Case ID: ohio-st_30/html/0389-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Laura Rawson v. Newton W. Taylor and Jacob Finger.
    1. A retiring partner remains liable for all tbe existing debts of the firm, to the same extent as if he had not retired. An agreement between him and the remaining partners, or with the new firm that succeeds, that they will assume and pay all such debts, while valid as between the partners, has no effect upon the creditors of the old firm, unless they become parties thereto.
    2. R. held the promissoiy note of the firm of T. G. & Co. After it was given, some members of the firm retired, leaving assets sufficient to pay all debts, and taking the obligation of the succeeding new firm, to pay all debts and save the retiring partners harmless — held: That unless R., by some valid contract, express or implied, had made himself a party to this new arrangement, or had so acted a? t.o be estopped, his rights on the note against all the members of the old firm remained unchanged; that while, as between the partners themselves, the relation of principal and surety existed, yet, as to the payee of the note, all were principals and joint debtors, although notice of such obligation was brought home to him.
    3. Where the payee of such note has recejved from the new firm a chattel mortgage of the partnership property sufficient, if applied, to satisfy the debt, he may, with the assent of the retiring partners, release the mortgage, and return the property or its avails to the new firm, without impairing his rights against all the joint obligors on the note, even though he had such notice of the subsequent contract between the partners.
    Error, reserved from the District Court of Cuyahoga county.
    The present plaintiff was plaintiff in the common pleas, •where she brought an action against Newton W. Taylor, Edward Griswold, and Jacob Einger, late partners, under the firm name of Taylor, Griswold $ Co., on a promissory note, a copy of which, with indorsements, is as follows: “$805.11. Cleveland, 0., Nov. 1*7th, 1865.
    “ One year after date we promise to pay to the order of Mrs. Laura Rawsou, eight hundred and five and eleven one-hundredths dollars, at our office. Value received.
    “ Taylor, Griswold & Co.”
    [45 cts. O. 8. Rev. Stamp.] .
    
    Indorsed as follows:
    “ Paid interest on this note for one year to Nov. 17th, ’66, $64.40. Nov. 14th, ’66.
    “Paid interest on the within for one year to Nov. 17th, ’67, $80.50. Nov. 15th, ’67.
    “Paid on the within note, $10. Nov. 24th, 1868.”
    The petition seeks to recover a judgment against each of the defendants, on their partnership liability, on said note.
    Taylor and Einger answer separately, and in substance admit that they were partners at the date of said note (November 17, 1865); but that soon after (November 24, 1865), the firm was dissolved and a new firm was formed, of which they were not members, called J8. R. Griswold § Co., consisting of said Edward Griswold, and C. II. Roberts and "William Eerguson.
    This new firm took the stock of goods on hand, and assumed to pay the debts of the old firm of Taylor, Gris-wold & Co., and save the retiring partners harmless.
    1. It is claimed that the plaintiff had notice of this arrangement, which by its terms, as between themselves, constituted Taylor and Einger sureties of their former partner, ancl as such, after such notice, entitled to all the rights and privileges of sureties, as against the plaintiff.
    
