Page
for
agai
11896
both
present onge
ms of nd the tter of if the tion, whether material or contract, the case the rule thus laid down and discharged. But the question is,
„such variation made by the terms of the con- re that Cheong ible for and pay no should fall due all etc., which might be by him or his employés Putting out of view for the question of the release of the r, which, falls, under another fence, as stated above, it may be riation of the contract was arrangement made at the inter- 7th March, 1892 ? According to ng, Cheong Koon Sing was not arrangement. It was made en- Darby and Kan Sing Toi. And being to deprive Cheong Koon medy to which he has entitled Sing Toi, I can find no round for this contention. If even ank was precluded by the arrangement suing Kan Sing Toi until his shares had realized, Cheong Koon Sing, was no party was not bound by that arrangement. was nothing to prevent him from suing Sing Toi forthwith, and it would have been no defence for the latter to say that the Bank had made an arrangement with him by which his liability was to be met in another way. Even if the case were otherwise on this point, it may be observed that the contract of guarantee contains no stipulation that the Bank is not to interfere with the remedies over of Cheong Koon Sing against the drawers of Chinese bills making default, although of course. it would be inequitable for it so to inter- fere and it might render itself liable to Cheong Koon Sing by so doing. This view of the matter is not, in my opinion, affected by the letter of Cheong Koon Sing of the 31st May, 1892. It is true that in that letter he asks the Bank to charge the account of Kan Bing Toi, but there was nothing in that to upersede any legal rights that he might have again Kan Sing Toi, the latter having been
party to the arrangement suggested in that letter. I do not think, therefore, that the first ground of defence can be supported.
- Then, to take the second ground, was the effect of the arrangement such as to discharge the surety by giving time to the principal debfor f
+
The rule of law as to the discharge of the surety by the giving of time by the creditor to the principal debtor is old and well settled. It is thus stated in the work to which I have already referred, at p. 369. If the creditor, without the consent of the surety, enter into a binding agreement with the principal debtor to give him further: time for payment the enrety will be discharged. This is the case, even though no injury could acorue to the surety, for he himself is the fit judge of is or is not for his own benefit. It ot, however, every agreement or promise de by the creditor which will have the oct of discharging the surety. In the place, an agreement by the creditor to given times to the principal debtor will discharge the surety, and never did so her at law or in equity, unless it be of à binding character and unless made on valuable consideration. Such an agreement may be either in express words or implied from the
not
arties;ų mirtrade den
now
དE!
CHINA OVERLAND TRADE REPORT.
of the bills of the Kwong Fuk Bank that the shares held by the Bank on that account would have to be realized in order to find out whether any such margin was available; and that, pend- ing such realization, Cheong Koon Sing was not to be called upon to make good the amount of those bills, or, in other words, was to have time given to him for that purpose. If we rely on Cheong Koon Sing's evidence, this inference is still more clear. But assuming that time was given, the question arises whether the implied agreement by which it was given was of a binding character and made on a valuable consideration P. I am unable to think that it had any such binding effect. As Mr. Francis s argued, there was nothing in the arrangement to prevent the Bank from repudi- ating it the next day and enforcing its remedies against all the parties to the bills. I can dis cover no trace of any consideration moving from Cheong Koon Sing to the Bank to induce it to make the arrangement. It was a case of his taking something from the Bank, by way of relief of his own position, and giving it nothing in return. For even if Cheong Koon Sing's statement is accepted that, if the arrangement had not been made, he would have taken possession of and realized the promissory notes which Kan Sing Toi had about him, I do not see that his forbearing to do this constitutes a valuable con- sideration on his part for giving him time. There is no pretence that this forbearance was at Mr. Darby's request, and, further, there is nothing to show that Cheong Koon Sing had any right to demand the delivery to him of the promissory notes or that Kan Sing Toi would have delivered them to him if he had so de- manded them.
