Crawford v. Edwards

Marston, J:

Orrin Goodrich .during his lifetime was liable, and after his decease his estate was subject, to the payment of the sixteen hundred dollar mortgage of November 2, 1867. There can be no question but that there was a mutual mistake made in describing the nine acres of land' intended to be conveyed in the second deed from John T. Edwards to Mr. Goodrich. Goodrich, at the time this second conveyance was executed, was in the actual possession of the land under his first deed, in which it was properly described,, and he remained in possession, after receiving the second deed, until the time of his death in 1868. After this his widow and heirs, and their grantees, continued in possession claiming under the deed of November 2, until the conveyance of October 30, 1869, to William Edwards. No mistake up to this tizne had been discovered, or if it had, it was not known to any of the heirs or grantees of Orrin Goodrich. There can be no doubt, therefore, but that up to the time (December 10, 1869) when John T. Edwards conveyed by proper description these lands to Francis P. Brown, the parties interested might, upon discovering the mistake, have had it corrected.

Alsina Goodrich, the widow of Orrin, was interested in having this one thousand six hundred dollar note and mortgage paid. At the time she conveyed the premises to her son-in-law, Jakeway, a clause was inserted in the deed by which he assumed the payment of this mortgage, and he also bound himself not to sell the land without the consent of Mrs. Goodrich, during her lifetime. Upon the 30th day of October, 1869, Jakeway, then claiming to own this property, and being in possession, conveyed the same to William Edwards, Mrs. Goodrich joining in this conveyance. The consideration expressed in this deed was twenty-five hundred dollars, and it is conceded the property was worth that amount. That deed contained this clause: “This conveyance is made subject to a certain mortgage of sixteen *359 hundred dollars ($1,600 00) executed by Orrin Goodrich to John T. Edwards, and supposed to be dated April 4, 1866, which the party of the second part hereby assumes and agrees to pay as part of the above consideration.” Passing for the present all question as to the acceptance of this deed by William Edwards, as well as the mistake in the description, what new rights and liabilities were created by this clause inserted in the deed?

The acceptance of such a deed binds the grantee as effectually as though the deed had been inter partes, and had been executed by both grantor and grantee. — Trotter v. Hughes, 2 Kernan, 78.

This must be treated, therefore, as an express agreement on his part to assume and pay that mortgage. It is more than a case of a conveyance of mortgaged property subject to the mortgage. In such a case the property would be made primarily liable for the debt, but the grantee would not have assumed, and would not be personally liable for its payment. Here, however, he expressly assumes and agrees to pay the mortgage, and that irrespective of the value of the land covered by the mortgage. The amount of the mortgage is deducted from the consideration which lie otherwise has assumed to pay for the land. That amount ho has retained in his hands for that express purpose. Ilis grantor, whose duty it was to pay, might have insisted'upon payment to him of the entire consideration, and paid it himself. By permitting his grantee to deduct this amount from the consideration and retain it, he has thereby rendered himself less able to meet the obligation, thereby reducing the mortgagee’s personal security, but has at the same time to a corresponding amount aided the other to meet it.

Why then should not the grantee be held personally responsible to the mortgagee for the amount which he has thus assumed and agreed to pay? It is no injustice to the grantee to require him to pay it, because he has boon permitted to deduct and retain that amount from the agreed *360 consideration and value of the land. The consideration he agreed to pay at the time he made the purchase, should be paid by him at the time and in the manner agreed upon, and there is nothing inequitable in requiring him so to do.

The obligation of the purchaser, when he assumes and agrees to pay the debt, enures in equity to the benefit of the mortgagee, who may enforce it against the purchaser, in a bill to foreclose his mortgage. — Blyer v. Monholland, 2 Sanf. Ch., 478.

It was said in Earl of Belvidere v. Rochfort, cited in Hoff’s Appeal, 24 Pa. St., 205, “The plain intent of the deed was to put the purchaser in the place of the vendor, and that he might not be longer liable to the mortgagee, a sufficient part of the purchase money was left in the purchaser’s hands for satisfaction of the mortgage, the purchaser thereby taking upon himself the vendor’s bond and covenant for payment of the mortgage as fully as if he himself had covenanted to pay it off. And either the vendor or mortgagee might, upon that contract, have compelled him to pay it off.” Of course the vendor would not be discharged upon his grantee’s making such a promise, except at the option of the mortgagee. The mortgagee may treat both the vendor and his grantee as principal debtors to him, and have a personal decree against either or both. — Corbett v. Waterman, 11 Iowa, 86 ; Thompson v. Bertram, 14 Iowa, 476 ; Curtis v. Tyler, 9 Paige, 435 ; Halsey v. Reed, 9 Paige, 451 . These last cases-also hold that the grantee under such a promise would be liable to have a personal decree rendered against him under the statute of that state, which is similar to § 5150 of our Comp. Laws.

