37 Ala. 320 (Ala. 1861), Cox v. Mobile & G.R. Co.

• Citation: 37 Ala. 320
• Opinion Judge: R. W. WALKER, J.
• Party Name: COX v. MOBILE & GIRARD RAILROAD COMPANY.
• Attorney: WM. P. CHILTON, and GEO. W. GUNN, for appellant. CLOPTON & LIGON, contra.
• Court: Alabama Supreme Court

Page 320

37 Ala. 320 (Ala. 1861)

COX

v.

MOBILE & GIRARD RAILROAD COMPANY.

Supreme Court of Alabama

January Term, 1861

[ACTION ON PROMISSORY NOTE, BY ENDORSEE AGAINST MAKER.]

APPEAL from the Circuit Court of Macon.

Tried before the Hon. ROBERT DOUGHERTY.

WM. P. CHILTON, and GEO. W. GUNN, for appellant.

1. An extension of the day of payment, by agreement between the creditor and the principal debtor, founded upon valuable consideration, and made without the consent of the surety, discharges the surety from all liability, irrespective of the length of time.-- Haden v. Brown, 18 Ala. 641; McKay & McDonald v. Dodge & McKay, 5 Ala. 388; Rathbone v. Rathbone, 10 Johns. 597; King v. Baldwin, 17 Johns. 384; 7 Hill, (N. Y.) 250; 2 Stew. 63; Theobald on Principal and Surety, 118, 123, 181, 184; 32 N.H. 560; 23 Barbour, 478; 6 Indiana, 128; 43 Maine, 381.

2. An extension of the day of payment, in consideration of the payment of usurious interest, discharges the surety. Kyle v. Bostick, 10 Ala. 589.

CLOPTON & LIGON, contra.

1. To discharge the surety by a new contract between the creditor and principal debtor, there must be a valid contract, founded on a valuable consideration, and for a definite period of time.-- Freeland v. Compton, 30 Miss. 424; Clark Co. v. Covington, 26 Miss. 470; 8 Texas, 66; 12 Penn. St. R. 383; 13 Ill. 347; 23 Miss. 559.

2. An agreement to pay usurious interest is not a valid contract.-- Kyle v. Bostick, 10 Ala. 589; 1 B. Monroe, 322; 31 Miss. 664.

R. W. WALKER, J.

It is said in many of the cases, that, to discharge a surety by extension of the time of payment, there must not only be a sufficient consideration, but the time of the extension must be definitely and precisely fixed.-- Gardner v. Watson, 13 Ill. 347; Parnell v. Price, 3 Rich. L. 121; Wadlington v. Gary, 7 Sm. & M. 522; McGee v. Metcalf, 12 Sm. &M. 535; Freeland v. Compton, 30 Miss. 424; Miller v. Stein, 12 Penn. St. R. 383, 389; Alcock v. Hill, 4 Leigh, 622; 1 Pars. Contr. 173; President of Police Board v. Covington, 26 Miss. 470; Burke v. Cruger, 8 Texas, 66; Thornton v. Dabney, 23 Miss. 559; Miller v. Stern, 2 Barr, 286.

It is undoubtedly true, that a mere indulgence, determinable at the will of the creditor, will not discharge the surety; and it is to indulgences of this character, that the cases just cited must be held to refer.

The principle to be extracted from the authorities is, that where the creditor, upon sufficient consideration, and without the consent of the surety, makes an agreement with the principal debtor, the effect of which is to postpone the period at which the performance might have been compelled in due course of law--in other words, if, by a valid agreement, the creditor precludes himself from proceeding against the principal, after the debt is due, according to the terms of the original contract, even for a moment, the surety is discharged. And the true ground on which the surety is relieved in such cases, is the presumptive injury to him, arising from the fact that such an arrangement obstructs his right to pay up the money as soon as it is due, thereby acquiring the power of immediately pursuing the debtor, and that it otherwise impairs the remedies which the surety may find necessary for his protection. If the creditor has tied up his hands, so that he could not himself immediately pursue the debtor, then the surety could not do so, either on paying up the debt, or filing his bill quia timet; for he can only be substituted to such rights as the creditor has.-- Norris v. Crummey, 2 Rand. 323, 334-38; Hunter v. Jett, 4 Rand. 104; Chicester v. Mason, 7 Leigh, 244, 253; Bangs v. Strong, 7 Hill, 250; S. C., 4 Comstock, 315, 325; Comegys v. Booth, 3 Stew. 14; Rathbone v. Warren, 10 Johns. 587; Addison Cont. 70, and cases cited; 2 Am. Lead. Cas. 176; Draper v. Romeyn, 18 Barb. 169.

In Haden v. Brown, (18 Ala. 641,) it was held, that where there was an agreement, on sufficient consideration, postponing the day of payment of a bill of exchange, although it may not be shown how long, or to what particular time, the payment is agreed to be postponed, the principle above stated applies, and operates the discharge of the...