Gold v. Ogden

• Court: Minnesota Supreme Court
• Writing for the Court: MITCHELL, J.
• Citation: Gold v. Ogden, 61 Minn. 88, 63 N.W. 266 (Minn. 1895)
• Decision Date: 10 May 1895
• Docket Number: 9168--(44)
• Parties: CORNELIUS B. GOLD and Another, Trustees, v. BENJAMIN H. OGDEN

63 N.W. 266

61 Minn. 88

CORNELIUS B. GOLD and Another, Trustees, v. BENJAMIN H. OGDEN

Nos. 9168--(44)

Supreme Court of Minnesota

May 10, 1895

Appeal by defendant from an order of the district court for Ramsey county, Brill, J., denying a motion for a new trial. Reversed.

Order reversed.

William G. White, for appellant.

James E. & George W. Markham, for respondents.

OPINION

MITCHELL, J.

This action was brought upon a covenant in a conveyance from one Flint to defendant by the terms of which the grantee assumed and agreed to pay plaintiffs' mortgage on the premises.

The undisputed evidence is that, in 1889, Flint and one Warner made an exchange of properties. Among the properties received by Warner was a tract upon which was a mortgage to plaintiffs for the payment of which Flint was personally liable. Warner for purposes of his own, caused the conveyance to be made to defendant. This conveyance contained the assumption clause above referred to. The deed was delivered to Warner, who placed it on record. Defendant had not authorized the taking of the deed in his name, and had no knowledge that it had been done until some time in 1891. He had no interest in the property, never exercised any control over it, and never received any of the rents and profits. Warner, who was the real owner of the property, took possession, and received all the rents and profits. In 1891 Warner informed defendant that the deed had been taken in his name, and the latter made no objection, but he did not then know that it contained any covenant purporting to make him, as grantee, liable for incumbrances. When he was for the first time informed of this fact by Warner some months later, he told him that he objected to holding the property in his name with this assumption clause in the deed, as it placed him in jeopardy. Thereupon Warner told him it would be all right, and promised to secure a release from this covenant. Thereafter, in December, 1892, Warner procured from Flint the instrument set up in the answer, releasing defendant from all liability on the covenant. Warner placed this release on record in May 1893. Defendant, supposing he was thereby released from all personal liability, made no further objection to the title of the property remaining in his name. In 1894 the plaintiffs foreclosed their mortgage, and bid in the mortgaged premises for less than the amount due, and thereafter brought this action to recover the deficiency from defendant on the covenant in the deed. There is no evidence that plaintiffs ever accepted, acted on, or even knew of the existence of this covenant until the commencement of this action. Neither were any facts proven to have intervened from which any equity could arise in their favor. The counsel for plaintiffs correctly concedes that the finding of the court as to the insolvency of Flint does not go far enough to avail him. He plants himself squarely upon the proposition that where the grantee in an absolute conveyance assumes and agrees to pay a mortgage thereon, for which his grantor is personally liable, an absolute and irrevocable obligation is thereby created in favor of the mortgagee, which cannot be released...