89 P. 517 | Ariz. | 1907
Lead Opinion
— The record in this case is remarkable for the extent and variety of the pleadings it presents, and for the number of judges who have successively heard the case and rendered judgment therein. There have been three trials and three judgments entered. The judgments entered in the first and second trials were set aside and new trials granted by the judges who rendered them. Both of said judgments were rendered for appellants. Upon the last trial judgment was entered for appellee, and the appeal is from this judgment and from the order overruling the motion for a new trial.
Without the aid of counsel, it would be impossible for this court to determine upon what pleadings the case was finally tried. It would appear from the minute orders incorporated in the abstract that the case at one time in the proceedings was consolidated with another cause between the same parties, but that subsequently by agreement the order of consolidation was set aside. This proceeding only added to the confusion of the record. The complaint, the answer of the defendant, and the cross-complaint filed by one of the defendants, and the answer of the plaintiff to this cross-complaint were each several times amended. It appears from the minutes that the trial court upon the last trial of the cause set aside various rulings made by the judges upon the former trials upon various demurrers, and dilatory motions filed by the parties, and thereupon overruled certain of these and sustained others. Some of the pleadings affected by these orders of the court have not been incorporated into the abstract, and their bearing, therefore, upon the issues finally submitted is not apparent. The appellants have not incorporated into the record any statement .of facts or bill of exceptions. The record consists of the pleadings, the find
By way of cross-complaint the defendant Pinney set up the facts above recited, and in addition alleged that after the execution of said trust deed and the notes with the assignment on the back thereof Wilson and his wife conveyed the premises for the express consideration of $2,400 to one Watrous, and that this conveyance was subject to the lien of the trust deed; that thereafter Watrous and his wife, for the express consideration of $2,400, conveyed the premises to the plaintiff, Libbie Goodwin, and Desda A. Wilson, and that the latter conveyance was subject to the lien of the said trust deed and the notes secured thereby, the payment of which was in said deed of conveyance assumed by said grantees; that the value of the premises at the time was $11,000; that thereafter, in 1902, said Desda A. Wilson, for an express consideration of $1,500, conveyed her interest in the premises to said plaintiff, Libbie Goodwin, subject, however, to the lien of the said trust deed and the notes secured thereby. In the prayer
The court found substantially as follows: That on the twenty-third day of October, 1899, the defendant James Wilson was the owner of the premises described in the complaint ,- that on that day Wilson, with his wife, Desda A. Wilson, executed a certain trust deed conveying said premises to P. L. Sherman as trustee to secure the payment of four promissory notes dated upon the day mentioned, executed by Wilson, and made payable to the order of himself. Three of said notes were in the sum of $1,000 each, and the fourth in the sum of $1,500; that the three notes first mentioned were delivered to Pinney by Wilson without consideration, and that Wilson received no consideration whatsoever from Pinney or Sherman, or from any. person whatsoever, for the execution or delivery of said deed of trust or said notes, and that the latter were not intended by said parties or either of them to create any obligation on the part of said Wilson; that on the thirteenth day of March, 1900, by deed containing full covenants of warranty, said Wilson and his wife, Desda A. Wilson, conveyed the premises to J. L. Watrous, and that thereafter said Watrous conveyed said premises by good and sufficient deed of conveyance to the plaintiff, Libbie Goodwin, and the said Desda A. Wilson, which last-mentioned deed contained the following clause, viz.: “And it is hereby mutually agreed between the parties hereto that the grantees herein named do hereby assume all mortgage and other liens or encumbrances, which stand against the property hereby conveyed, and that the said grantor does not warrant or agree to defend the title
' Numerous errors have been assigned by counsel for appellants in their briefs. In the state of the record, however, such of these as pertain to the introduction of evidence, and other matters not appearing upon the face of the record, we may not consider. The ruling of the trial court upon the demurrer filed by Pinnpy to the answer of Libbie Goodwin to his cross-complaint is assigned as error. An inspection of the record discloses that the answer of Libbie Goodwin to the-cross-complaint contained a general denial, and as the demurrer to this answer was a general demurrer and went to-the whole of the answer it was properly overruled, whether or not any special defense set up was or was not good. Defendants further assigned as error that the court erred in permitting plaintiff, Libbie Goodwin, to introduce any evidence to sustain her answer to .the cross-complaint, for the reason that the facts set forth did not constitute a defense to the said cross-complaint. Although the evidence is not before us,, from the recitals in the findings and judgment it is apparent that the court did hear evidence to sustain the special answer of Libbie Goodwin, and that the relief granted by the judgment was based upon the truth of the allegations therein contained. The broad question of law is therefore presented by the record as to whether the facts set up by Libbie Goodwin in her special answer, and found by the court, constitutéd a good defense to the mortgage sought to be foreclosed by Pinney in his cross-complaint. The question turns upon the-effect to be given to the deed from.Watrous to Libbie Goodwin and Desda A. Wilson. The court does not specifically say in the findings whether this deed was in form a warranty, bargain and sale, or quitclaim deed. It is termed by the court a “good and sufficient deed of conveyance.” What purports-to be this deed is printed in the abstract, but as it is not incorporated in the bill of exceptions or statement of facts, or
