Case ID: ohio-st_60/html/0384-01.html
Source: Caselaw Access Project
Author: {"author": "Shauck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Stuts, Administrator, v. Strayer, Administrator.
    
      Surety’s liability — not discharged by independent contract between principal parties, when.
    
    To discharge a surety from liability because of a variation in the contract without his consent, it is indispensable that the variation be in the terms of the contract by which the surety is bound. He will not be discharged by. an independent contract between the principal parties, though it may be contemporaneous and relate to the same subject, without varying the terms of the contract of the surety
    (Decided June 6, 1899.)
    Error to the Circuit Court of Logan county.
    Plaintiff in error brought suit in the common pleas court against the defendant in error to recover a balance on two promissory notes endorsed by the payee to his intestate. The notes differ only in amounts and dates of maturity, and the following is a copy of one of them :
    $213.00. Degrape, O., October 25, 1879.
    Eighteen months after date we, or either of us, promise to pay Jonathan Thatcher or order, Two Hundred and Thirteen Dollars, value received, with interest at 6 per cent, per annum. Payable at the Farmers and Merchants’ Bank, Degraff, Ohio.
    Dan S. Spellman,
    
      W. M. Strayer,
    A. J. Lippencott.
    The question for decision here arises on the second defense in the answer of Strayer’s administrator, which is as follows :
    2. For a second defense said defendant says that he is informed and he believes and avers the truth to be that said notes described in the petition were given by said Dan S. Spellman, principal, to Jonathan Thatcher, the payee named therein, as part consideration for the purchase of a printing press and newspaper outfit in DeGraff, Ohio; that by their contract the said notes were to be' drawn as said notes are set out in the petition, except that they were to bear interest at the rate of 8 per cent, per annum after maturity; that said notes were drawn as they are set out in the petition and signed by said Spellman, and at his request signed by said W. M. Strayer and A. J. Lippencott as his sureties, and in that form tendered to said Jonathan Thatcher, the payee therein named. Said Jonathan Thatcher then and there refused to accept said notes because they did not conform to the contract as aforesaid and did not call for interest thereon at 8 per cent, per annum after maturity. The said Dan S. Spellman and Jonathan Thatcher then and there, in the presence of said George Stuts, now deceased, or his authorized agent, without the knowledge or consent of said W. M. Strayer, this defendant’s testate, modified and altered said contract and notes by an additional paper then and there made and delivered with said notes by said Dan S. Spellman to said Jonathan Thatcher, by which paper it was agreed that said principal maker thereof should pajr interest on each and both of said notes from the date of maturity respectively until paid at the rate of 8 per cent, per annum. ■ A eopy of said agreement in writing is hereto attached, marked “Exhibit A,” and made part of this answer.
    Said paper writing was then and there in the presence of said George Stuts, deceased, or his authorized agent, attached to said notes, and they were then and there sold and assigned by said Jonathan Thatcher to said George Stuts, now deceased.
    Defendant further says that his intestate, W. M. Strayer, had no knowledge of said alteration of said contract at the time it was made or before the delivery of said notes to said Thatcher, or before the sale or delivery to said George Stuts, now deceased; and said alteration was a material one which avoided the said contract and surety-ship of said Strayer.
    To this defense the plaintiff interposed a demurrer which, in the court of common pleas, was sustained. The cause was tried at the October term, 1895, of the common pleas court, and the trial resulted in a verdict and judgment for the plaintiff for the amount claimed. This judgment was reversed by the circuit court at its February term, 1896, for the reason that the court of common pleas had erred in sustaining the demurrer to said second defense. Later proceedings were had in the case in the common pleas and circuit courts, but they are not material to the point to be decided nor to the judgment to be rendered.
    
      
      West <& West, for plaintiff in error.
    
      Roioenstine & Huston and A. Jay Miller, for defendant in error.
   Shauck, J.

The judgment recovered by the plaintiff at the October term, 1895, of the common pleas court should have been affirmed by the circuit court unless the facts alleged in the second defense are sufficient in law to defeat a recovery. Whether they are sufficient or not was, and continues to be, the only question of substance in the case. Those facts, briefly stated, are that the notes described in the petition were executed by the principal and his sureties in consideration of the purchase of chattels sold by the payee to the principal; that by their terms they were to bear but six per cent, interest after their maturity, instead of eight per cent, as required by the contract of sale, and that at the time of the delivery of the notes the principal, in response to the demands of the payee, executed his individual separate obligation in writing to pay the higher rate agreed upon after maturity, and that this was done without the knowledge of the surety. In support of the judgment of the circuit court it is said that the two instruments, being contemporaneous and having relation to the same contract of sale, are to be construed together, and being so construed there appears to be a change in the contract. Althoug’h these contracts are contemporaneous they are not between the same parties. By the second instrument the principal debtor assumed an independent obligation to' pay the interest required. by the original contract of sale and not embraced in the terms of the note executed by the principal and sureties, without in any manner attempting to effect a change in the contract to which the sureties were parties. The general rule upon the subject as stated in Brant on Surety-ship (section 378) is familiar and accurate: “Any agreement between the creditor and principal which varies essentially the terms of the contract by which the surety is bound without the consent of the surety, will release him from responsibility. ” The condition that to discharge the surety the variation must be in “the terms of the contract by which the surety is bound” is indispensable.

The judgment of the circuit court at its February term, 1896, is reversed, and that of the common pleas court at its October term, 1895, is affirmed.