Watson's Appeal , 1879 Pa. LEXIS 272 ( 1879 )

Mr. Justice Mercur

delivered the opinion of the court,

This fund, in contention, is the proceeds of a sale of lands formerly owned by Ozias Potter and Joseph H. Wonderly, as tenants in common. While thus owning the land, in November 1866, they jointly executed a mortgage thereon to Albert T. Nichols, to secure the payment of eleven bonds, ten of $2000 each, and 'one of $4000. In December of the next year, Nichols assigned nine of the $2000 bonds to one Piper, and .guaranteed their payment. About the same time, Nichols borrowed money of one Porter, and gave him the $4000 bond as collateral security. Nichols failed to pay Porter, and the latter transferred the bond to one of the appellants. After the obligors had paid and taken up two of the $2000 bonds, in January 1871, Wonderly conveyed his undivided one-half of the property to Nichols. The deed contained a covenant of Nichols, by which he agreed to assume and pay the'balance owing on said mortgage, and to save harmless, said Wonderly, his heirs, executors and administrators from the payment of the same of any part thereof. After this, Nichols procured a re-assignment of the seven bonds from Piper, and the appellees acquired and hold them under later transfers from Nichols. The present contention is between the appellees on the one side, who hold the bonds thus taken up and negotiated again by Nichols; and the appellants on the other side, who hold the $4000 bond not taken up. The appellants contend that the bonds re-assigned to Nichols, were, thereby, by operation of law, paid and satisfied.

As between two mortgagors of land held by them as tenants in common, and third persons, each mortgagor is-liable for the whole sum secured by the mortgage; but, as between themselves, each is liable for one-half only. As-to the other half, each is surety for the other: Gearhart v. Jordan, 1 Jones 325. As no partnership existed between the mortgagors, none of the incidents applicable to copartners can be invoked. The rule which denies subrogation in case of a debt arising in a partnership transaction before settlement of the partnership accounts, does not apply. On the conveyance by Wonderly of his interest in the land to Nichols, the latter became a tenant in common with Potter. Thenceforth they sustained the same relation in regard to the payment of the mortgage, as Wonderly and Potter had previously sustained. No consideration passed from Potter. He .was a stranger to the contract between Wonderly and Nichols. His rights were unaffected thereby. They were neither enlarged nor diminished. The covenant of Nichols obligated him to protect Wonderly from all liability on the mortgage and bonds; but not to protect or relieve Potter therefrom. It follows, when Nichols paid and took up the bonds, secured by the mortgage, which he and Potter were jointly obligated to pay, he thereby acquired a right to collect the one-half thereof out of the estate of Potter. He was not driven to an action to enforce this right; but was entitled to all the securities and all the remedies given by the mortgage: Wright v. Grover & Baker, 1 Norris 80. By virtue of subsequent assignments, all these rights and remedies passed to the appellees, and they are justly entitled to the sum decreed to them.

Decree affirmed, and appeal dismissed at the costs of the appellant.