Davis Sewing Machine Co. v. Buckles

Citations

• 89 Ill. 237

Syllabus

<p>1. Surety—release on giving note for sum due. Where a principal settles with his agent, who has given bond with sureties, for all indebtedness incurred by the agent to the principal, and the principal, in consideration of the execution of notes to him by the agent and his sureties, releases the bond given, if the settlement includes a note given by the agent, and another guaranteed by one of his sureties, the release will be a discharge of the guarantor on the note so guaranteed, and will be a complete defense to such guarantor, but not if such note forms no part of the sum found to be due on the settlement, but was given for a different indebtedness for which the guarantor was not liable as surety on the bond.</p> <p>2. Where the surety on a bond is induced by his principal to guaranty the payment of a note given by the latter for an indebtedness incurred by him before the former became surety, under the representation of the principal that he is liable as surety, a subsequent release of Ms liability on the bond by the obligee upon giving notes for the sum found to be due from his principal, not induced by any representations of the obligee and payee of the note so guaranteed, will not discharge the guarantor from the payment of such prior note so guaranteed by him.</p> <p>3. Same—misrepresentations of Ms principal inducing Mm to assume a liability. A surety or guarantor can not interpose the fraudulent or false representations of his principal, whereby he was induced to become liable, as a defense to the payment of a note or bond, without connecting the payee with such representations.</p> <p>4. Estoppel—to claim a note given by partners is an individual debt of one. Where a sewing machine company settled with their agents, who were partners in buying and selling sewing machines, and surrendered their bond, accepting their note for the balance due, and one of the partners having withdrawn, the other gave Ms bond to the company to secure any indebtedness he migh