Cleveland v. Southard

Paiíte, J. The deed from Southard to Safford must have effect according to its terms. There is no attempt to reform it on the ground of mistake; and whatever dissatisfaction Safford may have felt, when he first learned of the existence of the railroad mortgage, and the exceptions against it in the deed, must be considered as of no avail after he finally accepted the deed, and took possession under it, claiming title. Taking the deed, therefore, as expressing the real contract of the parties, we have no doubt that as between them the land was the primary fund for the payment of the mortgage.' True, there is no covenant by the purchaser to pay it, as is often the case, so that he could not be made personally liable. But the land is expressly conveyed subject to the mortgage ; it is excepted from the covenant against incumbrances ; and the covenant to warrant and defend the title is qualified by the addition, “subject to the mortgage before men [485] tioned.” The intention was therefore clear, that the vendee was to take the land subject to the burden of that mortgage, and without any obligation on the part of his vendor to pay it. And the result was, that, although Southard remained personally liable to the holder of the mortgage, yet, as between himself and Safford, he had the undoubted right to have the land fairly sold in case of a foreclosure, and the proceeds applied to the payment of the mortgage debt. The evidence offered on the motion shows clearly that this was not done ; but that, on the contrary, while the land was worth from $2,500 'to $3,000, it was sold to Safford for $600, in pursuance of an arrangement with Cleveland that he should have it, at the sale, for that sum. It appears from Safford’s testimony, that, during the negotiations, Cleveland was informed by him that whatever he paid was his loss¿ .as he had no recourse upon Southard, so that Cleveland had actual knowledge that Safford had purchased subject to the mortgage; This being so, and the arrangement that the land should be sold on the foreclosure to Safford for $600 being obviously destructive of Southard’s rights, provided he was still to remain personally liable to Cleveland for the deficiency, he would clearly be entitled to have the sale set aside, and the land resold. But the counsel for the appellant suggests, that, npon this theory of the case, the arrangement between Cleveland and Safford would discharge Southard from any further personal liability to Cleveland for the debt. This is undoubtedly true. Cleveland, knowing of the terms of the sale from Southard to Safford, and that, as between them, Southard had the right to have the full value of the land applied to the payment of .the mortgage, after collusively selling the land to Safford on the foreclosure, for a part only of the debt, when he knew that, if fairly sold, it would have much more than paid the whole of it, ought not to be allowed to enforce [486] the personal claim for the deficiency which he had himself thus caused, against Southard. And if the suit for this deficiency were pending in this state, we should hold, that as Southard had a complete equitable defense, he had no interest in having the mortgage sale set aside, and therefore the order setting it aside should not have been made. But as that suit is in another state, and it is impossible to know what view may there be taken of the case, we have determined, that, upon all the facts here presented, it was proper for the judge of the circuit court to set aside the sale, though it might be also proper to make a further order staying all proceedings until the determination of the suit of Cleveland against Southard, and to make an actual resale finally contingent upon the result of that suit. By the Court. —The order appealed from is affirmed.