It frequently happens that several grantees successively buy the premises and assume payment of the mortgage. It is rightly held that the last grantee can be charged as well as the immediate grantee of the mortgagor. The same reasoning which justifies charging the first grantee through his obligation to the mortgagee's debtor requires the application of the obligation of the second grantee to the first grantee in order to satisfy the obligation of the latter to the mortgagor, and so on.65 Moreover, all who have assumed the mortgage may be charged though they have parted with the premises.66
They have made a valid contract to pay the mortgage, which they cannot abrogate by selling the premises, though they may get such protection as any promise which their grantee may make to assume the mortgage can give. As between the grantor and grantee, the latter becomes principal debtor and the former a surety. Accordingly, if the mortgagee gives time to the grantee, he is generally held to forfeit all right to assert a claim against the grantor.67 A few decisions to the contrary the court noticed the question and disposed of it thus: "Although the mortgagor might properly have been made a part; to this bill, yet as no objection was taken on that ground at the hearing, and the omission to make him a party cannot prejudice any interest of his, or any right of either party to this suit, it affords no ground for refusing relief." See also Silver King Coalition Mines Co. v. Silver King Consol. Min. Co., 204 Fed. 166, 122 C. C. A. 402; Miller v. Thompson, 34 Mich. 10; Fruden v. Williams, 26 N. J. Eq. 210.
65 See, e. g., Flint v. Cadenasso, 64 Cat. 83, 28 Pac. 62; Ingram v. Ingram, 71 111. App. 497, 172 111. 287, SO N. E. 198; Risk v. Hoffman, 60 Ind. 137; Carnahan v. Tousey, 93 Ind. 581; Boice v. Coffeen, 138 Ia. 705,138 N. W. 857; Corning p. Burton, 102 Mich. 86, 96, 62 N. W. 1040; Clifford v. Corri-gan, 117 N. Y. 267, 22 N. E. 756, 6 L. R. A. 610, 15 Am. St. Rep. 508;
Baber v. Hanie, 163 N. C. 588, 80 S. E. 57; Merrimon v. Parkey, 136 Tenn. 646, 191 B. W. 327.
65 Ingram v. Ingram, 71 111. App. 497, 172 111. 287, 50 N. E. 108; Carnahan v. Tousey, 93 Ind. 561; Corning v. Burton, 102 Mich. 86, 96, 62 N. W. 1040; Hyde v. Miller, 168 N. Y. 590, 60 N. E. 1113. In Pennyalvaaia by Act of June 12, 1878, one who has assumed a mortgago does not continue liable to the mortgagee by virtue of his assumption after he has himself conveyed the land unless in conveying he expressly assumes a continuing liability. Sloan v. Kline, 230 Pa. 132, 79 Atl. 403.
67Herd v. Twohy, 133 Cat. 55, 66 Pan. 139; Wyatt v. Dufrene, 106 111. App. 214; Union Stove & M. Works v. Caswell, 48 Kan. 689, 29 Pac. 1072, 16 L. R. A. 85; George v. Andrews, 60 Md. 26, 45 Am. Rep. 706; Chilton v. Brooks, 72 Md. 644, 20 Atl. 125; Mt.v v. Todd, 36 Mich. 473; Dedricesk lay stress on the fact that there is no direct contractual relation between the creditor and the grantee of the mortgaged premises and that there is a direct contractual relation between the mortgagor and his grantee which cannot be affected by any arrangement between the mortgagee and the grantee.68 But as it has been truly said: 69 "The creditor need not be a party to the contract which creates the relation of principal and surety between his debtors, or between his debtor and a third person; neither is the right of subrogation dependent on privity of contract between the creditor and the surety." The rule that the giving of time to a principal debtor discharges a surety depends in part at least on the impairment thereby caused to the surety's right by subrogation to sue the principal debtor, after the surety has himself paid the debt. Therefore, even though the grantee of the mortgaged premises takes them subject only to the mortgage without assuming the debt, an extension of the mortgage discharges the mortgagor to the extent of the value of the mortgaged property,70 for the mort-
DenBleyker, 85 Mich. 475, 48 N. W. 633; Nelson v. Brown, 140 Mo. 580, 41 S. W. 960, 62 Am. St. Rep. 755; Commercial Bank p. Wood, 56 Mo. App. 214; Wayman v. Jones, 53 Mo. App. 313; Citizens Bank p. Douglass, 178 Mo. App. 664, 161 S. W. 601; Merriam v. Miles, 54 Nob. 566, 74 N. W. 861,69 Am. St Rep. 731; Cairo v. Davits, 73 N. Y. 211, 29 Am. Rep. 130; Hyde v. Miller, 168 N. Y. 590, 60 N. E. 1113; Paine v. Jones, 14 Hun, 677; Jester v. Sterling, 25 Hun, 344; Fish v. Hayward, 28 Hun, 456; Mete-ger v. Nora Realty Co., 160 App. Div. 394, 145 N. Y. S. 649; Walter v. Nova Realty Co., 160 App. Div. 400, 146 N. Y. S. 653; Dillaway v. Peterson, 11 S. Dak. 210, 76 N. W. 925; Miller v. Kennedy, 12 S. Dak. 478, 81 N. W. 906; Hull v. Hayward, 13 S. Dak. 291, 83 N. W. 270; Schrceder p. Kinney, 15 Utah, 462,49 Pan. 894. See also Hodges p. Ebyton Co., 109 Ala. 617, 20 So. 23; Home Natl. Bank v. Waterman's Est., 134 111. 461, 29 N. £. 503; Mulrane p. Sedgiey, 63 Kans. 105, 64
Pac. 1038, 66 L. R. A. 662. In the Federal courts the law established by State courts is applied, and in accordance with that law the Supreme Court held the surety discharged in Union Life Ins. Co. p. Haniord, 143 U. S 187,12 S. Ct. 437, 30 L. Ed. 118. See also Johns v. Wilson, 180 U. S. 440, 448, 21 S. Ct. 446, 45 L. Ed. 613. But where at liberty to apply its own rule the court holds the surety still bound. See oases in the following note.
