and get rid of paying the interest, is also relinquished for such period. Here, then, are all the elements of a binding contract. But it is said there is no consideration for the extension of time, because the law gives six per cent. after the note is due. But the law does not secure the payment of this interest for any given period, or prevent the discharge of the principal at any moment. There is precisely the same consideration for the extension of time as there was for the original loan. The consideration of the loan, in the part of the borrower, is the payment of interest. If there was no law limiting the amount of interest, the parties might contract for any rate they pleased. A contract to forbear the collection of a debt for a specified period, in consideration of the payment of a rate of interest beyond what the law allows, is founded upon a valid consideration. This would never have been doubted at all, if the law had not fixed the rate for which collection could be had. But, by limiting the rate of interest, the law does not declare that such rate is not a valuable consideration, but, on the contrary, declares that such rate is so fully valuable, that it will not permit a higher rate for the use of money or forbearance. The law would permit any amount to be paid for forbearance, if it were not for the fact that this would break down the whole policy of the law limiting the rate of interest; and that forbearance amounts to nothing more than a mere loan. The only doubt which has arisen from the fact in this case is, that, in countries where the law declares usurious contracts void, a contract to pay usurious interest is void; and hence, such a contract to pay would form no consideration for an agreement to give time, or forbear the collection of a debt for a specified period. Such a contract with us is not wholly void, but the statute steps in and pares it down to the legal rate, and permits that to be collected. Hence this $34.44 note is a good and valid contract for the payment of six per cent. interest-and hence, a good consideration to support the agreement to extend the time of payment of the $2,000, to the time contracted for; and the original parties, without the knowledge of the surety, having, by valid agreement, extended the time, the surety is discharged.

This view carries out the spirit of the statute respecting interest, secures it from the opportunity of violation, harmonizes

with the decisions had under it, and rests, in our opinion, upon a solid foundation.

PEARL v. DEACON.

24 Beav. 186. 1857.

The MASTER OF THE ROLLS.

I retain the opinion expressed by me yesterday. The facts are shortly these:-Mr. Pearson applied to the defendants, who are brewers at Windsor, for a loan of 2501., to enable him to take a public-house, called The Carpenters' Arms. They said we will do so if you will get a good surety for the amount, and assign over your pension and furniture. That was agreed to; Pearson offered the plaintiff as his surety for half the amount, and Castles as surety for the other half; the defendants accepted them, and on the 16th of November, 1852, two joint and several promissory notes were given to the defendants, one by Pearson and the plaintiff, and the other by Pearson and Castles. Six days afterwards, viz., on the 23rd of November, Pearson assigned his pension and all the goods and chattels to secure this debt of 2501. On this transaction, the first point which was raised by the plaintiff, in my opinion, fails. He says that this arrangement was a variation of the contract of suretyship, and that it discharged the plaintiff, because the money was made payable on the 16th of November, 1858, or six years after the date of the mortgage. If the case had rested here, the plaintiff would probably have been successful, but the deed goes on, "or at such earlier or other time" as the defendants should appoint for the payment thereof "in and by a notice in writing." I do not think that this was such a variation in the terms of the security as to discharge the surety; but the question is of little importance, as I am of opinion, on the evidence, that the plaintiff had notice of this assignment and of the terms of it.

The only other facts important to be stated are these:-The defendants were landlords of The Carpenters' Arms, and in the year 1856, four years after this transaction, Pearson's rent being considerably in arrear, the defendants distrained and put a

broker in possession of the furniture under the distress; on this, by arrangement, instead of selling the goods, they took them at a valuation for 1161.

The question is this:-The furniture having been expressly mortgaged for the 2501., was it within the power of the defendants, to the injury of the surety, to give up the security on the furniture for the 2501., and take it in discharge of another and different debt due to themselves? I am of opinion that they could not do so. It was said, that this security was not within the scope of the Plaintiff's contract, and that a surety cannot go beyond it. That is a mistake with respect to the relation between a principal and surety. Lord ELDON expressly stated, in Craythorne v. Swinburne, 14 Ves. 169, that the rights of a surety depend rather on a principle of equity than upon contract; there may be a quasi contract, but it arises out of the equitable relation between the parties, to be inferred from the knowledge of an established principle of equity. The same doctrine is also stated in Mayhew v. Crickett, 2 Swan. 191, and it is laid down distinctly, that sureties are entitled to the benefit of every security which the creditor has against the principal debtor, and that whether the surety knows of the existence of those securities or not is immaterial. If the creditor makes available any of his securities, the surety is entitled to the benefit of it.

