Merriman v. Moore

Mr. Justice Paxson

delivered the opinion of the court,

In recent cases some attempts have been made to define with as much precision as possible the mutual and dependent rights and duties of mortgagees, mortgagors, the grantees of mortgagors and the alienees of such grantees. 1. A conveyance of land “ under and subject” to a mortgage executed by the grantor, creates, as between themselves, a covenant of indemnity to the grantor on the part of the grantee. 2. If the grantee- alien by a deed containing the same “ under and subject” clause, without more, the alienee does not assume a liability to the mortgagee, or undertake to discharge ' the grantee’s covenant of indemnity. 3. It is competent, however, for the mortgagee to show by adequate evidence that the alienee has taken upon himself not only the grantor’s duty to indemnify the mortgagor, but a personal obligation to pay the mortgage-debt. 4. In all cases arising before the Act of 12th of June 1878, this adequate evidence may consist of stipulations in the deed, of written articles, outside its terms, or of a verbal contemporaneous agreement between the parties. And the fact of such an undertaking may be implied from circumstances attending and connected with the conveyance of the land: Moore’s Appeal, 7 Norris 450; Samuel v. Peyton, Id. 465, and Thomas v. Wiltbank, 6 W. N. C. 477. Is the present case within these principles ? It is an action of assumpsit brought by the assignee of a mortgagee against a grantee to enforce a promise to the grantor to pay off an outstanding mortgage, for which the grantor was not himself personally bound, made upon no other consideration than the value of the land conveyed. At the trial, an attempt was made to fasten a personal liability upon Cochran’s grantees for the amount of the $800 mortgage to Clay. The plaintiff proposed to prove by Richard W. Hammel that “ he was the broker who effected the sale to Ileebner and Kennedy, and that it was expressly agreed between the parties to this deed that they were to assume the payment of both the mortgages named in the deed, and that said mortgages formed part of the consideration.” The testimony was rejected, and afterwards, upon the facts found by the special verdict, a judgment was entered for the defendants'.

Was Cochran in a position to enable him to make a contract like *81 that alleged, so that it may inure to the benefit of the plaintiff? The court below held that he was not, for the reason that he was bound by no personal obligation to Milner, for he had received a general conveyance of encumbered property without any stipulation it should be subject to the encumbrances. In other words, that because Cochran was under no obligation or duty to pay the encumbrances, his grantees, who had bought “under and subject” to such' encumbrances, had expressly agreed to pay them, as a part of the purchase-money, were not liable upon such promise, because without consideration. This was clearly error. The consideration was the price of -the land. It was nothing to Cochran’s vendees what the former did with the purchase-money. He saw proper to apply a portion of it to the payment of the mortgages which bound the land conveyed, although they imposed no personal liability upon . him. A vendor may direct how the purchase-money shall be paid. He may reserve it to himself, donate it to a public charity, or may make such other disposition of it as may best meet his views, and if his vendee agrees to pay it according to such directions, he cannot set up as a defence that his vendor was under no duty to apply it in such manner. The difficulty in the way of the defendants is, that the evidence rejected would go to show that they have not paid the .purchase-money. The right of the plaintiff to recover' does not depend upon privity of contract. “ It is a rudimental principle, that a party may sue on a promise made on sufficient consideration for his use and benefit, though it be made to another and not to himself:” Hoff’s Appeal, 12 Harris 200; Townsend v. Long, 27 P. F. Smith 143; Justice v. Tallman, 5 Norris 147.

The court below rejected the evidence offered by the plaintiff for the further reason that it came within the Act of 12th June 1878, Pamph. L. 205. There is nothing upon the face of the act to lead to the conclusion that the legislature intended it to be retrospective. It speaks in the future tense throughout, and evidently means only to apply to future cases. In this respect it closely resembles the fourth section of the Act of 22d April 1856, Purd. Dig. 724, which was held to be prospective, in Lingenfelter v. Ritchey, 8 P. F. Smith 485.

Judgment reversed, and a venire facias de novo awarded.

Justices Mercur and Gordon dissented.