Court Opinion

ID: 5555438
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:40:17.018288+00
Date Added: 2024-06-11T08:35:18.778376
License: Public Domain

McCAY, J.
Nothing is better settled than that any change of the contract, between the principal and the creditor, releases the security from his contract. The surety is only bound by the *contract he makes, and if that is so altered *307between the principal and the creditor as that it has become a new contract, the right against the surety is gone, since it is the essence of his cóntract that he is only bound by its terms, and if the principal is ¡not bound by the same terms, then the surety has no redress over.
Clearly, a contract to pay in currency, which it is admitted was the surety’s undertaking, is different and less onerous than a contract to pay in specie. Clearly, also, as the contract now stands, between the principal and the creditor, the principal’s contract is to pay in specie. Has the surety undertaken to pay in specie? By the words of the contract he has not. When, therefore, the principal agreed that his contract was to pay in specie, he agreed to a different contract from that made by the surety. In such a case, the authorities are uniform that the security is released from the whole undertaking.
Had the fact been, that the original contract was a specie contract, and the security knew it, and become security with that understanding, the mere fact that, under a mistake of the law, they left certain words out of the contract, which were after-wards put in by the principal, would not release the surety.
If the surety became surety knowing that he was becoming surety to a specie contract, then this memorandum is no change of the contract, of both principal and surety, as it was in fact made. But prima facie this was not a specie contract by the surety, and the making it such was a change of the contract as he made it. There is, it is true, some evidence that the surety knew it was a specie contract, though that evidence is by no means strong. The Court, however, by his charge authorized the jury to find for the plaintiff, if they believed the original contract ■ between the principal and the creditor was a specie contract, entirely ignoring the necessity of showing that the surety knew this and became surety with that understanding. This, we think, was error.
To make the surety liable, after the parties have by mutual consent, without the surety’s knowledge, put this memorandum *011 the note, it must be shown, by competent testimony, that the surety signed the note with the knowledge and understanding that the debt was to be paid in specie.
Judgment reversed.