158 Iowa 705 | Iowa | 1912
The amount of the mortgage in question was originally $1,000. Its principal was reduced by payment to $880. The mortgagee was the Winneshiek County Bank. The plaintiff acquired the note and mortgage by assignment and indorsement "without recourse.” The validity of this assignment is assailed by defendant Jensen. We pass that question to a later stage of the discussion; and we will first consider the case as though the plaintiff were the original payee of the note and mortgage. In his cross-bill Coffeen asked that his liability be deemed secondary to that of Mullaney and to that of the mortgaged property. The defendant Jensen asked that the liability of the mortgaged property be deemed secondary to the personal liability both of Mullaney and Coffeen. He also asked relief, as already suggested, on the theory that the plaintiff was not a party in interest, and that the mortgage should be deemed paid.
It will be noticed that all of the defendants appear in the chain of title from Steele to Jensen. Coffeen, as grantee of Steele, assumed to pay the mortgage. Instead of paying it, he conveyed to Mullaney, and Mullaney assumed to pay the mortgage. Loomis, as grantee of Mullaney, did not assume the mortgage. Neither did Jensen as grantee of Loomis. -In its essential elements the case would be very simple, were it not that the parties to the appeal have filed seven abstracts and amendments and five briefs.
2. Same. The liability of the mortgaged property was not affected by either conveyance. By the conveyance to Mullaney and his assumption of the mortgage, Mullaney stepped into the shoes of Coffeen. The existence of the mortgage then operated to protect Coffeen upon his secondary liability in like manner as it operated to protect Steele upon his. If this foreclosure had been brought while the mortgaged property remained in Mullaney, there could be no question but that the payee of the note and mortgage could have taken personal judgment against Mullaney, and could have taken foreclosure and special execution against the property. It would be clear, also, that Coffeen, as between himself and Mullaney, would have been entitled to protection as against primary liability. This right was not lost by Mullaney’s subsequent conveyance. Jensen holds his title under Mullaney. As against the mortgagee and Coffeen, his rights can rise no higher than Mullaney’s. We find him entitled to equitable relief, but only as against Mullaney, his warrantor. Such equitable relief must be awarded to him, but without prejudice to the pre-existing equities of the mortgagee and Coffeen.
These general propositions will suffice as a basis for further discussion of the details of the case as presented by the appeals. The decree entered below awarded the plaintiff a foreclosure of the' mortgage and a special execution against the property and a general execution against Mullaney. The decree also awarded judgment in favor of Jensen, with general execution against Mullaney, for the full amount of the incumbrance upon his property. It is made to appear that after the decree was entered the plaintiff sold the mortgaged property under special execution and bid $800
We will now proceed to consider more in detail the questions presented by the appeals.
II. We turn first to the appeal of Mullaney. This presents two branches: (1) An appeal from the decree ,as entered in favor of the plaintiff; (2) an appeal from the decree as entered in favor of Jensen.
It is quite manifest that if the plaintiff failed in a showing of foundation there was sufficient foundation in the testimony of Coffeen for the introduction of the same certified copy. The original instrument was thereby traced into the hands of Mullaney himself. The original instrument was not one to which the plaintiff, or those under whom he claimed, were parties. On' the face of the instrument Mullaney, and no one else, was entitled to possession of it. It is at least doubtful whether such a showing was not a sufficient foundation for the introduction of the record without the testimony of Coffeen. See Bixby v. Carskaddon, 55 Iowa, 537. Be that as it may, the certified record was properly introduced under the testimony of Coffeen.
It is argued for appellant Mullaney at this point that the defects of plaintiff’s case could not be supplied by the testimony of Coffeen on his cross-bill. But if the evidence was properly in the record on behalf of Coffeen it could not be eliminated, even though the plaintiff had failed to introduce
It is the general rule in this state'that where there is a failure of title recovery upon a covenant of warranty cannot exceed the consideration received by the warrantor. Mischke v. Baughn, 52 Iowa, 528; Royer v. Foster, 62 Iowa, 321.
It is also the general rule that where a covenant against incumbrances is breached, and the warrantee is compelled to pay an incumbrance in order to protect his title, the amount so paid is presumptively the measure of damages in such a case. Newburn v. Lucas, 126 Iowa, 88; Knadler v. Sharp, 36 Iowa, 234.
