Fish v. Glover

• Decision Date: 29 October 1894
• Citation: 154 Ill. 86,39 N.E. 1081
• Parties: FISH et al. v. GLOVER.
• Court: Illinois Supreme Court

154 Ill. 86

39 N.E. 1081

FISH et al.

v.GLOVER.¹

Supreme Court of Illinois.

Oct. 29, 1894.²

Appeal from circuit court, Cook county; R. W. Clifford, Judge.

Judgment by confession by Henry T. Glover against Peter Fish and James T. Young.Defendants appeal.Affirmed.C. W. Grenfield, for appellants.

Gurley and Wood, for appellee.

This is a judgment by confession for $8,578, entered on November 25, 1890, in open court, in favor of the appellee, Henry T. Glover, against the appellants, Peter Fish and James T. Young, upon a judgment note for $8,000, dated Chicago, November 20, 1889, payable to the order of appellee in one year, with interest at the rate of 8 per cent. per annum, which note was secured by a trust deed of the same date, executed by said Fish and Young to Otis R. Glover, trustee, conveying certain premises in Streator, La Salle county, being a coal mine and the surface real estate around and adjoining the shaft, together with machinery and other appliances necessary to operate the mine.The trust deed was recorded on November 25, 1890.On December 13, 1890, the defendants below entered a motion to set aside and vacate the judgment and for leave to file affidavits.On July 9, 1891, the court below overruled the motion, and ordered that defendants be allowed to plead within 30 days, and that the judgment stand as security.The general issue and various special pleas were filed, but in March, 1892, it was stipulated that the special pleas should be withdrawn, and that any evidence admissible under any plea properly pleaded might be introduced under the general issue.In February, 1893, the trial came on before the court and a jury, and, after the conclusion of the evidence, the court instructed the jury to find for the plaintiff, and they so found the issues, to which the defendants duly excepted.Thereupon it was ordered by the court that the previous order, directing the judgment to stand as and for security, should be vacated, and that the said judgment stand and remain in full force and effect.An appeal was taken to the appellate court, which has affirmed the judgment of the circuit court.The present appeal is prosecuted from such judgment of affirmance.

The evidence tends to show that the note was given for borrowed money; that about the time the trust deed was delivered the defendants told the plaintiff, or his attorney, that it was their intention to convey the property to a coal company, which would assume the payment of the trust deed or mortgage; that no conveyance was made to the company, but on May 31, 1890, after the payment of the semiannual interest due on the note, the property was conveyed to one Thompson; that Thompson, the grantee, consented and agreed in the deed to him ‘to pay off, discharge, and satisfy a note or notes made by said Peter Fish and said James T. Young, amounting to or aggregating the principal sum of $8,000, with interest thereon at the rate of eight per cent. per annum, as secured by a mortgage upon said property, or a part thereof, to become due on or about November 20, 1890,-all of which principal, interest, and mortgage the grantee assumes and agrees to pay and discharge at the maturity thereof, and to save said grantors, and each of them, free from all liability thereon;’ that about May 20, 1890, defendants notified the plaintiff of the sale to Thompson; that appellee made inquiry as to the responsibility of Fish and Young, and made the loan mainly upon their personal credit; that the attorney of appellee made demand upon Young for payment of the note about November 25, 1890, and was then told that ‘the property was in danger of being levied on for small liens of miners in Streator,’ and was requested to foreclose the mortgage, and informed that, if the mortgage was foreclosed, Young would buy in the property himself; that on December 12, 1890, the defendants served upon the plaintiff and the trustee in the trust deed formal written notice of the sale of portions of the articles connected with the mine under executions, and of the removal of the articles so sold, and in said notice renewed their request for a foreclosure of the mortgage, and stated therein that Thompson had assumed the payment of the mortgage indebtedness, and had, since the sale to him, sold the premises to one Sweet, who had agreed with Thompson to assume and discharge the amount of said indebtedness, and therein also notified plaintiff and said trustee that, unless steps were taken in accordance with the notice, the defendants, as sureties for the payment of the mortgage indebtedness, would insist upon the claim the benefit of all legal rights to which they might be entitled by reason of the failure to comply with said notice and requests.Appellee took no steps to foreclose the trust deed, and the mining property was diminished in value by reason of the levies and removal of articles as above stated.

MAGRUDER, J.(after stating the facts).

The position of the appellants in this case is that, when the mortgagors and makers of the note secured by the mortgage, namely, Fish and Young, appellants herein, conveyed the mortgaged property to Thompson, and the latter, in the deed made to him, assumedthe mortgage debt, and agreed to pay it, the appellants were no longer principal debtors to appellee, but were sureties; and that by the failure and refusal of appellee to foreclose the mortgage when the property was sufficient in value to pay the debt, and to bring any suit in accordance with the notice served upon him, the appellants were released and discharged from their obligation to pay the indebtedness.It has been held that, as between the mortgagor and the grantee of the mortgaged property, who assumes the mortgage debt, the latter becomes the principal debtor, and the former the surety for the payment of the debt.Flagg v. Geltmacher, 98 Ill. 293;Dean v. Walker, 107 Ill. 540;Ellis v. Johnson, 96 Ind. 377;George v. Andrews, 60 Md. 26.But this is only true as between the grantee of the mortgagor assuming the mortgage debt and the mortgagor himself.As between them, the mortgaged property becomes the primary fund.But the mortgagee may treat both as principal debtors, and may have a personal decree against both, unless he has consented to accept such grantee of the mortgagor as the principal debtor, and to hold the mortgage as surety merely.The mortgagee, in the absence of such assent, is not bound by the relation of suretyship existing between the mortgagor and the grantee who assumes the payment of the mortgage.The rights of the mortgage remain unchanged, and his relation to the mortgagor is not affected, so that, as against him, the mortgagor is in no position to assert and take advantage of the right of a surety.The doctrine is stated by Mr. Jones in his work on Mortgages (at section 741) in the following words: ‘The mere assignment by the mortgagor of his interest in the mortgaged premises to a third person, who agrees to pay off the mortgage, does not release the mortgagor.There is no novation unless there he something to show that the mortgagee has released the mortgagor, and has agreed to look solely to the purchaser for payment of the mortgage debt.There must be a substitution of a new obligation for the old one, and the new obligation must be a valid one.’Shepherd v. May, 115 U. S. 505, 6 Sup. Ct. 119;Hayward v. Burke, 151 Ill. 121, 37 N. E. 846;Corbett v. Waterman, 11 Iowa, 86;James v. Day, 37 Iowa, 164;Massie v. Mann, 17 Iowa, 132;Thompson v. Bertram, 14 Iowa, 476;Waters v. Hubbard, 44 Conn. 340;Marsh...