This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
70. Comstock v. Hitt, 37 111. 542; Siegel v. Borland, 191 111. 107, 60 N. E. 863; Townsend v. Ward, 27 Conn. 610; Twichell v. Mears, 8 Biss. 211, Fed. Cas. No. 14,286.
71. Siegel v. Borland, 191 111. 107, 60 N. E. 863; Belmont v. Co-man, 22 N. Y. 43S, 78 Am. Dec. 213; Moore's Appeal, 88 Pa. St. 450.
72. Fiske v. Tolman, 124 Mass. 254, 26 Am. Rep. 659; Green v. Hall, 45 Neb. 89, 63 N. W. 119; Equitable Life Assur. Society v. Bostwick, 100 N. Y. 628, 3 N. E. 296; Belmont v. Coman, 22 N. Y. 438, 78 Am. Dec. 213; Granger v. Roll, 6 S. D. 611. Contra, semble, Twicbell v. Mears, 8 Biss. 211.
A clause in the conveyance, "subject to the payment of" the mortgage has been held to involve a personal undertaking to pay it,75 as has a statement that the "payment of" the mortgage forms part of the consideration of the conveyance.76
Enforcement by mortgage creditor. The transferee of the mortgaged premises, if he agrees to pay the mortgage debt, is, by the decided weight of authority, liable directly to the mortgage creditor, who may recover by virtue of the agreement, though not a party thereto. This right of recovery by the creditor is frequently in terms based upon the doctrine, quite generally accepted in this country, that a third person for whose benefit a contract is made may sue thereon,77 a doctrine which, however, appears to be
73. Bristol Sav. Bank v. Stiger, 86 Iowa, 344, 53 N. W. 265; Hubbard v. Ensign, 46 Conn. 576.
74. Belmont v. Coman, 22 N. Y. 438, 78 Am. Dec. 213; Fiske v. Tolman, 124 Mass. 254, 26 Am. Rep. 659.
75. Campbell v. Shrum, 3 Watts (Pa.) 60; Taylor v. Preston, 79 Pa. St. 436; Carley v. Fox, 38 Mich. 387. But see Louden-slager v. Woodbury Heights Land Co., 64 N. J. L. 405, 45 Atl. 784.
76. Jager v. Vollinger, 174 Mass. 521, 55 N. E. 458. A stipulation that the consideration "shall be payable as follows: $2000 In said mortgage," was regarded as involving an assumption of the mortgage debt. Torrey v. Thayer, 37 N. J. L. 339.
77. Morris v, Fidelity Mortgage Bond Co., 187 Ala. 262, 65 So. 810; Holmes v. Bennett, 14 Ariz. 298, 127 Pac. 753; Starbird v. Cranston, 24 Colo. 20, 48 Pac. 652; Dean v. Walker, 107 111. 540, 47 Am. Rep. 467; Bay v. Williams, 112 111. 91, 54 Am. Rep. 209, 1 N. E. 340; Gilbert v. Sanderson, 56 Iowa, 349, 41 Am. Rep. 103, 9 N. W. 293; Schmucker v. Sibert, 18 Kan. 104, 26 Am. Rep. 765; Follansbee v. Johnson, 28 Minn. 311, 9 N. W. 882; Burr v. Beers, 24 N. Y. 178, 80 Am. Dec. 327; Thorp v. Keokuk Coal Co., 48 N. Y. 253; Gifford v. Corrigan, 117 N. Y. 257, 6 L. R. A. 610, 15 Am. St. Rep. 508, 22 N. E. 756; Poe v. Dixon, 60 Ohio, St. 124, properly inapplicable in the case of the assumption of a mortgage debt by the transferee, for the reason that such a contract is almost invariably made for the benefit of the promisee and not of the mortgagee.78 In some cases the mortgage creditor's right of recovery against the transferee has been based on the theory that, by his agreement to pay the mortgage, the transferee becomes the principal debtor, and his grantor becomes the surety for the payment of the mortgage debt, and that since, in equity, a creditor is entitled to be subrogated to any security which the surety has for his indemnity, the mortgagee is entitled to be subrogated to the right of the mortgagor against the trans-fere.79 This latter theory, as stated, is objectionable as basing the transferee's liability to the mortgage creditor on a relation of suretyship which, so far as the creditor is concerned, does not exist, and also because it assumes that a mere personal right of action against the principal in favor of the surety, arising out of the very contract by which the relation of suretyship is created, constitutes a security furnished to the surety for his indemnity, within the rule entitling the creditor to the benefit of such a security. The most satisfactory theory on which to base this liability of the transferee to the mortgage creditor is, as has been admirably explained by a contemporary writer,80 that it involves merely the application by a court of equity of property of the debtor, that is, of his right of action against the transferee, to the payment of the mortgage debt, and this, as is remarked by the same writer, is what the courts have in mind when they say that the mortgagee is subrogated to the rights of the transferor. Their assumption, for the purpose of attaining this end, of the existence of a relation of suretyship which evidently has no existence, serves merely to obscure the matter.
71 Am. St. Rep. 713, 54 N. E. 86; Merriman v. Moore, 90 Pa. St. 78; Urquhart v. Brayton, 12 R. I. 169; Enos v. Sanger, 96 Wis. 150, 37 L. R. A. 862, 65 Am. St. Rep. 38, 70 N. W. 1069. In Pennslyvania a statute has been adopted, (Act of 1878) which provides that the right to assert the personal liability of the grantee shall not enure to any person other than the person with whom the agreement is made. Sloan v. Klein, 230 Pa. 132, 79 Atl. 403; In re Tritten's Estate, 238 Pa. 555, 86 Atl. 461.
78. See Editorial note, 10 Columbia Law Rev. 765.
79. Hopkins v. Warner, 109 Cal.
133, 41 Pac. 868; Bassett v. Bradley, 48 Conn. 224; Herrin v. Abbe, 55 Fla. 769, 18 L. R. A. (N. S.) 907, 46 So. 183; Wright v. Briggs, 99 Ind. 56; Miller v. Thompson, 34 Mich. 10; Crowell v. Hospital of St. Barnabas, 27 N. J. Eq. 650; Wager v. Link, 134 N. Y. 122, 31 N. E. 213, 150 N. Y. 549, 44 N. E. 1103; Woodcock v. Bostic, 118 N. C. 822, 24 S. E. 362; Sherman v. Goodwin, 12 Ariz. 42, 95 Pac. 121; Baber v. Hanie, 163 N. C. 588, SO S. E. 57; Davis v. Hulett, 58 Vt. 90, 4 Atl. 139; Osborne v. Cabell, 77 Va. 462; Keller v. Ashford, 133 U. S. 610, 33 L. Ed. 667.
In England and Canada, and perhaps also in Massachusetts, the agreement of the transferee to pay the mortgage debt cannot be enforced by the mortgage creditor either in equity or at law, this according with the general rule existing in those jurisdictions that one not a party to a contract cannot recover thereon.81