The case of Capel v. Butler, 2 Sim. & S. 457, is a distinct authority for this proposition. Mr. Ellis sought to distinguish that case by saying, that, in that case, there was a recital of all the securities, but that here there was none. The answer, however, is this:-That there was notice to the surety of the whole transaction, and being so, the reciting it is immaterial. Lord ELDON distinctly laid down in Mayhew v. Crickett, 2 Swan. 185, that it is a matter of perfect indifference, whether the surety is aware of another security having been taken by the creditor or not.

In the judgment of Vice-Chancellor Wood in Newton v. Charlton, 10 Hare 651, there is a statement, in every word of which I concur. He says, as regards the creditor, "He is bound to give to the surety the benefit of every security which he holds at the time of the contract,-every security which he then holds; and he is not allowed, in any way, to vary the position of the

surety with reference to those securities; that has been decided most distinctly in Mayhew v. Crickett by Lord ELDON, where there was a warrant of attorney in the hands of a creditor put into operation by the creditor, and a judgment obtained, from which he afterwards discharged the principal debtor. Lord ELDON held it utterly immaterial, whether the warrant of attorney was known to the surety at the time he entered into the contract or not. The surety had a complete right to the benefit of it, and if the benefit were lost to him, he was at once discharged." It is argued that this was a security for a separate and distinct debt; but I am of opinion that it was not taken for a separate and distinct debt, but for the debt of 2501.

I am of opinion, therefore, that if the defendants enforce payment of the rent due to them out of the furniture, and then seek to compel the plaintiff to pay the debt for which he became surety, the plaintiff is entitled to say to them, "you must give me the benefit of the security on the furniture and pension which were mortgaged to you for this debt."

What the defendants have done is this:-They have thought fit to apply the produce of the furniture to a different and dis tinct debt, contrary to the original arrangement, on the terms of which, it is to be assumed, the surety consented to become liable. I am therefore of opinion, that whatever the defendants have received ought to be applied rateably in discharge of the whole debt, and that the plaintiff is only liable to pay half of the bal

ance.

If it were otherwise, the result would be this:-That if a man advanced 1,000l. to another on a mortgage of an estate, and had the security of ten sureties, each of whom was liable for 100l, he might release or reassign the mortgage, and then sue the ten sureties. This is a proposition impossible to be sustained.

If the defendants have received anything from Castles, it must not be taken into account; but with respect to the money received from Pearson, it ought to be taken as a discharge for the debt.

As to the pension, either they have received it or they have not; if they have, it was distinctly applicable to the payment of their debt; if they have not, they must show why they did not make that security available.

PAIN v. PACKARD ET AL.

13 Johns. 174. 1816.

This was an action of assumpsit on a promissory note made by Packard & Munson, in which Packard alone was arrested, the other defendant being returned not found. The defendant, Packard, pleaded: 1. Non-assumpsit. 2. That he signed the note which was for $100, payable on demand, as surety for Munson; that he urged the plaintiff to proceed immediately in collecting the money due on the note from Munson who was then solvent; and that, if the plaintiff had then proceeded immediately to take measures to collect the money of Munson, he might have obtained payment from him; but the plaintiff neglected to proceed against Munson until he became insolvent, absconded and went away out of the state, whereby the plaintiff was unable to collect the money of Munson. 3. The third plea was like the second, except that the defendant alleged a promise, on the part of the plaintiff, that he would immediately proceed to collect the money of Munson, and a breach of that promise, by which the defendant was deceived and defrauded, and prevented from obtaining the money from Munson, etc.

There was a demurrer to the second and third pleas and a joinder in demurrer, which was submitted to the court without argument.

Per Curiam. The facts set forth in the plea are admitted by the demurrer. The principles laid down in the case of The People v. Jansen (7 Johns. 336) will warrant and support this plea. We there say a mere delay in calling on the principal will not discharge the surety. The same principle was fully and explicitly laid down by the court in the case of Tallmadge v. Brush. But this is not such a case. Here is a special request, by the surety, to proceed to collect the money from the principal; and an averment of a loss of the money as against the principal, in consequence of such neglect. The averments and facts stated in the plea are not repugnant, or contradictory to the terms of the note. The suit here is by the payee against the makers. The fact of Packard having been security only is fairly to be presumed to have been known to the plaintiff. He was, in law and equity,