BOTHFELD v. GORDON

Guaranty. Landlord and Tenant. A guarantor of the performance of the covenants of a lease is not discharged from liability by an agreement between the lessor and the lessee, made without his consent, by which it is agreed that in a pending action for rent due under the lease, defended by the lessee, judgment shall be entered for the plaintiff for the amount claimed and that execution shall not issue until a day named which is earlier than the time when execution would issue in the ordinary course of judicial procedure.

It is no defence to an action on a guaranty of the performance of the covenants of a lease to recover rent due under the lease and unpaid by the lessee that, when the rent sought to be recovered was due and unpaid and an action against the lessee was pending for its collection, the lessee agreed to surrender possession of the leased property without forcing the lessor to enter and take possession as he might have done under the terms of the lease, and surrendered the property in accordance with this agreement.

HAMMOND, J.

The first ground of the defence is that by the agreements for judgment and stay of execution in the actions against the principal debtor time was given to him without the consent of this defendant. The actions were pending in the Newton Police Court, and inasmuch as the agreements were signed by an attorney in behalf of the defendant therein, it fairly may be assumed that the actions were being contested. It does not appear at what time the actions in the ordinary course of business in that court would have gone to judgment, but even if the defendant therein had been then defaulted he could have appealed to the Superior Court, and it is manifest that in the ordinary course of proceeding in the appellate court the cases could not have been reached for trial until after February 15, 1903, the time to which the stay of execution under each agreement extended; and the defendant in the case before us does not argue to the contrary.

It is to be observed that this is not a case where an agreement for a stay of execution is made concerning a judgment already in force and upon which the judgment creditor at the time of the agreement has the right to take out execution, as in Gibson v. Ogden, 100 Ind. 20, and many other cases cited by the defendant. In the case before us the plaintiffs at the time of the agreement had no judgment. The agreement for a stay of execution was a part of that under which the judgment was obtained, and there is nothing to show that the agreement for judgment could have been then obtained without the clause relating to a stay of execution. Nor is it a case where by the agreement for the stay of execution the time is extended beyond the time in which in the ordinary course of judicial proceedings it could have been obtained, as in Wingate v. Wilson, 58 Ind. 78, and several other cases cited by the defendant. The plaintiffs were prosecuting their claim by a suit against Gordon, the principal debtor, who had entered upon an active defence. By the agreement they obtained the right to an execution within a time shorter them that required by the ordinary course of judicial procedure. Although there is some conflict in the authorities, yet we think that upon principle and the great weight of authority such an agreement is not a giving of time within the true meaning of the phrase as contained in the general proposition that the giving of time to the principal discharges the surety. As stated in Hulme v. Coles, 2 Sim. 12: "Time was not given, but the remedy was accelerated." Among other cases supporting this view, see Fullam v. Valentine, 11 Pick. 156; Stevenson v. Roche, 9 B. C. 707; Price v. Edmunds, 10 B. C. 578; Fletcher v. Gamble, 3 Ala. 335.

The second ground of the defence is that without the assent of the defendant the lease was surrendered before its termination by arrangement between the plaintiffs and the lessee. In considering this claim it becomes necessary to look into the nature of the original contract. It was a lease for ten years, containing many covenants on the part of the lessee, of which one was that certain rent should be paid monthly, and another, that neither he nor his successors or resigns, or "others having their estate in the premises," would assign the lease without first obtaining the written consent of the lessors "or of those having their estate in the premises." The lease further provided that if the lessee should "neglect or fail to perform and observe any or either of the covenants . . . which on his part are to be performed," then the lessors might "immediately or at any time thereafter, and whilst such neglect and default continues, and without further notice or demand" enter into the premises and "repossess the same as of their former estate, . . . without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant," and that upon such entry the term should cease. The defendant guaranteed the prompt payment of the rent and the faithful performance of all the covenants of the lessee.

At the time of the surrender dated November 1, 1902, the rent for three month was due and unpaid and actions for the collection of the same had been begun against the lessee, and the liability of this defendant to pay the same also had become fixed. Under these circumstances, instead of forcing the lessors to make a formal entry into the premises the tenant consented to surrender the estate, thereby relieving the lessors from the necessity of such entry. The transaction was in substance a termination of the estate in accordance with its original terms. It was simply applying the original contract to a condition of circumstances which had been anticipated therein, and substantially in a manner therein provided for. In a word, the term was ended substantially as it was provided that it should be ended; and the consent of the defendant, the guarantor, to such an ending must be presumed. Moreover, by the terms of the lease the defendant never could have become the assignee of the lease or have held possession under it if an entry had been made for possession by the lessors. The obligation to pay the past rent was not changed by the surrender, and the liability of the defendant to pay it, which before the surrender had become fixed, continued notwithstanding the termination of the lease. See Kingsbury v. Westfall, 61 N.Y. 356.

Judgment reversed; judgment for the plaintiffs for $440.30, with interest from the date of the writ.