    
      2. Again : It was claimed in the answer, as a corollary from that proposition, that, after such notice, she gave time to the new firm by receiving interest to a day beyond its paymeut.
    3. Another defeuse insisted on by the defendants was,'that plaintiff took security, by way of a chattel mortgage, from E. R. Griswold & Co., to secure this note, said E. R. Gris-wold & Co. having given chattel mortgages to other creditors, at the same time, on the same property, and that plaintiff released her mortgage and proceeds thereof, as hereinafter set forth, and said note was paid, and Taylor and Eiuger discharged therefrom by operation of law, as follows: O. D. Dudley, as agent of said mortgagees, of whom plaintiff was one, received and had in his hands, from the sale of the mortgaged property — proceeds—money sufficient to pay all the mortgages, including plaintiff’s mortgage, given to secure the note in suit; and plaintiff having released her mortgage and ordered the mortgaged property and proceeds of that sale to be returned to E. R. Griswold and Co. by Dudley, this, by law, operated as a release of Taylor and Finger as sureties, and as payment of said note as to them.
    The plaintiff by reply : 1. Denies that Taylor or Finger over became sureties, as to her, on said note. 2. She admits the release, by her, of the mortgage; but avers that it was done by the consent of all tbe makers of the note; that she was not advised of the contents of the mortgage, except that it was to secure said note, and that it was placed on file and taken away again by said E. li. Griswold.
    On the trial in the common pleas, evidence was offered, by each party, tending to maintain the action and defense, which is all embodied in a bill of exceptions.
    It is only necessary to note the substance of it, so far as to understand the bearings of the charge of the court to the jury.
    1. The defendant, after a showing that the firm of E. R. Griswold & Co. liad assumed all the debts of the firm of Taylor, Griswold & Co., and upon evidence tending to show that the plaintiff:' knew of this assumption of the debts, obtained the charge to the jury of the following, as a rule of law affecting the plaintiff’s -rights:
    “ Therefore I say to you, as matter of law, that after this note was given, if, for a valuable consideration passing between Taylor and Finger and E. R. Griswold & Co., the relation of surety was created as between them; if the relation was created by an arrangement between them; if they handed over to E. R. Griswold & Co. property sufficient to pay this debt, then the relation of principal and surety existed between Taylor and Finger and E. R. Gris-wold & Co. in reference to the payment of this note. But there is something more than that you must ascertain before you can give effect to it, and that is — you are to ascertain, from the evidence, whether Mrs. Rawson, at the time when this transaction took place, or at any other time after the transaction between Taylor and Finger and Griswold & Co. took place, whether she knew that this relation had been created; whether she knew that, as between them, such an arrangement had been m.ade, for a consideration that, as between them, made Taylor and Finger sureties merely for the payment of this note. If she did, then she loas, after that knowledge, bound to treat them as sureties, and they were entitled to all the protection that sureties would, be entitled to, as if the name Taylor and the name Finger had not been attached as sureties when the note was executed.”
    
    The plaintiff' claims this was erroneous.
    2. The next defense was that time was given by accepting of E. R. G. & Co. interest beyond the date of its payment. The indorsements show that three days before the note was due, to wit: November 14, 1886, interest at 8 per cent, was paid to date of maturity; and on November 15, 1867, interest at ten per cent, was received for that year, to November 17, 1867, which it was claimed was equivalent to extending the time on the note two days, to the end of the second year.
    
      The argument is that these answering defendants were sureties of E. R. G. & Co. within the knowledge of the plaintiffs, and that her thus giving that firm two days’ time, discharged the sureties.
    Upon this' point the defendants’ counsel asked the court to so charge; to which request the court replied :
    “I have some doubt upon that question, but inasmuch as it can not, under the view I take of it, make the slightest difference with the parties here, for it can only affect the question in case Taylor and Einger were sureties. If Mrs. Rawson knew they were sureties, if she took this property into her hands, converted it into money, had the money in her hands or her agent’s, and then gave it up, without the knowledge of Taylor and Einger, to my mind it is a perfect answer to this petition. Therefore I refuse to charge as requested by Mr. Canfield on that subject,”
    3. On the trial it further appeared that on the 18th of January, 1867, the partners in the firm of E. R. Griswold & Co. executed twenty-one chattel mortgages on their stock of goods, and caused them to. be verified and filed in the proper office, to as many of their home creditors, including the •plaintiff and the defendants. These mortgages all seem to have been of equal priority on the same property.
    At the same time one O. D. Dudley w.as appointed the agent of the mortgagees to take possession of the property and sell sufficient to pay the debts thus secured.
    Subject to these mortgages, E. R. G. & Co. made a general assignment to George II. Wyman, for the benefit of his unsecured creditors.
    After Dudley had sold sufficient property to pay off the mortgages, and had received the money, he turned the residue of the mortgaged property over to the assignee of the unsecured creditors.
    Meanwhile E. R. G. & Co. had settled or compromised with their unsecured creditors, and with a view of regaining possession of the money in Dudley’s hands, and of resuming business, induced all the mortgagees,' including plaintiff" and defendants, to sign the following order, which was accepted by Dudley, and the money turned over to them:
    
