138 A. 804 | Conn. | 1927
The complaint alleges that on July 3d 1925, the plaintiff Tuttle, together with his wife, conveyed by warranty deed to Whitney Curry and five others, a tract of land in Florida. On July 25th, 1925, these grantees executed four promissory notes payable to the plaintiff Tuttle, each for $24,000, for the unpaid balance of the purchase price for this tract, and on the same date executed a mortgage to secure their payment. On November 3d 1925, these grantees conveyed by warranty deed to Palmetto Properties, Incorporated, the above real estate, in which it assumed and agreed to pay the mortgage. On the same day, November 3d 1925, Palmetto Properties, Incorporated, conveyed this property to Musick as *686 trustee, subject to this mortgage, which he as trustee assumed and agreed to pay. On the same date Musick as trustee, and Jockmus, the defendant, Lalley, and Musick individually, as cestuis que trustent, entered into an agreement, styled therein a declaration of trust. The agreement recites the transfer of this real estate to Musick, trustee, and that the title to it is to be held by him as trustee under this declaration of trust. It then recites that in consideration of the agreements therein and of the property transferred to Musick, trustee, for the purposes of the trust, Musick covenants that he will hold, use and manage the property and the profits arising from its use or sale, for the purposes of the trust and the benefit of the cestuis que trustent, subject to his right as trustee to manage, sell, convey, mortgage, and lease the property, and exercise over it, at his discretion, the powers of the trust for the duration of the trust, and that all moneys, funds and properties arising from the rents, leases or sale of the property, shall be held for the benefit of the cestuis quetrustent and be divided as follows: Jockmus, 69.6 per cent; Lalley, 15.2 per cent, and Musick, 15.2 per cent. The cestuis que trustent agreed that they will pay their pro rata share of any and all expenses, including mortgage payment, in the proportions specified for sharing in the profits or proceeds.
The trust is limited to a period of one year, and may be terminated sooner by the sale and disposition of the proceeds to the cestuis que trustent in the proportion outlined, or it may be extended for a period mutually agreed upon by the cestuis que trustent. In case of the death, disability or refusal of Musick to act as trustee, then the Manatee River Bank and Trust Company, or such person or persons as Jockmus and Lalley shall designate, shall be the successor in the trust, with like powers, and the title to the property *687 shall vest in such successor for the uses and benefits and upon the trusts above specified. This declaration was executed November 27th, 1925, and recorded December 3d 1925.
Tuttle is the owner of the notes and mortgages referred to and they are wholly unpaid. One of the notes and the indebtedness thereby evidenced became due and payable July 25th, 1926. The notes bear interest at the rate of eight per cent per annum, payable semiannually from date. The mortgage provides: "It is covenanted and agreed, that in case this note or any instalment of interest is not paid when the same is due and payable, according to the tenor and effect of the notes . . . then the whole sum of principal and interest remaining unpaid shall, at the option of the owner . . . of the notes . . . become due and collectible at once." Instalments of interest which became due on these notes and indebtedness on January 25th, 1926, had not been paid on July 25th, 1926.
The demurrer could have been consolidated into three points, and these we will consider in the order of their proper precedence. The first of these contentions is that the law of Florida governs the construction of the conveyances and the declaration of trust, and of the promises and agreements contained therein, and by that law no action, legal or equitable, lies upon a promise contained in the deed to Musick or in the declaration of trust, to pay the mortgages outstanding against the property conveyed at the time of the conveyance. So far as the rights of the parties are affected by the conveyances and the declaration of trust they must be determined by the law of Florida.Braman v. Babcock,
The complaint contains no allegation that the law of Florida gives to the holder of a mortgage the right to sue a purchaser of the equity of redemption, who, in the deed to him, assumes and agrees to pay the mortgage. The omission is of no legal consequence, since we have the right to take judicial notice of the printed statutes and judicial decisions of other States; General Statutes, §§ 5726, 5727; moreover, counsel for the parties assumed in argument that these might be considered in determining plaintiff's right to recover. The statutes of Florida do not accord to the plaintiff the right to maintain an action upon an assumption of, and an agreement to pay, the mortgage and the debt for which it is security, contained in the deed to Musick. They do recognize a right in the holder to have a deficiency judgment against the party or parties liable for the mortgage debt "whether such liability is primary or secondary, and whether such liability is created by the indorsement of the note or as a joint maker of the note or as a guarantor or otherwise of the obligation sought to be enforced." Florida Cumulative Statutes, 1925, § 3847, p. 756. Florida also has a statute providing that "any civil action at law may be maintained in the name of the real party in interest." This provision obviates the intervention of nominal parties plaintiffs to work out the rights of the real parties in interest, as was frequently necessary at common law, but it does not purport to create any new rights or liabilities. We must therefore *689 find in the opinions of the Supreme Court of Florida, in the absence of a statute, a right in the plaintiff to maintain an action by the holder of a mortgage against a grantee of the equity upon his promise to the grantor of the equity to pay the mortgage upon the property conveyed.
The right of the mortgagee to bring an action upon an assumption of the mortgage by the grantee of the equity of redemption is ordinarily based upon the principle which permits a third party to bring an action upon a contract made for his benefit. 1 Williston on Contracts (1920 Ed.) § 384. In Hunter v. Wilson, Stearly Co.,
The Herrin case was based upon an oral promise, as was Hunter v. Wilson, Stearly Co. It did not decide, nor purport to decide, that a promise, in a conveyance under seal, to pay to a third party a mortgage debt, may be recovered upon in an action by the mortgage against a purchaser of the equity. It does, however, decide that the action can be maintained upon an oral promise against a grantee of the equity, whether the grantee be the first grantee of the equity, *691
as in Hunter v. Wilson, Stearly Co., or the second grantee of the equity, as in the Herrin case. The same principle is involved, however far removed the grantee of the equity be from the first grantee of the equity. In Brownson v. Hannah, (Fla.)
