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Mutual Life Insurance v. Davies

44 N.Y. Super. Ct. 172 12 Jones & S. 172 Court N.Y. Super. Ct. Decision date 1878-11-04 English

Contents

Majority

p. 172
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Plaintiff and Respondent, v. THOMAS A. DAVIES, Impleaded with others, Defendant and Appellant.

Headnote

I. Principal.
1. Changing the relation to that of surety.
(a) Mortgage assumed by grantee op mortgagor.
1. Effect of.
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1st. As to the mortgagor.—The land becomes the primary fund for the payment of the mortgage debt, and the mortgagor stands thereafter in the attitude of surety only.
2nd. As to tiie mortgagee.—After notice of assumption by the grantee, he is bound in his dealings with the grantee and others, in regard to the mortgage debt, to do nothing to the injury of the mortgagor as surety.
3rd. Rights resulting.
(1) Pursuit of land and grantee.—The mortgagor had a right to demand that the mortgagee proceed without delay, after his right of action has accrued, to collect the mortgage debt out of the land and grantee, and if he neglects so to do after full and explicit request, and collection therefrom becomes thereby either wholly impossible or only partially impaired, then the mortgagor is either wholly, or pro tanto, as the case may be, discharged.
(2) Extension of time.—If the mortgagee extends the time of payment to the grantee, the mortgagor will be discharged.
(3) Conveyance "by such grantee of the mortgage to a subsequent grantee who also assumes the mortgage, effect of.
(d) Docs not impair the above stated rights of the mortgagor. It gives him the additional advantage of the subsequent assumption.
II. Surety.
1. Bequest to creditor to pursue principal, requisites of . a. Where it is a corporation creditor the request must be made to some officer or agent who is authorized to act in the premises.
1. An assistant to the solicitor of its law department, which department examined vouchers, the surrender of death claims, and had the supervision of all litigated business and general direction of it, but had no right to order the foreclosure of a mortgage, which right was vested in its president and finance committee, is not such officer or agent.
2. If such assistant, however, could be regarded as a proper officer or agent to receive an unqualified request to foreclose a mortgage, yet he is not a proper officer or agent to receive a conditional request which imposes on the corporation the duty of keeping itself advised as to when the conditions occur upon which the request is to become operative.
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(a) Such a request is not the full and explicit one required.
2. Extending time of payment so as to discharge surety.
(a) What is not.—A mere forbearance to collect, or a naked promise to forebear, is not.
1. The mere abandonment of foreclosure proceedings upon payment, by a subsequent incumbrancer, of the costs and interest then due, and the receipt from such incumbrancer of interest subsequently falling due, there being no agreement to extend the day of payment of the mortgage, will not discharge one who stands in the position of surety for the mortgage debt, although he be the mortgagor.
HI. Corporation creditor.
1. Surety's demand on, to proceed against principal debtor.
(a) Requisites of.
1. See Surety, supra.
Before Sedgwick, Van Voest and Speir, JJ.
Decided November 4, 1878.
The defendant Davies made a mortgage to the plaintiff, in 1869, to secure the payment of $44,000 on the first of June, 1870, with semi-annual interest.
The mortgage covered lots in the City of New York, owned by Davies.
The mortgagor, subsequently to the execution of the mortgage, and during the same month in which it was made, conveyed the mortgaged premises to the defendant Cudlip. By the terms of the conveyance to him, Cudlip assumed the payment of the mortgage.
The plaintiff was advised by Davies of his conveyance ro Cudlip, and of his assumption of the mortgage. Cudlip, on July 15, 1871, conveyed the premises to John Adriance, subject to the mortgage, which he agreed to pay. Adriance died in November, 1874, but previous to his death, he conveyed the premises to Nathaniel Jarvis, Jr., and others, in trust for certain
