160 P. 530 | Or. | 1916
delivered the opinion of the court.
The record discloses the following facts, the controverted part being amply supported by the evidence: On July 3,1914, defendant W. H. Misz, acting in behalf
The plaintiff in good faith claimed the right to foreclose his mortgage. Both the parties appeared to have believed that it contained a covenant for the payment of taxes on the land, and that its condition had been broken at the time they made the new agreement. Having an abstract of title of the premises, neither examined the mortgage or record thereof. Butson had paid the taxes which were in arrears, and to that extent his demand was valid. Whether the mortgage was then due or not the court will not inquire. The parties have settled that matter between themselves in so far as the new contract is concerned. That the policy of insurance should be made payable to the mortgagee as his interest might appear was the reasonable and usual method of underwriting a building with an encumbrance. Defendants were not deceived
There can be no question but that defendants, purchasing the real estate upon which plaintiff held a mortgage of $2,500 and against which property there were unpaid delinquent taxes, gained an advantageous position by settling the matter, when a foreclosure of the mortgage was .threatened, which was refrained from by the mortgagee. A contract based upon such a settlement did not lack a consideration. When the equities are otherwise all in favor of the enforcement of such a stipulation and it is necessary in order to preserve the security of plaintiff’s mortgage that an equitable lien upon the insurance fund be declared, a court of equity should lend its aid in the enforcement of the covenant and declare the amount of the policy of insurance which has been collected by defendants to be held in trust for the plaintiff: 19 Cyc. 885; Nordyke v. Gery, 112 Ind. 535 (13 N. E. 683, 2 Am. St. Rep. 219).
The decree of the lower court was right, and should be affirmed, and it is so ordered. Affirmed.