Case Name: Henry K. Willard, Administrator, vs. Mary L. C. Wood, Executrix
Court: Supreme Court of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1886-03-29
Citations: 4 Mackey 538
Docket Number: Law. No. 25,866
Parties: Henry K. Willard, Administrator, vs. Mary L. C. Wood, Executrix.
Judges: The Chief Justice and Justices Cox and Merrick sitting.
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 15
Pages: 538–558

Head Matter:
Henry K. Willard, Administrator, vs. Mary L. C. Wood, Executrix.
Law. No. 25,866.
Decided March 29, 1886.
The Chief Justice and Justices Cox and Merrick sitting.
1. When the question is by which of several systems or laws contract rights are to be determined, the rule is that whatever relates merely to the remedy and constitutes part of the procedure, is determined by the lex f rjri, but whatever goes to the substance of the obligation and affects the rights of the parties as growing out of the contract itself or inhering in it or attaching to it, is governed by the lex loci comtraclus.
2. A mortgage was executed in New York; the mortgage debt was presumed to be payable there since no other place of payment was designated.
3. As by the law of New York an assignee of an equity of redemption by a deed which he accepts, containing a covenant on his part to assume and pay the mortgage debt, but which deed is not sealed nor signed by him, nor intended so to be, is liable to suit for the debt by the mortgagee, he must likewise be held liable here ; but the questions as to the form of the action, the time within which it must be brought, as well as the dignity or grade of the contract, i. e., whether a specialty or in parol, must be decided by the law of this forum.
4. At common law, and it is so in this District, the acceptance of such a deed creates no specialty obligation on the part of the grantee, although he may be held liable on it in assumpsit as on a simple contract.
B. When the administrator of the mortgagee in such a deed brings suit upon it in this District to recover from the grantee’s executrix a portion of the mortgage debt remaining unpaid after the foreclosure of the mortgage, the action must be in assumpsit, and the Statute of Limitations in force here is a bar if the suit be brought more than three years after the cause of action accrued.
Hearing in G-eneral Term in tbe first instance on an agreed statement of facts.
The Case is stated in tbe opinion.
Enoch Totten for plaintiff:
1. Tbis is a New York contract and must be governed and construed according to tbe laws of New York. Tbe parties all resided in New York, tbe contract was made there, tbe mortgaged property was situated there, the contract was to be performed and tbe money was payable there. McGoon vs. Scales, 9 Wall., 27; Orvis vs. Powell, 98 U. S., 176 ; Brine vs. Ins. Co., 96 U. S., 627 ; Norton vs. Pritchard, 106 U. S., 129 ; Gebhart vs. R. R. Co., 109 U. S., 527; Dennick vs. R. R. Co., 103 U. S., 11.
2. By the law of the State of New York, a purchaser of mortgaged real estate who accepts a deed thereto, containing a covenant that he assumes and covenants, and agrees to pay the mortgage as a part of the purchase money, is liable for the amount of the incumbrance, and his liability is precisely the same, whether he actually signs the deed or not. He is bound by the covenants in the instrument in either case, and an action at law may be maintained on the contract by the mortgagee. Trotter vs. Hughes, 12 N. Y., 74; Burr vs. Beers, 24 N. Y., 178; Thorp vs. Keokuk Co., 48 N. Y., 257 ; Hand vs. Kennedy, 83 N. Y., 149 ; Atlantic Dock Co. vs. Leavitt, 54 N. Y., 35; Vrooman vs. Turner, 69 N. Y., 280 ; Bowen vs. Beck, 94 N. Y., 86.
3. When a contract has been concluded between two persons for a good consideration for the benefit of a third, that third person may maintain an action on the contract against the obligee according to the common law, as well as in New York. Whorewood vs. Shaw, Yelv., 25 (1603) ; Dutton vs. Pool, 1 Ventrie, 318 (1673) ; 2 Lord Raymond, 928 ; Cowper, 443; 1 Bos. & Pul., 101, note c; 2 Dow. & Ry., 277; Schemerhorn vs. Vanderheyden, 1 John., 140: Cumberland vs. Codrington, 3 John. Ch., 255 ; Trotter vs. Hughes, 12 N. Y., 74; Lawrence vs. Fox, 20 N. Y., 268; Burr vs. Beers, 24 N. Y., 178 ; Griswold vs. Selleck, Minn. Sup. Ct., March, 1883; Hendrick vs. Lindsey, 98 U. S., 143; Nat’l Bank vs. Grand Lodge, 98 U. S., 123 ; Opdyke vs. R. R. Co., 3 Dill., 55 ; Hinkley vs. Fowle, 15 Me., 285.
(See an able article, by Henry O. Taylor, Esq., on this subject, in the Am. Law Review of April, 1881, vol. N. S., p. 232.)
