Occidental Life Insurance Co. v. McCracken

THE COURT.

This was an action to foreclose a mortgage on real property. Judgment of foreclosure was entered providing for a deficiency judgment against appellant in case the sale did not satisfy the judgment. Appellant does not

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complain of the judgment decreeing a foreclosure but appeals from that portion which provides that the respondent recover from him a deficiency judgment.

In 1926 Appellant Courtney McCracken executed and delivered to one Stevenson a promissory note and to secure the repayment thereof executed a mortgage- upon certain real property. Through various transfers the note and mortgage, before maturity, became the property of Occidental Life Insurance Company, who was the owner and holder at the time this action was brought. Also the mortgaged premises were, shortly after the execution of the mortgage, sold and conveyed to defendants herein, the deed of conveyance reciting that the real property therein described was conveyed subject to the mortgage.

Shortly before maturity demand for payment was made and a small remittance paid on account, but the note remained unsatisfied. After maturity defendants wrote to the insurance company, the holders of the note and mortgage, that they were unable to pay the note in full but could pay $200 on account and $30 a month until the note was discharged. This was accepted by the company and the debtors made several payments, including monthly interest payments, computed at the rate of 6 per cent per annum. Later defendants found they could not keep up the payments and foreclosure was instituted and the judgment, including a deficiency judgment against McCracken, was entered. It is the claim of McCracken that he was released from personal liability on the debt by the extension of time given without his consent by respondent to the subsequent holder of the land.

There is no doubt, and it is so held in

Braun

v.

Grew,

183 Cal. 728 [192 Pac. 531], under facts very similar to the instant case, that where a vendee takes land subject to a mortgage, the land becomes, so far as the mortgagor is concerned, as between him, the creditor, and the vendee, primarily liable for the payment of the debt, and the relation of principal and surety arises, the mortgagor being the surety and the land the principal debtor, and he is entitled to all the protection which the law gives to sureties. A surety is exonerated (sec. 2819, Civ. Code), if by any act of the creditor, without the consent of the surety, the original position of the principal is altered in any respect. Under these prin