Houseman v. Bodine — 33 N.Y. St. Rep. 332

Majority

p. 332

Jacob I. Houseman, Resp’t, v. William H. J. Bodine, App’lt.^[1]

(Court of Appeals, Second Division,

Filed October 7, 1890.)

Headnote

Mortgage—Consideration of—Assignment.

Plaintiff and defendant were sureties upon the bond of Albert Bodine, as administrator of Mary Bodine. Albert appropriated $15,000, and plaintiff loaned him $7,500, and defendant, his co-surety, gave Albert the bond and mortgage in question for $7,500, on the understanding that it should not be assigned or in any manner used, except as a voucher, or in evidence in his favor as administrator. Albert, however, upon plaintiff threatening him with proceedings in the surrogate's court, offered to assign the bond and mortgage to him, and defendant executed a'consent wherein he covenanted that they were valid liens and securities, and that he had no defense thereto, and plaintiff accepted the assignment on the agreement that the attachment proceedings should be abandoned, and that plaintiff would remain a surety upon Albert’s bond. Held, that there was a sufficient consideration to support defendant’s agreement in the relinquishment by plaintiff of his right to proceed against Albert, and the practical effect of the agreement was the creation of a valid and effectual bond and mortgage.

Appeal from a judgment of the general term of the supreme court, second judicial department, entered on an order affirming a judgment of foreclosure and sale granted after trial at special term.

This action was brought to foreclose a mortgage given by the defendant, William H. J. Bodine, to Albert Bodine and by him assigned to the plaintiff.

The defense interposed was that the mortgage was wholly without consideration, of which fact the plaintiff had full knowledge prior to the assignment thereof to him. Annexed to the assignment, at the time of the delivery thereof to the plaintiff, was a writing signed, sealed and acknowledged by the defendant, William H. J. Bodine, which reads as follows: “ Know all men by these presents, that I, William H. J. Bodine, the mortgagor named in the mortgage to Albert Bodine, administrator, etc., dated November 17, lb79, recorded in Richmond county clerk’s office, in liber 104, page 335, December 16, 1879, described in the foregoing assignment thereof, do hereby consent to the execution and delivery of the said foregoing assignment of said mortgage and the bond accompanying the same by said mortgagee to Jacob I. Houseman, and in consideration of one dollar to me paid in hand by said Houseman, the receipt whereof is hereby acknowledged, I covenant, stipulate and agree with said Houseman that the said bond and mortgage are good, valid and subsisting

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securities for the principal sum of seven thousand five hundred dollars, and interest thereon from the 17th day of November, 1879, no part of which has been paid or satisfied, and there are no offsets or counterclaims against the same, and I have no defense of any kind to said bond and mortgage.”

The circumstances surrounding, and which led to, the making and delivery of the bond and mortgage, and induced the subsequent assignment to this plaintiff, and his acceptance thereof, are as follows: The plaintiff and defendant mortgagor were sureties upon the bond of Albert Bodine as administrator of Mary Bodine. Albert appropriated to his own use moneys of the estate amounting to about $15,000. At his request the plaintiff loaned him $7,500, and the co-surety, William H. J. Bodine, a brother of Albert, made and delivered to him the bond and mortgage in ■question for $7,500, upon the understanding, nevertheless, that it should not be assigned or in any manner used exceptas a voucher or evidence in his favor as administrator.

Albert failing to repay the loan, the plaintiff instituted proceedings in surrogate’s court to secure his release and discharge as surety upon the bond of Albert as administrator.

The steps taken in that direction resulted in the granting of an order by the surrogate’s court that the administrator render and file an account on or before the 15th day of January, 1884, or that .an attachment as for contempt issue against him.

William H. J. Bodine and Albert having failed in their attempt to j>ersuade the plaintiff to abandon such proceedings, Albert ■offered to assign to him the bond and mortgage in controversy. v Plaintiff had been informed by the mortgagor personally that Albert had no right to dispose of them, and he declined to take ■an assignment. Thereafter, in order to prevent a further prosecution of the proceedings and to induce the plaintiff to continue on the bond as surety, Albert executed an assignment of the bond and mortgage to the plaintiff, and the defendant William IT. J. Bodine executed the foregoing consent, wherein he covenanted ■and agreed that such bond and mortgage were valid subsisting liens and securities and that he had no defense thereto. The plaintiff thereupon, and on the day designated for the issue of an .attachment against Albert, in the event of his failure to file an account, accepted the assignment, upon the express agreement that the pending proceedings in surrogate’s court should be abandoned and the plaintiff remain a surety upon the administrator’s bond.

A. B. Byeti, for app’lt; Sidney F. Bawson, for resp’t.

We think the plaintiff’s right to enforce the mort-

gage may rest upon the agreement of the defendant, and his intention, founded upon it, to give it effect in the hands of the plaintiff, inasmuch as it is supported by a good consideration.

There was sufficient consideration to support an agreement, in the relinquishment by the plaintiff of his right to proceed against Albert. And the trial court has found upon evidence to support it that such was the consideration of the agreement which induced the plaintiff to accept the assignment.

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Had the defendant for such consideration executed and delivered to the plaintiff a bond and mortgage for $7,500, its validity-in the mortgagee’s hands, and his light to enforce it, would not-admit of controversy.

Instead of taking that course the mortgagor executed the agreement before us, in which he not only consented to the assignment, but in addition covenanted that there was due and unpaid on the bond and mortgage the full amount purporting to be secured thereby. This was in legal effect a promise to pay to the assignee the moneys secured by it, Elder v. Rouse, 15 Wend., 218 , and this proposition might be given application in support of the judgment, were it not that we prefer to rest our decision, upon the broader ground that the practical effect of the agreement was the creation of a valid and effectual bond and mortgage. Here was a bond and mortgage made for a given purpose. That purpose had in part been accomplished, when the parties to it determined to make still further use of it. For a valuable consideration it was assigned to the plaintiff, and thereby he acquired title. Had it been done without the consent of the mortgagor, it. could not have availed him. But the mortgagor consented and in writing. He did more; he covenanted that the whole amount secured by the bond and mortgage was due and owing thereon. And from this instrument it is apparent that it may be assumed to have been the intention of the parties that these securities, should first have aivalid inception in the hands of the plaintiff.

That, as between themselves, the intent of the parties must govern and be allowed to give force and effect to the bond and mortgage in the hands of the plaintiff, is established by authority.

In Purser v. Anderson, 4 Edwards Chan., 17, the court considered the question whether a bond and mortgage which had been paid, and thereby became satisfied and “ a dead letter ” in the hands-of the mortgagee, could be assigned so as to be of any effect or avail to the assignee. It was held that “ with the assent and concurrence of the mortgagor, it could be assigned, and in the hands of an assignee for value it would be available as against the mortgagor and mortgagee.” This proposition was cited with approval in Hoy v. Bramhall, 19 N. J. Chan., 563.

In Hubbell v. Blakeslee, 71 N. Y., 63 , it was held that if the mortgagor pay the mortgagee the amount" secured by the mortgage, yet if it was agreed at the time, and payment was received on the condition, that the mortgage should be kept alive and transferred to another creditor of the mortgagor, such an agreement would have been valid, and the payment would not have extinguished the mortgage.

As between themselves, in such case, whether or not the mortgage retain life is determined by the intent of the parties. Cady v. Merchant's Bank of Rochester, 14 N. Y. State Rep., 99 ; Champney v. Coope, 32 N. Y., 543 .

The judgment should be affirmed.

All concur.