Summary
In Comstock v. Drohan (71 N.Y. 9, 13) it was stated that "as between the plaintiff [the grantor] and defendant [the grantee], therefore, the defendant was the principal debtor, and the plaintiff was her surety," but that both were "personally liable for the same debt" to the holder of the mortgage.
Summary of this case from Albany Exchange Savings Bank v. WinneOpinion
Argued September 21, 1877
Decided October 2, 1877
George W. Palmer, for appellant.
Douglas Campbell, for respondent.
The rights and equities of the parties, under the state of facts existing in this case, have been defined by several adjudications. The defendant, by taking a conveyance of the land from the plaintiff subject to the mortgage in question, and assuming the payment of the mortgage as part of the consideration for the conveyance, became personally liable to the holder of the mortgage for the mortgage debt, and her grantor (the plaintiff), being also personally liable for the same debt, she, by assuming it, became bound to indemnify the plaintiff against his liability. The amount allowed to the defendant out of the purchase-money, by reason of her assumption of the mortgage, was a fund in her hands applicable to the payment of the mortgage in exoneration of the plaintiff. As between the plaintiff and defendant, therefore, the defendant was the principal debtor, and the plaintiff was her surety. But the defendant having in turn conveyed the land to Mrs. Martin, who in like manner assumed the payment of the mortgage, the land was, both as to plaintiff and defendant, the primary fund for the payment of the mortgage, and as against the defendant the plaintiff was entitled to have it so applied before being called upon to respond to his liability as her surety, so that he might not be compelled to advance more than the deficiency which should arise on a sale of the mortgaged premises. For this deficiency, paid by him, the defendant was clearly liable to him.
These propositions are fully sustained by the authorities cited in the opinion of DANIELS, J., at General Term, reported in 15 Sup. Ct. R. (8 Hun), 373. In that opinion the law applicable to the several points urged by the appellant is clearly and accurately stated, and it is not necessary to add anything to it, unless it be in answer to the objection strenuously urged on the argument here, that the costs of the foreclosure should be deducted from the plaintiff's recovery, the defendant not having been a party to the foreclosure suit. It is claimed that the plaintiff might have averted those costs by paying the whole mortgage debt without action, and therefore he should bear the loss of these costs. But the answer is, that as between him and the defendant, he was not bound to advance the whole amount of the mortgage. The land was the primary fund, and he was entitled to have it applied, in the first instance; and the necessary expense of making such application was properly deducted from the fund.
The points as to want of notice to the defendant of the foreclosure suit, and as to the necessity of obtaining leave of the court to bring this action, are sufficiently answered in the opinion at General Term. The statute requiring leave, applies only to the holder of the mortgage, who may, and should enforce his claim for a deficiency in the foreclosure suit.
The judgment should be affirmed.
All concur, except FOLGER and MILLER, JJ., absent.
Judgment affirmed.