The assumption clause quoted in the findings negatives the idea that the conveyance was a quitclaim deed. Under paragraph 728, Revised Statutes of 1901, any conveyance of a fee simple title to land in which the use of the word “grant” or “convey” is made impliedly contains certain covenants of warranty, among these being that the estate granted is at the time free from encumbrance, “unless restrained by express terms contained in such a conveyance. ” It is therefore immaterial in its bearing upon the question here to be considered whether the deed containing the assumption elausewas in form a bargain and sale deed or warranty deed. It is found by the court, that the deed from Wilson and wife-to Watrous was a warranty deed, and that no limitation upon, the covenants contained therein was made, and no mention: made of existing mortgages, or other liens or encumbrances. It is argued by counsel for appellees that the assumption clause in the deed from Watrous to Goodwin and Wilson imports merely a purpose to relieve the grantor from the effect of the covenants, express or implied, of his deed, and that its effect was not to create on the part of the grantees any special obligation to pay the debt secured by any of the mortgage or other liens which stood against the property conveyed. It is claimed that to assume a mortgage is not to assume payment of the debt secured by such mortgage. In the case of Locke v. Homer, 131 Mass. 107, 41 Am. Rep. 199, it was held that a stipulation made in a deed that the land conveyed was free from encumbrance, except a mortgage previously made by the grantor, “which the grantee assumes and agrees to hold the grantor harmless therefrom,” amounts to an agreement on the part of the grantee to pay the mortgage debt.
In the light of this decision, and others that might be cited, we construe the stipulation' in the deed in question to mean that the grantees assumed the debts secured by such mortgages, liens or other encumbrances, as may have existed against the property at the time of the conveyance. Under the great weight of authority such an agreement renders a grantee not only personally liable for the payment of the debt secured by the mortgage, the payment of which is assumed, but estops him from denying its validity, and from
In the present case the findings show that Watrous, the grantor of appellee, Libbie Goodwin, was not personally liable to pay the mortgages outstanding against the property. Notwithstanding that fact, however, we hold under the authorities cited, that appellee, by accepting the deed from Watrous and claiming title thereunder, did assume to pay the mortgages standing against the property at the time of the conveyance, and that therefore, irrespective of the question of her personal liability for any deficiency, she is estopped in this action from attacking the validity of the mortgage debt sued upon by Pinney. The relief granted by the trial court in its judgment was based upon the invalidity of the mortgage debt, and as we hold that the appellee was estopped from raising this issue, error appears upon the face of the record. It is argued by counsel for appellee that the judgment must be sustained, for the reason that the cross-complaint filed by Pinney is insufficient to sustain a judgment in foreclosure, in that it appears therein that no indebtedness was created by the execution and delivery of the notes held by Pinney, because it is therein stated that these notes were made payable to the order of Wilson, the maker thereof. A note made payable to the order of the maker, when indorsed and delivered to the indorsee, becomes a valid note. Roby v.
The judgment is reversed, and the cause remanded to the district court for further proceedings not inconsistent with this opinion.
DOAN, J., concurs. The CHIEF JUSTICE, being disqualified, took no part in the decision of this case.
Dissenting Opinion
Dissenting. — There is great diversity of opinion among the courts of the several states as to the grounds upon which rests the liability of a grantee who assumes payment of a mortgage given by his grantor. In the view of the courts deciding the cases cited in the majority opinion, his liability rests upon contract. Putting it upon that ground, there is no difficulty in perceiving that the majority of the court is right in holding that-such a grantee is estopped from denying the validity of the mortgage; but upon questions of general law we are bound by the decisions of the supreme court of the United States. That court, in Union Mutual Life Ins. Co. v. Hanford, 143 U. S. 187, 12 Sup. Ct. 437, 36 L. Ed. 118, states that the settled law of that court is “that the grantee is not directly liable to the mortgagee at law or in equity, and the only remedy of the mortgagee against the grantee is by a bill in equity in the right of the mortgagor or grantor by virtue of the right in equity of a creditor to avail himself of any security which his debtor holds from a third person for the payment of the debt.” In the ease at bar, the plaintiff’s grantor was not in any wise indebted to the mortgagee, nor was he indebted to the mortgagor. He could have interposed any defense to the foreclosure of the mortgage that was open to the mortgagor. The debtor, therefore, does not hold from a third person any security for the payment of the debt. There is no privity of contract between the mortgagor and Goodwin. Her liability is only to her immediate grantor. In my opinion, she stands in the same relation to the mortgagor as if there was no assumption clause in the deed, and should be permitted to make any defense that the mortgagor could make. Without further elaborating the reasons upon which my dissent is based, I call attention to the cases of Ward v. De Oca, 120 Cal. 102, 52 Pac. 130, and Johns v. Wilson, 180 U. S. 440, 21 Sup. Ct. 445, 45 L. Ed. 613.