Booth v. Connecticut Mutual Life Insurance

Cooley, J.

If Austin & Tomlinson, the assignors of complainant, had themselves mortgaged the lands to defendant to secure the payment of their own liabilities, the questions arising would in our opinion be very different from what they are now. They would then have been liable at law personally and directly, and the demand might have been enforced against them by suit in any jurisdiction where service could have been obtained.

But these assignors have incurred a liability only as purchasers of the mortgaged lands, subject to the payment by them of the encumbrances. They have never assumed any obligation to defendant, and if the implied undertaking arising from the acceptance of their deeds is to be treated as a promise on their part to pay the mortgagee, it is nevertheless a promise on which no suit by defendant can be maintained, because it is a promise not made to defendant but to third persons. Pipp v. Reynolds 20 Mich. 88 ; Turner v. McCarty 22 Mich. 265 ; Hicks v. McGarry 38 Mich. 667 .

It is nevertheless held that in á suit to foreclose, the party who is chargeable with an implied - promise of the sort may be joined as a party defendant, and a decree obtained against him for any deficiency that may exist when the land is sold. Crawford v. Edwards 33 Mich. 354 ; Miller v. Thompson 34 Mich. 10 ; Higman v. Stewart 38 Mich. 513 . But this is only by way of enforcing an equity by subrogation. Hicks v. McGarry 38 Mich. 667 . And if the party then made liable is compelled to make payment, he is doubtless entitled to be subrogated *302 to collateral securities, if any, which the mortgagee may have held.

But in order to enable the mortgagee to enforce any such equity against the purchasers, it is necessary that the purchasers and the land -mortgaged be within the same jurisdiction. No personal decree can be made in one jurisdiction against parties not personally served or not submitting voluntarily by appearance. Lawrence v. Fellows Walk. Ch. 468; Outhwite v. Porter 13 Mich. 533 ; McEwan v. Zimmer 38 Mich. 765 . There is therefore in this case, where the purchasers of the land reside in Michigan and the land is in Illinois, neither a direct liability of the purchasers to the defendant, nor a contingent liability, except such as depends upon the voluntary action of the purchasers' themselves. Whatever liability they may incur at some future time, when the incumbrances are foreclosed, by voluntarily going into the State of Illinois and submitting to the service of process there, none exists against them now, either presently or contingently, in this State. It follows that the defendant has no claim against the funds in complainant’s hands, which complainant would be at liberty to recognize.

This view leads to a dismissal of complainant’s bill. He should have distributed the fund without regard to any claim made by defendant, and the decree of the court below will be affirmed with costs. Nevertheless, as the case was one which fairly admitted of some doubt, and complainant has no doubt acted in good faith, it would be proper for him, in making up his own accounts, to credit himself with the costs he is compelled to pay to defendant, and with his own necessary expenditures in the suit.

Marston, C. J., and Graves, J., concurred. Campbell, J., did not sit in this case.