4. It is the general rule in the other States, also, that a purchaser of mortgaged real estate who accepts and enters into possession under a deed containing such a covenant, as is found in this case, becomes personally liable for the debt and on default may be sued. In most States the action may be maintained by the mortgagee, but this is not allowed in others, and it seems that a technical distinction is made in a few States (mostly of the original 13) between sealed and unsealed, instruments, and some .courts hold that the action must be assumpsit, and not covenant. Jones on Mortgages, secs. 752 to 769 ; Huyler vs. Atwood, 26 N. J. Eq., 504; Hall vs. Marston, 17 Mass, 575 ; Allen vs. Stenger, 74 Ill., 119 ; Barnes vs. Johnston, 84 Ill., 95 ; Bristrow vs. Lane, 21 Ill., 194; Walden vs. Karr, 88 Ill., 49; Brown vs. Strait, 19 Ill., 89; Lamb vs. Tucker, 42 Ia., 118; Arnold vs. Lyman, 17 Mass., 400; Joslyn vs. Car Spring Co., 7 Vroom, 146; Brewer vs. Dyer, 7 Cush.. 337 ; Carnegie vs. Morrison, 2 Metcalfe, 381; Urquhart vs. Brayton, 12 R. I., 169; Bohanon vs. Pope, 42 Maine, 93; Thompson vs. Bertram, 14 Iowa, 476; McDowell vs. Law, 35 Wis., 171; Bassett vs. Hughes, 43 Wis., 319; Huff’s Appeal, 24 Pa. St., 200; Snell vs. Ives, 85 Ills., 280; Ross vs. Kenison, 38 Iowa, 306; Comstock vs. Hitt, 37 Ills., 542 ; Fitzgerald vs. Barker, 70 Mo., 529; Heim vs. Vogel, 69 Mo., 529 ; Merriman vs. Moore, 90 Pa. St., 78 ; Brewer vs. Maurer, 38 Ohio St., 543 ; Rogers vs. Herron, 92 Ills., 583 ; Dean vs. Walker, 107 Ills., 540; Flagg vs. Geltmacker, 98 Ills., 293; Locke vs. Horner, 131 Mass., 93; Furnam vs. Durgan, 119 Mass., 93; Osborn vs. Cabell, 77 Va., 462.
The Federal courts recognize this doctrine. Twitchell vs. Mears, 8 Biss., 211; (S. C.), 9 Myers’ Fed. Dec., C. C., 5, § 723; Betts vs. Drew, Chic. Leg. News, Nov. 8, ’79, Harlan, J.; Drury vs. Hayden, 111 U. S., 223; reversing S. C., 9 Myers’ Fed. Dec., ch. 5, § 719.
Many of the cases hold that this liability of the grantor so assuming the incumbrance, exists whether or not his grantor is bound personally to pay the debt, as in Thorp vs. Keokuk Co., 48 N. Y., 253; Gurnsey vs. Rogers, 47 N. Y., 233; Bassett vs. Hughes, 43 Wis., 319.
In Illinois, Iowa, Michigan, Wisconsin and Minnesota, and probably in most of the United States, as in New York, this assuming purchaser, becomes the principal debtor as between him and his vendor. Crawford vs. Edwards, 33 Mich., 354; Miller vs. Thompson, 34 Mich., 10; Dean vs. Walker, 107 Ill., 540; Thompson vs. Bertram, 14 Ia., 476; Moses vs. Clark, &c., 12 la., 140; Jones on Mortgages, secs. 752 to 762.
II. 1. At the common law the grantee in the deed of the kind in question here, who accepted the deed and took possession under it, was bound by the covenants contained therein, precisely as if he had actually signed and sealed the deed and “covenant” was the proper form of action. 1 Saunders’ Pld’gs & Ev., 476, [389]; 1 Chitty Pld’gs, 119; Brett vs. Cumberland, Croke’s James, 398; Coke Lit., 231a; Hunt vs. Bodney, 1 Wash. C. C., 375; Finley vs. Simpson, 23 Gab., 311; Scott vs. Lunt, 7 Pet., 605 ; Rose vs. Poulton, 23 E. C. L., 191; Vernon vs. Jefferys, 2 Strange, 146; Burnett vs. Lynch, 5 B. & C., 599; 12 E. C. L., 327; Hutchinson vs. R. R. Co., 37 Wis., 582; Hubbard vs. Marshall, 50 Wis., 327; Patchin vs. Swift, 21 Vt., 293; Schack vs. Anthony, 1 Maule & S., 573; Hawkins vs. Sherman, 3 C. & P., 459; 14 E. C. L., 388.
In many States an action at law may be maintained on the covenant by the mortgagee. Urquhart vs. Brayton, 12 R. I., 169; Merriman vs. Moore, 90 Pa. St., 78; Townsend vs. Long, 77 Pa. St., 143; Justice vs. Toltman, 86 Pa. St., 147; Jones on Mortgages, § 762.
This is undoubtedly the established rule in New York, and hence the liability of the defendant is the same hero as if his testator had in fact signed and.sealed the deed. The deed, as has been seen, must be 'construed as it would be in New York. Trotter vs. Hughes, 12 N. Y., 74; Atlantic Dock Co. vs. Leavitt, 54 N. Y., 35; Bowen vs. Beck, 94 N. Y., 86; Thorp vs. Keokuk Co., 48 N. Y., 257.
