Shepherd v. May , 6 S. Ct. 119 ( 1885 )

115 U.S. 505 (1885)

SHEPHERD
v.
MAY.

Supreme Court of United States.

Argued November 11, 1885. Decided November 23, 1885. IN ERROR TO THE SUPREME COURT OF THE DISTRICT OF COLUMBIA.

Mr. William F. Mattingly and Mr. A.C. Bradley for plaintiff in error.

Mr. Andrew B. Duvall for defendant in error.

MR. JUSTICE WOODS delivered the opinion of the court. After stating the facts in the language above reported, he continued:

The first contention of the plaintiff in error is, that by reason of the transactions stated in the bill of exceptions, Walker became the principal debtor of May, and Shepherd became his surety, and as May, upon a valid contract with Walker, extended the time for the payment of the note without the consent of Shepherd, the latter was thereby discharged.

The plaintiff in error sought upon the trial to give effect to this contention by asking the court to direct the jury to render a verdict in his favor. The court having refused to do this, the refusal is now assigned for error.

We have under this assignment of error to decide whether, by the mere conveyance of the premises in question to Walker by Shepherd, subject to the encumbrance created by the deed of trust, Walker became bound to May as principal debtor, and Shepherd became his surety. We are of opinion that the conveyance of the premises to Walker did not subject him to any liability to May whatever. To raise such a liability as is contended for by Shepherd there must be words in the deed of conveyance from which, by fair import, an agreement to pay the debt can be inferred. This was expressly held in Elliott v. Sackett, 108 U.S. 132, where Mr. Justice Blatchford, in delivering the judgment of this court, said: "An agreement merely to take land, subject to a specified encumbrance, is not an agreement to assume and pay the encumbrance. The grantee of an equity of redemption, without words in the grant importing in some form that he assumes the payment, does not bind himself personally to pay the debt. There must be words importing that he will pay the debt to make him personally liable." To the same effect see Belmont v. Coman, 22 N.Y. 438; Fiske v. Tolman, 124 Mass. 254; Hoy v. Bramhall, 4 C.E. Green, 74, 78; Fowler v. Fay, 62 Ill. 375. There are no such words in the deed made by the plaintiff in error to Walker.

Neither is there any other sufficient evidence of any agreement between Walker and Shepherd, whereby the former undertook to pay the debt of the latter to May. The remark made by Walker to May, when he asked to have the time for the payment of the note extended, that "he had it to pay," falls far short of showing any such agreement. As he had bought the property, subject to the encumbrance of the deed of trust, for the consideration of $30,000, which, as appears by the deed to him, he had paid to Shepherd, he might well say that he had the encumbrance to pay without admitting or meaning that he had become personally liable to Shepherd to pay it. His words may be fairly construed to mean that he had the encumbrance to pay or would have to lose the property on which he had already paid $30,000 of the purchase money. But, even if Walker had said to May that he was liable for the debt, his admission would not have been binding on May so as to establish the fact without other proof. And if Walker had expressly promised May to pay the debt, that would not, without the assent of May, have converted Shepherd from a principal debtor into a surety merely. Cucullu v. Hernandez, 103 U.S. 105; Rey v. Simpson, 22 How. 341. The only way in which Walker could become the principal debtor of May, and Shepherd the surety, was by the mutual agreement of all three. There is no proof of any such agreement. It follows that, as the relation of principal and surety did not exist between Walker and Shepherd, the latter was not discharged from his liability to May by the contract of May with Walker to extend the time for the payment of the money due on Shepherd's note. But even if it had been shown that Shepherd had become the surety of Walker it was incumbent on the former to show as a part of his defence that the indulgence given by May to Walker was without his assent. Sprigg v. Bank of Mount Pleasant, 14 Pet. 201; Bangs v. Strong, 7 Hill, 250; S.C., 42 Am. Dec. 64; Cox v. Mobile &c. Railroad Co., 37 Ala. 320, 323. There was no proof of want of assent. The defence therefore failed.

It is next contended by the plaintiff in error that May is estopped to deny that the note sued on is not paid in full, because the deed of conveyance made to him by the trustees recites that the property was sold to him in accordance with the terms of the deed of trust, and the deed of trust declared that the terms of sale should be the amount due on the note of Shepherd, and the expenses of sale in cash, and the balance on a credit of twelve and eighteen months. This contention is based on the theory that the clause of the deed of trust executed by Shepherd prescribing the terms of sale, and which merely showed his expectation that the property would bring, at least, the amount of the note and expenses of sale, estopped May from denying that the property would, and actually did, bring that amount. There is no estoppel. The proposition amounts to this, that when a mortgagor represents to his mortgagee that the property mortgaged is sufficient security for the debt, and the mortgagee, relying upon the representation, accepts the security, and it turns out that the proceeds of the mortgaged property are insufficient to pay the debt, he is estopped to deny that his debt is paid. The statement of the proposition is its answer. The authorities referred to upon this contention^[*] by counsel for Shepherd are cited to sustain the proposition, that a person who accepts a deed of conveyance is estopped to deny recitals therein contained. But as there is no recital in the deed that May had agreed that the property should bring a sum sufficient to pay his note, he is not estopped to deny that the note is paid.

Judgment affirmed.

NOTES

[*] Note by the Court. — Fitch v. Baldwin, 17 Johns. 161; Freeman v. Auld, 44 N.Y. 50; Dundas v. Hitchcock, 12 How. 256.