Woodcock v. . Bostic

Montgomery, J.: On the 2nd of August, 1890, J. B. Bostic con veyed to D. JD. Suttle a tract of land for the price of $5,500, Suttle at the same time ' executing his bond for the purchase money' and securing the same by a deed of trust on the land. Bostic assigned the bond to the plaintiff, Julia E. Woodcock, for value. Afterwards the defendant Ray became the purchaser of the land from Suttle or his grantee, and entered into a written agreement with Bostic and Suttle in which he, after reciting the indebtedness of Bostic and Suttle to the plaintiff, and declaring that it was secured bv a deed of trust upon the land which he had bought subject to the same, assumed and agreed with Bostic and Suttle to pay the aforesaid debt of Julia E. Woodcock, and also to protect and save Bostic and Suttle from any and all liability by reason of or from the same. Bostic and Suttle assigned and transferred this assumption an 1 guaranty to the plaintiff. This action was commenced by the plaintiff against the defendant upon his assumption and guaranty. It is in form an action ex eontraetu. The bond of Suttle to Bostic, which Bostic assigned to the plaintiff, is only mentioned in the complaint as a recital to explain what was the exact amount of defendant’s assumption and that the debt was still due. The trustee named in the deed which secured the bond is not a party to the action, nor is there *827 any prayer for a foreclosure of the trust, and for a personal judgment against the defendant Ray, for any deficiency. Neither is there any equitable subrogation invoked, by which the assumption of the defendant might be subjected to the satisfaction of the bond. This action is under the old form of assumpsit, and is against the-defendant on his promise made to Bostic and Suttle under their assignment of the same to the plaintiff. The plaintiff insists that she can recover both on the assignment of Bostic and Suttle to her of the defendant’s assumption and on the broad ground that the defendant is liable to -her directly, even if the assignment of the assumption of the-defendant bal not been made to her by Bostic and Suttle, because of the promise made by the defendant to Bostic- and Suttle to pay her debt. We will discuss the last proposition first. The proposition is that, at law, a third person may maintain an action upon the promise of one person to another for the advantage and benefit of the third. There is conflict of julicial opinion on the question. The affirmative is held in many of the states, including New York. Burr v. Beers, 24 N. Y., 178. In others of the states, including North Carolina, the contrary is held. Peacock v. Williams, 98 N C., 324; Morehead v. Wriston, 73 N. C., 398. But the plaintiff insists further that Suttle ought to be considered a mortgagor and the defendant Ray a vendee who-has purchased and agreed to pay the mortgage debt to Bostic, the latter to be considered a mortgagee ; and that between them Bostic has become the surety, and Ray the principal debtor, and that the plaintiff stands in the shoes of Bostic by virtue of his assignment of his bond to her, and that therefore she ought to be subrogated to the rights of Bostic, and have the assumption of Ray subjected to the payment of the plaintiff’s debt. This is a sound principle- *828 of equity. In New Jersey and Massachusetts it has been held that the liability of the grantee of a mortgagor who has promised and Assumed to pay the mortgage debt can be enforced in equity by the mortgagee or his assignee by the application of the principle of equitable subrogation. Hayden v. Snow, 14 Fed. Rep., 70. In the case of Keller v. Ashford, 133 U. S., 610, the same principle is declared, and Mr. Justice Gteay, who delivered the opinion, quoted with approval from Cromwell v. St. Barnabas Hospital (N. J. Court of Errors) as follows : “ The right of a mortgagee to enforce payment of the mortgage debt, either in whole or in part, against the grautee of the mortgagor does not rest upon any contract of the grantee with him or with the mortgagor for his benefit.” The purchaser of land subject to mortgage, who assumes and agrees to pay the mortgage debt, becomes, as between himself and his vendor, the principal debtor, and the liability of the vendor as between the parties is that of surety. In equity, a creditor may have the benefit of all collateral obligations for the payment of the debt which a person standing in the relation of a surety for others holds for his indemnity. It is in the application of this principle that decrees for deficiency in foreclosure suits have been made against subsequent purchasers who have assumed the payment of the mortgage debt, and thereby become principal debtors as between themselves and their grantors. But the plaintiff here has not brought her action in this form and with this end in view. Her action is not for equitable subrogation to get the benefit of a security held by her debtor, Bostic. She alleges in her complaint that she owns the assumption and premise made by Kay to Bostic and Snttle, and seeks to enforce it against Kay in her own right at law, without any prayer for equitable relief or stating any element of equity in her complaint. *829 She cannot therefore have equitable relief, because she has prayed for none. ¥e will now take up and