Cashman v. Henry

Where the grantor of an equity of redemption in mortgaged premises is not personally liable to the holder of the mortgage for the payment thereof, and has no interest in such payment, legal or equitable, except in so far as the mortgage may be a charge upon the mortgaged lands, his grantee thereof incurs no personal liability to the holder of the mortgage, by reason of a clause contained in the deed, whereby the payment of such mortgage is, in terms, assumed and agreed to be.paid by him as part of the consideration of such conveyance (King agt. Whatly, 10 Paige, 465; Vrooman agt. Turner, decided by the court of appeals, April 10, 1877, but not yet reported; vide 4 N. Y. W. Dig., 504; N. Y. Daily Reg., June 2, 1877). The case last cited carefully and clearly distinguishes the principle upon which exemption from liability is accorded to the grantee of mortgaged premises, under- the circumstances above stated, from the rule adopted in that class of cases of which Lawrence agt Fox (20 N. Y., 268) is an example, and in which it has been *239held that an action sometimes accrues in favor of one, for whose benefit a promise has been made to another, against the promisor, upon the breach of such promise. It holds, that in order to give the third party, who may derive benefit from the performance of the promise, a right of action against the promissor, there must be in him a legal right to adopt and claim the promise as made for his benefit, founded upon some obligation or duty on the part of the promissor toward himself.

Where no such obligation or duty exists, as, for instance, where a grantor of mortgaged premises is not personally bound for the payment of the mortgage debt, the rule adopted in that class of cases cannot be invoked. The principle, upon which a grantee, who assumes payment of a mortgage debt for which his grantor is personally liable, may be directly pursued by the mortgage creditor, or held for any deficiency in- the proceeds of a sale of the mortgaged premises, is involved in and grows out of the equitable doctrine of subro.gation, whereby a creditor is entitled to the benefit of any security, held by surety, for the payment of the debt due him. As between the grantor, liable for the payment of a mortgage, and his grantee, who assumes and agrees with him to pay it, the latter becomes, in equity, the principal debtor, the former a surety for the payment of the debt. The creditor, under the rule of subrogation, may resort to the rights and remedies available to the surety who is charged with an obligation or duty toward himself, and may enforce them in the same manner and to the same extent as the surety himself may do. But if the grantor be not chargeable with any liability to the holder of the mortgage, no relation of suretyship exists as between him and his grantee,'and the rule of subrogation is, therefore, wholly inapplicable to any promise or undertaking made by the grantee in his favor.

It would seem to follow from these premises, that unless Kate M. Cormac was personally liable to the plaintiff for the payment of the bond and mortgage in suit, or for a deficiency *240upon the sale of the mortgaged premises, no right of action accrued to him or exists in his favor, as against her grantees, the present defendants. In other words, unless the plaintiff’s claim can be enforced against her, neither can it be enforced against those to whom she may have recourse, by way of indemnity, in case of its enforcement against herself. He can only be entitled to subrogation to her rights and remedies by reason of her obligation or liability to himself.

We have, therefore, to inquire and determine whether, under and by virtue of the assumption clause contained in the deed to herself, Kate M. Gorman, the defendants’ grantor, became personally liable to the plaintiff for the payment of his mortgage, or so charged her separate estate with liability for its payment, as to be legally or equitably interested in having it paid, after she ceased to have any interest in the lands upon which it was a specific lien. If she was under no obligation to the plaintiff in respect to it, and had no interest.in securing its payment, except to the extent that it charged those lands, the plaintiff, acquired no right and can enforce no remedy against the defendants under and by virtue of their covenant of assumption contained in the deed from her. It affirmatively appears that she was a married woman at the date of the conveyance to herself. Her coverture precluded her from contracting, and her disability rendered her contracts void, except in so far as the provisions of the married woman’s acts imparted validity to them. The onus of establishing the validity of a contract made by a feme covert is upon him who asserts it. It was earnestly insisted, upon the argument, that the burden of proof was upon the defendants to show that their grantor was not liable. Such is not the correct view to take of the relations subsisting between the parties. The plaintiff claims that the defendants are liable to him. To establish such liability he must show that the defendants’ grantor with whom they contracted, as he alleges for his benefit, was under some obligation to him, from which it can be inferred that the contract with her was intended to have that *241effect. The plaintiff was, therefore, under the necessity of proving against them the state of facts which would have been requisite, if he had sought to establish the liability of their grantor against herself. To establish her liability it would have been essential that he should prove not only a contract, but a contract within the statutory exceptions. As no intention to charge her separate estate was expressed in the instrument or contract, by which her liability is supposed to have been created, it should have been made to appear by proof, on the part of the plaintiff, either that such liability was assumed in the prosecution of a trade or business carried on by the wife, or that it had relation to and was incurred for the benefit of the wife’s separate estate (Manhattan B. and M. Co. agt. Thompson, 58 N. Y., 80). No evidence was adduced tending to establish either of these conditions. As was said in Mash agt. Mitchell (opinion of court of appeals, reversing 8 Hun, 471, vid. Albany Law Journal, December 15, 1877), “ the law does not authorize the presumption, and courts cannot assume without evidence, that a simple contract, without any thing on its face to indicate the fact, was made for the benefit of the estate of a married woman.” The same case is full authority for the proposition that the burden of proof is upon him who asserts, and not upon him who impugns, the validity of a contract made by one under the disabilities of coverture. The proofs would not, in my opinion, have warranted a finding that Mrs. Cormac ever became personally liable to the plaintiff for the payment of his mortgage, or ever charged the payment thereof upon her separate estate.

The costs of the issue, tendered by the answer, were in the discretion of the court below. I am of the opinion that such discretion was wisely and properly exercised.

The judgment, so far as appealed from, must be affirmed, with costs against the appellant.

Curtis, Ch. J., concurring.