Whether in such a ease the warrantor may show that the
Other objection is urged which goes to the form of the decree. We will consider this in a later paragraph and in another connection.
It is made to appear that when Coffeen became the purchaser of the property and assumed the mortgage the payee bank recognized him as a debtor. They received interest from him, and additional security. It is claimed for Jensen
It is practicaly conceded that plaintiff’s alleged purchase of the note and mortgage was made for the protection of Colfeen. The payee so understood it and assented to it. Coffeen so understood it and signed an accommodation note to the plaintiff, which the plaintiff indorsed and used in the purchase of the note and mortgage in question. If this purchase operated as a fraud upon the other defendants; if it
Granting that the purchase was collusive in the sense that Coffeen and the payee and the plaintiff all agreed to it in advance, ;and for the purpose of enabling Coffeen to be protected as a debtor who was only secondarily liable, it yet remained for Jensen to show wherein such collusion operated as a fraud upon him. No right of his was violated. His liability was in no manner enlarged by the transfer of the cause of action. The original payee could lawfully have proceeded in precisely the same manner in which the plaintiff proceeded. Coffeen could have obtained the same equitable relief, as against the original payee, which he has obtained in this suit. Of course, if he had actually paid the debt without protecting his equities, he might have put himself at a disadvantage, and such disadvantage might have operated to the benefit of the other defendants. But he vigilantly chose not to pay the debt without guarding his equities. That he should seek to have the papers transferred to a friendly holder was not in itself a fraud upon any one. He was entitled to- the relief awarded to him as against any holder. The alleged scheme, therefore, of which Jensen complains renders it plain that the parties thereto intended a transfer of the paper, and not a satisfaction of it. As between them, therefore, it was not satisfied. As against Jensen, he had no right to demand its satisfaction in such manner. He is therefore in no position to deny the title of the plaintiff, or to assail the same as fraudulent.
It is urged by Jensen that such assignment carried to the plaintiff nothing but the note and mortgage, land that it
Neither the premise nor the argument can be sustained. That the indorsement to plaintiff should be “without recourse” served only to protect the indorser against liability for the debt. There is nothing contrary to be found in Watson v. Chesire, 18 Iowa, 206, or Leach v. Hill, 106 Iowa, 171, which are relied upon by Jensen in support of his major premise at this point. The assumption of Mullaney was not an independent contract or cause of action in the sense urged. It was incidental to the particular mortgage debt, and was measured by it. It operated, of necessity, to the benefit of the holder of the mortgage, whoever it might be. The right to sue thereon followed the note and mortgage as a part of the security. And, even though we should hold otherwise as to the liability of Mullaney, it would not affect the validity of the mortgage or the liability of the mortgaged property in the hands of Jensen.
If plaintiff had successfully asserted a claim to such securities in this suit, it could not operate to the advantage of Jensen or Mullaney or the mortgaged property. The liability of such securities would be co-ordinate with that of Coffeen only, and would therefore be secondary to the liability of Mullaney and of the mortgaged property.
Complaint is made of the form of the decree, in that it holds Mullaney doubly liable for the amount of the mortgage, first to plaintiff, and, second, to Jensen. The decree is not free from ambiguity. It awarded to plaintiff (1) a special execution against the mortgaged property, (2) a general
It is manifest that there ought to be some modification in the decree, or some control of the process issued thereunder. It is manifest that Jensen ought not to be permitted to collect from Mullaney in greater sum than the amount necessary to be paid to redeem, his property, from the incumbrance. If by judicial sale Jensen’s property is relieved from all liability above the amount of the bid therefor, there is no reason why he should be permitted to recover more. Mullaney’s liability for the balance is to the plaintiff and not to Jensen in such case.
In view of the complication which has arisen by the use of process subsequent to the decree, we do not feel warranted in undertaking to formulate a decree here, unless the parties can agree thereto. It will be ordered, however, that the decree be modified to this extent, that jurisdiction will be reserved to the district court to make such further orders, in the light of subsequent proceedings under the process of the court, as shall conform to the views herein expressed. This may be done either by a supplemental decree, or by proper order controlling the process to. be issued under the decree. In all other respects the decree entered is Affirmed.