Court Opinion

ID: 6121559
Source: CourtListenerOpinion
Date Created: 2022-02-04 18:49:53.99672+00
Date Added: 2024-06-11T08:23:29.816894
License: Public Domain

LEARNED, P. J.,
dissenting:
It seems to me that there are two classes of cases, which have sometimes been confused, but which are really different in princi pie. One class embraces such cases as that of Lawrence v. Fox (20 N. Y., 268). In that case, Holly, owing Lawrence $300, lent Fox that amount, telling him of this debt to Lawrence, paya ble the next day; and Fox agreed to pay Lawrence this sum Holly, therefore, intending to benefit Lawrence, put the means of payment into the hands of Fox. Fox might well be liable, as in; the old action of assumpsit, for money had and received to the use of the plaintiff. The promise, which. Fox had made Holly, showed that the money was really received to the use of Lawrence. In that quasi equitable action the inquiry was whether the defendant had money, which, in justice, he ought to pay over to the plaintiff. Thus the fact that Fox had the money, and that he had promised so to apply it, showed the justice of the plaintiff’s claim.
But another class of oases embraces those where a mortgagor assigns the mortgaged land, and the assignee assumes the mortgage debt. In such a case the transaction is not for the benefit of the mortgagee, but for the benefit of the mortgagor. No property is put into the assignee’s hands, except that which is already pledged for the payment of the debt. The assignee holds nothing which he ought to apply to the payment of the debt, except the land itself; and that is already bound by the mortgage. The transfer, therefore, is not for the benefit of the mortgagee, and the promise is made only to protect the mortgagor.
The liability then, which has been enforced, in such cases, against the assignee and in favor" ef the mortgagee arises on other principles. As the mortgagor is liable, it follows that, if he should be *97compelled to pay, be could look to the assignee, who has practically agreed to indemnify him. And to avoid circuity of action, or by a quasi subrogation, the mortgagee is allowed to sue the assignee directly ; the assignee having become the quasi principal debtor, and the mortgager the quasi surety, as between themselves.
And, because the rule in such cases depends on these principles, it follows that, if the assignment by the mortgagor be, in fact, conditional, the assignee is not liable to the mortgagee. (Garnsey v. Rogers, 47 N. Y., 233.) For, in that case, the assignee has not become the principal debtor, as between him and the assignor. •
Henee it is also that, if the assignor were not personally liable,the mortgagee cannot recover against the assignee. ( Vrooman v. Turner, 69 N. Y., 280.) For there could be no right of action by the assignor, as ho could not be compelled to pay the debt. And hence there is no right to which the mortgagee could be subrogated.
But now, to show the contrast between the two classes of cases, suppose that a person, not liable for a certain debt, had put in the hands of another money, with which to pay the same, and the party, so receiving the money, had agreed therewith to pay the. debt, would not the creditor be entitled to an action, as for money had and received to his use, according to the case of Lawrence v. Fox? Thus it is said in Garnsey v. Rogers, that, to entitle the third party to his action, the contract must have been made for his benefit.
Now in the case of the assignment of mortgaged property, where the assignee assumes the mortgage, the contract is not made for the benefit of the mortgagee. The assumption of the mortgage is for the indemnity and protection of the assignor; and such indemnity and protection alone are within the view of the parties. And it is only through the rights of the mortgagor that the mortgagee has any claim against the assignee. Hence it follows that, whenever the mortgagor chooses to- surrender this indemnity and protection, he may do so. And the mortgagee has no right to complain. Nothing is taken from him to which ho had any ifight. (Stephens v. Casbacker, 15 Sup. Ct. N. Y., 116; Crowell v. Hospital, 27 N. J. Eq., 650.)
*98If the case were one, like Lawrence v. Fox, where money, not already subject to the debt, had been put in the hands of a person for the payment of the debt, so that the creditor could insist that such money was held by that person for his benefit, his rights would be very different. It would be unjust to him that the person who held this money should pay it back and be discharged. But, in the present case and in those like it, there can be no paying back, to the prejudice of the creditor ; because the only property which was transferred was subject to the lien of the creditors debt; and no transfer can affect the creditors right thereto.
The remark in Garnsey v. Rogers that where, in an absolute conveyance, the payment of the mortgage is assured, it is unconditional and irrevocable, was intended, as I think, to point out the difference between an absolute deed and a deed in the nature of a mortgage. It certainly did not mean that an agreement to assume the mortgage could not be revoked, by mutual consent, as between the parties. The effect of such revocation on the rights of the mortgagee is the present question ; and was not under consideration in that case.
I think that the judgment should be affirmed, with costs.
Judgment reversed and judgment ordered on demurrer for plaintiff, with costs.