Court Opinion

ID: 6741033
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:24:13.833152+00
Date Added: 2024-06-11T16:01:57.552356
License: Public Domain

JONES, J.
1. If a creditor accepts goods in full payment of a debt owing him by his debtor and executes a written release of the debt to the debtor, one who guarantees the payment of the debt is also released from his obligation as guarantor of the debt.
*3852. C. guaranteed payment of goods to the extent of $1500.00 bought by a firm from a seller creditor. After the goods were delivered the firm became involved in financial difficulties and its assets were placed in the hands of a receiver. The creditor and debtor agreed that the former would release the firm from the debt if the latter would turn over to the creditor all of the firm assets in the hands of the receiver. This was done and a written release executed. 'The guarantor had notice of but did not agree to the transaction in that form. The amount. realized from the sale of the assets was applied to the debtor’s account and not in reduction of the guarantor’s liability, as requested by the latter, nor was there any agreement made by the guarantor that he was to continue liable, either in whole or in part, upon his guaranty—
HELD: The transaction resulting in the release of the principal debtor was a full and not a partial payment of the debt, was prejudicial to the guarantor and released him from his obligation as such.
(Day, Allen, Kinkade, Robinson and Matthias, JJ., concur.)