Dean v. Walker

• Decision Date: 30 September 1883
• Citation: 1882 WL 10496,107 Ill. 540,47 Am.Rep. 467
• Parties: ALGY DEAN, for use, etc.v.EDWIN WALKER.
• Court: Illinois Supreme Court

107 Ill. 540

1882 WL 10496 (Ill.)

47 Am.Rep. 467

ALGY DEAN, for use, etc.

v.EDWIN WALKER.

Supreme Court of Illinois.

Filed at Ottawa Nov. 20, 1882.Rehearing denied September Term, 1883.

APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Superior Court of Cook county; the Hon. SIDNEY SMITH, Judge, presiding.

Messrs. REMY & CHUMASERO, for the appellant:

A purchaser of land from a mortgagor who assumes and agrees to pay off the mortgage debt, makes himself personally liable to the holder of the mortgage debt. Burr v. Beers, 24 N. Y. 178; Cumberland v. Codrington, 3 Johns. Ch. 255; Law rence v. Fox, 20 N. Y. 268; Troup v. Keokuk Coal Co. 48 Id. 253; Rogers et al. v. Herron et al. 92 Ill. 583.

The grantee in a deed is bound to fulfill covenants on his part contained in a deed executed by the grantor only, and his acceptance of the deed binds him to pay a mortgage he has assumed therein. Spaulding v. Hallenbeck, 33 N. Y. 207; Trotter v. Hughes, 2 Kern. 74; Belmont v. Cowan, 22 N. Y. 438.

Where the payment of an outstanding mortgage is part of the purchase price of the land, the law will imply an agreement by the grantee to pay it. Comstock v. Hitt, 37 Ill. 542; Townsend v. Ward, 27 Conn. 610.

Where A promises B, for a valuable consideration, to pay C, the latter may maintain an action for the money. Brewer v. Dyer, 7 Cush. 337; Arnold v. Lyman, 17 Mass. 400; Hall v. Marston, Id. 575; Binsee v. Page, 1 Abb. Ct. App. 138; Rubens v. Brindle, 44 Barb. 369; Cornell v. Rescott, 2 Id. 16; Johnson v. Zinke, 52 Id. 396; Miles v. Watson, 1 Sweeney, 374; Tillotson v. Boyd, 2 Sandf. Ch. 516; Ranson v. Copeland, 2 Id. 256; Butler v. Bucklin, 2 Denio, 45; Tripp v. Vincent, 2 Barb. Ch. 613; Guernsey v. Rogers, 47 N. Y. 233; Miller v. Winchell, 70 Id. 437; Fulton v. Dickinson, 10 Mass. 287; Watson v. Cambridge, 15 Id. 256; Lent v. Pudelford, 10 Id. 230; Scott v. Gill, 19 Iowa, 187.

Mr. ELLIS S. CHEESBROUGH, Jr., for the appellee:

The modern English doctrine, and that of many of the States, is, that no action can be brought by a party who is a stranger to the consideration. Crow v. Rogers, 1 Strange, 592; Tweddle v. Adkinson, 1 Best & Smith, 393; Exchange Bank v. Rice, 107 Mass. 37; Warren v. Bachelder, 15 N. H. 129.

In States where exceptions to this rule have crept in, the present tendency is toward narrowing the exceptions, and at all events there must be a definite intention to benefit the party who sues. Moore v. House, 64 Ill. 162; Kountz v. Holthouse, 85 Pa. St. 235; Davis v. Callaway, 30 Ind. 112.

Where the grantor is personally liable, a bill in equity will lie in favor of the mortgagee, to avoid circuity of action, but there is no right of action when the grantor is not liable. Mellen v. Whipple, 1 Gray, 317; Furnas v. Durgin, 119 Mass. 500; King v. Whitely, 10 Paige, 465; Trotter v. Hughes, 12 N. Y. 74; Vrooman v. Turner, 69 Id. 280; Norwood v. De Hart, 30 N. J. Eq. 412; Stewart v. Worden, 42 Mich. 154.

The bargain made by Walker was simply a purchase of the equity of redemption. The recital in the deed that the mortgage is assumed as part of the consideration, in the absence of proof of intention, does not create an imaginary fund. Fiske v. Tolman, 124 Mass. 254; Belmont v. Cowan, 22 N. Y. 438.

To sustain this action an actual liability to the grantor is necessary. The mortgagor can not rely on any recorded acknowledgment of liability. Judson v. Dada, 79 N. Y. 373; Dunning v. Leavit, 24 Alb. L. J. 55; Young v. Trustees of Public Schools, 31 N. J. Eq. 290; O'Neill v. Clark, 33 Id. 444; Laing v. Byrne, 34 Id. 52.

Mr. JUSTICE CRAIG delivered the opinion of the Court:

This was an action of assumpsit, brought by Algy Dean, for the use of Samuel H. Sweet and Charles Hutchinson, against Edwin Walker, to recover the amount of certain bonds, secured by mortgage on real estate in Chicago, which Walker had assumed and agreed to pay.