      “In order to promote a settlement of the affairs and business of the firm of E. R. Griswold &¡ Co., we, the undersigned mortgagees of said firm, hereby authorize and direct O. D. Dudley, who was by us placed in possession of the goods and assets of said firm, and directed to sell the same, to deliver so much of said goods and assets as he may have on hand, together with all the money he may have received as our agent on the sale of such goods, after deducting his expenses as such agent in the sale of said goods, to said E. R. Griswold & Co., and we hereby release and discharge our said mortgages on the goods of said E. R. Griswold & Co., and direct the assignee of said firm, Geo. IT. Wyman, to release said assets to said firm so far as we are concerned.”
    Cleveland, March 13, 1867.
    In order to obtain possession of the unsold property then in the assignee’s hands, a like order was presented to him signed by all the other creditors, upon which he surrendered it back to the firm of E. R. G. & Co.
    By these proceedings E. R. Griswold & Co., after having thus arranged their matters with their creditors, were reinstated in their business for the time being.
    It also appears that before Taylor signed the foregoing order to Dudley, he had been paid his claim., and that Finger was also paid, but whesher before or after signing, does not clearly appear. This private arrangement by defendants in a general adjustment or compromise by E. R. G. & Co. with their creditors was a manifest fraud on the other mortgagees.
    As to the legal effect of this release and surrender of the money in Dudley’s hands, the defendants claim they were discharged from all liability on the note, while the plaintiff insists that she signed this order to Dudley, with the assent of the defendants and on the faith of their having first signed, and thereby consented to such arrangement.
    Upon this point, the court charged: that if money came into Dudley’s hands as agent of the mortgagees, sufficient to pay them off, then, as he was the plaintiff’s agent, to the extent of her mortgage, and had money sufficient to pay it off, an order by her that he should return the amount to E. R. GL & Co., was equivalent to a payment and a, discharge of defendants; that the money being in the hands of her agent paid the note, and her return of it -without the consent of defendants did not restore the plaintiff to her right of action on the note.
    The plaintiffs claimed that Taylor and Finger signing the order to Dudley, to return the money to E. R. GL & Co., was a consent by them that the plaintiff might release her interest in this money and retain her rights on the note on which they were liable.
    Upon this the court charged : “I think the jury should look at all the evidence in the case. It is claimed by Taylor that he never knew of the existence of this note, and by Finger that he did not know' of the note, and it is said that he knew nothing of the mortgage of Mrs. Rawson. I think the jury should look at all the evidence in the case, and ascertain therefrom what part Taylor and Finger took in reference to the return of these goods — what part all of these parties took in reference to them, each one being liable to respond for his own act, not the acts of others. . There was just as many appointments of an agent as there was parties to the paper appointing Dudley. He acted for them all. After that appointment he was the agent of them all, not jointly, but the individual agent of each and every one of them, and so far as he, or either of them, gave any direction to him in reference to the disposition of the money, just that much he is bound, and no further. You will learn what part each of them did.take in reference to the return of those goods and money.
    “ By Mr. Canfield—
    “ I would like the court, from a construction of this instrument, to say that, so far as Taylor and Finger are concerned, that this instrument authorizes Dudley to release this prop
      
      erty, or anything he had in his hands as their agent, so far as their individual mortgages were concerned, and no further.
    
    
      “ By the court—
    “ TKat would be the construction of that, unless there is some other testimony outside that shows that it meant something more., Jf there is any such evidence the jury should give effect to it.”
    
    
      J. P. Bishop, for plaintiff in error.
    I. As to the suretyship of Taylor and Einger, see Parsons on Partnership, 421, 424, 425; Story on Partnership, sec. 158 ; Brightly’s U. S. Digest, sec. 133 ; Butler v. Birkey, 13 Ohio St. 322; Greenbough v. McClelland, 2 Ellis & Ellis, 424 (105 E. C. L.); Pooley v. Barradme, 8 Ellis & Bl. (90 E. C. L.), 431; S. & C. 160, sec. 129; lb. 1083, sec. 449.
    II. The court below erred in charging as to the effect of notice of Mrs. Rawson in taking the mortgage from E. R. Griswold & Co.
    As I understand the charge, it was substantially that Mrs. Rawson was estopped from denying notice of what the mortgage contained, and that the mortgage substantially contained notice that Taylor and Finger were no longer principals, but only sureties on the note. This toas dearly error.
    
