Court Opinion

ID: 8297996
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:09:21.498584+00
Date Added: 2024-06-11T16:44:09.962846
License: Public Domain

PETITION TO REHEAR.
Upon petition to rehear,
Cooper, J.,
said:
In the opinion delivered in this case at a former day of this term, it was held that a person who becomes the surety of the principal debtor, in the course of legal proceedings to collect the debt, makes himself liable before any prior surety for the debt, and, there*647fore, to an earlier surety in the course of fbe same legal proceedings. As a consequence of the general principle thus announced, it was decided that between the complainant’s intestate as the surety of the debtor on a eertiorari bond to bring a justice’s judgment into the circuit court, and the surety of appeal from the judgment of that court to the Supreme Court, the latter surety is primarily liable. In support of the conclusion reached, besides authorities from other States, a number of our own decisions were cited, commencing with 8 Yerger and coming down to 14 Lea. It was said in the opinion delivered, that the reason for all these rulings is that the new surety, by joining the principal in a bond by which he obtains time in the collection of the debt, changes the terms upon which the previous surety was bound, and prejudices his rights. The result to him is precisely the same as if the debtor had obtained time by giving a new obligation with new sureties.
The learned counsel of the defendant, in the petition for rehearing which he has presented and accompanying argument, takes the illustration in the last clause cited as if it were the case decided, and the change of terms mentioned as meaning the same in two distinct classes of eases, and, having thus built up a man of straw, undertakes to demolish it. The distinction between successive obligations made binding by law without the creditor’s assent, and similar obligations made by direct contract with the creditor, is overruled, and consequently the distinction between exoneration and subrogation. A contract made by the *648creditor with his debtor for delay, if valid, releases the prior surety who does not consent to it. An obligation authorized by the law, to which the creditor is not a party by contract, does not release the prior surety. He only becomes entitled to the benefits of the obligation by way of subrogation to the creditor’s rights. Exoneration and subrogation are entirely distinct rights, although they both rest upon the same general principle of an interference with the surety’s agreement, or, as it is commonly expressed, changing its terms. A surety has the right to stand on the very terms of his agreement, and any alteration, although it be for his benefit, if made without his consent by the creditor, discharges him: Paine v. Jones, 76 N. Y., 279; Haden v. Brown, 18 Ala., 643. If the alteration be made, through the instrumentality of the law, without the aid of the creditor, by the debtor and a new surety, the former surety is not discharged from liability to the creditor, but the latter surety becomes primarily liable, because the first surety is entitled to be subrogated to all the rights of the creditor upon payment of the debt. The two cases are analogous but not the same, and the change of terms spoken of in each is not identical.
Upon the idea that they are the same, the argument in support of the petition for rehearing insists that the terms of the contract of the complainant’s intestate on the certiorari bond were not changed by the execution of the appeal bond by the defendant. And it is clear that those terms are not altered, so far as the creditor is concerned. Neither were they *649altered in any of the cases in our books. The prior surety remained liable to the creditor as before. But the effect of the new security in all the cases was, if not to alter the terms of the obligation, to prejudice the rights ■ of the first surety in precisely the same way as if it did alter the terms. And so the courts have said, illustrating the character of the injury by reference to the change of a contract by the creditor and debtor. Without the delay occasioned by the act of the new surety, the prior surety could proceed at once against the principal. The contract between the first surety and the debtor is, in effect, changed, and, in analogy, even if the change be for the surety’s benefit, still he is entitled, as between him and the new surety, to the indemnity furnished by the latter.
Our courts, in all the cases like the one before us, have recognized the principle laid down in the leading case of Dering v. Earl of Winchelsea, 1 Cox, 318, that one who becomes surety in the course of legal proceedings against the principal has no right of contribution against the original surety for the debt, but on the contrary, the latter is entitled to be sub-rogated to the creditor’s rights against him. The principle was quoted with approval by Judge McKinney, in Chaffin v. Campbell, 4 Sneed, 184, and would have controlled the ruling in that case if the statute itself had not provided for the respective liabilities of the original surety and the stayer. It was recognized in McNeilly v. Cooksey, 2 Lea, 43, and Tennessee Hospital v. Fuqua, 1 Lea, 612, and is expressely adopted as *650the law of this State by Chief Justice Deaderick in Briggs v. Hinton, 14 Lea, 239. Aud in the opinion delivered in the case now before us, the principle was extended, in accord with the authorities, to the case of successive sureties in the course of legal proceedings. The cases are decided upon the principle enunciated, and not upon the facts of' each particular case, as contended for.
The petition makes the point that .the equity of the surety will not arise if he consent to the giving of the new security, and that upon the pleadings in this case, the bill alleging the absence of such consent and the answer denying the allegation, the burden of proof is on the complainant, and he has made none. The counsel produces the syllabus of a recent decision of the supreme commission of Ohio to this effect, where the suit was by the creditor against the surety, and the latter pleaded in defense an extension of time given by the principal: Bramble v. Ward, 18 Am. L. Rev., 178. But even if it be conceded that thi$ is the correct rule as between the creditor and the surety upon such a state of the pleadings, where the surety is prima faeie liable upon the instrument sued on, it can have no application to a suit between successive sureties in the course of legal proceedings, there being no written or other positive contract between the parties, and the party, against whom the implication of liability primarily attaches, is seekiug to relieve himself and cast the burden upon the prior surety. All of our authorities assume, if they do not directly decide, that the primary liability *651is fixed by the date of the obligations, the sureties being liable in the inverse order of these dates.
The point is also made that, under our decisions, a contract for delay, after judgment, will not release the sureties, citing Peay v. Poston, 10 Yer., 112, and other cases. But the argument is based upon the identity of the case of a surety released by the act of the creditor, and the case of successive sureties. The two cases, as we have seen, are not identical, and the analogy misleading. The surety ceases to be such, so far as the principal is concerned, in the matter of delay or giving time by contract. But our authorities are uniform, that as between successive sureties, the fact of suretyship is as open to inquiry after, as before judgment.
It is contended, lastly, that there has been an officious payment of a part of the debt, under the ruling of Briggs v. Hinton. But in that case, the judgment of the Supreme Court was void as to Briggs, who did not sign or join in the appeal bond, the ruling being directly put upon that ground; while in this case the judgment against the complainant’s intestate, he being before the court, was merely erroneous.
The petition for rehearing must be disallowed.