The facts out of which this litigation arose, are, in substance, the following: In February, 1873, George F. Work, being the owner of the premises, executed a trust deed thereon, to secure the payment of ten bonds, of $1000 each, payable four years after the date thereof. Afterwards, and on the 1st day of August, 1873, Work conveyed the premises, by warranty deed, to Henry B. Jenks. On the 18th day of November, 1873, Henry B. Jenks conveyed the premises to Algy Dean, for an expressed consideration of $27,500. This deed contains the usual clauses, and concludes, after stating that the grantor had not incumbered, or caused to be incumbered, the premises and property conveyed, in any manner, as follows: “Except as to a certain deed of trust made to Henry M. Shepard, bearing date October 1, 1872, to secure a loan of $25,000, and also a certain deed of trust made to George Scoville, trustee, bearing date February 1, 1873, to secure a loan of $10,000; which said two trust deeds, and the indebtedness thereby secured, are hereby assumed, to be paid by the said party of the second part.” On the 4th day of November, 1874, Algy Dean, the grantee in the last named deed, for a consideration of $54,000 expressed in the deed, sold and conveyed the premises to the defendant, Edwin Walker. This deed contains, immediately following the description of the property conveyed, the following clause: “Subject, however, to a certain deed of trust made to Henry M. Shepard, bearing date October 1, 1872, with accrued interest thereon from October 1, 1873, to secure a loan of $25,000; and subject, also, to a certain deed of trust made to George Scoville, trustee, bearing date February 1, 1873, with accrued interest thereon from August 1, 1874, to secure a loan of $10,000.””” And immediately after the habendum et tenendum clauses in the deed, is contained the following assumption: “Subject, however, to the two trust deeds, the taxes and claims aforesaid, all of which the said party of the second part hereby assumes and agrees to pay as part of the consideration of this conveyance.” Sweet and Hutchinson having purchased a portion of the bonds secured by the deed of trust named in the assumption clause, this action was brought in the name of Dean, for their use, to recover the amount of the same from Walker, who had assumed payment by the clause contained in the deed under which the premises were conveyed to him.

It will be observed that Walker did not sign the deed under which the property was conveyed to him, and which contained the assumption clause, but he accepted the instrument and placed it upon record. The law did not require Walker to sign and seal the deed himself in order to make its terms and conditions binding upon him. The acceptance of such a deed, with a knowledge of its contents, binds the grantee as effectually as though the deed had been inter partes, and had been executed by both grantor and grantee. ( Crawford v. Edwards, 33 Mich. 354.) Thorp v. Keokuk Coal Co. 48 N. Y. 255, is also an authority in point. It is there said: “In the deed from Franklin to it, the defendant expressly assumed to pay the plaintiff's mortgage, and this, as it is now well settled, binds the defendant to the same extent as if it had also signed the deed.”

Deeds of lands made subject to a mortgage, and deeds containing an assumption clause purporting to bind the grantee to pay an existing incumbrance, have been the source of much discussion in the courts in regard to the rights and duties of the grantor, grantee, and the person holding the incumbrance on the property conveyed. A deed made subject to an outstanding mortgage creates no personal liability on the grantee to pay off the incumbrance, in the absence of a contract to pay, or unless the amount of the mortgage has been deducted from the purchase price, and left in the hands of the grantee. ( Comstock v. Hitt, 37 Ill. 542; Fowler v. Fay, 62 Id. 375; Jones on Mortgages, sec. 748.) Thus far the law seems to be well settled. Where, however, a deed contains a clause in which the grantee assumes an incumbrance on the premises conveyed, and agrees to pay the same, and an action is brought to enforce such a contract, the questions growing out of such a transaction have been attended with more difficulty. But we think the law may be regarded as well settled, where A has given a mortgage on a tract of land to B, and subsequently conveys to C, the deed containing a contract that C assumes the mortgage and agrees to pay the same, that B may compel the grantee to pay the mortgage indebtedness, either by a suit at law or by a bill in equity foreclosing the mortgage, and a personal decree against the mortgagor and the purchaser of the mortgaged premises, for any deficiency. Jones on Mortgages, sec. 741, in discussing the relation of the parties in such a case, says: “A purchaser who assumes the mortgage becomes, as to the mortgagor, the principal debtor, and the mortgagor a surety; but the mortgagee may treat both as principal debtors, and may have a personal decree against both.” But whether this is the true situation of the parties or not, where the mortgagor, who is bound for the payment of a sum of money secured by mortgage on land, conveys the same, and the grantee, by a clause in the deed, assumes the payment of the mortgage indebtedness, no reason is perceived which will prevent the mortgagee, for whose benefit the clause in the deed is inserted, from maintaining an action upon such a contract against the grantee.

It is a familiar rule, and one well sustained by authority, that where one person, for a valuable consideration, makes a promise to another for the benefit of a third person, such third person may maintain an action upon it. It is not necessary in such a case that there should be any consideration moving from the third person, for whose benefit the promise is made, or that there should be any privity between them. The conveyance of the land is the consideration for the promise, and the fact that the...