Galbraith v. Fullerton

Citations

• 53 Ill. 126

Syllabus

<p>1. Surety—as to release of, by agreement of the payee of a promissory note with the principal debtor, to extend, the time of payment. An agreement to ' extend the time of payment, to operate as a release of the surety, must b?, on sufficient consideration, legal and binding, and without the assent of the surety.</p> <p>2. It must be such an agreement as can be interposed to prevent a recovery on the debt, such as suspends the action, and without the concurrence of the surety.</p> <p>3. If the agreement be a nudum, pactum, or illegal, the rights of the creditor as against the surety will remain unimpaired.</p> <p>4. If, however, time has been legally extended by a valid contract, the surety could not compel the holder to receive the money, or if he should, the principal to the note would not be liable to him, as the time had not elapsed when he was required by his agreement to pay it.</p> <p>5. Usurious contracts—whether parties to an unexecuted, usurious contract, are bound for its performance. Neither of the parties to an unexecuted usurious or unlawful contract, is bound by it, or estopped from repudiating the same, where such party would derive no benefit, or acquire an advantage he did not previously hold, by such repudiation.</p> <p>6. Where the payee of a note entered into an agreement with the princi- . pal, without the knowledge or consent of the surety, to extend the time of payment of the note for one year, upon condition that the principal should pay him fifteen per cent interest, it was held, that neither the payee nor the principal was bound by the agreement, and that the surety was not thereby released from his liability.</p> <p>7. In such case the surety could pay the note at its maturity, and recover the money from his principal, and he could not set up his illegal contract with the payee to defeat such recovery.</p>