Case Name: Bank of Steubenville v. H. H. Leavitt and Judith Carrol, Administrators of Robert Carrol, deceased
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1831-12
Citations: 5 Ohio 207
Docket Number: 
Parties: Bank of Steubenville v. H. H. Leavitt and Judith Carrol, Administrators of Robert Carrol, deceased.
Judges: Judge Wright, having been counsel, did not sit in this case.
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 5
Pages: 189–196

Head Matter:
Bank of Steubenville v. H. H. Leavitt and Judith Carrol, Administrators of Robert Carrol, deceased.
Where a creditor suspended his right to proceed promptly against a principal debtor to enforce the collection of his debt, the surety is discharged. The ■ defense may be made at law, as well as in equity. The plea should’ aver that the suspension was without the assent of the surety.
This cause was adjourned from the county of Jefferson. It was an action of debt, brought in the common pleas of Jefferson county, to November term, 1830. The declaration counted upon a writing obligatory made by the intestate in his lifetime, dated August 7,1819, for the payment of one thousand four hundred and thirty dollars to the Bank of Steubenville, at that bank, sixty days after date.
At the May term of the same common pleas, Í831, the defend.ants pleaded in substance that their intestate executed the writing obligatory declared upon as security for one John C. Bayless, and not as principal debtor, and that it was so known to the plaintiffs, who then accepted and received said writing obligatory from their intestate as surety only. That since the commencement of the suit, John C. Bayless, the principal debtor, had made a power of attorney, authorizing W. W. Tracy, or any other attorney, to appear in any óf the courts of record of Ohio, and confess judgment *to the plaintiffs for certain specified sums of money, with stay of execution for one-third of the amount for six months, one-third for twelve, and one-third for eighteen months. That after the last continuance of the causQ, at May term, 1831, under' and by virtue of this power of attorney, the plaintiffs caused a ju'dgmcnt to be confessed for the sum of one thousand four hundred and thirty dollars debt, and seven hundred and ninety-two •dollars and twenty cents interest and costs, with stay of execution as set forth in the warrant of attorney. And the defendants .aver that the obligation upon which the judgment is confessed, is tho same upon which the plaintiffs count in this case.
To this plea there is a general demurrer and joinder. The common pleas gave judgment for the defendants, and the cause was taken by appeal to the Supreme Court.
Marsh and Stoicely, in support of the demurrer:
To show as distinctly as possible the precise questions arising on this record, we will make a brief synopsis of the pleadings. The plaintiffs declare on a bond of Robert Carrol, dated August 27, 1819, payable in sixty days at the bank, for one thousand four hundred and thirty dollars, with a profert, and aver non-payment, etc. Suit is brought to November term, 1830.
The defendants plead puis dañen continuance without oyer, in bar of the further maintenance of the- suit, and that the bond, in the declaration mentioned, was made by Carrol as surety for one John C. Bayless and not as principal, and was so accepted by plaintiffs. a
That since the commencement of this suit, viz: December 20, 1830, Bayless executed and delivered a sealed power of attorney, authorizing judgment to be entered against him, inter alia, on a note for one thousand four hundred and thirty dollars, signed by him and Robert Carrol, with stay of execution for six, twelve, and eighteen months.
That plaintiffs, since the last continuance, viz: at May term, 1831, by virtue of said power of attorney, entered judgment in ■said court, against said Bayless, on said writing obligatory, in said declaration mentioned, with a stay of execution as the warrant specified.
^Defendants aver that the note for one thousand four hundred and thirty dollars, in the warrant of attorney mentioned, and the bond in the declaration mentioned, are the same, etc.
General demurrer and joinder.
On this demurrer three questions arise:
1. It is not averred in the plea that the judgment against Bayless was entered without the knowledge and consent of the defendants.
It is a rule in pleading that every plea is to be taken most strongly against th.e party pleading. Wimbisb v. Talbois, Plowd. 46; Co. Lit. 303, b; 1 Chit. PI. 522. Here it is to be inferred that the judgment was taken with the assent of the defendants and then they have no ground for complaint. The substance of the objection to a recovery from the surety after giving time to the principal is, that the creditor has changed the contract without the assent of the surety, whereby the surety is injured. If, then, the arrangement be made with the assent of the surety, the ground of the objection does not exist.
2. It is not averred in the plea that the principal has become in worse circumstances, or that the surety is in any way injured by the arrangement.
This plea is an attempt to make an equitable ground for an injunction, in particular cases, a defense, on a general principle at law. It will be found that the plea places it on grounds which have never been assumed as warranting a decree in equity. No bill can be found placing a prayer for relief on the naked fact that time had been given. Essential and indispensable parts of every bill for relief have been that the arrangement had been made with•out the assent of the surety, and that since the arrangement the affairs of the principal have so altered as to place the surety in a worse situation, as to indemnity from the principal, by the delay. Rees v. Berrington, 2 Yes. Jr. 250; Samuel v. Howarth, 3 Merivale, 271; 2 Rand. 333.
