Osgood v. Miller

Appleton, C. J. This is an action against one of the sureties on a note on which one James C. Miller was principal. The principal being insolvent and about to take advantage of the bankrupt law, the defendant agreed with the plaintiff in writing that he might “release the principal maker of the note, James C. Miller, without prejudice to the rights of either party in interest to said note.” In pursuance of this arrangement the principal on the note paid the sum- of $263.50 which was indorsed on the note, and the plaintiff released the principal by drawing a line over his name. This was done in good faith by him, simply to discharge the principal, but with no design to prejudice the rights of the sureties. [176] The sureties now claim that they are discharged from all liability ; but we think not. What was done was by their consent and probably for their benefit, inasmuch as the principal did not take advantage of the bankrupt law, and paid a sum which he probably would not, had he become a bankrupt. A surety is not discharged by a contract, made with his assent, between the creditor and the principal debtor, although it may operate to extend the time of payment. Wright v. Storrs, 6 Bosw. 600, 601. In Ex parte Harvey ; In Re Blakely, 27 Eng. L. & Eq. 272, Turner, L. J., says: “It is not disputed that a surety, who concurs in- an arrangement between the principal and the debtor, is not discharged by such arrangement.” This assent of the surety may be shown by parol. Wyke v. Rogers, 12 Eng. L. & Eq. 162. The surety is not discharged by the execution by the creditor of a composition deed with his consent. Cowper v. Smith, 4 M. & W. 519. The consent of the surety to the discharge of the debtor prevents such discharge operating to release the surety. DeColyar on Guarantees, 403. A surety by deed guaranteed the payment of a banking current account and agreed that no composition with the principal debtor should discharge his liability. The principal debtor entered into a deed of composition with his creditors, which contained an absolute release of his debts. Held, that the surety was not discharged by the release of the principal debtor. Union Bank of Manchester v. Beech, 8 H. & N. 672. The alteration of the note by striking off the name of the principal was done in good faith and intended to be and was in conformity with the agreement signed by the defendant. The sureties agreed in writing to the discharge of the principal and no other mode being mentioned the erasure of his name from the note was not an improper mode of doing it. An alteration of a bond without any fraudulent intent will not, it seems, avoid such bond. Adams v. Frye, 3 Met. 103 ; nor when made merely to correct a mistake. Ames v. Colburn, 11 Gray. 390. Judgment for plaintiff. Walton, Barrows, Virgin, Beters and Libbey, JJ., concurred.