2. It being established that the defendant’s testator was bound by the covenants in this deed in the same manner as if he had signed it, it must follow that he is bound by the covenants in it until they shall be “above twelve years’ standing,” and that the plea of the defendant of the Statute of Limitations constitutes no defence-
Some of the courts of this country, wherein the strict common law rules as to pleading and forms of action are still observed, have held that the action of covenant cannot be maintained, for the technical reason that the defendant did not actually seal the deed, and that “assumpsit” must be resorted to.
The Statute of Limitations in force here provides that:
“No bill, bond, judgment, recognizance, statute merchant or of the staple, or other specialty whatsoever * * * shall be good and pleadable, or admitted in evidence against any person or persons of this province after the principal debtor and creditor have been both dead twelve years or the debt or thing in action above twelve years’ standing.” Act of Md., 1715, ch. 23, sec. 6.
By the code of procedure of New York, it is requisite that the complaint shall contain—
“A plain and concise statement of the facts constituting a cause of action without unnecessary repetition.”
The 28th rule of this court is in the following words:
“ The declaration shall state only the substantive facts necessary to constitute the cause of action without unnecessary verbiage, and with substantial certainty.”
There is no substantial difference between these two prescribed rules, and it may be said that the forms of action are the same. If this cause were in a New York court, this declaration would answer in the place of the “complaint” of the code, and the “complaint” in one of the courts of' that State, would stand here for a declaration.
It will be admitted by all those courts which recognize the liability of the assuming purchaser, and which, also, observe the strict rules as to pleading, and as to the forms of action, that an action of assumpsit may be maintained against the purchaser, on such a contract as this, by the mortgagee; they put it on the ground of an implied promise to pay the debt to the mortgagee, enforced by the fact that the money was retained out of the purchase money for that purpose, and that therefore the equitable action of indebitatus assumpsit for “money had and received,” may be resorted to for the purpose of enforcing justice. Now, inasmuch as our rules practically ignore the forms of actions and pleadings, and require the pleader to state his case without designating or labelling it “assumpsit,” “case,” “covenant,” “trover” or “slander,” the character of the debt or of the instrument creating it, alone, furnishes the food for the Statute of Limitations to feed on; the circumstances of the case, and not the forms of action nor the forms of the pleadings must be looked to, in reference to the plea of the Statute of “Limitations.” According to our rule of pleading, it can make no difference what we may call the action; the only question is whether or not the estate of the defendant is liable on the covenants contained in the deed. If it is, then the rule says the declaration shall state “only the substantive facts necessary to constitute the cause of action.” The form is as wholly immaterial under our rules as under the New York code.
Wm. B. Webb and John Sidney Webb for defendant:
1. To prevent the har of the Statute- of Limitations, the action is brought, not in “assumpsit,” upon the implied promise to pay, raised hy entry and possession of the premises by Wood, but on the covenant contained in the indenture made between Wood and Dixon.
Therefore, the action being “covenant,” must conform to the technical rules of the common law; it must be founded upon a deed — profert is made of a deed, which, aside from its irregularities, shows that the plaintiff is not a party, nor is he in any way a representative of a party.
“ It is an inflexible rule that if a deed be inter partes, that is, on the face of it expressly describe and denote who are parties to it (as between “A of the first part and B of the second part”), C, if not expressly named as a party, cannot sue thereon, although the contract purport to be made for his sole advantage, and contain an express covenant with him to perform an act for his benefit. * * * The right of action at law has therefore been wisely' vested solely in the party having the strict legal title and interest, in exclusion of the mere equitable claim.” Chitty on Pleading, 3, 4- 1 Saunders’ Pleadings and Ev., 390; 1 Walford on Parties, 11; Berkeley vs. Hardy, 21 E. C. L., 495; Metcalf vs. Rycroft, 6 M. & S., 75; Anderson vs. Martindale, 1 East, 495; Barford vs. Stuckley, 6 E. C. L., 497; Southampton vs. Brown, 13 E. C. L., 322.
And is further extended in England to agreements in writing. Pigott vs. Thompson, 3 Bos. & Pul., 147 and note.
And to bonds for another’s benefit. Offley vs. Ward, 1 Lev., 235.
The excejotion was said to be in cases of near relationship of the third person to the promisee. Dutton vs. Poole, 2 Lev., 210.
But that exception does not apply hero, and the case has been practically overruled. Tweddle vs. Atkinson, 101 E. C. L., 392; Peddie vs. Brown, 3 Jurist, N. S., 895, H. L., 1857.
In this country the States most closely following the common law have held, that on a promise under seal made by A to B for the benefit of C, C cannot sue. Mellen vs. Whipple, 1 Gray, 317; Millard vs. Baldwin, 3 Gray, 484; Saunders vs. Filley, 12 Pick., 554; Ross vs. Milne, 12 Leigh., 204; How vs. How, 1 N. H., 474.
The cases in equity serve to show that no such right exists at law. Klepworth vs. Dressler, 2 Beas. Eq., N. Y., 62; Bissell vs. Bugbee, 7 Reporter, 550 (1879); Crowell vs. Hospital, 12 C. E. Green, 650; Culver vs. Badger, 29 N. J. Eq., 78.
