1844.-Archer v. Hudsou.

such, that this court would have said that, having entered into this liability, she should be held by it. It might have been so ; but to say that Mr. Hauxwell, the agent of the bank, a person with whom the uncle was dealing, the person through whom he is carrying on his business as customer of the bank, by explaining to an inexperienced young woman who had just attained her age of twenty-one years the meaning of this note, offered any thing like such a protection as would secure to her that free and independent judgment which she had a right to exercise, seems to me to go far beyond any thing which has been proved in this

case.

It does not appear to me, taking this transaction as it stands upon the evidence before me, that it can be supported even on the fi st ground.

I think, also, that it cannot be supported on the second ground. The second ground is this, that she was only security for a floating balance, and that, instead of treating *her [*562] as a surety for a floating balance, an attempt was made to make her a debtor for the whole sum, without regard to the circumstances of the account upon which that balance was to arise. This young lady having signed this joint and several promissory note in January, 1838, married Mr. Archer upon the 13th of November, 1841. What had been done with this note in the meanwhile? The promissory note was given to Mr. Hauxwell, and was kept among the securities of the bank. The account, as between the bank and Mr. Daniel, was an account between them alone, not affected in any way by this transaction; sums were paid in and drawn out, and the note was dealt with as in the ordinary mode of dealing between a bank and a customer, where a security is deposited for a floating balThe promissory note was joint and several, and payable upon demand; but it did not, on the face of it, represent the real contract. The contract, Mr. Hauxwell says, was, that it should be a security for what the bank wanted of the uncle for the amount due upon the open account. That was the contract, though it does not appear on the promissory note. It was kept among the securities of the banking account, and according to the statement made by Mr. Hauxwell, if there was a balance

ance.

1844-Archer v. Hudson.

due to the bank from Mr. Daniel on that account, then the promissory note was to be a guarantee for it.

This lady was married on the 13th of November. The marriage comes a short time afterwards to the knowledge of the agents of the bank. They had an agent at York, a Mr. Wilkinson, and an agent at Thirsk, Mr. Hauxwell. What communications took place immediately after the marriage we do not know: the first statement which we have relating to it is in the letter of the 26th of November, 1841, in which Mr. Wilkinson directs

Hauxwell to make this "a tangible security." They [*563] probably *were under some mistake about the effect of it; but I scarcely know, whether what they did was through mere blunder or mistake of their rights, or whether it was not an attempt to place themselves in a different position from that in which they ought to have been. We find that, after a little negotiation, and after inquiry as to the property of Mrs. Archer, Mr. Wilkinson thinks fit, on the 8th of December, 1841, without any communication with Mr. and Mrs. Archer, to give this direction to Mr. Hauxwell, "enter the 500l. promissory note Daniel, to his credit in the ledger and debit loans, Daniel and Kendray. Do the same in Daniel's pass-book, 500l. to his credit, but date it 12th of November. You can then continue any other credits as usual. My object was to have it in the passbook before Miss K.'s wedding, which was, I believe, on the 20th of November."

Was this the contract, that there should be 5001. placed to the credit of Mr. Daniel upon the liability of Miss Kendray? If that was the contract, why was it not done at the first? What reason or pretence could there be for doing it on the 9th of December, 1841, and dating it upon the 12th of November? What pretence could there be for doing it in December, 1841, which did not exist upon the 2d of January, 1837? Is it not an attempt to put this matter in quite a different situation from what it was before? I cannot concur in the argument, that the situation of surety is in no way altered by it. The promissory note, as I said, did not evidence the contract; there was something more than was expressed on it. The contract, according to the statement of Mr. Hauxwell, was, that the promissory note

1844.-Archer v. Hudson.

should be a security for a floating balance. Miss Kendray was answerable for a floating balance, while it remained as a floating balance, and for no more was she, at any time, answerable *than the floating balance amounted to. But what [*564] was the effect of entering it as a loan? It was giving an immediate credit for the sum of 500l. The consequence was, that they had an immediate demand upon the note, for Daniel had the immediate benefit of the sum of 500l., he had a right to draw for it all at once, and having credit for this sum, she, all at once, even without his drawing on it, might be made answerable for this note. That was not the contract, but an entire violation of it, and was made without the least authority from, and without any communication with, the plaintiffs.

If, therefore, it were necessary to determine that question, I should have no hesitation in saying that that species of conduct vitiated and put an end to the whole transaction, and released the surety from an obligation which was made quite different from that which she had been induced to enter into.[2]

Upon both of these grounds I am of opinion that this promissory note cannot stand, and there must be a decree for the plain. tiffs, with costs.

No

NOTE.-Affirmed by the Lord Chancellor on the 18th of March, 1846. opinion was however given by the Lord Chancellor as to the release of the surety.

