Case ID: va_20/html/0599-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE ROANE JUDGE CABELE", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ward v. Johnson.
    Decided Oct. 22, 1817.
    a. Joint Obligors — Covenant Not to Sice One Obligor-Release oí Go-Obiigor.- — Where an obligee covenants not to sue one of two joint and several obligors, (and much more, where he binds himself not to sue him for a limited time,) this does not amount to a release, but a covenant only; he may still sue the other obligor at law.
    a. Sureties —Release in Equity — Confession of Judgment by Plaintiff.- — The majority oí the Court were Inclined to think that a surety is exonerated in equity, tho’ not at law, by the plaintiffs accepting a confession oi judgment from the principal, and covenanting thereupon to grant him a stay of execution for a limited time; the surety not having assented to such new contract and compromise.
    The Judgment in the case between these parties, (reported in 1 Hunt. 45,) being certified to the Superior Court of Green-brier County, Ward filed a plea stating, In substance, that he was surety for William Dong, in the bond on which the suit was originally brought; that the confession of judgment, with stay of execution, was given and accepted without his assent; and that thereby he was discharged; stating also, (as the fact was,) that the confession of judgment was on terms; Dong having liberty to discharge it by a conveyance of land.
    To this plea the plaintiff demurred, and judgment was given in his favour; whereupon Ward obtained a Supersedeas from this Court.
    Wickham for the plaintiff in error.
    The Judgment with a stay of execution, (especially with such a condition,) *was a merger of the original obligation, so that no farther proceeding’s could take place upon it, either against Long the principal or Ward the surety. Especially as to the surety; a new contract with the principal, appearing on the record in the suit, to which contract the surety never assented, is, on legal principles, a bar to any future proceedings on the bond against him, in that action or any other, 
    
    Wirt contra.
    The doctrine is laid down by Buller, J., in 1 Bos. & Pul. 422, that no favour shewn to the principal, which does no injury to the surety, can discharge the latter. The cases cited by Mr. Wickham, from Brown & Atkins, were not at law, but in equity: — In Nisbet v. Smith, a credit of three years was given to the principal, against the surety’s express directions: the debt too was safe as against the principal: the Court therefore injoined the plaintiff from proceeding against'the surety. In Skip v. Huey, the bond was surrendered to the surety, with a receipt in full, to quiet him; and other notes and a draft were given, in lieu of the bond.— Lord Hardwicke says explicitly, that the whole transaction was intended expressly to discharge the surety.
    Wickham in reply.
    7 Bac. 506, contains a reference to the authorities on this subject, and lays down a principle, which has been repeatedly recognized by this Court, in Baird v. Rice, 1 Call 18, and Croughton v. Duval, 3 Call 69; that “if an obligee in a bond make any variation in the original contract with the principal, without the privity of the surety, as, if he change the nature of the security, or agree to postpone the day of payment, he thereby discharges the surety.”
    How is the line to be drawn between six months’ indulgence, or three years’? — If you change the contract, and tie up your own hands, so that you cannot proceed against the principal, is not the surety exonerated? — ’The principal is discharged from the old contract; how then can the surety be bound by it? He surely is not bound by the new contract to which he was no party: — he therefore must be discharged altogether.
    The possibility of injury to the surety is enough, without any actual injury. — The time of performance is of the ^'essence of the contract. — I am .confident that the principle on which the Court went in Rees v. Barrington, 2 Ves. p. 540, and Nisbet v. Smith, was not that another security was taken, but that the extension of the time without the surety’s consent, discharged him.
    A mere forbearance for years to enforce a contract, is a very different thing from making a new contract binding the plaintiff to wait six months.
    The case of Peel v. Tatlock, in 1 Bos. & Pul., has no bearing that I can see upon this case.
    I admit there is some difficulty in the question whether a Court ot common law can take notice of this discharge. But the exoneration of the surety being by matter of record in the same cause, I contend that he ought not to be turned ’round to a Court of Equity.
    If a creditor can take a confession of judgment, in a joint action, from one of the defendants, giving him time, and can afterwards get a judgment against another, he can favour one improperly to the injury of the other, and make that several which before was joint.’ — The bond in this case was joint and several; but the suit, having been brought against both, was an election, on the part of the plaintiff, to consider it joint. He might either have sued them jointly or severally ; but, having sued jointly, he has no right to make a distinction.
    Wirt. None of the authorities in this country have departed from the principle laid down by Judge Buller in Bos. & Pul. —Baird v. Rice was a case of particular hardship: — the favour shown was to the prejudice of the surety.
    
      
       Joiist Obligors — Covenant Not to Sue One Obligor— Release of Co-Obligor — A covenant not to sue one of two obligors is not to be pleaded as a release by the other. Tremper v. I-Iemyhill. 8 Heigh 626, citing the principal case. And in Waggener v. Dyer, 11 Heigh 391. the principal case was cited to the point that a covenant not to sue a surety does not exonerate his co-surety.
    
