81 N.Y.S. 1 | N.Y. App. Div. | 1903
Lead Opinion
There is no conflict of testimony or dispute about the facts nor doubt as to the law and yet the conclusion to be drawn as to whether or not what occurred with respect to dealing with' the bond and mortgage resulted in a discharge of Casey from all liability upon the bond, requires serious consideration.
It is agreed that, under the settled law of this State, when a mort
It is conceded by the respondent that a binding extension of time to a grantee would release the mortgagor on the principle applicable to all sureties. (Calvo v. Davies, 73 N. Y. 211.) The crucial question, therefore, upon the undisputed facts, is whether there was proof of an agreement enforcible by the debtor which changed the. terms of Casey’s original contract, either in respect to the rate of' interest which should be payable or extending the time of payment..
It is not necessary that the agreement changing the terms of the. contract should be in writing, for after a breach of a sealed instrument it may be modified in any respect or even wholly-rescinded by an executed parol agreement. (Kane v. Cortesy, 100 N. Y. 132; Dodge v. Crandall, 30 id. 294; Thomson v. Poor, 147 id. 402.) This subject is well summarized in Brooks v. Wright (13 Allen 72) wherein it is said: “We know of no rule which requires that such an agreement to give time, to a principal, by which a surety will be discharged, must be in writing, or in any precise form of words or even in express language at all. It is a. question of mutual understanding and intention, and like other contracts, the agreement of the parties may be derived from and inferred by acts, declarations, facts and circumstances. When such are-the sources from which the mutual agreement of the parties is to be-gathered, it is for the jury to determine what the intention and understanding were, if any, upon which the minds of the parties; met. That is their contract.”
Upon the question as to changing the terms of the contract as to. the payment of the rate of interest, we have the fact that, by order of the finance committee of the plaintiff, the rate of interest was. increased, and that in compliance with such order the then owner
It is true that there was no express agreement, but under the law which permits inferences to be drawn from the declarations and acts of parties, there was certainly enough, it seems to us, from which the inference might fairly be drawn of an agreement between them. We are not unmindful of what was said in Scott v. Stockwell (65 How. Pr. 249; affd., 28 Hun, 641; 93 N. Y. 636): “We have to do with a mortgage, a lien upon real property, an instrument under seal, with terms precisely determined, and the rights and remedies of the parties should not be destroyed, unless by an agreement concerning which there could be no reasonable doubt, vwhich imposed a binding obligation upon the parties affected.”
Considering, the action of the finance committee, communicated to the owner of the property, that the intei’est thereafter payable •should be at the rate of six per cent instead of at the former rate of five, and the acquiescence in such action on the part of the owner in thereafter paying, and the company in thereafter receiving, the interest at the new rate of six per cent, we do not think there could be any reasonable doubt as to the then intention of the parties to change the rate of interest. This is the only inference -deducible from the evidence, and it leaves the finding to the Contrary without any evidence to support it.
So, too, upon the question of the extension of the time of payment, we think that the evidence leads to but one conclusion, namely, that there was a valid agreement which extended the time of payment of the principal sum without the knowledge or consent of the defendant Casey. It will be- recalled that the evidence is that the defendant Nordenschild paid the plaintiff on December 29, 1893, the sum of $660 interest due on January 1,1894, for the pre
In principle, we¡ do not think that the present case is distinguishable- from Wakefield Bank v. Truesdell (supra); for here, too/ although there was no express agreement to wait for the payment ■during the three days, the right to enforce payment was not expressly
Having • reached the conclusion that the judgment must be reversed and a new trial ordered, we do not deem it necessary to determine the other point raised by the appellant as to the alleged irregularity and defect in the judgment that it was entered upon insufficient proof of service upon the parties to the action, as this, upon a new .trial, will necessarily be corrected.
The judgment should, accordingly, be reversed, and a new trial ordered, with costs to the appellent to abide the event.
Van Brunt, P. J., and McLaughlin, J., concurred; Ingraham and Hatch, JJ., dissented.
Dissenting Opinion
I do not concur in the reversal of this judgment. The question presented is whether the' obligor upon the bond to secure the payment of the mortgage upon real estate was discharged from liability in consequence of the receipt by the mortgagee, on December 29, 1893, of the six months’ interest due on the 1st of January, 1894, from the grantee of the property covered by the mortgage. The action was to foreclose the mortgage. The referee filed his decision under section 1022 of the Code of Civil Procedure, concisely stating the grounds upon which the issues were decided and directing judgment to be entered thereon. That decision, after setting forth the bond and mortgage to secure its payment, stated that the mortgaged premises were conveyed by Casey to one Friedberg, and by Fried-berg to one Nordenschild, who, in 1893, was.the owner of the premises ; that there was no agreement on the' part of the plaintiff to change the rate of interest or to extend the time- of payment of the bond and mortgage, and that the fact, that the plaintiff accepted a different rate of interest than that provided in the bond and mortgage does not prove an agreement to change the rate of interest, and that no consideration for such agreement was shown.
The court' has found -as á fact that there was no agreement to extend the time of payment of the mortgage, which would discharge the liability of the obligor upon the bond which the mortgage was given to secure. The only evidence in the case from which such an agreement could be inferred was contained in the cross-examination
It is not proposed to reverse this finding of the trial judge, that the extension here alleged was not proved. It appearing, however, upon the cross-examination of one of the plaintiff’s witnesses that the interest that became due on the 1st' of January, 1894, was received by the plaintiff on the 29th of December, 1893, three days before it became due, it is held in. the prevailing opinion as a matter of law,that the receipt of such interest discharged the bond. It may be conceded that a valid agreement to extend the payment of of this mortgage for one day would discharge the obligor, but the question presented is, whether or not the receipt of this interest three days before it became due was conclusive evidence of such an agreement. In Bangs v. Strong (7 Hill, 250) there was an express agreement, the execution of which seems to have been admitted, by which the time for the payment of the mortgage was extended from eight to ten months, during which time the mortgagee could not proceed with the collection of the debt, and this agreement was made between the creditors and the principal debtor, without the consent of the surety. Judge Bronson, in delivering the opinion of the Court of Errors, says: “Where time is thus given to the principal debtor by a valid agreement which ties up the hands of the creditor, though it be but for a single day, it is quite clear that the surety is, discharged. The principle is the same whether the time be long or' short.” There is no reason to doubt the entire correctness of this statement. The question in this case is whether such an agreement' was proved,- so that the finding of the trial judge that there was no
The question here is what was the intent of the plaintiff and the owner of the property making this payment on the 29th of December, ' 1893, when the interest was paid ? There is certainly no proof of .any intention or understanding to extend the time of payment of this mortgage. The interest was due on the 1st of January, 1894. Three days before the interest’was due the owner of the property paid it, and all we have is the fact that on that day the plaintiff received it. Unless we are to say that as a matter of law. this receipt of interest extended the time of the payment of the mortgage for three days, the finding of fact by the trial judge should not be disturbed. ’ Yet it is quite clear that if it was understood between the parties that the receipt of the interest three days in advance should not have the effect of extending the time of the payment of the bond, so that notwithstanding the receipt of this interest
I think, therefore, that as this extension was not pleaded and was not insisted upon before the trial judge, he was justified in refusing to consider it, and that his finding that there was no extension was sustained by the evidence.
Judgment reversed, new trial ordered, costs to appellant to abide event.