Bristol Bank & Trust Co. v. Broderick

• Decision Date: 08 January 1937
• Citation: 189 A. 455,122 Conn. 310
• Parties: BRISTOL BANK & TRUST CO. v. BRODERICK et al.
• Court: Connecticut Supreme Court

189 A. 455

122 Conn. 310

BRISTOL BANK & TRUST CO. v. BRODERICK et al.

Supreme Court of Errors of Connecticut.

January 8, 1937

Appeal from Superior Court, Hartford County; Edwin C. Dickenson Judge.

Action by the Bristol Bank & Trust Company, the holder of a note against Frank T. Broderick and others, the guarantors of payment note, which was tried to the court. Judgment for the plaintiff, and certain defendants appeal.

No error.

Argued before MALTBIE, C.J., and HINMAN, AVERY, BANKS, and BROWN JJ.

Daniel E. O'Keefe, of New York City, and Joseph M. Donovan, of Bristol, for appellants.

Frederick W. Beach and S. Russell Mink, both of Bristol, for appellee.

BANKS Judge.

On March 31, 1930, Mary Broderick gave to the Bristol Trust Company her note for $6,000 payable on demand with interest payable quarterly in advance and an agreement that a payment of $200 would be made on the principal on May 1, 1930, and every month thereafter until the note was paid in full. The note was secured by a third mortgage upon property in Bristol, the two prior mortgages upon which were also held by the trust company. All three mortgages were assigned to the plaintiff. The defendant Vincent Broderick and two others signed a guaranty of this note which read as follows: " We hereby guarantee the payment of the within note." The defendant Margaret Duffy and Julia Place (who is not a defendant) each signed a separate guaranty which read in part as follows: " I hereby guarantee the payment of the principal sum of said mortgage when the same comes due; but I am not to be liable under this guarantee for a larger amount than three thousand ($3,000.00) dollars." Payments of $200 each were made on the principal of the note up to August 22, 1931, reducing the principal amount due to $4,000, and interest was paid up to March 1, 1932. In July, 1933, Mary Broderick was adjudged bankrupt. Demand for payment of the note was made on all parties prior to the bankruptcy. On August 10, 1933, Frederick W. Place bought the property subject to these mortgages from the trustee in bankruptcy. In February, 1935, the plaintiff brought suit against Place to foreclose the two prior mortgages, and against the guarantors of the note secured by the third mortgage. The foreclosure action went into judgment March 15, 1935, the amount of the debt being found to be $12,458.54 and the property appraised at $10,500. The plaintiff secured judgment against the defendant Vincent Broderick and two other guarantors for $4,250, the balance due on the note, and against the defendant Margaret Duffy for $3,000, the amount of her guaranty. These defendants have appealed, claiming that they are released from liability upon their respective guaranties by reason of material alterations in the contract the performance of which they guaranteed.

They claim to be relieved of liability as the result of an agreement entered into between the plaintiff and Place, at the time the latter bought from the trustee in bankruptcy the equity in the property which was subject to the mortgage securing the note which they guaranteed. In this agreement Place agreed to pay the plaintiff $100 per month to be applied by it to the payment of interest and back taxes and other liens on the property, and the plaintiff agreed to allow its mortgages to remain on the property until September 1, 1934, and not to demand any payment of principal, provided Place should not be in default for more than fifteen days in his monthly payments, and further agreed to waive all back interest on any of the mortgages and to assume all back insurance premiums. The defendants contend that by this agreement the plaintiff substituted Place in the stead of Mary Broderick as mortgagor, renewed the mortgage for a different period of time and upon different terms and conditions, and that it follows that they are relieved of their obligations under the well-settled rule that any material change in the obligations and duty of the principal, made without the consent of the guarantor, relieves the latter of any liability upon his guaranty. But Mary Broderick, the maker of the note which defendants guaranteed, was not a party to this agreement between the plaintiff and Place. It was not a substitute for the agreement contained in her note which the defendants guaranteed. So far as appears, she remained still liable upon that agreement except as she may have received a discharge in her bankruptcy proceedings. The plaintiff was entitled to bring suit against her on the note in disregard of the mortgage. Calamita v. DePonte, 122 Conn. 20, 26, 187 A. 129. Her liability was not affected by the act of the plaintiff in entering into this agreement with Place, the purchaser, from her trustee in bankruptcy. That agreement had relation only to the mortgage security, being an agreement with Place that, if he purchased the property subject to the three mortgages, the plaintiff would allow the mortgages to remain until September 1, 1934, provided he made the payments therein provided for. It had no relation to the obligation of the guarantors of the note and could not have the effect of discharging them from such obligation.

Any claim of the defendants that the agreement with Place impaired the security...