150 N.Y.S. 1032 | N.Y. App. Div. | 1914
Lead Opinion
This is an action for the foreclosure of a mortgage. A deficiency judgment is demanded against the respondent Levy, who executed the mortgage as collateral security for his bond given on the 31st day of May, 1894, to one Ranger, for the payment of $35,000, and interest at the rate of four and one-half per cent per annum, on the 31st day of May, 1899. The bond and mortgage were duly assigned to the plaintiff on the 5th day of July, 1894.
The indebtedness was reduced to $20,000 and plaintiff alleges that on the 3d day of December, 1902, the respondent and one Fitzpatrick, who claimed to be the owner of the mortgaged premises, entered into an agreement in writing with her whereby, for a valuable consideration, the time for the payment of the balance remaining unpaid was extended to the 30th day of November, 1905, and “whereby the said mortgage debt was to bear interest from the 30th day of November, 1902, at the rate of five per cent per annum, payable semi-annually, and whereby said defendant Mitchell A. 0. Levy agreed that he would pay to the plaintiff or he rassigns the said sum of $20,000 and the interest thereon at the time and in the manner aforesaid.” Judgment was demanded for the unpaid balance of $20,000 and interest from the 30th day of November, 1911, at the rate of six per centum per annum.
The demurrer to the separate defense is on the ground that it is insufficient in law on the face thereof. The answer of the respondent denies that there was anything due and owing from him on the bond and mortgage. The separate defense repeats the denials, and alleges that after executing the bond and mortgage the respondent conveyed the premises to Fitzpatrick; that thereafter he and the respondent entered into an agreement in writing with plaintiff extending the time of payment of the unpaid principal until the 30th day of November, 1905, and that on the 30th day of November, 1906, the plaintiff and Fitzpatrick, who still owned the premises, executed an agreement “whereby the plaintiff duly and for a valuable consideration
The point made by the appellant is that the defense is insufficient for the reason that it is not shown that there was a good and valid consideration for the extension agreement to which the defendant was not a party. The defense is predicated upon the equitable rule that a mortgagor, who is liable as a principal for the debt secured by the mortgage, becomes, on conveying the equity of redemption, a surety, the land being then primarily liable, and that where, without his knowledge or consent, the mortgagee and his grantee execute a valid agreement for the extension of the time of payment, he is discharged from liability on the bond to the extent of the value of the land at that time, and the mortgagee takes the risk of future depreciation. (Murray v. Marshall, 94 N. Y. 611; Antisdel v. Williamson, 165 id. 372; Calvo v. Davies, 73 id. 211; Howard v. Robbins, 170 id. 498; Matter of Piza, 5 App. Div. 181.) It is incumbent upon a surety claiming to be released by an agreement between the creditor and the principal debtor for an extention of time to allege and prove a valid agreement founded upon a good consideration. (Olmstead v. Latimer, 158 N. Y. 313; National Citizens’ Bank v. Toplitz, 178 id. 464.)
. The allegation that the extension provided for the payment
The authorities in this State are not in harmony on the question as to whether an allegation that a contract—other than a negotiable instrument to which a statutory rule applies — was made “for a valuable consideration,” is a sufficient allegation of the fact that there was a good and valid consideration. It has recently been held by the Appellate Division in the Third Department in St. Lawrence County Nat. Bank v. Watkins (153 App. Div. 551) that such an allegation is an allegation of fact; but it has been repeatedly held in this department, following the common-law rule requiring that the particular consideration be pleaded (See National Citizens' Bank v. Toplitz, 178 N. Y. 464, 467), that such an allegation is a mere conclusion of law, and insufficient to constitute an allegation of the fact. (Fulton v. Varney, 117 App. Div. 572; Czerney v. Haas, 144 id. 430; Browning, King & Co. v. Terwilliger, Id. 516.) (See, also, Kinsella v. Lockwood, 79 Misc. Rep. 619.) In view of the former decisions of this court on the precise point now presented, which being only one of pleading is not vital, and with which it is no hardship to comply, I think that we should adhere to the rule prescribed by the decisions in this department, and leave it for the Court of Appeals to correct us if we are in error, and to decide whether the rule that an allegation that a promise to pay or that a note or other instrument was duly assigned “ for value received” (Prindle v. Caruthers, 15 N. Y. 425; Benedict v. Kress, 97 App. Div. 65; National Citizens' Bank v. Toplitz, supra), is a sufficient allegation of the fact, should apply where the allegation is, as here, that the parties “ for a valuable consideration ” made and entered into a certain contract.
If this view prevail, it will require a reversal of the order; but another point has been presented by the appellant which is likely to arise again, and it is advisable that it should be discussed, with a view to avoiding another appeal.
The casé of Merriken v. Godwin (2 Del. Ch. 236) is quite in point on the facts. The court there said: “The original connection of the complainant [Merriken] with the debt for which the defendants have judgment and execution was that of an indorser and surety to Chambers; and I do not think this character changed by his subsequent execution of a bond, in connection with Chambers, to take up the note. He is still a surety merely; and is entitled to all the benefits of that relation in a court of equity, though the form of his obligation be changed from indorser of a note to co-obligor in a bond. He remains bound for the same debt, and one in which he had no other interest or participation than as surety of another.”
It follows that the order should be reversed, with ten dollars costs and disbursements, and the demurrer sustained, with ten dollars costs to appellant, hut with leave to the respondent to amend on payment of costs in this court and in the court below.
Scott and Dowling, JJ., concurred; Ingraham, P. J., dissented.
Concurrence Opinion
I concur in the result, because I feel bound by the decisions of this court in this department on the question of pleading,
Order reversed, with ten dollars costs and disbursements, and demurrer sustained, with ten dollars costs, with leave to respondent to amend on payment of costs in this court and in the court below.