Page:Harvard Law Review Volume 8.djvu/72

56 56 HARVARD LAW REVIEW. no more than a tenant's right to fixtures, whether he holds under the mortgagor in possession or the mortgagee. The present case is, how- ever, a good one apparently, and will, as Lindley, L. J., says, tend to reasonable security in dealing with mortgagors in possession, which could hardly exist if one was likely to have one's property confiscated, and be left to an action against a mortgagor who has been sold out, often not the solidest of debtors. An Unfortunate Creditor. — A case in the last Texas Reports has brought up squarely the question whether two joint debtors, by agreeing with each other to become respectively principal and surety, and by notifying the creditor of their agreement, may compel him to respect its terms, and to treat them thereafter as principal and surety. Hall v. Johnson, 24 S. W. Rep. 861, was the case of a continuing partner who agreed to indemnify his retiring copartner against payment of the firm debts ; notice of this arrangement was given to the creditor. The ma- jority of the court held that an extension of time given to the continuing partner discharged the retiring copartner, Fisher, C. J., dissenting. Each side marshalled its authorities (many of which are collected in 17 Amer. & Eng. Enc. Law, 1131) in full array, and the dissent went into a more extended examination of the principles involved. The English courts, not content with the theoretical difficulty of the question, have still further complicated the question by disputing the effect of the decision in Oakeley v. Fasheller, 10 Bligh (n. s.), 548, in the House of Lords in 1836. In Swire v. Redman, i Q. B. D. 536, the court held that notice to the creditor of the new arrangement did not oblige him to treat the debtors as principal and surety, and said that Oakeley v. Fasheller went on the ground that the creditor had virtually assented to the new arrangement. Lord Justice Lindley, in his work on Partnership (5th edition, p. 252), considered this view of Oakeley v. Fasheller to be correct ; but now in Rouse v. Bradford Banking Co., 38 Sol. Law Jour. 270, he says that Swire v. Redman took the wrong view of Oakeley v. Fasheller^ and that the law is settled the other way. A. L. Smith, L. J., agreed with him, and Kay, L. J., took the contrary view. These cases have tied the Gordian knot so tight that it needs a deci- sion of the House of Lords to cut it ; but in the United States the case may be decided on principle. If we free the question from all analogy as to the rights of mortgagees who have notice Of a conveyance by the mort- gagor, and of a covenant by the grantee to pay the mortgage debt, it is simply this : Can two joint debtors agree to become principal and surety, and compel the creditor to treat them as such? Surely not. The cred- itor has a legal right, — how can his debtors force him to relinquish it? Generally the position of his debtors will not be a matter of importance to a creditor, and therefore it will not seem so unjust that equity, in order " to do a great right," should do a " little wrong," by depriving him of his theoretical right. But it may be very material to him. Suppose he thinks that the surest way to secure full payment of the debt is to take the time note of one of the debtors. If they are still joint debtors he may safely do this, and still hold the other ; if they are principal and surety he must take the risk of being able to prove that he expressed himself as "le- serving all rights against the surety," — a risk which was not part of his original contract, but which is now forced upon him against his will. It