Arkansas: Thompson v. Robinson, 34 Ark., 44.

New York: Sailly . Elmore, 2 Paige, 497; Mutual, etc. v. Davies, 44 N. Y. Superior Ct. R., 172.

A new agreement between a creditor and his principal debtor will not discharge the sureties when, by the new agreement, the remedies of the creditor against the sureties are expressly and clearly reserved: Morgan v. Smith, 70 N. Y., 539.

Illinois: Mueller v. Dobscheutz, 89 Ills., 176.

Massachusetts: Kenworthy v. Sawyer, 125 Mass., 29.

Where a surety gives notice to a creditor to proceed and collect the debt, he will not be relieved of liability unless the failure to observe the notice resulted in an injury to him; and the burthen of showing this is upon him: Arkansas: Thompson v. Robinson, 34 Ark., 44.

New York: Hunt v. Purdy, 82 N. Y., 486.

Vermont: See the peculiar rule in this state, 52 Verm., 247.

The rule in Russell . Weinberg, that where a mortgagor, having sold the mortgaged premises to one who has assumed payment of the mortgage, requests the mortgagee, after the mortgage becomes due, to foreclose immediately lest the premises become insufficient, the latter must do so or the former will be discharged from liability on the bond if the property afterwards becomes insufficient, applies when the mortgage is not due by its terms; but the holder of the mortgage has an option to declare the whole due by reason of a default in the payment of interest, taxes or instalments.

In such case, the person collaterally liable is entitled to call on the holder of the mortgage to exercise his option and foreclose for the whole amount; and if he refuses to do so, he cannot recover a deficiency against the one who made the request: Loomis v. Balheimer, 5 Abb. N. C., 263.

The mortgagor had a right to demand that the mortgagee proceed without delay, after his right of action has accrued, to collect the mortgage debt out of the land and grantee, and if he neglects so to do after full and explicit request, and collection there from be

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comes thereby either wholly impossible or only partially impaired, then the mortgagor is either wholly, or pro tanto, as the case may be, discharged: Mutual, etc., v. Davies, 44 N. Y. Superior Ct. R., 172.

Where the creditor is a corporation, a request by a surety to proceed and collect the debt must be made to some officer or agent who is authorized to act. As to who is? Mutual, etc., v. Davies, 44 N. Y. Superior Ct. R., 172. As to the requisites of a notice to a creditor to proceed and collect the debt,

see

Illinois Imming v. Fiedler, 8 Bradwell, 256.

New York: Hunt v. Purdy, 82 N. Y., 486; Mutual, etc., v. Davies, 44 N. Y. Superior Ct. R., 172.

Vermont: Benedict v. Cox, 52 Vermont, 247.

A surety has a right to the securities which the creditor holds, and if the creditor surrender or impair them, without the surety's consent, he is, pro tanto, discharged: 14 Am. L. Rev., 839; Renegar v. Thompson, 1 Lea (Tenn.), 457; Allen . Hanley, 2 Lea (Tenn.), 141; Murrell v. Scott, 51 Texas, 520; Richards v. Yoder, 10 Neb., 429; Guild v. Butler, 127 Mass., 386.

See National, etc., v. Bigler, 83 New York, 51, affirming 18 Hun, 402.

Where a mortgage is assumed by a grantee of a mortgagor, as to the mortgagor the land becomes the primary fund for the payment of the mortgage debt, and the mortgagor stands thereafter in the attitude of surety only.

After notice of assumption by the grantee, he is bound in his dealings with the grantee and others, in regard to the mortgage debt, to do nothing to the injury of the mortgagor as surety: Mutual Life . Davies, 44 N. Y. Superior Ct. R., 172; Curry v. Hale, 15 W. Va., 867.

If a prior mortgagee releases part of the mortgaged premises, to the prejudice of a subsequent incumbrancer, or purchaser, with notice of such subsequent mortgage, or deed, his release will operate as a discharge of his lien, to the extent of the value of the land released. Actual notice need not be shown in such case; it is enough if sufficient facts, out of which the equity arises, is brought home to the mort

the right to proceed against the estate of K. in the first instance without resorting to C.

As to whether such a contingent liability would give the obligee the same rights as the direct liability, quære.

Also held, that if plaintiff by any act of bad faith had impaired the security of the chattel mortgage, to the injury of the defendants, they could avail themselves of it, but it would not release them save to the extent of the injury; that plaintiff held the mortgage to secure her individual claim for the purchase-money, in preference to any rights which defendants might have in it as security for the debts; and that, as it appeared that the mortgaged property was not worth more than the balance due on the purchase, it did not appear the defendants would have been injured if the mortgage had been released: Kohler v. Matlage, 72 N. Y., 259.

Where, after maturity of a promissory note held by a bank, and due protest and notice thereof, the maker makes a general deposit in the bank of an amount sufficient to pay the note, this does not of itself as between the bank and the indorser operate as a payment. In the absence of any express agreement or directions, it is optional with the bank whether or not to apply the money in payment; it is under no legal obligation to do so: National, etc., . Smith, 66 N. Y., 271, 23 Am. Rep., 48, 50 note; Voss . German, etc., 83 Ills., 599.

