Case Name: BENJAMIN L. LUDINGTON, Respondent, v. HENRY R. LOW, as Admr., &c., Appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1886-06-08
Citations: 21 Jones & S. 374
Docket Number: 
Parties: BENJAMIN L. LUDINGTON, Respondent, v. HENRY R. LOW, as Admr., &c., Appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 53
Pages: 374–381

Head Matter:
BENJAMIN L. LUDINGTON, Respondent, v. HENRY R. LOW, as Admr., &c., Appellant.
Mortgage—Assumption of—Contract, construction of effect of recitals.
S. and W. entered into an agreement under seal, reciting that whereas W. had bought a certain house, &c., from S. for the sum of $35,500, payable as follows: “22,000, by assumption of a certain mortgage now on said premises toL., together with interest,” &c., the balance to be otherwise paid as therein set forth. On the same day and as part of the same transaction, S. at the request of W., executed a deed of the premises to W.’s wife, subject only to the mortgage aforesaid, and acknowledging the receipt of the consideration money.
Held, that the agreement and deed are to be construed together, and from them it appears that Mrs. W., as the appointee of W., took title to the premises subject only to the mortgage, and without personal liability for the same, and that as to Mrs. W., the consideration was paid; that W. by the agreement between him and S., was liable as principal debtor for any deficiency after foreclosure; and that the mortgagee L. could have the benefit of this agreement in an action brought by him against W. to recover such deficiency.
further held, that the fact that the agreement upon which the liability of W. is based, is found only in a recital, is of no importance.
Before Sedgwick, Oh. J., Truax and O’Gorman, JJ.
Decided June 8, 1886.
Appeal from a judgment entered in favor of the plaintiff for $5,557.18.
The action was tried by a single judge without a jury, and was brought to compel Hezekiah Watkins to make good a deficiency of $3,514.54, arising on a sale of real estate under foreclosure of a mortgage, on the ground that Watkins had, by his written agreement, assumed payment of the mortgage. It appeared that the plaintiff Ludington, being owner of a lot in Lexington avenue, with the house thereon, sold it to Sarah E. Slauson for the sum of $35,500, and she gave him, in part payment thereof, a mortgage on the premises for $22,000. Some time afterwards, on April 18, 1873, she entered into a written agreement with Watkins, which was in part as follows : ‘ ‘ Memorandum of agreement made this eighteenth day of April, 1873, between Sarah E. Slauson and Hezekiah Watkins, as follows : Whereas, the said Watkins has this day bought of the said Slauson the house and lot known as No. 359 Lexington avenue, New York, together with the furniture, &c., &c., for the sum of thirty-five thousand five hundred dollars ($35,500), payable as follows : $22,000 by assumption of a certain mortgage now on said premises, to B. L. Ludington, together with interest from April 1, 1873,” &c. The balance of the purchase money Watkins agreed to pay, partly by his notes amounting to $3,500, and partly by railroad mortgage bonds. The agreement further recited that, 1 ‘ Whereas, there are liens upon said premises which are to be paid off by said Slauson as follows ” (setting forth such liens), and then provided that the note and securities mentioned were to be deposited with a trustee to be delivered to said Slauson on payment of the liens which by the agreement were to be paid by her. This agreement was executed under seal by Sarah E. Slauson and her husband, and by said Watkins. On the same day, April 18, 1873, and as part of the same transaction, and at the desire and request ,of Watkins, a warranty deed of the said lot and house was executed and delivered by Mrs. Slauson and her husband to Elizabeth F. Watkins, wife of said Hezekiah Watkins. In this deed the consideration is stated as $35,500, in hand paid by the grantee (Mrs. Watkins), and it was covenanted that the property was free and clear of all incumbrances, except that it was subject to the said mortgage of $22,000 to Ludington, the plaintiff.
Further facts appear in the opinion.
