Hayes v. Wells

Maulsby, J., delivered the opinion of the Court. Two questions are presented in this case, one on the admissibility of evidence, and the other on the prayer of the appellant refused by the Circuit Court. We will consider the prayer first. The appellant assigned to the appellees the bond of Alexander A. Laws and Daker G. Jester, due February 7th, 1857, by an assignment in writing under seal, containing a guaranty for the payment thereof, and on this guaranty the suit was brought.

Laws, one of the obligors in the assigned bond, had two bonds of Theodore L. Davis, one of which was due in December, 1857, and the other in September, 1858, on both of which, judgments had been rendered, under the laws of Delaware, it is presumed, by a Delaware Court at May Term, 1856, and in November, 1856, both of said judgments were entered “transferred to Wells & Babbitt” on the docket of that Court. Evidence was offered by the appellant, tending to prove that the appellees had received the bonds of Davis in payment of the bond of Laws & Jester; and by-the appellees, that the appellant had waived any right arising from neglect on their part to institute suit on the bond of Laws & Jester, or on those of Davis, and that the bonds of Davis were assigned to them as collateral security for the payment of the bond of Laws & Jester. On these points there was conflicting proof. The appellees also offered evidence to prove that Laws & Jester were insolvent at the time of the maturity of their bond in February, 1857, and that Davis was insolvent at the maturity of each of his bonds.

The appellant offered no evi ⁵¹⁵ deuce contradicting this proof, and none tending to prove that any of the parties, Laws, Jester or Davis, were solvent. The first prayer of the appellant wras, that if the jury believed from the evidence that the appellant assigned to the appellees the bond of Laws & Jester, and that subsequent to the assignment, and before the maturity of the bond, the appellees received from Laws the bonds of Davis in payment and discharge of the debt due on the assigned bond, their verdict must be for the appellant, which was assented to by the appellees. Thereupon the appellant offered the prayer now under consideration: That if the jury believe from the evidence that the appellant assigned to the appellees the bond of Laws & Jester, and guaranteed the payment thereof, and that subsequent to said assignment the appellees received from Laws the bonds of Davis as collateral security, and extended the time of payment of the assigned bond by Laws & Jester, without the knowledge and consent of the appellant, their verdict must be for the appellant. This prayer was defective on several grounds.

Even if there had been proof of a valid contract for extension of the time of payment of the bond of Laws & Jester, on which the appellant was guarantor, yet if that agreement had been entered into after the day of the maturity of the bond, it would be inoperative to discharge the guarantor or security. To give to such an agreement that effect, it must be made before the maturity of the bond. Rees vs. Berrington, 2 Vesey, Jr., 540; United States vs. Howell, 4 Wash. C. C. Rep., 620 .

The proposition contained in the prayer being that an extension of time of payment given by the holder to the principal obligor at any time after the assignment to the holder, operates to discharge the surety, or guarantor, without regard to whether the extension were given prior or subse-r queiit to the maturity of the bond, it is, in this respect, defective. An agreement, which will operate to discharge a surety in a bond, or a guarantor of payment of a bond, must be an ⁵¹⁶ actual agreement between the creditor and the principal to extend the time of payment, and it must be upon sufficient consideration, and must amount in law to an estoppel upon the creditor, sufficient to prevent him from beginning a suit before the expiration of the extended time; when such an agreement is made the surety is discharged. See the numerous authorities collected in note f, 2 Parsons’ Cont., 26; Oberndorff, Trustee, vs. Union Bank of Baltimore, 31 Md., 126 . The agreement for extension must not only be valid and binding in law, but the time of the extension must be definitely and precisely fixed.

Miller vs. Stem, 2 Penn. St. Pep., 286, and cases collected in note f above referred to. Whether, to have the effect of discharging the surety in a bond, or a guarantor under seal, an agreement for extension of time of payment, in all other respects valid, may. be by parol, or whether it must be under seal, we are not to be understood to decide. There are conflicting authorities on the point, and we are not called on to decide it in this case.

That a parol contract is not sufficient is held in Tate vs. Wymond, 7 Blackf., 240 , where the case of Davey vs. Prendergrass, 5 Barn. & Ald., 187, is relied on, whilst the contrary is held in United States vs. Howell, 4 Wash. C. C. R., where Mr. Justice Washington reviews the case in 5 Barn. & Aid., and supposes that it was not meant to hold that position, but concludes that if it does, he dissents from it, for the reasons which he assigns. There is, in this case, no evidence from which the jury could be at liberty to find such an actual agreement between the creditor and one of the principals, Laws, to extend the time of payment, upon sufficient consideration, and sufficient to prevent the creditor from bringing suit before the expiration of the extended time, even if a paro'1 agreement were conceded to be sufficient, as the law requires, and on that ground alone, it would have been error in the Court below to have granted the prayer. It would have misled the ⁵¹⁷ But the prayer assumes that the bond of Davis was accepted, by the appellees as collateral security for the payment of the bond of Laws & Jester.

The possession of an additional or collateral security cannot impair or affect the right of a creditor to pursue and enforce payment of the obligation, to secure which the collateral was given and accepted, so long as it did not appear that the debt had been paid. Brewster & Spratt vs. Frazier, 32 Md., 302 . The effect of the prayer would be to assert as a legal inference that an agreement to extend the time of payment of the assigned bond, must result from the acceptance by the holder of a collateral security which did not mature until after the assigned bond matured. In 2 Parsons on Contracts, 685, it is said that an agreement to suspend or delay will not be inferred from the mere giving of collateral security, with power to sell the same at a certain time, if the debt be not previously paid.

And in Ernes, et al. vs. Widdowson, 4 Carrington & Payne, 151, where the plaintiffs and defendant had come to an arrangement whereby the defendant assigned certain property