Case Name: OST v. MINDLIN et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1915-12-20
Citations: 156 N.Y.S. 695
Docket Number: 
Parties: OST v. MINDLIN et al.
Judges: 
Reporter: West's New York Supplement
Volume: 156
Pages: 695–700

Head Matter:
OST v. MINDLIN et al.
(Supreme Court, Appellate Division, First Department.
December 20, 1915.)
1. Guaranty <§=47—Liability of Guarantors—Election to Declare Debt Due.
Where the whole amount of a mortgage debt became due by the election, according to the terms of the mortgage, of the holders to so consider it on default in payment of an installment, guarantors of payment of the sum secured by the mortgage became immediately liable to pay the whole amount.
[Eld. Note.—For other cases, see Guaranty, Cent. Dig. § 58; Dec. Dig. <§='17.1
2. Subrogation <§=7—Payment by Guarantor—Rights.
The liability of guarantors for payment of the debt on failure of those primarily obligated to pay same when it becomes due is coupled with a right to be subrogated to any security which, the creditor holds.
[Ed. Note.—'For other cases, see Subrogation, Cent. Dig. §§ 17, 18, 21-29, 58, 77, 83, 92; Dec. Dig. @=7.j
3. Guaranty <§=56—Release of Guarantor—Extension of Time of Payment.
The liability of guarantors for payment of a debt is canceled, where the data of payment is postponed without their consent.
[Ed. Note.—For other cases, sco Guaranty, Cent. Dig. § 67; Dec. Dig. <§=5Q.]
4. Guaranty <§=56—Release of Guarantors—Extension of Time of Payment—Rescission of Flection.
Where the holders of a bond and mortgage elected to declare the whole debt presently due for default in payment "of an installment, their attempt to revoke such election without consent of persons who had guaranteed payment of the mortgage debt according to the terms of the mortgage, which attempt operated to extend the time of payment, released such guarantors from liability, regardless of whether the extension actually worked to their detriment.
[Ed. Note.—For other cases, see Guaranty, Cent. Dig. § 67; Dec. Dig. <§=50,]
5. Guaranty <§=56—Payment of Debt—Extension of Time—Consent of Guarantors.
Consent by persons, who had guaranteed payment of a mortgage debt, to a discontinuance of a suit to foreclose the mortgage, was not a consent to an extension of time of payment of the debt by revocation of an election to declare the entire debt due when the discontinued suit was brought, especially where the consent was signed on assurance that arrangements had been made whereby the debt would be paid without recourse to the guarantors.
[Ed. Note.—For other cases, see Guaranty, Cent. Dig. § 67; Dee. Dig. <§=56.]
Laughlin and McLaughlin, JJ., dissenting.
<gT?For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests "& Indexes
Appeal from Trial Term, New York County.
Action by Mary Ost against Henry Mindlin and others. From a judgment for plaintiff, and denial of new trial, Louis Koch and another, defendants, appeal. Reversed, and new trial granted.
Argued before INGRAHAM, P. J., and McLAUGHLIN, LAUGH-LIN, CLARKE, and SCOTT, JJ.
Max Monfried, of New York City, for appellants.
John E. Donnelly, of New York City (Alfred J. Amend, of New York City, on the brief), for respondent.

Opinion:
SCOTT, J.
The facts upon which this appeal turns have been so fully stated by Mr. Justice LAUGHLIN that it is unnecessary to repeat them at length. The appellants are sued as guarantors for the payment of a bond secured by a mortgage, and the question involved has been accurately stated by him to be:
"Whether the election of the holders of the mortgage, at the time of the attempted foreclosure, to declare the whole amount due, was irrevocable, and inured to the benefit of appellants, and could not be waived without their consent."
The situation of the parties when Stecher and Paley, the then owners of the mortgage, elected to declare the whole amount due, for nonpayment of an installment, was that these appellants were guarantors that tire sum secured by the mortgage would be paid in strict conformity to the terms of that instrument and the accompanying bond. This included the obligation to pay the whole amount when it should become due, if those primarily obligated should fail to do so. Hence, when the whole amount became due by the election of the holders to so consider it, the appellants became instantly liable, as guarantors, to pay the whole amount; but coupled with this obligation was the right to be subrogated to any security which the creditor might hold. It was also their right to insist that the date o,f the payment should not be postponed without their consent, under penalty of the cancellation of their liability. These rules are fundamental and elementary.
Nothing is better settled in this state than that the holder of a bond and mortgage, who has elected to declare the whole debt presently due for a default in paying interest or an installment of principal, cannot of his own accord, and to the detriment of any person obligated to pay the amount, revoke and recall his election. Such an- election, once made, is final and irrevocable after any person liable to pay the debt, whether as principal or surety, has changed his position and assumed an obligation which is the result of such election. The authorities to this effect are so numerous that it will be necessary to cite but a few of them. Kilpatrick v. Germania Insurance Co., 183 N. Y. 163, 75 N. E. 1124, 2 L. R. A. (N. S.) 574, 111 Am. St. Rep. 722; Pizer v. Herzig, 120 App. Div. 102, 105 N. Y. Supp. 38; Brown v. Mason, 55 App. Div. 395, 66 N. Y. Supp. 917, affirmed 170 N. Y. 584, 63 N. E. 1115.
It is quite clear that by electing to declare the whole sum due the then holders of the mortgage effected a material change in the position of appellants. The debt which they had guaranteed became changed from one payable in the future, and in installments, to one immediately payable. Having thus become presently payable, any attempt to extend the time of payment, such as would result from a revocation of the election, was in violation of their rights and detrimental to them as presumption of law. As was said in Calvo v. Davies, 73 N. Y. 211, 29 Am. Rep, 130:
"That an agreement by the, creditor with the principal debtor, extending the time for the payment of the debt, without the consent of the surety, discharges the latter, is established by numerous authorities, and the court will not enter into the question what injury the surety has sustained."
The contention that appellants consented to the revocation of the election merits little consideration. What they did was merely to consent to. a discontinuance of the foreclosure action. This of itself is certainly not a consent to an extension of the time for the payment of the debt, and more especially in view of the fact that the consent was signed upon the assurance that arrangements had been made by which the mortgage debt would be paid without recourse to appellants. Reduced to its ultimate terms, we have, then, the case of a debt presently due for which the appellants were sureties or guarantors, and of an extension of the time for the payment of that debt by an agreement valid between the principal debtor and creditor, but without the consent of the sureties or guarantors. Upon well-settled principles the appellants were thereby released, and it is immaterial whether or not the extension of time for payment actually worked to their detriment. It was clearly error to have directed a verdict for the plaintiff. Indeed, upon the case as made the court should have dismissed the complaint, if a motion for that relief had been made; but, as no such motion was made, we are powerless to so dispose of the case on this appeal.
The judgment and order appealed from must be reversed, and a new trial granted, with costs to appellant to abide the event.
INGRAHAM, P. J., and CUARKE, J., concur.