Smith v. Rice

Van Hoesen, J.

The case of Elder v. Rouse (15 Wend. 218) has never been overruled, and it may be conceded to be a correct exposition of the statute (1 R. S. 738 § 139), which provides that “no mortgage shall be construed as implying a covenant for the payment of the sum intended to be secured; and where there shall be no express covenant for such payment contained in the mortgage, and no bond or other separate instrument to secure such payment shall be given, the remedies of the mortgagee shall be confined to the lands mentioned in the mortgage.” In Elder v. Rouse, Judge Nelson said that an unqualified admission of indebtedness by the mortgagor was equivalent to an express covenant, and that upon such an acknowledgment an action might be maintained. The decisions that have been made by our courts since Elder v. Rouse was decided, whilst recognizing the authority of that case, have uniformly been that an admission of indebtedness must be made in unequivocal terms, and would not be inferred from the fact that the mortgagor intended, by executing a mortgage, to secure the payment of some debt due to the mortgagee. The debt must be due from the mortgagor to the mortgagee, and it must be collectible without a foreclosure of the mortgage, in order to entitle the mortgagee to a personal judgment against a mortgagor who has given no bond, and who lias not expressly covenanted to pay.the amount for which the mortgage is a security (Hone v. Fisher, 2 Barb. Ch. 659; Coleman v. Van Rensselaer, 44 How. Pr. 368; Brandreth v. Sandford, 1 Duer 405; Gaylord v. Knapp, 15 Hun 87; Austin v. Mack, 29 Hun 534; Culver v. Sisson, 3 N. Y. 264).

*311In Gaylord v. Knapp and in Austin v. Mack, it is said that the debt, the existence of which is acknowledged, must be one which the mortgage did not create. Without either adopting that view or rejecting it, I think that we are bound to give effect to the statute by holding that where there is neither a bond nor an express covenant to pay the mortgage debt, the mortgagor is never liable unless the instrument discloses an intention on the part of the contracting parties to secure to the mortgagee a claim against him personally. An admission of indebtedness is usually an admission that an obligation exists on the part of the person who makes it to pay the debt, but circumstances may show that it does not carry with it any personal liability.

It is said in Bacon’s Abridgement (vol. 5, marg. p. 157, “Of Obligations”), that “Any words which declare the intention of the party and denote his being bound will create an obligation.” Bacon then gives a number of examples of words that have been held sufficient to bind a party in an action of debt. Thus, “ This bill witnesseth that I have borrowed 10 pounds of A. B.; ” or, “ Memorandum that I owe A. B. 10 pounds; ” or, “ Memorandum that, all things being reckoned and accounted between A. B. and C. D., A. B. acknowledges that he owes G. D. 10 pounds ; ” or, “I am content to give A. B. 10 pounds at Lady Day,” have been adjudged to import a promise to pay on which an action of debt could be maintained.

These admissions were all made with the intention of striking a balance between the parties, that both of them might know what one of them owed the other ; and it is a fair inference that a man intends to pay an acknowledged debt. But no inference of an intention to make a mortgage a personal charge upon himself can properly be drawn from the circumstance that a man gives a mortgage to secure a part of the purchase money of land that lie buys. The statute clearly recognizes the fact that a mortgagee has the land to resort to, and it declares that that shall be his only resource, unless he exacts an express promise from the mortgagor to pay the debt.

*312In the absence of a bond and of a covenant, the.presumption is that the mortgagor does not intend to make himself personally liable ; and the burden lies upon the mortgagee of proving that it was the intention of the mortgagor to assume responsibility for the payment of the mortgage debt, and thus relieve the mortgagee from the duty of looking to the land for his money.

In Elder v. Rouse the court discovered such an intention on the part of the mortgagor, and the facts of that case (which are not fully stated in the published volume) doubtless warranted the decision that was made; but here we have a different state of affairs presented to us. It is evident that the mortgage is a purchase monej'- mortgage, and that the recital that the defendant “is justly bound in the sum of $2,000 ” to the mortgagee, instead of being an admission of indebtedness, made with a A'iew of adjusting the accounts between himself and the mortgagee, was nothing more than an explanation of the reason for giving a mortgage for that amount on the land. Various other clauses in the mortgage are referred to by the learned counsel for the appellant, but they all fail to import any admission that the defendant intended to make himself personally liable for the purchase money.

The judgment should be affirmed, with costs.

J. F. Daly and Beach, JJ., concurred.

Judgment affirmed, Avith costs.