A judgment against a principal is at least prima facie evidence against the surety, though he was not notified of the action ; Dexter, Horton & Co. v. Sayward, 66 Fed. 265.
Discharge of obligation. The obligation may be discharged by acts of the principal or by acts of the creditor. Payment, or tender of payment, by the one, and any act which would deprive the creditor of reme dies which in case of default would enure to the benefit of the surety, are instances of discharge. In the first place, a payment by the debtor would of course operate to dis charge the liability. The only questions which can arise upon this point are, whether the payment is applicable to the payment in question, and as to the amount. Upon the first of these, this contract is governed by the general rule that the debtor can apply his payment to any debt he chooses. The surety has no power to modify or direct the application, but is bound by the election of the principal ; 2 Bingh. N. C. 7. If no such election is made by the debtor, the creditor may apply the payment to whichever debt he sees fit ; Brewer v. Knapp, 1 Pick. (Mass.) 336. This power, however, only applies to voluntary payments, and not to payments made by process of law ; Blackstone Bank v. Hill, 10 Pick. (Mass.) 129. A surety on a promissory note is discharged by its pay ment, and the note cannot be s gain put in circulation; Chapman v. Collins, 12 Cush. (Mass.) 163 ; so, also, extension of time by the holder of a note at the request of one maker without the knowledge of the other who signed as a surety, releases the latter though the holder did not know of the rela tion between the two makers at the time the note was given ; Scott v. Scruggs, 60 Fed. 721, 9 C. C. A. 246, 23 U. S. App. 280.
Where one of two sureties to a contract assented to a change which altered his lia bility to his prejudice, it was held that the other surety was released but the former was bound for the whole liability ; Mundy v. Stevens, 61 Fed. 77, 9 C. C. A. 866, 17 U. S. App. 442, 463. Whatever will discharge the surety in equity will be a defence at law ; People v. Jansen, 7 Johns. (N. Y.) 337, 5 Am. Dec. 275; Boston Hat Manufactory v. Messinger, 2 Pick. (Mass.) 223.
A release of the principal debtor operates as a discharge of the surety ; [1893] A. C.
313 ; though the converse is not true ; Bridges v. Phillips, 17 Tex. 128 ; [1893] App. Cas. 313; Trotter v. Strong, 63 Ill. 272 ; unless the obligation is such that the liability is joint only, and cannot be severed. But if the creditor, when releasing the principal, reserves his remedies against the surety, the latter is not discharged ; L. R. 7 C. P. 9; 4 Ch. App. Cas. 204 ; and "a creditor who is fully indeninified is not discharged by the release of the principal." Brandt, Sur. & Guar. § 147. The release of one of several sureties is said to release the others only so far as the one released would have been lia ble for contribution to the co-sureties; Jem ison v. Governor of Ala., 47 Ala. 390; but see Starry v. Johnson, 32 Ind. 438. Other cases hold such a release to be a discharge of the co-sureties; Stockton v. Stockton, 40 Ind. 225 ; Towns v. Riddle, 2 Ala. 694. When the discharge of one surety varies the con tract; Mitchell v. Burton, 2 Head. (Tenn.) 613 ; or increases the risk of the co-sureties, they are released also.
Fraud or alteration avoids a .contract of suretyship. Fraud may be by the creditor's misrepresentation or concealment of facts. Unless, however, the contract between the debtor and creditor is unusual, the surety must ask for information ; 12 Cl. & F. 109 ; •Warren v. Branch, 15 W. Va. 21. The credi tor has been held bound to inform a surety of debtor's previous default ; Rheem v. Wheel Co., 33 Pa. 358; L. R. 7 Q. B. 666 ; contra, 21 W. R. 439 ; Roper v. Trustees of Lodge, 91 IlL 518, 33 Am. Rep. 60 ; though not of his mere indebtedness ; 17 C. B. (N. S.) 482. But to accept a surety relying on the belief that there are no unusual circumstances increas ing his risk, knowing that there are such, and neglecting to communicate them, is fraud; Franklin Bank v. Cooper, 36 Me. 179 ; Hubbard v. Briggs, 31 N. Y. 518. The fraud must be practised on the surety ; Evans v. Keeland, 9 Ala. 42. The forgery of the signature of a surety on a constable's bond will release another surety, signing the same upon the representation that such signature is genuine ; Cornell v. People, 37 Ill. App. 490.