    As this was not an action between the parties to the mortgage, the recitals in it did not operate as estoppels in favor of Taylor and Finger, so that she could not show she had not, in fact, notice of the contents of the mortgage, or of Taylor and Finger’s relation to Griswold on the note.
    She had a right to show, as to defendants, that she did not know the contents of it, nor the legal effect of the recitals in it.
    2 Smith’s L. C. 677, top paging; Merrifield v. Parritt, 11 Cush. 590 ; Collins v. Tilton, 26 Conn. 363; Carpenter v. Butler, 8 M. & W. 209; Phillips Evidence, 202, note 1; lb. 472; McClelland v. Cox, 36 Me. 95; Carpenter v. Stillwell, 1 Kern. 73; BeZell v. Odell, 3 Hill, 225; Hearne v. Rogers, 9 Barn. & Cress. 577; Wallis v. Truesdell, 6 Pick. 455; 1 Greenleaf on Evidence, see. 211; 42 111. 89; 54 111. 88; 7 Ohio St. 99 ; Morgan v. Spangler, 14 Ohio St. 119; 2 Story’s Equity, sec. 1543.
    III. Eor one creditor to obtain secret advantage over the others in a composition of creditors, is a fraud on the others. Mdriclge v. Story, 34 N. Y. 491; Bean v. Anisinck, 10 Blatchford, 361; Hunting v. Clark, 39 Conn. 540; Harloe v. Foster, 53 N. Y. 386.
    
      McKinney and Caskey and R. P. Ranney, for defendants in error,
    claimed for their first defense that the note sued on had been paid. Hunt v. Nevers, 15 Pick. 500; JRandall v. Rich, 11 Mass. 496; Dismukes v. Wright, 3 Dev. & B. (N. C.) L. 78.
    2. That there was an agreement of release. That such an agreement may be proved in two ways: either by proof of an express agreement to that end, or by circumstances, acts and conduct of the parties from which such agreement is to be fairly inferred and implied. Thompson v. Percival, 27 E. C. L. 241; 15 E. L. & E. 70 ; Parsons on Part. 439 to 442 (Ed. of 1870); Story on Part. 256, 257.
    3. That defendants, Taylor and Einger, sustained to E. R. Griswold & Co. upon said note made to plaintiff by Taylor, Griswold & Co. the relation of surety, especially after the dissolution of Taylor, Griswold & Co. and the assumption of the debt by E. R. Griswold & Co., and as to this point we submit the following legal propositions :
    The relation of principal and surety arises through and depends upon the collateral relations between those who are bound by the obligation independent of the form of contract betwmen the contracting parties, and this relation may be shown to exist by parol. 2 American Leading Cases, 403-4, 409-10, 436-37; 3 Leading Oases in Equity, 547, 548, 560-9; 5 Gray, 457; 9 Metcalf, 511 •; 21 Pick. 195 ; 21 Miss. 122; Yol. 1 Parsons on Notes and Bills, pages 234 and 235 and notes.
    Makers of a.joint note are principals only for their proportion of the note, and as to all the rest of it are sureties for their co-makers. 20 Maine, 322 . 4 Corn’s N. Y. 603; 74 Penn. St. 445.
    When one of many makers of a joint note for a valuable consideration moving from his co-makers assumes and agrees to pay the whole of the note he then becomes principal for the whole, and the other makers are simply his sureties. 4 Comstock, N. Y. 603. And this rule is recognized as applying to partners, in 13 Ohio St. 523; Wilson v. Loyd, 6 English Rep. 642, Moakes’ Notes; Waddington v. Vredenburg, 2 Johns. Cases, 227.
    And the rule that a release to one partner releases all seems to have its foundation, in part, in the doctrine that they are sureties for each other.
    The relation of principal and surety when it exists by reason of the relation of the debtors to each' other, or by valid contracts with each other, binds the creditor whenever •the existence of that relation is brought home to his knowledge. Story on Partnership, sec. 158; Parsons on Notes and Bills, vol. 1, 234, 235, notes; Yol. 3 Leading Cases in Equity, 573, 575. This doctrine is recognized in Elwood v. Ddfendors, 5 Barb. 398; 1 English Reports, Moakes’ Notes, 478.
    This relation existing and being brought home to the knowledge of the creditor, we then claim that the releasing of securities or retracting steps taken for security of debt, or doing anything to the injury of surety, releases him. 2 American Leading Cases, 343-5, 355 and 424; vol. 3 Leading Cases in Equity, 552, 556 ; 1 Story E. Jurisprudence, sec. 325 ; 8 Pickering, 122 ; Law v. East India Co., 4 Yesey, Jr., 829 ; Ide v. Churchill, 14 Ohio St. 386 ; Oakley v. Pasheller, 4 Cl. and E., 207; Wilson v. Loyd, 6 English Rep. Moakes’ Notes, 642.
    Under such circumstances a creditor holding securities holds them in trust for the surety. 4 Johnson’s Chancery, 137; 2 American Leading Cases, 347; 14 Ohio St. 386.
    Surrendering up security to the principal would certainly be such a violation and breach of that trust as would release the surety.
    
