79 N.W. 853 | N.D. | 1899
This case was tried by the Court. Plaintiff, failing to recover below, appeals, and- demands a new trial in this Court upon all the issues raised'by the pleadings. By the action plaintiff sought to recover a personal judgment against Eliza A. Francis, based upon the covenants to pay found in two certain ^eal estate mortgages executed by Orin W. Francis and Eliza A. Francis, who were
Under these facts, was the relation of Mrs. Francis that, of surety for her husband in the covenants of payment contained in the mortgages? Did the mortgagee so understand it, and was the receiver charged with notice of such relationship? Was there such an extension of time as would release a surety ? All these questions were resolved in the affirmative by the trial court, and appellant insists that none of them were rightly decided.
Section 4649, Rev. Codes, reads as follows: “A surety is one who at the request of another and for the purpose of securing to him a benefit becomes responsible for the performance by the latter of some act in favor of a third person or hypothecates property as security therefor.” Section 4650 declares: “One who appears to be a principal, whether by the terms -of a written instrument or otherwise, may show that he is in fact a surety except as against persons who have acted oh the faith of his apparent character of principal.” These sections were in full force at the time of the transactions in this case involved. It stands undisputed that the debt named in the mortgages was the debt of Orin W. Francis, and that Mrs. Francis signed the mortgages at the request of her husband, and that her individual estate was in no manner benefited ,thereby. It stands undisputed, also, that Mr. Francis refused the request of the mortgagee to have Mrs. Francis sign the notes secured by* the mortgages, and that he consented to have her sign the mortgages only for the purpose of releasing any right of dower that she might have in the real estate. While these facts are not competent to show that she incurred no liability in signing the mortgages containing an express covenant to pay, yet they are competent to show, and undisputed they establish the fact, that the mortgagee knew that Mrs. Francis was not a principal debtor, and that whatever
Did the receiver stand in a better position ? Appellant urges that the surety must affirmatively show knowledge of the suretyship on the part of the creditor who grants the extension in order to claim a release thereby. As a general proposition, that is doubtless correct, but it will be sufficient if the facts appear from which the law will presume such knowledge. Certainly, in this case, the receiver had not acted on the faith of the apparent character of Mrs. Francis as a principal, within the meaning of our statute. That statute contemplates acting to his detriment, and operates by way of estoppel. It is urged that the receiver was not chargeable with a knowledge of the facts that were known to the bank. This is an unwarranted contention. It would, we think, be a surprising holding to declare that a receiver of a bank could enforce all unmatured commercial paper that he found among the bank assets, irrespective of the equities existing against such paper. And yet that must logically follow, if the knowledge of the bank is not to be imputed to the receiver. The fact is the receiver of a national bank is neither an indorsee nor an assignee for value. He is simply an agent and officer of the United States. Ex parte Chetwood, 165 U. S. 456, 17 Sup. Ct. 385, and cases cited. The government places him in charge of one of its financial agencies for the purpose of closing it up and terminating such agency, and in so doing he simply acts in lieu of the officers of the bank. He replaces them, stands exactly in their shoes, so far as the assets are concerned, and their knowledge necessarily becomes his knowledge. It follows, therefore, that whatever the receiver did, by way of extending time of payment, was done with full knowledge that Mrs. Francis was surety only.
Was there, in fact, such an extension of time of payment granted by the receiver to the principal as releases the surety? The trial •court; with the witnesses before him, so held. We, upon-the cold record, reach the same conclusion. For whatever agreement was made there was sufficient consideration in the fact that a new mortgage was given covering property that had not theretofore been included. Mr. Francis testifies positively that the agreement was that no proceedings should be had, either upon the chattel mortgages or' the real estate mortgages, until the maturity of the $1,000 note secured by the new chattel mortgage. The attorney who acted for the receiver thinks there was nothing said as to the real estate mortgages, but that the negotiation related only to the chattel security. In view of the fact that it was the duty of the receiver to realize on the assets as early as possible, and in view of the fact that he testifies that he thought he was strengthening his claim by taking the new chattel security, and in view of the fact that no steps whatever were taken to enforce the real estate security during the time for which it is claimed an extension was granted, we are of opinion that an actual extension of time, as to both the real and
It is urged that a receiver of a national bank has no authority to grant an extension of time. No case is cited where it has been so held. There are certain things a receiver may .not do. He has no power to compound or settle claims without authority from a competent court. Such is the statute. Section 5234, Rev. Stat. U. S. And in the case of Case v. Small, 10 Fed. Rep. 722, cited by appellant, nothing more is decided, and that is held only by an inference. Beckham v. Sheckelford, 8 Tex. Civ. App. 660, 29 S. W. Rep. 200, also cited by appellant, decides the same point, and also that such receiver cannot settle a claim against the bank in such a manner as to give effect to a preference made by the bank after it became insolvent. And Ellis v. Little, 27 Kan; 707, is to same effect. No other cases are cited upon this point. The duties of the receiver required him to convert the assets of the bank into cash as speedily as was consistent with realizing the largest amount therefrom, and deposit the money with the comptroller of the currency for distribution among the creditors of the bank. In this performance of his duty, necessarily, he must exercise a large discretion. It is inconceivable that all the details of collection are to be submitted to the comptroller, and his orders received thereon. Nothing of that kind was ever contemplated, and. nothing of that kind is ever done in practice. We have no doubt that the receiver had full power to grant an extension of time, as was done in this case, if thereby he could secure addition d security, which in his judgment strengthened the claim. If the receiver had authority to make such a contract for extension he had Í all power to ratify such contract when made by his attorney.
Counsel rejy upon section 4699, Rev. Codes, which declares that “a mortgagfe of real property can be created, renewed or extended only by writing executed with the formalities required in the case of a grant of real property.” Counsel wholly misapprehend the meaning of tbié word “extended” as there used. The statute has no reference whatever to an extension of time for the payment of the debt sepure,d by the mortgage. A mortgage is “extended” only when it is #hade to stand as security for some debt or obligation not originally -'included therein. This can only be done as the statute directs. That this is what is meant will clearly appear from the. cases which ha^ve considered the language. See Stoddard v. Hart, 23 N. Y. 556. California has the same statute, and appellant cites Wells v. Harber, 56 Cal. 342, as sustaining its view. An analysis of the case will sjhow that it is given the same meaning we attach to it. In that c-fisc a note had been given with real estate security. The note be- " une barred by the statute of limitations, and the lien of the mortgage, as the opinion recites, was extinguished. Thereafter the note