Mildred Collins BEAVER, Plaintiff,
v.
P. L. LEDBETTER and Wife, Katherine H. Ledbetter, Defendants.
No. 290.
Supreme Court of North Carolina.
January 20, 1967.*166 *168 Brock Barkley, Charlotte, for plaintiff appellee.
Kenneth B. Cruse, Concord, for defendant appellants.
BOBBITT, Justice.
Plaintiff bases her right to recover on this well settled legal principle: Where a purchaser of mortgaged land, by a valid and sufficient contract of assumption, agrees with the mortgagor, who is personally liable therefor, to assume and to pay the mortgage debt, such agreement inures to the benefit of the holder of the mortgage; and the holder of the mortgage can maintain an action at law on such agreement. Baber v. Hanie, 163 N.C. 588, 80 S.E. 57, 12 A.L.R. 1518; First Carolinas Joint Stock Land Bank v. Page, 206 N.C. 18, 173 S.E. 312; 4 Corbin on Contracts, § 796.
The general rule is stated in 59 C.J.S. Mortgages § 407, as follows: "A grantee who with knowledge of its contents accepts *169 a conveyance which requires him to assume the payment of an existing mortgage becomes personally liable therefor even though he does not sign the deed or was not present when the grantor signed and acknowleged it, and even in the absence of an antecedent agreement to assume, and without entry of possession." (Our italics.) Accord: 37 Am.Jur., Mortgages § 994.
The motion of P. L. Ledbetter for judgment of nonsuit was properly overruled. In addition to the testimony of plaintiff, of Turner and of Jordan, with reference to their dealings with P. L. Ledbetter, there was the direct and positive testimony of James A. Hagerty that, prior to the delivery of the deed, P. L. Ledbetter had agreed to assume and pay Hagerty's debt to plaintiff, and that the deed containing the assumption agreement was delivered by him in person to P. L. Ledbetter when the sale was consummated. There was no evidence tending to support the allegations of P. L. Ledbetter to the effect the transaction was not consummated. Since all the evidence tends to support plaintiff's allegations as to P. L. Ledbetter's agreement to assume and pay Hagerty's note to plaintiff and as to the amount of the unpaid balance thereon, there was no error as to P. L. Ledbetter in the peremptory instructions in plaintiff's favor with reference to the first and third issues.
We consider now whether the motion of Katherine H. Ledbetter for judgment of nonsuit should have been allowed.
"A husband is not jure mariti the agent of his wife, and if such agency is relied upon it must be proven." Pitt v. Speight, 222 N.C. 585, 588, 24 S.E.2d 350, 351, and cases cited. "No presumption arises from the mere fact of the marital relationship that the husband is acting as agent for the wife. There must be proof of the agency." General Air Conditioning Co. v. Douglass, 241 N.C. 170, 173, 84 S.E.2d 828, 831. Accord: Rushing v. Polk, 258 N.C. 256, 263, 128 S.E.2d 675, 680; Norburn v. Mackie, 262 N.C. 16, 22, 136 S.E.2d 279, 284; 26 Am.Jur., Husband and Wife § 228; 41 C.J.S. Husband and Wife § 70.
There is no evidence Katherine H. Ledbetter had any part in or knowledge of a transaction in which she was involved in any way as a purchaser. The Ledbetters lived in Concord. There is no evidence Katherine H. Ledbetter ever saw the Charlotte apartment property or that she had knowledge or notice that it was involved in any transaction between Hagerty and her husband. Although her name appears as one of the grantees in the deed, there is no evidence that she had any knowledge or notice of the existence of such deed. The evidence shows the deed was delivered by Hagerty to P. L. Ledbetter. It shows all communications and conversations relating to the transaction were addressed to P. L. Ledbetter. Jordan testified that James A. Hagerty told him the property had been sold to Mr. Ledbetter and that Mr. Ledbetter advised him that he (Mr. Ledbetter) had purchased the property. James A. Hagerty testified that "Mr. Ledbetter was told the terms of the $12,000.00 second mortgage and he agreed to assume it." (Our italics.) There is no evidence P. L. Ledbetter was authorized to act as agent for his wife in negotiations and transactions relating to said property. The evidence is silent as to when Katherine H. Ledbetter learned of the existence of the Hagerty deed and of the assumption clause therein. There is no evidence she received any benefit from said deed. Nor is there evidence of any fact tending to show her ratification of the transaction.
