Campbell v. Clay

• Citation: 4 Colo.App. 551,36 P. 909
• Parties: CAMPBELL v. CLAY.
• Decision Date: 14 May 1894
• Court: Court of Appeals of Colorado

36 P. 909

4 Colo.App. 551

CAMPBELL v. CLAY.

Court of Appeals of Colorado

May 14, 1894

Appeal from district court, Arapahoe county.

Action by William H.H. Campbell against H.M. Clay on a promissory note. Judgment for defendant, and plaintiff appeals. Reversed.

Bartels & Blood, for appellant.

Talbot & Denison and W.W. Dale, for appellee.

REED J.

This suit was brought to collect the amount due on a promissory note made by the appellee, payable to appellant six months after date, for $500, with interest at 10 per cent. until due, and 12 per cent. after maturity, dated "Wichita Kan., Feb., 1887." The complaint is in the ordinary form, and contains the following statement: "That no part of the same has been paid, except the sum of seventy-five dollars; being interest on said note from date to August 18, 1888." In defense, appellee alleged that at the time of making the note he bought from appellant real estate, for which the note was given, and that it was secured by mortgage upon the property purchased; that on the 17th day of March, following, he sold and conveyed the property to F.H. Stiles, who, by the terms of the deed, assumed the indebtedness, and agreed to pay it. These facts are conceded. The answer also contains the following allegations "That at the time of making said sale the plaintiff was fully informed thereof, and assented thereto; and it was the understanding and agreement between the plaintiff and this defendant and the said purchaser that the said purchaser would pay the said mortgage debt, and the said plaintiff would exonerate this defendant, and look to the said purchaser and his said security for the same. That on or about the 18th day of August, A.D.1887, as this defendant is informed and believes, said plaintiff, who was then the holder of said note, for a valuable consideration, without the knowledge or consent of this defendant, agreed with the said purchaser, who was then the principal debtor, to extend the time of the payment of said note for, to wit, one year from that date, which extension of time of payment discharged this defendant from all liability on said note and mortgage. That, thereafter, said plaintiff collected from the said Stiles the interest thereon to August 18, 1888; but whether no part of said note has been paid by the said Stiles, except said interest, this defendant has not, and cannot obtain, sufficient knowledge or information on which to base a belief, and therefore denies the same." A replication was filed, traversing the special defenses. Trial was had to a jury, resulting in a verdict and judgment for the defendant (appellee).

By accepting a deed containing a recital that the land conveyed is subject to a mortgage which the grantee "assumes and agrees to pay," and the grantee reserving and retaining the amount of such indebtedness from the purchase price, it is a payment of the debt by the grantor to the grantee. Burbank v. Root (Colo.App.) not yet officially reported except in 35 P. 275; Heid v. Vreeland, 30 N.J.Eq. 591; 1 Jones, Mortg. § 749; Carley v. Fox, 38 Mich. 387; Locke v Homer, 131 Mass. 93. But where, as in this case, the indebtedness is evidenced by a note of the mortgagor, the transaction between the mortgagor and his grantee in no way affects the mortgagee, unless he agrees to release the mortgagor, and look solely to the purchaser for the payment of the debt. Without such an agreement, he may treat both as principal debtors. 1 Jones, Mortg. § 741; Shepherd v. May 115 U.S. 505, 6 S.Ct. 119; Waters v. Hubbard, 44 Conn. 340; James v. Day, 37 Iowa 164. The testimony of the defendant in support of the allegations in the answer was as follows: "I informed the plaintiff that I had sold the property to Mr. Stiles, and that he had assumed and agreed to pay the note when due, and the plaintiff offered no objection thereto. Q. State what the plaintiff said to you on that occasion. A. I don't know how I can put it more definitely than I have put it. He had no objection to make, and he bowed in acquiescence to what I had done. I don't remember any exact words, as there was no occasion to speak. Q. You claimed that you informed the plaintiff that you had sold the property to Mr. Stiles, and that Mr. Stiles had agreed to pay the note? A. Yes, sir. Q. The plaintiff said nothing, except that he was silent? A. I would have as soon said that the plaintiff said it was all...