111 Wis. 372 | Wis. | 1901
Two propositions were decided by the circuit court, both of which are vigorously assailed by the appellant. The first is that it appeared by the plaintiff’s own evidence that the defendant, Johnson, to the knowledge of the plaintiff, bore the relation of surety to the indebtedness-originally evidenced by the notes signed by him and here sued upon; second, that by the taking of the several renewal notes the plaintiff extended the time of payment of that indebtedness, and thereby discharged the defendant. The rule is well settled that wherever, as between joint or several obligors to a contract, the duty of the one is primary and of the other secondary, so that, as between themselves,, the obligation or the debt is properly that of the former, who thus owes to the latter the duty of exoneration, the relationship of principal and surety exists, no matter what the form of the contract or how absolute may be the undertaking of him who is in fact the surety. This relationship cannot vary or diminish the rights of the creditor upon the original contract. He may even ignore the principal debtor and sue the surety alone, at his will or convenience, if the form of the contract warrants. But, if the fact of the true relationship between the debtors is brought to his knowledge, he owes to him who is only secondarily liable that duty which the creditor uniformly owes to the surety, of having no transactions or dealings with the principal debtor which shall vary the surety’s position or jeopardize him. This duty rests'upon the actual relation between the parties, and cannot be obscured or excused by any considerations of
In the light of this rule of law, we are convinced that the circuit court decided rightly that the defendant here was hut a surety. The testimony offered by the plaintiff from the mouths of its own officers was open to no other reasonable construction than that, the parties all being present, it was understood and explained that the defendant was not the beneficiary of the loans, nor the primary debtor for their repayment, but that he was pledging his liability upon a specific written contract as security for the debt of some one else. Uo other possible significance can be accorded the statement that in signing such papers he was to “ back up ” and “ stand behind ” the others,— a meaning which is emphasized and rendered all the more clear by the expression that he was understood to be signing merely as a security. Thus we reach the conclusion, as did the circuit court, that the defendant was a surety merely for the indebtedness evidenced by the four notes which are the basis of this action, although, by reason of the form of such notes, he made himself absolutely liable in the' first instance.
Among the acts by which a creditor will release a non-consenting surety, none has been more frequently or more universally declared effective than a binding extension of the time of payment of the indebtedness. Riley v. Gregg, 16 Wis. 666; Hallock v. Yankey, 102 Wis. 41, 43. The reasons for the efficacy of such act are that during the time of the extension the creditor has disabled himself from proceeding to collect from the principal debtor, and has subjected himself to an increased peril of such debtor’s becoming insolvent and unable to pay, thus protracting the period of peril to
By the Court.— Judgment affirmed.