Case ID: iowa_127/html/0518-01.html
Source: Caselaw Access Project
Author: {"author": "McClain, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

National Surety Company v. Warren Walker, M. A. Walker and D. J. Van Liew, Appellants.
    Principal and surety: release of surety. A release of property at plaintiff’s direction from a levy under a landlord’s writ of attachment, operates to discharge from liability a . surety on defendant’s bond given to secure any judgment for rent which plaintiff might recover, and to release any other additional security given by the _ surety for the same purpose, to the extent of the value of the property released from the attachment.
    
      Appeal from O’Brien District Court.— Hon. Wm.’Hutchinson, Judge.
    Friday, December 16, 1904.
    
    Action by plaintiff, as assignee of a note for $2,800, executed by defendant Warren Walker, secured by a mortgage on certain described real estate of Warren Walker and bis wife, M. A. Walker, to tbe American Savings Bank, as security for any judgment wbicli tbe bank might recover in an action to enforce a landlord’s lien-against tbe Shaver Carriage Company. A judgment was recovered by tbe bank against tbe carriage company, and on an appeal prosecuted by tbe carriage company, with tbe plaintiff in this action as surety on tbe appeal bond, tbe judgment was affirmed. Tbe bank baying assigned tbe note and mortgage to plaintiff, this action is brought to recover tbe amount of judgment and costs, less a small payment, tbe proceeds of a claim made by tbe bank in bankruptcy proceedings in wbicb tbe assets of tbe carriage company were disposed of, and tbe proceeds distributed among tbe creditors. Tbe defense interposed was that tbe bank, while bolder of tbe note and mortgage, bad released property of tbe carriage company, wbicb it held under landlord’s attachment, more than sufficient to satisfy its claim. Defendant Yan Liew was made a party to tbe foreclosure proceedings, as claiming title to tbe mortgaged premises under a tax deed. Tbe trial court rendered judgment in favor of plaintiff against defendant Warren Walker for $1,885.92, and directed tbe sale of tbe mortgaged premises to satisfy tbe judgment, and decreed that tbe tax title claimed by Van Liew was inferior and subordinate to tbe lien of tbe mortgage. Tbe defendants appeal.
    
      Reversed.
    
    
      Warren Walker, for appellants.
    
      Berryhill & Henry, for appellee.
    
      
       Note. — This opinion is out of chronological order because of a petition for rehcarmg, and is here published as modified by the opinion overruling the petition.
    
   McClain, J.

It is not questioned that tbe note in suit was executed by Warren Walker to tbe American Savings Bank, plaintiff’s assignor, “ as additional security to tbe bank for payment of any judgment that may be obtained ” in a pending suit in wbicb tbe bank was suing tbe Shaver Carriage Company for rent, and in wbicb two landlord’s attachments had already been issued, under wbicb property of tbe value of $3,500 bad been seized. It appears that tbe note and mortgage were executed in connection with a bond signed by tbe Shaver Carriage Company (by Warren Walker, secretary) and W. T. Shaver, as principals, and by Warren Walker individually, as security for tbe payment of any judgment that tbe bank might recover against tbe carriage company and W. T. Shaver in tbe action for rent. In tbe bond it was agreed that the consideration therefor was the waiving of the levy of any further landlord’s attachments in the above-entitled cause, but in no case is the landlord’s lien waived; but it is agreed that the said landlord’s lien is still in force and effect the same as if no bond had been given, the intention being to simply waive the right to levy further landlord’s attachments until judgment shall be rendered in the above-entitled cause.” It further appears that after the execution of this bond the attorneys for the bank, in writing, directed the sheriff to release any property held under landlord’s attachment issued in the case, and that in consequence of this direction the sheriff released to the carriage company and Shaver the property which had already been levied upon under attachment prior to the execution of the bond, and that this property was in part disposed of by tire carriage company, and in part was taken possession of by the trustee in the bankruptcy proceedings, and disposed of as assets of the company.

It is to be noticed that in the bond above described, in connection with which the note and mortgage in suit were executed as a part of the same transaction, there was no stipulation as to the release of property on which levy had already been made, and which was then held blf the sheriff under the landlord’s attachment. The property thus levied upon and in the possession of tire sheriff was the property of the debtors, the carriage company and Shaver. Walker became liable only as surety. We find no authority in the bond, nor consent outside of the bond on the part of the surety, Walkei*, that the property thus levied on, and subject to be applied to the payment of any judgment rendered in the pending action, should be released. As the bank had, therefore, a lien on the debtor’s property, the effect of the release, of this lien was to discharge the surety, Walker, to the extent of the value of the property so released; and, as the value of the property released exceeded the amount of the claim finally established as against the principal debtor, no claim can be enforced in this action against the surety, either on the bond, or on the note and the mortgage executed by him as a part of the same transaction in which the bond was given. That the release of the debtors’ property constitutes a release pro tanto of the liability of the surety is a proposition so well settled that no citation of authorities is called for. The trial court therefore erred in rendering judgment against appellant, Warren Walker, and in directing the foreclosure of the mortgage.— Reversed.

Bishop, J., talcing no part: