even a contemporaneous, but collateral, agreement on good consideration not to sue for a limited time on a bill or note (q). CHAPTER XIX. An express release, relaxatio, is an acquittance under the RELEASE. seal of the releasor. Being a deed, no consideration is essential to its validity (r). A release by the holder after the maturity of the bill is Release at a complete discharge as between the releasor and his trans- maturity. ferees on the one hand, and the releasee on the other. Its effect on other parties will be considered when we come to the subject of principal and surety. But a premature release, i.e., a release before the bill is Premature due, though good as between the parties, will not discharge release. the releasee from the claim of an indorsee for value, who took the bill before it was due, without notice of the release (s). And a release, whether before or after the maturity of the bill, is good as between the parties, although the releasor be not at the time of the release the holder of the bill (†). But a release of a drawee before acceptance is inoperative (u). A release by one of several joint creditors is a release by all. And a release to one of several joint contractors is in law a release of all (x). Therefore a release of one of two joint acceptors or joint indorsers is a release to both. (1) Ford v. Beech, 11 Q. B. 842, in error; Webb v. Spicer, 19 L. J., Q. B. 35; 13 Q. B. 894, in error; Moss v. Hall, 5 Exch. 50 per Parke, B., Salmon v. Webb, 3 H. L. Cas. 510; Flight v. Gray, 3 C. B., N. S. 320. (") The Code, ss. 62 and 63, makes no mention of any consideration as being necessary to support either a waiver or a cancellation. See Foster v. Dawber, 6 Ex. 851. (8) Dod v. Edwards, 2 C. & P. 602; Code, s. 62 (2). (t) Scott v. Lifford, 1 Camp. 246; 9 East, 347. If an acceptor plead a release it must appear by his plea that the bill had been (u) Drage v. Netter, 1 Ld. (x) Co. Litt. 232 a; Nicholson By a party who is not the holder. To drawee before accept ance. By or to one of several entitled or jointly liable. CHAPTER Restrained by a recital. Covenant not to sue. Covenant not to sue for a limited time. A release of one of several joint debtors, who are severally, as well as jointly, liable, is equally a release to all, for judgment and execution against one would have been a discharge to all (y). But it has been held, that a release to parties jointly liable may in some cases be restrained by the terms of the instrument (z), and may be construed as a covenant not to sue where such a construction is necessary to carry out the paramount intention of the deed (a). But it cannot be defeated by a mere parol agreement (b). Indeed, the most general and sweeping words of release may be qualified and restrained by the recital (c). A covenant not to sue amounts in law to a release (d). But though it may be pleaded as a release by the party to whom it is given, it does not so far operate as to discharge another person jointly liable (e). Nor will a covenant not to sue, given by one of two joint creditors, operate as a release (ƒ). A covenant not to sue for a limited time, though (as we shall hereafter see) it discharges sureties, does not, as between the parties, effect a release, or even a suspension of the action (y), unless there be a provision that it may be pleaded in bar (h). We have already seen that the creditor's appointment of Appointment his debtor as executor amounted in law (i) to a release; of debtor executor. () Nicholson v. Rerill, 4 Ad. & E. 675; 6 N. & M. 192; 1 Har. & W. 753; Ecans v. Themridge, 2 K. & J. 174; 25 L. J., Chan, 102. (z) Brooks v. Stuart, 1 Per. & D. 615; 9 Ad. & E. 854; Cocks v. Nash, 9 Bing. 341; 35 R. R. 547; Price v. Barker, 4 E. & B. 760; Henderson v. Stobart, 5 Exch. 99. (a) Solly v. Forbes, 2 B. & B. 38 22 R. R. 641; Willis v. De Castro, 27 L. J., C. P. 243; 4 C. B. (N.S.) 216. (b) 2 Rol. Ab. 412; Lacy v. Kynaston, 2 Salk. 575; 2 Saund. 