Tuska v. Eisner — 53 N.Y. Super. Ct. 442

Majority

p. 442

MORRIS TUSKA v. SAMUEL EISNER, et al., as Executors, &c.

Headnote

Guaranty of mortgage—Extension of time to principal debtor—What not waiver by guarantor.

Defendant’s testator duly guaranteed in writing the payment of a certain bond and mortgage. To an action on the guaranty, the defense was interposed that an extension of time had been granted to the mortgagor. There was testimony in plaintiffs behalf, to the effect that a brother of plaintiff had a conversation with the testator in which, in answer to a question, the latter said he would guarantee “ for two years longer for these bonds,” and that thereupon the extension of time in question, was granted for two years.

Held., insufficient to show either anew and valid contract of guaranty, or an assent to the extension of time granted to the mortgagor.

Before Sedgwick, Oh. J., Truax and O’Gorman, JJ.

Decided July 2, 1886.

This case comes before the court pursuant to an order made by the judge at trial term, directing a verdict of $24,382.91, in,favor of the plaintiff, subject to the opinion of the court at general term, both parties waiving all exceptions.

The facts are as follows : On September 2, 1870, one Koehler holding the legal title to certain premises, gave his bond and a mortgage upon said premises (which were then subject to prior mortgages for $30,000) to one Schwartz for $15,000 loaned thereon, payable on or before September 2, 1872. "On April 15, 1873, said bond and mortgage became the property of the plaintiff by assignment to plaintiff which was then accepted by him, and the time of payment duly extended for the term of two years from that date, upon the faith, and in consideration of an agreement, in writing, whereby one Henry Eisner simultaneously guaranteed the payment of said bond and mortgage. Between April 8 and 15, 1875, one Jonas Tuska, a brother of plaintiff, at his (plaintiff’s) request, called upon said Eisner at his place of business, at which

p. 443

interview, said Tuska testified the following conversation was had: “I asked Mr. Eisner if he will guarantee for two years longer for these bonds. Q. You asked Mr. Eisner if he would guarantee for two years more the money on this mortgage ? A. Yes ; and he said, ‘Yes.’ Q. Did you say anything to Mr. Eisner about your having talked with Mr. Koehler? A. No.” Thereupon, on the 15th of April, 1875, the plaintiff entered into a written agreement with said Koehler to extend the payment of said bond and mortgage of said Koehler for the said further term of two years from that date. The mortgaged premises were subsequently sold under the prior mortgages, and a deficiency remained. Neither Koehler nor Eisner paid the mortgage in suit or the interest thereon since April 15, 1875. Henry Eisner died January 29, 1882, and on February 7, 1883, plaintiff presented to the defendants, as his executors, plaintiff’s claim for the principal money of said bond and mortgage and the interest thereon from April 15, 1876, which claim was rejected by said executors, and this suit was begun for the recovery of the debt.

Johnson & Tilton, and Albert Matthews, for plaintiff :

—It was shown by undisputed evidence that for the benefit of Koehler (his associate in ownership of the mortgaged premises), the said Henry Eisner, upon the request of the plaintiff, did, at the proper time (and beforehand) assent to the extension of the payment of the bond and mortgage for the further term of two years from April 15, 1875 ; and in substance and effect also did agree that his guarantee should continue to run, and should not be forfeited or waived by reason of such extension being given by the plaintiff to accommodate said Koehler. Whatever words plaintiff’s agent may have employed, Henry Eisner must have known what he (Eisner) was asked to assent to, and to what he was assenting. He must be held to be bound by his word in the sense he believed his applicant understood him. That is the standard rule both of morality and law (Barlow v. Scott, 24 N. Y. 40 ). Such assent of a surety may be

p. 444

proved by parol; or it may be inferred from facts and circumstances ; and is equally effectual in either case to charge the defendants (Lafarge v. Herter, 11 Barb. 159 ; Wright v. Storrs, 6 Bosw. 611 ; Wright v. Storrs, 32 N. Y. 691 ; Remsen v. Graves, 41 Ib. 471; Ducker v. Rapp, 67 Ib. 464 ; Ross v. Hurd, 71 Ib. 14 ; Wyde v. Rogers, 12 Eng. Law & Eg. R. 162; Woodcock v. Railway Co., 21 Ib. 285 ; Solomon v. Gregory, 4 Harrison [N. J.] R. 112 ; Crosby v. Myatt, 10 N. Hamp. 318 ; Treat v. Smith, 54 Maine, 112 ; Adams v. May, 32 Conn. 160 ).

