Davis v. Williams

49 Iowa 83

• Court: Supreme Court of Iowa
• Decided: June 14, 1878
• Status: Published

Opinion

Adams, J.

1. estoppel: surety. If the plaintiff advised Williams to discontinue making improvements while he was proceeding f0 xnake the same, and Williams discontinued by reason of such advice, we think that the plaintiff should not recover against Williams’ sureties. It is true that Williams might not have succeeded in paying for the property, or even in completing the improvements, but if he had proceeded any further, or left the material which he had brought upon the premises, the sureties would have been relieved from their liabilities to that extent. Whether Williams ought to have disregarded the plaintiff’s advice or not, it is not for the plaintiff to say that he ought to have disregarded it. He is responsible for the effect which his words were intended to produce, and if the effect was to induce Williams to omit performing his .contract, his sureties are as effectually released as if the plaintiff had agreed with Williams that he might omit performing it. Indeed, if the allegations of the answer are true there was virtually an agreement, certainly an understanding, that the improvements should not be made. Such an understanding, it appears to us, was in fraud of the sureties’ rights. A creditor is bound to observe toward sureties the strictest good faith. He cannot be allowed to do anything the natural result of which is to increase their burden.

No one would contend that if the improvements in this case had been made, and the plaintiff had consented to Williams removing them, the sureties would be liable; and if they had signed the notes secured by the mortgage, and plaintiff had consented to the removal of improvements or diminution of the mortgage security in any way, the sureties would have been released to the extent of such diminution. This principle is a familiar one. The principle involved in the case is not essentially different. If Williams was induced by the plaintiff to omit to make the improvements, and thereby to forfeit his bond, the plaintiff must be regarded as responsible for its forfeiture, and should be estopped from maintaining an action on it.

Ee VERSED.