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Argument for Defendant in Error.

But even if it be held that sections 5419, 5832 and 5836, and the other sections of chapter 12, division 7, title 1, be repealed by implication, the question is whether or not sections 31750 and 3175p of the negotiable instruments act warrant the defense tendered by the plaintiff in error.

The question is whether or not the extension of the time of payment of a promissory note for a valuable consideration, by an arrangement between the holder and the principal debtor is a material alteration, and thereby releases a surety to the note, who did not authorize or assent to it. It is a well settled rule that sureties are only held according to the strict terms of their contracts. Brandt on Suretyship, section 378; Brewing Co. v. Schultz, 68 Ohio St., 415; Insurance Co. v. McDonnell, 41 Ohio St., 650; Ide v. Churchill, 14 Ohio St., 372.

Mr. Charles J. Pretzman, for defendant in error.

The court will note that the obligation of C. E. Richards is joint and several and that there is nothing on the face of the note to distinguish his signature from that of the other obligors. We take it, therefore, that the court will find C. E. Richards to be primarily liable on this note under section 3178a.

If C. E. Richards is primarily liable upon the note, he can only be released by the discharge of the note itself. Section 3175j fixes the way in which this may be accomplished.

Section 3175k should be read in this connection, because it is here fixed how and under what

Argument for Defendant in Error.

circumstances a surety or a person secondarily liable may be discharged.

We stand upon the plain words of the statute. Richards is primarily liable and can not be secondarily liable. He can only be discharged when the instrument itself is discharged, and it is only a person secondarily liable who can be discharged by an extension granted by the payee without his consent. Vanderford v. Bank, 105 Md., 164, 66 Atl. Rep., 47; Cellers v. Meachem, 49 Ore., 186.

The states of Maryland and Oregon have negotiable instruments acts similar to ours. Rouse v. Wooten, 140 N. Car., 557; Eaton & Gilbert on Commercial Paper, section 123.

In the first place, is there necessarily any conflict between chapter 12, division 7, title 1, Revised Statutes, and this negotiable instruments act? 27 Am. & Eng. Ency. Law (2 ed.), 506; Oriental Financial Corp. v. Overend, Gurney & Co., L. R., 7 Ch. App. Cas., 142.

The question here is not between section 3178a, Revised Stautes, or any one of the statutes in our new code of negotiable instruments, on the one side, and sections 5419, 5832 and 5836, on the other side. The question is between the old statutes and the whole body or code or system of law on negotiable instruments, extending from section 3171 to 3178g, and covering thirty-two pages of the Revised Statutes. In other words, did the legislature intend this new codification of the law of negotiable instruments to be a complete body of law on this subject? Plank Road Co. v. Cotton, 12 Ohio St., 272; Commissioners v. Forego & Binkly, 26 Ohio St., 491; Lessee of Moore

Opinion of the Court.

v. Vance, 1 Ohio, 10; State v. Commissioners, 9 O. C. D., 92, 16 C. C., 218; 26 Am. & Eng. Ency. Law (2 ed.), 733; Andrews v. People, 75 Ill., 605.

This elaborate codification of the Ohio law on the subject of negotiable instruments, not only constitutes a complete system of law on the subject, but it revolutionizes phraseology in an important particular. Nowhere in this long code. do we find the word "surety" used. used. In the new statutory law on the subject that word is obsolete. This code refers to obligors who are either "primarily" or "secondarily" liable.

We claim that the subject which is treated in chapter 12, division 7, title 1, Revised Statutes, is fully and exhaustively covered by this negotiable instruments act.

SPEAR, J. If the answer tendered stated a defense the motion to file it should have been sustained, and to refuse it was error. If, on the other hand, the pleading failed to state a defense, it was not only within the power of the trial court to refuse to permit it to be filed but it was its duty to so refuse and the judgment should be affirmed. The ultimate question, therefore, is: Where parties execute a joint and several promissory note, all signing on the face thereof, one being in fact a surety, and the holder of the note, with knowledge of this fact, at the maturity of the note extends the time of payment for a valuable consideration and without the consent of the surety, is the latter discharged from liability on the note? It is conceded that upon equitable principles incorporated as part of the common law, and sustained by numerous authoritative decisions of the courts of this state,

Opinion of the Court.

An

the answer would necessarily be in the affirmative unless the act of April 17, 1902, entitled: "An act to establish a law uniform with the laws of other states on negotiable instruments," sections 3171 to 3178g, Revised Statutes, requires a different answer. That act establishes the status of parties to negotiable instruments. As to accommodation parties the provision (section 3172a) is: "[Liability of accommodation party.] accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party." As to those primarily liable it provides that: "The person primarily liable upon an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are secondarily liable." We suppose the law to be too well settled to require citation of authorities in its support, that a surety is an original maker, and becomes primarily liable to any party lawfully holding the paper, his liability to pay being absolute and in no sense dependent upon demand at maturity. To obtain some trust, confidence or credit for another the surety engages to be answerable for him. A surety upon a note undertakes to pay if the principal debtor does not; he is absolutely liable as soon as default is made. Having undertaken to be bound for the debt of another he becomes bound as the principal is bound, and is primarily liable. For further com

Opinion of the Court.

ment respecting the primary liability of a surety see Rouse v. Wooten, 140 N. C., 557. So that, Richards being, according to the averments of his answer, a surety, he became liable upon the note primarily at its inception. It is to be understood that here, and elsewhere in the opinion, we are dealing with the liability of an accommodation maker who has signed on the face of the

note.

By the act under review the discharge of negotiable instruments as to persons primarily liable is provided in section 3175j as follows: "Discharge of Negotiable Instruments.

"Sec. 3175j. [Instrument; how discharged.] A negotiable instrument is discharged: 1. By payment in due course by or on behalf of the principal debtor; 2. By payment in due course by the party accommodated, where the instrument is made or accepted for accommodation; 3. By the intentional cancellation thereof by the holder; 4. By any other act which will discharge a simple contract for the payment of money; 5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right."

The section following makes provision for discharge with respect to persons secondarily liable, viz.:

"Section 3175k. [When person secondarily liable on, discharged.] A person secondarily liable on the instrument is discharged: 1. By any act which discharges the instrument; 2. By the intentional cancellation of his signature by the holder; 3. By the discharge of a prior party; 4. By a valid tender of payment made by a prior

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