George P. Avery, and Bichard S. Newcombe, for defendants

:—I. An extension of time to the principal without the consent of the surety, discharges the surety, and this although the surety has sustained no damages by such extension (Calvo v. Davies, 73 N. Y. 211 ; Miller v. McCan, 7 Paige, 451; Huffman v. Hulbert, 13 Wend. 377 ; Tucker v. Rapp, 67 N. Y. 464 ; 11 Paige, 11). In cases of suretyship, the contract is the measure of liability, and the surety’s obligation should be construed strictly and favorably to him, so far as warranted by the terms employed (Ward v. Stahl, 81 N. Y. 406 ; Wood v. Fisk, 63 Ib. 245 ; D. L. & W. R. R. Co. v. Burkhard, 36 Hun, 57 ).

II. It is not a sufficient consent in law, when a person goes to a guarantor and asks him if he “ would ” continue a guaranty for two years, to make it a binding contract between the parties extending the payment of the debt for two years, when the grantor simply says “yes.” This conversation at most only amounted to a consent on Eisner’s part that he would be willing to make a new agreement giving further time for the payment of the mortgage, and being an agreement to do something in the future was void for uncertainty (Buckmaster v. Consumers’ Ice Co., 5 Daly, 313 ; Holtz v. Schmidt, 59 N. Y. 256 ). That this is not a sufficient conversation upon which an action can arise, see Brown v. N. Y. Central R. R. ( 44 N. Y. 83 ); Holtz v. Schmidt (supra), see also, Ridgway v.

p. 445

Wharton (6 H. L. Cas. 268); Dietz v. Farish ( 79 N. Y. 523 ).

III. If it should be held that there was a sufficient agreement made by Eisner to extend the guaranty for two years, it was void as being an agreement which by its terms was not to be performed within one year from the making thereof (2 R. S. 135, § 2). The alleged agreement to extend the guaranty for two years from April 15, 1875, by its very terms was to endure for a longer period than one year, and hence that this case does not come within Trustees v. B. H. Ins. Co. ( 19 N. Y. 305 ), and kindred authorities. The contract was void (1 Chitty on Cont. [Am. ed.] 101, note y; 1 Comyn Cont. 87; Wood on Frauds, 466 ; Broadwell v. Getman, 2 Den. 89 ).

By the Court.

In this case, defendant’s testator had guaranteed, in writing, the payment of a mortgage, which would fall due at the end of two years. This action was upon that guaranty. The defense was that the plaintiff had extended time for payment. This was sustained by the testimony. The plaintiff met this defense by showing that a few days before the extension, the brother of the plaintiff had a conversation with the testator, in which in answer to a question, the latter said he would guarantee for “ two years longer for these bonds.” This it is argued, was tantamount to a consent that the plaintiff might extend time of payment, and that this would leave the testator liable upon the guaranty on which the action was brought.

I am unable to agree with this view, There were definite words used which in themselves constituted a contract in form, but invalid, because it was verbal. The testator is not to be bound by an engagement, except it be positively proved that it was intended on his part. There was a presumption of law that he knew that the verbal arrangement he made, if he did make it, was not valid. There can be ho legal inference that he intended that a void promise by him, should be turned into an assent to

p. 446

an extension of the time to the principal debtor, and which substantially would make the void promise a valid contract. In substance the oral promise was a renewal of the guaranty.

For this reason, I am of opinion that the defendant should have judgment dismissing the complaint, with costs.

Truax and O’Gorman, JJ., concurred.

Cases cited

Barlow v. Scott 24 N. Y. 40 N.Y. p. 443
La Farge v. Herter 11 Barb. 159 N.Y. Sup. Ct. 1850-11-04 p. 444
Wright v. Storrs 32 N. Y. 691 N.Y. p. 444
Calvo v. Davies 73 N. Y. 211 N.Y. 1878-04-02 p. 444
Huffman v. Hulbert 13 Wend. 377 N.Y. Sup. Ct. p. 444
Ducker v. Rapp 67 N. Y. 464 N.Y. 1876-12-12 p. 444
Ward v. Stahl 81 N. Y. 406 N.Y. 1880-06-15 p. 444
Trustees of the First Baptist Church v. Brooklyn Fire Insurance 19 N. Y. 305 N.Y. p. 445