The facts are sufficiently stated in the opinion of Chief JusticeShepherd. From the judgment on a verdict for the plaintiff, defendants appealed. It is settled by abundant authority that, "where a husband mortgages his property for his debt, and in the same mortgage the wife conveys her own separate property as security for the same debt, her property so conveyed will be treated in all respects as a surety, . . . and will be discharged by anything that would discharge a surety or guarantor who was personally liable." 1 Brandt on Suretyship, sec. 32; Cross v. Allen, 141 U.S. 528;Spear v. Ward, 20 Cal. 659; Gahn v. Niemcewieg, 11 Wend., 312; Bank v.Burns, 46 N.Y. 170; Bishop Married Women, 604; Jones Mortgages, 114; Gorev. Townsend, 105 N.C. 228; Purvis v. Carstarphen, 73 N.C. 575.
The deed in trust in the present case was made for the purpose of securing the payment of certain indebtedness of the husband, H. T. Greenleaf, evidenced by his notes, executed to C. W. Grandy, Jr. The *Page 6 deed conveys certain property of the said Greenleaf, and also the real estate of the wife, the latter alone being the subject of this controversy. It plainly appears from the said instrument that the property of the wife was conveyed as additional security for the indebtedness of the husband, and there can be no question as to the trustee, the cestuique trust, Grandy, and his assignee, Hinton, being affected with notice thereof. There is evidence tending to show that Grandy, before assigning the notes and after they were due, entered into a valid (8) agreement with Greenleaf to postpone the sale of the property contained in the deed of trust for a definite period. There is also evidence tending to show a similar agreement on the part of Hinton, the assignee, under which a sale of the said property was to be postponed four years. These contracts of forbearance were made without the knowledge or assent of Mrs. Greenleaf, and, in our opinion, resulted in a discharge of her property from all liability under the said deed of trust. This property occupied, as we have seen, the position of a surety, and it is common learning that "time or forbearance given by the creditor to the principal debtor by a contract which binds him in law, and would bar his action against the debtor," will discharge the surety. Bank v. Lineberger, 83 N.C. 454; Carter v. Duncan, 84 N.C. 676;Forbes v. Sheppard, 98 N.C. 111; Scott v. Fisher, 110 N.C. 311.
It is insisted, however, by the plaintiff's counsel that the above principle does not apply to the facts of this case, because in the contracts of forbearance the remedy against the property was reserved. It is undoubtedly true that the surety will not be discharged when at the time of the agreement for indulgence, there is a reservation of the creditor's rights and remedies against the surety, but such reservation must be distinct, explicit (Brandt, sec. 376) and unqualified. Bank v.Lineberger, supra. We are unable to find in the record any evidence of such a reservation, as it is very clear that the testimony of Greenleaf that "Hinton did not agree to give up the mortgage," does not amount to such a reservation of the remedy against the surety property as is contemplated by the law. Had there been a valid agreement of that character, it would have amounted to an equitable discharge of the trust, in which event the creditor could not have reserved his right to proceed against the said property. Nicholson v. Revill, 4 Add. Ell., 675;Kearsley v. Cole, 16 M. W., 136. The fact, therefore that the "mortgage" was not given up or discharged, is entirely consistent with (9) the principle invoked by Mrs. Greenleaf, which principle indeed would have nothing to operate upon but for the contemplated continuance of the liability. The agreement was, in effect, to postpone the sale of the entire property contained in the trust. This was an *Page 7 alteration of the original contract without the consent of Mrs. Greenleaf, and deprived her of her right to discharge the indebtedness at maturity, and to immediately proceed against the principal. In order to retain the security there should have been a clear reservation of the right to sell her property; but instead of doing this, the creditor, as we have said, entered into a binding contract with the principal to forbear the sale of any part of the property contained in the trust.
We think his Honor erred in directing a verdict against Mrs. Greenleaf, for, if her contention be true, the assignee, Hinton, who purchased at the sale made by the trustee, acquired only a naked legal title and would not be entitled to recover.
We will add that we have carefully perused the testimony and have been unable to find any evidence that Greenleaf, in making the agreements above mentioned, was authorized to act as the agent of his wife. There must be a
New trial.
Cited: Weil v. Thomas, 114 N.C. 201; Smith v. Loan Asso., 119 N.C. 259;Hedrick v. Byerly, ib., 421; Shew v. Call, ib., 455; Sherrod v. Dixon,120 N.C. 67; Meares v. Butler, 123 N.C. 208; Flemming v. Barden,127 N.C. 215; Benedict v. Jones, 129 N.C. 475; Smith v. Parker,131 N.C. 471; Edwards v. Ins. Co., 173 N.C. 618; Foster v. Davis,175 N.C. 544.
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