Case Name: Joseph W. Hartley, plaintiff and appellant, vs. Benjamin Tatham and Rebecca C., his wife, (who were impleaded with Samuel W. Dunscomb et al.,) defendants and respondents
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1863-11-14
Citations: 1 Rob. 246
Docket Number: 
Parties: Joseph W. Hartley, plaintiff and appellant, vs. Benjamin Tatham and Rebecca C., his wife, (who were impleaded with Samuel W. Dunscomb et al.,) defendants and respondents.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 24
Pages: 246–261

Head Matter:
Joseph W. Hartley, plaintiff and appellant, vs. Benjamin Tatham and Rebecca C., his wife, (who were impleaded with Samuel W. Dunscomb et al.,) defendants and respondents.
1. The assignee of a mortgage takes it subject to any equities subsisting in favor of the mortgagor, and any person who has succeeded to his estate, at the time of the assignment.
2. Thus where one holding an executory contract for the conveyance to him of certain premises subject to a mortgage, rendered services to the mortgagee upon an agreement that their value was to be received as payment of so much due on the mortgage, and such agreement was' afterwards assigned, and the premises subject to such mortgage also conveyed to a third'persoh;
Sold that the latter was entitled to the benefit of the application of the value of such services in part payment of such mortgage, as against an assignee of the mortgage by an assignment subsequently made.
8. One who has succeeded to the estate of the mortgagor is not estopped from asserting such right by the fact that his immediate grantor had assumed the payment of the mortgage for its full amount, and agreed, with the mortgagor, to pay it. This is a mere personal obligation of such grantor, to such-mortgagor, and does not so run with the land as to estop his grantee. The mortgages could not avail himself of it, nor can his assignee.
4. ■ Where, upon default in the payment of interest, upon a mortgage, which provides that on such default the principal shall, at the mortgagee’s option, become payable, the mortgagee has made his election by bringing an action claiming to foreclose for the whole amount, the defendant has a right, although after suit brought, to tender the whole amount, with costs, and the tender, if refused, extinguishes the lien of the mortgage.
(Before Mohcrief, Robertson and Monell, JJ.)
Heard October 16,1863;
decided November 14, 1863.
This was an appeal from a judgment entered at special term, in favor of the defendants, Tatham and wife.
The action was for the foreclosure of a .mortgage, and was tried the second time before Justice Moncrief, without a jury, on the 9th, 18th and 23d of April, 1863. A previous decision in the cause is reported 10 Bosw. 273. Upon this second trial the following facts were established : On the 30th of May, 1860, Michael Cunningham executed and delivered the mortgage in question to Samuel W. Dunscomb, to secure the payment of the sum of fifteen hundred dollars, part of the purchase money for the conveyance of the same premises by Dunscomb to him. on the same day. On the first of June of the same year, Cunningham conveyed the same premises to James J. Smith subject to the mortgage, which Smith assumed, and agreed to pay. On the 26th of January, 1862, Smith conveyed the premises to the defendant Tatham, subject to the same mortgage. The latter conveyance contained no assumption of the mortgage, nor any agreement on the part of Tatham to pay the same. On the 23d of Aprils Dunscomb, the mortgagee, agreed to sell eight lots of land, (including the premises afterwards mortgaged by Cunningham,) to one Higginson, he, Higginson, agreeing to erect thereon eight dwelling houses ; the conveyance to be delivered when the houses were completed, subject to $5500 of mortgage. Subsequently, in March, 1851, Higginson assigned this agreement, with the consent of Dunscomb, to one Arment, he, Dunscomb, agreeing to convey the eight lots and houses to Arment when the plumbing work was finished. In the fall of the same year, Arment agreed with Dunscomb to do certain plumbing work in the Beekman Hill chapel, which Dunscomb was then building, Dunscomb agreeing to pay Arment therefor, by deducting the amount from the $1500 -mortgage from Cunningham to him. The plumbing work was clone, and the amount thereof ($490.03) was certified and agreed to by Dunscomb.
At the time of the conveyance by Smith to Tatham, which was done by request of Arment, he agreed to assign to Tatham, and subsequently, on the 3d of May, 1862, did assign to Tatham his interest in the agreement between Dunscomb and Higginson, and also his claim against Dunscomb for the plumbing work upon the chapel, and his agreement in respect thereto.
