Seago vs. Harrison et al.

subject to this judgment. It was dated the 2d of April, 1869. The date of Seago's deed to Harrison does not appear. It is avered that "at the time of signing" that deed Seago knew nothing of said release, and "is not privy" to the arrangement for procuring it.

The part of the land still held by Seago was vacant. In 1870, Black had his fi. fa. levied on that part; it was sold by the sheriff to three persons; they subsequently sold it to Harrison, he built a house upon it and subsequently sold the two parts to Withers for $4,250 00, and Withers is now in possession of the whole tract. Seago knew nothing of this sheriff's sale till after Harrison had improved the lot as aforesaid.

As Black's judgment called for but $800 00, and as Black released $1,600 00 worth of the land from said judgment, under the circumstances as aforesaid, Seago claimed that the judgment was, in law, paid and that therefore the sheriff's sale was void and, of consequence the subsequent conveyances were also void, and he prayed that the Court would so decree.

To this bill Harrison, Black & Withers, the defendants, demurred, upon the ground that the bill contained no equity, and that if Seago was entitled to any relief, his remedy at law was complete. The demurrer was sustained and the bill was dismissed. That is assigned as error.

THRASHER & THRASHER, for plaintiff in error.

W. T. NEWMAN; R. H. CLARK, for defendants, said sec. 3608 of the Code applied to purchasers after the release, and not to Seago. A release will not be extended beyond the intention of the parties: 5th G. and J. Want of notice of sheriff's sale does not affect bona fide purchaser: 37th Ga. R., 255; 11th, 423. Seago's remedy, if any, is against Black for purchase-money: 24th, Ga. R., 40.

WARNER, J.

Phillips vs. Solomon.

The demurrer to the complainant's bill was properly sustained by the Court below. If the complainant is entitled to any relief on the statement of facts disclosed by the record, he has as ample and adequate remedy in a Court of law as in a Court of equity.

Let the judgment of the Court below be affirmed.

WILLIAM R. PHILLIPS, plaintiff in error, vs. WILLIAM SOLOMON, defendant in error.

Section 2121 of the Revised Code, of this State, providing that "the obligation of the surety is accessory to that of his principal, and if the latter, from any cause, becomes extinct, the former ceases, of course". is an affirmance only of the common law, and by the words "from any cause" is meant any cause dependent on the act or negligence of the creditor, and not such a cause as the discharge of the principal under the bankrupt law, which is beyond the control of the creditor, and by force of the laws of the land.

Bankruptcy. Surety. Lex Loci Contractus. Before Judge HOPKINS. Fulton Superior Court. October Term, 1871.

On the 22d of May, 1822, at Atlanta, Georgia, J. J. Morrison gave to Phillips his promissory note, due six months thereafter, with said Solomon as his security thereon. Upon this note Phillips sued Morrison as Maker, and Solomon as security. Morrison pleaded that on the 21st of January, 1869, he was "legally released" from said contract by a discharge in bankruptcy granted to him by the District Court of the United States, for the Northern District of Georgia. Solomon pleaded among other things "that he entered into said contract on the 22d of May, 1866, in said State, solely as a security for said maker," that said maker on the 30th of May, 1868, filed his petition in said United States District

Phillips vs. Solomon.

Court for a release from all debts, claims, liabilities and demands which could be proved against his estate in bankruptcy, under the Act of Congress of the United States, etc., approved the 2d of March, 1867, and was, on the 21st of January, 1869, legally released from the same by said Court, as appears by his discharge (fully set forth); that said note. was at the date of said application and discharge, and is yet, a debt which by said Act was provable against said Morrison's estate, and which existed on the 30th of May, 1868, and is not nor ever was such a debt as is by said Act excepted from the operation of a discharge in bankruptcy; that by that means said Morrison has been discharged from all liability on said note to said Phillips, and said Morrison's obligation on said note on the said day of said discharge became extinct. And by these means, according to the laws of Georgia, under which said contract was made, the said Solomon's obligation, which was only accessory to that of Morrison, became also extinct.

The note was read in evidence by plaintiff. The discharge as pleaded was admitted. Phillips' counsel demurred to said plea of Solomon, and the demurrer was overruled. Thereupon, no other evidence being introduced, the Court charged the jury that if the obligation of the principal had become extinct by his discharge in bankruptcy, the surety was discharged, and they should render a verdict for the defendants. This was done. Phillips' counsel say the Court erred in overruling said demurrer and in said charge to the jury.

