Woodcock v. Bostic

• Decision Date: 31 March 1896
• Citation: 24 S.E. 362,118 N.C. 822
• Court: North Carolina Supreme Court
• Parties: WOODCOCK. v. BOSTIC et al.

24 S.E. 362

118 N.C. 822

WOODCOCK.

v.BOSTIC et al.

Supreme Court of North Carolina.

March 31, 1896.

Appeal of RAY.

Action — Parties not Privy to Contract — Assignment of Written Agreement.

1. A third person cannot sue at law on a promise to which he was not privy, though it was made for his benefit.

2. While a promise by the grantee of a mortgagor to pay the mortgage debt can be enforced iu equity by one to whom the mortgagee has assigned the debt, on the principle of equitable subrogation, the assignee cannot enforce such promise in his own right in an action of assumpsit against the promisor without any prayer for equitable relief, or stating any element of equity in his complaint.

3. S. gave his bond and mortgage for the purchase price of land, and sold the property to defendant, who agreed with S. and the mortgagee, in writing, to pay the mortgage debt, which had meanwhile been transferred for value to plaintiff. Held, that such agreement was not assignable.

Appeal from superior court, Buncombe county; Graham, Judge.

Assumpsit by Julia E. Woodcock against J. B. Bostic and others. Defendant J. M. Ray demurred to the complaint, and from an order overruling his demurrer appeals. Reversed.

P. A. Sondley, for appellant.

Jones & Barnard, for appellees.

MONTGOMERY, J.' On the 2d of August, 1890, J. B. Bostic conveyed to D. D. Suttle a tract of land for the price of $5,500, Suttle at the same time executing his bond for the purchase money, and securing the same by a deed of trust upon the land. Bostic assigned the bond to the plaintiff Julia E. Woodcock for value. Afterwards the defendant Ray became the purchaser of the land from Suttle or his grantee, and entered into a written agreement with Bostic and Suttle, in which he, after reciting the indebtedness of Bostic and Suttle to the plaintiff, and declaring that it was secured by a deed of trust upon the land, which he had bought subject to the same, assumed and agreed with Bostic and Suttle to pay the aforesaid debt of Julia E. Woodcock, and also to protect and save Bostic and Suttle from any and all liability by reason of or from the same. Bostic and Suttle assigned and transferred this assumption and guaranty to the plaintiff. This action was commenced by the plaintiff against the defendant upon his assumption and guaranty. It is in form an action ex contractu. The bond of Suttle to Bostic, which Bostic assigned to the plaintiff, is only mentioned in the complaint as a recital to explain what was the exact amount of defendant's assumption, and that the debt was still due. The trustee named in the deed which secured the bond is not a party to the action, nor is there any prayer for a foreclosure of the trust and for a personal judgment against the defendant Ray for any deficiency. Neither is there any equitable subrogation invoked, by which the assumption of the defendant might be subjected to the satisfaction of the bond. This action is under the old form of assumpsit, and is against the defendant on his promise made to Bostic and Suttle under their assignment of the same to the plaintiff. The plaintiff insists that she can recover both on the assignment of Bostic and Suttle to her of the defendant's assumption and on the broad ground that the defendant is liable to her directly, even if the assignment of the assumption of the defendant had not been made to her by Bostic and Suttle, because of the promise made by the defendant to Bostic and Suttle to pay her debt. We will discuss the last proposition first. The proposition is that at law a third person may maintain an action upon the promise of one person to another for the advantage and benefit of the third. There is conflict of judicial opinion on the question. The affirmative is held in many of the states, including New York. Burr v. Beers, 24 N. Y. 178. In others of the states, including North Carolina, the contrary is held. Peacock v. Williams, 98 N. C. 324, 4 S. E. 550; Morehead v. Wriston, 73 N. C. 398. But the plaintiff insists further that Suttle ought to be considered a mortgagor, and the defendant Ray a vendee, who has purchased and agreed to pay the mortgage debt to Bostic, the latter to be considered a mortgagee, and that between them Bostic has become the surety and Ray the principal debtor, and that the plaintiff stands in the shoes of Bostic by virtue of his assignment of his bond to her, and that, therefore, she ought to be subrogated to the rights of Bostic, and have the assumption of Ray subjected to the payment of the plaintiff's debt. This is a sound principle of equity. In New Jersey and Massachusetts it has been held that the liability of the grantee of a mortgagor who has promised and assumed to pay the mortgage debt can be enforced in equity by the mortgagee or his assignee by tbe application of the principle of equitable subrogation. Hayden v. Snow, 14 Fed. 70. In the case of Keller v. Ashford, 133 U. S. 610, 10 Sup. Ct. 494, the same principle is declared, and Mr. Justice Gray, who delivered the opinion, quoted with approval from Crow-ell v. St. Barnabas Hospital (N. J. Err. & App.) 27 N. J. Eq. G50, as follows: "The right of a mortgagee to enforce payment of the mortgage debt, either in whole or in part, against the grantee of the mortgagor, does not rest upon any contract of the grantee with him, or with the mortgagor for his benefit." The purchaser of land subject to mortgage, who assumes and agrees to pay the mortgage debt, becomes, as between himself and his vendor, the principal debtor, and the liability of the vendor as between the parties is that of surety. In equity, a creditor may have the benefit of all collateral obligations for the payment of the debt which a person standing in the relation of...