On the 13th of May, 1862, Dunscomb assigned the $1500 mortgage (mortgage in suit) to the plaintiff.
On the 9th of July, 1862, Tatham tendered to the plaintiff the balance of principal and interest due on the mortgage, with the costs accrued in this action, after deducting the $490.03, the amount of the plumbing bill on the chapel, which was refused.
The conclusions of law from the foregoing facts, were,
■ 1st. That the sum of $490.03 for work, &c. done on the Beekman Hill chapel, under the agreement between Duns-comb and Arment, was a payment pro tanto, on the mortgage.
2d. That such payment must be applied to the interest; and being so applied there was no interest due at the commencement of the suit.
3d. That by force of the several agreements, and the assignments and conveyance to Tatham, he was substituted in the place of the mortgagor and of Arment, with all their rights.
4th. That the tender by Tatham to the plaintiff of the balance of principal and interest due, extinguished the lien of the mortgage.
■ A judgment was entered in conformity with these conclusions, from which the plaintiff appealed.
D. M. Porter, for the plaintiff, appellant.
I. The deed to the respondents recites the appellant’s mortgage, and conveys the land subject to it. They are bound, therefore, by such recitals. It was not only a contract that the land should pay the mortgage, but it estopped them from setting up any thing existing at that time inconsistent with the recital. (Chautauqua Co. Bank v. Risley, 4 Den. 480. Jackson v. Parkhurst, 9 Wend. 209. Penron v. Griffith, 4 Binn. 231. Stowe v. Wyse, 7 Conn. R. 214. Cram v. Morris, 6 Pet. 598. Jackson v. Harrington, 9 Cowen, 86. Parker v. Smith, 17 Mass. Rep. 413. Inskeep v. Shields, 4 Harr. Del. 345, cited in 2 Halst. Ev. p. 8, § 52. 1 A. K. Marshall, Ky. 475. 2 Hals. Ev. p. 111, § 26. Carver v. Jackson, 4 Peters, 83, 88. Sinclair v. Jackson, 8 Cowen, 585, 586. . Torrey v. Bank of Orleans, 9 Paige, 649. Demeyer v. Legg, 18 Barb. 14. Brinsmade v. Hurst, 3 Duer, 206. 2 Adolph. & El. 295. Addison on Cont. 856. Chitty on Cont. 85, 86. Barfoot v. Freswell, 3 Keble, 465. Sampson v. Easterby, 9 Barn. & Cres. 505. 4 Man. & Ry. 422, aff. 1 Crompt. & Jervis, 105. S. C. 4 Moore & Payne, 601. Sands v. Church, 6 N. Y. Rep. 2 Seld. 355. 24 N. Y. Rep. 173. McKinstry v. Curtis, 10 Paige, 503. Jumel v. Jumel, 7 id 591. Marsh v. Pike, 10 id. 595. Gilbert v. Averill, 15 Barb. 20. Mathews v. Aikin, 1 Comst. 604. Trotter v. Hughes, 2 Kern. 74. Carr v. Roach, 2 Duer 20.)
II. Another principle is also fatal to the claim of the respondents.
Arment directed Dunscomh to convey the house to Tatham, subject to the mortgages. Being at Arment’s request, he was a party to such arrangement, as well as Dunscomh, Smith and Tatham. Smith being the principal debtor, (Trotter v. Hughes, supra,) also held the title in trust for Dunscomh & Higginson. The covenants in the deed were with the principal debtor, because he could not discharge himself from liability by showing the fact that he was a trustee. (Jackson v. Stackhouse, 1 Cowen, 122. 1 McLean C. C. R. 178.) And he conveyed to Tatham, reciting in the deed, that the land was conveyed subject to the mortgage in question.
