STATEMENT OF FACTS
J. M. Young brought this suit in equity against Edwin W. Hood and others to obtain judgment upon certain promissory notes for the sum of $1,451.44, with the accrued interest, and for the foreclosure of a mortgage on real estate to secure said indebtedness. Hood denied liability on the notes.
It appears from the record that Nell A. Lane gave a mortgage to J. M. Young on two lots in the city of Fort Smith, Arkansas, to secure an indebtedness amounting in the aggregate to something over $1,800. Subsequently Nell A. Lane conveyed by deed the two lots to her son, Reginald Lane. This deed contains the following:
"This deed is made subject to a mortgage of $1,800 in favor of J. M. Young, which the said grantees hereby assume and agree to pay as part of the above consideration."
On the 4th day of October, 1926, Reginald Lane conveyed the two lots to Edwin W. Hood. The deed contains a clause that it is made subject to a mortgage to J. M. Young, dated June 25, 1924, for the sum of $1,800.
According to the testimony of J. M. Young and J. W. Young, Reginald Lane and Edwin W. Hood came into their office and stated that Hood was about to purchase the two lots in question. Hood wished to know the balance due on the mortgage indebtedness. Young told him that there was $54 then due, and Hood said that he would assume the payment of the mortgage indebtedness, including the $54 then due, if Young would extend the time for the payment of the $54. Young agreed to do this, and then prepared a deed from Lane to Hood which contained a clause that Hood agreed to assume the mortgage indebtedness due Young. Subsequently the deed prepared by Young was shown to the attorneys of Hood, and they told Hood that, under the terms of the deed, he had agreed to pay the mortgage indebtedness to Young. Hood said that this was not his agreement, and that he would not agree to assume payment of the mortgage indebtedness to Young. A deed was then prepared by the *Page 441 attorneys of Hood to show that he had purchased the lots in question subject to the mortgage of Young. In this form the deed was executed by Reginald Lane and wife, and delivered to Hood. Hood testified that he had asked Young how much was due under the mortgage, so that he might have an idea of whether or not the mortgage indebtedness would be paid by the parties owing it, and that he at no time agreed to assume the mortgage indebtedness.
The chancellor found the issues in favor of Young, and judgment was rendered against Edwin W. Hood and Nell A. Lane for the amount of the mortgage indebtedness, and the foreclosure of the mortgage was also decreed. The case is here on appeal. (after stating the facts). The decree of the chancellor was wrong. The testimony of J. M. Young and J. W. Young, to the effect that E. W. Hood came into their office and told them, in the presence of Reginald Lane, that he was going to assume the payment of the mortgage indebtedness when he purchased the property from Lane, does not entitle Young to recover against Hood the amount of the mortgage indebtedness. Suppose it to be true that Hood did tell Young that he was about to purchase the property from Lane and would assume the mortgage indebtedness, he evidently afterwards changed his mind. He not only did not execute the deed which had been prepared by Young to that effect, but he had his attorneys prepare a new deed, in which he stated that he had purchased the property subject to the mortgage of Young. He executed the deed in this form, and delivered it to Lane. Lane accepted the deed, and its terms became the contract between the parties. The clause in the deed to the effect that the deed was made subject to the mortgage of Young was contractual in its nature, and bound the parties. It could not have even been contradicted by parol evidence. Wilson v. Nugent, 174 Ark. 1115, 299 S.W. 18. *Page 442
The chancellor seems to have proceeded on the theory that the assumption of the mortgage indebtedness by Hood was a part of the consideration for the execution of the deed by Lane to Hood. Hood denies that he ever agreed to execute a deed in this form. On the other hand, both of the Youngs testified that he did state to them, in the presence of Lane, that such was his agreement. This did not make any difference. Assuming it to be true, the parties evidently changed their minds. Instead of executing the deed with the clause that he assumed the balance of the Young mortgage, Hood declined to execute this deed, and had another one prepared by his attorneys, in which it was stated that the deed was subject to the Young mortgage. In this form the deed was executed by Hood and delivered to Lane. As we have just seen, the clause that the deed was subject to the Young mortgage was contractual in its nature, and became the contract between Hood and Lane, who were the contracting parties. There is no clause in it indicating that Hood assumed the Young mortgage. On the contrary, the deed expressly recites that it is made subject to the Young mortgage. Young was not a party to the contract between Hood and Lane, and had no rights under it except what the contract itself gave him. Hence the chancellor erred in holding that Hood agreed to assume the mortgage indebtedness to Young.
For that error the decree will be reversed, and the cause remanded with directions to dismiss the complaint against E. W. Hood. No appeal was taken by Nell A. Lane, and the judgment and decree of foreclosure against her are not affected by this appeal. *Page 443