Farmers' Bank v. Raynolds

An agreement with the principal to give time, without a good consideration, does not discharge a surety. To discharge a surety, the agreement must be binding, and suspend the creditor’s right to sue. A mere delay to pursue remedies, or omission to enforce liens, does not operate to discharge the surety; to work his discharge, there must be some positive act of relinquishing securities or release of liens.

This is a motion for a new trial, from Stark county. The action was assumpsit, on a note discounted by the plaintiffs) for $2,793.10, made by one Alanson Pcnfiold, payable at *the Commercial Bank of Lake Erie, to the order of defendant, and by him indorsed to the plaintiffs. Plea, non assumpsit. On the trial of this cause to the jury upon the circuit, the facts proved and admitted were as follows: “The note in the plaintiff’s declaration mentioned, fell due at the Commercial Bank of Lake Erie, on August 19, 1836; some time previous to which it was offered for discount, and was discounted by the plaintiff at the request of the defendant, and for his benefit; and the defendant then indorsed said note to the plaintiff, and received the proceeds thereof. That when said note fell due, it was duly protested for non-payment, of which the defendant had due notice. That suit was commenced on said note against Alanson Pcnfiold, the maker thereof, at the next term of the court of common pleas of Cuyahoga county, after the same fell due; and that such proceedings were had in said suit until final judgment, in the Supremo Court of said Cuyahoga county, held August 12, 1837; and that such proceedings were had on said judgment after its rendition, as are stated in the transcript of the docket entries hereto annexed, and certified by A. Clark, clerk of said court of common pleas. This transcript shows a judgment at the August term, 1837, of the Supreme Court of Cuyahoga county, in favor of the plaintiff, against Penfield, for $3,124.04, and costs and proceeds. “ Mandate to common pleas, and execution ordered, October term, 1837; fi. fa. issued November 23, 1837, to sheriff, and returned March 18, 1838, by order of plaintiff’s attorney, indorsed, ‘Received on this execution, $1,043.16. Deposit fees, $20.40. S. S. Handerson, Sheriff.’ ” “ The defendant in the above case produced the plaintiff’s attorney’s receipts; one for $200, and the other for $100, to apply on said judgment; one dated May 1, and the other August 16, 1838. ’ A. Clark, Pep. Glerk.” “ The defendant produced a receipt, dated November 22, 1838, for $100. “ The defendant produced a receipt, dated February 2, 1839, for $100. *“ The defendant produced a receipt, dated January 31, 1839, for $100. “ The defendant produced a receipt, dated October 11, 1838, for $300/ “ Al. fi. fa. issued September 1, 1838, and returned by order of plaintiff’s attorney; S. S. Handerson, sheriff; foes, 40 cents. Plu. fi. fa., June 10, 1839, and returned made, $3. No goods. Not levied on goods for want of time; foes, 66 cents. M. Miller, deputy sheriff. Second plu. fi. fa., September 17, 1839, returned, levied on lot No. 1, St. Clair street, appraised at $3,100, not sold; foes, $6.65. M. Miller, deputj^ sheriff. Ven. ex., January 20, 1840, and returned sold to Commercial Bank of Lake Erie, for $2,067; fees, $4.15. M. Miller, deputy sheriff. May term, 1840, sale approved and deed ordered. Third plu. fi. fa-., January 11, 1842. Costs, on motion, for deed, 66 cents. “It was further proved that, in March, 1838, a letter was received from said Penfield, by John Harris, president of said Bank of Canton, and its attorney in said suit against Penfield, requesting that the execution, which had then been issued against him, might be stayed over the then next term of said court of common pleas, which was held Ajrril 17, 1838, on condition that he, Pen-field, would pay $1,000, to the credit of said Bank of Canton, in said Commercial Bank of Lake Erie, to be applied on said judgment. That said Harris exhibited said letter to the directors of said Bank of Canton, and was directed by them to accept said proposition. That said Harris accordingly wrote to said Penfield, stating that, on his paying $1,000, as proposed, and showing that loiter to the sheriff, he, the sheriff, would stay the execution as requested; and that the said $1,000 was paid, and said execution •was returned in manner stated in said transcript, March 18, 1838, and that this arrangement was made without the knowledge of the defendant. Also, that the sum of $40 was paid by said Pen-field to said bank, May 1, 1838, in addition to the several sums of $100, $100, $100, and $300, stated as paid in said transcript. *“ It was further proved that, at the time of the return of execution, in March, 1838, said Penfiold had sufficient real estate, subject to levy, to satisfy said judgment; that said judgment was a lien on said land, prior to all other liens thereon, and so continued until some time in July, 1839, when said Commercial Bank obtained a judgment against Penfield, in said court of common pleas, which judgment was decided to have a prior lion on said land, in the case of the Farmers’ Bank of Canton v. Commercial Bank of Lake Erie, 10 Ohio, 71. “It was further proved that the defendant was a stockholder of said Bank of Canton at the time of the discount of said note, and has continued a stockholder over since, and that he became a director thereof in January, 1839, and continued to be a director until the same was placed in the hands'of receivers, March 12, 1842; and that, in November, 1838, ho, the defendant, was informed by the said John Harris that the judgment against Penfiold was considered perfectly secure; and said Harris stated, on his examination, that ho might, and probably did, so inform the defendant at other times; and that the defendant has, since the discount of said note, been a resident of the town of Canton, where said bank is located, and is a brother-in-law of said John Harris, president and attorney thereof, as aforesaid. And, further, that the indulgence from time to time granted to said Penfiold, in manner aforesaid, was intended to facilitate the collection of said judgment against Penfield, the payment of which, it was supposed, would be suspended by a levy on real estate, which, during the years 1838 and 1839, could seldom bo sold on execution in Cuyahoga county, where the lands of Penfield were situated; and that such indulgence was considered, by the said attorney of the bank and its officers, to be judicious and proper, and that they acted in the premises in good faith. It was also proved that said Penfield, after a judgment obtained by said Commercial Bank, in July, 1839, became-totally insolvent, and has so continued over since, and that said judgment against him, in favor of said Bank if Canton, is uncollected and worthless. *“And upon the facts aforesaid, the court charged the jury [88 that, by law, the defendant was discharged from liability as indorser of said note, by the acts, neglect, and laches of the plaintiff) in respect to the collection of said judgment against said Penfield, and that the plaintiff was not entitled to rocovor; whereupon the jury found a verdict for the defendant. “And now the plaintiff, insisting that, in charging the jury as aforesaid, the court mistook the law, pray the court to set aside said verdict, and grant the plaintiff a new trial in this cause.”