Miscellaneous Notes of some Cases and Dicta in the IN Ex parte Mure, 2 Cox, 63, 74, Lord Thurlow-after observing In Wright v. Simpson, 6 Vesey, 714, 734, Lord Eldon said, that as to the case of principal and surety, in general cases he never understood that, as between the obligee and the surety, there was an obligation of active diligence against the principalthat the surety is a guarantee, and it is his business to see whether the principal pays, and not that of the creditor. So in Mayhew v. Crickett, 2 Swanston, 185, 191, the same judge remarked, that the creditor may remain passive if he chooses. S. C. 1 Wilson, C. C., 418, 423. The latter reporter has altogether misapprehended what Lord Eldon said. The surety has no right to say, that he is discharged from the debt, which he has engaged to pay together with the principal, if all that he rests upon is the passive conduct of the creditor in not suing. He must himself use diligence, and take such effectual means as will enable him to call on the creditor, either to sue, or to give him, the surety, the means of suing. Eyre v. Everett, 2 Russell, 381, 384. In Mactaggart v. Watson, 3 Clarke & Finnelly, 525, 541, Lord Brougham said, that while at law the surety in a bond is not at all discharged, even by a long neglect of the obligee to demand payment, or account, from the principal; nay, when the latter has become insolvent during the time thus suffered to elapse :the Courts of Equity had never, to his knowledge, given a discharge to the surety merely on the ground of the creditor, the obligee, not having called on the debtor so early as he ought, or not having given early notice of his failure, or non-payment, to the surety. See Orme v. Young, Holt, 84, 86, and Samuell v. Howarth, 3 Merivale, 272, 278. Lord Ellenborough said, in The Trent Navigation Company v. Mere delay on part of creditor to sue principal debtor will not discharge the surety. Old doctrine this head. Harley, 10 East, 34, 40, that whatever remedy there might be in equity, the laches of obligees in not calling upon the principal so soon as they might have done, was not, to his knowledge, an estoppel at law against the sureties. There is no case, which goes to the extent, that mere laches by the creditor to enforce his demand against his debtor, will operate as a discharge to the surety, whilst there are several decisions to show that laches only, by the party whose debt is secured, will not discharge the surety, or party guaranteeing its payment. There may, however, be an extreme case of negligence, which may almost amount to fraud, and fraud would be an answer to the demand as against the surety. Goring v. Edmonds, 3 Moore & Payne, 259, 264, 265; S. C. 6 Bingham, 94, 99. In the case of an executory contract the laches of the creditor may so alter the state of things as to conclude him; but that ought not to govern the case of a guarantee for the payment of money, or where a party becomes surety for an existing debt. Ibidem. The true distinction is this, the mere refraining, on the part of the creditor, from suing the principal debtor does not discharge a surety; but where time is, without the consent of the surety, given by a contract that is binding on the creditor (see post, pages 569, 588), the surety is discharged. Combe v. Woolf, 1 Moore & Scott, 241, 251; S. C. 8 Bingham, 156, 164. If the creditor continues to deal with the principal debtor on the original terms of the contract between them, he cannot by any length of credit which he so gives, be properly said to give time to the debtor. The time must be given as an extension of the original credit. Howell v. Jones, 4 Tyrwhitt, 548, 559; S. C. 1 Crompton, Meeson & Roscoe, 97, 107. The number of cases and dicta under this and some of the subsequent titles might be considerably increased. There is ground for thinking that in the reigns of James the of the Court on First and Charles the First, the Court did not so far consider it the business of the surety to see whether the principal had paid, as to refuse to interfere in cases, where the security had been on foot a long time after the money had become due, and the surety was not aware of that circumstance. In Hare v. Michell, Tothill, 182, a surety was relieved where the bond had been continued twelve years, without the plaintiff's privity. In Saunders v. Smith, ibidem, 180, it is said a surety was relieved where a bond continued in use without his privity, he thinking the same to be paid. But in the next page there is a more full note of the same case, according to which, the plaintiff was bound with the father of one Churchill, a defendant, for payment of money at a day, and the plaintiff supposed the money had been paid accordingly; the money however was not paid, and Churchill the father died three years after, and upon his death the obligee put the bond in suit against the plaintiff; but in respect the bond was continued without the plaintiff's privity, and the defendant Churchill had a good estate from his father, it was ordered that the feoffees, to whom the defendant Churchill had conveyed the lands in trust, should sell the same for the payment of the father's debts. It may be conjectured that the obligee was a defendant, and compelled to look to the proceeds of the sale for satisfaction of his bond. Johnson v. Pudicot, Tothill, 181, probably was a case in which the obligation had been continued in use without the privity of the sureties, they thinking the same had been paid. Tothill's words are-one became bound with sureties, and afterwards bankrupt; the creditors sued the sureties because they were remediless against the bankrupt, yet ordered not to take any advantage. In the same page and intermixed with the above, Tothill gives the titles of six other cases, but he does not state the effect of any except one, Little