In re the Assignment of Grotenkemper

1 Goebel 224

• Court: Hamilton County Probate Court
• Decided: June 14, 1889
• Status: Published

Opinion

Goebel, J.

The property described in the agreement being held in trust for Grotenkemper, the question arises, has Catherine Temmen a valid claim for $2,000, and if so, is it a prior lien upon the property so held in trust.

It is maintained that there wa§ no consideration for the transfer by Temmen to Catherine Temmen of his claim against Grotenkemper. The evidence shows that J. PI. Temmen at the time of the assignment of his claims against Grotenkemper was indebted to Catherine Temmen, but we do not think it is a proper question to raise.

Grotenkemper entered into the agreement with Catherine Temmen. Pie recognized her as his credit- or, and she him as her debtor. Grotenkemper could not make this defense at this time. His trustee on behalf of his creditors is estopped.

True, Catherine Temmen, stands in no better position than J. PI. Temmen, so far as the claim is concerned, for at the time of the transaction the claim was due, and it is subject to any equities that could be interposed.

It must be conceded that there was no legal liability against Grotenkemper for the loss Temmen had sustained by reason of the sale, which he, Temmen, could have enforced in a proceeding at law.

It has been held that a loss or expense occasioned by a surety attempting to avoid payment of an obligation can not be considered as a subject of indemnity. Hayden v. Cabot, 17 Mass. 169; Sedgwick on Measure of Damages, 7th Ed. 124; 2 Sutherland on Damages 577.

Yet, there was an equity, which was a subject for consideration by Grotenkemper, and this was so recognized by him. Temmen wanted the entire value paid to him ; Grotenkemper declined. That a compromise was effected is evident. Whether it was a valid claim can not be inquired into now. A compromise of a doubtful claim is a good consideration for a promise to pay money, and when an action is brought upon such promise, it is not necessary to show that the claim is a good and valid one. Crans v. Hunter, 28 N. Y. 389 ; Seaman v. Seaman, 12 Wend. (N. Y.) 381; Russell v. Cook, 3 Hill (N. Y.) 504.

This court will therefore not look beyond the compromise.

Has Catherine Temmen a prior lien ? If she has, it is not by virtue of any stipulation in the deeds or mortgage, but by virtue of an agreement entered into subsequently to the execution and delivery of the deeds and mortgage, and intended to cover an amount not contemplated at the time. The law is well settled in Ohio, that future advances may be secured by mortgage when so stipulated, and it has also been held that a subsequent mortgage will have priority over it, as to any. advances made after such subsequent mortgage is placed on record. Spader v. Lawler, 17 Ohio 371; Chotean v. Thompson, 2 O. S. 114; West v. Klotz, 37 O. S. 420; Jones v. The Guaranty and Indemnity Co., 101 U. S. 622.

The doctrine upon which all these cases rest is notice. Apply that doctrine here, and we find an agreement of the parties, not on record, which would have been notice to the world that the property was liable for more than was originally stipulated, and which seeks to enlarge the security and postpone subsequent lien holders. Such subsequent lien holders were not advised, nor enabled to guard against such encumbrances. To permit a security to be enlarged under such circumstances would be to deprive them of all their rights, and of the security which they had a right to rely upon by the record.

Nor do we think that the two thousand dollars was an advancement within the ruling of the cases cited. It was a compromise of a claim separate and distinct from the nature of the claim for which the deeds and mortgage were executed.

While we hold that Mrs.Temmen has a valid claim, we also hold that such claim is not prior to the liens and judgments, which became liens after the execution and delivery of the deeds and mortgage, and to the extent of the two thousand dollars, her claim must be postponed to that of the other lien holders.