Lee v. Newman

55 Miss. 365

• Court: Mississippi Supreme Court
• Decided: October 15, 1877
• Status: Published

Opinion

Chalmers, J.,

delivered the opinion of the court.

M. E. S. Lee loaned to the firm of Enos & Co., of which John M. Newman was a member, the sum of $2,000 in gold, taking a note therefor signed severally by each member of the firm, and receiving at the same time, for the protection of the note, a deed of trust executed by JohnM. Newman on certain lots in the town of Summit. Eighteen months afterwards Newman sold these lots, with certain others, to his son, E. S. Newman, for the sum of $8,000. The consideration is thus recited in the deed from the father to the son: ‘ That said party of the first part (the grantor), for and in consideration of the sum of eight thousand dollars, paid and assumed to be pajd as follows ; that is to say, the sum of five thousand and twenty-four dollars and seventy-two cents in cash, paid by the party of the second part (the grantee) to the party of the first part, and the further sum of two thousand nine hundred and seventy-five dollars and twenty-eight cents assumed to be paid to M. E. S. Lee in satisfaction of a deed of, trust for the last-mentioned sum, which said deed is a lien and incumbrance upon the property hereinafter conveyed.”

■The sum of $2,975.28, thus assumed to be paid by the grantee to Lee, was the amount due on the note held by the latter, allowing for the accumulated interest and the premium on gold ; but the trust deed to secure it was a lien only on a portion of the lots convoyed to the son, and not upon all of them, as stated in the conveyance. Shortly after this conveyance the son sold one of the lots to-Bunch, and paid oyer the whole proceeds, by direction of his father, to Lee, though the trust deed held by the latter covered only a half-interest in this particular lot. Twelve months afterwards John M. Newman removed to the state of Texas, carrying with him a large property, and has since died there. No further payments having been made by R. S. Newman to Lee, the. latter foreclosed his trust deed by a sale of the lots embraced in it, credited the amount realized on his note, and now brings this bill'against R. S. Newman to subject the other lots purchased by him and not embraced in the trust deed. He joins as defendants Garner & Tennison, to whom R. S. Newman had conveyed one of the lots purchased by him, which was not embraced in the trust deed, praying that if the lots remaining in the possession of Newman prove insufficient to liquidate his demand, this lot also may be subjected.

The defendants resist the relief prayed, upon the ground that the complainant has no claim upon any of the lots not covered by his mortgage ; that he acquired no rights by virtue of the false recital in the conveyance from John M. to R. S. Newman ; and that, being no party to said instrument, nor to any of the assumptions evidenced by it, he can maintain no suit thereon. R. S. Newman sets up further, by his answer and in his deposition, that in point of fact he never assumed to pay anything to the complainant, nor was he required or desired so to do by his father, the recital to that effect in the conveyance being a mistake of the scrivener, and the truth being that he paid to his father in cash the whole purchase price of the lots, save about $800, which he shortly afterwards paid to the complainant out of the proceeds of the sale of the lot to Bunch, as had been agreed between himself and his father. With regard to the question of fact thus raised, we think it incompetent for R. S. Newman to contradict the recitals of the instrument under which he holds the property, without having filed a bill or cross-bill to reform it. If those recitals impose a valid obligation upon him, they evidence the contract, and cannot be altered without a direct proceeding for that purpose. Eskridge v. Eskridge, 51 Miss. 522. The story told by him, of the manner in which he procured and paid the money to his father, strikes us as in the highest degree improbable, and certainly lacks the confirmation of the witnesses by whom, if true, it could have been corroborated.

Addressing ourselves to a consideration of the. questions whether any legal liability to pay the debt of the complainant was devolved upon R. S. Newman, or upon the land purchased by him, and, if so, whether complainant can assert it, it will facilitate our investigation to consider, first, the obligation of the vendee to his vendor, arising out of the conveyance. If this were a bill filed by John M. Newman to recover the balance of the purchase-money represented by the debt due the complainant, he would be able to obtain no decree in personam, against R. S. Newman, because our construction of that clause of the statute of frauds which requires all contracts in reference to lands to be in writing is that it applies always in behalf of the party defendant to the suit, so that, if it is a proceeding by the vendee to compel the making of a deed, he must be able to exhibit some writing signed by the vendor ; and, if it is a suit by the vendor to recover the purchase-money, he must show some written obligation to pay, signed by the vendee. Marqueze v. Caldwell, 48 Miss. 23.

But while no recovery in personam could be had against the vendee in this case, because of his failure to sign a written obligation to pay, yet, having gone into possession under a conveyance stating the price, which is declared to be a lien on the land, and that the purchaser had assumed to pay it, by his acceptance of the conveyance he has assented to the terms, and cannot successfully resist the subjection of the land to the burden thus imposed upon it.

The deed recites that the property is incumbered with a lien to Lee for $2,975, which the vendee has assumed to pay, and credit for which he has received in the cash payment made to the vendor. Certainly, as against the vendor, he could not escape payment of this portion of the purchase-money by showing that, in point of fact, there was no such incumbrance. This is a matter in which he has no concern. Having agreed to pay $8,000 as the purchase price, he must pay it, or surrender the land. The authorities, indeed, go much further than this, and hold that where the vendee has gone in under a conveyance reciting a previous mortgage to other persons, and has received credit in his ¡purchase for the amount of said mortgage, he will not be allowed, in a foreclosure suit brought by the mortgagees, to question the validity of the mortgage, even though it be absolutely void. Sands v. Church, 6 N. Y. 347; Murray v. Judson, 9 N. Y. 170; Hartley v. Harrison, 24 N. Y. 170.

