Keeler v. Hollweg

Willard Bartlett, J.:

The appellants have been held liable in this action as the indorsers of a $1,500 promissory note held and! owned by the plaintiff. The payment of the. original tóete, of which the note in suit was a renewal, was secured by a chattel mortgage to the plaintiff’s -husband, which he subsequently transferred to the plaintiff. At the time of this transfer, the makers of the note executed, to the plaintiff a new chattel mortgage in place of the first one upon the same, property, and to secure payment of the same notes. The appellants claim to have been released from their obligation as indorsers by reason of the plaintiff’s relinquishment' of the old chattel mortgage *491and acceptance of the new one without their knowledge or consent.. The learned judge who tried the case at Special Term decided against them, holding that, in the- absence of proof that the security had been diminished by the substitution of one mortgage for the; other, or that any other lien had obtained priority by the change,, the liability of the indorsers remained unaffected. .

We concur in this view. ' The case is not like that of Murray v. Marshall (94 N. Y. 611), cited in behalf of the appellants, or the-many similar cases in which it has been held that, where the terms-,of the contract have been essentially changed by the principal debtor without the surety’s consent, the change operates to discharge-the surety. Here there, was no alteration of the contract. There was simply a substitution of securities, not shown to have been in anywise detrimental to the appellants. Indeed, as was truly said in the court below, from the facts proved, the security is the very-same.”

In Underhill v. Palmer (10 Daly, 478), where the facts closely resembled those in the present case, the General Term of the Hew York Court of Common Pleas declared that, when a security is-relinquished, it becomes the duty of the creditor to show affirmatively that such relinquishment has not injured the surety. We think this burden was sufficiently sustained here by the proof .that,, while the first chattel mortgage was ineffectual as to, creditors by reason of the failure to file it, the mortgage taken in its stead on the same property had been filed immediately. This proof sufficed to show that the appellants had lost nothing by the change.

The judgment was right and should be affirmed.

All concurred.

Judgment affirmed, with costs.