The effect of a material modification of a contract agreed upon between the two adversary principals thereto without the consent of the sureties of one of such principles, is in some respects analogous to alteration, and requires a brief notice here. It is not usually a case of technical alteration, because the change is rarely made upon the face of the instrument; but in some respects the effect of such modification is the same as that of alteration. If one of two or more joint parties to a contract is a surety, a modification of the contract made between his principal and the adversary party without the consent of the surety discharges the latter.1 A common form of modification is found where the creditor and the principal debtor have agreed upon an extension of time without the assent of the surety.2 Extension of time discharges a guarantor.3 However, under a bond exacted by the government from a contractor under a public contract for the benefit of subcontractors and materialmen, conditioned on the contractor's paying them "promptly," it has been held that the act of the materialmen in taking notes for thirty and sixty days, does not discharge the surety.4 If A guarantees performance of a contract before it is made, he is released by a change in its terms from those guaranteed.5 In jurisdictions where A becomes a surety when X assumes A's debt to B, an extension of time given by B to X without A's consent discharges A.6 This principle does not, of course, apply where A does not under such circumstances become a surety, but remains primarily liable.7

1 England. Calvert v. London Dock Co., 2 Keen 638.

United States. Prairie States National Bank v. United States, 164 U. 8. 227, 41 L. ed. 412.

Alabama. First National Bank v. Fidelity & Deposit Co., 145 Ala. 335, 5 L. R. A. (N.S.) 418, 117 Am. St. Rep. 45, 40 So. 415.

Michigan. Backus v. Archer, 109 Mich. 666, 67 N. W. 013.

Minnesota. Stone-Ordean-Wells Co. v. Taylor, 130 Minn. 432, L. R, A. 1918E, 03, 166 N. W. 1069.

Pennsylvania. Schroyer v. Thompson, 262 Pa. St. 282, 2 A. L. R. 1567, 105 Atl. 274.

2 United States. Union Mutual Life Insurance Co. v. Hanford, 143 U. S. 187, 36 L. ed. 118.

Arkansas. Ward v. Nutt, 120 Ark. 443, 179 S. W. 667.

Illinois. Landon v. English, 75 111. App. 483.

Indiana. Matchett v. Winona Assembly & Summer School Association, 185 Ind. 128, 113 N. E. 1; Schieber v.

Traudt, 10 Ind. App. 349, 40 N. E. 605; Bugh v. Crum, 26 Ind. App. 465, 84 Am. St. Rep. 307, 59 N. E. 1076.

Kansas. Roberson v. Blevins, 57 Kan. 50, 45 Pac. 63.

Minnesota. National Iron Co. v. National Surety Co., 134 Minn. 121, 158 N. W. 802.

New York. Calvo v. Davies, 73 N. Y. 211, 29 Am. Rep. 130; Murray v. Marshall, 94 N. Y. 611.

North Carolina. Jenkins ▼. Daniel, 125 N. Car. 161, 74 Am. St. Rep. 632, 34 S. E. 239.

Oklahoma. Bennett v. Odneal, 44 Okla. 354, 147 Pac. 1013.

Tennessee. Watauga Bank v. Mat-son, 99 Tenn. 390, 41 S. W. 1062.

Utah. Gillett v. Taylor, 14 Utah 190, 60 Am. St. Rep. 890, 46 Pac. 1099; Schroeder v. Kinney, 15 Utah 462, 49 Pac. 894.

Washington. Bank v. Jeffs, 15 Wash. 230, 46 Pac. 247, 32 S. E. 1002; Lipsett v. Dettering, 94 Wash. 629, 162 Pac. 1007.

If extension of time is relied upon as the alteration, there must be a binding contract for an extension. An implied contract for an extension of time will operate as a discharge as well as an express contract.8 An unenforceable promise to grant an extension does not, however, discharge the surety.9 Still less does mere delay, without any agreement therefor, discharge the surety in the absence of statute.10 In order that extension of time may operate as a discharge, the holder of the note must know when he contracts for the extension that one of the parties is a surety.11 If, however, he does not know of the fact of suretyship when he takes the note, but he does know of it when he grants the extension of time, he releases the surety.12 If the surety assents to the extension of time, he is not discharged thereby.13 Extension of time granted by a contract between the creditor and one co-surety does not discharge a non-consenting surety.14 If the creditor grants an extension of time and expressly reserves his right of action against the surety, the surety is held not to be discharged by such contract.15

West Virginia. Parsons v. Harrold, 46 W. Va. 122.

Wisconsin. Fanning v. Murphy, 126 Wis. 538, 4 L. R. A. (N.S.) 666, 105 N. W. 1056.

See, Giving Time to Principal Debtors, by W. H. Griffith, 14 Law Quarterly Review, 370.

3 National Eagle Bank v. Hunt, 16 R. I. 148, 13 Atl. 115.

4 United States Fidelity & Guaranty Co. v. Brick Co., 191 U. S. 416, 48 L. ed. 242. This holding was based upon the peculiar character of the covenant, the surety having no idea when he entered into the contract when the respective payments would fall due.

5 Page v. Krekey, 137 N. Y. 307, 33 Am. St. Rep. 731, 21 L. R. A. 409, 33 N. E. 311.

6 Tuohy v. Woods, 122 Cal. 665, 55 Pac. 683; Herd v. Tuohy, 133 Cal. 55, 65 Pac. 139; Schroeder v. Kinney, 15 Utah 462, 49 Pac. 894.

