Court Opinion

ID: 6235365
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:31:17.57674+00
Date Added: 2024-06-11T08:58:02.063138
License: Public Domain

Mr. Justice Paxson
delivered the opinion of the court, October 30th 1876.
William and Henry Duncan gave their judgment bond to John Duncan to indemnify him for his liability as endorser upon certain promissory notes of the former. By the condition of the bond, the notes were to be renewed once, and if then paid at maturity, the bond was to be void. The renewed notes were not paid at maturity, but were again renewed, and the old notes given up. ' Did the judgment remain as a security for the second renewal ? This is the main question in this cause. We have no doubt as between the parties it was competent by agreement to extend the lien of the judgment so as to cover the subsequent renewals. If that was their understanding we see no reason why it might not be good as to them. But prior to the second renewal of one of the notes, and *490on the day of the renewal of the other, the Messrs Duncan gave to the People’s Savings Bank of Pittsburgh, appellee, their mortgage on the real estate bound by the judgment, for the sum of $3000. A mortgagee is a purchaser. As against a purchaser the lien of the judgment could not be extended to cover a renewal of the notes maturing upon the first renewal. The receipt of the new notes and the surrender of the old ones was an extinguishment of the latter. It is said in Story on Bills, sect. 441: “ Another mode of extinguishment familiarly known in the French law, and also in our law, is by a novation,which is a substitute of a new debt for an old one; as, for example, the substitution of a new bill in lieu of, and taking up, the old bill. Pothier lays it down as unquestionable that a novation operates as a clear extinguishment, and is equally applicable to bills of exchange, as it is to ordinary contracts.” Here the old notes delivered up were endorsed “ received new note for this one, at four months.” This endorsement, so far from weakening the position that this ivas a novation, tends to strengthen it. The new note was. received for the old one, and the latter thereby became extinguished. It is unnecessary, however, to elaborate this case. It is fully covered by Ayers v. Watson, 7 P. F. Smith 360, where it was distinctly said by Justice Sharswood, that “ it is plain that the mortgage, in law as well as in equity, was not a security for the renewal notes.” In that case there was the equity of a surety. Here, there is the equity of a bond fide purchaser; as against neither could the condition of the bond be extended.
Judgment affirmed.