HAMMOND, MYNATT & WELBORN, for plaintiff in error. Discharge of principal by bankruptcy does not discharge surety 1st Par. on Con., 29; 1st Par. on B. & N., 249; Hilliard on Bankruptcy 307, and cases cited: 6th Ga. R., 257; section 4 Bankrupt Act 1941, section 34 Bankrupt Act 1800; 1st Atkins, 84; 2 Cowp., 525; 7 Bing., 508: Obligation of surety at common law same as by section 2121 R. Code: Ch. on Con., 435; 24th Ga. R., 296; 17th, 536. "Any

Phillips vs. Solomon.

cause means causes stated in next chapter of Code, i. e. novation, etc.: Burge on surety, 40. The Bankrupt Act of 1867 says surety is not discharged by discharge of principal, and section 2121 will not be construed to defeat payee's right: Burge on Surety, 293; Smith S. and Con. L., 631, section 486; Ibid, 6873, section 542.

A. W. HAMMOND & SON for defendant. Lex loci contractus fixes the rights of the parties: Cooley's Con. L., 285; 68 E. C. L. R., 832; 79th, 652; 82d, 910. Story on Conf. of L., 410; 416 R. Code, section 8, and the whole doctrine as passed upon by the Supreme Court of the United States as quoted by this Court in 37th Ga. R., 151, 173; 6th, 439, 440; 38th, 383-4; 39th, 428, 457-8. The Bankrupt Act of 1867 did not change the old law, except in allowing a creditor to procure the discharge of principal, and yet hold others bound. The old law is stated in the authorties cited by the opposite side. But sections 2120, 2121, changed the law of suretyship. Congress said the discharge in bankruptcy should not "discharge or release" others in old Acts. In Act of 1867 it added "affect." Parties may contract to be governed by local law without regard to the bankrupt law: Parsons on C., 29, 285; 10th E. C. L., 104. The Bankrupt Act never was intended to be uniform in its effects. Examine provisions as to lien, exemption, etc. It does not discharge Solomon, but his contract, under lex loci, does.

MCCAY, J.

It is admitted that by the express terms of the Bankrupt Law of 1866, section 34, the discharge of the principal in an ordinary contract of suretyship does not discharge the surety.

The point really made in this case is, that the Act of Congress only applies to the contract of suretyship in the gen eral sense of the word surety, as it is understood in the commercial world, and does not cover a case of suretyship of a

1871.

ATLANTA, JANUARY TERM, 1871.

Phillips vs. Solomon.

195

special character, as, for instance, one in which it is expressly stipulated that the surety shall not be bound if the principal becomes a certificated bankrupt.

We are inclined to think this is a true view of the law; that it was not the intent of Congress to do anything more than to declare that the Act should not be construed so as to discharge sureties, and that this was done not so much to fix the law of the case, as by way of caution to prevent the Act from being construed to have an effect that, by its terms, it would not have. In other words, the contract of a surety, as it is understood in the commercial world, is always conditioned that the surety shall not be discharged by the bankruptcy of the principal: 1 Parsons on Con., 29; 1 Parsons on Bills, 249; Hilliard on Bankruptcy, 307; Ward vs. Johnson, 13 Mass., 152; 1 Atkins, 84; 2 Cowper, 525; 7 Bing., 508.

And section 33 and 34 of the Bankrupt Law of 1866, and the provisions of the Bankrupt Laws of 1841, and of 1800, are only in furtherance of and declaratory of what would have been true, had these sections not been put in the Acts. In my judgment, if such a contract of suretyship should exist, as was conditioned that the surety should be discharged, if the principal should be certified by a Bankruptcy Court, then this provision of the Act of Congress would not apply to the case; the surety would be entitled to the terms of his contract. His contract would be peculiar, and such a one as was not in contemplation of Congress in its passage of the Act. It is contended that this is just the nature of every contract of suretyship in this State; that section 2121 of the Revised Code declares the contract of the surety extinct, if, from any cause, the contract of the principal is extinct. It is argued that, as this was the law at the date of this contract, it entered into the stipulations of the parties and became a part of the contract. But is this a fair construction of our Code?

It must be remembered, that the object of the codification was not to make laws, but to codify or declare those already