with interest, and the money not being paid on that day, the parties had agreed that the debtor should pay an anticipated interest if after that the creditor brought his action, would not the new agreement have been a good defence at law? How can a man demand principal for what he has already taken interest? The question is, whether, if the obligee had brought an action on the 28th October to recover the penalty of the bond, a court of equity would not have entertained a bill to restrain that action, upon the suggestion and proof that he had taken interest up to the 1st January? Or suppose the case of a simple bond without any surety, and six months' interest taken by anticipation, and then an action were brought on the bond, would there be no remedy for the obligor in equity? If in such a case the time for payment of the interest could be explained consistently with the action, that would alter the state of the case; but if it appeared simply that the six months' interest had been given, what could the imagination suggest, but a contract ipsissimis verbis, that the creditor should not sue for that time? Besides, the interest being paid, would a court of equity endure that the creditor should put that interest into his pocket, and next day sue for the principal? If that be so, as between the principal debtor and the obligee, the same principles will apply to the surety. The question here is, whether the party did not preclude himself from suing on the bond, by receiving by anticipation the interest due between October and January. The shortness of that period cannot affect the question. Taking even an hour's interest in the same manner, if it were the habit to reckon interest by hours, would be attended with the same consequences.

The principle of law is, that where a creditor gives time to the principal debtor, there being a surety to secure payment of the debt, and does so without consent of, or communication with, the surety, he discharges the surety from liability, as he thereby places him in a new situation, and exposes him to a risk and contingency to which he would not otherwise be liable. Oakeley v. Pasheller, 4 Clarke & Finnelly, 207, 233; S. C. 10 Bligh, 548, 590.

A builder contracted with a company to perform certain works, and was to receive three-fourths of the cost of the work certified to be done every two months; and the remaining fourth after the completion of the contract. Sureties joined with him in a bond for the due execution of the contract. Much more than the three-fourths had been paid by the company to the builder. The Court said that the company had not kept them.

Miscellaneous

cases.

selves in the situation of debtors, having in their hands one-fourth of the value of the work done; and that, under the circumstances, the situation of the company with respect to the builder was so far altered, that the sureties must be considered to be discharged from the suretyship. Calvert v. London Dock Company, 2 Keen, 638.

In almost every case where the surety has been released, either in consequence of time being given to the principal debtor, or of a compromise being made with him, it has been contended, that what was done was beneficial to the surety; and the answer has always been, that the surety himself was the proper judge of that, and that no arrangement, different from that contained in his contract, is to be forced upon him. Ibidem, 644.

By a rule of equity, and law too, if a party gives [further] credit to his principal debtor, he discharges the surety. Suppose that A. owes B. a debt, and C. gives his bond for the payment of it at a particular time, and afterwards A. gives his bond to B., conditioned for payment of the same sum at a different period, it is clear that the original bond could not be enforced at law. Clarke v. Henty, 3 Younge & Collyer, 187, 189.

See Brooks v. Stuart, 1 Beavan, 512.

With reference to the doctrine as between principal and surety, there is a decision that a covenant not to sue one of several coobligors, is not at law a release of the co-obligors. That may introduce a question whether such a covenant is not a release in equity. Hawkshaw v. Parkins, 2 Swanston, 539, 550.

In Eyre v. Everett, 2 Russell, 381, 384, Lord Eldon said he had never known a case, in which where a principal and surety were indebted on the same bond, a dealing with the principal by considering him as a debtor in another sum of money or on another security, was held to discharge the surety in the first obligation.

Case where a creditor knew that by arrangement between debtors, one had become only a surety, the others remaining debtors. Oakeley v. Pasheller, 10 Bligh, 548; S. C. 4 Clarke & Finnelly, 207.

Generally speaking, a release to the principal debtor is a release to the surety; but if the surety has, previously to the release given by the creditor, paid part of the debt, and given a security for the remainder, the general rule will not apply; but the creditor, notwithstanding the release, will, in the absence of

evidence to the contrary, retain his right against the surety for the remainder of the debt. Hall v. Hutchons, 3 Mylne & Keen, 426, 428.

The obligation of a surety may be more extensive than that of the principal; as if a mortgage is given by a surety to secure a debt by bond, the creditor may make the mortgage as available as if it had been given by the principal debtor. Clarke v. Abingdon, 17 Vesey, 106, 109.

If a surety, after time given by the creditor to the principal, New promise by makes a promise to pay: he cannot object to that as a promise surety after time given. without consideration: the promise is valid, not as the constitution of a new, but the revival of an old debt. Mayhew v. Crickett, 2 Swanston, 185, 189.

If a creditor, having given time to the debtor primarily liable, makes a demand on one who is secondarily liable, and receives a promise from him that is sufficient to sustain the demand, not new, but as the revival of an old debt.

as the creation of a

Ibidem, 192; S. C. 1 Wilson, C. C. 418, 422, 424.

