the other's debt to him, which he denies, and also denies that he ever assented to the arrangement or released or intended to release the appellees from liability for the debt on the Calvert street property. He avers that the transactions with Meredith for extension of time were managed entirely by Mr. Guest as his agent, and he denies he ever received any bonus for the same, or ever knew of it. He also avers that he has brought the suit for the benefit of John C. George, his cestui que trust.

The case having been brought to hearing upon the proofs in the cause before the Circuit Court for Baltimore City, that court made the injunction against prosecuting the suit at law perpetual.

In his opinion the learned judge placing his decree upon the equities resulting to the appellees from the conduct of the appellant in extending the time for Meredith on the Calvert street property, most forcibly and tersely says: "It must be conceded that when Andrews and wife sold his property to Meredith, subject to the mortgage to George, and left their notes for the principal and interest in the possession of George, they had a right to have the property immediately sold upon any default by Meredith in the payment of either principal or interest. This right they could exercise by a demand upon George to pursue his remedy against the property; a demand which he could not disregard. When therefore by a binding agreement between himself and Meredith he deprived himself of meeting the demand of Andrews and wife, he released them from a liability which he might have averted by a compliance with such demand. This consequence could only have been avoided by a distinct agreement with Meredith, that the suspension of the remedy against the property was not to be operative if Andrews and wife should require the property to be sold for their protection on Meredith's default. But I find in the evidence no record of such an agreement.”

We find no error in this ruling nor in the reason assigned for it. On the contrary, we think it is fully sustained by the proof in the cause, and justified by the most approved text-book authority and judicial decision.

*

In 1 Jones on Mortgages, $$740-741, the doctrine is most clearly stated, that generally one purchasing land subject to mortgage not only purchases the equity of redemption, but purchases the whole estate, and assumes the payment of the mortgage

as part of the purchase-money. Generally an express agreement is made to that effect (as was done here), and the deed drawn subject to the payment of the mortgage. In such case as between the parties the purchaser becomes primarily liable for the debt and the mortgagor only security; "and as between them the mortgaged property becomes the primary fund for the payment of the debt." The same author says the mortgagee may by his dealings with the purchaser and mortgagor recognize the purchaser as principal and the mortgagor as only security toward himself. It is also stated, that "any material alteration of the mortgage contract will discharge the mortgagor." It is still further stated in section 742, thus: "A purchaser having assumed the payment of an existing mortgage and thereby become the principal debtor, and the mortgagor a surety of the debt merely, an extension of the time of payment of the mortgage by an agreement between the holder of it and the purchaser, without the concurrence of the mortgagor, discharges him from all liability upon it."

The doctrine as thus stated comports, we think, with true principles of equity and fair dealing to which parties ought always to be held. The question was presented in Calvo v. Davies, 73 N. Y. 211; s. c., 29 Am. Rep. 130, and was unequivo cally decided in accordance with the rule as we have extracted it from Jones on Mortgages. In that case the court said, that in such a case as this we are considering, it must be held on the authorities that the rights of parties must be determined by the rules governing the relation of principal and surety. We find that decision to have been frequently followed in New York, and have discovered no case to the contrary in this country, except Corbett v. Waterman, 11 Iowa 86. The weight of authority is strongly in favor of the rule laid down in Calvo v. Davies, which we think adopts the truly equitable rule. It is very clear that after this arrangement between the appellant and Meredith, if Andrews and wife, who were the original debtors, had tendered the amount of the mortgage debt to the appellant and demanded an immediate assignment to them that they might enforce immediate payment, Meredith could not have complied, so as to enable them to proceed; nor could he have proceeded at once upon the demand of the appellees as the sureties of Meredith under the theory of the law as stated, for he had bound himself to wait for a definite period. It may be possible that

during that period such depreciation might take place as to create the deficiency.

The appellant complains that no injury in fact has been shown. The authority we have cited says that no inquiry will be made into that. The reason is that the law presumes a man to have been injured by such dealing to his possible, if not probable, prejudice. This is the doctrine of Claggett v. Salmon, 5 G. & J. 252, in which Judge STEPHEN says: "It is upon the principle that the contract is changed or varied to his prejudice, and without his consent, that the surety is discharged. It is because the creditor has disabled himself from fulfilling the duties and obligations which he owes to the surety, that he is released from his responsibility." In that case there was an express reservation of rights as against the surety, which under the circumstances of that case was upheld. But in this case there was no reservation of rights as against the surety, nor of right to proceed at the sureties' request, to throw any doubt upon the propriety of applying the general rule to this case. The doctrine that any dealing with the principal debtor whereby the contract is varied or changed operates to release the surety is also fully maintained and applied in Mayhew v. Boyd, 5 Md. 102; Yates v. Donaldson, id. 389, and Oberndorff v. Union Bank of Baltimore, 31 id. 126. It follows from what we have said, that the decree of the Circuit Court must be affirmed.