2. The right of the plaintiff to sue in this case is sometimes put on the ground of a so-called exception to the rule stated by Chitty, often expressed in these words: “ A third person may sue on a contract made for his benefit.”
1st. It will be seen from an examination of the cases, that they are exceptions only in appearance, for the action is not brought on an express promise by A to B, but on an implied promise by A to pay money to C.
The benefit of the third person must have been ’the principal object of the contracting parties — it is not sufficient that it may incidentally benefit him. Dutton vs. Pool, 1 Ventris, 318; Felton vs. Dickinson, 10 Mass., 287; Farley vs. Cleveland, 4 Cow., 432; Garnsey vs. Rogers, 47 N. Y., 233; Merrill vs. Green, 55 N. Y., 270; Vroom vs. Turner, 69 N. Y., 283; Simon vs. Brown, 68 N. Y., 361; Treat vs. Stanton, 14 Conn., 445; Meech vs. Ensign, 49 Conn., 191.
“The real inquirí y is whether the promise and undertaking of Hendrick were intended to enure to to the joint benefit of Lindsay and Mansfield so as to entitle them to bring an action.” Hendrick vs. Lindsay, 93 U. S., 137.
As this cause of action accrued and the statute began to run against it March 14th, 1874, it has long since been barred. Meech vs. Ensign, 49 Conn., 191; Hendrick vs. Lindsay, 93 U. S., 143; Felton vs. Dickinson, 10 Mass., 287; Arnold vs. Lyman, 17 Mass.; Motley vs. Ins. Co., 29 Me., 337; Bohanon vs. Pope, 42 Me., 93; Pike vs. Brown, 7 Cush., 133.
Even this remedy is denied in England. Tweddle vs. Atkinson, 101 E. C. L.. 392; Price vs. Easton, 24 E. C. L., 193.
See also, Peddie vs. Brown, 3 Jurist, N. S., 895; Crowell vs. Hospital, 12 C. E. Green, 650; Warren vs. Batchelder, 15 N. H., 129; Tuttle vs. Catlin, 1 D. Chipman, 366; Exchange Bank vs. Rice, 107 Mass., 39; Owings’ Ex. vs. Owings, 9 Harr. & G., 484.
If the plaintiffs may recover the balance of the defendant, they have a security for their debt which they did not originally have, which they never contracted for and which the contracting parties did not intend that they should have, it in effect makes him the absolute guarantor of the debt. Meech vs. Ensign, 49 Conn , 191.
To hold that a binding promise from the fulfilment of which a third person will derive some benefit, necessarily gives such third person a right to sue thereon, notwithstanding the clearly expressed intention of the contracting parties to the contrary, would impose a restriction upon freedom in acquiring contract rights almost as great as would result from denying the right of the third person to sue under any circumstances. Am. Law Rev., vol. 2, N. S., 232.
No legal relation whatever is established between the mortgagee and the vendee by transactions between vendor and vendee to which the morgagee is not a party. 18 Am. Law Reg., N. S., 337, 401.
As the cases giving the mortgagee a right to sue in equity serve to show most clearly that no such right exists at law, some few of them are given here. Crowell vs. Hospital, 12 C. E. Green, 650; Culver vs. Badger, 29 N. Y., Eq., 78; Moore’s Appeal, 88 Penn. St., 450; Samuel vs. Peyton, 88 Penn. St., 465; Pettee vs. Peppard, 120 Mass., 522 ; Pike vs. Brown, 7 Cush., 133; Brannan vs. Dowse, 12 Cush., 228.
And the mortgagee for want of privity cannot sue such grantee. Mellen vs. Whipple, 1 Gray, 317; Exchange Bank vs. Rice, 107 Mass., 39; Townsend vs. Ward, 42 Conn., 250; Higman vs. Steward, 38 Mich., 667; Booth v. Conn. Ins. Co., 43 Mich., 299; Unger vs. Smith, 44 Mich., 22.
3. If for the sake of argument we concede to the plaintiff a right of action, it still becomes a question as to what remedy he has in a court of law.
The remedy is sought to be enforced here by an action of “covenant,” and the sole question for the court is, can the plaintiff sustain “covenant” upon an instrument which is not signed nor sealed by the party sought to be charged.
First. Whatever may be the laws of New York in regard to the rights of the mortgagee against this defendant, it is settled by all the authorities that the lex fori determines the form of the action, that is, whether it shall be assumpsit, covenant or debt. Pritchard vs. Norton, 106 U. S., 133; Bank vs. Donally, 8 Pet., 371; Andrews vs. Herriott, 4 Cow., 508 and note.
To same effect: Leroy vs. Beard, 8 How., C. C., 451; Douglas vs. Oldham, 6 N. H., 160; Trasher vs. Everhart 3 Gill & Johns., 234.