    
      
       Sureties — Release in Equity — Confession of Judgment by PHaintifl — The principal case was cited in McKenzie v. Wiley, 27 W. Va. 661, as holding that accepting a confession of judgment from the principal debtor with a stay of execution for a limited time, without the consent of the surety, is a release of the surety in equity. To the point that the surety is not thereby released at law, the principal case is cited in Devers v. Ross. 10 G-ratt. 253.
      Same — Same—Extension of Time to Principal.— Where the obligee of a bond makes a parol agreement with the principal, without the consent of the sureties, whereby he gives further time to the principal, the sureties are thereby discharged in equity but not at law. Sayre v. King, 17 W. Va. 573, citing principal case. To the same effect, the principal case is cited in Steptoe v. Harvey, 7 Leigh 531. In tes case (Steptoe v. Harvey,.7 Heigb 531), Judge Buookenbiiough, speaking of the principal case, said: “This decision was in 1817, and has never been questioned since, that I know of: and I am for standing by it.” See principal case also cited on this point in Norris v. Crummey, 2 Rand. 337; Fien-nett v. Maulé, Gilm. 328; foot-note to Hill v. Bull, Gilm. 149; Chichester v. Mason, 7 Heigh 262.
      Same — Release at Law- -Extension of Time to Principal. —But according to the settled law of Virginia and West Virginia, an agreement by the holder of a bond with the principal obligor to extend the time of payment does not release the surety at law, and his remedy is only in equity. Glenn v. Morgan, 23 W. Va. 470, citing principal case.
      Again, in Harnsbarger v. Kinney, 13 Gratt. 521, it is said: “An agreement between creditor and debtor for forbearance is no bar to an action at law, unless it be a covenant never to sue, which is equivalent to a release to the party with whom the coven ant is made. Regarding the sub jecc as the courts of law regard it, a contract for indulgence would not delay a suit for the debt, and the surety might avail himself of his remedies to enforce the collection thereof, and thus obtain exoneration from liability. Wardv. Johnson, (5 Munf. 6: Steptoe v. Harvey, 7 Heigh 501; Devers v. Ross, 10 Gratt. 252.”
      Mr. Barton claims that it is at least an open question in Virginia whether the surety may not now under § 3299. Va. Code 1887 — set up at law the agreement by the holder of the bond to extend the time for payment. 2 Barton’s Haw Pr. 1080 (note): 1 Barton’s Ch. Pr. 190.
      Same — Right to Subrogation. — In Coffmanv. Moore, 29 Gratt 248. it is said: “It is also held that the surety, as against his principal is entitled to all the securities which the latter has given the creditor for the purpose of reimbursing him, if he has paid the creditor, and, if he has not, for the purpose of having it paid for his own protection. The surety has a right to stand in the shoes of the creditor in the enforcement of such securities; and the creditor, as to such securities in his hands and under his power, is considered as trustee for the surety, and if he is unfaithful, he not only fails in his duty as trustee, but violates the rights of the surety as against his principal, and is liable for the loss which the surety thereby sustains. These principles are ñrmly established by repeated decisions of this court. I need only refer to the following cases: Ward Johnson. 6 Munf. 6: McKenny v. Waller, 1 rjeigh434c Alcockv. Hill. 4 Heigh 622; Humphrey y. Hitt, 6Gratt. 523, in which Judge Baldwin, with the unanimous concurrence of the other judges sitting, gives a clear and forcible exposition of the doctrines on this subject. Then follows Harnsbarger v. Kinney. 13 Gratt. 511, and the recent cases of Shannon v. McMullin, 25 Gratt. 211; Harrison v.. Price, 25 Gratt. 553.” 4. ’
      See generally, monographic note on Subrogation’ appended to Janney v. Stephens, 2 Pat. &H. 11.
      The principal case is distinguished in Shepherd v. Wysong, 3 W. Va. 52.
    
    
      
       Nisbet v. Smith. 2 Bro. ch. cases, 579; Skip v. Huey, 3'Atk. 91: 7 Bac. 508.
    
   JUDGE ROANE

pronounced the Court’s opinion.

The Court is of opinion, upon the authority of the cases of Dean v. Newhall, (1 Term Rep. 68,) and Lacy v. Kynaston, (12 Mod. 551,) that, where an obligee covenants not to sue one of two joint and several obligors, (and much more where the obligation is only not to sue him for a limited time, (Ayloffe v. Scrimshire, Carth. 63,) this obligation does not amount to a release, but is a covenant only; and that-the obligee may still sue the other obligor at law. — And, on this ground, the Court affirms the judgment.

*At the same time, the majority of the Court are inclined to think, upon the authority of the case of Nisbet v. Smith, (2 Bro. ch. cases, 581,) recognized in this Court in the case of Croughton v. Duval, (3 Call 69,) that, where, as in this case, during the pendency of a suit, the creditor enters into a covenant, upon receiving a confession of judgment by the principal, to stay execution for a given time, — as (to use the words of the Court in Croughton v. Duval,) “this amounts to a new contract and compromise with the principal, without the consent of the surety, and deprives him of his remedy by a bill of quia timet, the security is thereby discharged,” in Equity1, from the obligation of this contract.

JUDGE CABELE

delivered the following separate opinion.

It was decided in the case of Dean v. Newhall, (8th Term Rep. 168,) that a covenant never to sue one of two joint and several obligors, was not, at law, a discharge of the other obligor; even although that other be a security. If this decision be correct, of which I have no doubt, it follows a fortiori that the agreement for a temporary stay of execution against the principal in the case now before the Court, was not at law, a discharge of the security. —I am therefore of opinion to affirm the Judgment.

Whether the appellant be entitled to relief in equity, or not, is a question on which I forbear to express any opinion. The case when it goes before a Court of Chancery, may bear a different aspect, by the introduction of circumstances which the appellee knew were unnecessary to be exhibited to the Court of law ; and X am not prepared to say that there is any rule in equity by which a temporary suspension, even for a day or an hour, of proceedings once commenced against a principal, will, in all cases and under all circumstances, be a discharge of the security. On this point, however, I wish to be understood as giving no opinion at present.