Booth v. Stores

Citations

• 75 Ill. 438

Syllabus

<p>1. Surety — when released—fraud, hy creditor. If, with the knowledge or assent of the creditor, any material part of the transaction between the creditor and his debtor is misrepresented to the surety, the misrepresentation being such that but for the same having taken place, either the suretyship would not have been entered into at all, or being entered into, the extent of the surety’s liability might thereby be increased, the security so given is void at law, on the ground of fraud.</p> <p>2. Same — not released hy fraud, of his principal unknown to the creditor. The creditor is not responsible for communication or want of communication between the debtor and his surety, unless he has himself' been guilty of some fraudulent practices. The fact that the surety may be assured by the debtor that the note indorsed by the latter would be taken in full satisfaction of the creditor’s claim, when, in fact, such was not the case, but the debtor was to give his own note for the balance due, will not release the surety so indorsing, unless the creditor had knowledge of the fraud so practiced on the surety.</p> <p>3. But if the creditor had represented to the surety that he was compromising with his debtor by taking his note for one-half the sum due, with the surety as indorser, and by a secret arrangement not communicated to the latter, did any thing which increased his liability, or which, if known, the suretyship would not have been entered into, then the security taken would be void on the ground Of fraud attributable to the creditor.</p> <p>4. Same —creditor not hound to disclose facts to surety when not asked for information. Where a creditor receives from his debtor the promissory note of the latter, payable to a third party, who indorses the same as surety, in part payment of his claim, and the debtor’s individual obligation for the balance, without any knowledge of the representations which induced the surety to indorse, he is not bound to disclose the fact that h