v. Brooke, which is described as contrary to the note of Johnson v. Pudicot. Moile v. Roberts is to be found both in Tothill, 182, and Nelson, 9. According to Tothill, the heir of a surety, where the bonds were continued without the privity of the surety, was relieved. Nelson reports the case thus-About eighteen years before the bill filed, Moile, the father, became bound with one Rosecarrock in a bond of 2007., conditioned for the payment of 1007. to the Lord Roberts, the defendant, at a certain day long since past. Afterwards the defendant purchased lands of the said Rosecarrock to the value of 500l., which purchase was made about four years before Rosecarrock's death. After his death the plaintiff took out administration to him, and being sued upon this bond exhibited his bill for relief; and in regard of the antiquity of the bond, and for that Rosecarrock himself was never sued in his lifetime, it was presumed that the defendant did deduct the debt out of the purchase money, and notwithstanding What transactions with the principal discharge the surety. there were no proofs made of the payment of the money, the Court decreed that the defendant should be restrained from proceeding at law on the bond. Sir George Cary, who was a Master in Chancery at the end of the reign of Queen Elizabeth, says in his Reports, page 12, it is now usual in Chancery to help the surety against whatsoever default of principal, if so be he will offer the principal debt and damages; whereas (according to Cary's opinion) he ought to find there no other relief than the principal debtor should find; because he is not only a principal by his own bond, but also was the cause for which the money was lent, seeing that without him the principal had not been credited. And experience bewrayeth that this favour to sureties breedeth contempt to bonds. The relief which the principal found in Chancery has been explained by Sir George himself. See ante, p. 220. In addition to the authorities there mentioned, the student may consult Woffington v. Sparks, 2 Vesey, Sen. 569. Sir Thomas Clarke there made a decree relieving an obligee in the bond, "upon the common terms against the penalty." The obligee having, at the instance of the surety, put the bond in suit against the principal debtor, was prevailed upon by the latter to waive farther proceedings on his giving a warrant of attorney to confess judgment; upon which warrant of attorney a memorandum was indorsed, respiting execution for three years. Perpetual injunction against the obligee from suing the surety. Nisbet v. Smith, 2 Brown C. C. 579 (a). There shall be no transaction with the principal debtor, without acquainting the person, who has a great interest in it. The (a) Considering the antiquity of the doctrine (see ante, page 515) it is singular that the above should be the earliest case (as the author believes) in our Equity Reports upon the release of a surety in consequence of dealings between the creditor and principal debtor. However from a passage in Skip v. Huey, 3 Atkyns, 91, the doctrine appears to have been then (1744) commonly received. It was there alleged that as a bond was delivered up in consideration of notes, it was novated, and the surety in the bond was released, and no longer liable as a surety. See also the argument of the attorney-general. surety only engages to make good the deficiency. It is the clearest and most evident equity not to carry on any transaction without the privity of him, who must necessarily have a concern in every transaction with the principal debtor. You cannot keep him bound, and transact his affairs (for they are as much his as your own) without consulting him. You must let him judge whether he will give indulgence contrary to the nature of his engagement. Rees v. Berrington, 2 Vesey, Jun. 540, 543. It cannot be contended upon any principle that prevails with regard to principal and surety, that when the principal has left a sufficient fund in the hands of the obligee, and he thinks fit, instead of retaining it in his hands, to pay it back to the principal, the surety can ever be called upon. Law v. East India Company, 4 Vesey, 824, 829. When any act has been done by the obligee that may injure the surety, the Court is very glad to lay hold of it in favour of the surety. Ibidem, 833. In English v. Darley, 2 Bosanquet & Puller, 62, Lord Eldon said, we all remember the case where Mr. Richard Burke being surety for an annuity, the grantee gave time to the principal, and yet argued that Mr. Burke was not relieved thereby, though the principal was; but it was answered that the grantee could make no demand upon the surety, because he must by so doing enforce a payment from the principal contrary to the agreement. (See post, page 608. 611.) If the obligee begins to sue the principal and afterwards gives time, there the surety has the benefit of it. Wright v. Simpson, 6 Vesey, 714, 734. When it is stated in some cases, that it is for the interest of the surety that the compromise shall be made, the answer is, those for whose benefit it is alleged to be made, are the proper judges whether it is for their benefit, and it is not to be forced upon them. Ex parte Gifford, 6 Vesey, 805, 807. Bond for 10,000l. to secure balance of account, surety liable only to the extent of 6000l. The balance 95007.; and mortgage given by principal debtor for 40007.; and an agreement between him and the obligee that the residue should be paid by instalments. Lord Eldon said, the consequence of this transaction in equity is, that the surety continuing liable for the sum of 55001., remaining due upon the settlement of accounts, and the creditor agreeing with the principal debtor to postpone his remedychanging his immediate right to sue to a right to call for certain instalments, the effect of that agreement is, that in equity the |