Plaintiff cites Corbett v. Corbett, 249 N.C. 585, 107 S.E.2d 165, and cases cited therein. She stresses the legal principles stated in Corbett as follows: "Where a deed is executed and recorded, it is presumed that the grantee therein will accept the deed made for his benefit. This is so, although the transaction occurs without the grantee's knowledge. Such presumption will prevail in the absence of evidence to the contrary. [Citations]" The cited cases relate to whether *170 particular deeds were delivered so as to vest title in the grantees therein named. None of the deeds contains an assumption clause such as that involved herein.
"A mortgage assumption clause in a deed is not properly a part of the grant, and is not a covenant running with the land, but is a collateral undertaking, personal in nature, and contractual, relating to the consideration, and not relating to land." 59 C.J.S. Mortgages § 403. Accord: 37 Am.Jur., Mortgages § 992.
In Blass v. Terry, 156 N.Y. 122, 50 N.E. 953, it was contended that the defendant was obligated to pay the mortgage debt of one Howell to the plaintiffs because "Howell, in conveying a part of the land covered by the mortgage to the defendant, inserted in the deed a clause binding her to assume and pay the mortgage, and that this promise inured to the benefit of the plaintiffs." The plaintiffs offered in evidence the recorded deed containing such assumption clause. O'Brien, J., for the Court of Appeals of New York, said: "The record thus produced proves a grant of certain land therein described to the defendant, and it contains a clause assuming and agreeing to pay the mortgage thereon. But this clause does not prove a personal promise or obligation on the part of the defendant to pay the debt of a third party, in the absence of proof that she actually accepted the deed with knowledge of the assumption clause, or at least under such circumstances that she was bound to know its purport and legal effect. A clause of that character in such an instrument is, properly speaking, no part of the grant. It is a collateral undertaking, personal in its nature, not relating to the land." Again: "There may be constructive delivery of a deed, sufficient to vest title in the grantee, but it does not follow that such a delivery is sufficient to create a personal obligation on his part to pay a mortgage which is a lien on the land. In order to make the instrument effective for that purpose, enough must be shown to at least raise a presumption that it was accepted by the grantee with knowledge of the fact that it was not only a grant of the land, but contained a collateral promise on his part to pay a sum of money to some third party. The record in this case contains no such proof." Accord: Consolidated Realty Corporation v. Dunlop, 72 App.D.C. 273, 114 F.2d 16; Ludlum v. Pinckard, 304 Ill. 449, 136 N.E. 725, and cases cited; Fishback v. J. C. Forkner Fig Gardens, 137 Cal. App. 211, 30 P.2d 586.
Where a deed contains an assumption clause or other collateral provision purporting to impose a personal liability upon the grantee, it is our opinion, and we so hold, that the mere fact that such a deed has been executed and recorded is insufficient to raise a presumption that the grantee agreed to such collateral contractual provision. Evidence that such grantee had knowledge of such provision and expressly or impliedly assented thereto, or that she ratified such provision after acquiring knowledge thereof, is required before liability may be imposed upon such grantee under the terms thereof. There being no evidence that Katherine H. Ledbetter agreed to assume and pay Hagerty's note to plaintiff or that she ratified the assumption clause in Hagerty's deed to the Ledbetters, her motion for judgment of nonsuit should have been allowed. Hence, as to her, the judgment of the court below is reversed.
We have considered the assignment of error, discussed briefly by defendants, relating to the admission of evidence. Suffice to say, we find nothing in the court's ruling that would justify a new trial as to P. L. Ledbetter or that is of any significance in respect of the liability of Katherine H. Ledbetter.
As to P. L. Ledbetter: No error.
As to Katherine H. Ledbetter: Reversed.