Court Opinion

ID: 5514456
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:28:01.629949+00
Date Added: 2024-06-11T08:34:15.299890
License: Public Domain

*376By the Court,
Sutherland, J.
A new trial must be granted in this ease. The judge erred in admitting the evidence of the insolvency of John W. Hulbert, before and at the time of his death. The defendant John P. Hulbert signed the note on which this action was brought, as surety for his father, John W. Hulbert. This appears on the face of the note." His defence was, that the plaintiff had, for a valuable consideration, agreed with the principal to extend the time of payment ; and had, in pursuance of such argument, actually extended it; and the fact of such agreement appears to have been established by pretty clear and direct testimony. This fact, if satisfactorily proved, discharged the surety, and was per se a perfect defence to the action. Pain v. Packard, 13 Johns. R. 174. King v. Baldwin, 17 id. 384, in error. 15 id. 483. 16 id. 72. 9 Cowen, 206. 7 Wendell, 289. 2 Johns. Ch. R. 560. 2 Bos. & Pull. 62. It was varying the contract to his prejudice, as it deprived the surety of the power of paying the debt, and immediately calling upon his principal. It is unnecessary for him to show that he has been actually damnified. It was perfectly immaterial, therefore, whether the principal was or was not insolvent when the new agreement was made. It so changed the original contract that the surety might be prejudiced by it, and that is sufficient to discharge him.
Where a surety in a bond or note requests the creditor to proceed immediately to collect the money for the principal, who is then solvent, and the creditor neglects or refuses to proceed, and the principal afterwards becomes insolvent and unable to pay, the surety will be discharged. Pain v. Packard, 13 Johns. R. 174. King v. Baldwin, 17 Johns. R. 384, in error. This rule depends upon a principle entirely different from the other. Here the creditor has done nothing to vary the contract, or tie up the hands of the surety. But it is reasonable and just that he should, upon the request of the surety, collect the debt from the principal. If he neglects or refuses to do so, and the surety is thereby injured by the subsequent insolvency of the principal, the surety ought to be discharged. The judge appears to have confounded these two classes of cases, and to have supposed that it was competent for the *377plaintiff to show that the surety had not been damnified by his agreement to give time to the principal In this he eired. All the evidence upon both sides in relation to Hulbert’s insolvency, and all that the judge says upon that point in his charge, was irrelevant to the case.
New trial granted; costs to abide the event.