127 A. 219 | Pa. | 1924
Argued October 8, 1924. David C. Hensal bought nine separate tracts of coal land from different owners; included therein was the land of David Heinbaugh. In part payment of all the land, Hensal executed a mortgage on the nine tracts to John R. Scott as trustee for the former owners. The balance of the purchase money due to each was specifically set forth in the mortgage for the use of the former owner; a judgment for their benefit, in addition to the mortgage, was held by the trustee.
Hensal thereafter sold these tracts, with eight others, to the Pinkerton Coal Company, in part satisfaction of the purchase price; the company delivered to Hensal a mortgage for $62,197.38, covering the seventeen pieces. Of that amount $23,618.12 was specifically appropriated to the payment of the mortgage and bond given by Hensal to Scott, and a bond covering this item was given to Scott, trustee, as secured by the Pinkerton mortgage. In addition, for the purposes of this case, we may say the Pinkerton Company by the terms of its mortgage assumed and agreed to pay the grantor's mortgage to Scott, trustee. The latter died, and J. C. Lowry was appointed trustee to succeed him.
Defaults were made in both mortgages; the Pinkerton Coal Company did not pay the Hensal mortgage or interest that it had assumed and agreed to pay; nor did the mortgagor, Hensal, or his estate, pay Lowry, trustee, any part of the mortgage held by him. A bill was filed by the trustee to foreclose the first, or Hensal, mortgage, in which action the heirs and legal representatives of Hensal, the Pinkerton Coal Company and the assignees of all of the bonds created by the Pinkerton Company mortgage, were named as defendants. Its prayer called for specific execution against that portion of the land *576 (260 acres), which David Heinbaugh had conveyed to Hensal, and by the latter to the coal company. This same land was covered by both mortgages, and the bill would segregate it and endeavor to make the former owner's (Heinbaugh's) purchase money from a sale of it. In response to the answer denying jurisdiction, the court below dismissed the bill, and from that decree this appeal is taken.
Appellant urges, the Pinkerton Coal Company, in assuming and agreeing to pay the Hensal mortgage, is the principal debtor, and this being a dispute between a corporation and creditors, the Acts of March 23, 1877, P. L. 32, and May 4, 1893, P. L. 29, give equity jurisdiction. He further urges there is nothing in the law to forbid his selling through equity the land he had conveyed, even though included in a number of properties conveyed to a trustee to secure a number of creditors or bondholders, although the segregated property be sold to the exclusion of other creditors.
Assuming the language of the coal company's mortgage has the same binding force as if contained in a deed (see 1 Pingrey on Mortgages, 1003, 1007; 2 Jones on Mortgages, 7th ed., 165, 168), and creates an agreement to assume and to pay the grantor's (Hensal's) mortgage to Scott, trustee (and we see no reason why there should be any difference between a deed and a mortgage in this respect), it is clear that, as between Hensal, grantor and mortgagor, and the Pinkerton Coal Company, grantee, the general rule is that one purchasing a property and agreeing to pay a mortgage debt, is a purchaser as between himself and the vendor of the entire estate, and is liable to pay the mortgage as part of the purchase money due from him. Therefore, as between them, the grantee is the principal debtor, and personally liable for the debt, and the grantor is surety: Willock's Est.,
If, on the foreclosure of the mortgage, there is a deficiency which the grantor is obliged to pay, he may recover the amount of his loss in an action against the grantee. The latter's liability is coextensive with the original obligation. But, like all covenants of indemnity, as between grantor and grantee, before the grantor can recover on the covenant of indemnity, he must show a loss has been suffered: May's Estate, supra. These are some of the legal relations between the grantor and grantee. The mortgagee is not a party to this arrangement, and his rights are entirely unaffected by anything that may be done by subsequent owners of the land, unless, by agreement amounting to a novation, he consents to a substituted debtor. He may proceed against the mortgagor, or directly against the grantee. The most recent authority on the latter principle is Gill's Est.,
Commonwealth v. DuPont Land Co.,
Moreover, a chancellor has no authority to direct a trustee who holds a mortgage against a number of pieces of land, in trust for the creditors there mentioned as a unit or class, to segregate one piece and sell it for the benefit of one creditor to the exclusion of others of the same class whose rights are all equal (Western Pa. Hospital v. Mercantile Library Hall Co.,
The decree of the court below is affirmed at the cost of appellant.