p. 183Mesick & Sweezey, for Appellants.
I. The recital in the deed from Burlingame to defendants, that the grantees are to assume the mortgage, is not binding on them as forming no part of the conveyance. ( 16 Johns. 49 ; 4 Cow. 429 .) If there is any liability arising from such recital, no action can be maintained thereon except by the grantors. (Brown v. Hunter, 14 Cal. 31 ; McLaren v. Hutchinson, 18 Id. 80 .) Such action could not be maintained by Burlingame and wife until they had paid the mortgage. ( 14 Barb. 201 ; 9 Page's Ch. 446.)It is, if binding at all, a bare equitable obligation subjecting the land to the payment of the mortgage. ( 3 Johns. 261 , and cases; 2 Brown Ch. 88.) It may be enforced by the mortgagee by a foreclosure of the mortgage in equity, and not otherwise. ( 2 Sand. Ch. 498 ; 2 Denio, 595 ; 2 Brown's Ch. 88; 9 Paige's Ch. 432; 16 How. Prac. 430.)Here the mortgagee has released the premises. Can he then proceed against the defendants as such grantees ?As to Burlingame the clause in the deed can only operate as a covenant of indemnity, and as such he cannot sue thereon until he has paid the claim. ( 14 Barb. 201 ; 9 Paige, 446; 2 Barb. 16 .) Covillaud upon purchasing of Eye became solely liable. (10 Paige, 595-597; 2 Denio, 595 .)II. The settlement of defendant Covillaud with plaintiff was a full discharge and accord and satisfaction of all Ms and Eye’s liabilities to plaintiff under the deed from Burlingame to Covillaud. (2 Pars. on Cont. 193, 200, 139 and note *; 6 Humph. 85 ; 3 Denio, 410 ; 7 Cow. 223 ; 14 Wend. 116 .)The accord and satisfaction was complete even if the full amount of interest was not included. ( 5 Johns. 268 .) The delivery up to Covillaud of the mortgage is of itself a release and discharge. The question is, whether the terms of this agreement are - to be extended to the mortgage debt assumed by Covillaud and Eye, or restricted to the mortgage itself as an incumbrance upon the property ? It is certainly fair to assume that if an agreement on the part of defendants with the Burlingames to pay the mortgage is an agreement on their part to pay the mortgage debt, then an agree
p. 184ment on the part of Lewis to satisfy this mortgage is an agreement to satisfy the mortgage debt. Moreover, from the character of the transaction itself Covillaud must have understood that he was discharging, by Ms notes and mortgage, the obligation which he and Eye had assumed in respect to the Burlingame mortgage by the recitals in the deed to them.The witness Lawton so understood it, and the discharge by Lewis written upon the mortgage, and the record “ satisfied by being released,” means the same thing. The word “ satisfied ” can only apply to the mortgage and not to the property. If he “ satisfied ” the mortgage, then the mortgage debt was satisfied. The words “ by being released ” must refer to the mortgage as much as does the word “ satisfied,” and not to the property. And as the defendants’ assumption only extended by its terms to the payment of the mortgage and embraced the mortgage debt only by construction, so by the mortgage being released the release of the mortgage debt was effected. This discharge is simply a satisfaction of the mortgage, and the use of the words “ by being released ” cannot qualify the effect of the word “ satisfied,” and they signify nothing in the connection, unless a special release had been executed by Lewis of the premises from the mortgage or of the mortgage debt, which was not done. The release, then, was the result of the satisfaction, and the satisfaction not the result of the release.The correctness of our theory is not affected by the fact, that the Burlingame note was found in the possession of Lewis after the transaction of the twenty-fifth and twenty-sixth of September, 1857. There is no evidence that Covillaud knew of its retention by Lewis; none that by the terms of the arrangement Lewis was to retain it. There was evidence that the note had been pasted on the mortgage and torn away from it, but when, or by whom, does not appear. The proven and admitted understanding of Covillaud, as well as the nature of the transaction, is clearly inconsistent with a rightful retention of the note by Lewis; and this being so the presumption was all in Oovillaud’s favor, and the onus was clearly on Lewis of rebutting that presumption and of showing affirmatively that it was agreed that he should keep the note as a subsisting obligation, and that he so kept it as a part of the arrangement with Covillaud.
