5,000 bushels of corn, stored in certain cribs, for the purpose of securing the payment of a note for $1,000, due to Pope & Davis, of Chicago, Illinois. On the twenty-ninth of October, 1881, Cheney sold the corn to the defendant, and executed a bill of sale thereof, in which it is provided that said corn "is subject to a mortgage to Pope & Davis, of Chicago, Illi. nois, for $1,000, which mortgage said Porter hereby assumes and agrees to payoff and cancel." The defendant took possession of the corn, sold the same, realizing some $2,000 therefrom, but has wholly failed to pay off the mortgage or any part thereof, and the plaintiffs now seek to recover judgment against him for the amount due them on the mortgage ' debt. In executing the note and mortgage, D. A. Cheney attached to his name the word "agent;" but the papers do not disclose the name of a principal,· and the mortgage is so drawn as to be the act and deed of D. A. Cheney, notwithstanding the use of the word "agent." On argument of the demurrer, it was stated by counsel that D. A. was doing business in the name of his wife, and hence counsel for defendant, assuming that the debt due plaintiffs was that of the wife, and not of the husband, seeks to make the point that no recovery can be had at law upon defendant's undertaking, because the debt due plaintiffs was not the debt of the mortgagor, D. A. Cheney; and in support of this proposition counsel cites Jones, Mortg. §§ 755,760, in which it is said: "To support an action upon this ground, therefore, it is necessary, in the first place, that the grantor in whose favor the stipulation is made should himself be personally liable tor the debt assumed by the grantee; and, in the second place, that there be a debt or some obligation on the part of the person assuming the payment of the mortgage to support his undertaking. If the grantor be uotthe mortgagor him.self, or one who has bound himsel/personally for the payment of the mortgage debt, the grantee in assuming the payment of the mortgage does not beoome personally liable through the grantor tothe holder of the mortgage to pay the debt to him. There is in such case no chance for any eqUitable subrogation, and the agreement is considered as It mere declaration that the property was conveyed to the purchaser. subject to the lien of the mortgage... As already stated, the note and mortgage signed by D. A. Cheney, agent, are so drawn as to bind him personally, and the fact that he was doing business in his wife's name would not in any way tend to relieve him from such liability. Even if the wife was the real owner of the business, still, in the execution of the note and mortgage to plaintiffs, D. A. Cheney bound himself personally for the payment of the debt, and therefore, when the defendant, in consideration of the sale and delivery of the corn to him, contracted with D. A. Cheney to pay the debt due plaintiffs as part of the purchase price of said corn, the plaintiffs can sue on such contract according to the very authority relied on by counsel for defendant. Furthermore, the rule given in the authority cited is the one applicable to mortgages on realty, in which the question is whether the purchaser of the real estate has bound himself to pay the mortgage debt in any event, or has only bought the realty subject to the mortglige. In the case at bar .the mortgage was on personal property
POPE V. PORTER.
which the defendant bonght subject to the mortgage, further agreeing to pay the mortgage debt as part of the purchase price. By reason of this agreement, he obtained possession of the corn, sold it, and now holds the proceeds thereof. Under such circumstances he is liable for money had and received for the use and benefit of plaintiffs, as well as upon the express promise to pay the debt as part of the purchase price. It is also urged that an action at law cannot be maintained, for want of privity between plaintiffs and defendant. It has long been the settled law in Iowa that an action at law can be maintained upon a promise made by A. to B. to pay a debt due from B. to C., provided a sufficient consideration is shown to exist. Johnson v. Collins, 14 Iowa, 64; Thompson v. Bertram. Id. 477; Scott v. Gill, 19 Iowa, 187; Johnson v. Knapp, 36 Iowa, 616; Phillips v. Van Schaick, 37 Iowa, 229. Counsel for defendant cites the cases of Bank v. Grand Lodge, 98 U.S, 123, and Cragin v. Lovell, 109 U. S. 194, 3 Sup. Ct. Rep. 132, ing the doctrine that, under the facts of the present case, there is such a want of privity between the parties that the action cannot be maintained. In the latter case it appeared that Eliza A. Quitman had sold ,a plantation to one Fisk, who executed nine notes and a mortgage on the plantation to 'secure the purchase price. Subsequently George D. gin, by judicial proceedings, established the fact that, in making this purchase, Fisk was his agent, and wrongfully took the title in his own name. The vendor brought suit for foreclosure of the mortgage, and, under the decree therein, sold the plantation, but did not realize enough to pay the amount of the notes given by Fisk. Thereupon she brought an action at law against Cragin, setting up the giving of the notes, and averring that, in the proceedings between Cragin and Fisk, the former had averred that he was liable for and ready to pay for said property. The supreme court held that, if the action was based upon the'notes, it could not be maintained, because Fisk alone was the maker thereof. and that, if the action was founded on an agreement by Cragin to pay them, it could not be maintained, because there was no privity between plaintiff and Cragin, for the reason that the averments by Cragin in the proceedings against Fisk, that he was liable for and ready to pay for the lands, if "a promise to anyone, it was not a promise to the plaintiff, nor even a promise to Fisk, to pay to the plaintiff the amount of the notes; but it was at the utmost a promise to Fisk to pay that amount to him, or to indemnify him in case he should have to pay it." In other words, the court holds that the facts of the case fail to show an agreement between Cragin and Fisk that the former should pay to the mortgagee the debt due her. Herein lies the difference in the facts of that case and the one at bar, which renders the ruling in that case inapplicable to the one under consideration. . In the other case cited it was held that the promise made by defendant was concurrent with and dependent. upon the contract of the other party, and, being an executory contract between the immediate parties thereto, a third party could not sue thereon, without, in effect, changing the meaning of the contract. In the discussion of the case it is said
