American Casualty Insurance of Oneonta v. Green , 70 A.D. 267 ( 1902 )

SMITH, J.

We entirely agree with the conclusions of the. learned referee, and with the reasons assigned therefor in his opinion. We would add thereto only a single word. Appellants strenuously contend that the agreement of September yth in no wa)r altered the liability the parties to the contract of August i6th; that the agreement of the plaintiff to pay all expenses to be repaid by Erazier in no way extended the liability of Erazier, who was using plaintiff only as a medium of payment; and that the agreement that Frazier might, in all events, retain from the moneys collected $io a week for his living may be regarded as an agreement for a loan for which plaintiff does not claim to hold this defendant. Granting, for the argument, the construction contended for, the agreement of August i6th was by the contract of September yth altered to include plaintiff’s covenant to advance to Frazier moneys necessary to pay expenses, and to loan to him $io a week, whether earned or not. Such an alteration is, in my judgment, material, and prejudicial to the interest of the surety, and, when made without the knowledge of the surety, must effect his release. Defendant might well have argued, when assuming his obligation, that unless Frazier’s profit were sufficient to pay his expenses, the io per cent, due to plaintiff, and reserve to him a substantial income, he must soon surrender before an extended liability was incurred ; and might further have considered that his need of a net profit to secure his living would be such an incentive to him to work up his business as to make more probable his success. The mere fact that credit was given and a loan made to Frazier not contemplated by the August agreement would probably be immaterial. The insertion, however, into the contract guarantied of a covenant on plaintiff’s part to give that credit and make that loan makes a contract materially differing from that which defendant guarantied.

The judgment should be affirmed.

Judgment unanimously affirmed, with costs. All concur.