wholly immaterial so far as the claim of the plaintiff in this case was concerned.
Furthermore the evidence offered by the defendants was wholly insufficient to show that the association was being liquidated by the Department of Banking. The certificate of election to dissolve voluntarily, plaintiff's objection to the admission of which was sustained by the trial judge, merely indicated that the shareholders of the association had voluntarily determined to dissolve the association and wind up its affairs through liquidating trustees appointed by them, pursuant to the provisions of article 11 of the Pennysylvania Building and Loan Code of May 5, 1933, P.L. 457 (15 P.S. §§ 1074 -- 1101 to 1074 -- 1113 inc.). An examination of these statutory provisions makes it clear that the proceeding is a purely voluntary one under the supervision of the Department of Banking and is not in any sense a liquidation by the Department. The act contains no express prohibition of the enforcement of the claims of creditors by legal proceedings and on the contrary expressly provides that such claims shall have priority in payment over claims of shareholders. It is also provided that the articles of dissolution which terminate the proceeding shall contain a statement that there are no suits pending against the association in any court, which necessarily negatives the idea that suits against the association are prohibited by the act. It must be concluded that the Building and Loan Code is not a bar to the present action.
Finally the defendants urge that the extension agreement of June 5, 1930, was an agreement of guarantee or surety and that the defendant association upon executing it became a guarantor or surety for John H. Kramer, the original mortgagor. This being so, the defendants argue that the plaintiff is required to apply the full value of its collateral security, namely the mortgaged premises, to the original debt before calling upon the defendant. It is clear, however, that the agreement of 1930 was not one of guarantee or suretyship, but rather an original undertaking, a promise to compensate the plaintiff for forbearing for a definite time to exercise its lien on the property then belonging to the defendant. The facts in the present case are very much like those which were before the court in Bennett v. Rittenhouse Short-Term B. & L. Ass'n, 313 Pa. 391, 169 A. 757, in which Parry, Judge, in the opinion of the lower court, which was affirmed per curiam by the Supreme Court of Pennsylvania, said:
"The same observations dispose of the contention that the contract is one of suretyship. It was an original undertaking, a promise to compensate the plaintiff for not exercising her lien on the property then belonging to the defendant. * * *
"Lastly, the defendant suggests that the plaintiff is bound to exhaust her security before suing on the contract, but the plaintiff's mortgage lien was security for Feldman's debt and the defendant's new promise was not accompanied by the transfer of any security."
As in the case just cited, so here the plaintiff's mortgage lien was security for the original obligation of John H. Kramer. The defendant association's new promise to the plaintiff contained in the extension agreement of 1930 was not accompanied by the transfer of any security. Defendant's argument that they are entitled to have the plaintiff exhaust its security before proceeding against the defendant association is thus seen to be without merit.
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