Evans v. . Raper

Byoth, J. Learned and excellent briefs were filed in the case by the counsel of both sides, but they take, perhaps, a wider range than is required by the particular question submitted in the case agreed. That question is, whether the covenant set forth operates as a release of the defendant, who is the surety in the note and judgment. The covenant stipulates, first, that the plaintiff “will not issue execution upon the jridgment,” and second, “will not in any way attempt to collect the same or any part of it, against the said Martha Watson, as administratrix or otherwise.” The word “release” is not used, but it was unnecessary, when words, of equivalent meaning are substituted. Certainly, the phrases “ will not issue execution,” and “further, I will not collect, or attempt to collect,” the judgment or any part of it, are fairly incapable of any other construction than that of being a release. The cov *643 enant is of perpetual obligation, and so professes to be. A debt that is never to be collected, is discharged. The legal effect of the covenant is, therefore, to release and discharge the principal in the judgment; and nothing more appearing, it follows from all the authorities that the surety is also discharged. Any discharge or modification of the principal’s liability, without the consent of the surety, absolutely discharges the surety; for he has contracted to guarantee a specific agreement; and if a new agreement be substituted without his assent, his contract is at an end. -The same effect follows, if the creditor enters into a binding contract to give time for payment to the principal. For it would be a fraud upon the contract, if he were afterwards to receive the debt from the surety, and thus confer on 1dm an immediate right of action against the principal. The surety is therefore discharged altogether from his guaranty. Adams Eq., 107. It is, however, laid down by most of the authorities, that if the creditor, 'in giving time, expressly reserves his remedies against the surety, there is no discharge. To'use the language of Lord EldoN, in ex parte Glendenninq, 1 Buck. B. C., 517, “the law has been clearly settled, and is now perfectly understood, that unless the creditor reserves his remedies, he discharges the surety by compounding with the principal, and the reservation must be upon the face of the instrument by which the parties make the compromise; for evidence cannot be admitted to vary or explain the effect of the instrument.” It is thus seen that the creditor can reserve his remedies against the surety only when he gives time to the principal, and not when he absolutely discharges him, and then, that the reservation must be expressed in the. instrument itself. Whether this doctrine of the reservation of remedies against the surety, when time is given to the principal, obtains, or should obtain, in tills State or not, is immaterial here, for no such express reservation is contained in the covenant, in our *644 case, and the covenant does not give time to, but releases, the principal absolutely. But it is insisted by the plaintiff’s counsel, that the covenant not to sue or collect, is founded on no new consideration, and therefore, is void ; and that it does not express the intent of the parties. It is true, the case states that the consideration of the covenant was the payment of $250 on the judgment, and that the plaintiff did not intend, by the covenant, to release the surety, nor did the covenantee intend to take more than a covenant, that no execution should be issued against her. But none of these matters are set forth in the instrument ; and the question is, not what the parties intended, but what they did. The plaintiff does not now seek to reform the covenant as having been executed in mutual mistake, but merely sets out what construction the parties themselves put upon it at the time of its execution. But the construction of the instrument is the' business of the court alone. Nor is at all material what the- consideration was, or whether there was any, unless an illegal or otherwise insufficient one, had been expressed upon the face of the instrument. That enquiry is precluded by the seal, as the ease is presented. The plaintiff does not now repudiate the covenant, or seek to reform it, biit on the contrary she is pursuing the surety alone. The rule that the creditor does not discharge the debtor by taking a less sum in discharge of the whole debt, although he so contracted and intended, is extremely artificial and unsatisfactory ; but a rule that the creditor may discharge the principal and pursue the surety alone, even by an express reserva, tion of power to do so, is still more repugnant to a sense of justice and honor. The rights of the surety in such cases, results more from equity, than from contract, and can not be put upon too high a ground. See Re se v. Berrington, and notes, 2 White & Tudor’s Equity Cases ; Hare & Wallace’6 Notes 856, where the whole.doctrine of principal and surety, *645 is discussed and the authorities reviewed. This case is distinguished from Winston v. Dalby, 64 N. C. Rep. 299, and Russel v. Adderton, 64 N. C. Rep. 420, and other cases there cited, in that, here the debt had been pursued to judgment, which constitute a lien upon the lands of the principal and surety. A release, or even a covenant not to sue out execution against the principal in such case, operated as a discharge of the creditor’s lien, and thus deprived the surety of the benefit of one of his securities against loss. This voluntary act of the creditor to the prejudice of the surety, released the surety, at least to the extent of the loss thereby incurred. Reese v. Berrington, above cited. This case is further distinguished from Hagley v. Hill, 75 Penn. St. 108, and similar cases, in that the covenant is made not before, but after judg ment, and is “ not to issue execution ” or “ collect the same'or any part of it.” As an injunction perpetually enjoining the collection of the judgment, would have lain, under the former system, the practical effect of which would be to discharge the debt, so this court combining the powers of both courts, will put such a construction upon the covenant, as will reach the same end, by the shortest and most direct road. This is done by giving effect to the covenant as a release. There is no error. Pee Curiam, Judgment affirmed.