Court Opinion

ID: 8797831
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:18:22.100144+00
Date Added: 2024-06-11T17:03:43.949200
License: Public Domain

WAEKER, Circuit Judge.
This was an action against two of the four signers of two promissory notes, one for $2,000, payable six months after its date, and the other for $1,500, payable three months after its date, each of which contained the following stipulation:
“We agree that after maturity the time of payment may be extended from time to time by any one or more of us without the knowledge or consent of any of the others of us, and after such extension the liability of all parties shall remain as if-no such extension had been made.”
The defendants duly set up as a defense that a signer of the notes, who was not sued, was the principal thereon, that the defendants signed each of the notes merely as sureties, and that before the maturity of the notes and for a valuable consideration, to wit, $50, and without the consent, knowledge, or acquiescence of defendants, or either of them, the plaintiff, the payee of the notes, granted to the principal an extension for six months on the $2,000 note and an extension for three months on the $1,500 note, and thereby discharged the defendants as such sureties from any liability thereon. There was evidence tending to prove that the defendants were sureties, and that the plaintiff, for a consideration of $50 paid to him by the principal, and without the knowledge or consent of the defendants, “renewed” the two notes after the maturity of the one for $2,000, hut before the maturity of the one for $1,500. At the conclusion of the court’s charge to the jury an exception was duly reserved by the defendants to the failure of the court *666to submit to the jury the issue made by the pleadings that the notes were extended before maturity without the consent of the defendants. The court did not give the jury any instruction on that issue, nor submit it to them in any way.
[1-3] We áre of opinion that the evidence as to the notes having-been “renewed” by one of the makers imported that so far as he was concerned they were made new again, so that they were to be considered as if made anew in the same terms, but of the date of the taking effect of the renewal. 7 Words and Phrases, 6085. An effect of such renewal was to extend the time of payment for the same period the notes originally had to run. By the payee’s grant to the principal before maturity of such an extension of the time of payment a surety is discharged, because the creditor, by so giving time to the principal, puts it out of the power of the surety to pay the debt at maturity and then resort to his remedy against the principal. Union Life Insurance Co. v. Hanford, 143 U. S. 187, 12 Sup. Ct. 437, 36 L. Ed. 118. The stipulation in the notes that the liability of none of the makers should be affected by an extension of the- time of payment after maturity did not cover such an extension before maturity, as that stipulation did not stand in the way of a surety paying the note at or before maturity and then having recourse against tire principal, thus avoiding the risk of his right to proceed against the principal becoming a less valuable one as a result of a subsequent change for the worse in the latter’s financial condition.
[4] The exception above mentioned so called attention to an issue in the case which was raised by the pleadings and the evidence therein as to put upon the court the duty of submitting that issue to the jury by appropriate instructions. It was error for the court to fail to do so. This error did not affect the recovery on the $2,000 note, as there was no evidence to support the issue mentioned so far as that note was concerned. As we find no other' reversible error in the record, the conclusion is that the judgment should be-reversed, unless the plaintiff, the defendant in error here, within 30 days from the filing in the District Court of the mandate of this court, shall file in the District Court a remittitur of three-sevenths of the amount of the judgment, a certified copy of such remittitur to be filed with the clerk of this court — the judgment to be affirmed, if the stated condition shall be complied with: and it is so ordered.