the last note.)

Where a bond was executed by an insurance broker as the principal obligor and two sureties, with a condition that if they should pay the obligees certain premiums which should become due for assurances on ships at sea, to be made with the obligees by the insurance broker within six months after the making of the insurances, the bond was to be void, and the broker became bankrupt, and was indebted to the obligees in a considerable sum for premiums : although the premiums had been due three years before the bankruptcy, and no intimation whatever had been given by the obligees to the sureties of the state of the account as between the former and the principal, until after the bankruptcy, it was held, that the sureties were not discharged by the laches of the obligees, in suffering the credit of the broker to remain so long beyond the six months mentioned in the bond (9).

Upon the above principle, if the holder of a bill of exchange, having complied with the law merchant, by protesting it for non-payment, and giving notice to the drawer and indorsers, forbear to sue the acceptor (r) :-or if, after having signed judgment against the acceptor, he fail to prosecute that judgment(s), the drawer and indorsers are not discharg

(q) The London Assurance Com- v. Southey, Mood. & M. 14 (2). pany v. Buckle, 4 J. B. Moo. 153.

(s) See the observation of Lord (r) Walwyn v. St. Quintin, 1 Alvanley, C. J., in Clark v. Deolin, Bos. & P. 652; and see Farquhar 3 Bos. & P. 363.

(2) In this case, the defendants had accepted two bills of exchange for 500l. each, for the accommodation of one Leader, the drawer. Leader paid them into the hands of the plaintiffs, his bankers, without notice, who retained possession of them for several years, charging Leader with interest, but never debiting him with the amount of the bill. During this time the plaintiffs became bankers to the defendants also, but never gave them notice that they held the bills against them. The balance of the defendants' account was always in their favour, and sometimes exceeded the amount of the bills. In an action by the bankers against the acceptors for the amount of the bills, three years after the bankruptcy of the drawer, it was held, that the plaintiffs had not been guilty of laches, in not having, when they had money in their hands to an amount exceeding that of the bills, applied that money in extinction of the bills.

ed ; 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. But if the holder take out execution against the acceptor, and waive that execution, he discharges those who were sureties for the due payment of the bill (t).

If, however, the instrument of suretyship contain a stipulation, that the creditor, upon the default of the principal, shall sue without delay, it would seem, that mere passiveness on the part of the creditor, would have the effect of destroying the benefit of such security, as against the surety (u): thus, if commissioners are empowered, under an Act of Parliament, to advance money on certain securities, and in the Act of Parliament there is a clause requiring the commissioner, as soon as the money shall become payable under the instrument received by them from the principal and his surety in pursuance of the Act, to sue without delay, a non-compliance by the commissioners with the clause contained in the Act, will discharge the surety (v). So in a case where S. gave C. his guarantee for the value of coals to be supplied to P., on condition that no application should be made to him for payment, but on failure of the utmost efforts and legal proceedings to obtain the same from P., and C. allowed two years to elapse after P.'s debt became payable, before he commenced proceedings against P. for the recovery of his debt (during which time he might have proceeded against P.): P, having afterwards taken the benefit of the Insolvent Debtors Act, it was held in an action brought by C. against

(t) See ante, p. 177.

Beresford, supra; and the case of (u) See the observation of Lord Payne v. Ives, stated ante, p. 29, Eldon in The Bank of Ireland v. as one of the laches by the crediBeresford, 6 Dow, 233.

tor in not calling upon the surety (0) See The Bank of Ireland v. to confirm an executory contract.

S.

upon his guarantee, six years and three months after the principal's liability attached, that a plea of the Statute of Limitations was a good plea to the recovery by C. of P.'s debt; for that the condition was inserted for the surety's protection, and that the creditor ought to have used his utmost endeavours to recover the debt as soon as it was possible; for, were it otherwise, the creditor would have the power by his own laches, to keep alive the surety's liability for ever (w). So where a person put his son apprentice to a merchant, and gave him a bond for his son's fidelity, and at the same time took a covenant from the merchant, that he would at least once a month, see his apprentice make up his cash : the father was held answerable for no more than the merchant could prove the apprentice embezzled in the first month when the embezzlement began, and this notwithstanding the merchant had taken the accounts monthly, but had been deceived by the false entries of his apprentice; the meaning of the agreement being, the master should see the accounts effectually made up once a month, and that the surety would be liable but for one month's embezzlement (x).

5. Where the creditor receives further security from the principal.

The liability of the surety is not discharged by the circumstance of the principal's giving additional security to the creditor, if such additional security does not operate as a satisfaction of the former security, and so have the effect of tying up the hands of the creditor, and disabling him from suing the principal in respect of that original security (y):

(w) Hollv. Hadley, 2 Ad. & 7 Taunt. 126; and see Clarke v. Ell. 758.

Henty, 3 You. & Coll. 187; and (x) Montague v. Tidcombe, 2 the observation of Lord Eldon,

C., in The Bank of Ireland v. (y) Eyre v. Everett, 2 Russ. Beresford, 6 Dow, 233; and Hodg381; Twopenny

Young, 3 B. & Nugent, 5 T. R. 277, Cress. 208 ; Melvill v. Glendining,

Vern. 508.

son

thus, if the debt of the principal is secured by a bill of exchange, accepted by the principal, to which the surety is a party, and the bill at its maturity is not honoured by the principal, and the principal forward to the creditor another bill of exchange, if the creditor enter into no agreement precluding him from proceeding upon the original security, the acceptance of such second security will not, of itself, prevent him from suing upon the former security (%). So, if one bind himself by bond, as surety for the fidelity of his principal, during such time as the latter shall continue in the service of the obligee, and the surety obligor dies, and the obligee require from the principal further security, who procures a bond from another person as surety, in the same penal sum, and with the same condition ; an intention on the part of the obligee to give up the security of the deceased obligor, and to release the estate of the surety in the first bond, will not be inferred (in the absence of any express stipulation), simply by taking such second bond; for as the representatives of the first obligor would only be answerable to the extent of the surety's assets, it may reasonably be considered that the obligee took such second bond as an additional or further security (a). So, if the creditor take from the principal a cognovit without notice to the bail, the bail are not thereby discharged, if time has not been given to the principal (6). But where a father had given his bond as surety for his son, and the obligee, upon the surety's decease, instituted a suit in equity to administer his estate, but was afterwards prevailed upon by the son, and the widow of the deceased surety (the one being the surety's personal representative, and the other the surety's heir at law), to take their bond for the debt,

(2) Melvill v. Glendining, 7 Taunt. 126.

(a) Gordon v. Calvert, 4 Russ.

581; S. C. 2 Sim. 253.

(b) Hodgson v. Nugent, 5 T. R. 277.

« ΠροηγούμενηΣυνέχεια »