Berkshire Life Ins. Co. v. Hutchings

• Decision Date: 12 March 1885
• Docket Number: 11,480
• Citation: 100 Ind. 496
• Parties: Berkshire Life Insurance Company v. Hutchings et al
• Court: Indiana Supreme Court

100 Ind. 496

Berkshire Life Insurance Company v. Hutchings et al

No. 11,480

Supreme Court of Indiana

March 12, 1885

From the Marion Superior Court.

M. B Williams and W. Henderson, for appellant.

OPINION

Bicknell C. C.

The facts in this case are fully stated in Talburt v Berkshire Life Ins. Co., 80 Ind. 434. In that case a judgment of said court in favor of the present appellant was reversed on an appeal by Talburt, because said court, in its special finding, had left undetermined one of the issues which said appellant was bound to prove, in order to recover a personal judgment against Talburt.

The complaint seeks to foreclose a mortgage executed to the plaintiff by Hutchings, and it demands a personal judgment against him on the notes, and a like judgment against Talburt, because he, as purchaser of the mortgaged premises agreed with Hutchings to pay the mortgage debt as part of the purchase-money.

On the former hearing, this court held that when a mortgagor sells and conveys the mortgaged premises, and his grantee assumes the payment of the mortgage debt, the mortgagee, in a foreclosure suit, can not recover a personal judgment against such grantee, unless she has accepted him as her debtor. Prior to such acceptance, the mortgagor, originally the principal debtor, can not by such agreement of his grantee, be discharged, nor can he be made a mere surety for his grantee, without the assent of the mortgagee, but after such acceptance the grantee becomes the principal debtor, and the mortgagor is either absolutely discharged or remains liable as surety for his grantee, according to the agreement of all the parties. While the relations of such mortgagor and grantee remain unchanged, the institution of a suit against them by the mortgagee sufficiently indicates such acceptance, but if in the meantime, and before any acceptance, the relations between such mortgagor and grantee have been terminated by a bona fide rescission of their contract, the case becomes the same as if no such contract ever existed, and the right of the mortgagee as against such former grantee no longer exists.

If A., for a sufficient consideration, agrees with B. to pay B.'s debt to C., A. does not thereby become the debtor of C. It requires some act of adoption by C. to entitle him to the benefit of A.'s contract, and if before such adoption A. and B. rescind their contract, there is nothing left for C. except his original claim against B. Davis v. Calloway, 30 Ind. 112; Miller v. Billingsly, 41 Ind. 489; Durham v. Bischof, 47 Ind. 211; 2 Story Eq. Jur., section 973, n. 2; Kelly v. Roberts, 40 N.Y. 432; 1 Jones Mort., sections 763, 764; Carnahan v. Tousey, 93 Ind. 561.

The superior court, in special term, on a new trial, found for the defendant Talburt, who was the only party defending. At the request of the parties, the court made a special finding of the facts and stated conclusions of law thereon. There was no exception to the conclusions of law. The plaintiff moved for a new trial. This motion was overruled, and judgment was rendered on the finding. The plaintiff appealed to the court in general term. There the judgment was affirmed. The plaintiff appealed to this court.

The first error discussed by the appellant in its brief is, that the court in special term erred in overruling the appellant's demurrer to the first paragraph of the defendant Talburt's answer.

This paragraph of answer was pleaded to so much of said complaint as sought a personal judgment against Talburt. After admitting the principal allegations of the complaint, it alleges that after the execution of the deed from Hutchings, and before the defendant discovered that lots 117 and 118 had been conveyed to him instead of lots 217 and 218 which he had bought, he paid $ 150 for the purpose of keeping down the interest which he supposed was on the lots so conveyed to him, but that the plaintiff never claimed of the defendant that he had agreed to pay said $ 3,000 and interest, and never notified him that the plaintiff accepted his supposed promise to pay said debt; and that in the meantime, after the execution of said deed, and before the discovery of said mistake, judgments had been obtained against said Hutchings for an amount far exceeding the value of said lots, and he had become totally insolvent, and unable to make a good title to said lots 217 and 218, and that in consideration thereof said Talburt and Hutchings rescinded said contract for the sale of said lots, said Talburt agreeing that said Hutchings might retain all moneys paid by Talburt to him, and agreeing to give up all right of action against Hutchings on his covenants in said deed, and said Hutchings releasing said Talburt from his agreement to pay said mortgage debt. The answer also states that said Talburt never had possession of said lots 217 and 218.

Under the authorities above referred to, this was a good answer to a complaint seeking a personal judgment against Talburt.

In Carnahan v. Tousey, supra, this court said: "If the party, for whose benefit a contract is made, neglects to give notice of his acceptance of it, he incurs the peril of its abrogation, and if, without having given such notice, he brings an action, he may be...