      "We claim further, that even as principals these defendants are released from any liability to plaintiff on said note for the reason that plaintiff' received security for her debt sufficient to pay in full, and having released the same to E. R. Griswold & Co. (a third party and not a party to the original contract), has been guilty of such wrong, laches and negligence as will release these defendants from any liability to her on said note, as her action in the matter has worked to the injury and prejudice of these defendants to the full extent of the debt.
    This subject is fully discussed in vol. 2, American Lead-' ing Cases, 348, 349, and 350,424 and 436-7, and the authorities there cited.
   Johnson, J.

The note sued on was the joint liability of all the partners in the firm of Taylor, Griswold & Co.

Taylor and Eingei', as well as Griswold, were principal debtors.

When the note was executed and delivered to Mrs. Raw-son, for a valuable consideration, the liability thereon of each partner became fixed. Their relations to that contract, and their liabilities thereon, could by no act between themselves be changed.

After this note was given, two of the partners, Taylor and Finger, retired from the firm, and a new one was formed, including Griswold, their former partner, which obligated itself to the retiring partners to pay all debts, and save them harmless.

Of this arrangement, it is claimed that Mrs. Rawson had notice. The evidence tends to show constructive notice to her of the formation of the new partnership to succeed Taylor, Griswold & Co., and subsequent dealings by her with the new firm. Whether she ever in fact knew of this arrangement, by which the new firm was to pay the debts of the old, does not appear, but, conceding that she did, the question presented by the charge of the court is, as to the effect of such knowledge on her rights on the note.

The charge was.: “ If she did have notice, then she was, after that knowledge, bound to treat them as sureties, and they were entitled to all the protection that sureties would be entitled to, as if the names of Taylor and Finger had been attached as sureties when the note was executed.”

It is not claimed that Mrs. Rawson assented to this new arrangement, or by any valid contract, express or implied, agreed to modify or change the relations of these joint obligors to her upon the note, but simply, as between themselves, by the new arrangement, Taylor and Finger became sureties of their copartner, Griswold, of which fact Mrs. Rawson had notice. It is admitted that so long as she was not informed of this arrangement her rights and duties remained as fixed when the note was given ; but it is claimed that when such notice was given, then Taylor and Finger were entitled to the same rights and protection as if they had been originally sureties.

In substance, the charge of the coui’t lays down the law to be, that the liability of principals on an obligation may be converted into a liability of suretyship by the acts of the obligors, without the assent of the obligee, by giving notice of such new arrangement.

In Thurston & Hays v. Ludwig, 6 Ohio St. 1, it was held that in order to change or vary the terms of a written contract, there must be a new contract to that effect between the parties, based on some new consideration, or such new contract must have been so far executed or acted upon that a refusal to carry it out would operate as a fraud.

