Case ID: ny-super-ct_57/html/0042-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE NEW YORK LIFE INSURANCE COMPANY, Appellant, v. JAMES AITKIN, as Executor, etc., Respondent.
    
      Deed and mortgage.—Assumption of mortgage and covenant for its payment by grantee, in the conveyance of real estate subject to an outstanding mortgage lien.
    
    On the trial of the case at bar, the complaint was dismissed on the ground that in the deed to defendant’s testatrix, which contained the assumption clause, the description of the mortgage assumed was erroneous, and parol evidence was inadmissible to correct the erroneous description and show what mortgage was intended to be assumed by the grantee.
    
      Held, that this ruling was erroneous. That this case was one in which the mistake appears from the instrument itself, and where the intent of the parties can be ascertained, beyond a doubt, by parol proof of'existing and undisputed facts and circumstances connected with the property, its conveyance and the mortgage in question. In such a case the law will enforce the obligation according to its true legal construction, and there is no need of resorting to equity to reform the instrument. That the parol evidence offered at the trial was clearly admissible and its rejection was error.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.
    
      Decided May 6, 1889.
    Appeal by plaintiff from judgment, entered on a dismissal of the complaint -at trial term.
    
      Henry G. Atwater, attorney and of counsel for appellant, argued:—
    I. The description in the deed from Gregg to Aitkin of the mortgage assumed as being made by Gregg, although erroneous, is immaterial, since the mortgage intended is sufficiently ascertained by the other words of description, aided by the extrinsic evidence. There is here a latent ambiguity which can be removed by extrinsic evidence in the same way that the ambiguity was raised, quod ex facto oritur ambiguum, verificatione facti tollitur. Greenleaf Ev., § 297. On the face of the deed the description is plain enough, and only becomes ambiguous when by extrinsic evidence it appears that there is no mortgage which corresponds with the whole description, and then the other words of description and the extrinsic evidence are resorted to in aid of the interpretation, and if from these the intent is sufficiently ascertained, the misdescription becomes immaterial. That branch of the rule about latent ambiguities which applies here is generally laid down in the words “ Falso demonstrate non nocet." The exposition of this maxim as given in the various text books and decided cases is practically the same, though couched in slightly different language. 1 Greenleaf Ev., § 301; Taylor on Ev., § 1218; Broom's Legal Maxims, 629; Wigram on Extrinsic Ev., 144, par. 67; Miller v. Travers, 8 Bing. 244; Burr v. Broadway F. Ins. Co., 16 N. Y. 267.
    
      II. Taking the assumption clause as a whole and without rejecting any part of it, still it may be construed so as to apply to plaintiff’s mortgage. The object of an assumption clause is to have the grantee assume some obligation resting on the grantor. Gregg was liable for this mortgage because he had assumed it in the deed to him. If the words “made and executed by the party of the first part” are construed to mean “ assumed by the party of the first part ” the description is perfect. It was said in Coyne v. Weaver, 84 N. Y. 390, that “a court may wrestle if need be with unwilling words to find the truth or preserve a right which is endangered.” Gregg was in equity the principal debtor in the mortgage by reason of his assumption; and while it was not technically made by him, yet the words “ made and executed ” may without any undue straining of language be applied to a mortgage in which he was the principal debtor.
    
      Johnston & Johnston, attorneys and of counsel for respondent, argued :
    I. The plaintiff herein stands or falls by the terms of the covenant in the assumption or habendum clause in the deed from Gregg to the defendant’s testatrix. That a written instrument, until reformed, is the best evidence of a contract between the parties is a well settled rule of law. Until reformed it is the highest evidence of the contract, and it cannot be contradicted or varied by parol evidence. Hogan v. Smith, 16 Ala., 600. The question that is presented by the words of the said assumption clause is one of mistake. Until the instrument is reformed its terms must govern the liabilities of the parties thereto. It is not a question of misdescription, nor of parol evidence to vary a written instrument, nor of a patent or latent ambiguity, as contended below by the learned counsel for the appellant.
    