So, also, where the previous mortgage is nominally for a much larger amount than is really due, but the vendee obtains credit for the nominal sum, he will not be allowed to pay to the mortgagees the real amount due, but must pay to them the full sum expressed, and leave them to settle for the excess with his vendor; and the principle will apply to all successive purchasers. Freeman v. Auld, 44 N. Y. 50.

The obvious principle of these decisions is that the vendor has the right to impose upon the sale of his property such | •conditions as he chooses, and when these are plainly expressed in the conveyance, the vendee who enters under it takes the property cum onere, and must discharge the burden. Nor is an obligation to pay the debts.of the vendor to a third person, though in parol, obnoxious to that provision of the statute of frauds which requires all undertakings to pay the debts of another to be in writing:

Such assumptions are not within the statute. The contract is, not to pay the debts of another, but to pay the party’s own debt to some person other than his own creditor. “ It may be stated as a general rule that wherever thé main purpose and object of the promisor is, not to answer for another, but to subserve some purpose of his own, his promise is not within "the statute, although it may be in form a promise to pay the debt of another, and although the performance of it may-incidentally have the effect of extinguishing the liability of another.” 3 Pars, on Con., 5th ed., 24.

The statute of frauds was intended to protect from the enforcement of parol contracts to be answerable for the liabilities of others, but not to shield a party from the'performance •of his own contracts, though the effect of such performance would liquidate also the liabilities of another. Nor will it make any difference that the liability of the original debtor continues after the assumption by the new one. The contract not being within the statute, this cardinal test of whether it is a collateral or an original undertaking (see Sweatman v. Parker, 49 Miss. 19, and Bloom v. McGrath et al., 53 Miss. 249) does not apply. It is not the debt of another, but his own debt, which he has promised to pay, and neither the fact that the payment is to be made to a third person, nor the fact that in paying his own debt he extinguishes that of another, nor the fact that the liability of that other continues the same after as before his undertaking, brings it within the statute.

It is usually said that ‘ ‘ if the consideration of the new promise springs out of any new transaction, or moves to the party promising upon some fresh and substantive ground of personal concern to himself, the statute of frauds does not attach.” Mr. Browne, in his work on the Statute of Frauds, considers that a safer method of stating the rule would bo to say that wherever ‘ ‘ the primary and distinctive obligation assumed by the defendant is different from that of a guarantor, although as incidental to, and in the discharge of, that obligation the debt of another was satisfied, the defendant’s promise is no.twithin the statute.” Browne on Stat. Fr., sec. 212 and notes, sec. 166 and cases cited.

It is manifest, from a consideration of these principles, that against a bill filed by John M. Newman to subject the land sold to the payment of so much of the jsurchase-money as was represented by his own note to Lee, no valid defense could be interposed by his vendee. It is equally manifest that Garner & Tennison, the sub-vendees of E. S. Newman, are bound by the equitable lien of the vendor for this sum, since the deed to their vendor, through which their own title was derived, showed it to be unpaid. Taylor v. Deason, 53 Miss. 697.

Can the complainant assert, on his own behalf, this undertaking exacted by the vendor from the vendee for his benefit ? It has been held from very early times, though not always without question, that where a contract not under seal is made with A to pay B a sum of money, B may maintain an action in his own name ; and in America it has been held that such promise is to be deemed made to the third party, if adopted by him, though he was not cognizant of it when made. In law the promise is held to be made to him to whose benefit it inures, and in pleading, it is always sufficient to declare according to the legal effect. The rule is different where the promise is under seal, because there the action must be debt or covenant; and, hence, must be in the nazne of the obligee.

Especially will this right to bi’ing suit in his owzi zrame exist, izi behalf of him for whose bezzefit the promise was made,' where the consideratiozi of it was money or property simultaneously delivered or sold to the promisor. In such case the property is received under a trust, which will itself form a good consideration, inuring to the Benefit of him to whom the payment is due; and, if the purchaser has received credit for the sum thus contracted to be paid to such other person, the law will treat it as money had and received to his use. 1 Chitty’s Pl. 5; Arnold v. Lyman, 17 Mass. 400; Hull v. Marston, 17 Mass. 579; 1 Cranch (App.), 429; Burker v. Bucklin, 2 Denio, 45; Hendricks v. Lindsay, 93 U. S. 143; Lawrence v. Fox, 20 N. Y. 268; 1 Pars. on Con., 5th ed., 466-468.

In Dearborn v. Parks, 5 Greenl. 81, and in Whitbeck v. Whitbeck, 9 Cow. 266, the exact question here involved was presented. The purchasers of real estate had assumed (in one case in writing, and in the other by parol) to pay a portion of the purchase-money to creditors of the vendor. Though these creditors were not parties to the contract, it was held that they could recover the amounts so promised to be paid them, by direct action in- their own names. A personal recovery in such a case would not be permissible, as before remarked, under the construction of the statute of frauds announced in Marqueze v. Caldwell, supra, but, as we have seen, the vendor could assert his lien against the land. There can be no good reason for denying the same remedy to him for whose benefit the assumption was made. By reason of the assumption the purchaser has obtained a diminution in the amount paid to the vendor, and has taken the land charged with an equity in favor of a third person. A court of equity, in analogy to that principle which in a court of law would enable such third person to maintain an action of assumpsit, if there was a personal'liability incurred by the vendee, will permit him to assert against the land that trust which was fastened on it for his benefit; and this he can do both against the vendee and against all deriving title through the conveyance, which gave notice upon its face that the purchase-money was unpaid, and was to be paid to him.'

We would remark that, though Garner- & Tennison deny actual knowledge of the complainant’s equity, there is evidence tending strongly to show that they were aware of it, and anticipated that the land might be made answerable. They had constructive notice by the record of the deed.

Decree reversed and cause remanded for entry of decree in accordance with the principles here announced.