William J. Groo, for the appellant:
I. The deed and agreement considered and construed together, show that Mrs. Slauson and her husband for the consideration of $35,500, “ the receipt whereof is hereby acknowledged, ” conveyed the premises subject to the Ludington mortgage. Previous to the drawing and execution of these-instruments, the parties thereto must have agreed verbally to the provisions which they contain; viz., that although Watkins had agreed to buy the real and personal property of Mrs. Slauson, that it should be conveyed to his, Watkins’ wife, subject to the Ludington mortgage. The property being incumbered, it was necessary for Mrs. Watkins’ protection, that provision should be made to satisfy such liens, and it was agreed that an instrument should be drawn to accomplish that object. So the deed Was drawn and executed according to the previous verbal agreement, and Mrs. Watkins took the property subject to the mortgage, and the agreement, drawn and executed at the same time of the deed, recited the fact that the property had been sold, the amount of consideration, and that part of said consideration was payable by the assumption of said mortgage. This last mentioned instrument was not in duplicate, but when executed, was delivered to and always retained by Watkins. Its execution was not acknowledged or witnessed. Under these circumstances there can be no doubt, but that the parties thereto used the word, “ assumption,” in the recitals of the agreement, when referring to the mortgage, with the same significance as the words “subject to said mortgage.” They simply intended to refer to the terms of the deed on that subject. It is an unwarrantable assumption to claim, that Watkins intended, by this agreement, executed and delivered - to him for the protection of his wife’s property, to make himself liable for the mortgage that Mrs. Slauson had given to Ludington, if the property should not bring the amount. It will hardly be claimed, that he would be liable under this agreement, if the deed had been given to him, instead of his wife : nor that she would have been liable to Ludington had she signed the agreement instead of her husband. Schley v. Fryer (1 Centr. Reptr. 5), distinguished.
II. The case of Booth v. Cleveland R. M. Co. (74 N. Y. 15), is to be distinguished from the case at bar. In this case none of the acts to be performed relate to the payment of the $22,000 mortgage. They all have reference to judgments against said property, the payment of back interest on said mortgage and taxes, and the placing in escrow of certain securities. But for these judgments against the property, no such, agreement would have been necessary. By the execution and delivery of the deed to Mrs. Watkins, subject to the mortgage, and the surrender of. the notes and railroad bonds to Slauson, the transaction would have been complete, and terminated. The liability of Watkins was an afterthought, as shown by the fact that Ludington brought two foreclosure actions on said mortgage without making any personal claim against him. As the deed was executed, it imposed no liability upon any one, although the Ludington mortgage formed part of the consideration (Belmont v. Coman, 22 N. Y. 439). Nothing less than a positive promise to pay the outstanding mortgage, or language that the courts can fairly construe into such promise, will create a personal liability. All the recent decisions show that the court of appeals is not inclined to enlarge this rule (Smith v. Truslow, 84 N. Y. 660).
III. If it be said that the recitals preceding the agreement of April 18,1873, are evidence of a verbal agreement by which Mr. Watkins bound himself to pay said mortgage, we answer, that the agreement, whatever it was, having been reduced to writing, must control. No previous oral agreement can be proved or inferred to change the writing (Selchow v. Stymus, 26 Hun, 145 ; Burr v. Hyde, 17 Hun, 190 ; 7 Abb. N. C. 403 ; 81 N. Y. 175).
IV. The case of Slauson v. Watkins (86 N. Y. 597), ought not to be regarded as controlling here. It was an action between other parties and raised other issues.
B. L. Ludington, respondent in person.

Opinion:
By the Court.
—O'Gorman, J.
(Afterstating the facts as above.)—The manifest intention and result of this agreement and deed, forming together one transaction, were that Mrs. Watkins acquired the fee of the property, subject only to the mortgage, and that her husband, Hezekiah Watkins, paid the consideration for the sale, partly in cash and partly by assuming the burden of caring for the mortgage, so that the mortgagor should be held harmless on account of it (Pardee v. Treat, 82 N. Y. 385).
The mortgage was payable in installments—one of them for $5,000, being due on October 1, 1873. This installment not being paid, an action to foreclose was brought by Ludington, in which Mrs. Slauson, Mrs. Watkins and Hezekiah, her husband, were made defendants. This action was discontinued on the terms of defendant, Hezekiah Watkins, agreeing to pay $2,000 on account of the mortgage on May 1, 1874, and $3,000 on April 1, 1876, and said Watkins did pay $2,000 in June, 1874, in performance of his agreement to assume payment of the mortgage.
In May, 1876, another suit for foreclosure of that mortgage was begun by the plaintiff, Ludington. In this action, Hezekiah Watkins was made a defendant, but no personal judgment was asked against him, and a judg ment was obtained, and the premises were sold, the result being a deficiency of $3,514.54. To recover the amount of this deficiency from the legal representative of Hezekiali Watkins, since deceased, the present action is brought.
