Smith v. Varley

(dissenting.) The defendant Michael J. Varley executed his bond to one Frank Ferris, dated January 16, 1886, conditioned for the payment of the sum of $4,000, at the terms and in the manner therein specified, and, as collateral to such obligation, executed to the same Ferris his mortgage on certain real estate, which mortgage contained an insurance clause, conditioned that the buildings should be kept insured against loss or damage by fire to the amount of $1,000, for the benefit of the mortgagee. The bond and mortgage were duly assigned by Frank Ferris, the mortgagee, to Mark T. Ferris, April 1, 1887, who on the 27th day of April, 1888, duly assigned it to the plaintiff, and at the time of making such assignment guarantied the mortgage in the following words: “I hereby guaranty the payment of the within mortgage, according to its terms, until the same is reduced to three thousand dollars. Mark T. Ferris.” The interest was paid on this mortgage up to April 1,1889, and on the 1st of April, 1890, the following indorsement was made on the bond: “April 1st, 1890, received on the within $1,434, being $1,200 of principal and $234 interest to date, leaving a balance due of $2,700, with interest from date.” The case shows that before the commencement of this action the building insured on the mortgaged premises was destroyed by fire, and the insurance of $1,000 applied in part payment of the mortgage, and that at the' time of the commencement of the action the amount remaining unpaid upon the mortgage was $2,700. The trial judge held, in effect, that the application of the insurance money on the mortgage did not reduce the amount of the same to $3,000, within the terms of the guaranty, or its legal effect, and gave judgment against the appellant upon the guaranty. From that determination the guarantor appeals.

' On an examination of the facts, we think the trial judge was correct in his conclusion, and that the judgment should be affirmed on his opinion.

The defendant Mark T. Ferris appeals from a judgment entered against him upon a foreclosure of a bond and mortgage. Ferris was the owner of a bond and mortgage executed by the defendant Varley to secure the payment of the sum of $4,000, conditioned to pay the interest and $100 of the principal on the 1st day of April of each and every year until the whole amount was paid. The mortgage also contained the stipulation that the party of the first part was to have the buildings insured in the sum of $1,000, for the benefit of the party of the second part. Ferris sold and assigned the bond and mortgage, and at the time of the sale and assignment executed upon the face of the mortgage *259a guaranty in the following language: “I hereby guaranty the payment of the within mortgage, according to its terms, until the same is reduced to $3,000.” Subsequent to the assignment the buildings upon the premises were destroyed by fire. The plaintiff realized from the insurance the sum of $1,434, which was applied as follows: $1,200 upon the principal and $234 upon the interest, which paid the interest up to April 1,1890, leaving for the principal $2,700, with interest from April 1, 1890. A default having been made in the payments of interest and one of the installments of the principal, this action was commenced for the foreclosure of the mortgage, and judgment was rendered against all the defendants, and against the defendant Ferris, which, in substance, renders him liable for any deficiency that shall arise upon the sale of the mortgaged premises.

The court held as a conclusion of law that the defendant Ferris “was not discharged by the payment of $1,434 on April 1, 1890.” The appellant, Ferris, claims that the reduction of the amount of the mortgage to the sum of $2,700 by the payment of the insurance relieves him from his guaranty, the mortgage thereby being reduced below $3,000. Contracts of guaranty are subject to similar rules of interpretation as other contracts, but they should not be extended by construction beyond the plain and explicit language used in the contract. People v. Lee, 104 N. Y. 441-449, 10 N. E. Rep. 884; McCluskey v. Cromwell, 11 N. Y. 593. The liability of the guarantor is not to be extended by construction. McCluskey v. Cromwell, Id. 598. Where the language is plain and unambiguous, there is no room for construction or interpretation. That meaning must be given to it that its language imports, without taking into consideration surrounding circumstances, or possible intentions of the parties; the intent is to be sought in such cases in the plain meaning of the words used. It is only where the language is indefinite and uncertain, and the meaning ambiguous, that resort is had to surrounding circumstances, or an effort is made to ascertain the intention of the parties, in order to assist us in discovering the meaning of the words used. In this case the words are plain and certain,—“I hereby guaranty the payment of the within mortgage, according to its terms, until the same is reduced to $3,000.” The terms of the mortgage are the annual payment of $100 upon the principal, and that the property shall be insured for the benefit of the holder of the mortgage in the sum of $1,000; which means that the insurance to that amount shall be paid upon the mortgage in the event of the mortgaged property being destroyed by fire. The terms of the guaranty have been complied with; the mortgage has been reduced by payments made in accordance with its terms to the sum of $2,700. Ingenious arguments are used to show that it was not the intention of the parties to include payments made of the insurance money, because, if the property insured was destroyed by fire, the property would pay the mortgage to that extent, and the security would be reduced, and the guaranty be of no benefit, and that such a construction *260would not be beneficial to the assignee of the mortgage. Whatever was the intention of the piarties in that respect, they did not embody it in the contract. If it was the intent to exclude the payments made by the insurance money, they should have mentioned it. As it is, such a payment is just as much in accordance with the terms and conditions of the mortgage as the annual payment of the $100 therein provided for. Courts cannot make contracts, and cannot inject into them provisions which the parties omitted to insert themselves. Courts can only enforce contracts that the parties have made, and can only interpret those contracts from the language used, unless it is susceptible of more than one interpretation, or its meaning is doubtful. In this instance it seems to me the terms are plain and unambiguous, that the mortgage has been reduced to $3,000, and that the defendant Ferris is not liable upon his guaranty, and that as to him the judgment appealed from should be reversed, with costs.

PUTNAM, J., concurs.