Case ID: me_89/html/0420-01.html
Source: Caselaw Access Project
Author: {"author": "Stbout, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David B. Flint, in equity, vs. Winter Harbor Land Company, and West Shore Land Company. Same vs. Same. Same vs. Same.
    Hancock.
    Opinion December 28, 1896.
    
      Mortgage. Foreclosure. Deficient Security. Stat. Frauds. B. S., c. Ill, § 2.
    
    When in a conveyance of land, subject to a mortgage, it is provided in the deed that the conveyance is made subject to a mortgage of the premises, "which said mortgage this grantee by acceptance of this deed hereby assumes and agrees to pay and fully discharge,” the grantee becomes liable to the mortgagee, in equity, for. the mortgage debt; or the mortgagee may maintain assumpsit for the debt against either the mortgagor, or the grantee, in the deed.
    The mortgage debt, in such case, is part of the purchase money, and the promise of the grantee to pay it, is a promise to pay his own debt, and not the debt of another'within the statute of frauds.
    
      Meld; that the mortgage having been foreclosed, the debt is paid to the extent of the value of the mortgaged property, at the date that the foreclosure became absolute. If of less value than the debt, complainant is entitled to recover the deficiency from the original mortgagor, or from its grantee; and will be entitled to separate decrees against each for the full amount of such deficiency, — but can have only one satisfaction.
    The court appoints a master to ascertain and report to the court the value of the mortgaged property, at the date when complainant’s title became absolute, and the amount of the mortgage debt at the same date.
    On Agreed Statement.
    These were three suits in equity; the first two to recover the interest, and the third to recover the principal and interest, due on a mortgage, given by the Winter Harbor Land Company to Alice I. Hammond.
    The cases were reported to the law court upon tbe following agreed statement:
    “On the twenty-seventh day of June, A. D. 1892, the Winter Harbor Land Co. gave a mortgage to Alice I. Hammond of the real property described in the bills to secure the payment of a note of said corporation dated the same day for the sum of $7,000, payable in three years from date, with interest annually at the rate of five per cent per annum until paid. Said mortgage contains a one-year foreclosure clause.
    “December 8th, 1892, said Alice I. Hammond, for a valuable consideration, sold and assigned to the complainant said mortgage and note, indorsing the note without recourse.
    “On March 14th, 1893, said Winter Harbor Land Co. sold and conveyed said property, with other lands, to the West Shore Land Co., subject, however, to said mortgage. Said conveyance contained the following stipulation:—
    ‘Also made subject to a mortgage deed of the said premises for seven thousand dollars with interest at five per cent given by this grantor' to said Alice I. Hammond, dated June 27th, 1892, and recorded in said registry, in Vol. 263, page 165, and by said Hammond assigned to D. B. Flint by assignment dated December 8th, 1892, and recorded with said registry in Vol. 266, page 302, which said mortgage this grantee by acceptance of this deed hereby assumes and agrees to pay and fully discharge.’ ....
    “In July, 1895, said complainant began foreclosure of said mortgage by publication, tbe first publication baying been made on July 3d, 1895.
    “ On September 17th, 1893, tbe complainant began the above named suit in Equity No. 106, to recover tbe first year’s interest accrued on said mortgage of three hundred and fifty dollars.
    “On September 23d, 1894, tbe complainant began tbe above named suit in Equity No. 125, to recover tbe second year’s interest accrued on said mortgage of three hundred and fifty dollars.
    “July 1st, 1895, said complainant began, tbe above named suit in Equity No. 163, to recover tbe principal and interest of said mortgage.
    “ Said complainant has discontinued as to tbe defendant, Alice I. Hammond, and tbe bills have been taken pro confesso as to tbe Winter Harbor Land Co.”
    Tbe questions involved were:
    1. Whether tbe West Shore Land Co., is liable for any part of tbe principal and interest due upon said mortgage upon tbe foregoing statement of facts.
    2. If liable under the foregoing statement of facts, whether for tbe full amount of tbe principal and interest due, or for tbe excess of principal and interest over tbe value of tbe mortgaged property.
    3. Whether or not tbe issue of fact between tbe parties, as to whether or not tbe Winter Harbor Land Co. has any property, is material.
    Tbe causes came on to be beard June 1st, 1896, before tbe presiding justice, and being of tbe opinion that there were questions of law involved in tbe same of sufficient importance and doubt to justify tbe same, and tbe parties agreeing thereto, be reported tbe causes upon tbe foregoing agreed statement of facts, and upon any other facts set forth in tbe bills that are not denied by tbe answers, to tbe next law court within and for tbe Eastern District; and tbe parties consenting thereto, said causes to be entered and beard in tbe Western District. Tbe parties further stipulated that “if tbe law court shall determine that the West Shore Land Co. is liable, but that the extent of its liability in either of tbe suits depends upon tbe value of tbe mortgaged property, then it shall fix the mode of ascertaining the value of said property by sending the causes to a master or otherwise.
    “And if the law court shall determine that the issue as to whether or not the Winter Harbor Land Co. has any property is material, it shall also fix the mode of ascertaining that issue.
    “If the law court shall determine that neither the value of the mortgaged property nor the issue as to whether the Winter Harbor Land Co. has any property is material, then the law court shall order such a decree as the rights of the parties require.”
    Answer of the West Shore Land Company. . . .
    8. And further answering the said defendant says that if any such contract on its part was made as is set forth in the plaintiff’s bill, whereby the said defendant agreed to assume and pay the mortgage given by the Winter Harbor Land Co., to Alice I. Hammond, such contract or .agreement was a promise to' pay the debt of another, and was void under c. Ill, § 2, R. S. of Maine; and the defendant says that such contract or agreement was not in writing, nor was there any memorandum or note thereof in writing signed by this defendant, or by any person thereunto lawfully authorized by said defendant.
    And further answering the said defendant, says that the plaintiff has no remedy in equity against it.
    And it asks that it may have all the rights, under this answer against the said plaintiff’s bill, that it would have had if it had demurred thereto.
    