1. All the parties, therefore, to the Arment, the Dunscomh and the Higginson contracts met and consummated them by a deed. That deed being not only a conveyance, but an agree ment, all other contracts, whether written or parol, were merged in it. Arment’s contract to do work, &c., “ looked to, was connected with, and affected the title to the premises, and was merged and extinguished by the deed.” (Bull v. Willard, 9 Barb. 641, 645.) All prior or contemporaneous contracts were merged in it. (Pattison v. Hull, 9 Cowen, 749. Stevens v. Cooper, 1 John. Ch. 425. Howes v. Barker, 3 John. 506; Mumford v. McPherson, 1 id. 414. Lamatt v. The Hudson River Fire Ins. Co., 17 N. Y. Rep. 199, note. Spencer v. Tilden, 5 Cowen, 144. Austin v. Sawyer, 9 id. 39. Ruse v. The Mutual Benefit Life Ins. Co., 23 N. Y. Rep. 519, 520. Baker v. Higgins, 21 id. 397. 2 Phillips’ Ev. 4th ed. 665, 666, note 494, also p. 644. Lafarge v. Rickert, 5 Wend. 187. Creary v. Holly, 14 id. 30.)
2. The recital of this mortgage in the deed was a ratification and confirmation of it, and was an agreement that it was a valid and subsisting security, and amounted to á contract that the premises were held and should pay it; that the land was the primary fund therefor; and that the mortgage was prior to the respondent’s equity of redemption.
3. The respondents acted under the deed to them, which contained a covenant that the mortgage was a valid and subsisting mortgage. And the parties having by the deed put an end to all the agreements in any wise affecting the mortgage or the premises, they in law waived any prior agreements, inasmuch as they were merged in and by the deed. Tatham, by accepting the deed (at the request of Arment,) and putting it upon record, containing a recital that all the title he had was subject to this. mortgage, amounting in law to an agreement at the date of the deed, is very properly estopped, in pais and also by deed, from setting up any inconsistent contract or equities existing at the time of the deed, to defeat the deed and the covenants in it, which are binding upon both parties.
4. A recital in the deed that the mortgage was reduced or affected by the Arment contract for work to be done on the church, would have prevented estoppel, merger, public policy, or the statute of frauds from cutting it off. If this had been done, Dunscomb would not have assigned the mortgage to the appellant, as his good faith is not impeached. It would be unjust, when Tatliam, Smith Arment, and Dunscomb all knew the relation of the church contract to this mortgage, and made and received the deed covenanting that the mortgage was valid, that the land should pay it, to allow them to set up an oral agreement, which they knew of at that time, against an assignee without notice. To prevent such an injustice, the law of estoppel and merger has been held, on the grounds of justice and public policy, to apply and preclude such a result.
5. Only that part of the church contract which related to this mortgage was affected by the deed. He could collect the account of Dunscomb in an action therefor; therefore, no harm could result to Arment. He only waived the right to apply it upon this mortgage.
III. After the deed to Tath'am, Arment had no equity in the premises, ceased to have any interest whatever, and became an utter stranger to all equity therein. The case is different from what it would have been, if Arment had not become such stranger before the right to apply the claim in payment had accrued.
It is dangerous to have a parol agreement floating about to the prejudice of a mortgage. The law of merger, and of estoppel, if obeyed, is certain to prevent any injury to innocent assignees. A parol agreement can not be set up to impair the covenant in a deed. If parties have parol agreements, and subsequently put them into a deed, they will be prevented by merger and estoppel from showing any agreements not embraced in the writing. If so, there was no agreement to apply the work in payment, as it was done away with by the deed; and Arment, as a stranger, held nothing at the time of the assignment of the account, which amounted to, or could be applied as payment.
IV. Tatham also was an entire stranger to all equities growing out of the Higginson contract, as it continued to be held by the bank until after this action was commenced and was satisfied, and merged by his deed. Nor was he in any way liable to pay the mortgage, if the plaintiffs had sued him therefor. (Belmont v. Coman, 22 N. Y. Rep. 438.) Nor was the mortgagor a party to these transactions. Presumptively he knew nothing of them. The appellant did not, when he took the assignment. Being told so a few hours after, could not affect him. Arment being an utter stranger to any equity, after his equity was terminated by the deed to Tatham, the law of a claim in a third party, (this does not amount to an equity,) laid down in Murray v. Lylburn, (2 John. Ch. 441,) Livingston v. Dean, (Id. 479,) James v. Morey, (2 Cowen, 298,) would prevent any such claim from being set up against the appellant’s mortgage. This case can not be decided in favor of the respondents without overruling Ferris v. Crawford, (2 Denio, 595.) The premises still remain chargeable, in the hands of the purchaser, with the payment of this mortgage. It never became an equity as against the mortgage, even if it was an equity within the decisions. (Murray v. Lylburn, and Livingston v. Dean, supra.) It could not be set up, because we had no one to inquire of relative to it. Cunningham knew nothing of it, and Tatham’s recording his deed was not even notice to the prior mortgagee, or his assignee, to put him on his inquiry of Tatham. (Stuyvesant v. Hall, 2 Barb. Ch. R. 151.) It was, therefore, a latent claim within the rule just referred to, and no one whom the law pointed out as proper to inquire of could have informed him of Tatham’s claim. No decision can be found where- a claim like the present has been held even to be an equity in a third person. The cases are either where a payment has actually been made, or some interest in the premises themselves acquired or held at the time of any transfer, by some persons equitably interested in the title to the premises, before the mortgage could be affected in the hands of an assignee.
