Briefly stated, the case, so far as there is any controversy, is as follows: The defendant became surety for Cook’s debt to the plaintiff, and Cook indemnified him by executing to him a chattel mortgage on certain property. The plaintiff released Cook from liability for such debt, without the consent of the defendant. Afterwards, defendant sold his security to McArthur, without the consent of the plaintiff, for the consideration (as the circuit court found) of $475.
The only question in the case is, Did the release of Cook also release the defendant, his surety ? The general rule undoubtedly is that the release of the principal debtoi’, without the consent of the surety, releases the surety. But if the surety is fully indemnified against loss by reason of having become such, a release of the principal without payment of the debt does not release the surety. This is the rule laid down in Fay v. Tower, 58 Wis. 286, as applied to a case in which an unauthorized extension of credit had been given to the principal. Manifestly, the same rule should be applied where the surety is absolutely released from the debt. The rule is founded upon a very plain principle of justice. To illustrate: A. becomes security for B. to C. for the payment of $1,000. B. puts property into the hands of A., worth $1,000, to indemnify him against loss
By the Court.— The judgment of the circuit court is affirmed.