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purposes. The mortgage being unpaid, this action was commenced in April, 1876, for its foreclosure. The complaint demands judgment against the defendant Davies personally for any deficiency which might arise on the sale of the mortgaged premises. The defendant Davies, by his answer, avers that the plaintiff, without his knowledge or consent, several times extended the payment of the bond accompanying the mortgage, and bound itself not to foreclose the same for a specified time, and that, by reason of such extensions, he is released from all-liability on account of the mortgage. He claims also to be released by the neglect of the plaintiff to foreclose the mortgage, he having, as he claims, called upon the plaintiff in December, 1874, to ascertain whether there were any taxes and assessments unpaid upon the premises, with the object of having the mortgage foreclosed if such taxes and assessments were in arrear, and was there, as he claims, informed by the agent of the plaintiff, that there were no unpaid taxes and assessments. He alleges that the company well knew, at the time cf his application for information as to taxes and assessments, that his object was to procure the immediate foreclosure of the mortgage, in case any taxes and assessments were remaining unpaid, and protect himself from any depreciation in the value of the lands.
He claims that at the! time he was so advised that there were no taxes or assessments unpaid, there was in fact a large amount of taxes and assessments outstanding unpaid, and that the plaintiff well knew at the time that such taxes and assessments were liens upon the premises. Defendant further in his answer urges, that up to and within a reasonable time after July, 1875, the mortgaged premises were worth, and coiild have been -sold for, more than enough to have paid the mortgage, and all other claims against, and liens upon, the premises.
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The action was tried at special term, and a judgment of foreclosure was rendered, the defendant Davies being adjudged to pay any deficiency remaining after the application of the proceeds of the sale, according to the directions of the decree.
The deficiency amounts to $22,896.63. The defendan t Davies appeals from so much of the judgment as holds him for the deficiency, and also from the decree itself.
Edmund Coffin, Jr., attorney, and of counsel for appellant, urged:—I.
After the conveyances set forth in the complaint, the relation of the several parties became settled in equity ; the land became the primary fund for payment of the debt, and Adriance the principal debtor ; Cudlip surety to Adriance; and the land and Davies surety to all; while the plaintiff stood, so far as the collateral was concerned, as trustee holding the mortgaged lands for the benefit of Cudlip and Davies (Calvo v. Davies, 8 Hun, 222 ; Vrooman v. Turner, Id. 78 ; Ely v. McNight, 30 How. Pr. 97 ; Russell v. Pistor, 7 N. Y. 171 ; Bently v. Vanderheyden, 35 Id. 677; Garnsey v. Rogers, 47 Id. 242; Remsen v. Beekman, 25 Id. 552 ; Morss v. Gleason, 64 Id. 204; Barnes v. Mott, Id. 397; Colgrove v. Tallman, 67 Id. 95). As soon as knowledge of these transfers was brought to the plaintiffs, the same liabilities and responsibilities were thrown upon them as though the relationship to the 'transaction arose from the original contract made by and with their consent.
II. The interview and conversation between the defendant and William G. Davies in 1874 constituted a sufficient request to collect this mortgage. The request was conditional, but made so only because of the false information given to the defendant. William G. Davies was the proper agent of the corporation plaintiff in the matter, and the company is bound by his act, whether right or wrong (Booth v. Farmers’ & Mechan
