Dibble v. Richardson

We are confronted upon this appeal with the same difficulty which apparently operated upon the court at Special Term—the lack of evidence to support the plausible theory of the defendants — for while there can be no doubt of the power of a court of equity to look behind the form of a mortgage, and, in a proper case, to hold that the mortgagor is a mere' surety for the debt of another and entitled to all the rights incident to that relation (Erie County Savings Bank v. Roop, 80 N. Y. 591, and authorities cited), there are no presumptions in favor of suretyship, and where the mortgage recites an indebtedness on the part of the mortgagor, evidence is required to show a different state of facts before there is any ground on which a court of equity may properly intervene. Nor is the fact that a person other than the mortgagor actually received the money to his own use conclusive upon this point; it is necessary to show that the mortgagee understood the transaction, and that the mortgage was accepted as security for a debt owed by another. “ My difficulty was and is to make a finding of fact that the defendant wife was accepted only as a surety, and not as a principal debtor, by the deceased,” says the learned justice at Special Term, and as we have already suggested, the same difficulty confronts us upon this appeal. The court, after admitting evidence which, to say the least, encroaches upon the inhibitions of section 829 of the Code of Civil Procedure, was unable, though apparently willing, to find evidence *522to support the contention of the defendants, and the record certainly discloses no fact which would warrant this court in holding that the findings,'or refusals of the court to find, involved error of which the defendants may complain.

. This action was brought to foreclose a mortgage for $6,000, given by the defendant Annie 0. Richardson to the testator, to secure a bond for thó same amount, given by the same defendant to the testator; and judgment for any deficiency is prayed for against the said defendant. Defendant husband is a co-executor with the plaintiff in this action, and is joined as a defendant only because he refused to' unite with the plaintiff in bringing the action. The answers of both defendants plead payment of the $6,000 under the provisions of the last will and testament of Mary Callahan, deceased, which provision reads as follows: “ I hereby direct and provide that in case any sums of money should be owing to me or to my estate from Asa B. Richardson, that such sum or sums shall not be claimed from, him by executors, but shall be treated as a bequest to him ; and any evidence of indebtedness from him shall be given up and canceled -by my executors.” The contention of the defendants is that while the mortgage recites that, “ Whereas, the said Annie C. Richardson is justly indebted to the said party of the second part (the testatrix) in the sum of six thousand dollars lawful money o'f the United States,” etc., the real debtor was the husband of the defendant Annie 0- Richardson; that the mortgage was given merely as a surety for his debt, and that this indebtedness of the husband being canceled by the provisions of the codicil of the will ■of the deceased, the surety is released. We should find no difficulty in supporting this contention if there was evidence to show •that the testator accepted the mortgage with the understanding that it was intended as a security for the indebtedness of the husband; but the cáse is barren of such evidence, and the mortgage itself, declares that the defendant Annie C. Richardson is justly indebted. “ The transaction shows,” tó use the language of the learned court at Special Term, “ that she did not loan the money on the faith or credit of the husband, but on the bond and mortgage of the wife.” There is no suggestion that the testator took any obligation from the husband; that she ever recognized him as owing to her any sum of money secured by this mortgage; and in the absence of evidence *523• to show that the testator understood that she was lending money to the defendant Asa B. Richardson, rather than to the wife, and that the latter made and executed the bond and mortgage as a surety, no' rule of equity with which we are familiar would justify a reversal of the judgment. This is clearly the-doctrine in all of the cases which we have been able to find in this State (Erie County Savings Bank v. Roop, supra, and authorities there cited), and it is consistent with rules of equity as universally applied. The intent of contracting parties is to be looked for primarily in the words and terms of the contract (Bank of Albion v. Burns, 46 N. Y. 170, 175), and in the case at bar the contract of the defendant Annie C. Richardson was to repay $6,000 for which she was “ justly indebted to the said party of the second part.” A provision in the codicil of a will' of the testator releasing Asa B. Richardson from any indebtedness which he might be owing at the time of her death cannot be construed as releasing Annie 0. Richardson from the terms of her contract, unless it is clearly established that there was an understanding on the part of the testator that the mortgage was intended to stand as surety for the indebtedness of the. husband of the mortgagor. No evidence of this is to be found in the case now before us, and it follows that the judgment must be affirmed.

The judgment appealed from should be affirmed, with costs.

Hirschberg and Jenks, JJ., concurred; Sewell, J., read for reversal, with whom Goodrich, P. J., concurred.

I cannot concur in the affirmance of this judgment.

Aside from what may be claimed from the recital of an indebtedness in the mortgage, no evidence was given tending to prove that Mrs. Richardson was indebted to the testator; that she intended to take upon herself absolutely and at all events the debt of her husband, or that she was accepted as a principal and not as a surety. There is a total failure of proof of any facts that would have the effect to shift the debt from the husband to the wife or merge it in the bond and mortgage.

The evidence plainly shows that Mrs. Richardson was not indebted to the testator, and that the only consideration for the bond -and *524mortgage was the debt of Asa B. Richardson, her husband. I do not see how it can be held that the delivery of the money by the testator to the husband to pay his note and save her stock from possible sacrifice "was a loan to the wife or on her bond and mortgage. It seems to me that the legal effect of this transaction was a payment of the note by the testator through Richardson as her agent. The court found that the note was the debt of the husband ; that the testator had pledged her stock to secure it; that the bank demanded a settlement and the testator gave to Richardson three drafts aggregating $6,000 with which to pay the note, and that he paid the note with the proceeds thereof and returned the stock to her. I think that the suretyship of the wife follows as a legal presumption from these facts, it appearing that the testator had knowledge by.-actual information that the debt was the debt of her husband and the property pledged for its payment belonged to his wife. It is well settled that where a wife joins with her husband in a mortgage of her land to secure his debt or the payment of money loaned to him, she is the surety of her husband. (Vartie v. Underwood, 18 Barb. 561; Smith v. Townsend, 25 N. Y. 479; Bank of Albion v. Burns, 46 id. 170.) This rule is not peculiar to the marital relation. “ If I mortgaged my farm to secure my friend’s bond, debt, and the creditor knows it is my farm, I become a surety for my friend, 'and the creditor is bound to respect that relationship. The law indulges him in no conjecture that I intend to make a gift to my friend, or that the debt was incurred in some way for the benefit of my property.” (Loomer v. Wheelwright, 3 Sandf. Ch. 148.)

That the money was not loaned on the bond and mortgage also appears from the fact that they were not executed or delivered until two days after the money was advanced by the testator. No other evidence was given than that which the bond and mortgage furnished, for the .purpose of showing when they were executed or delivered. They are dated the twenty-third day of October. From this evidence the presumption is that they were .executed and delivered on that day. It, however, appears that they were acknowledged the twenty-fifth day of October, and were executed and delivered in the presence of the notary who took the acknowledgment. The only reasonable inference that can be drawn from this *525evidence is that they were executed and delivered at the time they were acknowledged. In view of this fact it would he giving undue weight to the date of these instruments to permit it to decide the time of their execution or delivery. I think it is entirely clear that the bond and mortgage were only given to secure the debt of Richardson, which was released by the codicil of the will of the testator, and, therefore, the judgment should be reversed and a new trial granted, costs to abide the event.

Goodrich, P. J., concurred.

Judgment affirmed, with costs.