Second. The authorities are abundant, that though the grantee enter into possession, yet he does not execute the deed, he must be sued on his parol contract, and not upon the covenants contained in the deed. 1 Chitty Pl., 104 and note 1, 118, 119; 3 Rob, Pract., 362, 363, 393, 438; Stabler vs. Cowman, 7 Gill & John., 286; West. Md. R. R. Co. vs. Orendorff, 37 Md., 334-335 ; Hensdale vs. Humphrey, 15 Conn., 431; Foster vs. Atwater, 42 Conn., 244; Johnson vs. Muzzy, 45 Vt., 420; Maule vs. Weaver, 7 Pa. St., 329; Taylor vs. Glaser, 2 Serg. & R., 502 ; Trustees of Hocking County vs. Spencer, 7 Ohio Rep., p. 2,149 ; Davis vs. Judd, 6 Wis., 85 ; Bishop vs. Douglass, 25 Wis., 696 ; Goodwin vs. Gilbert, 9 Mass., 513 ; Guild vs. Leonard, 18 Pick., 516 ; Nugent vs. Riley, 1 Met., 121; Pike vs. Brown, 7 Cush., 133; Newell vs. Hill, 2 Met., 181; Parish vs. Whitney, 3 Gray ; Maine vs. Cumston, 98 Mass., 317 ; Martin vs. Drinan, 128 Mass., 515.
The Massachusetts cases are cited with approval in Carroll vs. Green, 2 Otto, 514.
Before the introduction of code pleading, this point was sustained hy the courts of New York. Gale vs. Nixon, 6 Cow., 445; Andrews vs. Herriot, 4 Cow., 508; Leroy vs. Beard, 8 How., 451; Broadhead vs. Noyes, 9 Mo., 56.
The law of England is, clearly, that covenant will not lie on an unsealed instrument. Brown vs. McFarran, 5 Irish L. R., 223; Lock vs. Wright, 8 Mod., 40; Burnett vs. Lynch, 5 B. & C., 602; Walford on Parties, 18, 19; Platt on Covenants, 12; Ahhott on Shipping, (8th ed.), 242.
The force and effect given to a seal in England is best shown by the decisions that a covenantor who has sealed is bound, in covenant, to his covenantee, although the covenantee himself has not executed the instrument. Morgan vs. Pike, 78 E. C. L., 473; Northampton Gas Lt. Co. vs. Parnell, 80 E. C. L., 630.
There is absolutely no ground for claim of the counsel of the plaintiff that our rules of practice -have abandoned all distinctions in the forms of action and forms of pleadings.
Whatever changes have been made, the fundamental rules of the common law remain practically the same. The distinctions between actions of covenant upon a sealed instrument and actions of assumpsit upon an implied promise are in full force to-day as in 1801.
Any form of action which the plaintiff may bring is barred by the statute 29 Car. II, ch. 3, § 4. Tire -undertaking was not to be performed within the space of one year from the making thereof, nor was it signed by the party sought to be charged therewith.
If that portion of the contract, which is sought to be enforced, constitutes a substantial part of the contract, and comes within the statute, the action cannot he maintained. Broodhead vs. Getman, 2 Denio, 87; Lockwood vs. Barnes, 3 Hill, 128; Bowie’s Ex’r vs. Bowie, 1 Md., 94.
The ground upon which, after part performance, the statute is held to be inapplicable in equity is, that it would he a fraud to defend under the statute. Hamilton vs. Jones, 3 Gill & J., 127; Md. Sav. Inst. vs. Schroeder, 8 Gill & J., 110; Jones vs. Hardesty, 10 Gill & J., 417; Moale vs. Buchanan, 11 Id., 324.
As the statute says, “no action shall be brought,” the question is one of remedy, and is governed by the lex fori, therefore it is immaterial to consider whether, assuming an action would lie in New York, the statute in that State must govern the present proceeding. Leroux vs. Brown, 74 E. C. L., 800; 1 Rob. Prac., 319, 320; Story Conflict of Laws, § 262; Chitty Contr., 98.

Opinion:
Mr. Justice Cox
delivered the opinion of the court.
This is an action by the administrator of a mortgagee against the estate of a person who purchased the equity of redemption and assumed the mortgage debt, to recover the balance of the debt remaining unsatisfied after a foreclosure sale.
There is an agreed statement of facts.
Those material to the present inquiry are as follows, viz.:
On the 7th of July, 1868, Martin Dixon executed a bond to Charles Christmas, in the State of New York, for $14,000, to he paid on the 7th of July, 1873, with interest at seven per cent, per annum, payable semi-annually; and at the same time executed a mortgage to secure the debt on certain real estate in Brooklyn, N. Y. The bond came, by regular assignment, to the plaintiff. On the 19th of July, 1869, Martin Dixon and wife conveyed the mortgaged property in fee to William W. W. Wood, the defendant's.intestate, hy a deed, containing the following language, after the habendum, viz.: "Subject, however, to a certain indenture of mortgage made by said Martin Dixon to Charles Christmas to secure fourteen thousand dollars, dated July 7,1868, and recorded, &c., which said mortgage, with the interest due and to grow due thereon, the party of the second part hereby assumes and covenants to pay, satisfy and discharge, the amount thereof forming a part of the consideration herein expressed, and having been deducted therefrom." The grantee neither sealed nor signed the deed, and the "in testimonium" clause shows that he was not expected to do so, as it recited that it was signed and sealed by the grantors only; but he accepted it and went into possession under it and made several payments on account of the principal, and paid the interest regularly down to March 14, 1874, when he sold and conveyed the property to one Bryan.