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ics’ Nat. Bk., 50 N. Y. 396 ; Leslie v. Knickerbocker Life Ins. Co., 63 Id. 27, 34). A corporation can act in no other way than through its agents and employees. The former position and active duty of Mr. William Gr. Davies made him the most proper agent in the employ of the company for this particular business. He had been in charge of the bond and mortgage department, and therefore, knew best what information could be procured from the books of the department. He was their assistant solicitor in the law department, charged with the duty of keeping the clerical run of non-payment of taxes, so that action in directing foreclosure on account of such non-payment could be taken. But when the assistant solicitor of the company assumed, by referring to the books, to be able to find the information there, when the fact inquired for was made a basis of dealing with the company, a complete estoppel in pais arises against the company, so far as that transaction is concerned (Wickersham v. Lee, Alb. L. J., March 24, 1877, p. 234; Leslie v. Knickerbocker Life Ins. Co., supra). But leaving aside all this, the defendant contends that a conditional request by a surety that the creditor collect, is as ample for his protection, so soon as the condition is fulfilled, as an unconditional one. Admitting that the company was under no equitable obligation to protect the defendant by an immediate foreclosure when he made his request, because of this condition, the' obligation surely did arise in March, 1875, when the fact of the existence of taxes and assessments was brought to their attention. It was Mr. Harding’s specific instruction to insist on prepayment of taxes and assessments, as a condition precedent to discontinuance of foreclosure proceedings. “It is to be inferred that this would not have been departed from by him as a subordinate, unless by affirmative and particular direction from superiors, and for some particular reason and with a definite pur
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pose ” (Leslie v. Knickerbocker Life Ins. Co., supra). Mr. Harding testifies himself, that he did not forget his instructions, but made inquiry under them, and received special instructions to waive the general rule. For this instruction he must have gone to the law department, and either to Mr. William G. Davies himself or to his immediate superior, Judge Palmer. This brings the knowledge that the contingency mentioned by the defendant had arisen, not only to the company, but with moral certainty to the very officer of the company to whom defendant had applied. Then, with this knowledge, and after this expression of his desire on the part of the defendant, this company not only neglects to sue for defendant’s protection, but overrides its own general instructions, for the indulgence of a stranger, at the defendant’s expense. The proof is clear that the premises were at this time abundant in value to have paid the bond and all the tax and assessment liens. It is contrary to all justice and equity that the plaintiffs now, after this depreciation in value has occurred, may still hold the defendant for a deficiency arising solely from this late depreciation (Johnson v. Corbett, 11 Paige, 265 ; 1 Story Eq. §§ 325, 326).
III. The transaction between the company and Mr. Sage constituted an ag'reement not ■ to foreclose the mortgage in suit for an appreciable period of time, and was founded on a valid and binding consideration. There was a total of $3,217.50 paid by Mr. Sage to the plaintiffs or for their use, for which they had against him no possible claim in law or morals, unless it was in consideration for an agreement to delay foreclosure proceedings. That there was an agreement on the part of the company is abundantly proved. The plaintiffs sent the mortgage to their attorneys to be foreclosed. Mr. Sage wanted a delay in these proceedings. He went to the company-about it and to the company’s
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attorneys, having some conversation, as the result of which he paid his money, and the mortgage was returned to the company not foreclosed, and, with their consent, proceedings stayed for a year. In Mr. Sage’s language he “ paid the money'for the purpose of getting time.” If the company, on March 13, 1875, had gone right on with their foreclosure, to which Sage as second mortgagee was a necessary party, would not this payment under these circumstances have been a good defense and have justified an answer on his part ? A parol agreement to extend time of payment of a sealed instrument is valid (Burt v. Saxton, 1 Hun, 551 , and cases cited). This is applied directly to a case of mortgage foreclosure, and a parol agreement for time for a money consideration paid by a person other than the bondsman, but who was a necessary party defendant, is upheld as a good defense to an action of foreclosure (Dodge v. Crandall, 30 N. Y. 294 ; Hubbard v. Gurney, 64 Id. 457). The agreement may be implied and not express, and will discharge the surety (Beard v. Root, 4 Hun, 356 ; 41 Super. Ct. 235 ; Ducker v. Rapp, 67 N. Y. 464 ; Place v. McIlvain, 38 Id. 96). It is not necessary that a definite day be set to which time is extended (Brooks v. Wright, 13 Allen [Mass.] 72). But even if a definite time were necessary, we have it here, for Mr. Sage wanted time until his counsel could perfect certain proceedings then instituted. “ Id certwrn est, quod cerium, reddere potest.”