Where a creditor has in his hands the means of paying his debt out of the funds of the principal debtor, and he might have paid the same by the exercise of reasonable diligence, and does not use the means thus within his control, the surety is discharged. Where the principal debtor gave his check, and the money remained in bank for seven days before presentation of the check, and it was honored, because the bank had on that day appropriated the money intended to meet it to the payment of an indebtedness of the principal due the bank on that day, the surety is discharged by the delay in presentation.

It seems, that a check is generally designed for immediate presentaton, and not for circulation, and it is the duty of the holder to present it for pay

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ment as soon as he reasonably may, and if he does not, he keeps it at his own risk: Fegley . McDonald, 89 Penn. St. R., 128.

Where the debtor transfers collaterals to the creditor, the latter is bound to proper diligence in realizing thereon, and if inconsequence of his negligence loss accrues on such collaterals, the creditor is liable for such loss: Alexander v. Alexander, 64 Ind., 541; Key v. Fielding, 32 Ark., 56; Bellerton v. Roope, 3 Lea (Tenn.), 215; Briggs v. Parsons, 39 Mich., 408; Hanna v. Holton, 78 Penn. St. R., 334, 1 Leg. Chron. Rep., 335.

See Com. Bank v. Wilson, 11 U. C. Com. Pl., 581; Whitney v. Ball, 17 id., 474.

But see Hooker v. Gooding, 86 Ills., 60; McMahon v. Young, 2 Victorian L. R. (Law), 57.

Where the creditor has funds of the debtor he ought to apply on the debt, he will be compelled to do so : Wright v. Austin, 56 Barb., 13; Commercial Bank v. Wilson, 11 U. C. Com. Pl., 581.

So the creditor may retain what he has received as collateral, and collect his debt, provided he have been guilty of no negligence as to the collateral: Marschultz v. Wright, 50 Wisc., 175.

If, however, such collateral security is confided to a trustee, the common agent of both owner and creditor, the creditor cannot be charged as bailee of the trust property. If the creditor procures or connives at the mismanagement of the trustee, he may be held responsible for the result of such mismanagement.

A trustee is not an agent of the creditor to such an extent as to render the creditor responsible for his want of diligence in executing the trust, nor will the subsequent assent by a creditor to what the trustee has already wrongfully done or neglected, relate back and make the creditor responsible for a loss to the trust fund already incurred: Murrell v. Scott, 51 Texas, 520.

Though a general assignment to the creditor for the benefit of the principal's creditors, is not a defence to a surety, where it appears that the assignee has realized nothing from the assignment applicable to the debt on which the surety is sued: Watson v. Shuttleworth, 53 Barb., 357.

See Bates v. Rosekrans, 37 N. Y., 409.

In an action on a joint and several promissory note against one only of the makers, he answered that he was surety only for his co-maker who had deceased, that the note had been filed and allowed as a claim against the estate of the principal who was solvent, and that steps were being taken by the administrator of such estate, to realize money to pay off the note in suit: Held, on demurrer, the answer was insufficient Hayes v. Hayes, 64 Ind., 243. To an action by payee against the drawer of a bill of exchange payable twelve months after date, the defendant pleaded that he drew the bill and delivered it to the plaintiff for the accommodation of the acceptor and as surety for him; that, at the time the defendant so drew and delivered the bill to the plaintiff, it was agreed between the plaintiff and defendant and the acceptor that the acceptor should deposit with the plaintiff certain securities to be held by the plaintiff as security for the due payment of the bill; and that, in case the bill should not be duly paid, the plaintiff should sell the securities and apply the proceeds in the liquidation of the bill, and that, until the plaintiff should have so sold the securities, the defendant should not be liable to be sued on the bill. The plea went on to aver that the securities were deposited with the plaintiff by the acceptor, but that the plaintiff had not sold but still held them.

Held (Willes, J., doubting), that oral evidence of the agreement alleged in the plea was not admissible, inasmuch as it contradicted or varied the express written contract on the face of the bill: Abrey v. Cox, L. R., 5 Com. Pl., 37.

But see Molson's Bank v. Gerdlestone, 44 U. C. Q. B., 54.

Where a creditor holds stock as collateral security for the payment of a promissory note, he is not bound at the maturity of the note and its non-payment to sell the stock without notice from the debtor directing him to do so: O'Neil . Whigham, 87 Penn. St. R., 394.

One guaranteed the collection of a bond and mortgage he assigned, and the assignee delayed foreclosing the mortgage for fourteen months after it became due. For ten months of this

time the mortgaged property was a sufficient security; but afterwards the buildings thereon were destroyed by fire, and the value thereof reduced below the mortgage debt. Held that the delay was sufficient to constitute laches discharging the guaranty: McMurray v. Noyes, 72 N. Y., 523, distinguishing 35 Barb., 484; Griffith v. Robertson, 15 Hun, 344.

See Vass v. Letson, 2 Nova Scotia Dec., 375.

