Opinion
Argued March 6, 1884
Decided March 21, 1884
M.M. Waters for appellant. C.A. Clark for respondent.
The referee has found as a fact, upon conflicting evidence, that no bond was given by the plaintiff to accompany the mortgage upon which the defendant's counter-claim in this proceeding is based.
There was evidence to support this finding, and we are concluded by it as to the existence of the fact in dispute. ( Gaylord v. Knapp, 15 Hun, 87.)
He has also found that there was no evidence to establish the fact of a pre-existing debt from the plaintiff to the defendant for which the mortgage was given. Some evidence is produced to show that the defendant's intestate advanced money for the benefit of the plaintiff, at the time the mortgage was executed. In the absence of any evidence to the contrary, we must assume that it was advanced upon the terms and conditions specified in the written contract which was executed at the time of the advances.
This contract did not contain any covenant or promise on the part of the mortgagor to repay the moneys advanced, but provided in effect that the mortgagee should look to the premises mortgaged, alone, for the reimbursement of his advances. (1 R.S. 2195, § 139.)
The evidence of one witness who testified to the effect that the mortgage was given for an amount due the mortgagee does not specify who it was due from, or the consideration of the indebtedness. Such evidence is properly construed as meaning that it is due and payable according to the terms then provided for its payment. There is no other evidence in the case which is sufficient in law to establish the pre-existence of a debt due to the defendant by plaintiff, when the mortgage was given.
We are, therefore, of the opinion that the defendant's counter-claim was properly rejected by the referee.
We are further of the opinion that if it be conceded that the plaintiff was personally liable either upon a bond or pre-existing indebtedness, for any deficiency, arising upon a sale of the mortgaged premises, that the agreement of October 18, 1878, between the defendant and Morgan, the owner of the equity of redemption, being founded upon a good consideration, and providing for an extension of the time of payment of the mortgage debt, beyond the period fixed therefor by the mortgage, deprived the plaintiff of the privilege, to which she would otherwise be entitled, of paying the debt when it became due, and using the mortgage to reimburse herself to the extent of the value of the land mortgaged for the moneys she had thus paid.
This agreement was a valid contract and would preclude the holder of the mortgage from enforcing it against the land until after the expiration of the extended time.
The defendant's intestate being present and participating in the negotiations which preceded the execution of the contract, whereby Livermore, the plaintiff's grantee, assumed the payment of the mortgage in question, and taking the entire consideration paid by Livermore upon such purchase, in the absence of any request by the defendant for a finding to the contrary, may be assumed to have taken cognizance of the terms and conditions of the contract, and had notice of the fact that the plaintiff thereby became a mere surety for the payment of the mortgage debt. However this may be, he certainly had notice from the relation of the parties and the nature of a mortgage security, that the land was the primary fund for the payment of the mortgage debt, and to the extent of the value of such land the plaintiff occupied the position of a surety and was entitled upon payment of the mortgage debt to be substituted to the mortgage security as it originally existed, with the right to proceed immediately against the lands for her indemnity.
We recently decided in the case of Murray v. Marshall, that the grantor of real estate who had conveyed the same subject to the payment of a mortgage, occupied to the extent of the value of the land the position of, and was entitled to the same rights as a surety, and when the holder of the mortgage had by a valid contract with the owner of the equity of redemption postponed the time for its payment beyond the time therein provided, he had so impaired the equitable rights of the mortgagor as to discharge him from liability to the extent of the value of the land mortgaged.
The undisputed evidence in the case shows that the land in question exceeded in value the amount of the mortgage when the agreement of extension was made.
We, therefore, think that by treating with the principal debtor in the manner stated, and dealing with the land which constituted the primary fund for the payment of the mortgage debt in such manner as deprived the plaintiff of her right as a surety to resort to it for her indemnity, the defendant has released her from liability, if any existed, for the payment of the mortgage debt. ( Calvo v. Davies, 73 N.Y. 211; Paine v. Jones, 76 id. 274.)
There being, therefore, no view of the case under which the plaintiff was liable to the defendant in any sum of money which could be used as an offset in this proceeding, judgment was properly rendered against her for the balance due on the loan of $708.
The judgment should be affirmed.
All concur.
Judgment affirmed.