In 1877 the property was sold under a foreclosure proceeding, and the proceeds of sale credited on the bond, and the balance due, if plaintiff, on the facts stated, is entitled to recover, is agreed on.
This action was brought in December, 1884, and is, in form, an action of covenant on the agreement on the part of Wood, set out in the deed to him before mentioned.
The pleas are " never indebted," and " that the said cause of action did not accrue within three years before the commencement of the suit."
The case was heard here in the first instance.
The discussion of the case has assumed a wide range and embraced such questions as these, viz.: whether a man may sue at all on a promise to pay him money made to a third person; if so, whether he can sue unless the promise be made directly and designedly for his benefit, instead of being primarily for the benefit of the promisee; whether such action can be maintained by the intended beneficiary when the contract is under the seals of the parties to it; and if so, in what form; whether the alleged agreement in this case is to he considered a specialty or simple contract, not having been signed or sealed hy the defendant; and whether these questions are to he determined by the law of New York, where the contract was made, or by the law of this District where the remedy is sought.
Where a question arises hy which, of several systems or laws, contract rights are to he determined, the rule is that whatever relates merely to the remedy and constitutes part of the procedure, is determined by the law of the forum where the remedy is sought, for matters of process must be uniform in the courts of the same country; hut whatever goes to the substance of the obligation and affects the rights of the parties, as growing out of the contract itself, or inhering in it or attaching to it, is governed by the law of the place where the contract is made or is to he performed. See Pritchard vs. Norton, 106 U. S., 124.
In the present case the contract on which the action was founded was made in New York, and the money was payable there, as no other place was designated; and consequently the rights growing out of it are to be ascertained by a reference to the law of that State.
The first question is, whether an assignee of an equity of redemption, hy a deed which contains a covenant on his part to assume and pay the mortgage debt, but which deed is not sealed or signed hy him or intended so to be, is liable to suit for the debt in any form of action hy the mortgagee.
There is no statute on this subject in New York, but the right of the mortgagee to maintain such action has been maintained in a series of decisions hy the Court of Appeals of that State. See Trotter vs. Hughes, 12 N. Y., 14; Burr vs. Beers, 24 Id., 78; Thorp vs. Keokuk Co., 48 Id., 257; Hand vs. Kennedy, 83 Id., 149; Atlantic Dock Co. vs. Leavitt, 54 Id., 35; Vrooman vs. Turner, 69 Id., 280; Bowen vs. Beck, 94 Id., 86.
This may be taken as the settled law of New York, and so far the case of the plaintiff may he sufficiently clear.
But the important question relates'to his remedy.
It will be observed that tbe defendant never executed the deed containing the agreement on which he is sued, but simply accepted it as grantee; and the question is whether that act makes the deed his deed, so that he is to be sued in an action of debt or covenant as on a specialty; or, on the other hand, his obligation is merely a promise implied by law from the act of accepting the deed, on which only assumpsit can be maintained.
This indebtedness, if any, is more than three years, and less than twelve years, old. If it is a simple contract debt, the plea of limitations is a perfect defence. If it is a specialty debt, there is no defence.
The New York case last mentioned goes farther than to recognize a right of action in the mortgage, and, on a state of facts like those in the present case, holds that the deed is the deed of the grantee, though he did not sign it, and is not affected by the statute of limitations of New York applicable to simple contracts.
The case is exactly in point, in support of the plaintiff's case, if we are bound to accept the law of New York on this question as binding everywhere else. This depends upon the question whether the dignity or' grade of a contract is determined by the lex loci contractus or by the lex fori. Is the question whether a particular contract is a specialty or a simple contract, one which relates- to the construction of it, or the essential rights created by it, or one relating merely to the remedy? At first glance the former might seem to be the rule. But after all, the obligation of a contract, either to pay money or do a specific act, is just the same, whether it be under seal or not. The only differences made by the seal are in the form of the actipn on it, and the limit of time within which it must be brought. But these differences relate entirely to the question of remedy. It is admitted on all hands that the law of the forum must always determine what form of action must be adopted in a given case. And since the question whether assumpsit or ocvenant shall be brought depends on the dignity of the contract, the determination of the latter seems involved in the former, and dependent on the same law.
Such seems to be the rule settled by the authorities.
Thus in Bank U. S. vs. Donnally, 8 Pet., 361, it appeared that an action was brought in Virginia, in 1829, on a promissory note dated June 25, 1822, made and payable (in sixty days) in the State of Kentucky. The statute of Kentucky of 1812 provided—
"That all writings hereafter executed without a seal or seals, stipulating for the payment of money or property, or for the performance of any act, duty or duties shall be placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice, and to all intents and purposes having the same force and effect, and upon which the same species of action may be founded as if sealed."
