Court Opinion

ID: 9339673
Source: CourtListenerOpinion
Date Created: 2022-12-16 19:24:13.050689+00
Date Added: 2024-06-11T17:15:20.703708
License: Public Domain

The Chancellor.
One surety has an unquestionable right to stipulate for a separate indemnity to himself, and to apply that indemnity in- extinguishment of his portion of'his liability; and an indemnity taken by one surety can be reached by his co-sureties only where it *229was taken in fraud of them, or was taken for their joint benefit 4 Hawk. 358.
The note here being applied in part extinguishment of the liability of the complainants, they certainly have no right to complain. This is not a strict, technical release, but even if it were, although the rule at law is, that a release by the obligee of one of two persons jointly bound, is a release of both, yet equity will not give a release to operate beyond the intention of the parties, and the justice of the case. Gill & John. 314; 6 John. Ch. Rep. 242.
This rule seems to be sustained by Pothier on Obligations, who lays it down that a release by a creditor of one of several joint debtors, would release the others, if the creditor meant thereby to extinguish the debt, but not if the creditor meant to reserve his rights against the other co-debtors for their proportion.
But I apprehend that the release to Brown in this case cannot prejudice any rights to contribution which the complainant may have against him for any excess paid by them over and above their proportion of the debt. If this position be true, it would seem to follow that a release or discharge of one of several sureties would not operate as a discharge of them all. In 6 Ves. 805, Lord Eldon held that a discharge of one surety did not discharge the other sureties, and that as each surety was bound to contribute his share towards the general payment, no one could recover over against another who had been discharged, unless for the excess paid by him beyond his due proportion. The creditor might, therefore, as was done in this case, accept a composition from one surety, and still proceed against another to recover his full proportion of the original debt, without deducting the composition paid, if it did not exceed the proportion for which such surety was originally bound. I am aware that Mr. Theobald, in his treatise upon Principal and Surety, questions the accuracy of this decision, and supposes it to have been misreported; but Judge Story, 1 vol. 478, in a note to his treatise on Equity, remarks that he sees no reason to question either the accuracy of the report or the soundness of the doctrine; and in that remark I fully concur.
There are three sureties in this case. The notes amounted *230originally to four thousand one hundred dollars. Brown paid one thousand five hundred dollars at the time of his discharge, which it would seem was about his proportion of the principal and interest due up to that time, and this is all the complainants would have a right to hold him liable for, under any circumstances.
The demurrer must be sustained, and the bill dismissed.