47, t; Cheetham v. Ward, 1 B. & P. 630; 4 R. R. 741; Nicholson v. Revill, ubi supra, note (y); Brooks v. Stuart, 9 Ad. & E. 854; 1 Per. & D. 615. (c) Payler v. Homersham, 4 M. & S. 423; 16 R. R. 516; Simons v. Johnson, 3 B. & Ad. 175; 37 R. R. 377. (d) Com Dig. tit. Release. See as to a covenant in a composition deed, Ellis v. M Henry, L. R., 6 C. P. 229. (e) Dean v. Newhall, 8 T. R. 168; Hutton v. Eyre, 6 Taunt. 289; 16 R. R. 619; Price v. Barker, 4 E. & B. 760. (f) Walmesley v. Cooper, 11 Ad. & Ell. 216; 3 Per. & Dav. 149. (g) Thimbleby v. Barron, 3 M. & W. 210. (h) Walker v. Neville, 34 L. J., Exch. 73. (i) But not in equity. See ante, p. 64. XIX. and that the same consequence follows if one of several joint CHAPTER debtors be appointed executor. But a debtor's appointment of his creditor to be executor is no release unless there be assets (k). The release of a debt is a release of the right to hold any Right to hold securities that may have been given for the debt (1). securities for released debt. (k) See Lowe v. Peskett, 16 C. B. 503. (1) Cowper v. Green, 7 M. & W. 633. 320 CHAPTER XX. OF THE LAW OF PRINCIPAL AND SURETY IN ITS General principles of the law. Surety's Right to Indemnity 333 Co-Sureties Action for Contribution between Co-Sureties Determination of the Contract OUR law of principal and surety is in substance the same as the Roman law; not, perhaps, so much derived from it, as flowing from the same natural equities between creditor, principal debtor, and sureties. "Pro eo qui promittit solent alii obligari, qui fidejussores appellantur; quos homines accipere solent dum curant ut diligentius sibi cautum sit" (a). (a) Inst. 3, 20. See as to the the rules of the common law and the law merchant not inconsistent with the Code are preserved by sect. 97. A party liable on a bill sometimes bears to the holder the relation of principal debtor, sometimes of surety only. The contract of suretyship is a contract uberrimæ fidei. Therefore, where there is any misrepresentation, or any fraudulent concealment of any material fact, which fact if known might have induced the surety not to enter into the contract, that contract is void from the beginning as between the creditor and the surety (b). But mere nondisclosure of the state of accounts by the creditor to the surety will not avoid the contract (c). It is a general rule of law, that a discharge of the principal is a discharge to the surety. For the engagement of the surety, being but an accessory to the principal's agreement (d), terminates with it. If, notwithstanding this release of the principal debtor, the creditor could sue the surety, he would evade the effect of his own discharge to the principal, and regain a debt which he may have relinquished for a valuable consideration, or at least by his deliberate act. Besides, were the surety obliged to pay the creditor, the surety must either be allowed to resort to his principal, or he must not. If he may, then the principal will lose the benefit of that discharge which he received from the creditor; if he may not, the loss occasioned by the creditor's stipulation with the principal will fall on the surety. Further, it is a doctrine of equity that the surety is entitled to all the remedies which the creditor has against the principal, and the creditor by releasing the principal would prejudice those remedies. It is evident from these considerations, that the only rational and equitable rule is, that which is well established both in law and equity, namely that a discharge to the principal is a discharge to the surety. CHAPTER XX. In inquiring into the effect of a discharge or indulgence Division of by the holder, to parties liable on a negotiable instrument, subject. let us consider,-1st. What parties to a bill or note are principals, and what parties are sureties; 2ndly. What conduct of the holder will discharge the surety; 3rdly. How (b) See Owen v. Homan, 4 H. of L. Cas. 997; Hamilton v. Watson, 12 C. & F. 109; North British Insurance Company v. Lloyd, 10 Exch. 523. (c) Hamilton v. Watson; North British Insurance Company v. Lloyd, supra. But see Railton v. Matthews, 10 C. & F. 934, and B.B.E. the observations of Parke and (d) Nam fidejussorum obligatio re. 21 |