Graham v. Way

The opinion of the court was delivered by Peck, J. The defendant never having been in the occupancy or possession of the premises, and there having been no contract in fact between the parties, the right of the plaintiff to recover rests on an alleged privity of estate. The first count is debt for rent under an alleged lease from the plaintiff to Stevens, charging the defendant as assignee of the lessee. The deed from Stevens to the plaintiff, of June 5th, 1857, with the defeasance endorsed upon it, was in effect a mortgage, conditioned for the payment to the plaintiff within five years from date $851., together with the use of the farm. This was so decided in an action of ejectment in favor of this plaintiff against Stevens. 34 Vt. 166. It was further decided that that action was premature, it having been commenced before the expiration of the five years. The quit-* claim deed from Stevens to the defendant, dated August 18th, 1859, to secure him for signing a note for about $80. to Wheaton for Stevens, and the bond executed at the same time by the defendant to Stevens, conditioned to redeed on the payment of that note, constitute a mortgage from Stevens to the defendant. ' Thus the plaintiff and defendant are both mortgagees of Stevens, the plaintiff holding the prior mortgage, and the mortgagor in possession. The plaintiff claims to recover rent of the defendant from the date of the defendant’s mortgage. If no other relation exists between the plaintiff and defendant than that of successive mortgagees, it is evident that there is no such privity of estate as to create an obligation on the defendant to pay rent, in the absence of any contract between the par [23] ties. But the plaintiff claims that his deed from Stevens being conditioned for the payment within five years of $851, together with the use of said farm,” so far as relates to the use of the premises, Stevens stood as the plaintiff’s lessee rendering rent, and the defendant by taking his mortgage became the assignee of Stevens, the lessee, under the lease, and liable as such assignee for rent. If this is the true relation of the parties, still there is an objection to a recovery by the plaintiff. The action is premature. It was commenced April 30th, 1862, before the expiration of the five years specified in the defeasance of the plaintiff’s deed for payment. The plaintiff seeks to avoid this objection by proof that at the time the plaintiff took his deed, Stevens agreed verbally to pay at the end of each year for the use of the premises. But the defendant took his mortgage subject only to such incumbrance as appeared of record. He can not, for the purpose of creating a personal liability, be affected by a verbal agreement as to the time of payment, of which he had no notice, especially as he has never been in possession. The counsel for the plaintiff contends that the condition endorsed upon the deed to the plaintiff was sufficient to put the defendant upon inquiry, and that on inquiry he might have ascertained the terms of the agreement. But the condition of the plaintiff’s deed is clear and explicit as to the time of payment, and therefore it imposed no such duty of inquiry. íhe mortgage cannot be contradicted in this respect by parol evidence as between the parties to it, nor as to the defendant who took his mortgage upon the faith of the record without notice. It is true the court has decided that in an action on the verbal contract the plaintiff may recover of Stevens for the use of the premises, before the expiration of the five years ; but this is not upon the ground of varying the deed by parol evidence. It is on the ground that a party may by contract stipulate for a time of payment and be personally liable according to the terms of the contract, and give a mortgage to secure the debt, conditioned for the payment at a period more remote. In such case the debtor may be personally liable for the debt before the mortgage can be enforced. In this case the plaintiff’s mortgage contains no agreement or promise on the part of Stevens to pay; as to payment it is a mere condition. If Stevens can be treated as a lessee, the defendant, not being bound by the verbal agreement of Stevens, is not liable for the rent unless he is liable by [24] force of the plaintiff’s mortgage as a lease, and then can be liable only according to its terms. On this basis the action is premature. But independent of the objection that the action is premature, does Stevens stand in the condition of lessee of the plaintiff, under a lease for rent, and the defendant as assignee of the lessee? 'Ve think not. There is no doubt that Stevens had an assignable interest, but it was not the mere interest of a lessee rendering rent. The interest of Stevens was that of mortgagor, and the interest of the plaintiff was that of mortgagee. It is true the defeasance is for the payment of the $851., together with the use of the 'premises. This provision relative to the use of the premises does not change the character of the instrument from a mortgage to a lease, nor change the relation of the parties to it from that of mortgagor and mortgagee, to that of lessor and lessee. No interest is stipulated to be paid on the $851. for the five years, and it is evident that the payment for the use of the premises was inserted in lieu of interest on the debt. Whatever is to be paid for the use of the premises is an incident of the debt. The incident must follow the principal thing and cannot control or change the character of it. If we look to the parol evidence introduced by the plaintiff, from which it appears that the use of the premises was to be $60. per year, but to be reduced from year to year in proportion as Stevens should reduce the debt by payments, it is still more clear that the use of the premises is but another name for interest. The condition in Stevens’ deed to the plaintiff is not a lease in such a legal sense as is necessary to subject the defendant, who has never been in possession, to liability for rent. It is clear that there is no ground for a recovery on the second count in the declaration for use and occupation, there being no contract between the plaintiff.and defendant, and the defendant never having had the occupancy or any beneficial use or enjoyment of the premises. This view of the ’case renders it unnecessary to decide the question so fully discussed, whether a mortgagee of a lessee is liable to the lessor for the rent reserved in the lease, when such mortgagee has never been in possession. The authorities are conflicting on this question, and we dispose of the case without deciding this point. Judgment reversed and new trial granted.