Schmuckie v. Alvey

Opinion OF THE COURT BY JUSTICE LAMBERT Upon motion of appellant Gretchen Schmuckie, this Court granted discretionary review. The precise issue before us is whether a maker1 of a promissory note may be discharged from liability as a result of the holder's impairment of collateral which secures payment of the instrument. Appellees, James N. Alvey and Mary E. Alvey, conveyed a parcel of improved real property to James M. Schmuckie and Gretchen Schmuckie, husband and wife, and Joseph Sostarich and Doris Sostarich, husband and wife, for the sum of $230,000. Contemporaneous with the conveyance and in partial payment of the purchase price, the Schmuckies and Sostariches executed a ""First Lien"" promissory note in favor of the Alveys for the sum of $165,000. In the deed, a vendor's lien was retained to secure payment of the unpaid purchase money.