Clement v. Willett

• Decision Date: 07 August 1908
• Citation: 117 N.W. 491,105 Minn. 267
• Parties: CLEMENT v. WILLETT et al.
• Court: Minnesota Supreme Court

105 Minn. 267

117 N.W. 491

CLEMENT

v.WILLETT et al.

Supreme Court of Minnesota.

Aug. 7, 1908.

Appeal from District Court, Martin County; James H. Quinn, Judge.

Action by L. T. Clement, as administrator of the estate of John Schmidt, deceased, against David Willett and others. From and order sustaining a demurrer to the complaint, plaintiff appeals. Affirmed.

Syllabus by the Court

A provision in a deed whereby the grantee assumes and agrees to pay an existing mortgage does not create a covenant which runs with the land, although inserted in connection with the covenants of seisin and against incumbrances.

Such an assumption contract creates no enforceable obligation, unless the grantor in the deed was personally liable to pay the mortgage debt, or owed the owner thereof some duty or obligation respecting the subject-matter of the promise. Kramer v. Gardner (Minn.) 116 N. W. 925.

A deed which conveyed land situated in Iowa, executed and delivered in Minnesota, between parties residing therein, contained a provision by which the grantee assumed and agreed to pay an existing mortgage on the land conveyed. Held, that the assumption agreement is a personal contract, and governed by the laws of Minnesota. Harrington & Dickinson and Dean & Palmer, for appellant.

Putnam & Nicholson, for respondents.

ELLIOTT, J.

This is an appeal from an order sustaining a demurrer to a complaint which in substance alleges the following facts: In November, 1904, Fred Shaer and wife gave to John Schmidt, a resident of Iowa, a mortgage on 80 acres of land in Kossuth county, Iowa, to secure the payment of three promissory notes, aggregating the sum of $1,300. On June 11, 1905, Shaer and wife conveyed the land to Frank P. Barnes. Barnes did not assume and agree to pay the debt secured by the Schmidt mortgage. Thereafter, on September 28, 1905, Barnes and wife conveyed the land to David Willett by a deed which recited: ‘That the same are free from incumbrances, except a lien created by a public drain No. 3 in Kossuth county, Iowa, assessed at $403.20, which lien second party assumes and agrees to pay, also a mortgage of $1,300 in favor of John Schmidt, and a mortgage of $1,500 in favor of Rose M. Bulsom. Said second party assumes and agrees to pay these two mortgages.’ Default was made, and under foreclosure the land realized but $342.30 for the mortgagee. This action was then brought by the administrator of the estate of John Schmidt to obtain a personal judgment for the deficiency against Willett, on the theory that the became liable therefor by virtue of the assumption clause in the deed from Barnes to Willett.

The question is whether the owner of the mortgage can enforce the assumption agreement made with a grantor who had not himself assumed personal liability for the mortgage and owed no duty or obligation to the owner thereof respecting the subject-matter of the promise. It is the settled law of this jurisdiction that there can be no recovery in such a case. If the grantor is personally liable to pay the debt, the mortgagee or his grantee may maintain an action against the assuming grantee (Follansbee v. Johnson, 28 Minn. 311, 9 N. W. 882;Connecticut Mut. Life Ins. Co. v. Knapp, 62 Minn. 405, 64 N. W. 1137;Pinch v. McCulloch, 72 Minn. 71, 74 N. W. 897); but when the immediate grantor is not liable, and owes no duty or obligation to the owner of the mortgage in respect to the subject-matter, no cause of action arises in favor of the owner of the mortgage. Kramer v. Gardner (Minn.) 116 N. W. 925, and cases cited. In this instance there was no debt or obligation due from Barnes to Schmidt, which Willett agreed to pay as part of the consideration, and thus made his own debt; and under the decisions in the state no cause of action arose in favor of Schmidt. But in Iowa an action may be maintained by the owner of the mortgage, regardless of whether the immediate grantor was liable to pay the debt secured by the mortgage. Marble Savings Bank v. Mesarvey, 101 Iowa, 285, 70 N. W. 198. The appellants contend that the validity of this assumption contract should be determined by the laws of Iowa, because (a) such was the intention of the parties; (b) it was to be performed in Iowa; (c) it is a part of the deed, which should be construed as a whole; and (d) it is a part of the covenants of seisin and against incumbrances, and therefore runs with the land.

We cannot agree with the appellant that the contract to assume and pay the mortgage is a part of the covenant of seisin or the covenant against incumbrances. It is true that it is written into the deed in connection with these covenants; but this is not controlling. The question of what covenants in a deed run with the land received such full consideration by Mr. Justice Lewis in the recent case of Sjoblom v. Mark, 103 Minn. 193, 114 N. W. 746, as to render any detailed discussion at this time unnecessary. Covenants of seisin and against...