The law of Kentucky was set out in the declaration with the obvious view of giving to the note sued on the character of a specialty contract.
The defendant pleaded the statute of limitations of Virginia, which enacted that—
"All actions of debt, grounded on any lending on contract, without specialty, shall be commenced and sued within five years next after the cause of such action or suit, and not after."
If the note sued on was to be treated as a specialty in Virginia, because it was made so in Kentucky, this defence was insufficient; otherwise, if, notwithstanding the Kentucky statute, it was to be treated as a simple contract in the courts of Virginia.
The Supreme Court, after noticing that the Kentucky statute did not, in terms, declare the note to be a specialty but only gave it the force and effect of one, say:
" But whatever may be the legislation of a State as to the obligation or remedy, its acts can have no binding authority beyond its own territorial jurisdiction; whatever authority they have in other States depends on principles of international comity and a sense of justice. The gen eral principle adopted by civilized nations is, that the nature, validity and interpretation of contracts are to be governed by the law of the country whére the contracts are made or are to be. performed. But the remedies are to be governed by the laws of the country where the suit is brought. No one will pretend that because an action of covenant will lie in Kentucky on an unsealed contract made in that State, therefore a like action will lie in another State where covenant will only lie on an instrument under seal. * The nature, validity and interpretation of the contract may be admitted to be the same in both States; but the mode by which the remedy is to be pursued, and the time ivithin which it is to be brought, may essentially differ. The remedy in Virginia must be sought within the time, and in the mode, and according to the descriptive character of the instru-_ ment known to the laws of Virginia, and not by the description and character of it prescribed in another State."
Now, if to be a specialty, as distinct from a simple contract, is a part of the meaning or of the essence of a contract to pay money, the law of Kentucky entered into this contract, and it was entitled everywhere to the same consideration, force and effect as a sealed instrument. But the Supreme Court has decided otherwise, and held that, although it had the force and effect of a specialty in Kentucky, it had not, therefore, the same in-Virginia, but its descriptive character, in this respect, must be determined by the law of the latter State, and as by that law the note sued on was a simple contract, the defence" of limitations appropriate to that character of cause of action must prevail.
A similar case is that of Leroy vs. Beard, 8 How., 451. It was an action of assumpsit, brought in the United States Circuit Court for New York, .on a covenant of seisin contained in a deed of land executed in Wisconsin, to which only a scrawl or ink seal was attached, instead of a seal of wax or wafer which was required to make an instrument ^ deed) in New York. The court below instructed the jury that the action of assumpsit was the proper form. And the Supreme Court say: "It becomes our duty to consider the nstruction as correct in relation to the form of 1the remedy. It was obliged to be in assumpsit in the State of New York. ' * We hold this, too, without impairing at all the principles that, in deciding on the obligation of the instrument as a contract, and not on the remedy on it elsewhere, the law of Wisconsin as the lex loci contractus must govern."
This is a clear decision that what was a specialty in Wisconsin was not, for that reason, a specialty in New York, and that the law of the latter State must determine the question.
This would be sufficient to settle the law on this question for us, but it may not be amiss to show that the rulings in the State courts are similar.
In Trasher vs. Everhart, 3 Grill & J., 234, it appeared that a suit in assumpsit was begun in the State of Maryland by attachment on a single bill, or promissory note under seal, executed in Virginia, which, by the laws of Virginia, was not a specialty, but a promissory note.
At the trial, the note was offered in evidence and was objected to as not proper to sustain assumpsit. Evidence as to the law of Virginia having been given, the court admitted the paper.
The Court of Appeals reversed the decision, saying: " The dispute is merely upon the remedy; that is to say, whether the action shall be covenant or assumpsit, upon a given contract between two persons within the jurisdiction of the court. The substance and effect of the recovery is the same in either form. The character of the instrument must be regulated by a reference to our domestic law."
Similar rulings will be found in Andrews vs. Herriott, 4 Cow., 508; Douglas vs. Oldham, 6 N. H., 160; Brodhead vs. Noyes, 9 Mo., 56. And we are not advised of any line of decisions to the contrary.
We are therefore forced to the conclusion that our own local law must determine the form of action in which this right of the mortgagee is to be asserted in this jurisdiction and whether it is barred by limitations.
At common law, while there was some controversy as to the right of a third person to sue on a parol promise made to another for his benefit, it was pretty clear that no such right existed as to promises under seal.
As Sheppard's Touchstone says, p. 174: "Any one that is party to the deed, to whom the covenant is made, may take advantage of the covenant, but not a stranger; for if A covenant with B to do an act to C, who is no party to the deed, and he doth it not, B, and not C, must sue him upon this breach."
The United States Supreme Court evidently takes this view in Hendrick vs. Lindsay, 93 U. S., 149, where they say: "It is argued, as Mansfield's name does not appear in the letters of Hendrick, that he could not join in this action. This would be true if the promise were under seal, rqeuiring an action of debt or covenant; but the right of a party to maintain assumpsit on a promise, not under seal, made to another for his benefit, although much controverted, is now the prevailing rule in this country." And the court cite, for this position, 1 Parsons on Contracts (6th ed.) 467, where it is said: " But where the promise is made under seal, and the action must be debt or covenant, then it must be brought in the name of the party to the instrument; and a third party for whose benefit the promise is made cannot sue upon it."