* *

*

*

Decree affirmed.

b. It has been held in some states that joint obligors cannot by agreement between themselves, and without the consent of their creditors, so change their relation to the debt as to change the creditor's rights.

30 Ohio State 389; 27 Am. Rep. 464.

JOHNSON, J. The note sued on was the joint liability of all the partners in the firm of Taylor, Griswold & Co.

Taylor and Finger, as well as Griswold, were principal debtors. When the note was executed and delivered to Mrs. Rawson, for a valuable consideration, the liability thereon of each partner

became fixed. Their relations to that contract, and their liabilities thereon, could by no act between themselves be changed.

After this note was given, two of the partners, Taylor and Finger, retired from the firm, and a new one was formed, including Griswold, their former partner, which obligated itself to the retiring partners to pay all debts, and save them harmless.

Of this arrangement, it is claimed that Mrs. Rawson had notice. The evidence tends to show constructive notice to her of the formation of the new partnership to succeed Taylor, Griswold & Co., and subsequent dealings by her with the new firm. Whether she ever in fact knew of this arrangement, by which the new firm was to pay the debts of the old, does not appear, but, conceding that she did, the question presented by the charge of the court is, as to the effect of such knowledge on her rights on the note.

The charge was: "If she did have notice, then she was, after that knowledge, bound to treat them as sureties, and they were entitled to all the protection that sureties would be entitled to, as if the names of Taylor and Finger had been attached as sureties when the note was executed."

It is not claimed that Mrs. Rawson assented to this new arrangement, or by any valid contract, express or implied, agreed to modify or change the relations of these joint obligors to her upon the note, but simply, as between themselves, by the new arrangement, Taylor and Finger became sureties of their copartner, Griswold, of which fact Mrs. Rawson had notice. It is admitted that so long as she was not informed of this arrangement her rights and duties remained as fixed when the note was given; but it is claimed that when such notice was given, then Taylor and Finger were entitled to the same rights and protection as if they had been originally sureties.

In substance, the charge of the court lays down the law to be, that the liability of principals on an obligation may be converted into a liability of suretyship by the acts of the obligors, without the assent of the obligee, by giving notice of such new arrangement.

In Thurston & Hays v. Ludwig, 6 Ohio St. 1, it was held that in order to change or vary the terms of a written contract, there must be a new contract to that effect between the parties, based on some new consideration, or such new contract must have been so far executed or acted upon that a refusal to carry it out would operate as a fraud.

Such is the general rule governing all contracts. In its application to cases like the one at bar, STORY says: "It frequently happens that upon the retirement of one partner, the remaining partners undertake to pay the debts and to secure the credits of the firm. This is a mere matter of private arrangement and agreement between the partners, and can in no respect be admitted to vary the rights of existing creditors of the firm." Story on Partnership, sec. 154.

If the creditor assents to such arrangement after it becomes known to him, "and by his subsequent act or conduct, or binding contract, he agrees to consider the remaining partners as his exclusive debtors, he may lose all right and claim against the retiring partner."

The precise question at bar was considered at great length in Maingay v. Lewis, Irish R. Com. Law, 495 (1869).

To an action on the money counts, the defendant pleaded that the cause of action accrued against him and one W. and one S. as partners; that afterward the firm was dissolved by a memorandum, of which plaintiff had due notice, by which W. agreed to pay all debts of the firm and indemnify his copartners from all claims, by which he became a surety only, of which plaintiff had notice, and after such notice took a bill of exchange at three months from W. alone for the amount, and thereby gave time to W., whereby defendant was discharged from liability. It was held that this plea was bad, and did not constitute a defense either at law or in equity, WHITESIDE, C. J., saying: "It is clear that no arrangement among joint debtors could prejudice the rights of their creditors." Again: "Another averment is that the plaintiffs 'had notice of this arrangement.' Well, I do not see how the men giving notice to the plaintiff of an arrangement by which they can not be affected, is to prejudice their rights."

In that opinion the distinction is clearly drawn between a case where the relation of principal and surety existed inter se at the time the obligation was entered into, of which the creditor had knowledge, and a case of joint principals inter se at the date of the obligation, and a subsequent agreement between the joint debtors, by which, as between themselves, one becomes a surety of the other, of which subsequent arrangement, the creditor had knowledge.

It is of the first importance to keep in mind the distinction, as it furnishes the key to harmonize many apparently conflicting