[2] In Bonser v. Cox, (cited supra, 557,) 4 B. 379; 6 Beav. 110. A., and B. as his surety, joined in two promissory notes to C., each expressed to be given "for value received by a draft at three months date." C., instead of giving the drafts, immediately paid A. the amount of the notes: it was held, that the surety was discharged. The doctrine is well stated by Assistant Vice-Chancellor Sandford: "When a person becomes the surety for another in a note, to be used for a particular object or purpose, the principal cannot divert it from that object, without the surety's assent. And if he do so divert it, neither he nor any one with notice of the diversion, can maintain any action upon it, or set up any right by virtue of the transaction." Lee v. The Highland Bank, 2 Sand. Ch. Rep. 313. As to the rule that a surety is discharged by any variation of the contract without his assent, whereby his interest may be injuriously affected, see Rathbone v. Warren, 10 Johns. Rep. 587; Sailly v. Elmore, 2 Paige, 499; Bangs v. Strong, 10 Paige, 11; Vilas v. Jones, id. 76; Brooks v. Stewart, 1 Beav. 519; 1 Story's Eq. § 325, 326.

1844.-Hawkins v. Woodgate.

[*565]

1844: July 18.

*HAWKINS v. WOODGATE.

The grantee of an annuity effected a policy on the life of the grantor, at his own expense. The grantor had a power of redemption on payment of 25007., and it was provided, that in case the grantor should," at the time of making such repurchase," by notice in writing elect to take the policy, the grantee would assign to him any policy "then vested" in him, which might be effected in respect of the annuity; but it was declared, that it should not be incumbent on the grantor to keep on foot any policy. The policy became valuable, and the grantor gave the month's notice of repurchase, and declared his election to take the policy. Held, that the grantee had no right afterwards to surrender the policy for his own profit; and, semble, that although he might have let the policy drop, yet he was not, at any time, entitled to surrender it for his own profit.

IN 1825, the plaintiff granted an annuity of 3651. determinable on his own life, and to which Bradford afterwards became entitled. This annuity the plaintiff charged on certain property, and he covenanted to facilitate the grantee in effecting, at the grantee's expense, policies on his life, and to pay all extra premiums on such policies to the extent of 25001. Policies to this amount were accordingly effected by the grantee in the Sun and Crown offices.

Subsequently, in the same year, the plaintiff granted an annuity of 4421. to Hall, charged on the same property. Disputes arose, which ended in a suit in this court, pending which, the trustees accumulated the income of the property to the amount of 49457., and the annuities were left in arrear.

An arrangement was come to between the parties, and a deed, dated in 1839, was made between Bradford (the party entitled to the first annuity) of the first part, Hall of the second part, the plaintiff of the third part, and the trustees of the fourth part, whereby it was agreed, that the 49451. should be divided between Bradford and Hall, and that the trustees should hold the two annuities of 3651. and 4427., and the securities for the same (which were assigned to them by an indenture of even date,) [*566] upon trust to pay an annuity of *2157. a year to Brad

ford, an annuity of 300l. a year to Hall; then to pay the extra premiums payable on the said policies, or any other policies

1844.-Hawkins v. Woodgate.

effected in lieu thereof, and then upon certain trusts for the plaintiff. The plaintiff thereby covenanted to attend at the insurance offices to enable Bradford, at his own cost, to keep on foot or renew the said policies, or to effect and keep on foot policies in lieu thereof, to the extent of 25007.

And it was thereby agreed, that in case the plaintiff should be desirous to repurchase the same annuity, and should give one calendar month's notice in writing, and pay unto Bradford 25001, with all arrears of the said annuity, and costs, "and also all such extraordinary premiums, fees, and expenses, as Bradford, his executors, administrators, or assigns, should or might expend or be put unto, in or about keeping on foot, renewing, or effecting any policy or policies of insurance as aforesaid, by reason of the plaintiff going beyond such limits as aforesaid, and which should not have been paid under the trusts of the indenture now in statement; and also the said additional gross sum of 450%. therein before directed to be paid to Bradford, his executors, administrators, or assigns, or so much thereof as might not have been paid under the same trusts, then and in that case, Bradford, his executors, administrators, or assigns, should and would accept and take the said sum of 2500l., as and in full for the price or consideration of such repurchase of the said annuity or yearly sum of 2157. thereby granted and secured; and thereupon, the said annuity or yearly sum of 2141. and the several trusts, powers, and authorities thereby created and declared, so far as regarded the payment of the same annuity, should, respectively, thenceforward, cease and determine; and in case the plaintiff should, at "any time, repurchase the said annuity [*567] of 2151. under the proviso therein before contained, and the plaintiff should, at the time of making such repurchase, by notice in writing to Bradford, his executors, administrators or assigns, elect to take the policy or policies thereinafter mentioned, but not otherwise, he, Bradford, should and would, at the request and expense of the plaintiff, assign and make over any policy and policies of insurance upon the life of the plaintiff, which might be then vested in Bradford, his executors, administrators, or assigns, and which might have been effected in respect of the said annuity of 365l., or the said annuity of 2157., and all benefit