IY. The action of the company in regard to this mortgage, from the time of its maturity in June, 1870, has been so utterly in disregard of the bond of Bavies that it is evident that they had given up all claim against him long before commencement of this action ; and the company has been so entirely indifferent to his rights and interests that they must, in equity, be decreed to have waived all claim of a personal nature. Adding
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this to the fact of the great delay in this action, the defendant claims that the case comes under the equities suggested in Black River Bank v. Page, 44 N. Y. 453 ; Barhydt v. Ellis, 45 Id. 107, and cases cited ; North Am. Fire Ins. Co. v. Mowatt, 2 Sandf. Ch. 108 (marginal).
Turner Lee & McClure, attorneys, and Herbert B. Turner, of counsel, for respondent, urged:—I.
When Davies conveyed the mortgaged premises to Cudlip, and Cudlip accepted the deed, in which it was recited that he, Cudlip, assumed and agreed to pay off the mortgage in question as part of the consideration of the conveyance, the relation of principal and surety was created between them. Davies became the surety and Cudlip the primary debtor, as far as their relations to each other were concerned ; and, if Davies had been called upon to pay the amount due on his bond, he might have looked to Cudlip to idemnify him (Blyer v. Munholland, 2 Sandf. Ch. 478 ).
II. But the above proposition simply states the relations of Davies and Cudlip to each other. As far as their relations to the plaintiff are concerned,. they remained and are equally bound. Davies is bound, being the original debtor. The plaintiff might have relinquished its lien on the real estate and sued him on • his bond. It preferred to pursue the ordinary course— foreclose the mortgage, sell the land, and enter a judgment for the deficiency against him. It was not bound to enter such judgment against him or any other party. Cudlip, by accepting the deed, containing an agreement on his part to pay the mortgage, became liable to the plaintiff to do so. The mortgagee is entitled to claim the benefit of this promise made to its original debtor, by virtue of the doctrine of subrogation in equity, by which a creditor is entitled to all collateral . securities which a debtor has obtained, to enforce the
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primary obligation. (Trotter v. Hughes, 12 N. Y. 78 ; Rawson v. Copeland, 2 Sandf. Ch. 257 ). The agreement between Cudlip and Davies, by which the former assumed to pay Davies’ debt to the plaintiff, is a personal contract made between them for the benefit of the plaintiff; and the plaintiff might have maintained a personal action against Cudlip without foreclosing the mortgage, or joining Davies as defendant. This is on the principle that where a person makes a contract with another for the benefit of a third party, being himself bound, the third party may enforce its performance (Burr v. Beers, 24 N. Y. 178 ; Lawrence v. Fox, 20 Id. 268 ).
III. A surety will not be discharged unless, 1. The creditor is guilty of an act of omission, notwithstanding the request of the surety, and the surety sustains damage in consequence; or, 2. The creditor makes some agreement without the consent of the surety, which changes the terms of the original contract. (1) The defendant Davies, in order to claim relief from his obligation in consequence of the neglect or delay of the plaintiff in foreclosing the mortgage, must show a full and explicit notice or request to the plaintiff to proceed, without delay; and improper neglect, on the plaintiff’s part to do so ; and that thereby the recovery of the debt has been rendered impossible (Valentine v. Farrington, 2 Edw. 53 ; Warner v. Beardsley, 8 Wend. 194 ; Hoffman v. Hurlburt, 13 Id. 377). Or he may show that the plaintiff’s means of recovery have been partially impaired only, in which case his obligation is impaired only to the extent of the loss (Barhydt v. Ellis, 45 N. Y. 107 ). The rule which places it in the power of a surety to compel the creditor to collect the debt, by demanding that it be done, is now too firmly settled in this State to be questioned. But the history of the law in this respect shows that the rule should be restricted within close bounds, for it was
