Davey v. Nessan

Brief Fact Summary.

Davey sued Nessan for remaining payments under a contract for deed when Nessan defaulted on a loan for purchase of real estate.

Synopsis of Rule of Law.

An express assumption is the only way in which an assignee can assume the assignor’s obligation.

Facts.

Connecticut Mutual Life Insurance Company (Mutual) loaned money to Dessan to buy a farm from Davey. Nessan bought the farm through contracts for deed that permitted Nessan to pay the property off through installments. The sellers and Mutual entered into an agreement that permitted Mutual to make payments in the event that Nessan defaulted. When Nessan defaulted on the loan, Mutual gained Nessan’s interest in the farm. Mutual made payments on the farms for several years before giving the farm back to the sellers. The sellers accepted the farm but sued Nessan and Mutual for the remainder of payments under the contract for deed. The trial court dismissed Mutual from the suit.

Issue.

Is an express assumption the only way in which an assignee can assume the assignor’s obligation?

Held.

Yes. The order of the trial court is affirmed. The agreement between Mutual and Davey was that Mutual can make payments, but specifically stated that Mutual was without obligation under the contract. Davey subsequently has no case against Mutual.

Discussion.

An express assumption is the only way in which an assignee can assume the assignor’s obligation.