Willard v. Worsham

Citations

• 76 Va. 392
• 1882 Va. LEXIS 44

Syllabus

<p>Subrogation—Covenant of grantee of trust-deed debt.—In 1859 S sold to C for $15,000 cash one-half of Hygeia Hotel, and they became partners in running it. Sale was subject to debt of $5,000, secured to W by deed of trust on hotel; this debt S and C agreed should be paid by them equally and jointly. It was in four instalments—first was paid by S-before sale to W;' second and third were paid by S and C; fourth remains unpaid. The hotel was destroyed in 1862 by Federal orders. S became and remains insolvent, and in 1864, without consideration, released 0 from all liability on the agreement to pay W’s debt. On bill' in chancery to collect this instalment from S and C—</p> <p>Held:</p> <p>1. O, as grantee of half the trust property, assumed payment of half the trust-deed debt as part of the consideration, and became personally liable to W.</p> <p>2. As between S and _C, the latter is principal and former surety. W is entitled to all collateral securities held by his debtor, S, and hence may be subrogated to the benefit of the covenant of C with S to pay half the debt.</p> <p>3. It may be that W, not being a party to the agreement between S and O, could maintain no action at law. His remedy is in chancery, where all the parties may be convened and the matter closed.</p> <p>4. It is manifest that as between S and C, it was intended that the-latter’s liability should be for only one-half the debt.</p> <p>5. The release of S to O, however effectual as between the parties,. was and is invalid as to W.</p> <p>6. Qucere: Where grantee assumes payment of the mortgage debt for the indemnity of the mortgagor, and not for the better security of the mortgagee, can grantor release grantee so as to defeat mortgagee’s right against the latter on his promise to pay the debt?</p>