Merchants' & Manufacturers' Bank of Ellisville v. Hammer
| Decision Date | 29 May 1933 |
| Docket Number | 30621 |
| Citation | 148 So. 641,166 Miss. 383 |
| Parties | MERCHANTS' & MANUFACTURERS' BANK OF ELLISVILLE v. HAMMER et al |
| Court | Mississippi Supreme Court |
Suggestion Of Error Sustained In Part And Overruled In Part June 12, 1933.
APPEAL from chancery court of Hinds county HON. V. J. STRICKER Chancellor.
Bill by W. L. Hammer and another against the Merchants' & Manufacturers' Bank of Ellisville, wherein defendant filed a cross-bill. From a decree for complainants, defendant appeals. Reversed, and bill dismissed as to the Merchants' & Manufacturers' Bank.
Sustained in part, and overruled in part.
Butler & Snow, of Jackson, for appellant.
The mortgagee's rights are derivative, that is, that such a mortgage has no rights than the grantor in the deed.
So far as we have been able to find, the courts of this state have not had occasion to pass upon the questions presented by this appeal. The cases dealing with the assumption of mortgage or unsecured debts in deeds and bills of sale and of the rights of the grantor and the creditor whose debt is assumed, are dealt with in the following cases, viz.:
Vignau v. Ruffins, 1 Walker, 311; Hairston v. Jaudon, 42 Miss. 380; Marquez v. Caldwell, 48 Miss. 23; Sweatman v. Parker, 49 Miss. 19; Lee v. Newman, 55 Miss. 365; Ware v. Allen, 64 Miss. 547; Washington v. Soria, 73 Miss. 665; Wear v. Boogher Dry Goods Company, 84 Miss. 236; Dodge v. Cutrer, 100 Miss. 647; Dodge v. Cutrer, 101. Miss. 845; Barnes v. Jones, 111 Miss. 337; Gilliam v. McLemore, 141 Miss. 253; Palmer v. Bridges, 151 Miss. 12; Arnold v. Lyman, 17 Miss. 400; Washington v. Soria, 73 Miss. 673; Atkinson v. Whitney, 67 Miss. 665.
So far as we know, the cases reviewed are those most directly bearing upon the general propositions now before the court. In none of these cases was the derivative right of the mortgagee discussed. None of them involved the question of accident or mistake. They were all cases where the promise to pay the third person was a part of the consideration agreed to be paid for the property. In none of them did there arise the effect of an assumption clause in a mortgage, or deed poll given as a mortgage, so that, we are compelled to resort to general principles and the authorities of other states for a correct solution of the questions presented by this appeal.
This general question is dealt with in Jones on Mortgages (8 Ed.), sec. 916, et seq.; Wiltsie on Mortgage Foreclosure, sec. 233, et seq., and Devlin on Deeds, sec. 1047, et seq., and notes 78 Am. Dec. 77; L.R.A. 1919A, 999; 21 A.L.R. 433 and 504 and 47 A.L.R. 339.
All the authorities seem to agree that in cases of this kind the right of the mortgagee, or a credit whose debt is assumed, is a derivative right of the mortgagee, and can arise no higher than the rights of the grantor in the deed, save in exceptional circumstances, which do not exist in this case.
Throughout the work of Jones on Mortgages, it is distinctly recognized that the grantee when sued by the mortgagee, whose debt is claimed to have been assumed, may show in defense anything which he might show as a defense had the suit been brought by the mortgagor. For instance, the agreement must be supported by a good consideration. (Section 938.)
The promise may be avoided where the purchaser has been evicted and there has been a total failure of consideration. (Section 942.)
That the assumption was induced by false and fraudulent representations. (Section 942.)
That the clause is inserted through fraud or mistake, that is, that the grantee did not in fact assume the debt. (Section 943.)
Where the grantee reserves the right to annul the deed upon paying a debt. (Section 947.)
The right of a mortgagee who is a gratuitous beneficiary, to enforce an agreement to assume and pay a mortgage debt, is subject to the equities between the parties to the contract.
Flagg v. Munger, 9 N.Y. 483; Dunning v. Levett, 85 N.Y. 30; Lloyd v. Lowe, 63 Colo. 288, L.R.A. 1918A, 999; Clarinda National Bank v. Kirby, 191 Iowa 786; Becker v. Nelson, 164 Minn. 367; Guarantee Mortgage, etc. Co. v. Cox, 206 N.W. 278; Parker v. Interstate Trust & Banking Co., 56 F. 792; Epps v. Thompson, 202 Ala. 145, 79 So. 611; Drury v. Hayden, 111 U.S. 223.
That the right of the mortgage creditor is derivative seems to be expressly adjudged, or at least recognized, in this state in the case of Catlett v. Bacon, 33 Miss. 270.
Where the assumption clause is inserted through error and mistake, the grantee is not liable.
