New York Life Ins. Co. v. . Casey

Gray, J. This appeal presents the question whether the defendant, Casey, standing as surety for the payment of the mortgage debt, was discharged' from his liability upon liic bond by the transactions, which took place between the plaintiff and Uordenschild. If such was their effect, of course, a judgment for any deficiency arising upon a sale of the mortgaged premises could not be entered against him, as was the case here. The finding of fa,ct by the trial court was that there was no agreement on the part of the plaintiff to *385 change the rate of interest upon, or to extend the time of payment of, the bond. With respect to so much of the question as turns upon the existence of any agreement by the plaintiff to extend the time of payment, I concur with what was said below by the dissenting justices, through Mr. Justice Ieobaham, and with what is said by Judge Webeee in his opinion, and I shall not continue that discussion. I agree with the view that there was, in the evidence, sufficient to sustain the finding that no such agreement was made out and, therefore, that it was error for the Appellate Division to reverse upon such a ground. But I am, also, of the opinion that the reversal by the court below cannot be sustained upon the other ground, that there was an agreement to change the rate of interest, whereby Casey’s liability was discharged. The finding of fact is to the contrary and to affect its conclusiveness, upon this review by us of the order of the Appellate Division, we have nothing in the findings of the decision of the trial court, unless it be found in the language, that “ the fact that plaintiff accepted a different rate of interest than that provided in the bond and mortgage does not prove an agreement to change the rate of interest.” It is not pretended that there was any evidence of the making of such an agreement, other than in the action of the plaintiff’s finance committee, in ordering an increase in the rate of interest, during the six months’ interest period from July to January, to be paid from October 1st, and in the payment by the owner of the mortgaged property of the increased rate for the last three months of that interest period. Does that prove any agreement and, if it should be considered as tending to prove one, what sufficient consideration was there ? It is clear that an agreement, which was unenforceable for want of any consideration, would not discharge the surety. The plaintiff did not bind itself to do anything in consideration of receiving an increased interest and the defendant does not appear to have received any benefit. There were no mutual promises disclosed. If hiordenschild chose to pay more than the bond and mortgage obligated him to pay, in the way of *386 interest, that would not discharge Casey; if there was no valid agreement changing the contractual obligation. The court is not to imply some agreement, merely because there was a consideration, upon which one might have rested. The agreement, which was to affect the principal contract, must be proved clearly. The plaintiff might have covenanted with Hordenschild to extend the time of payment, or might have granted some indulgence, upon such a consideration; but it did not do so and that is what the- trial court found as a fact. I- am quite unable to agree in the view that the action of the plaintiff’s finance committee and the voluntary payment by the debtor, under the circumstances disclosed, furnished the facts for an inference of an agreement. The debtor "was not bound to pay at the increased rate for the three months of ■the interest period and he came under no apparent obligation to pay it thereafter. As matter of fact, the action of the finance committee appears to have been annulled and the fixed contract rate re-established for the ensuing interest period. For the reasons stated, I think that the reversal of the judgment of the trial court was erroneous and I advise that the judgment of the Appellate Division should be reversed and that the judgment of the Special Term should be affirmed ; with costs to the appellant in this court and in the Appellate Division.