V; Neither can the claim he set up as an offset. 1. The debt was the bond and the promise in the deed to Smith, and not the mortgage. (Burr v. Beers, 24 N. Y. Rep. 178.) If the bond was once paid, the mortgage would be discharged. The mortgage might be discharged and the debt remain ; it was not even due until after the assignment to the plaintiffs, and the election of the appellants.
The plaintiffs had a right of action both on the bond against the mortgagor, and on the deed against Smith, and could have made the money out of either. An offset of a claim in the hands of Tatham could not be successfully set up by them while they did not own it, (Pignolet v. Geer, Sup. Court Gen. Term, June 1863,) there being no mutuality. If so the plaintiffs could have recovered of the mortgagor and his grantee. Then they could have enforced the lien as against Tatham, despite the claim which could not be set up as an offset against them, because Tatham’s claim is against Dunscomb only, and their claim, although a prior lien upon the premises owned by Tatham, is not against him. If so, it is no offset to our demand against the mortgagor and the land, which he never conveyed, but expressly reserved to pay this bond. 2. It would be a different case if the mortgagor, or Smith, his grantee, had held an offset against Dunscomb. A person who is not a debtor can not set up a claim due himself to offset a claim, in a suit to recover a debt against a third person. There is no mutuality. It is not a counter-claim. (Dillaye v. Niles, 4 Abb. 253. Davidson v. Remington, 12 How. 310. Spencer v. Babcock, 22 Barb. 327. Vassear v. Livingston, 3 Kernan, 248.)
VI. The judgment was erroneous, because although the court first found nothing due at the commencement of this action, yet it found that a tender was made which discharged the lien. It denied the appellant a judgment because the bond was not due, and then gave the respondents affirmative relief because it was due.
VII. No tender was made, because the respondents made the tender all that was due on the mortgage, principal, interest, and costs. A tender must be without any restrictions or conditions whatever. (4 Camp. 156. Wood v. Hitchcock, 20 Wend. 47.)
VIII. There was no proof of the value of the work. That it' was done is admitted, but not the value ; consequently, the respondents failed in showing they tendered enough. There is no proof of the amount of the costs, as they were not taxed, nor were thqy fixed by the plaintiff’s attorney. -His counsel had no authority to tax them. Therefore, enough not being tendered, there was no tender.
IX. Pleading a tender, admits the facts stated in the compfiaint. (3 Taunt. 95. Peake, 15. 2 Term Rep. 275. 4 id. 579. Burks v. Trippet, 1 Saund. 33. Cox v. Parry, 1 Durn. & East, 464. Wood v. Perry, 1 Barb. 114, 129. Slack v. Brown, 13 Wend. 390.) Consequently, the pleadings admitted the sum of $1207.54 to be due ; the appellant was therefore entitled to judgment for that amount, with costs. (Brown v. Ferguson, 2 Denio, 196. Sheriden v. Smith, 2 Hill, 538. Livingston v. Harrison, 2 E. D. Smith, 197.) The tender could only discharge the lien, (Kortright v. Cady, 21 N. Y. Rep. 343), but not the debt; to save costs, the respondent ought to have brought the money into court. (Cases supra.) An answer having been put in, admitting the amount by pleading the tender, the appellant was entitled .to judgment for the amount alleged to have been tendered, with costs, irrespective of the form of the action. (Barlow v. Scott, 24 N. Y. Rep. 40. The Nexo York Ice Co. v. Northwestern Insurance Co., 23 id. 357. Emery v. Pease, 20 id. 62.)
