Court Opinion

ID: 5120529
Source: CourtListenerOpinion
Date Created: 2021-10-22 16:11:13.686404+00
Date Added: 2024-06-11T08:22:18.010885
License: Public Domain

WILLSON, Chief Justice,
Dissenting. — It was not claimed that as a result of the transactions between Hill and McCleary the latter had been released from liability to Hoeldtke, and that the former had become liable to him. The contention was that as a result of those transactions McCleary continued to be and Hill became liable to Hoeldtke. Under such circumstances, the effect of the last transaction between McCleary and Hill -having been to release the latter from the obligation he had incurred to the former to pay his debt to Hoeldtke, I do not agree that Hill nevertheless was liable to Hoeldtke. *157I do not think Hoeldtke’s right to hold Hill liable can be referred to a contractual relation between them, or to any such relation between Hill and McCleary for Hoeldtke’s benefit; but must be referred to the doctrine which permits a mortgagee to become subrogated to the mortgagor’s right to enforce against' his grantee the latter’s undertaking to pay the farmer’s debt to the mortgagee. So long as the grantee is liable on his undertaking to pay the grantor’s debt to the mortgagee, he may be sued by the latter,' because, and I think only because, he may be sued by his grantor. "When he is no longer liable to a suit by his grantor., in the absence of other circumstances than appear in the record before this court, I think there is no personal liability on his part to the mortgagee. To treat the grantor here as bound by a contractual tie to the mortgagee, it seems to me, is to wholly ignore the absence of all the elements of a contract. There was no agreement between Hill and Hoeldtke whereby the former became liable to the latter. There was no consideration proceeding from the latter to support such an agreement between them, had there been one. Hill’s agreement was with McCleary alone for a consideration proceeding from McCleary alone. McCleary’s agreement with Hill was for his own (McCleary’s) benefit, and not in any sense for Hoeldtke’s benefit. He was liable to Hoeldtke on account of land Hoeldtke had a lien on, and having conveyed the land to Hill, he had the latter to agree to indemnify him against such liability. To say that McCleary’s purpose in contracting with Hill was to benefit Hoeldtke, is to ignore the truth of the matter and to give force to an obvious unreality. Mc-Cleary’s purpose plainly was to benefit himself. There was no reason, legal or otherwise, why he should make such a contract for Hoeldtke’s benefit.- He had already secured Hoeldtke in a way satisfactory to him, and was under no obligation to secure him further. The effect of the ruling made by the majority is to give' to Hoeldtke, without any consideration whatever from him to any one therefor, security for his debt he had not stipulated for, and had no right to expect; and to deprive McCleary and Hill, without a consideration therefor to either of .them, of a valuable right — a right to adjust between themselves, in their own way, their own affairs. I see no reason why they should be deprived of such a right; and I see no reason why Hoeldtke should have conferred upon him gratuitously such additional seeeurity for his debt.
There are authorities which fully support the position taken by the majority of this court. But those cited by Judge Hodges as having been decided by the Supreme Court of the "United States, I think, do not in the least, support it. As a matter of fact, the question presented by the record on this appeal was not before that court in either of the cases cited. In neither of them did it appear that the mortgagor had released his grantee from his undertaking to pay the debt due to the mortgagee. Those cases can be said to be applicable here only so far as the principles they discuss and apply, can be said to be applicable to the facts of this case. Applied so far, instead of supporting the position they have been cited as supporting, I think they strongly assail it as untenable. For, in one of them — Union Mutual Life Insurance Co. v. Hanford, 143 U. S., 192, 36 L. ed. 120, — Mr. Justice Gray declared if to be the settled law of that court that “the *158grantee is not directly liable to the mortgagee, at law or in equity; and the only remedy of the mortgagee against the grantee is.by bill in equity in the right of the mortgagor and grantor, by virtue of the right in equity of a creditor to avail himself of any security which liis debtor holds from a third person, for the payment of the debt.” If the mortgagee’s remedy is in right alone of the grantor, it is difficult to see how, in this case, when the mortgagor no longer can claim a liability against his grantee, a liability on the part of the grantee nevertheless exists in favor of the mortgagee. And in another of the cases cited — Keller v. Ashford, 133 U. S., 610, 33 L. ed. 673 — the same judge quotes at length, and approvingly from the opinion of Depue, J., in Crowell v. Hospital, 27 N. J. Eq. 650, where it was said that “the right of the mortgagee to enforce payment of the mortgage debt, either in whole or in part, against the grantee of the mortgagor, does not rest upon .any contract of the grantee with him, or with the mortgagor for his benefit. . . . Becovery of the deficiency after sale of the mortgaged premises, against a subsequent purchaser, is adjudged in a court of equity to a mortgagee not in virtue of any original equity residing in him. He is allowed, by a mere rule of procedure, to go directly as a creditor against the person ultimately liable, in order to avoid" circuity of action, and save the mortgagor, as the intermediate party, from being harassed for the payment of the debt, and then driven to seek relief over against the person who has indemnified him, and upon whom the liability will ultimately fall. The equity on which his relief depends is the right of the mortgagor against his vendee, to which he is permitted to succeed by substituting himself in the place of the mortgagor.” The other case cited from the Supreme Court of the Hnited States — Johns v. Wilson, 180 U. S. 445, 45 L. ed. 616, — not only does not in any way controvert or qualify the statements quoted from the opinions in the other two cases, but on the contrary cites said cases approvingly.
Entertaining the opinion expressed, I do not agree that the judgment of the trial court should be reversed. I think it should be affirmed.