Lewis v. Covillaud

California Supreme Court Jul 1, 1862Published

Before: Cope

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Holding. The court held that the defendants were liable for the mortgage debt they assumed, and that the trial court's finding regarding the parties' intent not to extinguish the debt was supported by sufficient evidence. However, the court reversed the judgment insofar as it enforced a vendor's lien, ruling that such a lien is a personal equity and not assignable.

Issues

Whether the defendants' agreement to pay a mortgage constituted an assumption of the underlying debt.
Whether the plaintiff could maintain an action against the defendants based on the assignment of the cause of action.
Whether the vendor's lien was assignable to the plaintiff.
Whether the trial court's finding that the parties did not intend to extinguish the original debt was supported by the evidence.

Disposition. Affirmed in part and reversed in part.

Quotations verified verbatim against the opinion

“It is clear that the objection taken cannot be sustained, and that Covillaud and Rye in assuming the payment of the mortgage, retaining for that purpose the amount of the mortgage debt, assumed and intended to assume the payment of the debt.”

“Our conclusion is, that as to the lien the judgment should be reversed, but that in other respects it should be affirmed.”

Synopsis

In a deed of land the consideration was expressed to be SI 0,000, $4,000 paid in cash, “ and the balance by the assuming, on the part of the said grantees, the payment of a certain mortgage ” then existing upon the property to secure the grantor’s note for $6,000: Held, that this recital, unless controlled by evidence of a contrary intention, showed an agreement on the part of the grantees to pay the mortgage debt, and not merely to obtain a discharge of the mortgage as a lion upon the property.

The doctrine of McLaren v. Hutchinson, (18 Cal. SO) that where A owes B, and the latter owes C, and A and B, without consulting O, agree that the former shall- pay to C what he is owing to B, an action cannot be maintained by 0 against A for want of privity—commented on and questioned.

A vendor’s lien is not assignable. Baum v. Grigsby (ante, 172) affirmed on this point.

A finding of fact by the lower Court will not be disturbed' by the appellate Court when the evidence is conflicting, or where the conclusion drawn from it is not necessarily erroneous in point of law.

Thus, where C. purchased a city lot of B., and as part of the consideration assumed the payment of a note from B. to L., secured by mortgage upon the property, and some time afterwards C. and L. entered into an arrangement by which C. executed his notes to L. for about three-fourths of the amount due on the original note, and to secure these latter notes gave a new mortgage upon the property, and L. thereupon delivered up the old mortgage, but not the note, and indorsed upon the record entry of the mortgage, “ Satisfied by being releasedHeld, that whether this was an accord and satisfaction of the whole debt, depended upon the intention of the parties, and that the Court below having, upon conflicting evidence in this respect, found as a fact that full satisfaction was not intended, its finding would not be disturbed, although the appellate Court might be of opinion that the weight of evidence was against the finding.

Cope, J. delivered the opinion of the Court Field, C. J. and Norton, J. concurring.

Covillaud and Eye purchased of one Burlingame a lot with the improvements thereon in the city of Marysville, and as a part of the consideration assumed the payment of a mortgage upon the property, in favor of the plaintiff, for the sum of §6,000. Eye conveyed his interest in the property to Covillaud, and the latter arranged with the plaintiff for a release of his mortgage, agreeing to pay him the sum of §8,000, in two installments of §4,000 each, and to secure the payment by a mortgage on the same property. This arrangement was carried out by the execution of the notes and mortgage as agreed on, and the release of the original mortgage, but as the debt and interest due from Burlingame amounted to more than the sum for which the notes were given, the note of Burlingame was retained by the plaintiff. The amount of the Covillaud notes was credited upon it, and a suit brought against Burlingame for the balance, and a judgment recovered, and the present action is against Covillaud and Eye upon their agreement to pay off the original mortgage. The action is based upon that agreement, and upon a written assignment frofn Burlingame to the plaintiff of his cause of action against Covillaud and Eye, including his lien as vendor, and the plaintiff asks a judgment for the amount claimed, and a decree enforcing the lien. The case comes up on appeal from an order refusing a new trial, and from a judgment granting the relief asked, and various objections are urged as grounds of reversal.

[189]It is objected that the agreement sued on does not bind Covillaud and Rye for the payment of the mortgage debt, and that it only amounted to an undertaking on their part to obtain a discharge of the mortgage as a lien upon the property. The intention obviously was to assume the payment of the debt, and any other construction would be inconsistent with the circumstances under which the agreement was entered into, and could not be maintained even upon the strictest interpretation of the language used. It would be absurd to hold, that an agreement to pay a mortgage is complied with by procuring a discharge of the mortgage, leaving the debt unsatisfied; and particularly where the person agreeing to pay receives the amount of the mortgage debt as the consideration for the agreement. It is clear that the objection taken cannot be sustained, and that Covillaud and Rye in assuming the payment of the mortgage, retaining for that purpose the amount of the mortgage debt, assumed and intended to assume the payment of the debt.

Lewis v. Covillaud

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