125 N.J. Eq. 584 | N.J. Ct. of Ch. | 1939
George B. Daetz and wife executed to John W. and Christine Meyer their bond for $8,000 and secured the same by their mortgage covering 58 Garrison avenue, Jersey City. Subsequently a deed was given by Daetz and wife to the defendant Paul C. Supinski for the stated consideration of $1 and other consideration, in which deed it is recited that the conveyance was subject to said mortgage. Thereafter Supinski conveyed to Herman Rausch and Minnie his wife *586 by deed reciting that the conveyance is "subject to a mortgage in the sum of $8,000 now a lien on said property, which the parties of the second part assume and agree to pay." Herman Rausch died May 20th, 1935, his wife surviving him and as a tenant by the entirety, she became the owner of the mortgaged property. She died August 4th, 1937, leaving a will by which she devised premises 10 Wayne street to her adult children Bennie, Victor and Elmer and her minor children Simon and Ruth as tenants in common (which premises were sold under foreclosure of another mortgage prior to the commencement of this suit) and she devised 150 Newark avenue and 231 Bay street to said minor children Simon and Ruth, as joint tenants (which premises said minors still own) and she devised the premises covered by the Meyer mortgage to her said five children as tenants in common.
Complainant became the owner of the Meyer bond and mortgage bymesne assignments and on February 8th, 1938, filed his bill to foreclose, naming as defendants Paul C. Supinski, and Bennie, Victor, Elmer, Simon and Ruth Rausch as heirs and devisees under the will of Minnie Rausch, and the said Bennie and Elmer Rausch as executors and trustees under said will and as guardians of the person and property of said Simon and Ruth Rausch. In the foreclosure proceedings a final decree was entered and June 9th, 1938, the mortgaged premises were sold to complainant for $100, leaving a deficiency due complainant of $10,130.16. The instant suit was brought by bill filed June 30th, 1938, against Supinski; the said five children of Minnie Rausch as heirs and devisees under her will; her executors and trustees and the guardians of the person and property of her two minor children, to recover the amount of said deficiency.
1. A provision in a deed conveying mortgaged premises that the grantee shall assume and pay the mortgage debt, is a contract with the grantor for the latter's indemnity and the grantee's obligation enures in equity for the benefit of the mortgagee, who may enforce it against the grantee. Green v. Stone,
It may simplify consideration of some of the defenses interposed here if we assume for the moment, that the Rauschs are alive and are defendants to this suit.
2. It is contended that complainant has failed to show that the defendant Supinski by the deed to him, assumed payment of the mortgage debt; that if he did not and therefore was under no liability to complainant, the Rauschs as assuming grantees of Supinski are not liable to complainant. Eakin v. Shultz,
It is stipulated that Daetz and wife entered into a written contract with Supinski to sell him the mortgaged premises for $14,500 which Supinski thereby agreed to pay, in part, by assuming the obligation of the $8,000 mortgage in question and that thereafter a deed was accepted by him "subject to a mortgage in the sum of $8,000, now a lien on said property." There is no further evidence on the subject of his assumption other than the testimony of Mr. Schwartz, solicitor in this cause for Supinski, wherein he said that the contract shows that Supinski was to assume the mortgage "and then it was changed." Mr. Schwartz did not represent Supinski *588 (who is a member of the bar) when the latter took title and it is apparent that Mr. Schwartz's testimony referred merely to the difference between the contract and the deed, in the words used referring to the mortgage.
The general rule that the acceptance of a deed is prima facie
full execution of a contract to convey and supersedes all prior agreements between the parties, does not apply to covenants which are collateral to the deed. It being established that the grantee of real property agreed with his grantor to assume a mortgage indebtedness as part consideration for a conveyance, such contract is independent of the deed and in no way contradictory thereto, if the conveyance is in terms subject to the mortgage.Dieckman v. Walser,
3. About seven months after this suit was instituted, the solicitor for complainant and the solicitor for Supinski entered into a stipulation that this action be discontinued as against Supinski, which stipulation was filed with the clerk the day prior to the hearing of the cause and an order was entered dismissing the bill as to said defendant. It is argued that such order operates as a release and discharge of Supinski's liability for a deficiency and that, if he is under no liability to complainant, the Rauschs are discharged from their promise of assumption because their liability is dependent on Supinski being liable to complainant. Except for the effect of the discontinuance, there is no evidence that complainant released Supinski as an assuming grantee. Supinski, as a witness testified that he paid no consideration for the discontinuance, received no release from his liability *589 or any promise of release. Complainant contends that dismissal of this suit as to Supinski did not release him from his obligation and has no effect on complainant's cause of action against the Rauschs, because Supinski was not a necessary party to a deficiency suit against the Rauschs and that complainant could have proceeded against the Rauschs alone as the last assuming grantees (Howell v. Baker, supra); that the situation as to the Rauschs is now as though Supinski had never been a party to the cause.
If discontinuance of this suit against Supinski operates as a discharge of his liability as an assuming grantee, then the Rauschs' obligation to indemnify Supinski against his liability to complainant is at an end and complainant is not entitled to the benefit of that obligation. Wise v. Fuller,
4. We come now to the fact that Herman Rausch and Minnie his wife are dead and that Minnie Rausch was the survivor. Complainant seeks to charge her devisees and the executors of Minnie Rausch, under the Heirs and Devisees act (R.S. 3:25-67,et seq.), with the liability of their mother as an assuming grantee, to the extent of the lands (or the value thereof) which the devisees received under their mother's will and it is urged on behalf of the devisees that such liability is enforceable only at law. Because I have decided that no liability now exists on the Rauschs' assumption agreement, it is not necessary to decide and I do not decide the further questions presented, but having given some consideration to them, I give the parties the benefit of such consideration.
It seems to be settled (notwithstanding R.S. 2:26-3.6) that Supinski's liability on his assumption agreement was enforceable by complainant only in this court (Mount v. Van Ness,
If the cases cited by defendant devisees and especially the case of Acton v. Shultz, support the proposition urged by them, it seems strange that the point was not referred to by our court of errors and appeals in Wootton v. Pollock,
5. For the executors and devisees of Minnie Rausch it is further contended that she did not have good title, or a title in fee-simple, to the lands which complainant alleges were devised to the defendant devisees, and that two of said parcels were involuntarily alienated by said devisees through foreclosure proceedings, wherein nothing was realized over the amount adjudged to be due in those causes. If complainant were entitled to a decree against the devisees it would be only a special judgment to the extent of the devise to them whatever such devise may be, and the lands alienated by foreclosure could not be said to have had any value to the devisees for which they might be held liable under R.S. 3:25-71. *593
6. If there should be a decree in favor of complainant he would not be entitled to the full amount of his deficiency. He bought in the mortgaged property for the nominal sum of $100 and he should be required to credit on account of his deficiency the fair value of the property he received as of the date of the foreclosure sale.