X. If the account could have been applied to affect the appellant’s rights, it would have satisfied the' first instalment of interest on the 3d of May, 1863, and its residue would have been applied upon the principal and not to reduce the interest not yet accrued," or upon the principal- remaining unpaid. (State of Connecticut v. Jackson, 1 John. Ch. 13.) Another installment of interest had fallen due, and the thirty days had elapsed thereafter, before the commencement of this action, July 8th, 1863 ; consequently, the mortgage was due when the action was commenced.
XI. Higginson’s contract-was subject to the equities between himself and Dunscomb.
Higginson’s contract, and all others-relating to this house, were merged in the deed to Tatham ; and the proof of them and about them was erroneous. (Armstrong v. Munday, 5 Denio, 170.) Nor can they have any force whatever, because they are extinguished thereby. •
XII. There was also error in admitting proof of the parol agreement between Dunscomb and Arment; also, in refusing to strike out that proof. (Armstrong v. Munday, supra.)
XIII. The court erred in overruling the plaintiff's objections to evidence.
A, Clarke, for the defendants, respondents.
I. The assignee of a chose in action, or any thing but commercial paper, when he takes it bona fide, is liable to all the equities which exist against the demand, while in the hands of the assignor. (Roberts v. Carter, 24 How. Pr. 44. Murray v. Lylburn, 2 John. Ch. 441. The Niagara Bank v. Roosevelt, 9 Cowen, 409, affirming Hopkins’ Ch. 579. Mangles v. Dickson, 3 Ho. of L. Cases, 702, 18 Law and Eq. 82. Voorhis’ Code, ed. 6, p. 82, note (c.) Code of Procedure, §§ 111, 112.)
1. A chose in action could not be assigned by the rules of the common law. (3 Black. Com. 442.) The assignment was originally, and still remains, in the form of a declaration of trust, and a permission by the assignor to use his name, in order to recover the possession. Until the passage of the Code, therefore, when a debt or bond was assigned over, it had to be sued in the name of the original creditor;. the person to whom it was transferred being rather an attorney than an assignee.
2. When an action, under the former statute of set off, was brought in the name of the party by one to whom he had assigned it, the defendant could show a set-off against the nominal plaintiff. (Beckwith v. Union Bank, 4 Sandf. 610, aff. 5 Seld. 211.) Section 112 of the Code was intended to preserve in the same manner the-rights of defendants, in cases where the suit was prosecuted in the name of the assignee, as required by section 111,
3. The rights of assignees will he protected only against such persons as have either express or implied notice of the assignment, before any dealing by them with the assignor. (Johnson v. Bloodgood, 1 John. Ch. 51. Wardell v. Eden, 2 John. Cas. 121. Van Vechten v. Graves, 4 John. 403. See 12 John. 343 ; 19 id. 95 ; 4 Barb. 47; Stuyvesant v. Hall, 2 Barb. Ch. 151; Truscott v. King, 6 Barb 346 ; Schutt v. Large, Id. 373.)
II. The assignee of a bond and mortgags, takes it subject to all existing equities between his immediate assignor, and the owner of the equity of redemption, whether such owner was the mortgagor or one who had succeeded to his rights by one of several conveyances. (Mickles v. Townsend, 18 N. Y. Rep. 579,580. Davies v. Austen, 1 Ves. 247. Matthews v. Wallwyn, 4 id. 118. Coles v. Jones, 2 Vern. 692. Murray v. Lylburn, 2 John. Ch. 441.)
1. He can not be protected, even in equity, as a bona fide purchaser, without notice, unless he has acquired the legal as well as the equitable title. (Peabody v. Fenton, 3 Barb. Ch. 451.)
2. The assignee of a chose in action, not negotiable, obtains only an equitable interest, and is not protected against a prior equity. (Gay v. Gay, 10 Paige, 369.)
III. The agreement of Dunscomb with Arment to deduct from the amount due on the mortgage, the value of plumbing work, and the acceptance by Dunscomb of such plumbing work, is in equity payment pro tanto.
1. Payment is the fulfillment of a promise. (Bou. Die. verb. lcpayment ”) It must be made in the thing agreed upon. (Id.)
