Deal v. Cochran

• Decision Date: 31 January 1872
• Citation: 66 N.C. 269
• Court: North Carolina Supreme Court
• Parties: ELI E. DEAL v. D. C. COCHRAN et al.

66 N.C. 269

ELI E. DEAL

v.D. C. COCHRAN et al.

Supreme Court of North Carolina.

January Term, 1872.

1. If a creditor enters into any valid contract with a principal debtor, without the assent of the surety, by which the rights or liabilities of the surety are injuriously affected, such contract discharges the surety. Mere delay on the part of the creditor to sue for or collect the debt, or even his refusal to do so, when requested by his surety, or his express promise of indefinite indulgence, does not discharge the surety.

2. When a creditor held a note given in 1859, and the principal debtor proposed to pay the same in Confederate money in 1863, which the creditor declined to receive, but made an agreement that, if the debtor would postpone the payment, interest should cease “from that time until a demend;” Held, that such an agreement did not amount to forbearance for any definite or specified time, nor increase the risk of the surety in any way, and could not therefore discharge him from liability. It would seem that if the agreement had been to forbear until the end of the war, it would have been nudum pactum, and therefore not binding.

Pipkin v. Bond, 5 Ire. Eq. 91. Howerton v. Sprague, 64 N. C. 451, cited and approved.

This was a civil action on a note for $372, dated May 6th, 1859, tried before Mitchell, Judge, at Fall Term 1871, Catawba Superior Court.

The execution of the note was admitted. The defendants introduced testimony to show that the principal in the note proposed to pay the same in Confederate money in 1863, which the plaintiff declined to receive, but agreed with him, that if he would postpone the payment, he (plaintiff) would release him from interest from that time on, and that the proposition was agreed to.

Plaintiff introduced testimony to show that the agreement was different, viz: that he was to release the interest from the 28th of July, 1863, until the end of the war.

It was submitted to a jury to ascertain the facts; the jury found that the “agreement began on the 28th of July, 1863, and ended on demand of the plaintiff, 28th of Sept. 1868.”

The defendant Cochran, “who was a surety,” insisted that the agreement between between the plaintiff and the principal debtor without his knowledge or consent, discharged him (Cochran) from payment of the debt.

His Honor held otherwise, and rendered judgment against all the defendants for the principal and interest of the note, excluding the interest between the 28th of July, 1863, and the 28th of Sept., 1868.

Ruled for a new trial; rule discharged. The defendant Cochran appeals from the judgment of the Court.

Schenck and W. H. Bailey, for plaintiff .

Bynum and J. L. McCorkle, for defendant .

READE, J.

It is well settled, that if the creditor enters into any valid contract with the principal debtor, without the assent of the surety, by which the rights or liabilities of the surety are injuriously affected, such contract discharges the surety. A familiar instance of this is, where a creditor binds himself not to sue for, or collect the debt for a given time; and thereby puts it out of the power of the surety to pay the debt, and sue the principal debtor.

It is equally well settled, that mere delay on the part of the creditor to sue for or collect the debt, or even his refusal to do so when requested by the surety, or his express promise of indefinite indulgence, does not discharge the surety; because the creditor is not obliged to be active, and because it is the duty of the surety to see that the principal debtor pays, or else to pay the debt himself. Pipkin v. Bond, 5 Ire. Eq., 91. Howerton v. Sprague, 64 N. C.??., 451.

It remains to be seen how these principles affect the case before us.

The plaintiff states the case more strongly for the defendant than the defendant does for himself; and the...