      L. B. Beasy, for plaintiff.
    The Winter Harbor Land Company, could have maintained an action of assumpsit upon the agreement of its grantee. Even without paying the debt, an action at law could have been maintained and the whole amount of the debt recovered of its grantee. Loche v. Homer, 131 Mass. 93; Barron v. Paine, 83 Maine, 323.
    But there being no privity of contract with the mortgagee, an action at law cannot be maintained by him. Prentice v. Brimhall, 123 Mass. 293 ; Mellen v. Whipple, 1 Gray, 317.
    In New York, and possibly some other states, an action at law will lie in favor of the mortgagee, but this is an exception to the general rule. Thorp v. Keokuk Goal Company, 48 N. Y. 259.
    The mortgagee may by bill in equity enforce such a covenant. This in some jurisdictions is based upon the avoidance of circuity of action and in others upon the doctrine of subrogation. Upon one or the other of these grounds jurisdiction in equity has been sustained where equity has been invoked. There are general statements contained in some cases that a covenant by a purchaser to assume and pay a mortgage cannot be enforced by the mortgagee; but these statements are contained in opinions in suits at law and do not apply to or preclude the remedy in equity. Counsel cited: Pruden v. Williams, 26 N. J. Eq. 210; Klapworth v. Dressier, 13 N. J. Eq. 62, (78 Am. Dec. 69); Crowell v. Hospital, 27 N. J. Eq. 656 ; Norwood v. DeHart, 30 N. J. Eq. 414 ; Trotter v. Hughes, 12 N. Y. 74, (62 Am. Dec. 137) ; Marsh v. Pike, 10 Paige, 595; Cornell v. Prescott, 2 Barbour, 16 ; Corbett v. Waterman, 11 Iowa, 86 ; Bowen v. Kurtz, 37 Iowa, 239 ; Higman v. Stewart, 38 Mich. 523; Stuart v. Worden, 42 Mich. 154; Booth v. Conn. Mat. Life Ins. Co., 43 Mich. 299 ; Waters v. Bassell, 58 Miss. 602 ; Hare v. Murphy, (Neb.), 29 L. B. A. 851. See also Cofin v. Adams, 131 Mass. 137, and note in' 78 Am. Dec. 72, 75 and 77.
    Stat. of Frauds: Locke v. Homer, 131 Mass. 102; Hubon v. Park, 116 Mass. 541; Alger v. Scoville, 1 Gray, 391.
    
      A. W. King, for West Shore Land Company.
    Counsel argued that, as to the second question, the value of the mortgaged property should be determined in some way which will insure a fair result; and that if the amount due under the mortgage is in excess of the value, judgment should be rendered only for such excess.
    Sitting: Walton, Emeby, Haskell, Whitehouse, Wis-~well, Stbout, JJ.
   Stbout, J.

The complainant is the holder of a mortgage upon real estate given by the Winter Harbor Land Company to Alice I. Hammond, and by her assigned to complainant. Two of the bills are to recover accrued interest upon tbe mortgage debt, and tbe third to recover the excess of the mortgage debt over the value of the estate mortgaged. The mortgage has been foreclosed, and complainant has full title to the premises. He alleges that the mortgaged property is of less value than the amount of the mortgage debt. This is denied by the West Shore Land Company, who hold a conveyance of the property from the Winter Harbor Land Company, which was made subject to this mortgage, and contains the provision “which said mortgage this grantee by acceptance of this deed hereby assumes and agrees to pay and fully discharge.”

Under this provision in the deed, the West Shore Land Company became liable to the holder of the mortgage, for the entire mortgage debt. It was part of the purchase money, and the promise to pay it was a promise to pay its own debt and not the debt of another within the statute of frauds. Complainant not being a party to that deed, he may have remedy in equity, against the mortgagor and his grantee, or implied assumpsit against either. Baldwin v. Emery, post.

Having acquired absolute title to the mortgaged property, the debt is thereby paid if the value of the property equals or exceeds the amount of the debt. If less than that, complainant is entitled to recover the deficiency from the original mortgagor, or from its grantee, and will be entitled to separate decrees against each for the full amount of such deficiency, — he can have, however, but one satisfaction.

The cases must go to a master to ascertain and report to the court the value of the mortgaged property, at the date when complainant’s title became absolute, and the amount of the mortgage debt at the same date. Upon the coming in' and acceptance of his report, final decree to be made.

Bill sustained. Master to he appointed.