that, "where a" debt already exists from one person to another,· a promise by a third person to pay such debt being primarily for the benefit of (he original debtor, and to relieve him from liability to pay it, (there being no novation,) he has a right of action against the promisor for his own indeinnity; and if the;. original creditor can also sue, the promisor would be liable to two separawactions, and therefore the rule is that the original creditor cannot sue." The cases in which this rule is applied are those in which the right of action is based solely upon the naked promise to pay; it being held that the maker thereof should not be held liable to two !tctions on an agreement made solely with one. The doctrine applicable to the present case is found fully stated in the same opinion inthe following terms: "We do not propose to enter at large upon a cpnsideration of the inqUiry how far privity of contract !;>etween a plaintiff and defendant is necessary to the maintenance of an of assumpsit. . The subject has been much de- . bated, .and the 'decisions 'are hot'aIl reconcilable. No doubt the general rule isthtsuch a privity must exist. But there are confessedly manyex:ceptions to it. One of them, and· byfartbe most frequent one, is the case where, under a contract between two persons, assets have come to the promisor's hands or under his pontrol, which .in eqUity belong to a thjl'd party... In such a case it is held that the third person may sue in his own name. .But then the suit is founded rather on· the implied .tindertaking the hi.w raises. from the possesassets than on the express promise." '.' sion of In the· case on trial, the mortgaged corn belorig(ld in equity to the plaintiffs;, is to say, they were entitled, by virtue of their mortgage, to take possession the,reof, to sell· the same, and apply the proceeeds to the payment oithe debt due them. The defendant came into possession of these a&8etEi' solely through the contract he made with Cheney, whereby he. assumed and ·promised tapay the debt due plaintiffs as part of the purchase price of the corn, and as, by means of this possession thus obtained, he has been enabled to sell the corn, and now holds the prohe is liable to suit on part of plaintiffs. The futther point is made that the mortgage was not so executed as to bind Mrs. Cheney, and that, consequently, the defendant is relieved from liability. The debt which the was given to secure was her debt, and thecorn belonged to her. The defendant got possession of the corn by agreej,ng to pay the mortgage debt as apart of purchase price, and he bought subject to the mortgage. He cannot now be heard to urge informalities in the execution of the mortgage as a reason why he should not perform :bis agreement to pay the amount actually due on the mortgage.The question is not as to the validity of the mortgage, but \Vhetherthe defendant should be.held to the performance of his agreement .to pay the debt due The demurrer is overruled.
MUT. BEN. ASS'N' V. BROWN. HOTEJ.-MEN'S MUT. BEN. ASS'N
(Oircuit Oourt, No
BROWN and another.
December 5, 1887.)
!.NSURANCE-MuTUAL BENEFIT SOCIETIES-DESIGNATION OF BENEFICIARY.
The constitution of an "hotel-men's mutual benefit association" permitted a change in the beneficiary, but provided that it "must" be done on a prescribed form of blank, the signature to which should be attested before a notary, and the change entered on the books. It also provided that, at death, benefits should be paid "to the person designated in the application for memo bership, as shown by the books, or as ordered by last will." An applicant for membership named his wife as beneficiary in his application, and her name was so entered upon the books. His application also set out that the receipt of the party to whom he designated his death loss to be paid should discharge the association. He SUbsequently executed a paper assigning his policy to one of his creditors as collateral security; but no application for a change was made to the association. nor was the· assignment made upon the prescribed blank, nor had the association any notice of it until after the death of tl:;le member intestate, when both the widow and the.assignee claimed the benefits. Held, on bill of interpleader, that the widow was entitled ,to the fund. '
,In Equity, H. H. O. Miller, for complainant. Abbott Balcer, for Daws. Nathan e. Miller, for Brown.
BWDGETT, J. This is a bill of interpleader, filed by the Hotel-men's MutualBenefit Association, to determine who is entitled to the payment of a benefit fund or death loss accruing by reason Or the death of George C. Brown, a member of the association. It appears from the proof that George C. Brown held a certificate of membership in the complainant company, and wasil, member in good standing from the fifth of February, 1881, until his death, on the sixth of December, ]886. 'At the request and by.the direction of Brown, his wife, Kate W. Brown, .WltS designated in his application for membership as his beneficiary, to whom all benefits accruing from the association in the event of his death were to be paid, and her name stood upon the books of the association as his beneficiary at the time of his death. Section 7 of article 2 of the constitution of the association provides that any member wishing to change his beneficiary must procure a blank fOTIn from the secretary, which, being filled out and properly attested, shall be returned to the secretary, when the necessary changes' will be made on the books of the association. And section 1, art. 5, provides that benefits payable on the death of a member shall be paid to the person designated in his application for membership as shown by the books of the association, or as ordered by his last will and testament. Before August 6, 1886, Brown had become indebted to defendant A. Daws in the sum of $1,763, as shown by his promissory notes, and on the day last mentioned, Brown executed a paper assigning his policy in the complainant company to Daws, to be held by Daws tillalJ amounts due him were paid; And after this paper was' executed and delivered,