Goodwin v. . Simonson

Conceding that the appellant's liability to pay the mortgage debt is that of a surety, it is by no means clear that any act was done by the plaintiff to relieve the defendant from the judgment against her for the deficiency upon the foreclosure sale. The alleged grounds upon which it is claimed that the defendant was discharged, are that the purchaser was not compelled to make a deposit, as was required by the terms of the sale; that the time for closing the sale was extended, and that no proceedings were instituted to obtain an attachment, as in a case of a contempt. The agreement to give time is not distinctly sworn to, and is positively denied by the plaintiff, as well as the purchaser. At most, it is a matter of inference, from the fact of the postponements of the sale. It is exceedingly questionable whether the proof should not have been more satisfactory, in order to discharge a person as surety, than such as is presented upon this motion. But even if the fact was made sufficiently apparent that the act of the plaintiff was the cause of delaying the sale, and of not compelling the payment of the purchase-money, as the terms required, and not proceeding by attachment, there are other obstacles in the way of releasing the defendant from liability. First. It is not shown by proper proof that the appellant was injured, or suffered anything by reason of the delay, because it does not appear that the purchaser possessed any pecuniary responsibility, so that payment of the bid could be enforced against him for the same, and for the amount to be paid down as cash upon the sale, or that proceedings by attachment could have been effectual for such a purpose. Second. It does not appear that, if a re-sale had been had, upon the failure of the purchaser to pay the percentage demanded, that the premises would have brought as much as upon the first sale, or sufficient to have satisfied the demand of the plaintiff. In a case like this, in order to discharge a person as a surety, it should be established that some injury was done to the defendant by the acts complained of, and that his rights as surety were compromised or affected.

Third. There is no proof of fraud in the proceedings on the part of the plaintiff, and they appear to have been conducted with a view of making the property produce the largest amount. In fact, it is shown that the waiver of the payment of the deposit and the adjournments were had at the request of the defendant's son, who claimed to act for her, and was himself a defendant. Nor was any request made by the defendant to the plaintiff to compel the bidder to fulfill the terms, or to institute any proceedings against him personally to enforce the conditions of the sale without delay. Ordinarily, to discharge a surety by reason of a neglect to proceed against a solvent principal, on request, it must be shown that the creditor was requested to enforce the collection of the debt "by due process of law." Nothing short of that will exonerate the surety. (Singer v. Troutman, 49 Barb., 182; see, also, Fulton v. Matthews, 15 J.R., 433.) We do not discover any reason why the same principle should not apply to the defendant in the case at bar.

Aside from the considerations suggested, there is another reason for sustaining the order. A purchaser at a foreclosure sale may be compelled to complete his purchase, or may be discharged and a re-sale ordered. (Requa v. Rea, 2 Pa., 339;Miller v. Collyer, 36 Barb., 250.) The plaintiff had an election either to proceed against the purchaser for a contempt, or to apply for a re-sale; and the omission to take the former course did not discharge the surety. As the court granted a re-sale, the purchaser was discharged from liability to make good the deficiency arising in the last sale, by the order of the court. This order is conclusive, and relieved the plaintiff from any obligation to institute proceedings to recover the deficiency of the purchaser.

The order must, for the reasons stated, be affirmed.

All concur.

Order affirmed.