p. 185IV. The assignment from Burlingame to Lewis invested him with no rights by which he could maintain this suit. It was executed and delivered after the suit had been commenced by Lewis against Burlingame for the balance unpaid of the Burlingame note, and before judgment. This transfer purports to convey the interest which Burlingame had at the time of its execution in the mortgaged premises and the rents and profits, etc., but Burlingame at the time had no interest in them. It next purports to transfer Burlingame’s right of action for the balance of the consideration money, but he had no claim for the balance of the consideration money over the $4,000 which was paid him. Eothing more was coming to him. His equivalent for the conveyance to Eye and Covillaud was that $4,000 paid to him, and a further implied covenant on their part that he should not suffer from his mortgage debt to Lewis. And until he had suffered from that debt there was no violation of their implied covenant with him in respect to that debt. He must have paid something before he had a right of action against Covillaud and Eye. (Halsey v. Reed, 9 Paige, 451, 452.)V. A vendor’s lien is not assignable—there is some conflict in the authorities but the preponderance is against their assignability. (Pollexfen v. Moore, 3 Ark. 272 ; Jackson v. Halleck et al., 1 Ohio, 318 ; Tierinan v. Beam, 2 Id. 306; Bush & Stansbury v. Rensley, Adams et al., 14 Id. 20-27; 5 Yerg. 295 , 215; Leading Cases in Eq., Hare & Wallace's Notes, vol. 1, and cases there cited; Webb v. Robinson, 14 Geo. 216; Welburn v. Williams, 9 Id. 86; Green v. Desmoss, 10 Humph. [1 Geo.] 165; 7 Yerg. 9 , 13; 6 How. Miss. 362; Devereux & Battle's Eq. 390-392; 1 Paige's Ch. 502; 1 Freeman's Ch. 574, 584; Shall v. Biscoe, 18 Ark. 142 .)Robinson & Beatty, for Respondent, and J. E. N. Lewis in pro. per.
I. That defendant first assumed to pay the mortgage debt to plaintiff is shown by the recital in their deed, and by the context and the subject of the agreement. Burlingame ivas selling his lot for $10,000. He received $4,000 down, and agreed to let the other $6,000 go to pay his debt to Lewis. He was interested in paying
p. 186this debt. If not paid, he was personally liable to Lewis. After sale of the property to Covillaud and Eye, he had no interest in releasing the mortgage. The question to be determined here is, whether Burlingame appropriated $6,000 of his money to pay his own debt, or appropriated that amount to procure the release of a mortgage in which he had no interest. It is only necessary to determine that Burlingame was a sane man, and not an idiot or a lunatic, to determine that he appropriated his own money to pay his own debt.II. "What was the nature of the agreement made between Covillaud and Lewis in 1857, when Covillaud paid Lewis the $8,000 ? Did Covillaud, by that transaction, do what Covillaud and Eye had promised to do—that is, did he pay the debt to Lewis, and thereby relieve Burlingame from responsibility, as under his contract with Burlingame, he and Eye were bound to do, or did he, regardless of his promise to Burlingame, only release the mortgage from his own property, and totally fail to perform the promise of Covillaud and Eye to Burlingame ?That Lewis only intended to release the mortgage and not the mortgage debt, is evidenced by the following facts: 1st. The indorsement on the mortgage is peculiar—(“ Satisfied by being released.”) 2d. He delivered the mortgage to Covillaud,* but retained the note. 3d. He indorsed as a credit on the note the $8,000 received of Covillaud. 4th. Soon after he brought suit for balance due upon nóte against Burlingame. 5th. The note was pasted to the mortgage and he tore it off, showing deliberate intention to keep it. 6th. Lawton, who was the witness and agent of Covillaud, did not understand that Lewis was releasing Burlingame, or giving up his claim against Burlingame for the balance of the debt.That Covillaud understood Lewis retained his debt against Burlingame, is rendered equally certain by numerous circumstances. He knew Lewis held a note against Burlingame; he knew it because the note had been pasted to the mortgage; he knew it because the note is referred to in the mortgage; he must have lmown that it is usual in all cases where large sums of money are secured by mortgage to give a note with the mortgage. Yet, while he was careful
p. 188self had, while some other authorities hold that the mere assignment of the note does not carry with it the right to enforce the vendor’s lien. But the very same authorities, or at least some of them, which held that the assignment of the note would not carry the vendor’s lien, held or intimated that a special assignment of the lien by deed would entitle the assignee to enforce the lien, and we believe no single authority can be found contradicting this latter proposition where there was a real or attempted assignment of the lien. (See on this point White v. Williams, 1 Paige's Ch. 502; 7 Maryland, 132.)Field, C. J. and Norton, J. concurring.
