The Peru Plow and Wheel Company v. Ward

• Decision Date: 01 May 1895
• Citation: 41 P. 64,1 Kan.App. 6
• Parties: THE PERU PLOW AND WHEEL COMPANY v. R. B. WARD
• Court: Kansas Court of Appeals

41 P. 64

1 Kan.App. 6

THE PERU PLOW AND WHEEL COMPANY v. R. B. WARD

Court of Appeals of Kansas, Northern Department, Central Division

May 1, 1895

Error from district court, Republic county; F. W. Sturges, Judge.

Opinion Filed July 6, 1895.

MEMORANDUM.--Error from Republic district court; F. W STURGES, judge. Action by the Peru Plow and Wheel Company against R. B. Ward. Judgment for defendant. Plaintiff brings the case here. Affirmed. The material facts are stated in the opinion herein, filed July 6, 1895.

Judgment affirmed.

Noble & Hogin, for plaintiff in error.

Jay F Close, and N. T. Van Natta, for defendant in error.

GARVER J. All the Judges concurring.

OPINION

GARVER, J.:

Under date of February 1, 1887, R. B. Ward became security for M. W. Ward and Thomas Ward for the payment of an indebtedness of $ 1,654.38, to the Peru Plow and Wheel Company, and as security signed three notes for $ 551.46 each, due and payable, unconditionally, in one, two, and three years, respectively, after date. As additional security, and before accepting said notes, said company demanded and received from M. W. Ward a mortgage on certain real estate in the town of Scandia, the mortgage stating that it was given to secure said notes, and also contained the condition: "If said sum or sums of money, or any part thereof, or any interest thereon, is not paid when the same is due; and if the taxes and assessments aforesaid (taxes and assessments levied upon said real estate) are not paid when the same are by law made due and payable, then, and upon default of these provisions and covenants, or any or either of them, the whole of said sum and sums, and interest thereon, shall by these presents become due and payable." The surety did not assent to this change of the contract, and defends on that ground. This presents the single question: Do the conditions of the mortgage effect such a change of the contract as will release the surety? We think they do. By the terms of the notes, neither the principals nor the surety could be called upon for payment of the second and third notes in less than two and three years, respectively, from their dates. By the terms of the mortgage, the failure to pay the first note, when due, or the failure to pay the taxes which might be assessed against the mortgaged property, caused all three notes to become at once due and payable. (Stanclift v. Norton, 11 Kan. 218.) Even though it might be said that such would not be the legal effect of the contract contained in the mortgage as to the surety, he not being a party thereto, yet it would be placing upon him an obligation materially different from that which he voluntarily assumed. His contract was to pay the several sums mentioned in the notes, if the principals failed to pay the same according to their express terms. He became surety upon the express agreement that the principals had three years within which to discharge this indebtedness, and not that they might be called upon for the whole amount in one year. Here is a marked and material change of the contract.

A surety may stand upon the very terms of the contract which he voluntarily entered into, and other parties to such contract cannot change or vary its terms in any material particular without his consent. If they do so, the surety may allege and prove such fact, and upon it claim his discharge. As said by Mr. Justice Story, in Miller v. Stewart, 22 U.S. 680, 9 Wheat. 680, 6 L.Ed. 189:

"The liability of a surety is not to be extended by implication beyond the terms of the contract. To the extent and in the manner and under the circumstances pointed out in the obligation, he is bound, and no further. It is not sufficient that he may sustain no injury by the change in the contract, or that it may be for his benefit. He has the right to stand on the very terms of his contract, and if he does not assent to any variation of it, and a variation is made, it is fatal."

An agreement between the principal debtor and his creditor, without the assent of the surety, to extend the time of payment of the note, releases the surety. (Rose v. Williams, 5 Kan. 483; Jenness v. Cutler, 12 id. 500; Hubbard v. Ogden, 22 id. 363.)

These decisions rest upon the principle that, if the surety is held...