## Facts

- Thomas and Penninnah Crew executed a promissory note secured by a recorded mortgage on their real property in favor of Braun.
- The Crews later conveyed the mortgaged property through a series of transfers ending with ownership by Clyde Cate.
- No grantee in the chain of title agreed to assume personal liability for the mortgage debt.
- Before the note matured, Braun and Cate entered a written agreement extending the time for payment for two additional years.
- The extension was made without notice to, or consent from, the Crews, and it did not reserve Braun’s right to proceed personally against the Crews as of the original maturity date.
- The debt was not paid at the extended maturity date, and Braun sued to foreclose the mortgage.
- The trial court entered a foreclosure decree and authorized a deficiency judgment against the Crews if the sale proceeds were insufficient.
- The Crews appealed only the portion authorizing a personal deficiency judgment.

## Issues

1. Whether original mortgagors who conveyed the mortgaged property, without any grantee assuming the debt, are discharged from personal liability when the mortgagee grants a binding extension of the debt’s maturity to a later owner without the mortgagors’ consent and without reserving rights against them.
2. Whether the mortgagors must plead and prove the value of the mortgaged property to obtain discharge based on such an unconsented extension.

## Decision

- The Supreme Court of California reversed the judgment insofar as it permitted a deficiency judgment against the Crews.
- The mortgage lien remained enforceable by foreclosure against the property, but Braun could not recover any remaining balance personally from the Crews.
- The Crews were discharged from personal liability because the mortgagee’s binding extension to Cate, made without the Crews’ consent and without reservation of rights, altered the obligation in a manner that releases a surety.
- The Crews were not required to allege or prove the property’s value to assert discharge based on the unconsented extension.

## Legal Principles

- After the mortgagor conveys the mortgaged property, the mortgagor may stand in the position of a surety as to later dealings between the mortgagee and the current owner affecting the debt.
- A creditor’s binding extension of time to the principal obligor, made without the surety’s consent, discharges the surety from personal liability when the extension materially changes the surety’s position.
- If an extension agreement is made without the surety’s consent and without an express reservation of rights against the surety, the surety’s personal obligation is released even though the mortgage lien remains enforceable against the land.
- To claim discharge under this rule, the surety need not plead or prove the value of the mortgaged property as an additional element.

## Conclusion

The court held that a mortgagee who, without the original mortgagors’ consent and without reserving rights against them, grants a binding extension of the mortgage debt’s maturity to a later owner cannot obtain a deficiency judgment against the original mortgagors, though foreclosure of the lien remains available.


Braun v. Crew, 183 Cal. 728, 192 P. 531 (Cal. 1920)