Please discuss those two questions below:
Question 1: Marcia executed a mortgage of Blackacre to secure her indebtedness to Ajax Savings and Loan Association in the amount of $25,000. Later, Marcia sold Blackacre to Morton. The deed contained the following provision: "This deed is subject to the mortgage executed by the Grantor herein to Ajax Savings and Loan Association."
The sale price of Blackacre to Morton was $50,000. Morton paid $25,000 in cash, deducting the $25,000 mortgage debt from the purchase price. On default in the payment of the mortgage debt, Ajax brings an action against Marcia and Morton to recover a judgment for the amount of the mortgage debt and to foreclose the mortgage. Can Ajax recover from Marcia and Morton? Explain.
Question 2: Sam and Eleanor Gaito purchased a home from Howard Frank Auman, Jr., in the spring of 2005. Auman had completed the construction of the house in November 2000. In the interim, three different parties had lived in the house for brief periods, but Auman had retained ownership. The last tenants, the Ashleys, experienced difficulties with the home's air conditioning system. Repairs were attempted, but no effort was made to change the capacity of the air conditioning unit.
When the Gaitos moved into the house in June 2005, they too had problems with the air conditioning. The system created only a ten-degree difference between the outside and inside temperatures. The Gaitos complained to Auman on a number of occasions, but extensive repairs failed to correct the cooling problem. In May 2008, the Gaitos brought an action against Auman, alleging that the purchase price of the home included central air conditioning and that Auman had breached the implied warranty of habitability. At trial, an expert in the field of heating and air conditioning testified that a four-ton air conditioning system, rather than the three-and-one-half-ton system originally installed, was appropriate for the Gaitos' house. The jury returned a verdict in favor of the Gaitos in the amount of $3,655, and the court of appeals affirmed. What result?