Evans and Fulmer entered into an agreement for an exchange of two pieces of property. Fulmer assumed two mortgages on the property conveyed to her. According to the agreement, Evans gave a first mortgage on the property conveyed to him to a third person and a second mortgage to Fulmer. Evans defaulted on the first mortgage assumed by him; Fulmer, who held the second mortgage, foreclosed and as a result suffered a $17,000 loss. Later, Evans regained possession of the promissory notes evidencing the second mortgage on the property conveyed to Fulmer, and assigned them to Goldfarb who sued Fulmer, the assuming grantee. Fulmer cross-claimed for her $17,000 loss on the other property. Held, the rights of a mortgagee or his assignee against an assuming grantee are those of a third party beneficiary and under the Tennessee Code are subject to set-off of the default by Evans on the mortgage assumed by him. Fulmer v. Goldfarb, 171 Tenn. 218, 101 S. W. (2d) 1108 (1937).
Anthony L. Dividio,
MORTGAGES - SET-OFF IN ACTION AGAINST ASSUMING GRANTEE ON THIRD PARTY BENEFICIARY THEORY,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol36/iss5/15