Covillaud and Eye purchased of one Burlingame a lot with the improvements thereon in the city of Marysville, and as a part of the consideration assumed the payment of a mortgage upon the property, in favor of the plaintiff, for the sum of §6,000. Eye conveyed his interest in the property to Covillaud, and the latter arranged with the plaintiff for a release of his mortgage, agreeing to pay him the sum of §8,000, in two installments of §4,000 each, and to secure the payment by a mortgage on the same property. This arrangement was carried out by the execution of the notes and mortgage as agreed on, and the release of the original mortgage, but as the debt and interest due from Burlingame amounted to more than the sum for which the notes were given, the note of Burlingame was retained by the plaintiff. The amount of the Covillaud notes was credited upon it, and a suit brought against Burlingame for the balance, and a judgment recovered, and the present action is against Covillaud and Eye upon their agreement to pay off the original mortgage. The action is based upon that agreement, and upon a written assignment frofn Burlingame to the plaintiff of his cause of action against Covillaud and Eye, including his lien as vendor, and the plaintiff asks a judgment for the amount claimed, and a decree enforcing the lien. The case comes up on appeal from an order refusing a new trial, and from a judgment granting the relief asked, and various objections are urged as grounds of reversal.
p. 189It is objected that the agreement sued on does not bind Covillaud and Rye for the payment of the mortgage debt, and that it only amounted to an undertaking on their part to obtain a discharge of the mortgage as a lien upon the property. The intention obviously was to assume the payment of the debt, and any other construction would be inconsistent with the circumstances under which the agreement was entered into, and could not be maintained even upon the strictest interpretation of the language used. It would be absurd to hold, that an agreement to pay a mortgage is complied with by procuring a discharge of the mortgage, leaving the debt unsatisfied; and particularly where the person agreeing to pay receives the amount of the mortgage debt as the consideration for the agreement. It is clear that the objection taken cannot be sustained, and that Covillaud and Rye in assuming the payment of the mortgage, retaining for that purpose the amount of the mortgage debt, assumed and intended to assume the payment of the debt.
It is objected further, that the plaintiff cannot sue upon the agreement for want of privity, and the case of McLaren v. Hutchinson ( 18 Cal. 80 ) is relied upon in support of the objection. In that case the suit was upon an agreement made by the defendant with a third person to pay a debt owing by the latter to the plaintiff, and we held that as the plaintiff was not a party to the agreement the action could not be maintained. The decision was placed upon the ground that there was no privity, but since the case was decided the matter has frequently been called to our attention, and we are by no means satisfied with the rule laid down. The agreement was founded upon a sufficient consideration, and the modern doctrine in such cases seems to be in favor of the maintenance of the action, and we are inclined to hold the question open for further investigation. It is unnecessary to pass upon it in this case, as the assignment of the cause of action enables the plaintiff to sue as the assignee of Burlingame, and in any event the point raised is untenable. It is claimed with reference to the lien, however, that it was not assignable, being a mere personal equity in the vendor, and not transferable by him to another. This point is covered by the decision just rendered in the case of Baum v. Grigsby, and under the rule there laid down the objection is well taken.
p. 190The more important question in the case arises upon the arrangement between Covillaud and the plaintiff, this arrangement being pleaded in discharge and satisfaction of the original debt. The question, of course, is one of intention, and being purely a question of fact, we cannot interfere with the decision of the Court below, unless there is a want of evidence to sustain it, and the conclusion drawn is legally erroneous. The Court finds that the parties did not intend by the arrangement to extinguish the debt, and concludes that the effect was to release the mortgage and to pay the debt to the extent of $8,000. If the finding is correct, the conclusion can hardly be complained of, and to sustain the finding the plaintiff relies upon the fact that the note was not surrendered with the mortgage, and upon the language used in discharging the latter as a lien. The words are, “ satisfied by being released,” and it is claimed that these words imply the existence of a debt, and show that the intention was to discharge the lien, and hold the debt as a personal obligation. There is some plausibility in this view, and taking the circumstances together, we are of opinion that there is sufficient evidence to support the finding, or at least to render interference on our part improper. We cannot consider the matter as an original question, for to do so would be to throw off our distinctive character as an appellate Court, and assume powers which the Constitution and laws have vested elsewhere. It is possible that upon the weight of evidence we should have arrived at a conclusion different from that of the Court below, but the question for us is, whether the finding is so plainly contrary to the evidence as to raise necessarily the inference of error. So far as mere opinion is concerned the finding is conclusive, and it is clear that upon the evidence before us we cannot interfere without overstepping the bounds of our legitimate authoriiy. There are undoubtedly some embarrassing circumstances in the case, and it may be that due weight and proper consideration Avere not given to these circumstances, and that the finding is not in accordance vnth the intention of the parties. If so, it is unfortunate that relief cannot be administered, but it is one of those misfortunes for which no remedy seems to exist, for we cannot set aside the decision of the Court below upon a difference of opinion as to the Aveight of evidence.
p. 191The rule is well settled that where the evidence is conflicting, or where the conclusion drawn from it is not necessarily erroneous in point of law, the decision cannot be disturbed.
Our conclusion is, that as to the lien the judgment should be reversed, but that in other respects it should be affirmed.
Ordered accordingly.