Travers v. Dorr

• Decision Date: 01 February 1895
• Docket Number: No. 8975.,8975.
• Citation: 60 Minn. 173
• Parties: WILLIAM R. TRAVERS v. RUSSELL R. DORR and Another.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

Page 173

60 Minn. 173

WILLIAM R. TRAVERS v. RUSSELL R. DORR and Another.¹

No. 8975.

Supreme Court of Minnesota.

February 1, 1895.

Appeal by the defendants from a judgment of the district court for Ramsey county in favor of plaintiff, pursuant to an order by Willis, J. Reversed.

C. W. Bunn and W. G. White, for appellants.

Ambrose Tighe and W. H. Yardley, for respondent.

MITCHELL, J.

The complaint is in the ordinary form upon promissory notes executed by defendants to plaintiff. The answer admits the execution of the notes, but alleges that they were secured by several mortgages executed by defendants to plaintiff upon real estate owned by the defendant Russell R. Dorr; that "thereafter he sold and conveyed the same, and all of the same, to one E. G. Rogers, who paid the valuable consideration therefor, and that the amount of said notes and mortgages constituted a part and portion of said consideration, and said notes formed and made a part of the purchase price of said premises which said Rogers then and there agreed to pay to this defendant Russell R. Dorr"; that thereafter, and while Rogers was the owner of the land, the plaintiff entered into a written contract with him, whereby it was agreed that payment of said notes and mortgages should be extended for a period of three years from the maturity thereof; that these defendants did not consent to such extension; that the value of the mortgaged premises at the time of the maturity of the notes before such extension was $12,000. The court ordered judgment in favor of the plaintiff on the pleadings for the amount of the notes, and from this judgment defendants appeal.

Plaintiff's counsel claim that the proper construction of the answer is that Rogers had paid the full purchase price, including the amount of the mortgages, to defendant Russell R. Dorr. The answer is certainly not a model of clearness, but, taking it as a whole, we think that, at least as against a motion for judgment on the pleadings, it should be construed as meaning that Rogers bought the land subject to the mortgages, and that plaintiff granted him the extension with knowledge of that fact. The answer might perhaps admit of the construction that Rogers personally assumed and agreed to pay the mortgages, but we will assume that he merely bought the land subject to them. The quite ingenious argument of plaintiff's counsel may, we think, be all summed up in the following propositions: (1) That if Rogers did not assume payment of the mortgages, so as to be personally liable, then defendants could not be sureties for him, because there would be no principal; (2) that no agreement between defendants and Rogers, to which plaintiff was not a party, could put Rogers and defendants in the relation of principal and surety towards the plaintiff, so that his granting time to Rogers would relieve defendants; (3) that no contract of extension between plaintiff and Rogers would be binding on defendants unless they were parties to it; (4) that, in any event, Louise B. Dorr was not released by the extension, because it is not alleged that she had any interest in the land, or was a party to the sale to Rogers. In all of these positions we are of opinion that counsel is in error. The reason upon which the rule rests that a binding extension of time given by a creditor to a principal debtor without the consent of a surety releases the latter is that a surety, on paying the debt, has a right of subrogation. But by subrogation he gets only such rights as the creditor actually has; therefore, where the creditor has postponed the debt, the surety, on paying it, cannot sue the principal until the extension expires; but the surety, by the only contract to which he has ever consented, has a right to pay, and sue the principal at any day after the debt matures. Hence the extension deprives him of this right, and from that fact the law conclusively presumes an injury to him, and releases him from liability. This right of subrogation does not depend upon contract, but is merely a creature of equity, whereby it substitutes the surety in place of the creditor or claimant so as...