Court Opinion

ID: 5186889
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:30:00.610029+00
Date Added: 2024-06-11T08:26:46.816448
License: Public Domain

Spring, J. (dissenting):
There is no doubt that Bird, the mortgagee, could have demanded judgment for deficiency against the plaintiff alone in this action, and upon payment by her she could have sued Miller and Oldfield. The answer to- this suggestion is that Bird did not adopt that course, but did in fact demand judgment against all three. Had he left out Miller and Oldfield, they could have defended against the plaintiff the skme as against the mortgagee. But when the mortgagee charged them with the payment of any deficiency which might arise, they were obliged to interpose any defense they had, and they availed themselves of that privilege. During the pendency of the foreclosure action the mortgagee entered into the stipulation recited in the prevailing opinion. The purport of that was to release, without reservation, Miller and Oldfield. , The parties carried out that arrangement on the one hand by withdrawing the answers, and, on the other, by not entering any deficiency judgment against them. The effect of this stipulation must have been the absolute discharge of these two men. ■ They paid the personal demand against them as effectually as if they had satisfied it by a money payment. It would be an idle ceremony .to enter into a stipulation by which they surrendered their defenses if a deficiency judgment Could be entered against their surety, which would be as effective against them as.a judgment primarily imposing the payment of any deficiency upon them. They were seeking to escape personal liability, and that-was the only object of the stipulation. Unless that purpose was accomplished the whole performance was a mockery.
It is plain that Miller and Oldfield were the principals, and the plaintiff in this action the surety, when their respective rights are measured up. Bird knew of the existence of this relation, for the complaint stated the facts upoñ which that relationship was founded. His agreement, therefore, to discharge .these principals operated to *405release the surety, Mrs. Hyde. That is as elementary as the other principles enunciated. (Brandt Surety & Guar. § 146.)
- After that agreement the mortgagee had no right to enter the judgment for deficiency against Mrs. Hyde. We must assume he knew that, by releasing the defendants, he as completely exonerated the plaintiff as if her release had been embodied in the stipulation. The defendants could not anticipate that he would disregard the import of his stipulation.
Much criticism has been indulged in on the assumption this was a secret agreement between Bird and these defendants. The evidence shows the contrary.' It was made in writing and included in the judgment roll in the action. It was open and public, and the judgment itself recognized its validity by not charging the defendants. The slightest inspection of the judgment roll, .which was the basis of the liability against her, would have disclosed that she was released by the voluntary action of Bird, and that inspection she was called upon to make. She was' a party to the action and bound to know what the record in it contained.
Again, in the complaint judgment for deficiency was asked against all the parties to this action. The _ plaintiff, as we must assume, knew she was eventually liable only in the event of the failure of these defendants to pay. When demand was made upon her for payment she, as the surety, was put upon inquiry to ascertain why her primary debtors had not satisfied this judgment. (Knobloch v. Zschwetzke, 53 N. Y. Super. Ct. 391.) That com’t says at page 397 : “ The plaintiff, being only secondarily liable, would make him the party to inquire whether the party primarily liable had not satisfied the claim if there were a duty as to the matter resting on one or the other.” She made no inquiry. She voluntarily paid a judgment she was under no obligation to pay, and now seeks to enforce payment against the defendants who have already paid the debt once. Her remissness should not be charged up to these defendants who have acted openly and without collusion, and for her benefit as well as their own.
If the defendants had succeeded in their defense to the foreclosure action their success would have inured to the advantage of the plaintiff. Their defenses rested upon transactions with the mortgagee, and whatever released them absolved her. If, however, he *406had entered judgment after it had been judicially determined that he had lost his claim against them she could not pay and then compel these defendants, her principals, to make payment. The entry of judgment would be notice to her at least of sufficient significance to attract her attention. The defendants were discharged by the action of the mortgagee, and the record discloses .the transaction as clearly as if the judgment had been entered after a trial on the merits resulting in a decision for the defendants. The plaintiff’s remedy is against Bird, not these defendants.
The judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.
Judgment and order affirmed, with costs.