CASES

IN THE

COURT OF APPEALS

OP

NEW YORK.

BLYDENBURGH v. BINGHAM.

[38 NEW YORK, 871.]

DISCHARGE OF SURETY-RELEASE OF SECURITY FOR PAYMENT OF DEBT. Where a judgment creditor released from the operation of his judgment certain land which the debtor formerly owned, but which he had conveyed away previous to its rendition, but in which it was thought that such debtor might have some contingent interest, for the purpose of relieving the premises from a possible cloud, does not discharge the surety of said debtor, where it is shown that in fact the debtor had no interest whatever in the land released, and that in consequence the judgment never was a lien upon it.

TO RELEASE SURETY BY SURRENDER OF SECURITY FOR PAYMENT BY PRINCIPAL, the security released must have an actual value, rather than a supposititious or imaginary one.

CONTRACT OF SURETY IS STRICTISSIMA JURIS, AND CREDITOR MUST NOT DEAL with the debtor, or the security which he holds upon the debtor's property, to the prejudice of the surety, unless he intends to release him. THE nature of the action is stated in the opinion of Mason, J. In substance, the court found that Johnson conveyed the premises in question to Bingham, in February, 1857. This judgment was recovered by Hoffman and Schubart in the succeeding July. In January, 1861, Johnson and wife executed a grant deed to Bingham. In November, 1862, Hoffman and Schubart assigned their judgment to Decker for value, and a few days later he released the land in question from the judgment. The court found that at all times after the first conveyance, Johnson had no interest in the land, but that it belonged to Bingham; that at the time of the release Bingham was embarrassed, and owed Decker a large sum of money

which he could not obtain or get secured unless the land in question was released from the judgment, and that consequently he purchased it, released the land, and held the judgment as collateral security.

George Miller, for the appellant.

J. H. Hedley, for the respondent.

By Court, DWIGHT, J. The facts found by the court below must be conclusive against the theory upon which the plaintiff in his complaint bases his claim to relief. That theory is, that the six city lots in Brooklyn was subject to the lien of the judgment of Hoffman and Schubart, as the property, legal or equitable, of Johnson, the principal debtor, and that the release of those lots by the holder of the judgment without the consent of the surety, Blydenburgh, discharged the latter from the obligation of his suretyship, and entitled him to a discharge of his estate from the judgment. The conclusion no one will dispute, if the premises be as stated. The difficulty is, that the findings below entirely negative those premises. The conveyance by quitclaim from Johnson to Bingham was five months earlier than the docketing of the judgment, and though the deed was not recorded until some months later *han the judgment, it is not claimed that the lien of the judgment had priority for that reason. Some objections to the quitclaim deed were urged by the appellant, both on the trial and on the argument, but no facts were shown which detract in any degree from its force and validity as a conveyance of all the interest of Johnson in the property, and upon this point the finding of the court below must be held conclusive: viz., that at the time of the docketing of the judgment and of the release of the lots Johnson had no interest in them. The subsequent deed of Johnson and wife may have been sought and obtained for the signature of the wife, but whatever its purpose, it conveyed nothing as to Johnson which had not previously been conveyed.

Indeed, I do not understand the appellant as insisting upon the argument here that the judgment was in fact a lien, either legal or equitable, upon the lots, but as claiming that it was so far considered to be such, and was thus so far a cloud upon the title to the property, that it gave the judgment creditors a position relative to that property which was worth something, to the benefit of which the surety was entitled to be subrogated,

and which could not be released without in some degree affecting his rights and remedies.

In support of this view of the matter, the appellant urges the facts found that Decker could not get security for his debt from Bingham, unless the lots should be released from the judgment, and that for that reason he was willing to pay, and that the judgment creditors, in fact, received the face of the judgment for the assignment of it. But these circumstances by no means establish the fact that the position of the judgment creditors' relation to this property was of any real value. Its advantage was at most supposititious and imaginary. If Johnson had no interest in the lots when the judgment was docketed, nor at any time thereafter, the existence of that judgment could affect the negotiation of the security offered by Bingham only upon the mistaken supposition that it was a lien upon the property. Nor can it be said that the position of the judgment creditors' relation to this property did, in fact, avail them the face of the judgment. That judgment must be supposed to have been perfectly good without reference to these lots. It was collectible from Blydenburgh, the surety, whose solvency was unquestioned, so that Decker got full value for his money in obtaining the judgment without reference to the release of the lots, and after the release, he held the judgment as collateral security for so much of the debt of Bingham.

