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 .
1. Bay v. Williams, 112 111. 91, 54 Am. Rep. 209, 1 N. E. 340; Starbird v. Cranston, 24 Colo. 20, 48 Pac. 652; Ranney v. McMullen, 5 Abb. N. Cas. 246. See Rogers v. Gosnell, 58 Mo 589; Douglas v. Wells, 18 Hun (N. Y.) 88.
2. Prof. Williston's article, 15 Harv. L. Rev. at p. 800. And see the able dissenting opinion of Learned, P. J., in Douglass v. Wells, 18 Hun (N. Y.) at p. 96, and Editorial note, 10 Columbia Law Rev. at p. 765.
Action by transferor. In several jurisdictions it has been decided that the right of action upon the contract of assumption is vested exclusively in the mortgage creditor, and that the person with whom the contract was made, the transferor, cannot sue thereon, though he is, in case he pays the mortgage debt, entitled to be subrogated to the right of the creditor to sue the transferee upon the contract.6 This is not however the view usually adopted, but the transferor is allowed to sue on the contract.7 And this he may ordinarily do upon the transferee's failure to pay the debt at maturity, without reference to whether the transferor himself has or has not paid it, that is, the contract is not ordinarily construed as merely one of indemnity.8
3. As tending to support this view of the subject Prof. Willis-ton cites Trustees v. Anderson, SO N. J. Eq. 366; Youngs v. Trustees, 31 N. J. Eq. 290, and Willard v. Worsham, 76 Va. 392, in which cases the invalidity of the release was regarded as depending, to a great extent at least, on the solvency of the transferor.
4. Ante, Sec. 463.
5. See 15 Harv. Law Rev. at p. 799, 10 Columbia Law Rev. at p. 765.
6. Ayers v. Dixon, 78 N. Y. 318 (Compare Sage v. Trulow, 88 N. Y. 240); Poe v. Dixon, 60 Ohio St. 124, 71 'Am. St. Rep. 713, 54 N. E. 86; Blood v. Crew Lev-ick Co., 171 Pa. St. 328, 33 Atl. 344; Gunst v. Pelham, 74 Tex. 586, 12 S. W. 233.
7. See Halstead v. La Rue, 177 Ind. 660, 98 N. E. 638; Gerardi v. Christie, 148 Mo. App. 75, 127 S. W. 635; Lamka v. Donnelly, 163 Iowa, 255, 143 N. W. 869.
In case the transferor sues the transferee before himself paying the mortgage debt, the measure of damages would ordinarily be the amount of the mortgage debt yet unpaid, that is, the amount of liability to which he is subjected by reason of the breach by the transferee.9 So if the debt is paid in part by the foreclosure of the mortgage, the deficiency only can be recovered,10 with the result that if it is entirely paid, the transferee is ordinarily liable under his contract for nominal damages only.11
If the transferor himself pays the mortgage debt, which the transferee should have paid, he may recover the amount of the payment from the transferee,12 and
8. Abell v. Coons, 7 Cal. 105, 68 Am. Dec. 229; Foster v. Atwater, 42 Conn. 244; Morlan v. Loch, 95 Kan. 716, 149 Pac. 413; Baldwin v. Emery, 89 Me. 496, 36 Atl. 994; Locke v. Homer, 131 Mass. 93, 41 Am. Rep. 199; Stichter v. Cox, 52 Neb. 532, 72 N. W. 848; Spark-man v. Gove, 44 N. J. L. 252; Holland Reform School Society v. De Lazier, 85 N. J. Eq. 497, 97 Atl. 253; Adams v. Symon, 22 Abb. N. Cas. 469; Haas v. Dudley, 30 Ore. 355, 48 Pac. 168; Callender v. Ed-mison, 8 S. D. 81, 65 N. W. 425; Perry v. Ward, 82 Vt. 1, 71 Atl. 721. But see Smith v. Pears, 24 Ont. App. 82; Slauson v. Watkins, 86 N. Y. 597. See 15 Harv. Law Rev. 795.
9. New Haven Pipe Co. v. Work, 44 Conn. 230; Stout v. Fol-ger, 34 Iowa, 71; Furnas v. Durgin, 119 Mass. 500; Locke v. Homer, 131 Mass. 93, 41 Am. Rep. 199; Sparkman v. Gove, 44 N. J. L. 252; Adams v. Symon, 22 Abb. N. Cas. 469; Callender v. Edmison, 8 S. D. 81, 65 N. W. 425.
10. Williams v. Moody, 95 Ga. 8. 22 S. E. 30; Strohauer v. Voltz, 42 Mich. 444, 4 N. W. 161; New Haven Pipe Co. v. Work, 44 Conn. 230; Walton v. Ruggles, 180 Mass. 24, 61 N. E. 267; Scott v. Norris, -Okla -, 162 Pac. 1085.
11. Muhlig v. Fiske, 131 Mass. 110. Compare Rice v. Sanders, 152 Mass. 108, 8 L. R. A. 315, 23 Am. St. Rep. 804, 24 N. E. 1079.
.12. Tuttle v. Armstead, 53 Conn. 175, 22 Atl. 677; Williams v. Moody, 95 Ga. 8, 22 S. E. 30; Lappen v. Gill, 129 Mass. 349; Strohauer v. Voltz, 42 Mich. 444, 4 N. W. 161; Tichenor v. Dodd, he is also entitled to be subrogated to the mortgage creditor's rights against the land.13 In case there is a retransfer by the first transferee, both transferees assuming the debt, the original transferor is, it has been decided, on paying the debt, subrogated to the righl of his immediate transferee to recover on the obligation of the second transferee, who is, as between the three parties, primarily liable for the debt.14
In case the assumption of the mortgage debt is by a purchaser of part only of the mortgaged property, and the whole property is disposed of at foreclosure sale, the transferor, or the person to whom he transfers the part retained, is entitled, it has been decided, to recover the value of the part belonging to him thus sacrificed to satisfy the mortgage debt.15