Barnes v. Mott

Loew, J. [after stating the facts of the case as above given].

—The question is therefore presented, whether on the state of facts, the learned Chief Justice before whom the case was tried was correct in adjudging and decreeing that the said premises should be released and discharged from the levy made thereon by the sheriff, and that the enforcement, by execution or otherwise, of any lien by reason of the said judgment against the said premises, should be perpetually enjoined and restrained. We think he was, for the following reasons :

1st. Burr was a iona fide purchaser of the real estate in question, and he and his successors stood, as respects the property, in the relation of sureties for the payment of the judgment against Britton (Ingalls v. Morgan, 10 N. Y. 178). It is true, no liability could attach to them personally, and their property only was bound for the satisfaction of the judgment, nevertheless, a person whose property is thus situated has all the rights and remedies of a surety who is personally bound (Ingalls v. Morgan, supra; Neimcewicz v. Gahn, 3 Paige, 614; s. c. 11 Wend. 312). If, therefore, the plaintiffs had been compelled to pay the judgment, in order to preserve their estate in the premises, or if the same had been taken to satisfy the judgment, they would in equity have been entitled to be substituted in the place of the creditor, not only with respect to the judgment itself, but also as to any other security, fund or lien which the creditor had, or to which he might resort for payment (Boyd v. Finnegan, 3 Daly, 222, and cases cited).

2d. As between the first sureties bound in their property and Wilson and Darrow, the subsequent sureties bound personally on their undertaking, the latter are primarily liable. They, with knowledge of the conveyance to Burr, executed the undertaking on appeal to the Court of Appeals, and thus delayed the enforcement of the judgment against the principal debtors for several years. Their intervention not only might have prejudiced, but actually did prejudice and "injure, the prior sureties; the judgment debtors, in the meantime, having become insolvent. The equities of the later sureties are, therefore, subordinate to those of the prior sureties (Ct. of Appeals, Hinckley v. Kreitz, MSS. Op.). Hence, if the plaintiffs had paid the judgment, they would have been entitled to be subrogated to the rights and remedies of the judgment creditor as regard the undertaking executed by Wilson and Darrow. But the latter, on payment of the judgment, would not have been entitled to be put in the place of the creditor, with the right to enforce the judgment against the land of the prior sureties (Id.).

3d. In general, if a creditor does any act which is prejudicial to the surety, or in contravention of his rights as such surety, or if he omits to do some act which his duty imposed on him, and such act affects the surety injuriously, the latter will be released from all liability (Hinckley v. Kreitz, supra; Ingalls v. Morgan, supra). In this case, Wagner, with knowledge of all the facts, discharged Wilson and Darrow from all liability on their undertaking on the appeal to the Court of Appeals. This act clearly injured and prejudiced the prior sureties, because it deprived them of their remedy over against Wilson and Darrow, the subsequent sureties. Consequently the judgment creditor, Wagner, lost the right of enforcing the judgment against the property of the first sureties. And his assignee, Mott, who is the present owner of the judgment, occupies the same position. He could acquire no other or greater rights than his assignor had.

It follows, from what has been said, that the judgment appealed from should be affirmed, with costs.

Larremore and Joseph F. Daly, JJ., concurred.

Judgment affirmed.