before the Court there was the evidence of either Mr. ong Koon Sing, any express pro- rstanding, made or given at the in- 27th March, 1892, to give time to Sing. The case is not so clear as ed agreement. Taking Mr. Darby's it could reasonably be inferred said and done at the interview
that might exist on Kan Sing. was to be applicable in payment
*
But besides the arrangement made on the 27th March, 1892, it is necessary to consider the effect of Cheong Koon Sing's letter of the 1st April; 1892, and the 3rd June, 1892. There was no answer sent by the Bank to either of these letters, but, having regard to the fact that they were written by Mr. Darby, I think it must be taken that the Bank assented to the proposals made in them. In the postcript to the first of these letters Cheong Koon Sing says "he will shortly hand the manager further cover, but he hopes the Bank will not press him too much." But, taking it that the Bank acceded to this request, it appears to amount, not to a binding agreement to give him time, but to no more than a promise to refrain from unduly pressing him, and it is clear law that mere passive inactivity, or omission to press the debtor, as distinguished from an agree- ment giving time, will not discharge the
surety" de Colyar on Guarantees, p. 372. Or, as Lord Hatherley said in the Oriental Financial Corporation v. Overend, Gurney & Co., L.R., 7 Ch. 150, "It is not simply neglecting to sue the principal which would have any effect upon the surety, but there must be a positive agreement with the principal that the creditor will postpone the suing of him to a subsequent period." The letter of the 3rd June, 1892, while it embodies an agreement by Cheong Koon Sing that his liability in respect of the Kwong Fuk and the Wing Tung Yau bills was not to be affected by the making of the debit entry with regard to them in Kan Sing Toi's account, engrafts on it two subsidiary agree ments to make good deficiencies on the account in respect of the bills. I think the express reservation made in this letter of the Bank's rights against. Cheong Koon Sing must have its due operation, and prevents the letter and its implied acceptance by the Bank from hav- ing the effect of granting time to the debtor so as to discharge the surety.
The last hat the B
509
noo put
lischer
iking
the
heong
that
om
ceptia
WZ BETO
defendan that, Koon Bing fo occasioned to Kwong Fuk and the Wing they would have recourse to such might remain on Kan Sing count after realization of the securities deposited ith the the advances, or, in other wor liability was substitute for liability. The question whether the Bank, in Sing Toi's account with the amo to which I am now referring a further security in lieu of the rity, that is to say, the liability Sing for the bills, or whether tended to take a security addition liability. It is evident that this a question of fact, and it will be what I have already said that there was no in- tention on the part of the Bank to release the liability of Cheong Koon Sing and to further or additional security in think that what the Bank really agree to have recourse to any margin available on Kan Sing Toi's account as an ad security to the claim which ther had against Cheong Koon Sing, and that such recourse was not by way of substitution for that claim. And it is clear that the taking of security which is merely additional to, and not in lieu of, that originally taken from the debtor will not discharge the surety. It was said by North, J., in Clarke v. Birley 4 C
CD It has never been held that the mere 437, acceptance of additional security, unaccom panied by a contract to give further time, would produce the result of releasing the surety.' And in the case of Rouse T. The Bradford Banking Company, Limited, 70- L.T., N.S., 430, Lindley, L.J., made the following remarks: The question whether a creditor of two or more persons has released one of them and converted the others into his sole debtors by what is called novation is a question of intention, and an intention to look to them for payment, especially when requested to do so by their co-debtor, is quite consistent with an intention to look to them as a mere matter of convenience without releasing him. To suc ceed on this ground, what the plaintiff the surety in that case has to show is conduct in consistent with a continuance of his liability,
The next contention on the part of the de- fendants is that the Bank discharged the surety by discharging the principal debtor. This contention is founded upon the statement of Cheong Koon Sing as to what was said by Mr. Darby at the conclusion of the interview of the 27th March, 1892. Even if this evidence is accepted to its full extent, it may be doubted whether Mr. Darby's assurances to Cheong Koon Sing are sufficiently definite to amount to a release of him from liability for the bills of the two banks in question. But it is unneces sary to determine this point because I have al ready intimated an opinion that I am not pre pared to accept Cheong Koon Sing's evidence in this matter.
from which conduct an agreement to release him may be inferred.
Dealing with the new firm and treating them as debtors, and proving against their estate, is quite consistent with not releasing the plaintiff.
It follows from these observations on the law of the case that, in my opinion, the defence has failed and the plaintiffs are therefore entitled to judgment. The question then is for what amount that judgment is to be entered. The plaintiffs contend that they are entitled to have judgment for $100,000, being the full amount cu ed to them, by the bond; while the de- fen tants on their side submit that, if the accounts are carefully examined, it will be found that the plaintiffs are indebted to Cheong Koon Sing and not Cheong Koon Sing to them, Then there have been dealings between the Bank and Cheong Koon Sing subsequent to the 22nd September, 1894, especially with respect to the Saigon property, and it was admitted by Mr. Francis that there should be a refere adjustment of the accounts between t subsequent to that date. But the acco somewhat complicated, and I think it will be more convenient that the parties should go fore the Registrar in order that he may settle them and certify the amount for which jadg- ment is to be entered and execution issued. But, in order to save time, it is desirable that I should express, for the guidance of the Registr r my opinion upon various items of claim which are in controversy between the parties and also upon some other points.
ΤΟΣ
are
To tako the disputed items in order I under stood at the hearing that the plaintif doned any claim to compound inter as regards simple interest, it was Court of Exchequer in Acke