Fertig v. Bartles

• Decision Date: 27 February 1897
• Citation: Fertig v. Bartles, 78 F. 866 (D. N.J. 1897)
• Parties: FERTIG et al. v. BARTLES.
• Court: U.S. District Court — District of New Jersey

78 F. 866

FERTIG et al. v. BARTLES.

United States Circuit Court, D. New Jersey.

February 27, 1897

James Bauchanan, for plaintiffs.

Paul A Queen and John T. Bird, for defendant.

DALLAS Circuit Judge.

This case has been heard on three demurrers,-- one by the plaintiffs to the third plea; and two by the defendant namely, one to the replication to the fourth plea, and one to the replication to the sixth plea, and 'to so much of defendant's seventh plea as relates to the writings of release in said seventh plea mentioned. ' The fact alleged by the third plea is that the plaintiffs extended a credit of $20,000 to the principal debtors, without the knowledge or consent of the defendant, and it avers that he as surety, was, in consequence, discharged. The demurrer admits the fact, but puts at issue the legal conclusion. If the surety was discharged, it must be because, by extending the principals' credit as stated, the plaintiffs violated some contract of theirs directly with the surety, or because such extension was made in breach of the principal contract or in pursuance of an alteration thereof. There was no contract by the plaintiffs with the surety limiting the credit. The bonds which he gave of course fix the amount of the surety's liability, but they contain no provision in restriction of the credit to be accorded; and to the primary contract the surety was not a party, nor was the clause thereof upon which he relies inserted for his benefit. By that clause (in its final condition) it was covenanted that a credit should be given to the principals of $5,000, and that at no time should the amount due by them exceed the amount of the bond which they were to give. By permitting that amount to be exceeded, surely the plaintiffs committed no breach of covenant; and as the plea does not allege that they had made any alteration in the contract, which required them to do so, it must be assumed that the allowance of credit in excess of the amount stipulated for was wholly voluntary.

There is no doubt that where a change is made in the original contract, without the surety's assent, he is released (Reese v. U.S., 9 Wall. 14); but I think it is also unquestionable that where there is no 'modification,' no 'variance in the agreement,' no subsequent 'positive contract,' changing the original one, the surety remains liable, even though the parties, 'without any legal constraint on themselves, mutually accommodate each other. ' Benjamin v. Hillard, 23 How. 149-165; Reese v. U.S., supra; Insurance Co. v. Hanford, 143 U.S. 187-191, 12 Sup.Ct. 437. If the contract itself had been varied, the surety would have been discharged, even though the original agreement had, notwithstanding such variance been...