Maingay v Lewis

• Jurisdiction: Ireland
• Judgment Date: 03 June 1870
• Date: 03 June 1870
• Court: Court of Exchequer Chamber (Ireland)

Exch. Cham.

Coram MONAHAN, C. J., PIGOR, C. B., KEOGH, J., FITZGERALD and DEASY, B., MORIS and LAWSON, JJ.

MAINGAY

and

LEWIS.

Hollier v. EyreENR 9 Cl. & Fin. 45, per Lord Cottenham.

Oakeley v. PashellerENR 10 Bligh, N. S. 548.

Davies v. StainbankENR 6 De G. M. & G. 679.

Combe v. WoolfENR 8 Bing. 161.

Howell v. JonesENR 1 Cr. M. & R. 97.

Rees v. Berington 2 Ves. 539.

Boultbe v. Stubbs 18 Ves. 20.

Thompson v. PercivalENR 5 B. & Ad. 925.

Davies v. Stainbank 6 D. M. & G. 679.

Pooley v. HarradineENR 7 E. & B. 431.

Greenough v. M'ClellandENR 2 E. & E. 424 & 429.

Oakeley v. Pasheller 10 Bl. N. S. 548.

Pooley v. HarradineENR 7 E. & B. 431.

Thompson v. PercivalENR 5 B. & Ad. 925.

Winter v. InnesENR 4 My. & Cr. 101.

Bedford v. DeakinENR 2 B. & Ald. 210.

Hllier v. Eyre 9 Cl. & F. 45.

Pooley v. HarradineENR 7 E. & B. 431.

Greenough v. M'ClellandENR 2 E. & E. 424.

Davies v. Stainbank 4 Cl. & F. 207.

Kearslake v. MorganENR 5 T. R. 513.

Stedman v. GoochENR 1 Esp. 3.

Griffiths v. OwenENR 13 M. & W. 58.

Belshaw v. BushENR 11 C. B. 191.

Oakeley v. PashellerENRENR 10 Bligh, N. S. 548; 4 Cl. & Fin. 207.

Oakeley v. PashellerENR 10 Bligh, N. S. 576, 577.

Doyle v. KinahanUNK Ir. R. 4 C. L. 150.

Tuff v. WarmanENR 5 C. B. 537.

Oakeley v. Pasheller 4 Cl. & F. 207.

Principal and Surety Discharge of Surety Equitable Defence.