During the pendency of the foreclosure suit which resulted in the sale of the property, an action was brought in this court by Mrs. Slauson, to compel Mrs. Watkins to pay the amount due on the mortgage to Ludington. The complaint in that action was dismissed, and this decision being affirmed by the general term, was afterwards sustained by the court of appeals (86 N. Y. 597), which held that by the express terms of the agreement of Watkins, $22,000, part of the price of the property, was discharged or paid ; by his "assumption " of the mortgage, and that that word indicated an adoption or taking on himself the burden of the mortgage by Watkins, so that Mrs. Slauson, the mortgagor, should not be harmed or troubled by it, that it was, in substance, a promise to indemnify or hold her as mortgagor harmless, for or on account of it; and the learned court further held that until the determination of the foreclosure suit, then pending, and the ascertainment thereby of the mortgagor's liability after the sale, this action of Mrs. Slauson did not lie.
Following in the track of this opinion of the court of appeals, there seems little difficulty in sustaining the judgment in the case at bar.
The amount of Mrs. Slauson's liability, as mortgagor, has been ascertained by the foreclosure and sale, and also the deficiency arising therefrom.
If, as the court of appeals say in Ludington v. Slauson (supra), Mrs. Slauson should be compelled to pay a deficiency arising on the foreclosure of the mortgage, the defendant (Watkins) would, by the terms of his agreement, be liable to her.
The effect of the conveyance to Mrs. Watkins and the agreement between Mrs. Slauson and Hezekiah Watkins, was to make the mortgaged premises primarily liable for the debt, and Watkins principal debtor, as between Mrs. Slauson and him.
That the plaintiff, Ludington, the mortgagee of the mortgage could have the benefit of the agreement between Watkins and Mrs. Slauson, cannot, I think, be successfully contended (Lawrence v. Fox, 20 N. Y. 268 ; Burr v. Beers, 24 Ib. 178 ; Garnsey v. Rogers, 47 Ib. 233 ; Pardee v. Treat, supra; Bennett v. Bates, 94 N. Y. 354 ; Todd v. Weber, 95 Ib. 181; Smith v. Truslow, 84 Ib. 660 ; Slauson v. Watkins, 86 Ib. 597 ; Vrooman v. Turner, 69 Ib. 280).
The appellant contends, that the question of responsibility of the defendant Watkins for payment of the deficiency, depends rather on the language of the deed to his' wife, than on the language in the memorandum of agreement, between him and Mrs. Slauson; that in the deed there was no covenant on the part of his wife,—the grantee,—that she should assume payment of the mortgage, but that she took title, subject only to the mortgage, and that no more than that was intended by the agreement between her husband and Mrs. Slauson; that in the deed the receipt of payment in full of all the consideration money was acknowledged; that the reference, in the agreement, as to the assumption of the mortgage by Watkins was in the "recital" only, and not among the things, which Watkins promised to perform. None of these objections seems to me of weight.
There is nothing inconsistent in the execution of the deed to the wife, as her husband's appointee, and the payment of all the consideration by him. As between Mrs. Watkins, the grantee, and Mrs. Slauson, the grantor, the consideration was paid, as set forth in the deed, and no personal obligation to pay the mortgage rested on the grantee.
Such liability did rest on Watkins, her husband, as the result of his own agreement to pay the consideration, and to pay it, in part, by the assumption of this mortgage (Pike v. Seiter, 15 Hun, 402). That his agreement to assume is to be found only in the "recital," is of no importance in this inquiry.
There is no particular form of words, necessary to the creation of an express obligation to do or to forbear to do a particular act. It is from the text of an agreement, and the language of the parties either in the body or in the recital or references, that the intention is manifested (Booth v. Cleveland, &c. Co., 74 N. Y. 15; Schley v. Freyer, 1 Central R. 5). In the case at bar, it was recited that Watkins had bought the house from Mrs. Slauson, for a sum of money payable, in part, by his assumption of the mortgage. This was not the creation of a new agreement to do an act, but the declaration and admission of an agreement, then in existence, on the faith of which the sale was made.
There was no contention in the case, as to the facts, and the exceptions on the part of the defendant to the findings and refusals of the learned trial judge to find, are immaterial and without merit.
The judgment appealed from should be affirmed, with costs.
Sedgwick, Oh. J., and Truax, J., concurred.