EMERY, V. C.
A bill for deficiency by Josle Downing Field against Hugh B. Thistle and others. Sustained.
Louis A. Ziegler, for complainant.
W. Bradford Smith, for defendants Bray and Thistle.
A. F. Stevens, for defendant Royle.
Charles F. Lighthipe, for defendant McChesney.
EMERY, V. C. This is a bill for deficiency, filed by the mortgagee against Thistle, the obligor and mortgagor, and against the successive grantees of the mortgaged premises, being Royle, Bray, and McChesney, in the order named, who have, as is claimed, assumed the payment of the mortgage in their respective deeds. The mortgaged property was sold under foreclosure proceedings to which the mortgagor and the grantees were parties defendant, and a deficiency of over $900 exists. On the day before the sale, Thistle, the mortgagor, released his grantee, Mrs. Royle, from her covenant of assumption, and she also released her grantee, Bray, from his covenant to assume, made in her deed to him. The covenant of Bray with McChesney, the last grantee, has not been released, but McChesney had died since the conveyance, and his executors, who are parties as his devisees, claim that the right to recover against them is barred by reason of the failure of complainant to exhibit his claim under oath within the time limited by the order to bar creditors, upon which a decree barring creditors has been duly made. The sale under foreclosure was not made, however, until after the expiration of the time limited by the order for presenting claims, and this defense of failure to present the claim must therefore be overruled, on the authority of Terhune v. White (Runyon, Ch.; 1881) 34 N. J. Eq. 98, which holds that before foreclosure the claim is contingent, and cannot be proved against the estate.
The first question in the case is the construction of the clause of assumption in the deed from Thistle to the defendant Mrs. Royle, then Mrs. Cross. The covenant is as follows, punctuatim et literatim: "This conveyance is made expressly subject to a mortgage encumbrance of three thousand dollars, given by the said Hugh B. Thistle to the said Josie Downing Smith, dated October (1st., 1886) first, eighteen hundred and eighty six. Together with interest and taxes from October first eighteen hundred and eighty six. All of which are assumed by the party of the second part" Mrs. Royle claims that by the true construction of this covenant the clause of assumption reaches only the interest and taxesour present practice, must precede the bill for deficiency, has the same effect if the grantees liable for deficiency are made parties to the bill for the purpose of settling the amount of their liability. I find, therefore, that as against the complainant the releases are void, and the parties are all liable, but in an order which has been affected by the releases. These, although void against complainant, are valid between the parties. Youngs v. Trustees (Err. & App.; 1879) 31 N. J. Eq. 290, 303. The order of liability will be: First, McChesney's executors; second, Thistle; third, Mrs. Royle; and, fourth, Bray. The unpaid taxes upon the property at the time of the sale cannot be added to the amount of the deficiency. The land was purchased subject to these taxes, which were prior liens, and it must be assumed that the bid at the sale was made for the property subject to these taxes to be paid by the purchaser.