Urquhart v. Brayton

• Court: Rhode Island Supreme Court
• Writing for the Court: DURFEE, C. J.
• Citation: Urquhart v. Brayton, 12 R.I. 169 (R.I. 1878)
• Decision Date: 20 July 1878
• Parties: WILLIAM URQUHART v. WILLIAM W. BRAYTON.

12 R.I. 169

WILLIAM URQUHART v. WILLIAM W. BRAYTON.

Supreme Court of Rhode Island.

July 20, 1878

A made three successive mortgages of his realty to B. and C and D. He then sold this realty to E., describing the mortgages in his deed of conveyance and adding the words " which said mortgages are hereby assumed by E. as part of the consideration of this deed." Subsequently B., the first mortgagee, sold the realty under the powers of his mortgage. D., the third mortgagee, then brought assumpsit against E., the purchaser from A., for the amount of A.'s mortgage note to D.

Held, that E. was liable for the amount of the note.

Held, further, that E.'s liability was under an implied contract, and hence not subject to the statute of frauds.

Held, further, that E.'s liability, not arising from a sealed contract, might be enforced by assumpsit .

Held, further, that D. was entitled to recover.

Semble, that E.'s implied contract with D. is by novation substituted for A.'s contract with D. ASSUMPSIT. Heard by the court on the following statement of facts agreed to by the attorneys of the litigants:

William W. Brayton purchased of one Alexander O'Toole certain realty and received a deed. O'Toole had previously given three mortgages on the property, and these mortgages are all referred to in the deed. This portion of the deed is recited in the opinion of the chief justice. Urquhart, the plaintiff, was the third mortgagee. After the purchase by Brayton the property was sold under the first mortgage. Prior to this sale and after his purchase Brayton paid two instalments of interest on Urquhart's note, the money to pay one of which was furnished by O'Toole, and the funds to pay the other were furnished by Brayton himself. Brayton, hearing that Urquhart was willing to sell O'Toole's mortgage for $200, offered this sum, which was refused, Urquhart demanding $400 for it, an amount which Brayton refused to give.

The action was begun in the Court of Common Pleas and brought into this court by the plaintiff's appeal.

Charles Bradley, for plaintiff.

B. N. & S. S. Lapham, for defendant.

DURFEE C. J.

This is an action of assumpsit upon a promise, which the plaintiff claims is to be implied in his favor against the defendant. The facts are these: On the second day of June, 1875, one Alexander O'Toole made his promissory note for $480, payable to the plaintiff, one year after date, with interest payable semi-annually in advance until the principal is paid. As security for the note, O'Toole gave the plaintiff a mortgage on real estate, subject to two prior mortgages, one for $1,200 and the other for $500. On the eighth day of July, 1875, O'Toole conveyed said real estate to William W. Brayton, the defendant. The deed, after stating the consideration to be $100, and describing the premises, declares that the premises are " subject to three notes dated as follows: One to Horace Martin, dated September 16, 1873, for four years, $1,200; one to Walter B. Martin, dated April 6, 1872, for three years, $500; and one to William Urquhart, dated June 2, 1875, for one year, $450, making whole amount of incumbrances upon said estate twenty-one hundred and fifty dollars, which said mortgages are hereby assumed by Wm. W. Brayton as part of the consideration of this deed."

The property was subsequently sold. Prior to the sale, and after the defendant's purchase, the defendant paid two instalments of interest on the plaintiff's note, the money to pay one instalment being sent by O'Toole through the defendant, and the other being paid by defendant himself.

The defendant having heard that the plaintiff was offering the mortgage for sale for $200, offered him that amount, but the plaintiff denied having offered to sell for $200 and demanded $400, which the defendant refused to give. The plaintiff then commenced this action. The defendant contends that the action cannot be maintained.

We think there can be no doubt that the defendant, by accepting the estate conveyed, must as a matter of law be presumed to have agreed to pay the notes secured upon it; for he does not simply buy the estate subject to the mortgages, but impliedly assumes to pay the mortgages as a part of the consideration. Braman v. Dowse, 12 Cush. 227; Pike v. Brown, 7 Cush. 133; Furnas v. Durgin, 119 Mass. 500; Crawford v. Edwards, 33 Mich. 354; Collins v. Rowe, 1 Ab. New Cas. 97; Thorp v. Keokuk v. Coal Co. 47 Barb. S.C. 439; Jones on Mortgages, §§ 748, 749. The contract, being implied, is not within the statute of frauds; and not being under seal, may be enforced by an action of assumpsit. Pike v. Brown, 7 Cush. 133; Goodwin v. Gilbert, 9 Mass. 510; Felch v. Taylor, 13 Pick. 133; Huff v. Nickerson, 27 Me. 106; Hinsdale v. Humphrey, 15 Conn. 431; Rawson's Administratrix v. Copland, 2 Sandf. Ch. 251.

The question is whether the agreement implied between the defendant and the grantor inures to the benefit of the plaintiff, as one of the mortgagees, so as to enable him to sue the defendant directly, or, in other words, whether it can create any privity of contract between them. The decisions on this question are conflicting, but many of the more recent cases support the right of the mortgagee to maintain the action. Burr v. Beers, 24 N.Y. 178; Lawrence v. Fox, 20 N.Y. 268; Joslin v. New Jersey Car Spring Co. 36 N. J. Law, 141; Bassett v. Hughes, 43 Wis. 319; Twichell v. Mears, 6 Reporter, 40; Lamb v. Tucker, 42 Iowa 118; Putney v. Farnham, 27 Wis. 187; Bristow et al. v. Lane et als. 21 Ill. 194; Bohanan v. Pope, 42 Me. 93; Vrooman v. Turner, 8 Hun, 78; Brown v. Roger Williams Ins. Co. 5 R.I. 394; Motley v. Manufacturers' Ins. Co. 29 Me. 337; Carnegie et al. v. Morrison et al. 2 Met. 381; Brewer v. Dyer, 7 Cush. 337; but contra see Mellen v. Whipple, Gray, 317; and Crowell v. Currier, 27 N.J.Eq. 152, the right of action being denied in the latter case, however, solely on the ground that a promise implied from the acceptance of a deed is a specialty.

The ground of decision is variously stated in these cases. It is sometimes broadly maintained that when one person contracts with another for the benefit of a third, the latter, though not privy to the consideration nor cognizant of the contract when made, may yet maintain an action upon it. It is sometimes argued that the grantee's retention of a part of the price, on agreeing to pay...