Wayman v. Jones

Smith, P. J.

— The defendant, Mrs. Jones, executed -to one Collins her promissory, note for $350, to secure which she also, executed a mortgage on certain real property in Kansas City. Collins assigned the note to plaintiff.

Mrs. Jones conveyed by deed the mortgaged property to defendant J. Carver Jones. The last named defendant, by deed, conveyed the property to William A. Jones, who reconveyed the same to the defendant J. Carver Jones. The last named defendant, by deed, conveyed said property to J. Allen Henry, who, by deed, conveyed the same to J. Ray Samuels. That each of the grantees in said several deeds assumed the payment of said note; that after the maturity of said note the plaintiff, the holder of said note, entered into an agreement indorsed thereon, whereby the time of the payment thereof was extended for one year.

After the expiration of the time for which the note had been extended the property was sold under the-mortgage, and failing to bring enough to pay off the note and interest, this suit was brought by the plaintiff assignee against Mrs. Jones, the maker, and the other two defendants who had assumed the payment thereof, for the deficiency. The question arising on these facts is, whether the defendant Mrs. Jones is liable on the note. Her contention is, that she was, as to the plaintiff, in law, but a surety, and that by reason of the extension of the time of the payment of the note *318by plaintiff, she was discharged from liability. This is by no means a groundless contention. The law is very well settled in this jurisdiction, that when a purchaser of real property accepts and holds under a •conveyance which contains a clause reciting that he has assumed to pay a note secured by a mortgage on 'the property so conveyed to him, that he directly subjects himself to a liability to the holder of the note which can be enforced by the latter in a personal action. Heim v. Vogel, 69 Mo. 529; Fitzgerald v. Barker, 70 Mo. 685; Kline v. Isaacs, 8 Mo. App. 568.

If one owning real estate incumbered by a mortgage, to secure his debt, sells it, and the vendee as a part of the purchase price agrees to pay the mortgage debt, the vendor becomes the surety for the mortgage debt, and the vendee becomes the principal and the vendor will, as to such debt, be entitled to the same rights and remedies against the vendee that any surety has against his principal. Brandt on Suretyship & Guar., sec. 37; Orrick v. Durham, 79 Mo. 174; Fitzgerald v. Barker, 70 Mo. 685; Heim v. Vogel, 69 Mo. 529. And in such case the vendor is entitled on payment of the debt to be subrogated to the rights of the mortgagee. Orrick v. Durham, supra. This rests upon the principle that in equity the property becomes a-primary fund for the payment of the debt. Johnson v. Zink, 51 N. Y. 333; 1 Story on Eq., sec. 499.

And any valid agreement by the mortgagee with the grantee of the mortgagor to extend the time of payment made without the consent of the mortgagor discharges the latter. This statement of the law is supported by the great weight of authority as will be seen by reference to the following citations: Bank v. Waterman, 134 Ill. 461; Union Mutual Life Ins. Co. v. Hanford, 27 Fed. Rep. 588; Spencer v. Spencer, 95 N. Y. 353; George v. Andrews, 60 Md. 26; Calvo v. Davies, 73 N. *319Y. 211; Fish v. Hayward, 28 Hun (N. Y.), 456; Murray v. Marshall, 94 N. Y. 611; Union Mutual Life Ins. Co. v. Hanford, 143 U. S. 187; Metz v. Todd, 36 Mich. 473; Remsen v. Beekman, 25 N. Y. 552; Hurd v. Callahan, 9 Abb. N. C. (N. Y.) 374; Jester v. Sterling, 25 Hun, 344; Paine v. Jones, 14 Hun, 577; King v. Baldwin, 2 Johns. Ch. 559. In Bank v. Wood, lately decided by us, 56 Mo. App. 214, the indorsee of the mortgage note entered into a valid agreement with the grantee of the mortgagor for the extension of the time of the payment of the note without the consent of the mortgagee and indorser of the note and it was held that the effect of this was to discharge the mortgagee and indorser.

It is a mistake to say that the great weight of authority preponderates in favor of the opposing view expressed in a few -cases. Corbett v. Waterman, 11 Iowa, 86; Crawford v. Edwards, 33 Mich. 354; Insurance Co. v. Mayer, 8 Mo. App. 18. There is no distinction between a suretyship created with the consent of the creditor and that which arises by operation of law. The principle is applicable alike in both classes, as is abundantly shown by the authorities which we have already referred to.

Applying these principles it would seem clear that if the plaintiff, the holder of the mortgage note, entered into a valid agreement with Samuels, the grantee, for the extension of the time of the payment without the consent of the defendant, Mrs. Jones, the mortgagor surety, the effect of this was to discharge her.

But was the agreement entered into between plaintiff and Samuels valid, for, if it was, the defendant, Mrs. Jones, is not liable, and, if it was not, she is. It appears that there was no consideration for the extension of time granted by plaintiff. In paying the interest, Samuels paid only what he owed, and the stipulation for *320another year’s time, depending alone on this payment, was without-consideration to support it. The giving of time, which will discharge the surety, is not a mere promise of indulgence; it is the act of the creditor depriving himself of the power of suing, by something obligatory, which prevents the surety from coming into a court of equity for relief, because the principal having tied his own hands, the surety can not release them. Brown v. Kirk, 20 Mo. App. 532; Nichols v. Douglas, 8 Mo. 49.

Judgment affirmed.

All concur.