Barman v. Carhartt

Campbell J.: The only question of importance in this case is, whether under the guaranty of collection the guarantor could be held until resort had been made to the mortgage which was given as collateral to the note and referred to in it. By this mortgage a special fund was set apart, out of which, so far as it went, the holder of the note had secured to him the means of collecting it. We do not think it reasonable to assume that, in any such case, a guaranty of collection refers merely to the personal responsibility of the debtor. When with the guaranty itself the guarantor furnished the means of obtaining payment, in whole or in part, and those means have been attached to the debt itself, and cannot be severed from it, the parties must be held to look to the entire transaction, and to contemplate a resort ito those means. Any other rule would be at variance with the object of such securities. Although a mortgage is in a strict sense merely collateral to a debt, yet it is generally regarded as forming its chief value, and persons usually contract with that idea. A person guaranteeing the collection of siich a debt, and assigning the mortgage with it, must, we think, be held to contemplate a collection by means of the mortgage, and not to anticipate that he will be looked to until the creditor has resorted to that. The sheriff’s deed is no evidence of a regular or legal foreclosure. The guarantor has a right to have the proper steps taken in due form of law, in order that bidders may be safe in purchasing, and that the property may not be sacrificed. The regularity of the proceedings becomes important', therefore, in determining the responsibility of the guarantor; and the sheriff1’s deed is no more evidence of it than an execution is of the proceedings to obtain judgment. The statute requisites must be shown to have been complied with so as to make the sale lawful. [341] The judgment below must be reversed, with costs in both Courts. Manning and Cheistianoy JJ. concurred. Martin Ch. J. was absent. Mr. Walker asked that the Court remand the cause for a new trial, that the plaintiff may have an opportunity to prove the correctness of the foreclosure proceedings. But the Court held that, on the decision of a case made after judgment for review upon the facts, a new trial could not be awarded. The position of the case in this Court is similar to that of a case heard in Chancery on pleadings and proofs, and appealed to this Court. The facts are supposed to be all before the Court, and the decision upon them disposes of the case. In this case an order will be entered simply reversing the judgment below, so as not to preclude the question of the right of plaintiff to bring a new suit.