Case Name: Slagle v. Pow
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1884-01
Citations: 41 Ohio St. 603
Docket Number: 
Parties: Slagle v. Pow.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 41
Pages: 603–605

Head Matter:
Slagle v. Pow.
Where the payee of a promissory note for $1,500 held another note of the makers for $1,000, given as collateral to the first note, with sureties, and payable at a time to which the payment of the principal note had been extended, and the payee after the maturity of the collateral note again extended the time of payment of the principal note for a definite time, by a valid agreement and without the consent of the sureties on the collateral note, he thereby discharged them.
Ekkoe to the District Court of Mahoning County.
On the 31st day of March, 1875, Robert A. Barnes and Avarilla A. Barnes, his wife, made and gave to the plaintiff in error, Slagle, their promissory note for $1,500, payable in one year with eight per cent, interest, and at the same time said Barnes and his wife executed and delivered to Slagle their mortgage deed of certain lands in Mahoning county to secure the payment of this note. On the 10th day of January, 1877, to further secure the payment of the note, and for the purpose of obtaining an extension of the time of payment, Barnes and his wife, with Pow and Hawkins as sureties, made and gave to Slagle the following contract:
“ January 10th, 1877.
“For value received we or either of us promise to pay to Jonas Slagle or order the sum of one thousand dollars against first day of February 1878, eighteen hundred and seventy eight. N. B. This n— is given as collateral security to secure the payment of a note that said Slagle holds against R. A. Barnes and Avarilla A. Barnes for which said Slagle has a mortgage. Said note dated March 31, 1875. Now be it remembered when the said Slagle shall have received the fifteen hundred dollars and eight per cent, interest then this note is void and to be returned to said Barnes. Interest eight per cent, from date.
“ Witness our hand and seal.
“ R. A. Barnes, [Seal.]
A varilla A. Barnes, [Seal.]
Wm. Hawkins, [Seal.]
John Pow.” [L. S.]
Slagle brought his action upon this contract and the sureties, Pow and Hawkins, for defense alleged that after the contract above stated became due, Slagle, for a valuable consideration, extended the time of payment of the noté for $1,500 from February 1, 1878 to February 1, 1879. Upon the trial in the common pleas the court instructed the jury that an extension of the time of payment of the note for $1,500, if made for a consideration, for a definite time, aud without the consent of the sureties on the contract above set forth, would release them. The verdict was for the defendants, and judgment was rendered on the verdict. This judgment was affirmed by the district court. It is now sought to reverse both judgments.
J. R. Johnson, for plaintiff in error.
Jared Huxley, for defendant in error

Opinion:
McCauley, J.
The makers of the note for fifteen hundred dollars were liable also on the contract which was held as collateral to it. The collateral contract did not rest on a distinct consideration, but the consideration of the principal note and of the collateral were the same. In the ordinary case of holding one note or contract as collateral to another, each note or contract rests upon a distinct consideration. The extension of time on a principal note or contract, which would release sureties upon it, would not affect a note or contract belonging to the principal debtor upon a distinct and different consideration held as collateral to it. When the principal and collateral contracts are upon separate and different considerations, if the collateral matures after the principal, it survives and may be enforced after the principal has become barred by limitation. In such cases also where the collateral matures before the principal it may be enforced before the principal debt is due. The right of action on the collateral is in no way dependent upon the principal debt, except that the principal must remain unpaid to give the right to enforce the collateral. The consideration to Barnes for the principal and the collateral being the same, and Pow and Hawkins being sureties only, their relation to the principal debt was the same as if they had been sureties on the original note, limited only by the amount for which they undertook. While the payment of the principal might have been extended without affecting the collateral, if the agreement for the extension had reserved the right to proceed on the collateral notwithstanding the extension, where no such right was reserved the extension of time for the payment of the debt extended the time on all notes or contracts held by the creditor for it, which were not supported by a consideration different from the one for which the principal note was given.
Judgment affirmed.