2. Payment, when properly made, discharges the debtor from his obligation, to the extent of the payment. (Id. And see Brown v. Feeter, 7 Wend. 301 ; Eaves v. Henderson, 17 id. 190 ; Toll v. Hiller, 11 Paige, 228 ; Cameron v. Fowler, 5 Hill, 306 ; 5 Cowen, 671; 26 Wend. 555 ; 2 Paige, 605; 24 N. Y. Rep. 391; 1 Hopk. 569 ; 9 Cowen, 409.)
3. Payment may be made by the real or principal debtor and any other persons from whom the creditor had a right to demand it. An agent may make payment for his principal. Any mode of payment by the agent, accepted and received as such by the creditor, as án absolute payment, will have the effect to discharge the principal, whether known or unknown, and whether in the usual course of business or not. (3 Chitt. Com. Law, 204. 1 B. & Aid. 14. 6 B. & C. 160. 7 Barn. & Cress. 17. Bou. Dic. “payment.”)
IV. No interest was due on the bond and mortgage, as alleged in the complaint, either on the 30th of November, 1861, or at the time of the assignment of the bond and mortgage by Dunscomb to the plaintiff.
1. By the agreement between Dunscomb and Higginson, the interest was to be computed from the date of the deed to Tatham, which was on January 26th, 1862.
2. Before that time, Dunscomb had made an agreement with Arment to do work on the “ Beekman Hill Chapel,” amounting to about $500, which was to be received as a part payment of the said bond and mortgage., The work was done by Arment, and accepted by Dunscomb, under the agreement, before the assignment of the bond and mortgage to the plaintiff, and was a payment pro tanto. (Bank of Niagara v. Rosevelt, 9 Cowen, 409.)
V. Where the principal is not, but the interest is due, a payment must be applied first to the interest, and the residue to the principal first to become due. (People v. County of New York, 5 Cowen, 331. Jencks v. Alexander, 11 Paige, 619. The State of Connecticut v. Jackson, 1 John. Ch. 13. Allen v. Culver, 3 Den. 284.)
VI. On the 9th of July, 1862, the defendant Tatham offered to the plaintiff, the receipted bill of Arment for the plumbing work done for Dunscomb ; and, at the same time, tendered to the plaintiff the principal, interest, and costs, in this action, amounting together to the sum of $1207.54, which the said plaintiff wholly refused to accept. Such tender and refusal of the whole amount due on the mortgage of principal, interest, and costs, discharges the lien of the mortgage. (Jackson v. Crafts, 18 John. 110. Edwards v. Farmers’ Fire Ins. & Loan Co. 21 Wend. 467, aff. 26 id. 555. Arnot v. Post, 6 Hill, 65. Kortright v. Cady, 21 N. Y. Rep. 343. 4 Kent’s Com. 7th ed. 165.)
VII. A defendant may set off any demand against the plaintiff which arose out of the contract or transaction set forth in the complaint as the foundation of his claim, or which is connected with the subject of the action, or any other cause of action arising on contract, and existing at the commencement of the action. (Code, § 150.) He may also set off any demand due him in his own right, or as the assignee and owner of the demand against the plaintiff or the assignee of the bond and mortgage, which existed at the time of the assignment thereof, and which belonged to the defendant in good faith before notice of the assignment. (2 R. S. 4th ed. p. 604, § 12, sub. 8.)
If the demand be for personal property sold, for money paid, or for services done, or be capable of being ascertained by calculation, the amount need not to be liquidated! (Id. sub. 3.)
VIII. Several of the exceptions taken to conclusions of fact and law are not available on appeal, because the case does not disclose that the judge who tried the cause was requested to find the said facts and conclusions of law, and that he refused so to find. (Grant v. Morse, 22 N. Y. Rep. 323.) Others are untenable. And there is no error in the rulings at the trial, excepted-to.

Opinion:
By the Court, Monell, J.
The assignee of a mortgage takes it subject to all the equities existing in favor of the mortgagee, or of any person who succeeds to his estate, at the time of the assignment, (24 How. Pr. 505,) and, hence, Tat-ham's right to require the application of the plumber's bill towards the payment of the mortgage, was as perfect as if Dunscomb had continued the owner of the mortgage. Tat-ham, by the assignment from Arment to him, succeeded to all the rights of Arment, under his agreement with Dunscomb, and could have required Dunscomb, while he held the mortgage, or his assignee afterwards, to deduct the amount of the plumbing work from the mortgage. It operated therefore, as a payment pro tanto, and left only the balance due on the mortgage.