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adopted against the opinion of some eminent judicial minds, and is not adopted to any extent in other States. The more general rule is that the surety must himself take measures, by bill in equity or otherwise, to free himself from his obligation. The history of the law in this State, on this subject, can be gleaned from the cases : Pain v. Packard ( 13 Johns. 174 ); King v. Baldwin ( 2 Johns. Ch. 554 ; S. C., 17 Johns. 384 ) ; Herrick v. Borst ( 4 Hill, 650 ). This doctrine of the Hew York courts has been expressly repudiated in other States. In Massachusetts, in the case of Fryer v. Jennings ( 4 Pick. 382 ). In Maine, in the cases of Leavitt v. Savage ( 16 Me. 72 ); Freeman’s Bank v. Rollins (13 Id. 202 ); Paige v. Webster (15 Id. 249); see also, Barker v. Marshall ( 16 Vt. 522 ) ; Ward v. Vass ( 7 Leigh, 135 ); Shaw v. McFarlane ( 1 Ired. 216 ); Johnson v. Planters’ Bank ( 4 S. & M. 165 ). We thus see, that even under the most lenient and indulgent view of the matter which the courts have ever taken, the surety must explicitly and formally request the creditor to sue before he can be discharged, and that this rule of law is confined to this State, and was introduced here with the admission that it was a “novel and alarming doctrine,” and in opposition to the expressed opinion of some of our greatest judges. As matter of fact, Davies made no such request. He was content to let the matter remain as it was, so long as he was not disturbed. He alleges a request in his answer, but has wholly failed to prove it. (3.) The defendant Davies alleges in his answer, that the plaintiff extended the time for the payment of the mortgage. Ho evidence of any such extension was even offered at the trial. To substantiate such a defense, the defendant must show that the plaintiff voluntarily and without his consent placed itself in such a position that it could not foreclose, (a.) To support any such extension there must exist some new consideration not contemplated in the original obliga
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tion. No mere payment made on account of the mortgage, can, under any circumstances, constitute any such consideration (Pabodie v. King, 12 Johns. 422 ; Hall v. Constant, 2 Hall, 205 ; Draper v. Romeyn, 18 Barb. 166 ; McLemore v. Powell, 13 Wheat. 554 ; Oxford Bank v. Lewis, 18 Pick. 458 ; Blackstone Bank v. Hill, 10 Id. 128 ; Freeman’s Bank v. Rollins, 13 Shepley, 203 ; Central Bank v. Willard, 17 Pick. 150 ). It clearly follows from these cases, and from the settled law on the subject, that the vital element of any continuance of a debt which will discharge a surety must be its postponement for some specified time within which no payment can be made or received, and in the absence of this element, an agreement to defer, which is not binding, and a postponement in accordance therewith, or partial agreement, or the payment of interest in advance, or even the concurrence of these, will not discharge the surety. A fortiori there is no extension in the present case, in which not even a single one of these circumstances relied on as a valid defense in the cases above cited, occurs, (b.) Mere indulgence granted by a creditor to the principal debtor, however long continued, and whatever the consequences, will not operate to discharge the surety (Schroeppell v. Shaw, 34 N. Y. 446 ; Thompson v. Hall, 45 Barb. 212 ; Pollock v. Hoag, 4 E. D. Smith, 473; Dorlin v. Christie, 39 Barb. 610 ; Albany Dutch Church v. Vedder, 14 Wend. 166 ; Hunt v. Bridgam, 2 Pick. 581 ; 2 Pars. on Contr. 24, and note, where the cases are collated ; People v. Jansen, 7 Johns. 336 ; Wright v. Simpson, 714, 734 ; Trent Navigation Co. v. Harley, 10 East, 34; Dawson v. Lawes, 23 E. L. & E. 374; Hunt v. U. S., 2 Gall. 32 , 34; Oxford Bank v. Lewis, 8 Pick. 458 ; Remsen v. Beekman, 25 N. Y. 552 , 557 ; Sprague v. Bank of Mt. Pleasant, 10 Pet. 257 ).

