This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
At common law a technical release under seal which was given to one joint promisor enured to the benefit of all.1 In some of the cases in which a release of a joint promisor was held to discharge all, emphasis was laid upon the fact that no intention to reserve rights against the other joint promisors appeared upon the face of the release.2 It was, however, held at common law that the release of one joint promisor operated as a discharge of all even if the release contained an express reservation of the rights of the promisee against the remaining joint promisors.3 This result was reached upon the theory that the promisee could not change the legal liability of the parties except with the consent of all, that the words of the release and the reservation were inconsistent and that in order to uphold the release the reservation of the rights of the promisee against the remaining promisors must be ignored as contrary to the paramount intent of the parties.4 If, however, all the parties to the original liability assented to the release and reservation of right of action against one of the joint debtors, full effect would be given, both to such release and to such reservation.5
12 King County v. Ferry, 5 Wash. 536, 34 Am. St. Rep. 880, 19 L. R. A. 500, 32 Pac. 538.
13 Miller v. Sullivan, 89 Tex. 480, 35 S. W. 362.
1 United States. Hunt v. Rousman-iere, 26 U. S. (1 Pet.) 1, 7 L. ed. 27.
Arkansas. Tancred v. First National Bank, 124 Ark. 154, 187 S. W. 160.
Massachusetts. Hale v. Spaulding, 145 Mass. 482, 1 Am. St. Rep. 475, 14 N. E. 534; Brooks v. Neal, 223 Mass. 467, 112 N. E. 78.
Minnesota. Randahl v. Lindholm, 86 Minn. 16, 89 N. W. 1129.
Nebraska. Scofield v. Clark, 48 Neb 711, 67 N. W. 754; Banking House v. Rose, 78 Neb. 693, 111 N. W. 590.
New York. Rowley v. Stoddard, 7 Johns. (N. Y.) 207.
Oregon. Crawford v. Roberts, 8 Or. 324.
West Virginia. Maslin v. Hiett, 37 W. Va. 15, 16 S. E. 437. A release of one partner has been held not to operate as a discharge of the other. Webb v. Butler, 192 Ala. 287, Ann. Cas. 1916D, 815, 68 So. 369.
For the effect of releases and cove-nants not to sue, see also Sec. 2446.
2Merriman v. Barker, 121 Ind. 74, 22 N. E. 992; Hale v. Spaulding, 145 Mass. 482, 1 Am. St. Rep. 475, 14 N. E. 534; Whittemore v. Oil Co., 124 N. Y. 565. 21 Am. St. Rep. 708, 27 N. E. 244.
3Cheetham v. Ward, 1 B. & P. 630; Nicholson v. Revill, 4 A. & E. 675; Kearsley v. Cole, 16 M. & W. 128; Rice v. Webster, 18 111. 331; Farmers' Savings Bank v. Aldrich (Ia.), 133 N. W. 383.
4 See Sec. 2039.
Equity, on the other hand, seemed to regard the reservation of the rights of the promisee against the other promisors as of at least as paramount importance as the release of the individual promisor, and to hold that a reservation of rights against the remaining promisors would prevent them from taking advantage of the release.6
The unsatisfactory character of the common-law rule may be shown from the fact that the common-law courts practically evaded it by ignoring the usual rules of construction and treating such releases of less than all of the joint promisors with reservation of the rights of the promisee against the remaining joint promisors as covenants not to sue rather than as releases.7 In many jurisdictions legislation has solved the problem by statutes which provide expressly that the release of two joint promisors does not necessarily operate as a discharge of the other.8
Where the common-law rule was in force its operation was greatly restricted. The common-law rule applied only to the technical release under seal.9 A statutory release might have the same effect.10 If presenting a claim under a statutory assignment for the benefit of creditors operates as a discharge, presenting a claim against the estate of one joint promisor operates as a discharge of the remaining joint promisors.11 An oral contract for the discharge of a joint promisor did not operate as a discharge of the other promisors.12 Since a joint promisor is bound to pay the entire debt, payment by him of less than the entire debt is not a valuable consideration for a promise on the part of the original promisee to discharge such joint obligor,13 and accordingly such contract does not release the party who makes such payment.14 A joint obligor may be discharged by a valid accord and satisfaction if sufficient consideration for such agreement exists,15 and it has been held that such a discharge will operate as a discharge of the remaining joint promisors.16 By statute in Louisiana, a release of a party who is liable in solido operates as a release of the other obligors unless the promisee expressly reserves his right against the latter.17 If an action has been brought jointly against the makers of a joint note and one of such joint makers, a married woman, alleges facts which, if true, prevent her from being liable upon such instrument, and if the other joint makers testify to such facts, it is not error for the plaintiff to dismiss the action as against such married woman and to prosecute the action to final judgment against the remaining joint makers.18 A covenant not to sue made with one joint promisor does not discharge the others.19
5Kearsley v. Cole, 16 M. A W. 128.
6 Whittemore v. Judd Linseed & Sperm Oil Co., 124 N. Y. 565, 21 Am. St. Rep. 708, 27 N. E. 244.
7 Price v. Barker. 4 Ell. A Bl. 760; Bradford v. Preacott, 85 Me. 482, 27 Atl. 461.
8 United States. Hosier v. Ireland, 219 Fed. 489, 135 C. C. A. 201.
New York. Harbeck v. Pupen, 123 N. Y. 115, 25 N. E. 311.
Ohio. Sprague v. Childs, 16 O. S. 10v.
South Carolina. Meyer v. Bouche, 107 S. Car. 254, 92 S. E. 471.
South Dakota. Central Banking &
Trust Co. v. Pusey, 22 S. D. 223, 116 N. W. 1126.
9 Haney, etc., Co. v. Creamery Co., 108 la. 313, 79 N. W. 79; Williamson v. McGinnia, 50 Ky. (11 B. Mon.) 74, 52 Am. Dec. 561; Shaw v. Pratt, 39 Mass. (22 Pick.) 305.
10 Munyan v. French, 60 N. J. L. 12, 36 Atl. 771.
11 Munyan v. French, 60 N. J. L. 12, 36 Atl. 771.
12 Valley Savings Bank v. Mercer, 97 Md. 458, 55 Atl 435.
13 See Sec. 609.