Wiltsie on Mortgage Foreclosure, sec. 240; Jones on Mortgages, sec. 943; Crow v. Lewin, 95 N.Y. 433; Dunning v. Levett, 85 N.Y. 30; Flagg v. Munger, 9 N.Y. 483; Lloyd v. Lowe, 63 Colo. 288; L.R.A. 1918A, 999; Becker v. Nelson, 164 Minn. 367; Peters v. Goodrich, 192 Iowa 790; Real Estate Trust Co. v. Balch, 45 N.Y.S. 528; Guarantee Mortgage & Loan Co. v. Cox, 206 N.W. 278; Llewelyn v. Butler, 172 S.W. 413; Epps v. Thompson, 202 Ala. 145; Elliot v. Sackett, 108 U.S. 133; Drury v. Hayden, 111 U.S. 223; Adams v. Wheeler, 122 Ind. 251; Bogart v. Phillips, 112 Mich. 697; Benedict v. Hunt, 32 Iowa 27; Citizens Bank v. Thomas, 264 S.W. 86; Parker v. Jenks, 36 N.J.Eq. 398; O'Neal v. Clark, 33 N.J.Eq. 444; Raiford v. Clark, 87 Conn. 567; Cushman v. Newburn, 75 Okla. 258; Bradshaw v. Providence Trust Co., 81 Ore. 55; Boyd v. Winde, 65 Okla. 141; Parker v. Interstate Trust & Banking Co., 56 F. 792; Luria v. Bank of Coral Gables, 142 So. 901; Warren v. Snowden, 82 N.Y. 604; Bull v. Tittsworth, 29 N.J.Eq. 73; Brookhart v. Hunter, 163 Wisc. 381; Wisc. S. & L. Ass'n v. Boehme, 171 Wisc. 1.
A stipulation in a mortgage, or deed given as a mortgage, whereby the mortgagee assumes and agrees to pay a prior mortgage, does not impose upon the subsequent mortgagee personal liability for the prior mortgage debt. Moreover, in such a case, there is no consideration to support the agreement for an assumption.
Sections 946, 952, Jones on Mortgages, note 78 Am. Dec. 77; Garnsey v. Rogers, 47 N.Y. 233, 7 Am. Rep. 440; Arnaud v. Greeg, 29 N.J.Eq. 482; Root v. Wright, 84 N.Y. 73; Boyd v. Winde, 65 Okla. 141; Flagg v. Munger, 9 N.Y. 482; Llewelyn v. Butler, 172 S.W. 413; Guarantee Mortgage & Loan Co. v. Cox, 206 N.W. 278; Gaynor v. Hicks, 131 Mass. 124; Parker v. International Bank & Trust Co., 56 F. 729; Broadbent v. Hudder, 83 Wisc. 380; Merriam v. Schmidt, 211 Ill. 363; Wisc. S. & L. Assn. v. Boehme, 171 Wisc. 1.
It seems that all the authorities hold that there must be a sufficient consideration for the assumption of the debt.
Allen v. Smith & Brand, 160 Miss. 303.
Horton & Sanders, of Jackson, for appellees.
After a careful examination of appellant's brief, it will be seen that the appellant treats the deed in question as a mortgage, without discussion or argument, and takes the position that the court held as a matter of fact, that the deed was intended as a mortgage, but that is not true as reflected by the record or is there any evidence to support such a finding as between the appellant and appellees.
Notwithstanding the decree pro confesso, the final decree, and the failure of appellant to appear in the court below, if, on the whole case as presented here, it appears that the appellee was not entitled to relief, the decree must be set aside.
Minor v. Steward, 2 How. 912; Kelly v. Brooks, 57 Miss. 225; Hargrove v. Martin, 6 S. & M. 61; Simpson v. Smith Sons Co., 75 Miss. 505, 22 So. 805; Soria v. Stowe, 66 Miss. 615, 6 So. 317.
There was not sufficient or competent evidence upon which the court could decree the deed to be intended as mortgage.
From a careful examination of the records, and we believe appellant will concede it to be true, that there were no charges of fraud in the pleadings or was there any fraud attempted to be proven at the trial, so the question of fraud does not concern us here.
Where one desires to offer parole proof that a deed absolute in form is a mortgage in fact, it must first be shown that the grantor remained in possession of the land.
Jordan v. Jordan, 111 So. 102.
What imposes a liability upon the grantee in a deed wherein a debt is assumed? We think that it is by virtue of the assumption in the deed accepted by them.
Gilliam v. McLemore, 106 So. 99.
When the deed executed by the grantor contains a clause sufficiently showing such an intent, the acceptance thereof by the grantee consummates the assumption, and creates a personal liability on his part, which inures to the benefit of the mortgagee as though he had executed the deed.
Gilliam v. McLemore, 106 So. 99.
In the case at bar there can be no question about the deed containing a sufficient assumption clause.
The appellant became the principal debtor, the grantor in the deed (Bradshaw) became a surety and according to the, rule of the McLemore case, supra, it would not have been necessary to have made Bradshaw a party to this suit for the appellees could have looked entirely to the bank for its money.
There is not one scintilla of evidence of record showing a mutual mistake, error or oversight, but on the other hand and by the testimony of this case, it is shown that both parties were guilty of gross negligence. It is our understanding of the law, and we take the question so well settler that we will not cite any authorities to sustain the proposition, that a party cannot complain of his own negligence. In other words, "Equity aids the diligent and not those who sleep on their rights."
A person cannot avoid a written contract, which he has entered into on the grounds that he did not read it or have it read to him and that he supposed its terms were different, unless he was induced not to read it or have it read to him by fraudulent representations made to him by the other party on which he was...
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