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.
"Whether the discharge of a surety operates as a discharge of the remaining sureties who have not assented thereto, is a question upon which there has been a divergence between law and equity, and in which law for once has been more favorable to the surety than has equity, by reason of its technical rules as to the effect of the modification of a joint contract;1 although it must be added that it is frequently difficult to determine whether the cases in which the surety was held to be released at law were all of them cases of joint contracts. At law it is held that the release or discharge of a surety discharges his cosureties as to liabilities which arise thereafter.2 In equity, on the other hand, it was held that the release or discharge of a surety did not operate as a complete discharge of liability of the other sureties,3 but that it operated as a pro tanto discharge only.4 In a number of jurisdictions, the equity theory has been adopted, and it has been held that sureties who are liable for the same debt are discharged only so far as they are actually injured by the release or discharge of one of their number without the consent of the rest.5 This result is reached under statutes which provide that the discharge of a joint debtor shall not operate as an entire discharge of the remaining joint debtors.6
Rep. 45, 5 L. R. A. (N.S.) 418, 40 So. 415; Kiessig v. Allspaugh, 91 Cal. 231, 13 L. R. A. 418, 27 Pac. 655; Welch v. Hubschmitt Building & Woodworking Co., 61 N. J. L. 57, 38 Atl. 824.
18 First National Bank v. Fidelity & Deposit Co., 145 Ala. 335, 117 Am St. Rep. 45, 5 L. R. A. (N.S.) 418, 40 So. 415; Kiessig v. Allspaugh, 91 Cal. 231, 13 L. R. A. 418, 27 Pac. 655; Welch v. Hubschmitt Building & Woodworking Co., 61 N. J. L. 57, 38 Atl. 824.
19 Southwestern Surety Ins. Co. v. Terry, 122 Ark. 522, 184 S. W. 54.
20 Powell v. Fowler, 85 Ark. 451, 102 Am. St. Rep. 41, 108 S. W. 827; Williams v. Gooch, 73 111. App. 557; Barrett v. Davis, 101 Mo. 5'9. 16 S. W. 377.
21 Powell v. Fowler, 85 Ark. 451, 102 Am. St. Rep. 41, 108. S. W. 827.
22Williams v. Gooch, 73 111. App. 557; Barrett v. Davis, 104 Mo. 549, 16 S. W. 377.
23 Mechanics' National Bank v. Comins, 72 N. II. 12, 101 Am. St. Rep. 650, 55 Atl. 191.
24 Stuts v. Strayer, 60 O. S. 384, 71 Am. St. Rep. 723, 54 N. E. 368.
25 Union National Bank v. Grant, 48 La. Ann. 18, 18 So. 705; Commercial Bank v. Cunningham, 41 Mass. (24 Pick.) 270, 35 Am. Dec. 322.
26 Faneuil Hall National Bank v. Meloon, 183 Mass. 66, 97 Am. St. Rep. 416, 66 N. E. 410.