Such is the general rule governing all contracts. In its application to cases like the one at bar, Story says: “It frequently happens that upon the retirement of one partner, the remaining'partners undertake to pay the debts and to secure the credits of the firm. This is a mere matter of private arrangement and agreement between the partners, and can in no respect be admitted to vary the rights of existing creditors of the firm.” Story on Partnership, sec.

If the creditor assents to such arrangement after it becomes known to him, “ and by his subsequent act or conduct, or binding contract, he agrees to consider the remaining partners as his exclusive debtors,_ he may lose all right and claim against the retiring partner.”

The precise question at bar was considered at great length in Maingay v. Lewis, Irish R. Com. Law, 495 (1869).

To an action on the money counts, the defendant pleaded that the cause of action accrued against’ him and one W, and one S. as partners; that afterward the firm was dissolved by a memorandum, of which plaintiff had flue notice, by which W. agreed to pay all'debts of the firm and indemnify his copartners from all claims, by which he became a surety only, of which plaintiff: had notice, and after such notice took a bill of exchange at three months from W. alone for the amount, and thereby gave time to W., ■whereby defendant was discharged from liability. It was held that this plea was bad, and did not constitute a defense either at law or in equity, Whiteside, C. J., saying: “ It is clear that no arrangement among joint debtors could prejudice the rights of their creditors.” Again : “ Another averment is that the plaintiffs ‘had notice of this arrangement/ Well, I do not see how the men giving notice to the plaintiff of an arrangement by which they can not be affected, is to prejudice their rights.”

In that opinion the distinction is clearly drawn between a case where the relation of principal and surety existed inter se at the time the obligation was entered into, of which the creditor had knowledge, and a ease of joint principals-inter se at the date of the obligation, and a subsequent agreement between the joint debtors, by which, as between themselves, one becomes a surety of the other, of -which subsequent arrangement, the creditor had knowledge.

It is of the first importance to keep in mind the distinction, as it furnishes the key to harmonize many apparently-conflicting decisions. In the former class of cases, the relation of suretyship exists at the very inception of the contract. The obligee having knowledge of that relation before he accepts the contract, takes it subject to all the-rights and equities of such sureties inter se not inconsistent-with the terms of the contract.

On the other hand,, where the obligors are in fact joint debtors, he accepts them as such, and no subsequent arrangement between the joint debtors alone can change that relation. Bedford v. Deakin, 2 B. & Ald. 210; Evans v. Drummond, 4 Esp. 89 ; Pooley v. Harradine, 7 E. & B. 431; Butler et al. v. Berkey, 13 Ohio St. 523; Parsons on Part. 421-425, ch. 13; Manley v. Boycott, 75 E. C. L. 45.

We may concede that/ such an agreement between remaining and retiring partners, with notice to a partnership creditor, would impose upon him the duty of acting in good faith and with reasonable diligence in the management of securities placed in his hands for the payment of his claim, in the preservation of liens, and in the application of payments made.

A failure by the creditor, after such notice, to perform these duties, resulting in damages to the retiring partner, might well be regarded in a court of equity as cause to release him.

In such case the terms of the contract have not been changed, but the fact that new relations had arisen between the partners, by which one assumes, as between them, the burdens of all, might well call upon the creditor to act in such way as not to injure the retiring partners. Eq. Lead. Cases, pt. 11, p. 1902.

In such cases it has been held, that if the creditor should give up securities in his hands, and take those of the new firm, or give long credit for additional interest or new security, or release a levy made, without the consent of the retiring partner, then in all such cases the retiring partner will be discharged. Story on Part., sec. 158 et seq.; Parsons on Part. 421 et seq.; Colyer on Part. 554-570; Harris v. Lindsay, 4 Wash. C. C. 271; Bedford v. Deakin, 2 Barn. & Ald. 210.

An examination of the cases in support of the doctrine ■of the text-books fails to support the charge of the court below. Upon both reason and authority, therefore, we •conclude that as Mrs. Rawson was not a party to this new ■contract between the partners, by which the new firm assumed the debts of the old, and had never assented thereto or agreed to be bound thereby, her rights on the promissory note, to regard all as principals, have not been altered or impaired.

