MAY

na

3dly. The guarantee is discharged where the creditor, by his own act, has put it out of his own power to transfer his rights of action against any one of his principal debtors, in the transfer of which the surety is interested. 4thly. The author asks, when the creditor has voluntarily received of the debtor any estate (héritage) in payment of à sum of money due to him, is the guurantee discharged, though a long time after he be evicted of that estate ? As to which case, the ground of doubt, he says, is, that the payment is not valable, not having transfered to him to whoin it was made the property in the thing: consequently, the principal obligation remains : whence it seems to follow, that the obligation of the surety ought to remain also; and Basnage reports à case so adjudged. But, notwithstanding these reasons, and though it cannot be deniell that the payment, in this case, is not valable, and that the principal obligation remains, it has been adjudged, says Pothier, by causes reported by Basnage (Traité des Hypothèques), that the creditor in this case is not allowed to sue the sureties, if, in the mean time, the principal debtor has become insolvent, The decision in this case, is founded on the rule of equity, Nemo ex alterius fueto pre. gravari debet. The surety ought not to suffer by the arrangement which has taken place between the creditor and the principal debtor. Now, if in this instance, the creditor were allowed to sue the surety, he would be prejudiced by the arrangement by which the creditor has taken the estate. The creditor, by this arrangement, having taken from the surety the power, by paying the ercditor, while the debtor was solvent, of recovering from the debtor the sum for which he had become responsible. He then goes on further to ask, whether, if the creditor had simply given a prolongation of the term of payment to the debtor, and, pending this prolongation, the debtor had become insolvent, the surety could resist the payment ? Vinnius, he says, holds the negative. This instance, says Pothier,is very different from the preceding. In the former instance, the gift of the estate in payment having, until the time of the eviction, caused the debt to be apparently paid, such an arrangement had taken from the surety all means of providing for indemwnity against his guarantee, even when he might perceive that the affairs of the debtor were beginning to be deranged : for he could not demand of the debtor the discharge of his guarantee, which, as well as the principal debt, appeared to be acquitted ; but the simple prolongation of the term given by the creditor to the debtor, which does not cause the debt to be apparently acquitted, does not take from the surety the means of providing for his indemnity, and of suing the principal debtor, if

he perd bon d tend tl does hi The pri telligib tit. (ur ity bin argued, laid do there is there fi

"rer en “taire « “ quelco “ cautio 2039. ‘ “ancier “qui pet ÿ puriem ceptance the aino not, thei the bills self fron si bona operates wiven to f taking of the de the suret debtor ; + insolvent maturity holds th:

debt is

expressic ou d'un

cluding t put by w property With a :

exchange ing of th When re:

by his fer his tors, in ly. The ived of sum of ough à , which it is not 18 imade | obligligation ports à ns, and | CASE, 1S s, it has Basnage se 1s not he prinhis case, cto prearrangeand the or were by the ate, The

surety was s0l-

he had

hether, he term ion, the he paynstance,

In the having,

arantee, debtor nand of well as à simple debtor, quitted, viding tor, if

he perceives that his affairs are beginning to be deranged ; si bona dilapidare coeperit. The surety, therefore, cannot pretend that the prolongation of the term given to the debtor does him any harm, since, on the contrary, he profits by it. The principles here laid down by Pothier, ure cleur and intelligible ; and they are briefly sammed up in the Code Civil, tit. Cautionnement, chap. IIT, which, though not an authority binding in Canada, muy be considered, as has been justly argued, in ‘the nature of a commentar y on the French law, a laid down by Pothier, respecting those matters in whioh there is no apparent intention to introduce alteration. We there find it stated, art. 2037 : “ La caution est décharge, ‘lorsque la subrogation aux droits, hypothèques et pr ivilèges, “du créancier ne peut plus, par le fait de ce créancier, s'opé- ‘rer en fuveur de lu caution" 2038. “ L'acceptation volon- “taire que le créancier « faite d'un immeuble, ou d'un effet “ quelconque, en paiement de la dette prine ipale, déc ‘harge la j caution, encore que le créance lei "U ienne à en étre év incé.’ 2039. “ La simple prorogation de terme, accordée pur le cré- “ancier «u débiteur principal, ne décharge point la caution, "qu i peut , en ce Cas, pourswrvr re Le débiteur pour Le fon ‘CC AU “paiement” We have seen that the creditor, by taking acceptances of his debtor, contracts with him, not to sue for the ainount of the debt until the bills become due. He cannot, therefore, transfer to the surety any right of suit while the bills &re running. But does this prevent the surety himne from suing the “principal debtor for his own indemnity, i bon« dilapidare coeperit ? If taking the accepted bills devtes as à simple prolongation of the time of payment given to the debtor, the surety may proceed against him ; but if taking the accepted bill operates as an apparent payment of the debt due to the drawer, so long as the bills are running, the surety could not commence any suit against the principal debtor ; and as the principal debtor in the present case became insolvent, in the interval between the acceptance and the maturity of the bills, the surety would be discharged. Pothier holds that the gift of an estate (héritage) in payment of debt is an apparent payment till eviction ; and from the expression in art. 2038 of the Code Civil, “ d’un immeuble où d'un effet quelconque,” We can have no hesitation in concluding that the word “ héritage,” employed by Pothier, was put by way of example only : and that his doctrine applies to property of any sort, given in payment, which is attended with a similar result. There can be no doubt that bills of exchange are property, and that they come within the meaning of the word “effet”. The bills given in the present case, when received by Bellingham & Wallis, became their prop-

erty, transferable by them to all persons at their pleasure ; and the acceptors became bound to pay them, when due, to the holders, whoever they might be. No restriction was imposed upon the negotiation of the bills; nothing appears to show that they were given as mere collateral securities. On the contrary, one of the bills appears, by the indorsements, to have been actually put in circulation by Bellingham & Wallis. They were property of value at the time of the acceptance, and were taken on account of the debt due. That debt, therefore, was, according to the French law (with which the law of England agrees in this respect), apparently paid, until the bills were dishonoured by non-payment at maturityv. The consequence cf which is, that the surety is discharged. Their Lordships are, therefore, of opinion, that the judgment of the Court of Appeuls of the Province of Lower-Canada, affirming the judgment of the Court of King's Bench, ought to be affirmed, with costs of the appeal. (1 Moore’s P. C. R., 333.) Sergeant STEPHEN and BURGE, K. C., for appellants. WIGHTMAN, for respoudent.