34 N.Y. St. Rptr. 711

M. Francis Wager, App’lt, v. Thomas B. Link et al., Resp’ts.

(Supreme Court, General Term, Third Department,

Filed December 12, 1890.)

-Mortgage—Covenant by subsequent grantee to assume—When mortgagee CANNOT TAKE BENEFIT OF.

One S. gave a mortgage to plaintiff and subsequently conveyed by quitclaim deed to K., who gave a bond to plaintiff as collateral security, which required the exhaustion of the remedy against the premises before suing upon such bond. Thereafter K. conveyed to defendant, the deed containing an assumption of the mortgage. Held, that as between K. and D. the former did not become principal debtor, but remained a surety only, and that as K.'s bond was unconnected with the sale to him and gave S', no right of action, the agreement between defendant and K. was merely personal between them and gave no right of action to plaintiff.

Appeal by plaintiff from judgment and order refusing to grant a judgment for deficiency against defendant Link, and which gave such defendant costs.

H. R. Harder, for app’lt; Orín Oambell, for resp’ts.

Learned, P. J.

This is an appeal by the plaintiff from that part of a judgment of foreclosure which, denie d him a personal judgment for deficiency against Link, and which gave Link costs.

Jennie Sully, in 1869, executed the mortgage in question to plaintiff. In June, 1873, she conveyed the premises to Kellogg by a quit-claim deed. In February, 1874, Kellogg executed to plaintiff a bond conditioned to pay amount of the Sully bond and mortgage ; stating therein that his bond was collateral to the bond and mortgage, and requiring the obligee to exhaust his remedy against the premises before suing the bond of Kellogg.

In April, 1875, Kellogg conveyed the premises to Link by full covenant deed, subject to the payment of the bond and mortgage, by the terms of which deed Link assumed and agreed to pay said bond and mortgage as part of the purchase money.

The sole question is whether the obligation thus incurred by Link enures to the benefit of the mortgagee, so that he can recover thereon.

Link had no knowledge of the bond executed by Kellogg to plaintiff. Mrs. Sully’s deed to Kellogg was on record; and as Link purchased from Kellogg he would be chargeable with knowledge of the contents of that deed, and conversely would be entitled to assume from that deed that Kellogg was under no obligation to pay the plaintiff’s mortgage. Link therefore cannot be said to have knowingly contracted with Kellogg for the indirect benefit of the mortgagee, being ignorant that Kellogg was under any obligation in respect to the mortgage.

"When a mortgagor conveys the premises, and in the deed the purchaser agrees to pay the mortgage, then equitably the pur*712chaser becomes the primary debtor, and the mortgagor becomes the su'rety.

In such case the purchaser is liable to the mortgagee. But in the present case Kellogg, the purchaser, did not by the purchase become the principal debtor. Indeed he did not enter into any agreement with Mrs. Sully either at the time of the purchase or afterwards.

Kellogg’s bond to the plaintiff was a distinct matter, and gave Mrs. Sully no rights against him. In fact that bond is expressly collateral to the Sully bond and mortgage, and cannot be enforced until the obligee has exhausted his remedy against the premises.' Thus, Kellogg stands in a very different position from that of a purchaser who by his deed has agreed with the mortgagor and vendor to pay the mortgagor.

To go one step further, when a purchaser who has thus become the primary debtor himself conveys to one who by the deed assumes the debt, then such second purchaser in his turn becomes in equity the primary debtor and liable to the mortgagee. Such liability, however, depends on the fact that his grantor was at the time of the sale the person primarily liable in equity to pay the mortgagee.

In the present case, as has been shown, Kellogg never became the primary debtor in equity and never assumed any liability to Mrs. Sully, the mortgagor. The mortgagee, in order to hold Link liable to him, must deduce such liability through the mortgagor. If Mrs. Sully could sue Link, then the plaintiff could sue him.

But as Kellogg’s bond to the plaintiff was a personal matter unconnected with the sale by Mrs. Sully to Kellogg, and one which gave her no right of action, it follows that Link’s agreement with Kellogg was merely personal between them and gave no right of action to any one but Kellogg himself.

Keilogg took the agreement from Link for his own protection; and, as Kellogg was only a surety, and as he did not obtain this security from the principal debtor, Mrs. Sully, the creditor has no claim to it.

Of course there is no question made here that Link is liable to Kellogg on the clause in the deed. The question, is, whether the plaintiff hás any right to the benefit of that clause.

We think he has not for the reasons above stated. The doctrine which we have set forth is laid down in the cases of Vrooman v. Turner, 69 N. Y., 280; Turk v. Ridge, 41 id., 201; Carter v. Holahan, 92 id., 498.

We think that the error of the plaintiff is in assuming that the liability of Kellogg on his bond to the plaintiff was' of such a character that any security which Kellogg took would he for the plaintiff’s benefit; but Kellogg being himself only .a surety could take for his individual protection any security, except, perhaps, from the principal debtor. And the security thus taken would not of necessity be for the benefit of the creditor.

Judgment appealed from affirmed, with costs against appellent

Landon, J., concurs; Mayham, J., not acting.

Wager v. Link
34 N.Y. St. Rptr. 711

Case Details

Name
Wager v. Link
Decision Date
Dec 12, 1890
Citations

34 N.Y. St. Rptr. 711

Jurisdiction
New York

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