The mere abandonment of foreclosure proceedings upon payment, by a subsequent incumbrancer, of the costs and interest then due, and the receipt from such incumbrancer subsequently falling due, there being no agreement to extend the day of payment of the mortgage, will not discharge one who stands in the position of surety for the mortgage debt, although he be the mortgagor: Mutual, etc., v. Davies, 44 N. Y. Superior Ct. R., 172.

Neglect by the holder of a note to protest it whereby a solvent indorser is discharged, does not relieve one who has guaranteed payment or collection of the note from his liability: Deck v. Works, 18 Hun, 266, 57 How. Pr., 292.

Mere neglect to issue execution on a judgment recovered against the principal will not discharge a surety: Fourth Nat. Bank v. Frazier, 2 Leg. Chron. Rep., 205.

See also Thompson v. Robinson, 34 Ark., 44.

An indorser is not discharged by the failure of the creditor to file the claim against the estate of the principal: Lawson v. Watson, 8 Baxt. (Tenn.), 72.

A surety upon a judgment by confession has the right to expect that the judgment will be entered of record within a reasonable time: and he is released from liability by an agreement between the judgment creditor and his principal, that the judgment shall not be recorded, in pursuance of which it is not entered of record until after the lapse of an unreasonable time: Hancock v. Wilson, 46 Iowa, 352.

A surety is not discharged by a failure of the creditor after judgment to issue execution and collect it, though the principal debtor have ample property to satisfy it, but on an execution being subsequently issued, no property can be found: Smith e. Erwin, 77 N. Y., 466.

A plea that the plaintiff has attached lands of the principal maker of the note, and that such levy of attachment is still pending and undetermined, presents no defence to an action of sci. fa. against a surety on the note. Levy upon real estate is not, like a levy upon personal property, a prima facie satisfaction: Cassell . Morrison, 8 Bradw., 175.

Where the creditor has obtained judgment against the principal, issued execution on which a levy is made, he discharges a surety by satisfying the judgment without the surety's knowledge or consent: Germania e. Frost, 43 N. Y. Superior Ct. R., 118; Renick . Ludington, 14 W. Va., 368; Coleman r. Dunlap, Nova Scotia Dec., 216; Holt . Mainer, 1 Lea (Tenn.), 488.

In Tennessee, by statute, it is the duty of an officer holding an execution against principal and surety to first satisfy the execution out of the property of the principal debtor: Sellers . Fite, 3 Baxt. (Tenn.), 120; Id., 121.

Where a bond stipulated that the surety should be liable for "any and every indebtedness or liability now existing or which may hereafter in any manner exist or be incurred on the part of" his principal, and a cotemporaneous agreement was entered into between the principal and the obligee expressing the conditions of the former's employment by the latter, it was held, that a change in the terms of the contract affecting the compensation of the principal, without the knowledge or consent of the surety, would not release the latter from liability on the bond.

The bond and agreement were independent of each other, and parol evidence was not admissible to show that the surety's liability was measured by the agreement: The Domestic Sewing Machine Company . Webster, 47 Iowa, 357.

A bond and mortgage were given to plaintiff's intestate by Smith, who subsequently sold the property to the defendant Gearty, who, in the deed, agreed to assume and pay the same. This action was brought to foreclose the mortgage, the complaint praying for a judgment against Gearty for any deficiency that might arise upon the sale. After the commencement of this

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action, Smith released Gearty from his agreement to assume and pay the mortgage.

Held that, as plaintiff knew of the agreement, and had accepted the same before the release was executed, his right to enforce the same was not affected thereby: Whiting v. Gearty, 14 Hun, 498.

It has been held that a surety will be discharged by any arrangement between the principal debtor and the creditor which operates as a fraud upon the surety; as where the money has been offered to the creditor and he, without the consent of the surety, requested the debtor to retain it longer. So where the creditor fraudulently colludes with the debtor to conceal from the surety the fact of the non-payment of the debt until the debtor becomes insolvent : Sailly v. Elmore, 2 Paige, 497.

But see 17 Eng. R., 188.

In an action against two joint cosureties for certain lessees, judgment was ordered against both, which was reversed by the general term as to one, and a new trial granted him on the ground of failure of consideration as to him, and was affirmed as to the other.

Held, that it was no ground of reversal, on appeal to this court by the latter; that, in case his co-surety succeeded on the new trial, he would lose his right of contribution.

As to whether the right would be lost in such case, quære: Morgan v. Smith, 70 N. Y., 537.

The obligation of one of two co-sureties is to pay the whole debt. If he does so, he may recover of his co-surety one half; if he pays less than the whole debt, he can only recover from the cosurety the amount which he has paid in excess of the moiety: Morgan v. Smith, 70 N. Y., 537.

Pending an action against several defendants on a joint contract, one of them died, and judgment was recovered against the surviving defendants, more than two years after letters of administration had been taken out on the estate of the deceased. This judgment was paid by all the judgment debtors except one, who was insolvent. Held, that they could not maintain a bill in equity for contribution against the administrators of the estate of the deceased: Spelman v. Talbot, 123 Mass., 489.