Gifford v. Father Mathew Total Abstinence Benefit Society

Majority

p. 528

Silas D. Gifford, Receiver, etc. Resp’t v. Father Mathew Total Abstinence Benefit Society, No. 1, of Tuckahoe, N. Y., William P. O’Connor, Exr., Appl’t, et al.^[1]

(Court of Appeals,

Filed January 18, 1887.)

Headnote

Mortgage — Assumption by grantee — Deficiency judgment — Grantee CANNOT RESIST.

By the terms of a certain deed the grantee as part of the consideration of the conveyance assumed the payment to the mortgagee of a mortgage debt on the land conveyed, Held, that (even if the title conveyed was imperfect and invalid) while the grantee remained in undisturbed possession and enjoyment of the premises he cannot resist a judgment for the deficiency upon his covenant of assumption after the foreclosure of the mortgage.

Appeal from a judgment of the Supreme Court, General Term, Second Department, affirming a judgment of the Westchester special term, directing the defendant O’Connor to pay the deficiency arising on foreclosure of the mortgaged premises.

p. 529

In 1869, the defendant, the Father Mathew Total Abstinence Benefit Society, No. 1, the owner of the mortgaged premises, mortgaged the same to John M. Masterton to secure $5,200 and interest, and by general assignment of Masterton and proceedings thereunder, and by virtue of an order appointing a receiver in an equity suit to set aside the assignment, the plaintiff obtained title to the bond and mortgage in suit. The supreme court, by order dated December 9, 1870, authorized the sale of the mortgaged premises, and the society conveyed by deed to John McEvoy, who in the deed assumed payment of the mortgage debt “ as part of the consideration hereof,” and the deed was duly recorded, and Father John McEvoy entered into possession of the land. Father John McEvoy» afterward granted the mortgaged premises with other land to Cardinal John McCloskey, archbishop of New York, who, in the deed to him, assumed payment of the mortgage debt “ as part of the consideration hereof.” The deeds were both duly recorded in the register’s office, and were read in evidence from the records. The appellant resists the payment of the mortgage, the payment of which his testator assumed in the deed, under which he took title and possession, which he afterward sold and conveyed to another. It appeared in evidence that under the deed to Father McEvoy the mortgagor delivered to him possession of the mortgaged premises, and that he took possession thereof, and there was no evidence that it was ever restored to the mortgagor, or that the grantees of the mortgagor were ever evicted.

T. Gr. Barry, for appl’t; Ralph JE. Prince, for resp’t.

The question presented on this appeal is not an open one. Granting, for the sake of the argument, what is by no means certain, that the title conveyed to McEvoy by the corporate deed was imperfect and invalid, it does not follow that Avhile as grantee he remains in the undisturbed possession and enjoyment of the premises he can retain that possession and at the same time withhold the purchase price, and so keep the fruit of his contract while repudiating its obligation.

By the terms of the deed which he accepted, the mortgage debt was in substance the purchase money which he agreed to pay directly to the mortgagee for the relief and discharge of the mortgagor. The force of the covenant left him practically in the same situation as if he had given back a purchase money mortgage with a bond or covenant to pay the debt directly to his grantors, and, Avhile retaining his possession and undisturbed therein, was resisting, if not the foreclosure, at least a judgment upon his covenant. That cannot be done. Parkinson v. Sher man, 74 N. Y., 88 .

That case covers broadly all that is involved in this. There an action was brought to foreclose a mortgage which the grantee of the mortgagor had assumed and agreed to pay; and judg

p. 530

xnent w.as sought for a deficiency against such grantee. The answer averred that the title made to the grantee was utterly invalid. and at the date of the deed was in a third person who remained the owner. The court held that inasmuch as the grantee was presumably in possession and alleged no eviction and made no offer of surrender as a basis for equitable relief, the failure of title furnished no defense either to the mortgage or the covenant to assume and pay it.

The case is decisive against the defense here interposed. The defendant McEvoy was shown affirmatively to have been put in possession and to have afterward conveyed to McCloskey. There is no allegation of an eviction, or pretense that the possession has been disturbed. The corporate grantor has disbanded, leaving a future assertion of title in it extremely improbable, but if that should occur and prove successful, which is hardly to be anticipated, I think equity would not be powerless, if McEvoy should pay the deficiency, by a revival of the mortgage to that extent or some process of subrogation, to furnish proper and adequate relief.

But in view of the foreclosure and the passing of the title under the mortgage, the validity of which nobody disputes, any action by the disbanded corporation is improbable and almost absurd. If the grantee should be called upon by the corporation to account for' the rents and profits received, I have no dou'bt that a recovery could be limited to those received in excess of the deficiency paid. But, be that as it may, there is no doubt of the rule which excludes the defense attempted.

In Dunning v. Leavitt, 85 N. Y., 30 , there was an eviction and ' so a total failure of consideration for the covenant of assumption.

In Crowe v. Lewin, 95 N. Y., 423 , there was a mistake of fact which invalidated the entire contract and carried down with it the- assumption agreement.

The cases finally cited, of which Albany Savings Inst. v. Burdick, 87 N. Y., 40 , is a type, concern only the question whether any contract of assumption was ever 'in fact made. The effort of the appellant to escape the operation of the rule invoked,, by treating the contract of assumption as independent of the consideration of the grant and outside of the contract of sale, and, so within the principle of Madison Ave. Baptist Church v. Baptist Church in O. St., 46 N. Y. 139 , cannot be sustained. By the terms of the accepted deed the assumption of the mortgage was itself the substantial consideration of the grant.

The judgment should be affirmed with costs.

All concur.