7 Denison University v. Manning, 65 O. S. 138, 61 N. E. 607.

8 Robertson v. Blevins, 57 Kan. 50, 45 Pac. 63.

9 Georgia. Bunn v. Bank, 98 Ga. 647, 26 S. E. 63; Tatum v. Morgan, 108 Ga. 336, 33 S. E. 940.

Illinois. Heenan v. Howard, 81 111. App. 629.

Indiana. Voris v. Shotts, 20 Ind. App. 220, 50 N. E. 484; Olson v. Chism, 21 Ind. App. 40, 51 N. E. 373.

Kentucky. Krupp v. Ritter Verein (Ky.), 53 S. W. 648.

Missouri Harburg v. Kumpf, 151 Mo. 16, 52 S. W. 19.

Tennessee. Sully v. Childress, 106 Tenn. 109, 82 Am. St. Rep. 875, 60 S. W. 499.

10 California. Bull v. Coe, 77 Cal. 54, 11 Am. St. Rep. 235, 18 Pac. 808.

Georgia. Hall v. Pratt, 103 Ga. 255, 29 S. E. 764.

Illinois. Villars v. Palmer, 67 111. 204.

Kansas. Hall v. Bank, 5 Kan. App. 493, 47 Pac. 566.

Louisiana. Forstall v. Fussell, 50 La. Ann. 249, 256, 23 So. 273, 1012.

A surety for the performance of a building contract is discharged by a modification of the original contract as to the manner of payment,16 at least if such modification prejudices the rights of the surety.17 Such a modification discharges the surety, even if the surety has agreed to protect the property owner against claims of the subcontractors and materialmen.18 A surety upon the bond of a contractor is discharged by a modification of the contract with the assent of the property owner, which brings the total cost of the. improvement beyond the amount limited in the contract of suretyship, although the excess above such amount is, by special agreement, to be paid for by the lessee of the property owner.19

Maryland. Gray v. Bank, 81 Md. 631, 32 Atl. 518.

Michigan. Colby Wringer Co. v. Coon, 116 Mich. 208, 74 N. W. 519.

Montana. Hefferlin v. Krieger, 19 Mont. 123, 47 Pac. 638.

Nebraska. Eickhoff v. Eikenbary, 52 Neb. 332, 72 N. W. 308; Bank v. McAllister, 56 Neb. 188, 76 N. W. 552.

New Jersey. Grier v. Flitcraft, 57 N. J. Eq. 556, 41 Atl. 425.

South Dakota. Bailey Loan Co. v. Seward, 0 S. D. 326, 69 N. W. 58.

Tennessee. Bank v. Matson, 99 Tenn. 390, 41 S. W. 1062; Weaver v. Ruhm (Tenn. Ch. App.), 47 S. W. 171.

Utah. Wallace v. Richards, 16 Utah 52, 50 Pac. 804.

West Virginia. First National Bank v. Parsons, 45 W. Va. 688, 32 S. E.

271.

11 Union Mutual Life Insurance Co. v. Hanford, 143 U. S. 187, 36 L. ed. 118; Gillett v. Taylor, 14 Utah 190, 60 Am. St. Rep. 890, 46 Pac. 1099; Parsons v. Harrold, 46 W. Va. 122, 32 S. E. 1002.

12 Zapalac v. Zapp, 22 Tex. Civ. App. 375, 54 S. W. 938; Gillett v. Taylor, 14 Utah 100, 60 Am. St. Rep. 890, 46 Pac. 1099.

13 Williams v. Gooch, 73 111. App. 557; Barrett v. Davis, 104 Mo. 549, 16 S. W.

377; Kuhlman v. Leavens, 5 Okla. 562, 50 Pac. 171.

14 Draper v. Weld, 79 Mass. (13 Gray) 580; Sherman County v. Nichols,

65 Neb. 250, 91 N. W. 198; Merchants' Bank v. Bussell, 16 Wash. 546, 48 Pac 242.

Contra, Ide v. Churchill, 14 O. S. 386.

15 Alabama. Hodges v. Land Co., 109 Ala. 617, 20 So. 23.

Kansas. Dean v. Rice, 63 Kan. 091, 66 Pac. 992.

Michigan. Big Rapids National Bank v. Petere, 120 Mich. 518, 79 N. W. 891.

Pennsylvania. Kaufman v. Rowan, 189 Pa. St. 121, 42 Atl. 25.

Washington. Boston National Bank v. Jose, 10 Wash. 185, 38 Pac. 1026.

16 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. Hubsehmitt Building & Woodworking Co., 61 N. J. L. 57, 38 Atl. 824.

Contra, if the right of the surety is not impaired.. Bateman Bros. v. Mapel, 145 Cal. 241, 78 Pac. 734; Hand Mfg. Co. v. Marks, 36 Or. 523. 52 Pac. 512, 53 Pac. 1072, 56 Par. 519.

17 First National Bank v. Fidelity & Deposit Co. 145 Ala. 335, 117 Am. St.

If the surety assents to a modification of the contract,20 whether such modification is made before the contract of suretyship is made,21 or subsequently thereto,22 such modification does not discharge the surety.

If property is pledged as security for the performance of a contract by one who does not own such property, such property is to be treated as a surety, as far as the discharge thereof by alteration of the contract.23

To operate as a discharge, the contract to which the surety is a party must be modified. Thus a collateral contract for paying two percent. interest additional to that stipulated in the main contract does not release a surety on the main contract.24 A release of the principal debtor operates as a discharge of the surety,25 unless the creditor expressly reserves his right to hold the sureties.26