109 Ala. 617 | Ala. | 1895
Counsel upon either hand are agreed on the proposition that the subvendees became the principals, and the original vendees became the
• The facts are as follows : Plaintiff sold to the defendants certain lots of land, gave them bonds for title, put them in possession, and took the notes sued on for the párchase money. Then defendants sold the land to Dodson & Co., at a profit, transferred to them said bonds for title, and put them in possession, Dodson & Co. assuming the payment of the original purchase money to plaintiff, the latter, however, having at the time no connection with this arrangement. Dodson & Co. was a partnership composed of Dodson, Brown, and three other persons. These latter subsequently sold, out their interest in the land and transferred the bonds for title to Brown and Dodson, a transaction with which plaintiff was likewise without connection. After this, Dodson & Brown applied to plaintiff for an extension of time for the payment of the notes they had assumed to pay for defendants ; and thereupon plaintiff took a surrender of said bonds for title, executed a deed to Dodson & Brown, took their notes for the original purchase money, payable at a date beyond the maturity of, defendants’ notes, and a mortgage on the land to secure payment of the purchase money. All this was done under and in accordance with an agreement then entered into between plaintiff and Dodson & Brown,. which, after reciting the foregoing facts set forth the following stipulation : “That on the payment in full by the said subvendee (Dodson & Brown) of said promissory notes given by them to the Elyton Land. Company, the Elyton Land Company will cancel and surrender to them said original notes given by said original vendees (the defendants) for said original purchase money. But, until the payment in full by said subvendees of the said notes given by them to the Elyton Land Company, the said notes of original vendees remain in full force, and are not paid ,or discharged, except to-the extent of the cash paid by said subvendees to the Elyton Land Company on account of said purchase money, said original vendees being enti
'The surety is, of course, entitled to stand upon the terms of his contract; and, if these be altered in any material particular without his consent, he is thereby discharged, and this though the change may have been of benefit to him. Therefore, if the payee, by an agreement, binding on him, with the principal, extends the time of payment of a note, without the consent of the surety thereon, the latter is discharged. The contract of the surety in such case is to pay at original maturity of the paper, and not at the,date fixed by the agreement for an extension; and such extension, without more, takes away the surety’s right to pay at the time origin-; inally fixed. This is a right esteemed material to his protection, because, upon the exercise of it, he may immediately proceed against the principal for indemnity, while his remedy to that end might well be unavailing if he were forced to wait to some future time fixed by the payee and principal, because of the insolvency, which meantime may have overtaken his indemnitor. Then, too, the surety upon maturity of the note may file a bill qvia timet to compel the principal to pay the debt. This right is suspended by such an extension as we-have supposed, and, for this reason also, the surety’s contract is changed, and he is discharged.
But where, in and by the contract of extension between the payee and the principal debtor, all the rights of the surety are expressly preserved, — if notwithstanding the agreement for the extension, he may still pay the note at maturity and go upon the principal for reimbursement, or may proceed by bill quia timet on maturity to compel the principal to pay, — and he has these rights when the agreement for extension expressly reserves all remedies against him, — such contract between the payee and principal does not discharge-the surety. The law on this subject is well stated by Mr. Brandt as follows : “If the creditor extends the time of payment to the principal, but at the same time expressly reserves all remedies against the surety, the surety is not discharged by such extension. With reference to this matter it has been said : ‘The giving of time to the principal debtor, with a reservation of the remedies, has in many cases the. appearance of absurdity, because, when
Applying this principle to the present case, it is obvious that the agreement for an extension of time for payment between plaintiff and Dodson and Brown did not discharge the defendants, standing in the relation of sureties to said sub-vendees, because all their rights and remedies are preserved intact therein, and it is thereby •expressly provided that the extension shall, not affect them unless they elect to avail themselves df it, or, in other words, consent to it. Notwithstanding the agreement, they had a perfect right to proceed by a bill quia timet on the maturity of their notes to compel, not only Dodson and Brown, but the other persons who were members of the firm of Dodson & Co. when the-sale to that partnership was made, to pay the plaintiff, or to require the principle to sue as authorized by section 3153 of the Code; and they also had the right to pay the notes at maturity, and at once go upon Dodson and Brown and such other persons for idemnification. Either of these courses, both fully open to them, would have protected them from the consequences of Dodson’s subsequent insolvency, of which they now complain.
It is also clear that they lost no security otherwise available to them by the substitution of a deed and mortgage back for the retention of title and bonds for
We therefore concur in the conclusion of the judge of the Circuit Court; and the judgment must be affirmed.