Mortland v. Himes

Bell, J.

The principle is familiar, that a release of one of two or more joint, or joint and several debtors, will operate to release all the others from the obligation of the debt. The reason is, that otherwise the effect of the release would be to increase the responsibility of those not included in its terms, by casting the whole burden of the debt upon them, in direct violation of their contract, which was to bear it only in common with the others. This cannot be done without the consent of all who are jointly bound; and as the release is efficacious in favour of him to whom it is given, the only way in which the rights of the other debtors can be pre- • served, is to absolve them altogether from the obligation to pay. But an obligee may release one of two several obligors without disturbing his remedy against the other; for the undertaking of each is commensurate with the whole debt, and therefore the release of one does not increase the liability of the other, or change the nature or amount of his obligation. On the same principle, the release of a principal debtor will discharge a mere surety; but a release of one co-surety will exonerate the other only to the extent to which the releasee would otherwise have been compellable to pay. The creditor may recover against the other co-sureties, but not more than the proportion they would have paid supposing the co-surety released had contributed his share: Ex parte Gifford, 6 Ves. jun. 805. So too it has been held, and the determination is noticed with approbation by this court, in McLenachan v. Commonwealth, 1 Rawle, 361, that the release of one of three guardians by a ward, only discharges one who was surety for all of them to the extent of the liability of the release, but still leaving the surety bound fol* the other two: Kirby v. Taylor, 6 Johns. Ch. R. 242. And the reason .given is, that such appeared to be the understanding and agreement of parties, and therefore by the discharge pro tantof the release was prevented from increasing the responsibility originally assumed by the surety. It will thus be seen, that in each case the solution of the question, Whether a release of one joint debtor discharges another? depends upon the further question, Whether the effect of the release will be to increase the original responsibilities of the latter? If not, though effective as to the releasee, it is never permitted to work a dissolution of the contract of the party not released.

Now, as between principal and surety, both at law and in equity, the former is considered as the debtor, and morally bound to protect the latter against liability. In chancery the doctrine is that “if a person is surety in a contract, there is an implied contract that the principal shall indemnify the surety,” and this equity arises where the money is due though not paid, for it would be unreasonable that the surety should be for ever at the mercy of the creditor in respect to an engagement which ought to be performed by the principal: 1 Eq. Ca. Abr. 79, pl. 5; Hungerford v. Hungerford, Gilb. Eq. R. 67. Therefore a surety may come into a court of equity to compel the principal to relieve him from his liability. At law, the surety may recover from the principal in an action of assumpsit the money paid by the surety, on the ground that in the absence of an express stipulation between the parties, a promise is raised by implication of law, on the part of the principal, to repay the money so paid for his use: Toussant v. Martinant, 27 R. 100. This being so, the release of a surety does in no wise increase the legal or equitable responsibilities of the principal, nor, as to’him, change the nature or extent of his contract.

Upon the principle which has been brought to view, it follows from this that the discharge of a surety interferes not with the liability of the principal to the creditor; for such a discharge is nothing beyond what the principal himself was bound to effect, and there- ■ fore no injustice is done him. In accordance with this doctrine are the cases which determine that if the holder of a bill of exchange or promissory note give time to the acceptor or maker, who are considered as the principals, without the consent of the intermediate parties who stand in the place of sureties; or allow the acceptor or maker to renew the bill or note without consulting the other parties, they are discharged from its payment. But giving time to the drawer or endorser is no discharge of the maker or acceptor; nor will any prior endorser be exonerated by giving time to a subsequent one, for he is regarded as the surety of the preceding endorsers. These and the analogous determinations, of which there are many, proceed upon the rule that the discharge of a surety has not the effect to release the principal debtor: Pitman on Prin. and Surety, 175, 192.

Nor is the operation of this rule excluded by the merger of the contract, in a judgment recovered. In The Commonwealth v. Miller, 8 S. & R. 458, it was solemnly decided, that the relation of a principal and surety is not dissolved by a judgment at law; for there can be no reason why the fixing of the parties at law should absolve the principal from the moral obligation to protect bis surety. The soundness of this determination is recognised in The Bank of Pennsylvania v. Winger, 1 R. 303, where it was held that the virtual release of the estate of a surety from the lien of a judgment will not discharge the estate of a principal, even in favour of other lien creditors. In delivering the opinion of the court, the Chief Justice remarked, “ the refusal of the bank to take satisfaction out of the hand of the surety, was in furtherance of the equity between the debtors themselves. It waived its preference in favour of a surety to pursue the principal — the very thing a court of equity would have compelled it to do.” The case of Benson v. Kincaid, 3 P. R. 57, though decided on the ground of consent by all the parties to be affected by the release, may, I think, be regarded as strongly sanctioning the doctrine I have endeavoured to illustrate, and is the more valuable in its application here, from its being the case of a joint judgment recovered against principal and surety. The only objection urged at the bar against the applicability of the principle to such a judgment, is the purely technical one that, as the judgment is joint, the process to enforce it must necessarily be also joint. In this, there is more of form than substance, for admitting it, the court from which the process issues will take care that it be not used to work injustice. In the proper exercise of the discretion vested in them, they will doubtless protect the. surety from an attempted disregard of the release by the creditor.

It will be perceived we are of opinion that the judgment rendered by the court below, in favour of the plaintiff, under the case stated, is correct. Wherefore,

Judgment affirmed.