*481On petition for a rehearing.
Biddle, J.I am constrained to dissent from the majority of the court in overruling this petition for a rehearing. It seems to me that the decision of the case is placed upon a wrong ground.
I concur with the opinion of the court in holding that the endorsement upon the note is not a valid agreement to extend the time of payment, and thereby discharge the surety; but, in my judgment, it is a merger of the note which the surety signed, and, thereby he is discharged from all liability. There is a clear distinction between giving time on a contract and changing its terms.
That the agreement upon the back of the note, in these words: “ I hereby agree to pay ten per cent, interest on this note hereafter,” and signed by the maker, was obligatory between the maker and the payee, has been fully settled by this court. The case of Harden v. Wolf, 2 Ind. 31, was founded on a note made by Harden and Hall, payable on the 25th day of November, 1841, with interest at the legal rate.
Upon the back of the note was endorsed the following agreement:
“November 29th, 1841.
“ It is agreed that the within is to bear at the rate of ten per cent.
Harden & Hall.”
In deciding this case, the court say:
• “We think the contract, made at the date of the note, to pay the same with six per cent, interest, was merged in the new agreement made at the time of the indorsement, and that the note, with the indorsement, imports an agreement to pay the sum therein specified with six per cent, interest to the date of the indorsement, and ten per cent, thenceforward, until the note should be paid. The new agreement amounted to the same thing, in effect, as if the note had *482been cancelled and a new note had been executed bearing ten per cent, interest.”
And this case is cited and approved in Beckner v. Carey, 44 Ind. 89. Beckner had made two notes to Mahan for one thousand dollars each, payable with interest at six per cent. Afterwards, the following contract was endorsed on each of the notes:
“ I do agree to pay (ten) 10 per cent, interest on the within note, from the 25th day of December, 1869, until paid.
Jacob Beckner.”
This court held that the original notes were merged in the new ones, and became notes payable with interest at the rate of ten per cent., instead of six. In these two cases there is no right of a surety involved, but they establish the law as to merger of contracts, which is supported uniformly by both English and American authorities. I think, therefore, that in the case we are considering, when the agreement was endorsed upon the original note, it became a new note, as effectually as if it had been written on a separate piece of paper and the old note destroyed. When there is a merger, the surety on the original note is necessarily discharged, and the payee cannot abandon the new contract and hold the surety on the old one, after it has been merged. The same contract cannot be two contracts, nor can it be either the one or the other as the payee chooses.
In the case of Schnewind v. Hacket, decided at the present term of this court, March 7th, 1877, it was held that when, by an agreement between the maker and the payee, the words “ at ten per cent.” were added in the face of the note, immediately after the words “ with interest,”—thus changing the rate of interest which the note bore from six per cent, to ten per cent.—this discharged the surety; and the previous rulings of this court upon the same question wex*e cited and approved. Now, what legal difference there can be between an agreement written in the face of a note, and an agi’eement to the same effect written upon the back of a note, I cannot *483perceive; and this is the only difference between the two cases.
In this case, as I view it, a rehearing should be granted, the judgment reversed, the cause remanded and the surety discharged.