Rudolf v. Burton — 85 A.D. 312

Majority

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Jennie E. Rudolf, as Administratrix, etc., of Tillie Taff, Sherman, Deceased, Respondent, v. Catherine Burton and Others, Defendants, Impleaded with Luther Craig and Others, Appellants.

Headnote

Assumption, by several grantees, from a mortgagor, of separate pm-cels of the mortgaged premises, of definite pa/rts of the debt created, by two mortgages thereon — their-right on a foreclosure of the second mortgage to have the first mortgagee made a party thereto.

Frank Burton executed to Dionysius Knab two mortgages upon the same-premises. Thereafter Burton sold and conveyed to eighteen different purchasers. separate portions of the premises. Sixteen of such purchasers purchased a one-twentieth portion of said premises and two of them- purchased a ■ two-twentieths portion thereof. In each of the deeds to the sixteen purchasers, of the one-twentieth portions the following clause appeared: “Subject,.

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however, to two certain mortgages amounting together to $6,750, which said party of the second part hereby assumes, covenants and agrees to pay to the extent of ($337.50) three hundred thirty-seven and 50-100 dollars.”

A similar clause was contained in the deeds to each of the purchasers of the two-twentieths portions, except that the sum. assumed in each of the conveyances-was $675.

After Knab had assigned the second mortgage, actions were begun to foreclose-both mortgages. Knab, the holder of the first mortgage, was not made a party to the action to foreclose the second mortgage.

Upon an appeal from a judgment foreclosing the second mortgage, it was Held, that the liabilities of the purchasers of the mortgaged premises, upon the-assumption Clauses contained in their deeds, should not be determined in the action to foreclose the second mortgage until Knab, the holder of the first mortgage, had been made a party to the action;

That a more feasible course would be for all the parties, who were necessary defendants to the action for the foreclosure of the first mortgage, to have their rights determined in that action.

Appeal by the defendants, Luther Craig and others, from so-much of a judgment of the County Court of Erie county in favor of the plaintiff, entered in the office of the clerk of the county of Erie-on the 15th day of November, 1902, upon the decision of the court, rendered after a trial before the court without, a jury, as adjudges-that each of the appellants was liable to pay a portion of the deficiency after the sale in foreclosure of premises described in the complaint.

Clarence U. Carruth, for the appellants.

Harry D. Williams, for the respondent.

On the 25th day of January, 1898, one Frank Burton executed toDionysius Knab two mortgages to secure the payment of the purchase price of the premises described in said mortgages, one for the sum of $5,089.20, and the other for $1,660.80. The smaller one was the second mortgage and is now owned by the plaintiff, and Knab parted with his interest therein in February, 1898. The bond of the mortgagor accompanied each mortgage.

After the execution of said mortgages Burton, the mortgagor,, sold and conveyed to each of eighteen different purchasers a distinct: portion of said premises. Sixteen purchased each a one-twéntiethportion of said premises, and two a two-twentieths portion. In each

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of the deeds to the sixteen purchasers of the one-twentieth portion the following clause appears: “ Subject, however, to two certain mortgages amounting together to $6,750, which said party of the second part hereby, assumes, covenants and agrees to pay to the extent of ($337.50) three hundred thirty-seven and 50-100 dollars.”

A like clause is contained in the deeds to each of the two purchasers of the two-twentieths portion, except that the sum assumed in each of those conveyances is $675.

' It will be observed that while in terms the assumption does - not make each grantee liable for an aliquot part of the mortgage indebtedness, that is the effect of the assumption. Both mortgages are stiff unpaid and it is claimed that the premises will not sell for sufficient to meet them. The judgment in this action adjudges that each of the appellants, except the appellant Wardle, pay any deficiency to the extent of $337.50, and as to the appellant Wardle and the defendant Donovan, that each be liable for a deficiency to the extent of $675. The record shows that the first, mortgage is also being foreclosed. The first mortgagee is not a party to the present action.

As a result of. this judgment for deficiency each of the appellants is made liable to the full extent of his assumption, and if any of the grantees are unable to pay their proportion each of the others who is responsible may be called upon to pay more by reason of the inability of those delinquent to meet their shares. But this is not the most serious difficulty. When the land is sold under the first mortgage pursuant to a judgment and sale there may also be a deficiency and the grantees may each be liable to pay again because of their assumption. Without passing upon the exact nature of the liability of these grantees, it seems to us essential that Knab be brought into this action so that his rights may be considered before any liability is imposed upon these defending grantees, or a more feasible course probably is for all these parties who are necessary. defendants to the action for the foreclosure of the first mortgage to have their rights determined in that action. It may be that Knab will claim that he is entitled to collect of these grantees on their assumption before any right inures to the plaintiff in this action. Again, it may be that a proper construction of the assumption clause is that the amount to be paid is to be applied toward the extinguish

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ment of the entire indebtedness so that there will be a proportionate application upon each mortgage. In any event the liability of these various grantees ought not to be determined now as the necessary parties are not in court.

That part of the judgment appealed from is, therefore, reversed and new trial granted, with costs to the appellants to abide the event.

All concurred.

That portion of the judgment appealed from reversed and new trial ordered, with costs to the appellants to abide event.