McMasters ex rel. Parsons v. Wilhelm

Mr. Justice Woodward delivered the opinion of the court, November 5th 1877. It was alleged in the affidavit of defence that the mortgage in suit was given for part of the purchase-money for thirty-six lots of land bought of the plaintiffs by the defendant; that at the time of the purchase, it was agreed that the plaintiffs should release the lien of the mortgage from any lots the defendant should sell, on receiving a reasonable amount of the purchase-money, so as not unreasonably to reduce the security for the sum unpaid; that a short time afterwards, the defendant sold thirteen lots, and offered to pay the plaintiffs one thousand dollars upon receiving a release of the lien on those lots; that the plaintiffs refused to execute the release, in consequence of which the purchaser brought suit against the defendant for damages, and recovered against him the sum of fifteen hundred dollars; and that the twenty-three lots remaining unsold were ample security for the amount that would be still due [220] on the mortgage. It appears by the record that the mortgage was assigned to. Mrs. Parsons on the 25th of August 1873, thirteen days after its execution. The assignment was acknowledged on the day of its date, and was recorded on the 9th of September. The affidavit of defence did not assert that the sale of the thirteen lots was prior to the date of the assignment, nor did it set out any facts showing or tending to show that the parol agreement was anything more than a purely collateral and subordinate understanding; that it had formed the inducement or even a motive for the completion of the original contract; or that it had been omitted from the mortgage by fraud, accident or mistake. There was no pretence that the assignee had actual notice of the agreement, and, as there had been no breach of it when the assignment was executed, its existence could not impair or affect her rights under the expressed terms of the mortgage. As in Davis v. Barr, 9 S. & R. 137, this agreement in no respect related to the validity of the instrument assigned, to the existence of the debt it secured, or to the amount of it that was due. It was held, in The Commonwealth v. The Councils of Pittsburgh, 10 Casey, 496, that a secret equity or an agreement merely collateral could not be asserted by the obligor in a bond against a holder without notice. This was a-collateral contract enforceable perhaps between the parties to it, but it created no equity attaching to the mortgage in regard to which it was the duty of the assignee to inquire. No difficulty can arise in adjusting the claim for a credit of ninety dollars made in the affidavit of defence. When the rule for judgment was applied for, the plaintiffs offered to allow it, and it was not objected to at the argument. The prothonotary will deduct it in liquidating the amount due on the mortgage. The order of the Court of Common Pleas is reversed, and it is now ordered and adjudged that the rule to show cause why judgment should not be entered for the plaintiffs for want of a sufficient affidavit of defence be made absolute.