The conveyance

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of the land by the defendant Davies to Cudlip, and the agreement by the latter to assume and pay the mortgage, created the relation of principal and surety between them. The effect of this transaction was, in equity, to make the land the primary fund for the payment of the mortgage debt, and to place Davies in the attitude of surety only thereafter (Johnson v. Zink, 51 N. Y. 333 ; Jumel v. Jumel, 7 Paige, 594).

The subsequent conveyance from Cudlip to Adriance, although the latter also assumed the payment of the mortgage, did not affect Davies’ relation as surety. It gave him the additional advantage of the agreement of Adriance. This being the relation between Davies and the grantees of the premises, of which plaintiff had notice, although Davies still remained liable on the bond accompanying the mortgage, yet the plaintiff was bound in its dealings with the grantees and others, in regard to the mortgage debt, to do nothing to the injury of Davies as surety.

A surety has a right to request the creditor to proceed without delay in the collection of the debt, and if the creditor, notwithstanding such request, neglects to proceed, and the recovery of the debt thereafter has become by such delay impossible, the surety would be discharged, or should it appear that the creditor’s means of recovery have been, by delay after such request, only partially impaired, then his obligation against the surety is impaired to the extent of the los 3 only (Paine v. Packard, 13 Johns. 174 ; King v. Baldwin, 2 Johns. Ch. 554 ; S. C., 17 Johns. 384 ; Warren v. Beardsley, 8 Wend. 194 ; Herrick v. Borst, 4 Hill, 650 ; Colgrove v. Tallman, 67 N. Y. 95 ). The reason for this conclusion being that the creditor is under an “ equitable obligation” to obtain payment from the principal debtor, and the surety can by a “full and explicit request” compel the creditor to

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proceed to recover the debt, and his refusal to do so will exonerate the surety (King v. Baldwin, supra).

The learned judge before whom the trial was had was requested by the defendant’s counsel to find in substance as facts, that in November or December, 1874, the defendant Davies, at the plaintiff’s offices, informed William Gr. Davies (who was attached to the law department of the plaintiff’s business) that he was anxious about the value of the security, and desired to have the mortgage foreclosed, if any taxes or assessments upon the premises were unpaid; that thereupon William Gi. Davies made an examination of the books and papers of the company, and assured the defendant that there were no taxes or assessments unpaid, or interest in arrear ; that defendant informed William Gr. Davies that if any taxes or assessments should be unpaid and in arrear, he wished the mortgage forthwith foreclosed for his protection, which William Gr. Davies, thereupon, and at several times thereafter, assured him should be done.

The learned judge declined to find these facts, and the defendant excepted.

We have examined the case to ascertain whether the judge before whom the witnesses were examined was justified in refusing to find the facts he was requested.

From such examination, we cannot conclude that the judge was in error in declining to find any portion of what was requested of him which is material to the just disposition of the case. And the case in that respect may well rest upon his decision. William Gr. Davies, who is a nephew of the defendant, and who was frequently consulted by him, in the plaintiff’s offices, and elsewhere, in respect to Ms mortgages, has testified, that he could not have informed the defendant that there was nothing against the property, when interest was unpaid, the December interest being in

p. 186
arrear, and that the entries of payment of interest were promptly made in the books ; that the company’s books did not at that time show what taxes or assessments were against the property ; that he had not the information to give upon that subject; that he might have said that they knew of none; that he did not understand the defendant to direct or request that the, mortgage should be foreclosed ; that he very probably made a remark that he wanted it done if taxes and assessments accumulated.

Conceding that the plaintiff requested that the viortgage should be foreclosed, if taxes and assessments accumulated, and should be in arrear, does that amount to a “full and explicit” request to the plaintiff, to foreclose the mortgage ?

The request, it must be observed, was made of a person, who, under the evidence, had no duty in his relations to the plaintiff in that direction.

The president and finance committee of the plaintiff were the persons who had the control of such matters ; they directed the foreclosure of the company’s mortgages. The person of whom the request was made was neither president nor member of that committee. He had no authority to direct or order the foreclosure of a mortgage.

When a request of this nature is to be made of a corporation, to be effective, it should be formally made, and communicated to one charged with the subject.

This is the more important, as a disregard of the request is followed by a release of a security. In large corporations, there must needs be a systematic distribution of duties among numerous officers and agents. And persons seeking to charge a corporation with notice to, or with acts or omissions of its agents, must see to it that the notice is communicated to, or that the act or omission proceeds from a person charged with a duty in the premises. By way of illustration,

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a communication made to the discount clerk of a bank with respect to matters clearly not under his control, but within the specific duty of the notary, paying or receiving clerk, could not well be considered a good notice to the bank, by which it would be absolutely bound.

When a corporation is engaged in making investments of money, the duty of calling in loans is quite as important as that of making them. The decision in'each instance must rest in responsible hands. The plaintiffs intrusted this duty to its chief officer and principal committee, with whom the defendant, who was not a stranger to the plaintiff’s offices, should have formally communicated, and especially so, as his request to foreclose was conditional, accompanied with the added service, care and judgment, with respect to taxes and assessments.

