72 Pa. 372 | Pa. | 1872
The opinion of the court was delivered, by
— That the relation of principal and surety exists with all the equities to which the latter is entitled in full force, not only after the liability of both parties is fixed, but even after judgment against them, is well settled in this state. It will he sufficient to refer to the case of The Manufacturers’ and Mechanics’ Bank v. The Bank of Pennsylvania, 7 W. & S. 343, in which it was distinctly decided that the rule of general equity, recognised perhaps in England and elsewhere, that a judgment against the principal and surety extinguishes the relation between them, as to every one but themselves, has no place in the jurisprudence of Pennsylvania; and that hence, if after judgment the creditors agree for a sufficient consideration to give time to the principal, the surety will be discharged.
It may be that after the liability on the contract where it is executory, is fixed, an agreement between the principal and the creditor to submit their variances to arbitration without the consent of the sureties will not have the effect of discharging them. If an action were instituted by the creditor against the principal, it would certainly seem that a reference of the cause in court would not have that effect, and if so, it is not easy to perceive why an amicable arbitration out of court could do so.
In the case before us, however, there was much more than a reference of the dispute between the principal and the creditor. That would have been to determine whether the principal had or had not performed his contract, and if not, what damage the cred
Judgment affirmed.