McRae v. Pope - 311 Mass. 500, 42 N.E.2d 261 (1942)

Rule:

A grantor is not absolutely bound by the consideration or the acknowledgment of its payment expressed in his deed, and the true consideration may be shown by parol or other evidence. Under the exception to the parol evidence rule that admits evidence to show the consideration for a deed, it has been generally held, in the absence of an assumption clause in the deed or a covenant affecting the result, that parol evidence is admissible, even as between immediate parties to the instrument, to prove an assumption by the grantee of a mortgage debt that is secured by the premises conveyed. In Massachusetts, where land is conveyed subject to a mortgage, the grantee does not become bound by mere acceptance of the deed to pay the mortgage debt, but if the deed contains a stipulation that the land is subject to a mortgage which the grantee assumes and agrees to pay, a duty is imposed upon him by the acceptance of the deed, and the law implies a promise to perform his undertaking.

Facts:

Plaintiff sellers sold the larger portion of their property to the buyer, on the condition that he assume and pay off the entire mortgage, leaving their retained parcel free of any mortgage. The buyer made some payments on the mortgage but then his mother acquired the mortgage and released him from further payments, without any consideration. The mother, relying on the unclear language of the deed, began foreclosure proceedings against the sellers, who she contended were still liable for the mortgage. The trial court held that the buyer and his mother were jointly and severally liable to the sellers in the mortgage dispute. The buyer and his mother appealed. 

Issue:

Were the sellers still liable for the mortgage? 

Answer:

No.

Conclusion:

The court affirmed the judgment below, finding that the sellers were not liable for the mortgage and that the buyer and the sellers had clearly contracted otherwise, leaving the sellers only as sureties in the event of a default. Consequently, the sellers were entitled to recover from the buyer and his mother all the funds that they had paid in their attempt to forestall the foreclosure.