Thompson v. Cheesman

• Decision Date: 20 April 1897
• Docket Number: 773
• Citation: 15 Utah 43,48 P. 477
• Court: Utah Supreme Court
• Parties: JAMES THOMPSON, APPELLANT, v. M. J. CHEESMAN, RESPONDENT

48 P. 477

15 Utah 43

JAMES THOMPSON, APPELLANT, v. M. J. CHEESMAN, RESPONDENT

No. 773

Supreme Court of Utah

April 20, 1897

Appeal from the Third district court, Salt Lake county. Hon. M. L Ritchie, Judge.

Action by James Thompson against M. J. Cheesman. On the death of plaintiff, Frank Thompson, executor, and Joseph R. Lane administrator, were substituted as parties plaintiff. From the judgment, plaintiffs appeal.

On the 25th day of July, 1894, the late James Thompson filed in the court below his complaint against John J. Snyder, Laura D Snyder, his wife, M. J. Cheesman, and Mary A. Cheesman, his wife, in which he alleged that John J. Snyder executed to William Glassman three promissory notes, bearing date January 25, 1890, payable one year after their date,--one for $ 2,600, and the other two for $ 900 each; that he secured the same by a separate mortgage upon separate parcels of land describing them; that, on the same day, Glassman assigned the same to James Thompson; that, on the 25th day of January of the same year, the mortgagor conveyed an undivided half interest in the land described in the first-named mortgage, and all of the real estate described in the other two, to defendant M. J. Cheesman, and, as part consideration for the conveyance of the land, Cheesman then verbally agreed with Snyder to assume and pay one-half of the note for $ 2,600, and the whole of the other two notes. The complaint also asked the court to find the amount due on the respective notes, and to decree a foreclosure of the mortgages given to secure them, and a sale of the property, and, if a sufficient amount should not be realized, that a personal judgment be rendered against defendants John J. Snyder and M. J. Cheesman, respectively, for one-half of the deficiency on the note for $ 2,600, and against them for the entire deficiency on the other two notes. It further appears that Thompson died during the pendency of the suit, and the above-named plaintiffs were substituted as his personal representatives. To each of the three causes of action alleged the defendant M. J. Cheesman demurred, on the following grounds: (1) The facts alleged did not authorize a deficiency judgment against him. (2) The statute of frauds barred the cause of action alleged as against him. (3) That the action, as against him, was barred by the statute of limitations. The court sustained the demurrer on the third ground, and overruled it as to the first and second grounds. To the ruling of the court sustaining the demurrer, the plaintiff excepted; and, the plaintiffs having elected to stand on their complaint, the court entered a decree of foreclosure against the land for the amount found due, and costs, and a deficiency judgment against Snyder, and refused a deficiency judgment against Cheesman, to which decree plaintiffs excepted, and appealed to this court, and assign the ruling of the court sustaining the demurrer as error.

Affirmed.

Bennett, Harkness, Howat & Bradley, for appellants.

S. McDowall, for respondent.

No briefs were filed.

ZANE, C. J. BARTCH and MINER, JJ., concur.

OPINION

ZANE, C. J. (after stating the case):

The principal question presented for our decision upon this appeal is: Was the recovery of the deficiency judgment asked by the plaintiffs against the defendant Cheesman barred by the statute of limitations? The promissory notes held by plaintiffs, and the mortgages securing them, on the land conveyed to Cheesman, became due on the 25th day of January, 1891, and this suit was not commenced until July 25, 1894 (three years and six months thereafter). An action upon a contract, obligation, or liability not founded upon an instrument in writing, if not commenced within two years, is barred by section 3145, 2 Comp. Laws Utah 1888. The action on such a contract is barred if not commenced within two years after the right to bring it accrues. The statute begins to run when the right of action accrues. Wood, Lim. (2d Ed.) p. 311, § 117.

The plaintiffs insist that the agreement of Cheesman was with his grantor, Snyder, and was a contract to indemnify him; that it was not a contract to pay the holders of the notes and mortgages, but to indemnify the mortgagor in case he should pay them; that he did not make the debt his own by his promise to pay it. Plaintiffs insist, further, that as between the grantor, Snyder, and the grantee, Cheesman, the latter, by his promise to pay the mortgages, became the principal debtor, and the former the surety, and that the holders of the notes had the equitable right, upon foreclosure of the mortgages, to be subrogated to the rights of Snyder against his principal, Cheesman, and that Cheesman's liability to pay any deficiency cannot be ascertained until after the sale of the property on the foreclosure, when the deficiency, if any, shall be ascertained; that the right of the plaintiffs against him for the deficiency will not accrue until that time; and that the statute of limitations will not commence to run until then. The propositions upon which plaintiffs rely are: First, that Cheesman's promise was not to the holders of the notes and mortgages, but to his grantor, and that the mortgagor's right to sue will not accrue until he pays the notes; second, that plaintiffs had a right to foreclose their mortgages, and if the property, when sold, does not pay the debt secured, they can be subrogated to the mortgagor's rights upon Cheesman's promise to him, and recover a judgment against Cheesman to the extent of the deficiency; but the right to such judgment will not accrue until a deficiency is ascertained and known, if any, and the statute of limitations will not commence to run until that time. Cheesman disputes plaintiffs' position, as above stated, and insists that the order of the court granting the demurrer to the complaint should not be reversed if plaintiffs' contentions were conceded, because the statute of frauds is also a bar to a personal judgment against him. Such conflicting views of counsel render it necessary to determine the nature of the contract relied on, and its effect at law and in equity. Its language, as alleged, is: "That * * * said Snyder conveyed said real estate to said Cheesman, * * * and, in consideration of such conveyance, the said Cheesman agreed verbally with said Snyder to assume and pay the said mortgages upon the said real estate." Cheesman obtained the title to the land, and that title was the consideration of the promise by him to pay the mortgages. Instead of receiving the money for the land, and paying the notes and mortgages himself, the grantor agreed that the grantee might retain it, and pay the mortgage debt with it. As between the grantor and grantee, the debt secured by the mortgage became the latter's debt, and the former became his surety; and the holders of the mortgage indebtedness gave their assent to the agreement when they asked for a judgment against him for the difference between the value of his land described in the mortgage, to be ascertained by a sale, and the debt which he agreed to pay. Thereby he became the debtor, according to his agreement. He simply promised to pay his own debt to the creditor of his grantor. This was something more than a verbal promise to pay Snyder's debt; it was a promise by Cheesman to pay his own debt as well; and as to the latter it was an original undertaking, on a sufficient consideration, and not within the statute of frauds. Society of Friends v. Haines, 47 Ohio 423; Merriman v. Moore, 90 Pa. 78; Strohauer v. Voltz, 42 Mich. 444, 4 N.W. 161; Farley v. Cleveland, 4 Cow. 432.

The further question arising for decision is: Did...