Holmes v. Northern Pacific Railway Co.

Although the pleadings in the present action differ somewhat from those in the former action of the same title, in which an opinion has recently been handed down by the appellate division in this department ( 72 N. Y. Supp. 476 ), that opinion is, in. effect, decisive of the issues raised by the demurrer to the present answer. The second and third separate defenses in the present action do not contain a repetition of the denials and allegations contained' in the first defense, and the demurrer is not, therefore, obnoxious-to the very obvious objections which confronted the demurrer in the-first action,—that it applied only to a part of each defense. The demurrer, however, searches the whole record, and invites an inquiry as to the sufficiency of the complaint. A majority of the appellate-division seems to have been of the opinion that the complaint in the-earlier action between these parties was insufficient. The opinion of the court, concurred in by three of the justices, reads as follows:

“Here the complaint is bad. It counts upon a covenant made by the defendant. There is nothing in it to show that the covenant was made upon-consideration. It is not declared in the complaint that it is under seal, and that will not be implied. The complaint does not show with whom the-covenant was made, or that it was made for the plaintiff’s benefit; nor-does the plaintiff bring himself in privity with the covenantor.”

If the present complaint was identical with that under consideration by the appellate division, the opinion from which quotation has-been'made would be controlling in the present action. It is identical-, save for the insertion of a single new paragraph, and it becomes,

“That the defendant in the year 1890, and prior to, on, or about November 10, 1896, and pursuant to certain decrees in foreclosure in the United States circuit court for the Eastern district of Wisconsin, and to certain other decrees duly made and entered by the United States circuit courts for various other districts, acquired as purchaser upon a sale or sales in foreclosure the said railroad, rolling stock, telegraph lines, lands and land grants, franchises, and other properties covered by and included in the mortgage or deed of trust described in the said bonds Exhibit A, subject to the said debt secured by the said mortgage or deed of trust as a prior lien, and thereby assumed the payment of the said bonds secured by the said mortgage, and became the debtor of the plaintiff for the interest and the principal to become due according to the terms of said bonds.”

It is evident that this new paragraph contains both allegations of fact and conclusions of law. The allegations of fact are that the defendant at the foreclosure sale purchased the property subject to the debt secured by the prior mortgage or deed of trust. That by so purchasing it the defendant assumed the payment of the prior mortgage debt, and thus became a debtor of the plaintiff, is a mere conclusion of law, and, strictly speaking, has no place in the complaint. The paragraph in question does not allege as a fact that the defendant assumed the payment of the prior mortgage, except as a legal consequence of having bought the mortgaged premises subject to the debt secured by the prior mortgage. This result does not, however, flow from the facts set forth. To render the purchaser of land incumbered by a mortgage personally liable for the payment of the mortgage debt, it must appear, in the first place, that the grantor himself was personally liable for the debt, and, in the second place, that the grantee expressly assumed or agreed to pay the debt. There is no allegation of such assumption or promise on the part of defendant. It is merely alleged that it bought the property “subject” to the debt secured by the mortgage, which implies only that it acquired the property burdened by a lien which might, in case of default, be enforced against the property. In re Simpson, 36 App. Div. 562 , 55 N. Y. Supp. 697 ; Id., 158 N. Y. 720 , 53 N.

Demurrer overruled, with costs.