Hand v. Kennedy — 45 N.Y. Super. Ct. 385

Majority

p. 385

EDWARD S. HAND, Plaintiff and Respondent, v. GEORGE H. KENNEDY and WILLIAM I. HUTCHINSON, Impleaded with JAMES A. WILLIAMSON, Defendants and Appellants.

Before Speir and Freedman, JJ.

Decided November 3, 1879.

Headnote

In case of promise made to one for the benefit of another, lie for whose benefit the same was made may bring an action for its breach; and where a party, for valuable consideration, promises another party to pay a certain mortgage to a third party, who is the mortgagee, the latter may recover, from the party making the promise, upon a breach thereof, without foreclosure of the mortgage, and joining the mortgagor in the action.

Sucli a promise may be made and enforced without any consideration moving from the mortgagee or third person. Where several parties are liable to the mortgagee in different amounts, under their agreements with each other, an action can be maintained against them all in equity, and a judgment rendered therein, according to the facts established therein against them all, according to their joint or several liabilities.

Appeal by defendants from a judgment of the special term.

The plaintiff, by contract in writing, on November 15, 1871, agreed to sell to the defendants and James A.

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Williamson, for $44,000, a tract of land in the State of Hew Jersey, to be paid $10,000 in cash, and the balance to be secured by bond and mortgage upon the property purchased. On January 8, following, an agreement was entered into between Kennedy, Hutchinson and Williamson, by the terms of which the title to said premises was to be'taken in the name of Williamson, he to render an account of the same in the proportions therein specified, Kennedy and Hutchinson to pay their proportion of all moneys which should be necessary to carry out said contract, and for disbursements in preparing said lands for market, and to assume their proportion of the mortgage to be given for the purchase of the same—being Kennedy, one-half ; Hutchinson, one-quarter; and Williamson, one-quarter. On June 1, 1872, plaintiff executed and delivered to Williamson a deed of the premises, and took from him, in part payment therefor, his bond to secure $35,383, and interest secured by a mortgage upon the premises so conveyed. Thereafter all the premises, excepting a “house lot,” was laid out into blocks and lots—a number of lots were sold by Williamson—plaintiff releasing them from his mortgage upon being paid a sufficient part of the consideration.

On September 23, 1874, Williamson conveyed, for a nominal consideration, to Kennedy and Hutchinson, their interest in the remainder of this tract, being to Kennedy one-half, and to Hutchinson one-fourth. This deed contained this provision: ‘ ‘ The proportional parts of all which,” referring, among other things, to the mortgage in question made to plaintiff, “ according to the undivided shares and portions of the said parties of1 the second part to these presents are hereby assumed and agreed to be paid by the said parties of the second part to these presents, as part of the consideration or purchase money for the said undivided shares and por

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tions of the said lands and premises hereby conveyed, and the same forming a-part thereof.”

This mortgage was foreclosed in the court of chancery of New Jersey, on May 5, 1877, and the premises sold to the plaintiff for $12,000, which' the court found was a fair value of the premises sold, leaving a balance due of $12,596.06, for the recovery of which this suit is brought.

Wilson & Wallis, attorneys for appellant; Hamilton Wallis, of counsel.

Martin & Smith, attorneys for respondent; Pennington, Whitehead & M. W. Devine, of counsel.

By the original agreement between the plaintiff and the defendants the latter became liable and bound to purchase from the plaintiff the whole tract of land, and to pay to him therefor $10,000 in cash, and secure the balance of the purchase-money by their bond and mortgage. Shortly after this engagement with the plaintiff, the defendants, Kennedy and Hutchinson, entered into an agreement with Williamson, whereby they agreed that he should take the title to the land in his own name—they agreeing to pay their proportion of all moneys necessary to carry out the original agreement to buy of the plaintiff, and Williamson to render an account to them—they agreeing to assume their proportion of the mortgage to be given for the purchase—being, Kennedy one half, and Hutchinson one quarter. The deed from Williamson to Kennedy and Hutchinson was executed and delivered, and by its terms they accept the conveyance from Williamson of three undivided fourth parts of the premises in question, subject to the plaintiff’s mortgage thereon, which they assume and agree to pay as part of the consideration or purchase-money for their proportion.

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The promise made by Kennedy and Hutchinson to Williamson, was in effect a promise made by them upon a valid consideration for the benefit of the plaintiff, and comes within the principle illustrated by the example so frequently cited and concisely stated, “That when a promise is made to one for the benefit of another, he for whose benefit it is made may bring an action for its breach.” It has been, therefore, well settled that in such a case the action will lie in the name of the creditor for whose benefit the promise was made. The plaintiff here is such a creditor ; and it is equally well settled that he may pursue this remedy without foreclosing the mortgage and without joining the mortgagee as defendant.

It is insisted by the defendant that with a full knowledge of all the circumstances- in the case, and of the respective rights of the parties on the part of the plaintiff and Williamson, the individual obligation of Williamson was accepted by the plaintiff instead of the joint obligation of the three, and is in effect an accord and satisfaction of all claims against Kennedy and Hutchinson. The answer to-this is, there was no controversy then between the parties to settle, nor was the debt secured to be paid to the plaintiff satisfied or attempted to be by any one. It is also urged that under the original agreement the plaintiff was entitled and could have demanded the bond of the three parties for the balance of the purchase-money, and that he chose to abandon his right to accept the individual bond of Williamson, and that, therefore, he has no claim against the other two. It is enough that the plaintiff did not release the defendants from their promise; and whether he could or not is a question not now involved. He could not well discharge the promise beforé suit made, as it was for the plaintiff’s benefit, and, in accordance with legal presumption, accepted by him until his dissent was shown. Under

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the decisions such promise is to be deemed made to the plaintiff, if adopted by him, though he was not a party, nor cognizant of it when made (Lawrence v. Fox, 20 N. Y. 268 ); and in Barker v. Bucklin ( 2 Den. 45 ) it is held that a promise so made may be without any consideration moving from the plaintiff.

It is objected that a court of equity has no jurisdiction to hear and determine a case of this character. The subject-matter of the action is the liability of the defendants, under the two agreements and the deed referred to. The plaintiff, in his complaint, relies upon a contract between himself and the defendants, and one between the defendants and the covenants of assumption in the deed, as between them and the plaintiff, in adjusting the equities among the defendants themselves. The cause of action is found in the breaches under the agreements and covenants assumed in the deed. The claim is for a separate judgment against each defendant, and for separate amounts due from each. It seems to me, the mere statement of the case sufficiently shows that the objection is not well taken.

The judgment below must be affirmed, with costs.

Freedman, J., concurred.

Cases cited

Lawrence v. Fox 20 N. Y. 268 N.Y. p. 389