Cochrane v. Hawver , 61 N.Y. Sup. Ct. 556 ( 1889 )

Learned, P. J.

The deceased, some 16 years before making the note in question, executed a mortgage to Moore, to secure him against liability for ■accommodation indorsements to be made. After making the note, he obtained the indorsement of Moore, and had the note discounted at a bank. Subse•quently, he married Clara Y., one of defendants. After his marriage, he ■died, leaving his widow surviving, and having made a will by which he gave his property in trust for his child. The note has not been paid by the maker, -or his estate; but the note and the mortgage have been assigned to the plaintiff. It therefore becomes important to the widow that the note should be paid by the executor, out of the personal estate, which is ample.

No question has been made whether Moore could maintain an action of foreclosure until he had been obliged to pay and had paid the note. If he could not, then, of course, neither could the plaintiff. But we do not pass ■on this.

Of course, there are cases in which the creditor, in order to collect his debt, is entitled to the benefit of securities held by the surety. But this right of the creditor is for his benefit. It is not for the purpose of controlling the question of marshaling the assets of the principal debtor. Therefore, this right of the creditor is of no consequence in this case. The old rule was that a debt, though secured by a mortgage, was to be paid by the executor out of personal property. That rule is changed by Rev. St. p. 749, § 4, (3 Rev. St. N. Y., 7th Ed., p. 2205;) and the only question here is whether that statutory provision applies to this case. The reason of the statute was undoubtedly that, though legally the mortgage is collateral to the debt, yet it is ordinarily thought of as the principal tiling. The legislature saw that a testator, devising property which was subject to a mortgage, would, usually intend that the ■devisee should take the land with the burden, and would not intend, unless he so expressly stated, that his personal property should be used to relieve the land. The legislature thus gave to a will the effect which the testator undoubtedly would intend. So, also, as to an intestate. But a mortgage of the kind in this case is very different. The mortgagor does not intend to permanently burden his estate. He only desires to secure his surety. He intends to perform to his surety the duty of paying the debt, and does not desire that the surety shall pay, and then foreclose. The mortgage is not given to the creditor as security for the debt. It is a collateral affair, intended merely to keep safe the surety. It is conditioned on the event that the surety •suffer loss. The land is not specifically appropriated to the payment of the debt. It is appropriated only to the indemnity of the surety. The reason, therefore, of the statute fails; and though, as urged, the language may be broad, yet we are confident that this case is not within the intent of the statute. We think, therefore, that the learned justice was right that the widow is entitled to the marshaling of assets which was provided for by the decree? that is, that the debt is to be paid, if possible, out of the personal estate. Judgment affirmed, with costs against the executor, to be paid out of the estate*.

All concur.