1841.

COWPER

v.

GREEN.

Suppose a third party had given security for the debt; if Exch. of Pleas, the creditor released to the principal debtor, and did not obtain his full debt, could he still hold the surety liable? There are indeed cases, running near the present, where a creditor has been allowed to resort to securities remaining in his hands, notwithstanding a release in a composition deed; but that is where he has specially reserved the right to do so as in Duffy v. Orr (a), where the creditor added to his signature to the composition deed the words-" without prejudice to any securities whatever that I hold ;" and the other creditors signed it afterwards. But the effect of a legal instrument cannot be altered by the mere understanding of the parties.

But further, the agreement for full payment of the plaintiffs' debt was a fraud on the other creditors parties to the composition deed, and therefore could not form any consideration: Lewis v. Jones (b). There are cases where a subsequent promise or security has been sued on, but that is where it has been under seal; a subsequent promise, not under seal, to pay the remainder of the debt, is nudum pactum: Ex parte Hall (c).

Humfrey, in reply. - The question is, whether the agreement contained in the composition deed is such as bound the plaintiffs to give up the securities they at that time held for their debt. The plaintiffs had a right to retain them in order to reduce their debt. If they could, by selling the lease, reduce the amount of their debt, they had a right to do so. Thomas v. Courtnay (d) is an authority for the plaintiffs. There the creditors of an insolvent agreed, by an instrument not under seal, to accept in full satisfaction of their debts 12s. in the pound payable by instalments, and to release him from all demands. One of

(a) 5 Bligh, N. S. 620; 1 Clark

& Fin. 253.

(b) 4 B. & Cr. 506.

(c) 1 Deac. B. C. 171. (d) 1 B. & Ald. 1.

1841.

COWPER

บ.

GREEN.

Exch. of Pleas, the creditors who signed for the whole amount of his debt, held at the time, as a security for part, a bill of exchange drawn by the debtor and accepted by a third person; and the money due thereon was afterwards paid by the acceptor. It was held that the creditor might retain the bill, the agreement for composition not containing any stipulation for giving up securities, and the effect of it not being to extinguish the original debt. It must be contended on the other side, that the instant the composition deed was signed, every security held by the plaintiffs could have been recovered by the defendant in an action of trover. It would be for the benefit of the creditors generally, that the plaintiffs should reduce their debt by means of this security, which was not intended to be given up, and therefore they have a right to retain it. [Lord Abinger, C. B.-In Thomas v. Courtnay, the Court thought there was no release of the debt itself.]

Cur. ad. vult.

The judgment of the Court was delivered on the 30th of January by

PARKE, B.-The declaration in this case states, that in consideration that the plaintiffs would deliver up a lease held by them as a security for a debt due to them by the defendant, and from which it is contended the defendant had previously been released by force of a composition deed executed by the plaintiffs, he promised to pay them the balance of their debt, which should remain due after the stipulated dividend had been paid, and should not have been previously realised by other securities. To this the defendant pleaded a plea setting out the composition deed, and describing it as a general release of all debts whatever due from him to the plaintiffs from the beginning of the world to the date of the instrument; and the objection made in the case arises on the declaration,

1841.

COWPER

บ.

GREEN.

namely, that by force of that deed the plaintiffs' debt Exch. of Pleas, having been previously released, they were no longer entitled to hold the indenture of lease as a deposit to secure repayment, and consequently that their giving up the latter could form no consideration for a promise by the defendant to pay the balance due on that debt. On looking into the authorities, we find that the law is so. In Sheph. Touchst. p. 342, it is thus laid down:-" By a release of all debts, are discharged and released all debts then owing from the releasee to the releasor upon especialties or otherwise, all debts also due upon statutes. And therefore if the conusor himself, or his land, be in execution for the debt, and he hath such a releasc, he must be discharged." And Mr. Preston adds-" For, by releasing the debt, the security for the debt is released." That authority is precisely in point. Here is a release of the debt, the consequence of which is, that the party releasing has no right to hold the collateral security which was deposited with him; for, looking at the form of the release, it must not be understood simply to release the right of action on the debt, but the security also. The debt is released, and consequently as much gone in point of law as if it had been satisfied; and as the plaintiffs had no right to hold the security for it afterwards, so they had no right to make the giving up of that security the consideration of a promise by the defendant, and consequently the present action cannot be maintained. The judgment must therefore be for the defendant.

Judgment for the defendant.

642

MEMORANDA.

IN this Vacation, Mr. Justice Littledale resigned his seat in the Court of Queen's Bench, which he had occupied since Easter Term, 1824. He was succeeded by

William Wightman, Esq., of Lincoln's Inn, who was first called to the degree of Serjeant at Law, and gave rings with the motto quam servare mentem: and shortly afterwards received the honour of knighthood.

Sir Joseph Littledale was, a few days after his resignation, sworn of her Majesty's Privy Council.

AN

INDEX

TO THE

PRINCIPAL MATTERS.

ACCORD AND SATISFACTION | right to enter upon the land to remove