See also Smith v. Winter, 4 Meeson & Welsby, 454.

lost by the creditor's negligence, the

extent dis

White sold to Butler an annuity which was secured by an If a security be assignment, amongst other property, of two ships: and also by the bond of White and Capel his surety. In the annuity deed there was a proviso of repurchase. Butler neglected to comply surety is to that with the requisites of the Ship Register Acts: and White, taking charged. advantage of that negligence, sold the ships. The Court said that Capel, as surety, was entitled to the advantage of the repurchase proviso: and that the value of the two ships being lost to him, by the neglect of Butler, such value must be deducted from the stipulated price of repurchase. Capel v. Butler, 2 Simons & Stuart, 457.

the

William Hodgson, as committee of the estate of a lunatic, and A surety, Henry Hodgson and Samuel Hodgson as his sureties, had exe- being insolvent, principal debtor cuted the usual bond to the crown. William became a bankrupt, obtains an indemnity from a and Susannah his wife having separate property, executed an third party, and indenture dated in 1827, charging the same by way of security afterwards reto Samuel Hodgson, with all monies the latter might pay in his leases his cosurety, he shall character of surety. Afterwards a deed, dated in 1829, was only recover executed between Samuel Hodgson and Henry Hodgson, the from the party effect of which was, that the former could not call upon the demnity a

giving the in

moiety of what he may pay by

reason of the suretyship.

latter for contribution. The Court said, that Samuel had, under deed of 1827, a claim for all he should be compelled to pay in the lunacy for William; and it was clear that he had a right to contribution from Henry (a), and clear also that Susannah, being under the obligation to make good his payments, had a right to the benefit of his remedy against Henry: but by his release of Henry he deprived her of that benefit: that Samuel could not without her consent release Henry, and at the same time continue his claim against her for that, which he had previously a right to recover from him that in a case such as that Susannah ought to have had an opportunity of judging for herself whether she would or not (having regard to the circumstances of Henry) [which were doubtful], prosecute her claim to contribution that Samuel was not entitled to relieve Henry with a view to make Susannah pay that, therefore, Samuel, by executing the deed of 1829, exonerated Susannah from so much of the claim he had against her as arose from payments in respect of which he had a right to contribution from Henry; and that the deed of 1827 was to stand as a security for the payment of one moiety only of the payments, which Samuel had made for the balances due from William. Hodgson v. Hodgson, 2 Keen, 704, 710, 711.

See Austen v. Howard, 1 Moore, 68; S. C. 7 Taunton, 327.

(a) A gentleman, who has accidentally had a proof of this sheet communicated to him, observes that the above is not the language of the reporter. That is very true, and it is right, perhaps, that the compiler should state, that he has in this work, often ventured on alterations similar to that to which his attention is thus directed, without having thought it requisite always to apprise the reader of the circumstance. Mr. Keen's words are these,"Now supposing Samuel to have had, what I think he had, under the deed of 1827, a claim for all he should be compelled to pay in the lunacy for William, it is clear that he had a right of contribution from Henry, &c." Of course the Master of the Rolls never expressed himself thus. It is pure nonsense to make Samuel's right to contribution depend upon his claim against Susannah.

In general, however, any liberty which the author may have taken with the text of a report, is distinguished by brackets.

As against a surety the contract cannot be carried beyond the Contract of strict letter of it. Straton v. Rastall, 2 Term Reports, 366, 370. Bona fides in suretyship.

A guarantee as against a surety must receive a strict construc- respect of it. tion, and it ought to be so framed as to embrace, in letter and in spirit, the nature of the dealing or transaction intended to be guaranteed, so as to make the surety answerable for the default of the original debtor. Evans v. Whyle, 3 Moore & Payne, 130, 136; S. C. 5 Bingham, 485, 488.

The claim as against a surety is strictissimi juris, and it is incumbent to show that the terms of guarantee have been strictly complied with. If I engage to guarantee, provided eighteen months' credit be given, the party is not at liberty to give twelve only, and after the expiration of six more to call upon me. Bacon v. Chesney, 1 Starkie, 192.

A clerk to the Fishmongers' Company had incurred a considerable debt. The deficit had been increasing from year to year, and was at length carried beyond what the company were likely to recover. They demanded additional security, which he procured. Lord Eldon said the case had come before him only upon motion; but he had thought a good deal upon it, and the light in which it appeared to him was this :-If he knew himself to be cheated by an agent, and concealing the fact, applied for security in such a manner, and under such circumstances, as held him out to others as one whom he considered as a trustworthy person, and any one acting under the impression that the agent was so considered by his employer, had become bound for him, it appeared to him (Lord Eldon) that he could not conscientiously hold that security. He was then of opinion that the Fishmongers' Company could not hold their security. He had since reconsidered the matter, and still retained his former opinion. Fishmongers' Company v. Maltby, stated 1 Dow, 294.

Sureties for the conduct of an agent and then the employers ascertain that he is no longer trustworthy, and the employers trust him notwithstanding: question as to the sureties being discharged from the consequences of all subsequent transactions. Smith v. Bank of Scotland, 1 Dow, 272, 287.

In Smith v. Bank of Scotland, 1 Dow, 272, 296, Lord Redesdale said,—a banking company at Dublin had trusted their clerk too far, and had not called him to account in the ordinary manner. He became indebted to them in a large sum, which he was unable to pay, and they called upon his sureties. When the case came before him, the sureties contended that the bank had not

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