It is quite clear that in executing the release of the lots from the judgments in question, Decker released nothing which could have availed in its collection, and consequently that the rights and remedies of the surety were in no manner affected by such release.

Counsel for the appellant insisted with much earnestness that there was a possibility that Johnson might have had some interest in the lots, and that therefore the surety might have been prejudiced by their release from the judgment, and he cited some authorities in point to show that the question was not necessarily, Has the surety, in fact, been prejudiced? but, Has there been a change in the relations of the parties by which he may have been prejudiced?

But here, as before, the appellant is concluded by the positive finding of the court below, that Johnson had no interest in the lots in question,-a finding which negatives even the possibility referred to.

There was another finding in the case, which is probably equally fatal to the plaintiff's claim to relief; viz., that the

property was already encumbered for its value before the docketing of the judgment against Johnson, but it is unnecessary to inquire as to the effect of prior liens, when it is found, as above, that the judgment against Johnson was not a lien at all.

The judgment appealed from should be affirmed.

MASON, J. The plaintiff seeks in this suit to exonerate the real and personal estate of Richard F. Blydenburgh, deceased, from the payment of a judgment of $558.58, obtained July 8, 1857, in favor of Emanuel Hoffman and Henry Schubart, against the said Richard F. Blydenburgh and George G. Johnson, upon a promissory note by Johnson, and indorsed by the said Blydenburgh for his accommodation. The plaintiff's case is based upon the theory, that Johnson being the principal debtor, and Blydenburgh the surety, Blydenburgh has been released and discharged in law by the acts and doings of the defendant Decker; that Decker, knowing that Blydenburgh was surety, procured from Hoffman and Schubart, the plaintiffs in said judgment, an assignment of the same on the 20th of November, 1862, and on the same day released certain lots of land from the operation of the said judgment, and that said lands had belonged to the said Johnson once, and that the said judgment was a lien upon the said lands so belonging to the said Johnson, and that by the release thereof the defendant Blydenburgh, as surety, was released. The judge before whom the case was tried has found the fact, that at the time of the docketing of the said judgment, and at the time of the assignment thereof to the said Decker, and at the time of the release by him of the said premises in the complaint mentioned, the said George G. Johnson had no interest in the same, but that the same were the property of the defendant Amos F. Bingham. As there was evidence upon which to predicate such a finding, it is conclusive upon this court. I do not see, however, how the court could have found otherwise.

The deed from Johnson to Bingham, of the 14th of Febru ary, 1857, was good in form, and operative to pass all of Johnson's title to Bingham. This conveyance being before the recovery of the Johnson judgment, and there being no evidence to impeach it, the finding of the judge is in accordance with the evidence. The subsequent execution of a deed in 1861, by Johnson and wife, of the same premises to Bingham,

being made for the purpose of releasing the wife's contingent right of dower, affords no evidence to impeach the prior conveyance of Johnson. At any rate, the finding of the judge upon this question is conclusive upon this court.

The plaintiff also made the claim in his complaint, and sought to maintain it upon the trial, that the defendant Decker purchased the said judgment of Hoffman and Schubart, for the benefit of said Johnson and Bingham, and to hold it for their benefit, and that Johnson being the principal debtor, the judgment should not be permitted to remain against Blydenburgh, the surety. The judge finds this issue against the plaintiff: he finds that Decker purchased the judgment for his own benefit, with his own money, for the purpose of securing an indebtedness at that time due and owing to him by the said Bingham, and that the said judgment is not held by the said Decker for the benefit of the said Johnson and Bingham, but for his own benefit, and as collateral security for moneys due to him by the said Bingham. This finding is in accordance with the evidence. The plaintiff entirely failed to prove the case made in his complaint, as the judge who tried the cause has found, and there is no principle upon which this court can interfere with his findings; and if the findings are sustained, the plaintiff is not entitled to any relief in this action.

I fully appreciate the argument of the appellant's counsel, that the contract of the surety cannot be, in any manner, interfered with, nor can his rights of subrogation be taken away by the creditor. His contract is strictissima juris, and the creditor must not deal with the debtor, or the security which he holds upon the debtor's property, to the prejudice of the surety, unless he intends to release the surety. No such thing has been done here, if Johnson never owned any of these lands after this judgment was obtained. This was a question of fact to be determined upon the trial, and was justly found against the plaintiff upon the trial. The same is true in regard to the question whether this judgment was purchased by Decker for Johnson's benefit. The judgment of the supreme court must be affirmed.

All agree to affirm.
Judgment affirmed.

SURETY IS DISCHARGED WHEN CREDITOR RELINQUISHES ANY HOLD which be has actually acquired on the property of the principal, and which might