Walters v. Cooper

Mortgages—Rights of Parties—Recovery of Principal Obligation—Assumption of Mortgage by Third Person. The right of a creditor, holding a purehase-money mortgage, to waive his security and recover on the note accompanying it cannot be divested by an agreement between the debtor and a third person that the latter will pay the mortgage; the debtor’s remedy, under such circumstances, being to sue the assignee for breach of the agreement or to be subrogated to rights of the original creditor. [As to concurrent remedies of holders of mortgages, see note in 73 Am. St. Rep. 559.]

Prom Washington: James TJ. Campbell, Judge. In Bano. Statement Per Curiam. This is a cross-bill by Van Walters and Anna J. Walters to restrain the prosecution of an action at law, arising out of the following facts: On December 12, 1912, Walters purchased real estate from Cooper for $18,000. The premises were subject to mortgages of $4,000 and $900. Walters gave a third mortgage as a part of the purchase price. Walters sold to Dawson and wife, who assumed and agreed to pay the mortgage given by Walters to Cooper. Dawson and wife have sold to Hugh M. Shull, who now holds title. Cooper waived his mortgage and brought action against Walters and wife on the note secured by the mortgage. Walters answered in the action and filed a cross-bill in equity, alleging the facts herein stated, and that the premises represented a value of more than the three mortgages, that Dawson and wife were solvent; that execution could be satisfied for any possible deficiency on foreclosure, and praying that the action be abated and that Cooper be required to exhaust the security of the mortgage and that of personal liability of Dawson and wife. Cooper filed a demurrer to the cross-bill, which was sustained and the suit dismissed. Walters and wife appeal from this order. Submitted on briefs without argument under Supreme Court Eule 18, 56 Or. 622 (117 Pac. xi).