24 Mo. App. 316 | Mo. Ct. App. | 1887
delivered the opinion of the court.
The single question presented by this record is, whether an endorser or surety is. released by a composition agreement between the holder of the obligation and the maker, acceptor, or other principal debtor, which composition, in express terms, reserves every right and remedy which the holder, or obligee, has against other persons. The question must be answered upon authority, that such an agreement does not discharge the endorser or surety.
Two principles are universally conceded in respect of the rights of sureties, and are not disputed by the parties to this proceeding: (1) That a valid agreement between a creditor and his principal debtor, whereby the creditor, in consideration of the payment of a part of the debt, discharges the principal debtor, will, without more, operate to discharge a surety. (2) That an- agreement between a creditor and his principal debtor, whereby the creditor agrees, for a consideration, to extend the time of payment, will, without more, operate to discharge a surety. But it is an exception to the former of these rules, equally well settled, that such an agreement will not operate to discharge a surety where the agreement itself contains an express reservation of the remedies of the creditor against sureties, or against all persons other than the principal debtor, who may be liable. Ex parte Gifford, 6 Ves. 805, 807, per Lord
These two exceptions to the two rules above stated rest upon the same principle. They are grounded upon the principle that, where a contract expressly reserves the remedy of the creditor against other persons (which includes sureties), the sureties are in no way prejudiced by the agreement. By entering into such an agreement, the principal debtor impliedly consents that whatever remedies his sureties have against him shall remain open to them. They are, thereafter, at liberty to pay the debt at once, and proceed immediately against their principal for reimbursement. An examination of many decisions shows that the principles which support these two exceptions to the respective rules above stated are precisely the same. Courts adopt the same mode of reasoning in the two cases, and cite interchangeably decisions where the agreement was for a discharge of the principal debtor, and where it was merely for an extension of time to him.
We find, then, that the exception to the general rule,, which supports the plaintiff’s claim in this case, has-been thoroughly settled in England, and in this country, by the most authoritative courts; and as we have no. jurisdiction to change the law, we must hold that the-circuit court erred in the view that the defendant was-not liable, and in non-suiting the plaintiff.
II. The decedent, against whose estate this claim was-proved, became liable as an endorser for value on a bill of exchange drawn in favor of a partnership firm of which he was a member. In view of this fact, we have thought it worth while to consider whether the statute providing. for the discharge of a surety by the delay of the creditor,, upon notice to sue the principal debtor (Rev. Stat., sect-3896, et seq.), might not operate to change, in this state,, the rule of the common law above stated. But we find, on examination of the decisions of our supreme court,, that it is settled in this state that this statute has no-application to endorsers, even for accommodation, of commercial paper, but that it applies only to sureties who were originally liable as such by the terms of the instrument creating liability. Clark v. Barrett, 19 Mo. 39; Miller v. Mellier, 59 Mo. 388; Faulkner v. Faulkner, 73 Mo. 327, 338; recognized in Priest v. Watson, 75 Mo. 310, 316.
The judgment will be reversed and the case remanded. It is so ordered.