The mortgage, by its terms, was not payable until the 30th of May, 1863; but it contained a provision that if default was made in the payment of interest, the whole principal should, at the option of the mortgagee, become immediately due and payable.
The plaintiff, in his complaint, elected to have the principal due, and the defendant had then the right, although after suit brought, to tender the amount of principal and interest due, and such tender and a refusal to receive it would- extinguish the lien of the mortgage. (Kortright v. Cady, 21 N. Y. Rep. 368.)
It is objected that Tatham is estopped from asserting the equity derived under the assignment from Arment, inasmuch as his immediate grantor had assumed the mortgage for the whole amount, and agreed to' pay it.
The general rule in respect to estoppels by deed is, that a man shall not be permitted to make any averment which contradicts the record to which he is a party. In other words, that he shall be concluded by the admissinns in the deed to which he is a party. Hence, the grantee is estopped by the-admissions of the grantor in the deed.
This rule, however, is not of uniform application ; and it is unavailing except as between the immediate parties and privies of blood or estate. To á stranger it is wholly unavailable. (Jackson v. Bradford, 4 Wend. 619. Jewell v. Harrinqton, 19 id. 471.)
In Jewell v. Harrington the deed conveyed the premises, "subject, nevertheless, to the right of dower of Cloe Jewell, who was the widow of Samuel Nash, deceased, who was the former proprietor of the above described premises." And the court held the grantee was not estopped from contesting the plaintiff's claim for dower. They say the plaintiff is not privy to the deed in any way ; but a stranger, who had no interest or concern with it.
The only effect of the assumption of the mortgage by Smith was to make him surety for Cunningham the mortgagor, and he became personally liable for the payment of the debt of the latter to the holder of the mortgage. (Halsey v. Reed, 9 Paige, 446. Russell v. Pistor, 7 N. Y. Rep. 171.) There was no covenant by the grantee, which would run with the land, and bind those who succeeded to his estate. It was a mere personal obligation, implied by the acceptance of the deed, and upon which an assumpsit could be raised in favor of the holder of the mortgage.
Even if Smith, who had assumed the mortgage, had been the owner of the premises at the time of this foreclosure, he would not be estopped .by the recital in his deed. As Dunscomb the mortgagee was not bound by them, Smith would not be, for there must be reciprocity to render an estoppel available. (Lansing v. Montgomery, 2 John. 382.) But there is nothing in the assumption by Smith which binds his grantee. The defendant, Tatham, stands in no relation of surety, in respect to the mortgaged debt, and can not in any way be affected by the purely personal obligation of his grantor.
There is, however, another reason why the doctrine of estoppel does not apply to this case. The deed from Cunningham to Smith, which recites the mortgage, and which it is claimed should operate as an estoppel, 'was • executed and delivered before the agreement between Dunscomb and Arment, respecting the plumbing work, was made. At that time the whole amount of the mortgage was secured and unpaid, and it was proper for Cunningham to sell subject to, and for Smith to assume, the whole mortgage. The equity which was transferred to Tatham arose afterwards. The agreement with Arment for the plumbing work, and the performance of it by Arment, was the assumption by Smith of the mortgage, and while Duns-comb was the holder of it. It is clear, therefore, that-in the hands of Dunscomb, the plumber's bill would have been a good set-off against the mortgage, either by Smith, had he taken the bill, or by Tatham, who did take it.
The plaintiff purchased the mortgage after all this took place, and he took it subject to those equities, which in my ' opinion, were not defeated nor extinguished by the subsequent transfer of the mortgage to the plaintiff.
My conclusions are, that Tatham having received, by transfer, the bill for plumbing work, performed by Arment, under his contract with Dunscomb, could require its application, a' a payment pro tanto, on the mortgage, and that the terms of the balance due on the mortgage, and the refusal of the plaintiff to receive it, extinguished the lien of the mortgage. •
The conclusion of the learned justice was therefore correct, and the judgment should be affirmed, with costs.