N.Y. General Obligations Law § 15-105: Discharge of one obligor, without reservation

§ 15-105. Discharge of one obligor, without reservation. 1. If an

obligee releasing or discharging an obligor without express reservation

of rights against a co-obligor, then knows or has reason to know that

the obligor released or discharged did not pay so much of the claim as

he was bound by his contract or relation with that co-obligor to pay,

the obligee's claim against that co-obligor shall be satisfied to the

amount which the obligee knew or had reason to know that the released or

discharged obligor was bound to such co-obligor to pay.

2. If an obligee so releasing or discharging an obligor has not then

such knowledge or reason to know, the obligee's claim against the

co-obligor shall be satisfied to the extent of the lesser of two

amounts, namely (a) the amount of the fractional share of the obligor

released or discharged, or (b) the amount that such obligor was bound by

his contract or relation with the co-obligor to pay.