AIR 1937 RANGOON 499

Rangoon High Court

Hon'ble Judge(s): Roberts , C.J. AND Leach , J

(A) Contract Act (9 of 1872) , S.227— Agent authorized to stand surety for 6ne person, standing surety for two more-Unauthorized act is separable from authorized-Principal's liability is confined to authorized act. Where an agent authorized to stand surety for one person stands surety for two persons in addition, outside the scope of his authority, the unauthorised act of the agent is clearly separable from his act in standing surety for the person authorized and the principal's liability will be restricted to that person only under S. 227, Contract Act: Baines v. Ewing, (1866) 1 Ex, 320 and 10 Bom HCR 319, Ref.(Para 501C1) (B) Principal and Surety - Discharge of surety-Mere entering into compromise by parties does not discharge surety-Complicated arrangement entered into, not in contemplation of parties-New terms imported outside reasonable requirements of settlement-Surety is discharged. Mere entering into a compromise decree by the parties would not necessarily discharge the surety. But where a complicated arrangement is entered into which could not have been within the contemplation of the surety and new terms are imported which are quite outside the reasonable requirements of a settlement by consent, the surety will be dis....