
    Eliza W. Patrick, Plaintiff, v. Theodosia J. Underwood, Defendant.
    (Supreme Court, New York Special Term,
    July, 1896.)
    
      Mortgage — Deficiency — Liability of one not a .party to the instrument.
    An associate and agent of the defendant purchased certain land of plaintiff, taking title in his own name and giving back his individual notes and a mortgage and a declaration of trust which stated ■the' interests of the associates in the land and their respective liability on the mortgage. The mortgage contained no covenant for payment.
    • ' Held, that no covenant on defendant’s part was to be implied and that she could not be held liable, under the circumstances, for a . deficiency arising on a foreclosure of the mortgage.
    Demubbeb to complaint.
    E. Wakely, for plaintiff.
    Samuel F. Jarvis, Jr., for defendant.
   Pbyob, J.

A demurrer' challenges for insufficiency a complaint which alleges: That one Allen, as associate and agent of defendant and others, bought land of plaintiff for the price of $510,000; that of this sum $110,000 was paid in cash; that in' payment of the residue Allen executed his promissory notes, took title to himself, and gave back a purchase-money mortgage as security for the notes; that defendant contributed her share of the cash payment and acquired a proportionate interest in the land; that Allen made and delivered a “ declaration of trust” acknowledging the respective interests of .the associates in the land and stating that “ the same are liable in the'same proportion upon the mortgage given to secure the deferred payments upon the said property; ” that defendant, with her associates, caused Allen to convey the land to a corporation which they had organized, and for her interest received a proportional part of the stock of the corporation;' that upon default in the payment of interest on the mortgage debt, plaintiff procured a judgment of foreclosure; that on the foreclosure sale a deficiency resulted of $101,278.76, for which judgment was entered against Allen; that defendant here was a party defendant in that suit, but no personal judgment was entered against her, and the prayer for relief is .that plaintiff recover “ the portion of said judgment ” (of deficiency) “ for which defendant is liable,” namely, $38,705.21.

That the defendant was a purchaser of the land and that the mortgage was made on her behalf to secure payment for her .interest is an express allegation of the complaint, and, indeed, is a fundamental fact in plaintiff’s case. Hence it was that defendant was made a party in the foreclosure suit; and hence this action to recover of her a proportion of the deficiency on the foreclosure sale. In legal effect, then, the action is by vendor against vendee for so much of the pinchase price of land as remains unpaid after foreclosure of a mortgage to secure it.

But, by positive provision of statute, “Ho 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, the remedies of the mortgagee shall.be confined to the lands mentioned in the mortgage.” 1 R. S. 738, § 139. This enactment, being a remedial regulation, is the law of the forum and determines plaintiff’s right of recovery.

Conceding defendant a party to the mortgage through the agency of Allen, still, upon the complaint, it is not apparent that the mortgage contains an express covenant for payment of the money; and none can be interpolated by construction of the pleading. Clark v. Dillon, 97 N. Y. 370.

■ Hor was Allen’s note such “ separate instrument ” as imposes upon the defendant a personal obligation for thé price of the land. It is not her promissory note, and “ a person not a party ” (to negotiable paper) “ cannot Be charged upon proof that the ostensible party signed or indorsed as his agent.” Briggs v. Partridge, 64 N. Y. 357, 363; Tuthill v. Wilson, 90 id. 423.

Heither is the declaration of trust by Allen the “ separate instrument ” of defendant, nor a security from her to the plaintiff for the price of the land.

Indeed, the learned counsel for plaintiff asserts no express engagement by defendant for the mortgage debt, and'in the absence of such obligation the plaintiff can have recourse only to the land. Mack v. Austin, 95 N. Y. 513; Gaylord v. Knapp, 15 Hun, 87; Hone v. Fisher, 2 Barb. Ch. 559; Severance v. Griffith, 2 Lans. 38; Coleman v. Van Rensselaer, 44 How. 368; Vrooman v. Dunlap, 30 Barb. 202.

Upon the facts of the complaint the inference is 'obvious that-the plaintiff sold the land on the personal responsibility of Allen and the mortgage security; and these failing her, she cannot recur to the defendant,, especially after pursuing Allen to judgment. Apart, then, from the statutory obstacle to her suit, she shows no right of recovery. Williams v. Gillies, 75 N. Y. 197; Tuthill v. Wilson, 90 id. 423; Patterson v. Brewster, 4 Edw. Ch. 352, 355; Coleman v. First Nat. Bank, 53 N. Y. 388. And such is the justice of the case between the parties... The plaintiff has now the cash payment of $110,000 and the price of the land on foreclosure. For the deficiency she has a judgment against Allen; and rightfully, toó, because he expressly agreed to pay the purchase' money. Why should she fasten on the defendant a liability for which she did not stipulate and which defendant did not assume ? '

In any aspect the complaint is untenable.

Demurrer sustained, with leave to amend.  