      II. It being a question of mistake, the plaintiff being a stranger to the contract on which it now sues, cannot seek to reform the said contract. This court (Sedgwick, Ch. J., O’Gorman and Truax, JJ.), has recently passed on this question in Willis v. Sanders, 51 N. Y. Super. Ct. 384, saying that “ one demanding the reformation of a deed must show himself a privy to the transaction wherein the deed was made,” and “ an action for the reformation of the deed is not sustainable by one who does not, as a matter of fact, connect himself with the arrangement, bargain or contract under which the deed was made.” The court of Mississippi has enunciated the same doctrine in Kilpatrick v. Kilpatrick, 23 Miss. 124, saying : “ It is a well settled principle that a court of equity will not rectify a mistake in a written instrument by the aid of parol evidence, except as between the original parties.” So also has the court of Alabama in Hogan v. Smith, 16 Ala. 600, saying : “a party to a deed or other instrument who alleges a mistake in drawing it must become an actor in seeking to reform it.”
    III. The plaintiff was assuredly not a party or privy to the transaction in which the said deed from Gregg to defendant’s testatrix was made, and viewed by the law of New Jersey, the lex loci rei sites (Bouvier Dict., sub. tit.; 2 Parsons on Contracts, 702; 2 Kent, 294; Story Conf. Laws, p. 103), there is no privity of contract of any kind whatever between plaintiff and defendant’s testatrix. The courts of New Jersey refuse to extend the doctrine' of Lawrence v. Fox to contracts under seal (Crowell v. Currier, 27 N. J. Eq. (12 C. E. Gr.) 152 and 650), and hold that there is no privity of contract between the mortgagee and the party assuming the payment of the mortgage, and they give the mortgagee a judgment for deficiency against the party assuming only on the equitable principle of subrogation and of preventing a multiplicity of actions (Crowell v. Currier supra; Young v. Trustees of Public Schools, 4 Stew. (31 N. J. Eq.), 290), reversing S. C. sub nom. Trustees v. Anderson, 3 Stew. (30 N. J. Eq.) 366, and not by virtue of any equity residing in him [Ib., p. 666). Hence the plaintiff has no standing in court to ask a reformation of the terms of this contract.
    IV. This court has already held in Ranny v. McMullen, 5 Abb. N. C. 246, that in a collateral proceeding of this kind the written instrument cannot be reformed ; it must be done in a direct suit for that purpose.
    V. Even were the plaintiff able to connect itself as a party to the transaction in which the deed was made, the mistake is one of law and not of fact, and one that the court will not relieve against (Hoover v. Reilly, 2 Abb. N. S. 471 ; Leavitt v. Palmer, 3 N. Y. 19 ; Hall v. Reed, 2 Barb. 500), and the plaintiff did not offer nor prove any fraud, imposition, undue influence, imbecility of mind or the like (Gwyne v. Hamilton, 29 Ala. 233 ; Gordere v. Downing, 18 Ill. 492 ; Atlantic Fire Ins. Co. v. Wilson, 5. R. I. 479 ; Kesler v. Zimmerschitte, 1 Texas, 50), and the plaintiff does not stand on any equity superior to the defendant (Henderson v. Dickey, 35 Mo. 120), it is simply offering evidence tending to show that Helen E. Aitkin paid interest on a $4,000 mortgage, and did not offer testimony sufficient to warrant the court to act. (Vreeland v. Bramhall, 28 N. J. Eq. 85 ; Flaacke v. Mayor, &c., of J. C., 28 Ib. 110 ; Voorhis v. Murphy, 26 Ib. 434 ; Treacy v. Hecker, 51 How. Pr. 69).
   By the Court.—Freedman, J.

This action is brought on an assumption clause in a deed.

On December 3, 1868, Phoebe T. Drew and John G-. Drew, her husband, made a certain indenture of mortgage to the plaintiff whereby they mortgaged certain premises therein described to the plaintiff to secure the payment to plaintiff of the sum of $4,000 and interest.