3. Where time is given to the principal after the bond is due, the surety can not avail himself of it at law, but must seek relief in equity, if his ease entitle him to it.
*The ground of defense is the alteration of the contract without the assent of the surety. Where the time of payment is extended before the day of payment, it is considered as a waiver of the performance, a change of the terms of the contract, but after the forfeiture of the bond, any arrangements do not affect the bond, but concern only the compensation for the breach of it. Davey v. Hendergrass, 5 Barn. & Aid. 187; United States v. Howell, 4 Wash. C. C. 620. In this last case the point is distinctly made and decided. The same distinction is recognized in Rees v. Berrington, 2 Yes. Jr. 520. The same distinction is also recog nized in Orme v. Young, 1 Holt’s N. P. Cases, 84, both in the-' pleadings and by the court in giving judgment.
In this ease the stay is long after the forfeiture of the bond, after judgment, and not without the assent of the surety, so that, on the-facts disclosed in. this plea, neither at law nor in equity is there any ground for discharging the defendants from the payment of the bond.
J. and D. L. Collier, and Goodenow and Wright, for defendants :
The plaintiffs, in support of their demurrer, rely upon three-points :
1. That it is not averred in the plea that the judgment against Bayless was entered without the knowledge and consent of the defendants.
2. That it is not averred, that the principal has become in worse-circumstances, or that the surety is in any way injured by the arrangement.
3. Where time is given to the principal, after the bond is due, the surety can not avail himself of it at law, but must seek relief in equity, if his case entitle him to it.
We prefer, in answering the arguments of the demurrants, to-examine the points raised, in the reverse order in which the plaintiffs have treated them, and will, therefore, speak first to the-third point, that our relief, if anywhere, is in equity.
Before, however, we proceed directly to that point, we would remark, that the plea alleges the decedent signed and ^sealed as a surety, and not as a principal, which is admitted by the demurrer ; and therefore the inquiry is presented free of all embarrassment. Is the security discharged by the creditors giving the-principal further credit, or time of payment, and taking other and higher security? If so, can ho avail himself of these suits at law t
That such further credit, or extension of the time of payment, may be pleaded at law, we think is sustained by the whole current of authorities, both in England and in this country; a reference to a few of which we consider sufficient to advise the court fully of the-established principles and doctrines on the subject. 13 Johns. 174; 17 Johns. 384; 3 Merv. 276; 1 Vern. 196; 2 Caine, 56; 2 Rand. 334; 3 Wash. C. C. 74.
We think, from those authorities, there can be no doubt the- rule is the same at law as in equity; and the only doubt which' could, perhaps, ever arise would be, whether the mode of proof and relief at law were such as to give effect to the principle. As-to this question, it may be observed that every case furnishes for itself the circumstances which decide the applicability of the principle; and we see nothing here to prevent the defendants from availing themselves of the full benefit of the rule on this-side of the court as well as on the chancery bench. Surely it is-not in the mouth of the plaintiffs to complain, and call him over to the other side of the court, to receive there the application of that rule, which applied here, will mete out to him the same justice and equity.
The second point raised by the demurrants is, that we do not show by our plea that the principal has, by the judgment against him and extension of time, “ become in worse circumstances, or that the surety has been injured ” thereby. Here we would refer to a remark of the plaintiff’s counsel, under his first head, which we think more congruous with the one now under consideration, namely, that “ the substance of the objection to a recovery from the surety, after giving time to the principal, is that the creditor has changed the contract without the assent of the surety, whereby the surety is injured.”
It seems to us the counsel on the other side have *misapprehended the principle upon which the plea is predicated. The doctrine in reference to a “ change of contract,” speaking in technical language, is this: that the alteration or change must be made while the contract is yet open and its time of performance unexpended; at least this doctrine embraces a class of cases different from ours, and in this point of view forms no feature of our defense. We rely upon the principles of law, applicable to cases where a higher security has been taken on the same instrument, and a further credit given, after a right of action has accrued.
