Sherwood v. Dunbar

Mr. Justice Terry delivered the opinion of the Court. Mr. Justice Heydenfeldt concurred.

This is an action by one of the makers of a joint and several promissory note, against his co-maker for contribution.

Plaintiff and defendant executed their joint and several promissory note, in favor of S. J. Field, for the sum of $1,552, with interest secured by mortgage on certain property. Field assigned the note and mortgage to one Benham. Afterwards, to enable the parties to sell said property, Field and Benham entered a satisfaction and discharge of the mortgage on the record, though the debt was not paid. The property mentioned in the mortgage was sold for $800, which was paid to Benham and credited on the note. Plaintiff advanced money and performed labor for Field in the years 1851 and 1852. On the 10th of April, 1852, a settlement was had between the plaintiff and Field, and the amount due from Field to plaintiff was appropriated to the payment of said note, which was, at the time, cancelled and delivered to plaintiff on his executing a release of all demands against Field.

On the trial, plaintiff asked the Court to instruct the jury : 1st. That the .entering a discharge of the mortgage, by the mortgagee, does not, of itself, discharge the debt, but merely the security. 2d. That the Statute of Limitations did not begin to run until the settlement between Field and Sherwood, and the execution of the release and delivery of thé' note to Sherwood.

These instructions were pertinent and legal, and should have been given as asked. The mortgage was merely a security for the note, and there is no doubt that a party can release the security without affecting the liability of the debtor on the note.

In the case of Fleming v. Parry, the Supreme Court of Pennsylvania held that “ A bond and mortgage, taken for the same debt, though distinct securities, possessing dissimilar attributes, and subject to remedies which are as unlike as personal actions and proceedings in rem, [55]are, nevertheless, so far one, that payment of either discharges both, and a release or extinguishment of either, without actual payment, is a discharge of the other, unless otherwise■ intended by the parties. As it is competent for parties to adjust their securities, in the first place, to their mutual satisfaction, so they may alter and change them at pleasure—give up one and retain the other, or cancel all and substitute something new, provided no other interests have intervened to be affected by what they do.”