Meredith College, Inc. v. Lee

CONNOR, J. On tbe facts admitted in tbe pleadings and found by tbe jury at tbe trial of tbis action, tbe defendants W. L. Adams and John Jernigan were each personally liable to tbe plaintiff on tbe note sued on in tbis action. In Bank v. Randolph, 207 N. C., 241, 176 S. E., 561, it is said: “Whatever conflict there may appear to be in tbe decisions of tbis Court witb respect to tbe liability of tbe grantee of land who bas assumed tbe payment of an indebtedness of bis grantor which was secured by a prior mortgage or deed of trust executed by tbe grantor, as said in Bank v. Page, 206 N. ’C., 18, 173 S. E., 312, Tbe law undoubtedly is, that when a purchaser of mortgaged lands, by a valid and sufficient contract of assumption, agrees witb tbe mortgagor, who is personally liable therefor, to assume and pay off tbe mortgage debt, such agreement inures to tbe benefit of tbe bolder of tbe mortgage, and upon its acceptance by him, or reliance thereon by tbe mortgagee, thenceforth, as between themselves, tbe grantee occupies tbe position of principal debtor and tbe mortgagor that of surety, and tbe liability thus arising from said assumption agreement may be enforced by suit in equity under tbe doctrine of subrogation, Baber v. Hanie, 163 N. C., 588, 80 S. E., 57, or by an action at law as upon a contract for the benefit of a third person, Rector v. Lyda, 180 N. C., 577, 105 S. E., 176.’ ” Tbe liability of a grantee of mortgaged lands, by reason of an assumption agreement witb bis grantor, both to tbe mortgagor and to tbe mortgagee, arises out of bis contract, and is limited by its terms. See 41 C. J., p. 760, sec. 837. *331 Where, as in tbe instant case, tbe grantee by bis assumption agreement witb bis grantor limits bis liability on tbe indebtedness of bis grantor secured by a mortgage on tbe land, sucb limitation applies to his liability not only to tbe mortgagor but also to tbe mortgagee. Tbe defendants in this ease, by reason of' tbeir assumption agreements witb tbeir respective grantors, were liable to them and to tbe plaintiff for only dne-half of tbe indebtedness of J. T. Lee and bis wife, Aldonia Lee, to wit, $800.00 and interest which should accrue after tbe dates of tbeir respective agreements. This liability was discharged by tbe payment made on said note out of tbe proceeds of tbe sale of tbe land which was conveyed to tbe defendants, to wit, tbe sum of $1,282.47. Neither of them is now liable to tbe plaintiff on tbe note sued on. There is error in tbe judgment that plaintiff recover of tbe defendants tbe sum of $558.76. Tbe action is remanded to tbe Superior Court of Johnston County that judgment may there be entered in this action in accordance witb this opinion. Error and remanded.