Court Opinion

ID: 6237482
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:36:01.824653+00
Date Added: 2024-06-11T08:58:05.656669
License: Public Domain

Mr. Justice Teunkey
delivered the opinion of the court,
Both parties to the bond testify that it was given for part of the purchase money of real estate in Trenton, New Jersey, and was secured by a mortgage on said real estate; that they agreed at and before the execution of the bond and mortgage that there should be no personal liability thereon, but be collectible out of said real estate only ; and that the obligor refused to buy the property and give the bond, except upon such agreement. The obligee assigned the mortgage and bond to Williams, who, having caused the mortgaged premises to be sold at sheriff’s sale, now seeks to recovera personal judgment on the bond against the obligor.
The first three assignments of error relate to the same question. namely, whether the assignee of the bond can be affected by the verbal agreement between the obligor and obligee, set out in the offer of testimony which is the subject of the first assignment. At the argument the plaintiff contended that such agreement could not avail to relieve the obligor from personal liability, even as against the obligee. But this point has been settled in Pennsylvania, in Irwin v. Shoemaker, 8 W. & S. 75, wherein it was decided that in an action on a bond secured by a mortgage' given for purchase money of land, the defendant may prove that it was part of the contract that the plaintiff was *420to look alone to the property sold for payment. As a general rule the assignee of a bond takes it subject to every equity which might have been set-up against it in the hands of the obligee. Among the few exceptions to this rule is a collateral agreement by a separate writing that the obligee would not cause judgment to be entered on the bond, with warrant of attorney, in a specified place. It was saidnby Justice Gibson that such an agreement in no respect affected the existence of the deed, and that the assignee was not bound to inquire of the obligor about matters of which he had no reason to suspect; the necessity of inquiry being limited to want of consideration and set off : Davis v. Barr, 9 S. & R. 137. Soon after, that eminent judge materially modified his opinion and remarked that “ perhaps there will be rarely, if ever, a case to which the principle of that decision will be applicable :” Frantz v. Brown, I P. & W. 257. In the latter case lie said, “ The assignee is bound to take notice of every thing, as well a secret trust as want of consideration or set off, which may affect the existence of the debt between the original parties, unless the obligor after inquiry made, has withheld the requisite information.” This principiéis not militated by any subsequent ruling. In the late case of Iloopes, use of Baily’s Administrators v. Beale, 90 Pa. St. 82, it was applied without question. What would have been the answer had Williams made inquiry of Smith? Hot that he was liable to pay the bond, but that its collection was restricted by agreement to the mortgaged property alone. That restriction entered into the consideration of the bond; was the condition upon which the bond, farm and other property were given for the mortgaged premises. Such answer would have been as pertinent to a proper inquiry as would actual payment, set off, or procuration of the bond by frand. In Frantz v. Brown, supra, it was shown that there may be acts of the parties which effect the existence or quantum of the'debt which are not referable to failure of consideration, or set off. Williams made no inquiry of the obligor, and the court rightly ruled that the cause should be determined as if there had been no assignment and’the action had been brought by the obligee.
The fourth assignment is to a portion of the charge, but we are of opinion that it is free of error. It must be understood not only in connection with the other parts of the charge, but in the light of the conduct of the trial. The complaint is, that the court submitted the question of verbal agreement upon insufficient evidence, and without proper instructions as to the considering of the evidence, and that the portion of the charge contained in the assignment assumes that the legal effect of a specialty may be changed by a verbal agreement without reference to' any question of fraud, accident or mistake. The time *421and place of making the alleged verbal agreement and its terms in detail, were testified by each parry, and if believed''by the jury, they were bound to find its existence. In the written points presented to the court by the plaintiff there is no suggestion that the evidence was insufficient to submit to the jury, or that there was no evidence of fraud, accident or mistake. His points which related to the evidence that had been adduced to establish the alleged agreement were fairly answered and affirmed. Only one of his points was refused, and that was, that the verbal agreement would not avail the defendant as a defence against the assignee of the bond. In the charge, among other things, it was remarked, “A written instrument may be reformed where by reason of fraud, accident or mistake, it does not express truly the contract between the parties, but to do this the evidence must be of the kind I have stated.” Had the plaintiff deemed fuller or more specific instruction on this point essential he could have obtained it by asking. The charge was clear and easily understood, and fairly covered all matters raised by the plaintiff’s points; he has no reason to complain of omissions.
Nothing in this record can justify an inquiry whether the defence could prevail against the bond by the laws of New Jersey. It is not pretended that in the court below the plaintiff alieged the contract was made in that state, or that it was to be controlled by the laws of that state in its construction, or that said laws differed from, the laws of Pennsylvania.
Judgment affirmed.