The principle upon which this rests is, that the creditor is entitled to the benefit of all collateral obligations for the payment of the debt, which a person standing in the name of a surety for others has received for his indemnity, and to relieve him or his property from liability for such payment. .

In addition to the authorities cited, see Marsh v. Pike, *361 10 Paige, 595 ; Burr v. Beers, 24 N. Y., 178 ; Converse v. Cook, 8 Vt., 164 ; Hoff’s Appeal, 24 Pa. St., 200; Lennig’s Estate, 52 Pa. St., 138; 2 Wash. on Real Pr., 193 (571).

Defendant William Edwards says lie did not accept of this deed, and had no knowledge that there was any such agreement on his part contained therein, until after the commencement of this suit, and that as he obtained no title to the premises in question, on account of the mistake in the description, even had he accepted of the deed and so agreed, he ought not to be held responsible.

His answer and the testimony in the case shows clearly, that he knew Orrin Goodrich, and those claiming through and under him, had been in the actual possession of this property from April, 1866, to October, 1869, claiming to be the owners thereof and to have acquired title thereto from his brother John T. Edwards; that a mortgage had been given to John T. Edwards by Orrin Goodrich for a part of the purchase money, which was outstanding and unpaid; that as they were unable to pay this indebtedness, John T. was desirous of purchasing their interest in the premises; that the parties who were to make the' conveyance would take defendant William Edwards’ note for nearly the entire consideration to be paid; that he then inquired of John T. whether there were any mortgages or encumbrances on the land, and was informed than there was no incumbrance that would trouble him. He thereupon delivered his note to John T., payable to Alsina Goodrich, for the amount agreed upon, “with which he supposed said John T. Edwards intended to purchase the interest of said Alsina Goodrich and Gaudier E. Jakeway and wife, in and to said land, and take a deed in this defendant’s name, as a security to him, and turn the same to the best account he could in payment of his debts.” At the time he gave this note he says he supposed he was to receive a deed of the premises in question. He claims to have had no knowledge whatever, and that he was not consulted at all, about the sale and conveyance by *362 John T. by correct description to Brown. . Yet at the time of this conveyance a mortgage was executed by Brown to William Edwards for nine hundred and sixty-five dollars,— part of the purchase money. This mortgage he accepted, retained, and collected a portion thereof.

There are other- strong facts and circumstances in the case tending to show that William Edwards knew what was being done; that a deed was to be made to him of the premises, and that he expressly agreed, before the deed was drawn, to assume and pay this mortgage. I am satisfied from a careful reading of the evidence that William Edwards knew of the conveyance to himself, of the mistake, and of the conveyance by correct description to Brown; that there was an object in all this which would not boar incpriry and investigation, and, to put it in the mildest form, that he studiously closed his eyes to what was going on, omitted to make inquiries, when he should have made them, was willing that others should manage the business, he being a- mere instrument in their hands.

I am of opinion, there fore,, that he is entitled to no protection upon the ground of ignorance of what was going on, or because he did not accept this deed. Under the circumstances it is too late, and comes with rather bad grace, to disclaim having any knowledge that a conveyance was made to him. I am also of opinion that under the circumstances in this case William Edwards is in no position tó avoid liability under his agreement because on account of the defective description he obtained no title under that deed. It is true that he acquired no legal title thereby, but he obtained possession of the premises. He obtained the right under his deed to h.ave the mistake corrected, and if he did not avail himself of that right, but permitted a conveyance to be made direct from John T. to Brown in order to cut off this mortgage, he must not expect a court of equity to step in, sanction and complete the transaction thus fraudulently commenced, in order that he may be the gainer thereby.

*363 Defendant William Edwards further insists that, on account of the mistaken description in the deed from John T. to Orrin Goodrich, there was a failure of title, therefore no consideration for the note for the purchase money which this mortgage was given to secure; that Orrin Goodrich, if living, would not be, and his heirs for the same reason are not liable on that note, and that he is entitled to the benefit of this defense.

A similar theory was set up in Comstock v. Smith, 26 Mich., 321 , but held no defense. That case disposes of this question.

I am of opinion that the decree of the court below should be reversed, and a decree rendered in favor of the complainant and against the defendant William Edwards, for the amount due upon the sixteen hundred dollar note of November 2, 1867, with costs of both courts, and that complainant have execution therefor.

The other Justices concurred.