On December 15, 1869, the said Phoebe T. Drew and John Gr. Drew conveyed the said mortgaged premises to John Gregg by a deed wherein he, Gregg, covenanted and agreed to pay the mortgage aforesaid.

On December 28, 1870, the said John Gregg and Phoebe Gregg, his wife, conveyed the said premises to Helen E. Aitkin. This deed contained an assumption clause in the following words :

“ And that this conveyance is made, subject nevertheless to the lien of a certain mortgage made and executed by the said party of the first part to the New York Life Ins. Co. bearing date the 3d day of December, 1868, to secure the sum of four thousand (4,000) dollars, lawful money of the United States, with interest thereon, which mortgage forming a part of the consideration money hereinbefore expressed, and having been deducted therefrom, the said party of the second part hereby assumes and undertakes to pay and to indemnify and to save said party of the first part harmless therefrom.”

This is the assumption clause on which this action is brought.

Helen E. Aitkin entered into possession of the premises so conveyed and remained in possession as owner thereof for a considerable time thereafter. Subsequently she died leaving a will which was duly admitted to probate by the surrogate of the city and county of New York on the 16th day of March, 1875, and letters testamentary were issued thereon to the defendant James Aitkin, the executor named in said will, who ever since has been, and now is, the sole executor of said Helen E. Aitkin.

On March 5, 1880, the said mortgaged premises were duly sold by decree of the court of chancery of New Jersey in a suit to foreclose the plaintiff’s mortgage. Not enough was realized to satisfy the amount due thereon. The deficiency remaining due and owing to the plaintiff, for which the plaintiff holds no security of any sort, amounts to $1,590.80, with interest thereon from March 5, 1880. To recover this sum and interest the present action was brought.

At the trial plaintiff’s complaint was dismissed on the ground that in the deed to defendant’s testatrix, which contains the assumption clause sued upon as above set forth, the description of the mortgage assumed is erroneous, and that parol evidence was not admissible to correct the erroneous description and to show what mortgage was intended to be assumed. In this the learned trial judge erred. The description of plaintiff’s mortgage was in all respects correct, except as to the name of the mortgagor. The party of the first part (i. e., John Gregg) could not have been such mortgagor because at the time of the execution of the mortgage he was not the owner of the premises. Four thousand dollars had been deducted from the purchase price on account of a mortgage on the property for that amount, and there was but one mortgage on the property, as it was understood by the parties, for there was a covenant that the premises were free from encumbrances, which, taken in connection with other parts of the deed, meant that there was no encumbrance but the mortgage mentioned. The payment of this mortgage was assumed, for there is no uncertainty or ambiguity as to the personal undertaking. After all this the plaintiff was prepared to show, if it had been permitted, that no other mortgage held by the plaintiff could have been intended because it never had but this one mortgage on the premises, and that subsequently Helen E. Aitken paid interest to the plaintiff thereon. This evidence was admissible. The object of the assumption clause was to have the grantee assume some obligation resting on the grantor. Gregg was liable for the amount of the mortgage because he had assumed it in the deed to him. If the words, “ made and executed by the party of the first part” are construed to mean “assumed by the party of the first part,” the description is perfect. Upon the whole case, especially with the aid of the rejected evidence, the intent of the parties is apparent without any doubt.

The case, therefore, being one in which the mistake appears from the instrument itself, and where the intent of the parties can be ascertained without any doubt, the law will enforce the obligation according to its true legal construction, and there is no need of resorting to equity to reform the instrument. This precise point has been determined by this court, after a review of authorities, in Fairchild v. Lynch, 42 N. Y. Super Ct. (10 J. & S.) 265, and a reference to that case is all that is necessary here.

The claim of the defendant that, in as much as the mortgaged premises were situate in the state of New . Jersey, the law of that state should be considered, requires no examination now, because no such question was raised below. If there is a difference between the law of this state and that of New Jersey of which the defendant can take advantage, it should be shown in" some competent way upon the new trial.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Sedgwick, Oh. J., and O’Gorman, J., concurred.