
    [No. 5812.
    Decided January 5, 1906.]
    A. H. Clambey, Respondent, v. Jennie Corliss, Appellant.
      
    
    Appeal — Review — Objections to Pleadings — Tbial on Agreed Pacts. Where a case is tried upon an agreed statement of facts, objections to the pleadings may he eliminated from the case on appeal.
    Mortgages — Construction — Whether Collateral or Original Undertaking — Release by Changed Relation oe Principal. Where mortgages are executed pursuant to a tripartite agreement, whereby the mortgages were given by two of the parties to the third party, and the mortgagee agreed to pay stated sums to each mortgagor, it cannot he claimed by one of the mortgagors that he executed his mortgage as a surety mortgage, when the contract contains no reference to such suretyship and it was stipulated that certain liens against his land should he discharged, and there were other direct considerations moving to him, and it was one entire transaction; hence his mortgage would not be discharged by changed relations between the other two parties to the agreement.
    Appeal from a judgment of the superior court for Island couuty, Hatch, J., entered February 17, 1905, upon findings in favor of the plaintiff, after a trial on the merits before the court without a jury, iu an action to foreclose a mortgage.
    Affirmed.
    
      George McKay, for appellant.
    
      S. S. Langland and 8. D. King, for respondent.
    
      
      Reported in 83 Pac. 422.
    
   Hadley, J.

This action was instituted to foreclose a mortgage upon real estate. Oné of the defendants, Jennie Corliss, interposed a defense. She became the holder of the mortgaged land by virtue of a quitclaim deed executed by tbe mortgagor subsequent to tbe giving of tbe mortgage. In her answer she avers that tbe plaintiff has released and discharged the mortgage. Tbe cause was tried upon an agreed statement of facts which' showed that, on April 24, 1902, tbe plaintiff in tbe action and tbe defendants C. W. Corliss and the Patentee’s Manufacturing Company, a corporation, entered into a tripartite written agreement By the terms of that agreement, tbe plaintiff agreed and promised to pay to tbe other two parties to tbe agreement tbe sum of $5,200, of wbicb sum tbe agreement states $1,000 was to be paid to one Cantrell for a purpose specified, but not stating on whose account or for whose obligation it was to be so paid. It was also specified that such portion of the $5,200 as should be necessary for tbe purpose should be applied to tbe discharge of all liens or claims against certain lands of said C. W. Corliss. All of tbe balance of tbe $5,200 was to be paid into tbe treasury of said Patentee’s Manufacturing Company to carry on its work of manufacturing. Thp agreement also provided that the plaintiff should assign to said C. W. Corliss all of plaintiff’s stock in tbe Snoqualmie Boom Company.

In consideration of tbe plaintiff’s part of said agreement,' viz., tb'e payment of tbe $5,200 and tbe assignment to said Corliss of tbe said stock, tbe corporation agreed to issue bonds in tbe sum of $10,000, secured by a first mortgage on all its property, and that it would deliver to tbe plaintiff bonds in tbe sum of $6,000. Said Corliss also agreed that, to secure said $6,000 of bonds, be would execute a mortgage to plaintiff upon certain land, and would also assign, to him fifty-five thousand shares of tbe capital stock of said corporation. Said agreement was fully carried into effect, and tbe mortgage given by Corliss in pursuance of tbe agreement is tbe one now sought to be foreclosed. Thereafter tbe said corporation was insolvent and unable to meet its obligations, and it entered into an agreement with creditors, including tbe plaintiff, whereby it transferred all its property to one Campbell, as trustee. In pursuance of the trust arrangement, the trustee sold the property and distributed the proceeds as provided in the agreement. The trustee paid to plaintiff $898.75, to be applied upon the indebtedness represented by said bonds. It is stipulated that no release of the mortgage in suit was ever demanded, and that no release has ever been made, unless the facts agreed upon amount in law to a release.

