Berry v. Pullen

• Decision Date: 25 January 1879
• Citation: 69 Me. 101
• Court: Maine Supreme Court
• Parties: HARRISON BERRY v. BAXTER C. PULLEN & another.

69 Me. 101

HARRISON BERRY v. BAXTER C. PULLEN & another.

Supreme Judicial Court of Maine.

January 25, 1879

ON MOTION to set aside the verdict as against law and evidence.

ASSUMPSIT on the following promissory note: " Palermo, December 23, 1870. For value received, we jointly and severally promise to pay Harrison Berry or bearer one hundred dollars in one year from date, with interest. B. C. Pullen. Surety E. W. Pinkham." The defendant Pullen was defaulted. The other defendant, Edward W. Pinkham, pleaded the general issue, with a brief statement that he signed the note declared on as surety only; that he received no consideration therefor; that he signed it for the accommodation only of Baxter C. Pullen, as the plaintiff well knew; that subsequent to the time when he so signed, the plaintiff without the knowledge or consent of said Pinkham and for a valuable consideration, extended the time of payment thereof to a certain definite time, after the time of payment specified in the note, and after the maturity thereof, whereby the said Pinkham was released.

There was evidence tending to show that there was an oral agreement between the payee and the principal maker that the former would extend the time of payment so long as the latter would pay eight per cent interest; that some time thereafter elapsed before bringing the suit, and that nothing was paid on the note. The material part of the evidence on the point raised is stated in the opinion.

The verdict was for the defendant; and the plaintiff moved to set it aside as against law and evidence.

E. W. Whitehouse, for the plaintiff.

S. & L. Titcomb, for the defendant.

VIRGIN, J.

Probably no principle has ever been in substance more frequently repeated by courts than that, a surety is entitled to have his contracts performed according to its terms; and that if any alteration, either in substance or time of performance, is made therein, without the surety's consent, by parties knowing his relation to it, he thereby becomes absolved from all further liability thereon.

The rights and liabilities of sureties are well defined. Whether or not a note, executed by two makers, discloses the fact that one of them is a surety for the other, their respective liability to the payee finds expression in the terms of the note,--each being alike liable to pay it according to its tenor. Moreover it is not only the legal duty of the surety to pay the note at its maturity, but it is also his legal privilege to do so, for then he may at will seek indemnity from the principal. For whenever the surety has paid the note to the holder, he has the right forthwith to sue and recover it of the principal, in an action at law, and be subrogated to all the rights of the holder in equity, among which is a suit by the latter against the principal. If, therefore, the holder has by any act precluded or estopped himself from demanding payment of the principal, or has entitled the principal to claim exemption from payment during a single day beyond the time of the maturity of the note, his rights and remedies thereby become prejudiced, and he is thereby discharged. For while it is the privilege of the surety to become subrogated to the rights of the holder by paying, that is the extent of his rights. Therefore if the holder has bound himself, without reservation, not to receive payment from the principal, the latter may enjoin him from receiving it from the surety, who will thereby be prevented from asserting his legal and equitable rights against the principal and consequently be discharged.

One of the most common modes by which creditors let sureties off from their liability, is by giving time to their principals. Thus if the holder of a promissory note, knowing one of the makers to be a surety for the other, agrees with the principal, without the knowledge and consent of the surety, to enlarge the time of payment thereof even for a day, the surety's liability is thereby terminated. Mere gratuitous forbearance of whatever duration inside of the limitation bar, will not discharge; for it is not the forbearance, but the contract which operates the discharge. Page v. Webster, 15 Me. 249. But before a surety, whose name was deliberately and understandingly placed upon a note to give it credit, can be thus absolved from liability, the law as well as justice and equity requires that, there shall be a valid, binding contract--one founded on a sufficient consideration, and the effect of which shall be to give further definite time to the principal, without the consent of the surety.

The matter of consideration and time in such contracts is copiously illustrated by a large number of cases, English and American,...