VOL. V.] COMMON LAW SERIES. 229 (IN THE EXCHEQUER CHAMBER) (1). Exch. Chan, MAINGAY v. LEWIS. 1870. Principal and Surety-Discharge of Surety-Equitable Defence. June 3. Where two joint debtors entered into an arrangement between themselves by which, inter se, one of them became the principal and the other the surety, to the knowledge of the creditor, who afterwards, by taking a bill of exchange, gave time to him who had so become the principal. Held, reversing the decision of the Court of Queen's Bench (FITZGERALD, B., diss.), that the surety was discharged, and that the above facts constituted a good answer, by way of equitable defence, to an action subsequently brought by the creditor against the surety, although the relation of principal and surety did not subsist at the time of the original contract. Held also (KEoolc, J., and DEASY, B., diss.), that the equitable defence was not bad on demurrer, for want of an averment that the time was given to the quasi principal without the knowledge or assent of the quasi surety. ERROR brought by the Defendant to reverse the judgment of the Court of Queen's Bench allowing the demurrer to the DeÂÂfendant's third defence. The pleadings; arguments, and cases cited are fully set out in. the report of the case in the Court below, Ir. R. 3 C. L. 495. Ryan, Q. C., and. M'Kenna (for the Plaintiff in Error, the DeÂÂfendant in the Court below), in support of the defence, cited, in addition to the authorities referred to by them in the Queen's Bench, Hollier v. _Eyre (2) ; Oakeley v. Pash,eller (3) ; Davies v. Stainbank (4) ; Byles on Bills, 381, 10th Ed. James Murphy, Q. C., and J. A. Byrne (for the Defendant in Error, the Plaintiff in the Court below), relied upon the same arguÂÂments and authorities as in the Court of Queen's Bench. Cur. adv. vult. (1) Coram MoE&RAN, C. J., Floor, (2) 9 Cl. & Fin. 45, per Lord CctÂÂC. B., KEOGH, J., FITZGERILD and tenham. DEASY, BB., MORRIS and LkwsoN, (3) 10 Bligh, N. S. 548, JJ. (4) 6 De O. M. & G. 679. 230 THE IRISH REPORTS. {I, R. LAWSON, J . :- The question in this ease is, whether an equitable defence which has been pleaded by the Defendant affords an answer to the action. This defence has been demurred to, and the Court of Queen's Bench allowed the demurrer. If, in the original transaction, Lewis, the Defendant, had been a surety and Wadge the principal debtor, it is quite clear that the giving of time by the creditor to the principal debtor would discharge the surety. There is also no doubt that the taking of a bill for the debt suspends the remedy while the bill is current, and is a giving of time. This doctrine of the giving of time has been imported from the Civil Law into our law, and prevails alike in Courts of Law and of-Equity. In Combe v. Woolf (1), C. J. Tindal says : "It has been contended that though the surety has sometimes, under such circumstances, been held to be discharged in equity, such is not the rule in courts of law. But except where a surety has entered into a bond for payment in default of the principal debtor, courts of law, as well as courts of equity, have always held the surety to be discharged where, without his assent, time has been given to the principal debtor. Where the surety has entered into such a bond, and by a parol agreement time has been given to the principal, the surety is comÂÂpelled to resort to a court of equity, because by the rules of law a parol agreement cannot be pleaded in discharge of an instrument under seal." The case of Howell v. Jones (2) shows that the taking of an acceptance from the principal debtor when the time for payment had arrived, is a giving of time, and discharges the surety. The cases of Bees v. Berrington (3), and Boultbee v. Stubbs (4), show that the doctrine applies, although the surety is not damnified by what takes place ; indeed, Lord Eldon observes, in the latter ease, that the giving of the indulgence is, in most cases, for the advanÂÂtage of the surety, but the law takes no notice of that circumÂÂstance. The question, however, in this case, is, whether that doctrine ap- 4 plies to a case where the relation of principal and surety did not (1) 8 Bing. 161. (3) 2 Yes. .539. (2) 1 Cr. M. & R. 97. (4) 18 Yes. 20. VOL. V.] COMMON LAW SERIES. 231 exist between the creditor and the person claiming the benefit of Exch. Chan,, this rule, where both the debtors were jointly and severally liable 1870. primarily for the whole debt, but by subsequent arrangement m _AINGAY between the two debtors one becomes primarily liable, and agreesv. LEWIS, to pay the debt and indemnify the other against it : they are then principal and surety inter se ; and it is contended that, when notice is given to the creditor of the arrangement, although he is no party to it, he is placed in the same position as if the relation of creditor, principal, and surety had existed in the original transacÂÂtion. If the making of that arrangement and the communication of it to the creditor entail the same legal consequences as if the relation originally existed, it would seem that the defence of disÂÂcharge by giving time to the so-called principal ought at law as well as in equity to discharge the so-called surety. To hold that this is so seems to me contrary to all sound prinÂÂciples of law. To affect the rights and alter the reinedies,-or even the order of the remedies,-of a creditor, by an arrangement entered into between his debtors, to which he was no party, seems to be an interference with contracts very contrary to the spirit of our law. To-day a man has two debtors, both liable to him in the same degree, and to-morrow, by no act of his own, his dealings with those parties are fettered by the obligations of a suretyship to which he never assented. Such a doctrine, too, if carried out fully, may produce very strange results, if it applies to all cases of liaÂÂbility originally joint and equal, but converted into primary and secondary liability by covenants to indemnify entered into beÂÂtween the debtors. We can put a case of two lessees of land, jointly and severally liable for the rent ; but if one assigns his share to the co-tenant, with a covenant...