The court found that $146.69 was paid by the trustee to unsecured creditors and that, as the plaintiff has an interest in the company’s first mortgage upon all its assets securing the bonds to the extent of six-tenths thereof, that portion of said last named sum should, therefore, have been applied to reduce the amount of plaintiff’s claim as secured by the mortgage in suit, and it was accordingly so reduced. The plaintiff was awarded foreclosure for the unpaid balance, according to the terms of the mortgage. The defendant Jennie Corliss has appealed.

Appellant in her answer simply alleges that the plaintiff has released and discharged the mortgage. No other affirmative allegation appears in the answer. She does not contend that any release was ever entered of record, or that any other direct and specific release was made between the parties. Her contention is that the mortgage was given as a collateral or surety obligation only, to secure the debt of another owing to the plaintiff, and that she, as the holder of the land, is entitled to urge the release of the mortgage as a surety obligation through operation of law, by reason of certain acts of the mortgagee done with the consent of the principal debtor. The facts upon which she bases her claim that the mortgage has been released are not pleaded in her answer. Inasmuch as she seeks toi raise the question of suretyship, the respondent suggests that she has not sufficiently brought that matter into the issues made by the pleadings. In view of the statutory provision found in Bal. Code, § 5707, it might be so argued ; hut as the case was tried upon an agreed statement of facts, we shall eliminate that subject from our discussion of the case.

Appellant in her argument concedes that the questions raised by her are reducible to one, viz., was the plaintiffs mortgage discharged by reason of the facts ? Her contention is that the mortgage given by Corliss, ber grantor, was only a surety obligation given to secure the debt of the Patentee's Manufacturing’ Company. She urges that the transfer of the assets of that insolvent corporation to a trustee, the subsequent sale thereof, and the application of the proceeds upon the debt secured by its mortgage, without foreclosure of the latter, should he held to have discharged the mortgage iu suit. She does not allegei, and it is not shown, that the sale of the assets was not for reasonable valuer or that she has be>en injured by a sale for an inadequate sum. Shfe only contends that the mortgage is a surety contract, and that the contractual relations have been so modified and changed that the surety has been released.

Prom the stipulated facts we do not think it should he held that the mortgag’e sustained the mere relation of a surety to the original transaction. The written agreement which led to the making of this mortgage states that it was made with both the manufacturing company and Corliss, and no reference is made to the former as a principal or to the latter as a mere surety. It is drawn in form as an ordinary joint agreement, making no distinction as to the obligation of one from the other. It recites that the plaintiff agreed to pay both parties, not to the company only, $5,200. More than that, it specifically recites that a part of the money, the amount not specified, should he used to p-ay liens and claims against the land of Corliss. That was a direct consideration moving to Corliss and for his benefit. It also recites that the respondent should assign certain boom company stock to Corliss. With these specified considerations moving to Corlissi, he agreed to, and did, execute the mortgage in suit.

The respondent’s relation to the matter was simply that he agreed to pay, and did pay, to both the other parties $5,200, and he also assigned the boom company stock to Corliss. It was to respondent a single and entire transaction, and he was to receive, and did receive, in return for what he paid and assigned, bonds of the corporation in the face snm of $6,000, secured by the company’s mortgage on its assets, and by the Corliss mortgage on this land. We therefore think the Corliss mortgage was not collateral to the other, and that it was not intended as mere surety for the other, but that it was as much primary security to respondent as was the company’s mortgage. There were simply two mortgages given by different parties to secure the same thing, viz., the payment of the money furnished by respondent and the value of the assigned boom company stock. Both mortgagors were beneficially interested in the thing secured. The company’s mortgage secured $4,000, in addition to the $6,000 held by respondent; but the Corliss mortgage secured nothing but the $6,000, which he agreed to secure and which amount the agreement says was to be paid to both him and the company. Neither mortgage was collateral, but each was original, since it was made in consideration of a benefit and advantage peculiar to the mortgagor. Stearns, Law of Surety-ship, § 39.

Since we view the relations of the parties as above stated, it is unnecessary for us to discuss other questions relating to the defense of suretyship, which have been discussed in appellant’s brief. We think it was not error to decree foreclosure of the mortgage, and the judgment is affirmed.

Mount, C. J., Fullerton, Crow, Rudkin, and Dunbar,JL, concur.  