#### Pincus Cohn, Respondent, *v.*Daniel Spitzer and Abraham L. Spitzer, Appellants.

Fourth Department,

May 3, 1911.

Mortgage —liability of mortgagor who conveys — principal and surety — extension of time of payment of installments — when mortgagor not discharged, from liability for unmatured installments.

A mortgagor who conveys the mortgaged premises to one who does not assume the payment of the debt is treated as a surety.

While a valid agreement between a creditor and a principal debtor extending the time of payment without the consent of the surety discharges the latter, yet the extension of the time of payment of one or more installments of the principal does not discharge the surety as to unmatured payments not included in the extension agreement.

Thus, where a mortgagee extended the time of payment of certain installments at the request of the grantee of the mortgaged premises, who did *105not assume the debt, the original mortgagor, although treated as a surety, is not discharged as to unmatured installments, the payment of which was not extended.

And this is true although the bond contained a clause that if installments of principal or interest should remain unpaid for a certain time, the mortgagee could, at his option, declare, the whole sum due, for such clause is exclusively for the benefit of the mortgagee.

Appeal by the defendants, Daniel Spitzer and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 6th day of January, 1911, upon the decision of the court rendered after a trial at the Erie Trial Term, a jury having been waived.

*Alexander*Pfeiffer, for the appellants.

*William F. Wierling,*for the respondent.

Spring, J.:

The action is one at law to recover a balance unpaid on a bond given by the defendants on August 1,1905, to the Beacons-field Realty Company for the sum of $1,378, and interest thereon, and the facts were stipulated upon the trial. The principal sum was payable in semi-annual installments of $100 each, extending to the 1st of February, 1910, when the balance of $578 became due. The* bond contained the condition that if default be made in the payment of any installment of the principal, or of the interest, and remain unpaid for twenty days, the whole principal and arrearages of interest “shall, at the option of the said obligee, its legal representatives or assigns, become and be due and payable immediately thereafter.” The bond was accompanied by a mortgage, containing the same conditions as the bond on real estate in the city of New York, upon which there was a prior mortgage of $9,000. The plaintiff became by assignment the owner of the bond and mortgage on February 10, 1906. • The defendants conveyed the premises, and the title was finally vested in one Cecilia Ferrari, as executrix. Noné of the grantees assumed the payment of the bond and mortgage in suit.

On the. 6th of June, 1907, there was unpaid on the.principal of the bond and mortgage the sum of $1,078, when an agree*106ment was entered into between the plaintiff and Mrs'. Ferrari, the owner of the fee of the. land, whereby for a valuable consideration the payment of the unpaid installments was extended until February 10, 1910, the date of the maturity of the unpaid principal sum of $578. This extension was made without the knowledge of the defendants. At that túne the value of the premises exceeded the amount of the two mortgage liens, including the unpaid interest thereon. The stipulation does not state its value at the time the first installment fell due. after the making of the agreement.

In the early part of 1909 the first mortgage was foreclosed and the land sold, and there was no surplus to apply on the bond in. suit. The defendants claim that the effect of the extension of the time of payment of the semi-annual installments was to release them wholly from their liability as obligors on the bond. The trial court held that they were released as to the payments which were extended, but not as to the balance of the principal sum maturing the 10th day of February, 1910, and the payment of which was not affected by the agreement of extension.

The defendants technically are not sureties, but original obligors; yet, as the land was the. primary fund for the payment of the mortgage debt, they are entitled to be treated as sureties, even though the payment of the indebtedness was not assumed by any of their grantees. *(Murray*v. *Marshall,*94 N. Y. 611; *Wiener*v. *Boehm,*126 App. Div. 703, 707 *et seq.)*

It is elementary that a valid agreement between the creditor and the principal debtor extending the time of payment of an indebtedness, without the consent of the surety, discharges the latter. It is also a rule of general application that the extension of the tune of payment of. one or more installments of the principal does not discharge the surety as to unmatured payments and which are not included in the extension agreement. *(Coe*v. *Cassidy,*72 N. Y. 133, 137; *Ducker*v. *Rapp,*67 id. 464, 474; *Kingsbury*v. *Williams,*53 Barb. 142; *Lowman*v. *Yates,*37 N. Y. 601; *Klein*v. *Long,*27 App. Div. 158.)

The counsel for the appellants, without impugning this principle, claims that it is not applicable to the present case for the *107reason that the defendants had the right to insist upon the foreclosure of the mortgage or the enforcement of the indebtedness upon the failure to pay any installment as it fell due, and in case of payment by them they would be subrogated to the rights of the plaintiff. If no extension agreement had been made, the defendants, possibly, in case a maturing installment was not paid, might have insisted that the same be collected by foreclosure or by action on the bond; and in case of failure to comply with the request, the defendants would be exonerated from liability as sureties to the extent of the installment. *(Remsen*v. *Beekman,*25 N. Y. 552; *Osborne*v. *Heyward,*40 App. Div. 78; *Gottschalk*v. *Jungmann, No. 1,*78 id. 171.)

The principle is not sufficiently comprehensive to permit the defendants to require the plaintiff to treat the whole mortgage debt as due when an installment falls due.' The option clause in the bond and mortgage was exclusively for the benefit of the obligee or its assignee. (Thomas Mort. [2d ed.] § 229; 2 Jones Mort. [6th ed.] § 1183a; *Lowenstein*v. *Phelan,*17 Neb. 429.)

The defendants by conveying the mortgaged premises were not placed in a position where the terms of the bond were changed to their benefit and to the detriment of the plaintiff. He might prefer to hold his bond and mortgage until the installments matured. This was his privilege certainly against these obligors. By nothing less than satisfaction of the entire indebtedness could the defendants have been subrogated to the rights of the plaintiff in the mortgage security. (Jones Mort. [6th ed.] § 885b.) .

The debt was not wholly due until February 10, 1910, and they could not compel the plaintiff to' accept payment in full until that date. . The defendants have received the full measure of relief to which they are entitled, and the judgment should be affirmed.

All concurred.

Judgment affirmed, with costs