We rely upon.the positions: That a security is bound by the express terms of his contract, and by them alone; that they can neither be narrowed, extended, or modified at the will and pleasure of the principal and creditor; that the giving of further credit or further time to the principal, whereby he suspends his own right to demand or to enforce his claim, is an act which the creditor does at his peril, and has no right to hold the surety still subject to an action or judgment at law; because by his own act ho nobs the surety of a right which entered into and formed a part of his original undertaking. These positions are as well established in courts of law as in courts of equity; are as broadly and liberally applied in the one as in the other; are certain, and rest upon fixed principles, and admit oi the proof of facts and the efficacy •of relief at law as well as in equity. It is in cases where the •creditor has given indulgence contrary to the will and directions •of the surety, where courts of equity would coerce the creditor to diligence, that the inquiry ever arises whether the principal has become less able to pay or the surety has, in^fact, been injured. It would, indeed, be a doctrine not only novel but full of perplexity and endless inquiry, to establish the principle that the extension of credit or time to the principal should or should not be a discharge of the surety, depending upon the future good or bad fortune, the industrious or idle life, or the wise or foolish speculations of the principal during such extension. Hence we think reason and common sense, as well as the authorities, establish unequivocally, at law as well as in equity, that the taking of a judgment against the principal and extending to him a definite time of payment, which prevents the ^security, either by a court of equity or otherwise, from coercing the creditor to prosecute, and himself from taking any steps of indemnification, aside from the inquiry, whether he is or is not damnified, is, in itself, a discharge or release of the surety. We refer the court to the following authorities, which present the doctrines and principles of law on this point in every' different aspect, and, as we humbly conceive, most clearly and satisfactorily sustain the plea: 9 Wheat. 680; 2 Bro. C. C. 583; 15 East, 617; 4 Taunt. 453; 5 East, 619; 5 Taunt. 319; 10 Johns. 587; 1 Saund. Pl. & Ev. 377; 2 Ves. 440; 4 Ves. 737; 12 Wheat. 554; 1 Mason, 323; 1 Paine, 305; 3 Wash. C. C. 70; Kirby, 397; 1 Caine, 1; 3 Bin. 523; 6 Bin. 295; 2 Johns. Ch. 559; 2 Des. 230, 389; 3 Des. 604; 4 Johns. Ch. 131; 2 Randolph, 333; 6 Mon. 9; 1 Mon. 45; 13 Johns. 174.
Upon the first point made by the demurrers, that “ it is not averred in the plea that the judgment against Bayless was entered without the knowledge and consent of the defendants,” we deem it proper to say that it was not raised in any argument heretofore made in the cause. Whether the averment be necessary, we have not examined or reflected sufficiently upon it to argue it. But we would suggest that the facts set forth in the plea afford no inference that the defendants had knowledge of, or consented to the “ arrangement.” Why, then, should they be required to negative that which is not inferable from the facts stated? Although “ every plea is to be taken most strongly against the party pleading;” yet unless, as on a demurrer to evidence, the facts fairly .authorize the inference, it is not to be drawn or taken against the pleader; no more than on the same facts before a jury they would be authorized or required to infer the knowledge or consent of the party. The entry of judgment is a fact over which the defendants had not, nor could they have any control; nor is their privity inferable from their relation to the parties to that judgment. Hence it seems to us that if their knowledge and consent would destroy the bar which the plea sets forth, it were the duty of the plaintiffs to reply to that fact.
But being now first advised of this exception to the plea, and not havingjbeen ourselves originally employed in this *cause, .should the court sustain the plea on the other material points we would ask permission of the court to amend in that particular, that the decision on the merits may be known, if possible, at the present term, as there are other causes depending much upon the same facts and principles.

Opinion:
By the Court :
He who becomes surety for another has a right to pay the debt when it becomes due, and collect it from his principal; he may substitute himself in place of the creditor, and subject any funds or securities provided for the' payment of the debt by the principal ; or he may call upon the creditor to prosecute his suit without delay. The law does not permit the creditor to interfere with these rights. If he do invade them, the surety is held to be discharged.
No principle is better settled, at.the present day, than that a surety can not be further bound than by the terms of his undertaking. These terms can not be changed without his consent. If any change is made that might prejudice his rights, without his consent, he is protected by holding his obligation at an end. A simple omission on the part of the creditor to pursue this remedy is not considered as affecting the rights of either party. But any act which destroys or suspends the right to an instant and continuing pursuit of the remedy, so "as that the surety can not enforce the collection of the debt without delay, absolves him from-his liability.
The defense which such an act gives -to the surety is one proper to be set up in a court of law. The doctrine is originally of chancery, and is of recent introduction there. Its adoption, in the courts of law, is almost within our own times. 4 Cam. C. 336. And it prevails, in either court, according to the circumstances of the-case. The authorities upon which it rests are very numerous. 7 Johns. 336; 12 Johns. 174; 17 Johns. 384; 2 Merivale, 276; 4 Johns. Ch. 7, 337; 2 Marsh. 82, 392; 2 Ves. Jr. 550; 4 Ves. 737; 1 Gall. 32 . 1 Mass. 339; 1 Paine, 305; 3 Wash. C. C. 7; 4 Wash. C. C. 26; 2 Rand. 333; 12 Wheat. 556.
*In the case in 2 Rand., the court lay down the doctrine broadly: " If a creditor, by agreement with the principal debtor, or by any other act, precludes himself, at law, from proceeding against the principal, after the debt is due, for a moment, or if the agreement is such that a court of equity would stay proceedings at law, the surety is discharged." Here is a judgment with a stay of execution entered of record. This ties up the creditor's-hands. If the surety were to pay the debt, he could do nothing-with the judgment until the stay of execution expired. The consideration upon which the stay of. execution was entered is not a matter for investigation. The fact that it is entered suspends the creditor's right to sue execution, until the entry is avoided. That is sufficient to discharge the surety.
It is objected to the plea that it does not sufficiently aver that the stay of execution was entered without the consent of the surety. The want of this consent is the material facts of the whole defense. We therefore think that the plea is defective. But leave is given to amend.
Judge Wright, having been counsel, did not sit in this case.