Santoro v. Kleinberger

• Decision Date: 15 November 1932
• Citation: 115 Conn. 631,163 A. 107
• Parties: SANTORO v. KLEINBERGER.
• Court: Connecticut Supreme Court

163 A. 107

115 Conn. 631

SANTORO v. KLEINBERGER.

Supreme Court of Errors of Connecticut.

November 15, 1932

Appeal from Superior Court, New Haven County; Arthur F. Ells and John Richards Booth, Judge.

Action by Luciano Santoro against Jacob Kleinberber, who filed an answer by way of counterclaim, to recover the amount of a mortgage note, which defendant assumed and agreed to pay. From a judgment for plaintiff on trial to the court after sustaining plaintiff's demurrer to the answer and a judgment granting plaintiff's motion to reopen the previous judgment and correct the amount thereof, defendant appeals.

No error.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

Zalmon S. Hirsch and Henry Greenstein, both of Bridgeport, for appellant.

Francis P. Guilfoile, of Waterbury, for appellee.

BANKS J.

The complaint alleged that the plaintiff conveyed to the defendant certain real estate in Waterbury subject to two mortgages which the defendant expressly assumed and agreed to pay, that the defendant has transferred the property to a third person who did not assume the mortgage, and has refused to pay the second of the two mortgages, and that the plaintiff is held responsible by the holder thereof and will be obliged to pay the same. In an answer by way of counterclaim, the defendant alleged that the holder of the first mortgage on the property had foreclosed that mortgage in an action to which the plaintiff herein was a party but to which the defendant herein was not a party and of which he had no notice; that none of the defendants in the foreclosure action redeemed, and the title to the property became absolute in the first mortgagee; that the value of the property was more than sufficient to pay all incumbrances on it, including the second mortgage; and further alleged that the plaintiff herein had negligently and willfully failed to notify the defendant herein of the pendency of the foreclosure action as a result of which he was deprived of his security and his equity in the mortgage premises. The plaintiff demurred to the counterclaim upon the ground that the defendant was not entitled to notice from the plaintiff of the pendency of the foreclosure proceedings, and the court sustained the demurrer.

A demurrer is to be tested by the allegations of the pleading demurred to, which cannot be aided by the assumption of any fact not therein alleged. Ryan v. Knights of Columbus, 82 Conn. 91, 92, 72 A. 574; Tomes v Thompson, 112 Conn. 190, 198, 151 A. 531, 72 A.L.R. 297. Since, however, the parties and the trial court have assumed the existence of certain facts alleged in the complaint but not in the counterclaim, we shall follow them in that course.

The undertaking of the defendant under his assumption agreement was that, if he should fail to pay these mortgage notes in accordance with his contract, and the plaintiff in consequence thereof became liable to satisfy them, then the defendant would make good the resulting damage. Trotta v Prete, 112 Conn. 442, 445, 152 A. 585. That situation has arisen as to the second mortgage note, and the defendant's liability to the plaintiff for the amount due thereon follows unless he has been relieved therefrom by the failure of the plaintiff to notify him of the pendency of the suit to foreclose the first mortgage. Having disposed of his equity of redemption, and not being a maker of that mortgage, he was not a necessary party to the foreclosure action. The claimed duty of the plaintiff to notify the defendant of the pendency of the foreclosure action is rested upon an analogy sought to be drawn between the position of the defendant and that of a surety who is held to be exonerated from the payment of the debt for which he is surety to the extent that the creditor has surrendered or permitted to be lost or impaired the securities in his control which are applicable to the debt. Stearns' The Law of Surety ship (3d Ed.) s 99. As between a mortgagor and one to whom he transfers the equity of redemption and who assumes and agrees to pay the mortgage, by the assumption agreement the latter becomes the principal and the former the surety which a right of recourse against his principal if he is compelled to pay the debt. Trotta v. Prete, supra, page 445 of 112 Conn., 152 A. 585. The mortgagor has the right to have the mortgaged property applied to the payment of the mortgage debt so far as necessary for his protection against his personal liability for the debt secured. If, therefore, the mortgagee releases the mortgage or a portion of the mortgaged premises to a purchaser who has assumed the mortgage, the mortgagor is relieved of liability to the extent of the value of the security of which he has thus been deprived. Townsend Sav. Bank v. Munson, 47 Conn. 390; Goodwin v. Jackson, 97 Conn. 358, 116 A. 617; First Nat. Bank & Trust Co. v. Strong, 112 Conn. 412, 152 A. 575; 2 Jones on Mortgages (8th Ed.) s 839. It has been held that the same rule applies where the grantee of the mortgagor does not assume and agree to pay the mortgage but merely takes the property subject to the mortgage. North End Sav. Bank v. Snow, 197 Mass. 339, 83 N.E. 1099, 125 Am.St.Rep. 368; 41 A.L.R. 294, note.

The plaintiff is not a mortgagor who is seeking to enforce the personal liability of a mortgagor. He is the mortgagor who has himself been foreclosed out by the first mortgagee, but who is still personally liable upon the second mortgage from which liability he is entitled to be held harmless by the defendant. It is true that if he had redeemed the first mortgage he could not have recovered from the defendant assuming the latter to occupy the position of a surety, so long as the property was of sufficient value to cover both mortgages, for under...