Tuohy v. Woods
Before: McFarland
Synopsis
Promissory Note—Collateral Security for Mortgage Debt—Extension of Time to Grantee—Release of Sureties.—Sureties who executed and deposited a note as collateral security for the payment of another note secured by mortgage, are released and exonerated from liability by an extension of time given by the mortgagee to a grantee of the mortgagor, who had assumed payment of the mortgage debt.
Id.—Assumption of Mortgage Debt—Privity of Grantee—Surety-ship.—A grantee of the mortgagor who assumes payment of the mortgage debt is not a mere stranger to the principal obligation, but becomes the principal debtor, and his grantor becomes his surety; and the doctrines concerning suretyship must control the dealings between the mortgagor, mortgagee, and such grantee.
In.—Consent to Extension of Time—Pleading—Negative Averment in Answer—Burden of Proof.—A negative averment in the answer of the sureties to a complaint on the collateral note that time for payment was extended to the grantee of the mortgagor, “without their consent,” is unnecessary, and the absence of such consent need not be proved by them. It is sufficient for them to show that the principal contract was «hanged; and the burden of proof is upon the plaintiff to show that it was changed with their consent.
Id.—Extent of Injury to Sureties Immaterial.—The extent to which the sureties were injured by the extension of time on the principal obligation is immaterial, and is not a legitimate subject of inquiry in an action to enforce their liability.
Appeal—Immaterial Findings.—Immaterial findings which do not affect the correctness of the judgment, though erroneous, are not ground for reversal of the judgment.
McFARLAND, J. This is an appeal by plaintiff from a jndg[666]ment in favor of defendants, and from an order denying a motion for a new trial.
The action was brought upon a promissory note, in the usual form, for five thousand dollars and interest, dated September 26, 1890, payable one year after date to plaintiffs or order, and sigaed by defendants. In their answer defendants, after some denials and averments not necessary to be here considered, allege that the note sued on was given solely as security for the payment of the principal and interest of a certain other note for eighty-two thousand five hundred dollars and interest, to be made by one John Herd, Jr., to the plaintiff, and which note was so made by Herd to plaintiff, dated October 31, 1890, and payable on or before October 1, 1894, which note was secured by mortgage given by Herd to plaintiff upon certain lands; and that the plaintiff afterward extended the time for the payment of said note for a period of more than two years, and that by such extension defendants were released and exonerated from the payment of the note here sued on—they by signing said note becoming merely sureties for the payment of said note of eighty-two' thousand five hundred dollars. The court found that the note sued on was signed by defendants merely as sureties, that the plaintiff did extend the”time for the payment of the said note and mortgage, and that thereby the defendants were exonerated and their obligation as such sureties satisfied and extinguished.
The evidence was sufficient to justify the said findings of the court. At the time the note sued on was signed by defendants there was also a written agreement made by the plaintiff and the defendants to the effect that the note should be placed in escrow with the Bank of Visalia for so long as the annual interest on the eighty-two thousand five hundred dollar note should be paid, and that if the said interest should not be paid, “or if at the maturity of said last-named note full principal and interest due thereon be not paid, then said Bank of Visalia shall in either event deliver said first-named note to John Tuohy, or order, or otherwise to be returned to said Woods Brothers.” This written agreement, together with other testimony, warranted the court in finding that defendants, by signing said note, became merely sureties as aforesaid. There was also sufficient evidence to warrant the finding that plaintiff extended the payment oi [667]
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