68 Shepherd v. May, 116 U. S. 505, 29 L. Ed. 456; Keller v. Ashford, 133 U. S. 610, 625, 33 L. Ed. 667; Union life Ins. Co. v. Hanford, 143 U. S. 187, 190, 12 8. Ct. 437, 36 L. Ed. 118; Seeman v. Mills, 197 111. App. 589; Corbett v. Waterman, 11 Ia. 86; James p. Day, 37 Ia. 104; Conn. Mut. Ins. Co. v. Mayer, 8 Mo. App. 18 (overruled); see also Ridgley p. Robertson, 67 Mo. App. 45; Aldoim p. Hicks, 21 Ont. 95.
69 Travere v. Dorr, 60 Minn. 173,178, 62 N. W. 269.
70Travere v. Dorr, 60 Minn. 173, 63 gaged property stands in effect in the position of principal debtor. The possibility of injury in such a case is clear, for though the mortgagor would still have a right to pay the debt to the mortgagee, he would not thereby acquire by right of subrogation an immediate power of foreclosing the mortgage, since that has been extended. If the grantee assumes the mortgage debt, an extension of time given by contract to the grantee should for the same reason discharge the mortgagor to the extent of the value of the mortgaged property.
Whether the mortgagor should be freed from personal liability beyond that amount, depends on whether the mortgagee is to be regarded as having a direct right of his own against the grantee, to which right the mortgagor may be subrogated or whether, as is believed the better though not commonly held view, the mortgagee's right is merely derivative, - a right to apply to his claim an obligation running not to himself but to his debtor. Even if the mortgagee's right against the grantee is held to be direct no more technical application of the doctrine that giving time to a principal debtor discharges the surety can be found. No possibility of injury to the mortgagor beyond the value of the property seems to exist, for the mortgagor can sue his grantee for damages if the latter fails to pay the mortgage as he agreed. Moreover, the mortgagor if he likes, when the debt is due, can pay it himself, in spite of the fact that the creditor has made an agreement with the grantee to extend the debt. And if the mortgagor discharges the debt he would have an action for money paid against the grantee, since the payment was not made officiously but in discharge of his own legal liability, which the grantee had assumed but failed to discharge. The only possible right of which the mortgagor is deprived is the right to be subrogated to the direct claim which it is assumed that the mortgagee has against the grantee personally; and there is no real injury to the mortgagor in failing to get this subrogation, since the right of paying the debt himself and suing for money paid is in every respect a practical equivalent. On the other hand, if the mortgagee has no direct contractual right against the grantee, but only a right against the mortgagor, through which the obligation of the grantee to the mortgagor may be reached, the absurdity of talking about subrogation to such a right of the mortgagee is apparent. The only right the mortgagee has is to enforce the obligation of the grantee to the mortgagor, and no action of the mortgagee can deprive the mortgagor of this right. He does not need to be subrogated to the right; he has it without subrogation. The doctrine of giving time to the principal, therefore, should have no application beyond the value of the mortgaged property. A curious situation arises when a mortgagor transfers the premises to one who, though taking them subject to the mortgage, does not agree to pay it, and this grantee thereafter transfers the premises to another who by the deed assumes and agrees to pay the mortgage. The promisee has no interest in the performance of tins promise, since he is not personally liable for the debt, and he is no longer the owner of the premises. It may be thought that the only intelligent object for requiring the promise from the grantee is a wish to benefit the mortgagee. In that view the case would fall within the first type of promises for the benefit of a third person and the mortgagee would be the sole beneficiary. But it is hard to suppose that the promisee had any such intention. The object in fact of such a stipulation, if its insertion is not altogether a mistake, in which case the grantee would be entitled to reformation of the deed, is doubtless to guard against a supposed or possible liability on the part of the promisee which in fact does not exist. The decisions which generally deny the mortgagee a right to recover in such a case, therefore, seem sound.71
N. W. 269; Murray v. Marshall, 04 N. Y. 611; Antisdel v. Williamson, 165 N. Y. 372, 375,59 N. E. 207; Metager v. Nova Realty Co., 160 N. Y. App. D. 394,145 N. Y. S. 649; Walter v. Nova Realty Co., 160 N. Y. App. D. 400, 145 N. Y. S. 663; Bunnell v. Carter,
14 Utah, 100, 46 Pac. 755. But see contra, Chilton v. Brooks, 72 Md. 554, 20 Atl. 126; and the decisions cited above which hold that the mortgagor is not discharged even where the grantee has assumed payment of the mortgage.
71 Ward p. De Oca, 120 Cal. 102, 52 Pat. 130; Sherwood v. Lowell (Cal. App.), 167 Pac. 554; Colorado Sav. Bank v. Bales, 101 Kan. 100, 165 Pac. 843; Morria v. Mix, 4 Kan. App. 654, 46 Pac. 58; Brown v. Stillman, 43 Minn. 126, 45 N. W. 2; Nelson v. Rogers, 47
Minn. 103, 49 N. W. 526; Crone v. Stinde, 68 Mo. App. 122 (reversed); Hicks v. Hamilton, 144 Mo. 495, 46 S. W. 432, 66 Am. St. Rep. 431 (overruled); Harberg v, Arnold, 78 Mo. App. 237 (overruled); Wise v. Fuller, 29 N. J. Eq. 257, 266; Norwood P. De Hart,