We cannot but regard it is an innovation upon the common law, to hold that in case of a deed containing mutual covenants, regularly executed by both parties, a third person, a stranger to the instrument, may sue one of the parties on his covenants, though made for his benefit.
Still, it is no business of ours if the courts of New York choose to so modify the common law in reference to a New York contract, as to create rights which we woDld not recognise in a similar case arising within our own jurisdiction.
But we regard it as a still bolder innovation on the common law, to hold that the acceptance of a deed in fee-simple containing words of covenant on the part of the grantee, but which is not and never was intended to be executed by him, makes it his deed, as if he had signed and sealed it, and creates a specialty obligation on his part.
We are not aware tha't any such result followed the acceptance of a deed at common law, except where a relation of tenure was created between the parties, and then only to a limited extent.
Co. Littleton, 231a, is referred to in support of the position taken in New York. The case was that where a lease was made to two on certain conditions, and the indenture bound them in a penalty to the performance of the conditions, and one only of the lessees sealed the' lease, it was nevertheless held that an action for the penalty ought to be brought against both, and'the plea in abatemeut of nonjoinder was sustained. In fact, Lord Coke was not discussing covenants, but commenting on Littleton's text in relation to estates in condition, in which (sec. 294) it was shown that whoever enters under a deed is bound by all the conditions in it, whether he executed it or not. The case put by him to illustrate this does go so far as to hold that a tenant bound by conditions is also bound by a penalty securing them, and was liable to action. What the form of action was does not appear. The liability to the penalty was put on the ground that he had agreed to the lease. The action must have been debt because there was no covenant, and that did not necessarily rest upon a specialty, but may have been founded on the assent to the conditions of the lease inferred from the act of entering under it.
The case is not a clear authority for treating the lease as the deed of the lessee, not executing it even as between landlord and tenant. But the limitations of the law on this subject are further shown in Sheppard's Touchstone, p. 176, in which Coke is cited. It is said :
" If a feoffment or lease be made to two, or to a man and his wife, and there are divers covenants in the deed to be performed on the part of the feoffees or lessees, and one of them doth not seal, or the wife doth not, or doth not seal during the coverture, and he or she that doth not seal doth, notwithstanding, accept of the estate, and accept the lands conveyed, or demised; in these cases, as touching all inherent covenants, as for payment of rent and the accessories thereof, clauses of distress or re-entry, nomine poenoe, reparations and the like, they are bound by these covenants as much as if they -do seal the deed."
And after giving one or two other illustrations, he adds : " But quaere of collateral covenants in the first cases, for therein it seems the feoffee or lessee is not hound."
In all the cases referred to by him there is the relation of tenure accompanied with a reservation of rent.
But this is not authority for holding that in a deed in fee by which a grantor parts with his entire estate, a covenant to pay a gross sum to a stranger, which is essentially, collateral, becomes the covenant of the grantee, though not executed by him, so as to sustain the technical action of covenant. Such a position seems to us contrary to common law principles which are our only guide upon questions of this character. The weight of authority seems to us to be' that a deed, whether in form of indenture or deed poll, is only the deed of him who signs and seals it, while it may be the simple contract, at the same time, of him who signs without sealing, or, under some circumstances, of him who neither signs nor seals, but only accepts it.
In Stabler vs. Cowman, 7 Gill & J., 284, where an agreement was clearly intended to be signed and sealed by both parties, but one omitted to seal through accident, the court held that he could be sued in assumpsit, while the instrument was the deed of the other party.
The subject has been discussed at some length in other States where common law principles have not been departed from, and even in cases of leases it has been held that the, same rule applies. Without citing from them at length we refer to Henderson vs. Humphries, 15 Conn., 431; Johnson vs. Muzzy, 45 Vermont, 420 ; Maule vs. Weaver, 7 Pa., 329; Trustees vs. Spencer, 7 Ohio, pt. 2,149 ; Martin vs. Drinan, 128 Mass., 515. In one of these cases (45th Vt.), the case ot Finley vs. Simpson, 2 Zabriskie, 311, is spoken of as the only American case holding an opposite view.
For these reasons, even in States where a right of action by a mortgagee against the grantee of the equity of redemption, in cases like the present, is conceded, it is, nevertheless, held that the action must be assumpsit, as upon a promise implied from the acceptance of the deed containing the covenant to be performed by the grantee. Locke vs. Horner, 131 Mass., 93, and cases cited.
Our conclusion, then, is that if the mortgagee, under the rulings in New York, is entitled to claim the mortgage debt directly from the purchaser of the equity of redemption, in a case like the present, still he must asssert his claim here in an action of assumpsit, and that our act of limitations is a bar to any action brought more than three years after the cause of action has accrued.
For these reasons judgment must he for the defendants.