Bottineau Cnty. Bank v. Staf-Ford

• Court: North Dakota Supreme Court
• Writing for the Court: BIRDZELL
• Citation: Bottineau Cnty. Bank v. Staf-Ford, 49 N.D. 942, 194 N.W. 393 (N.D. 1923)
• Decision Date: 20 June 1923
• Parties: BOTTINEAU COUNTY BANK v. STAF-FORD et al.

49 N.D. 942

194 N.W. 393

BOTTINEAU COUNTY BANK

v.STAF-FORD et al.

Supreme Court of North Dakota.

June 20, 1923.

Syllabus by the Court.

A demand note taken by the creditor from the principal debtor is not a contract for an extension of time such as will discharge the obligation of a surety for the same indebtedness.

In the absence of a notice, under section 6683, Compiled Laws 1913, the creditor is not required to proceed originally against the principal debtor, and, where he holds a real estate mortgage securing indebtedness and where he obtains judgment against the principal debtor, he is not required to exhaust remedies on the mortgage or the judgment before proceeding against the surety, at the peril of being held to have exonerated the surety under section 6681.

Appeal from District Court, Bottineau County; W. J. Kneeshaw, Judge.

Action by the Bottineau County Bank against Grant Stafford and another. From a judgment for plaintiff, defendants appeal. Affirmed.J. J. Weeks, of Bottineau, for appellants.

W. H. Adams, of Bottineau, for respondent.

BIRDZELL, J.

This is an appeal from a judgment for $1,736.65 upon a promissory note. The case was tried in the district court of Bottineau county before a jury and a verdict returned in favor of the defendant. Subsequently the plaintiff moved for a judgment non obstante, which motion was granted. The facts are as follows: The defendants gave to the plaintiff their note for $1,230, dated November 9, 1918, and due October 1, 1919, which they secured by giving a real estate mortgage. Soon after giving the note the defendants sold the land to one Lagerquist, who assumed and agreed to pay the mortgage indebtedness. Lagerquist subsequently, after the maturity of the defendants' note, gave to the plaintiff a demand note of $1,400, dated May 22, 1920, and covering the same indebtedness. Plaintiff subsequently brought action on this note and obtained judgment. This judgment has not been paid nor the real estate mortgage foreclosed. In defense to this action brought on the original note the defendants allege an agreement between the plaintiff and Lagerquist extending the time of payment of the obligation without the knowledge or consent of the defendants, the failure to collect the judgment against Lagerquist, and the failure to foreclose the mortgage. Upon this appeal it is argued that, as there is evidence supporting the defenses alleged in the answer, the trial court erred in setting aside the verdict of the jury and ordering judgment for the plaintiff.

[1] The appellants' contentions upon this appeal are grounded upon a violation of the rights of the defendants as sureties. It is claimed that the assumption of the mortgage indebtedness by Lagerquist with the knowledge of the plaintiff resulted in creating the relationship of principal and surety between Lagerquist and the defendants and in imposing upon the plaintiff the obligation to respect the rights of the defendants as sureties. For the purpose of this opinion it may be assumed that the plaintiff was obliged to treat the defendants as sureties. Leach v. Nelson (N. D.) 189 N. W. 251, 3 Pomeroy's Equity Jurisprudence (4th Ed.) § 1206; 1 Brandt on Suretyship and Guaranty (3d Ed.) §§ 1 and 47. These rights, it is claimed, were violated by the plaintiff in taking a demand note from...