These principles are aptly illustrated by the case before us.

By the several mortgages the claim of Mrs. Rawson was amply provided for.

Dudley, as the agent of the mortgagees, had sold sufficient property to pay them in full, and held the money, the proceeds of such property, applicable to such payment. So much of this money as equalled the claim of Mrs. Rawson belonged to her. Had she, without the consent of these retiring partners, and with full knowledge of her rights, surroridered it back to E. R. <3-, & Co., after notice that they were the principal debtors, and thus have thrown the burden on these defendants, equity might well treat them as discharged.

In this case, it is not clear that Mrs. Rawson had full knowledge of all the facts, and it is clear that Taylor and Finger consented to the surrender of the money then in Dudley’s bauds. Had it been distributed, the debt would have been satisfied. The reason why it was not so applied by Dudley is disclosed in the bill of exceptions.

E. R. Griswold & Co. had succeeded in compromising with their general creditors, and had obtained their consent to a return to the firm of the unsold goods then in the hands of Wyman, the assignee.

They also desired to get possession of the money in the hands of. Dudley.. To do this, they must have the assent of all the mortgagees who were entitled to receive their proportions of that fund. Taylor and Finger were among the mortgagees whose assent was necessary.

To secure such assent, a paper was drawn up and signed by all the parties interested in the funds. Taylor and Finger assented. They are first to sign this paper, thereby recommending the others to do the same. Mrs. Rawson, seeing their names to it, was influenced to sign among the last. Taylor and Finger took good care, however, to insist on a private arrangement, in fraud of the rights of the' other creditors, by which they received their share of these moneys, unknown to Mrs. Rawson.

We think the court erred in saying that their signatures-to this paper operated only as to their individual interest in. the fund.

The avowed object of this paper was “ to promote a settlement of the affairs and business of the firm of E. R., Gris-wold & Co.”

All had to sign to make the scheme operative. The object was to reinstate the embarrassed firm in business.

It may be that if part only had signed, the trustee might-have paid the others their share, and returned back to E. R. G. & Co. the shares of the assenting parties, yet it is-quite evident that the paper, which all in fact signed, was an express assent of each ; that Dudley wTas authorized to-return to the firm, not only his own share of the money,, but also the shares of the other mortgagees. In short, Taylor and Finger assented to this arrangement as an entirety. They consented that Dudley should, instead of paying the-debt to Mrs. Rawson, return the money to E. R. Griswold & Co., to enable them to resum-e business.

Taylor and Finger, by signing this paper, consented, not only that their share of the money should be returned to E. R. G. & Co., but also consented that Mrs. Rawson should do the same. They said to her : We are willing, in order to promote a settlement by our principals, and enable them to start again in business, that you shall still hold our note unpaid, and return to them the money in Dudley’s hands applicable to its payment. In Woodcock v. Oxford, and Worcester Railway Co., 1 Drew, 521, D. and S. were sureties of A., B., and C. A. and B. retired, and F. was substituted. Subsequently, disputes arose between the new firm of C. & F. and the company with which the old firm had contracted, on which contract D. & 8. were the sureties.

The-sureties were not parties to the transactions growing, out of these disputes, but acted as the solicitors of the new ■firm, and prepared many of the documents by which the original contract was varied. It was held that the sureties were not discharged by reason of these changes, because, with full knowledge of the facts, they assisted as solicitors in carrying into effect the arrangements of which they complain. These defendants, having signed this paper, thereby ■consented and recommended that all the other mortgagees do the same. This consent bars their present defense.

III. It is also claimed by the defendant that the receipt of interest on the 15th of November, 1867, to the 17th of the same month was such a giving of time as discharged ■the defendants.

The authorities cited and the conclusions reached on the first point disposes of this.

As these defendants were still jointly liable on the note as partners, the mere payment of interest by one jointly liable with them, for a time in advance, would not discharge them, even if we concede that such payment, by operation ■of law, extended the time on the note.

Judgment of common pleas reversed and cause remanded.