77 Va. 462 | Va. | 1883
Lead Opinion
delivered the opinion of the court.
The appellee, Henry O. Cabell, on the 30th day of April, 1860, borrowed from James Lyons, special commissioner in the suit of Vaughan and als. v. Goddin and als., then depending in the circuit court of the city of Richmond, the sum of $2,853.08, and executed his bond to said Lyons, commissioner, in the proper penalty, with William Daniel, Jr., as surety, and conditioned for the payment of the principal sum and interest in such time and
In January, 1862, the said Cabell and wife conveyed the same lot of land to Francis J. Barnes in consideration of a certain sum of money in cash and his assuming to pay the debt secured by the aforesaid trust deed. This deed was also executed and acknowledged by Barnes.
In November, 1862, Barnes conveyed the same lot of land to E. D. Hitchcock for a certain sum in cash and the assumption by Hitchcock of 'the debt due to Lyons, commissioner.
On the 4th day of December, 1865, an agreement was executed by and between Hitchcock and the appellant, John J. Osborne, for the purpose of adjusting and settling all unsettled claims between them as individuals and also as partners; and in pursuance of that agreement Hitchcock conveyed the said lot to Osborne in consideration of the sum of $1,000 and the assumption and pi-omise of Osborne to pay the said debt according to the tenor of the bond and trust deed executed by Cabell. Each of these deeds was executed and acknowledged, as well by the respective grantees therein and by the grantors and their respective wives.
Hitchcock having failed to perform his part of the agreement of December 4, 1865, Oahell was called upon by Lyons, commissioner, to pay the principal and interest accrued on his bond, and upon his failing so to do, the lot of land was sold by Lyons as trustee and commissioner, in September, 1861, at public auction, in pursuance of the deed of trust, for the net amount of $1,566.65.
In March, 1869, a judgment was rendered in the circuit court of the city of Richmond, against Cabell and his surety, Daniel, in favor of Lyons, commissioner, for the amount of Cabell’s bond, subject to a credit for the aforesaid sum of $1,566.65.
In February, 1815, the appellee, Cabell, instituted suit in the chancery court of the city of Bichmond, against Barnes, Hitchcock and Osborne, and levied an attachment on the real estate of Osborne, who is a non-resident.
On the 20th day of November, lSTS, the said Cabell filed in court an amended and supplemental bill. Both bills were taken for confessed as to the defendants, Barnes and Hitchcock, but were answered by Osborne.
The facts were agreed in the action of covenant brought by Lyons, commissioner, against Osborne, and the record of that suit was filed by Osborne with his answer. On the 14th day of June, 1819, the cause was heard, when a decree was rendered in favor of Cabell for the balance due after crediting the debt secured by the deed of trust, by the net proceeds of the sale of the lot. From this decree" Osborne has been allowed an appeal to this court.
The sole question to he determined, is whether the chancellor should have decreed against Osborne, or should have dismissed the bill as to him.
As preliminary to this inquiry, let us see what were Hitchcock’s rights against Osborne. The circumstance that the deed to the lot in Bichmond, the deed of trust on the Lancaster plantation, and the agreement, were all executed in the same city, on the same day, and acknowledged before the same magistrates, when taken in connection with the fact that the agreement contemplates the execution of those deeds, to fully effectuate its objects, clearly shows that these writings are but parts of one transaction, and should be construed as one entire
The plain purpose of these parties, fully expressed in the agreement, was to settle and adjust all the various and conflicting claims which they had against each other; to reduce them into certain definite and ascertained demands ; and to embody them in one contract, in which some of the provisions were to be performed by Osborne on condition that the others should be performed by Hitchcock. By the terms of this contract Hitchcock, amongst other things which he is required to dp, is to convey to Osborne the lot in Richmond; all the-book debts, notes, accounts, bills receivable and choses in action of the late firm of Hitchcock & Osborne, and to deliver to him as many cords of pine wood as should net him the sum of $20,000, at the very least. And Osborne, on the other hand, as a part consideration for all this assumes to pay the debt due from Cabell to Lyons, commissioner. That these provisions and covenants were intended to -be dependent, seems to us obvious, but if this intention were not so plainly manifest, the good sense and justice of the case requires that they should be so construed. 1 Wms. Saund. 320, n. 4. Bream v. Marsh, 4 Leigh, 25.
How, not only has not Hitchcock performed his part of this agreement, but, as the agreed facts show, he was and is indebted to Osborne, under that agreement, for more than the sum of $3,000. And this failure to perform his part of this agreement has absolved Osborne from his obligation to indemnify him against the payment of the mortgage debt.
In this aspect, the inquiry comes to this: can the appellee, Cabell, who has no contract relations with Osborne, and who when he paid off the deficiency to Lyons, commissioner, merely paid off his own debt, compel Osborne, under the circumstances before detailed, to indemnify him for that deficiency ?
How that the weight of reason, if not of authority, is in favor of the proposition that no mere covenant with a mortgagor
The usual ground upon which a grantee of mortgaged premises, who has purchased subject to a mortgage for which his grantor was ■ primarily liable, and has assumed the payment of the mortgage debt as a part of the consideration, is personally liable to the mortgagee in a suit to foreclose the mortgage, is that as between the parties to the deed the grantee thereby becomes the principal debtor for the mortgage debt which has been allowed to him out of the purchase money, and the grantor is thenceforward merely a surety for the debt; and then, upon the familiar principle that the creditor is entitled by way of equitable subrogation to all the securities held by a surety of the principal debtor, the mortgagee is entitled to the benefit of this agreement made by the purchaser, although he did not know of its existence until long afterwards. And then a court of equity,' having all of the parties before it, allows the mortgagee to recover a deficiency of the grantee by a mere rule of procedure, going directly as a creditor against the grantee, in order to; avoid a circuity of action, and save the mortgagor as an intermediate party, from being harassed for the payment of the debt, and then driven to seek relief over against his grantee, upon; whom the liability must ultimately fall. In such cases, however, the mortgagee does not acquire a right of action against the purchaser, but the benefit flowing to him from the contract
The decree of the chancery court of the city of Richmond must be reversed, the hill be dismissed as to the appellant, Osborne, the attachment against the property of the said Osborne be abated, and a decree entered in conformity with the views herein expressed.
Dissenting Opinion
dissented.
The decree is as follows:
The court is of opinion, for reasons stated in writing and filed
Decree reversed.
Concurrence Opinion
concurred in the opinion of the court.