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3. As laches on the part of the plaintiff discharges the surety, so à fortiori this will be the effect where actual fraud can be established. Thus, where the defendant agreed to guarantee the payment of the price of certain iron to be delivered to J. S., and a secret bargain was entered into between J. S. and the plaintiff that 10s. per ton should be paid beyond the market price, this was held to be such a fraud upon the defendant as to discharge his liability (g). On the same principle, if the real object, which the guaranty had in view, be evaded, and the transaction between the plaintiff and the principal be colourable only, the defendant will not be held liable on his guaranty (h).
Agreement to discharge.
4. The liability of the surety may be discharged by express agreement between him and the plaintiff, or by the substitution of another contract, before breach; provided that the plaintiff can avail himself of his remedy on the substituted contract(). Thus, where the declaration stated
(g) Pidcuck v. Bishop, 3 B. & C. 605; S. C. 5 D. & R. 505. “ Such a bargain would have the effect of increasing the surety's responsibility; for, it would compel the vendor to appropriate to the payment of the old debt a portion of those funds, which the surety might reasonably suppose would go towards defraying the debt for the payment of which he made himself collaterally responsible.” Per Abbott, C. J., 3 B. & C. 609.
(1) Erans v. Whyle, 3 M. & Payne, 137, note (c); S. C. M. & Malk. 468 ; 5 Bingh. 485.
(i) See Case v. Barber, Sir T. Raym. 450.
that the defendant guaranteed the payment of Discharge
of surety £200 by J. S. for goods to be furnished to the latter, to which defendant pleaded, that, after the making of the promise, and before breach, it was agreed between plaintiff and defendant that the goods should be paid for at the end of three months by a joint bill at four months, accepted by the defendant, which agreement the plaintiff accepted in full discharge of the former undertaking, the plea was held good on demurrer(k). And the second agreement, being in fact substituted for the former, and not by way of accord and satisfaction, discharged the former agreement, without allegation or proof of performance (1).
(1) Taylor v. Hilary, 5 Tyrwh. 373; S. C. 1 C. M. & R. 741.
(l) Id. See per Parke, B., 5 Tyrwh. 376. Secus if it had been after breach. Bac. Abr. Accord (A).
RIGHTS AND LIABILITIES OF VENDOR IN RESPECT OF
Section I.— Rights and Liabilities of Vendor in
respect of his own Agents. I. Rights of Vendor.
The liability of brokers and factors, in the event of the loss or destruction of goods, seems not to be on the same footing with that of innkeepers and carriers; the liability of the latter is greater, because it is founded upon a notion of public trust and employment(a). A factor is not liable for any accidental loss, and is discharged by such caution, in keeping the property entrusted to him, as a prudent man would exercise in the preservation of his own (6). He is justified if he exercise reasonable caution in delegating the goods to another (c).
(a) Paley, Pr. & A. 16; Jones Bailm. 75; Coggs v. Bernard, 2 Ld. Raym. 909.
(6) Anon. 2 Mod. 100; Rol. Abr. 124 ; Maltby v. Christie, 1 Esp. 341.
(c) Goswell v. Dunkley, 1 Str. 681 ; Bromley v. Corwell, 2 B. & P, 438.
Where a special authority has been given, the In case of
special auagent ought to adhere to it strictly, and if he de- thority. parts, he will be liable though he acted bonâ fide and for the good of his principal(d). But he is justified, if the compliance would have been a fraud upon third parties (e), or illegal(f). And the law exonerates him where he has followed the ordinary usage of trade (g), or where he has done everything in his power to comply with the instructions(h). In the absence of proof to the contrary, everything necessary will be presumed (i).
If the act of the agent has made the principal when he is liable to a third party, the agent will be liable over laches. to the same amount(k). So, where, by omitting to do something which he ought to have done, a loss has been entailed on the principal(/). It is the duty of the agent to give early notice to the principal of any loss or casualty, or other circumstance which may render it necessary for particular steps to be taken by the latter for his own security; such as the dishonour of a bill given in payment for goods by the purchaser (m), or the insolvency
(d) Catlin v. Bell, 4 Campb. 184.
(1) Wallace v. Telfair, 2 T. R. 188, n. ; Lcwson v. Kirk, Cro. Jac. 265.
(m) Beawes, 431.
In cases where no
Liability of of the underwriters with whom an insurance had
been effected in behalf of the principal(n).
Where there is no price fixed, and the factor or price is general agent has a discretionary power, he ought
to sell to the best advantage(6). If he has made interest on a balance remaining in his hands, he is liable for it(p); and a custom to make a profit by retaining a premium paid on his principal's account cannot be supported (9).
The agent is justified in selling, according to the ordinary usage of trade, upon credit, if there be no express direction to the contrary(r); but he is
liable if the vendee was notoriously an irresponsiLiability ble person (s). Unless the agent has given improfor price.
per credit, or has been otherwise guilty of laches, he will not be liable for more of the price than he has himself actually received (t). But if it is through the neglect or mismanagement of the agent himself that the price has not been received, he will be liable; as, where an auctioneer, without
(n) Jameson v. Swainstone, 2 Campb. 546, n.
(9) Diplock v. Blackburn, 3 Campb. 43; Massey v. Davies, 2 Ves. Jun. 317.
(r) Anon. 12 Mod. 514, 515; 2 Mod. 100; Scott v. Surman, Willes, 404, 407. Per Chambre, J., Houghton v. Matthews, 3 B. & P. 489.
(s) Sadock v. Burton, Yelv. 202; S. C. Bulstr. 103. Molloy, 328.
(t) Varden v. Parker, 2 Esp. 710; Alsop v. Sylvester, i C. & P. 107.