But again: the defendant could not, through a notice to or request of William Gv Davies, cast upon the plaintiff the duty of watching taxes and assessments, so as to guard against their accumulation.

That was a matter about which the defendant might himself have inquired, as his interest prompted, at the proper municipal offices where reliable records are kept.

The evidence shows that the books of the company did not, at that time, disclose what taxes and assessments were returned against the property, and that the plaintiff had in fact no information to give upon that subject, and could only obtain it by an inquiry at offices equally open to the defendant.

The person in the plaintiff’s employment with whom the defendant communicated, according to his testimony, was not assigned to any duty of the nature of the one sought to be imposed by the defendant.

He was the assistant to the solicitor of the company in its law department. This department exam

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ined vouchers, the surrender of death claims, and had the supervision of all litigated business and general direction of it. He had no right, as assistant to the solicitor, to order the foreclosure of a mortgage for non-payment of taxes.

Had William G-. Davies, therefore, chosen to act in the direction requested, it must have been for the defendant, and in his interest, and for his omission, if any, the plaintiff is not liable.

But it is urged by the learned counsel for the defendant, that the plaintiff extended for a time the payment of the mortgage, at the request of Mr. Sage, the owner of a subsequent incumbrance. It appears that the plaintiff, in January, 1875, was about to foreclose the mortgage, and had placed the same in the hands of its attorneys for that purpose.

At this stage Mr. Sage came forward and paid the interest in arrear, and the expenses of the preliminary proceedings, and the mortgage was returned by the attorneys to the company. Mr. Sage, in August following, paid another installment of interest on the mortgage.

He testified that he was desirous of getting an opportunity to investigate the value of the property, and to that end made those payments. It is not shown that any agreement was made to extend the payment of the mortgage for a day.

The plaintiff simply forbore the collection of the debt which was due. However such forbearance of the creditor may prejudice the surety, it will not of itself have the effect to discharge him.

A naked promise to forbear, if one was made, would work no change in the antecedent relations of the parties.

The distinction between an agreement to give time, and time given irrespective of an agreement is important.

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A creditor may refrain from taking proceedings, or abandon those he has commenced, provided he releases no lien, without discharging a surety (2 Am. Leading Cases [Hare & Wallace] notes to Pain v. Packard, and King v. Baldwin, pp. 390, 394).

There is nothing to show that the plaintiff was restrained by any agreement, for any length of time, from collecting the mortgage, and the defendant could, notwithstanding the payment of the interest in arrear by Sage, have at any moment paid the debt, and have been subrogated to the plaintiff’s rights and remedies under the mortgage (Calvo v. Davies, in the court of appeals, per Andrews, J.).

The manuscript opinion in that case has been handed up with the papers.

This opinion fully recognizes the position and rights of the defendant Davies as surety, upon the facts appearing as above stated.

The judgment for a deficiency in this case is doubtless owing, in a large degree, to the accumulated taxes and assessments upon the premises, which were, by the judgment of the special term, directed to be paid out of the moneys arising on the sale of the land.

Some of these assessments accrued as early as the year 1872, and a considerable portion of the whole was a matter of record in the proper city offices in December, 1874, when the defendant had the interview with the assistant solicitor in the office of the company.

However unfortunate the result may prove to the defendant, we cannot think that the case would justify this court in casting upon the plaintiff the burden of paying these liens.

If the plaintiff was at all at fault in allowing them to accumulate through its forbearance to foreclose when the assessments first appeared, the defendant is not wholly free from responsibility. If the existence of these liens depreciated the security of the mortgage,

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and furnished a reason for its foreclosure, the defendant, whose pecuniary interest in the matter was large, could have readily acquired a knowledge of them, and by a seasonable and explicit request to the plaintiff, could have secured himself against any loss whatever.

We fail to discover any error in the proceedings on the trial or in the judgment.

Judgment affirmed with costs.

Sedgwick and Speir, JJ., concurred.

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