This disposes of the defendant's contention in the instant case, that his liability could not be found since he had not signed the deed. It also disposes of the contention that the law of Florida only permits an action upon the oral promise of a grantee of the equity to assume a mortgage upon the property conveyed. In the course of the opinion the court also said: "By the assumption by the grantee in a deed of a mortgage indebtedness the grantee thereby becomes the primary *692
obligor for the debt." Its citation of and quotation from authorities fully support the court's holding: "Where a grantee in a deed poll knowingly accepts a deed in which the consideration is expressed as a certain amount, and `other valuable considerations,' and such deed contains a clause that the grantee assumes the payment of a specified mortgage debt upon the land conveyed, he is as effectually bound by said deed as though it was an indenture deed inter partes."Peoples Savings Bank of Tallassee v. Jordan,
The next question we are required to answer is whether the defendant made the promise upon which this action is based. That depends entirely upon the terms of the declaration of trust. The cases which base the right of the mortgagee to sue the grantee of the equity, whose deed recites that he has assumed the mortgage outstanding upon the property, are, as a rule, based upon the theory that the assumption is one for the benefit of the mortgagee. Such title as this defendant acquired by the declaration of trust was one which arose out of that instrument and was limited and defined by it. The law of Florida as regards the right of a third party beneficiary to sue upon *693
a contract is the same as that generally obtaining, and as declared by us in Baurer v. Devenis,
Our construction of the declaration of trust is made in the light of the fact that there is no difference between our law and that of Florida, — that third parties who are directly benefited by a contract may maintain an action thereon for its breach. Palmetto Properties, Incorporated, transferred this property to Musick as trustee on November 3d 1925, and as part consideration for the deed Musick as trustee assumed and agreed to pay two mortgages outstanding, one for $96,000 and one for $37,000. On the same day it is alleged that the declaration of trust was entered into between Musick, trustee, and Jockmus, Lalley and Musick, cestuis que trustent. It is true that the declaration was executed by Jockmus in this State on November 21st, and later executed by Musick as trustee and individually and by Lalley on November 27th, following. Musick held the title as trustee and in no other way, and for the obvious purpose of the development and sale of the property conveyed to him for the profits that might accrue therefrom, for Jockmus, Lalley and himself. Provision is made for a successor in the trust with like powers as were vested in Musick and in whom *694
the title should become vested for the uses and benefits and upon the trusts therein recited. Provision is also made for the sharing by the cestuis que trustent in the expenses incurred by the trustee in the proportions specified for the distribution of the profits or proceeds from this property. If the property had been disposed of, those who had title to the proceeds would have been the named cestuis que trustent. Musick did not own it, he or his successor in trust held the title for the cestuis que trustent, who were the beneficial owners; equity would so decree upon their petition on the termination or failure of the trust. The declaration recites the transfer to Musick by the deed of November 3d 1925, and that the deed was made to Musick as trustee and the title to the property was to be held by him as trustee under the declaration of trust. It also provides that the cestuis que trustent are each to pay their pro rata share of "any and all expenses, such as interest payment, mortgage payment," etc. The mortgage payment could only refer to the mortgages which Musick in his deed as trustee had assumed and agreed to pay. The cestuis que trustent, by their execution of the declaration of trust, adopted as their own the conveyance to Musick as trustee, made solemn declaration that the title to this property was in them in the stated proportions, and promised to pay their pro rata share of these mortgages. The declaration of trust admits of no other reasonable or legal conclusion. The payment of these mortgages by the cestuis quetrustent could only be made to the mortgagee who would have in their payment a direct and substantial benefit, and in consequence could maintain an action against a cestuis que trust for the payment of such proportion of the mortgages as he had agreed to assume or pay. Woodbury v. Tampa Water Works Co.,
Musick, trustee, upon acquiring the equity in this property, thereby became liable for the whole of the mortgage by his assumption of and agreement to pay it. Under the declaration of trust the cestuis quetrustent acquired an interest in the equity in this property and are in the same position as that of grantees of the equity, to the extent of their proportional interest in the property. Lewis Oyster Co. v.West,
The defendant's final claim is that the whole debt is not now due because three of the notes thereof have not matured. The amendment to the complaint alleges that the mortgage provided: "It is covenanted and agreed, that in case this note or any instalment of interest is not paid when the same is due and payable according to the tenor and effect, of the notes hereinabove described, . . . then the whole sum of principal and interest remaining unpaid shall, at the option of the owner and holder of the said notes and mortgage, without notice, be precipitated to maturity, and shall thereupon become due and collectible at once." It is also alleged that the note payable July 25th, 1926, is overdue. The defendant claims the reference to "this note" instead of stating that in the event that "any *697 of these notes" is not paid when due, makes the mortgage in this particular indefinite and the acceleration provision void. The claim is without merit. The error is a purely clerical one; reference to this mortgage when read in the light of common experience makes it clear that the parties to the instrument intended to include under "note" any of the four notes which the mortgage secured.
The demurrer should have been overruled.
There is error; the judgment is set aside and the cause remanded to be proceeded with according to law.
In this opinion the other judges concurred, except MALTBIE and HINMAN, Js., who dissented.