discuss the proposition of the plaintiff that she can recover upon the assignment of the assumption and guaranty of the defendant, made to Bostic and Suttle, and by them transferred to her. The question for decision then is, Is the assumption and guaranty assignable? If it is, then the plaintiff can maintain' her action; if it is not, she must fail. Section 55, C. C. P., which is Section 177 of The Gode, with a slight alteration, was almost a literal transcript of Sections 111 and 112 of the New York Code when our Code of Civil Procedure was adopted. Those sections of the New York Code produced so much litigation and involved the courts in so great perplexities in their attempts to arrive at some uniformity of decision in construing them, that the legislature of that state, to declare with some degree of certainty what things might be the subject of assignment, repealed them and enacted in their place (now Section 1910 of the New York Code) the following provision: “ Any claim or demand can be transferred except in one of the following cases : 1. When it is to recover damages for personal injury or for a breach of promise to márry. 2. When it is founded on a grant which is made void by a statute of the date, or upon a claim to or interest in real property, a grant of which by the transfer would be-void by such a statute. 3. Where a transfer thereof is-expressly prohibited by a statute of the state, or of the United States, or would contravene public policy.” In New’York it might be that under their statute an agreement and assumption like the one sued on in this action would be the subject of assignment. But in North Carolina we have no such statute. Section 177 of The Gode contains the law by which we are to be governed in arriv *830 ing at a conclusion. We have no decisions of this Court upon that Section of The Oode bearing directly on the particular point raised in this case, nor any general rule of construction of this statute by which we might be aided in our investigations. In Petty v. Rousseau, 94 N. C., 355, it would seem that something like a general rule had been laid down, but Asi-ib, J., who wrote the opinion in that case, was inadvertent to the change which had been made in the New York Code by the repeal of Sections 111 and 112 thereof, and the adoption of Section 1910, which we have quoted in full above, in their places, and quoted Section 1910 in full as being the annotations of Mr. Bliss upon Sections 111 and 112. He quoted by mistake the amended law of New York, instead of, as he supposed, the construction which Mr. Buss put upon Sections 111 and 112, which had been repealed. So, the opinion in that case does not aid us, for it was really based on the then statutory law of New York. Upon a merely cursory examination into the matter it will appear that many inconsistencies and incongruities must attend the assignment.. of an agreement like the one before us. If an assignee can make no possible use of the thing assigned to him, the assignment is a vain thing. If the courts would not and could not entertain a suit at the hands of an assignee, because of the uselessness to him in any event of the thing transferred, how can it be said that such a thing is assignable ? The law could not say that-a matter, even though based on contract, could be assigned if it could not possibly be of use to the assignee. The law means, when it says that a thing is assignable, that the assignment carries with it rights of property, and that those rights can be enforced in the courts. It would seem to be clear, too, that a thing, to be assignable, must be the subject of *831 assignment generally — to every one — and not be confined in its application to particular persons. It cannot be that the same subject matter of assignment can be assigned to one person and not to another person. It is difficult to understand how the subject of assignment can be limited in its transference to particular persons — good'if assigned to some persons, and of no avail if assigned to others. Now what use could a stranger make of the agreement sued on in this case, if it had been assigned to him instead of to the plaintiff? Suppose a stranger was the owner by assignment of this agreement and had brought suit upon it, what would his complaint be, and what kind of a judgment would he pray for? The complaint would have to state that the defendant had promised to pay a note due, not to himself but to Mrs. W., and that he was the owner by assignment from Bostic and Suttle of the defendant’s promise to do so. He could not demand judgment that the money be paid to him, because his complaint stated that it was due to Mrs. W. He could not ask that the money be paid to Mrs. W., for he could not prosecute an action in her name, nor have any judgment pronounced for or against her in a suit where she was not a party. In truth, the court could give no judgment. So, looking at the matter in all its bearings, we are constrained to say that the assumption and promise sued on in this action is entirely personal to Bostic and Suttle, with whom it was made, and is not assignable, although it would pass to the personal representative of Bostic in case of his death, and that the plaintiff cannot maintain this action upon it. His Honor erred in overruling the demurrer of the defendant. Error.