Clough v. Seay, 49 Iowa 111

Clough v. Seay

49 Iowa 111 | Iowa | 1878

Day, J.

1. mortgage: foreclosure of: constitutional law. I. The appellants assign as error the action of the court in denying them a jury trial, and insist that upon the’issué as to usury and alteration in the note they were entitled to a trial by jury under article 1, section 9, of the Constitution. Section 2509 of the Code of 1873 • provides: “The action on a note, together with a mortgage or deed of trust for the foreclosure of the same, shall be by equitable proceedings. ” This action was brought upon a note, and for the foreclosure of a mortgage made to secure it. We think that all the issues properly-arising in such an action may be tried as an issue in an equitable proceeding, if this section be constitutional. In State v. Orwig, 25 Iowa, 280, the following language is employed: “Conceding appellants’ proposition that the cause was, as to Orwig, a mortgage foreclosure case, yet it was undeniably of equity cognizance as distinguished from a ease at law, and being such * * * * appellant could not, as of right, demand a jury trial, since neither the old nor new Constitution, nor any statute, ever gave an absolute right to a jury trial in equity suits. ” Without further extending the opinion upon this branch of the case, we think this holding is decisive of the constitutionality of a law providing that an action for the foreclosure of a mortgage shall be by equitable proceedings.

II. Appellants insist that the alteration of the note was fraudulent, and that, therefore, the plaintiff should not be permitted to recover upon the original consideration. The answer does not allege, nor does the court find, that the alteration was fraudulent. We have no statement that the abstract contains all the evidence, and hence we cannot review the findings of the court upon the facts. If, however, the abstract contains all the evidence, and the case were in u*114dition to be tried ele novo, we should feel impelled to find that the fact of alteration is not established by a preponderance of evidence. We are bound by the finding of the court that there was a material alteration, but we cannot go beyond that finding, and find the further fact that the alteration was fraudulent.

2. promissory note: alteration of: debt may be recovered. III. Appellants seem to insist, however, ’that the note embraces the contract of the parties, and supplies the place of any implied promise arising out of the bor_ rowing of the money, and that the alteration of the note, however innocently made, deprives the plaintiff of any right to recover upon the original consideration. We believe the better doctrine to be opposed to this view. In Krause v. Meyer, 32 Iowa, 569, both parties conceded that if the alteration was innocently made the plaintiff might recover upon the consideration of the note. Because of this concession the point was not determined in that case. In Vogle et al. v. Ripper, 34 Illinois, 100, which was an action to foreclose a mortgage executed to secure notes which had been altered so as to draw ten instead of six per cent, the following language is employed: “In a court of equity a mortgage is regarded as an incident of the debt, and, where a mortgagee has released or discharged the debt by a fraudulent alteration or destruction of the written evidence of it, he ought not to be permitted to sustain a suit for its recovery; but where the alteration was not fraudulent, although the identity.of the instrument may be destroyed, we think it should not cancel the debt of which the instrument was merely the evidence. If there was no attempt to defraud there is no reason why a court should not assist the creditor so far as it can consistently. ” In this case there was a decree for the sum due, and foreclosure of the mortgage. See, also, Matteson v. Ellsworth, 33 Wis., 488. In Parsons on Notes and Bills, vol. 2, page 572, respecting alterations of notes innocently made, it is said: “And though it is true that an avoided note, destroyed innocently by a material alteration, cannot even be evidence of *115tlie original debt, it does not destroy the debt. The debt is still obligatory, and may be recovered by a suit on the original cause of action.” The case of Wheelock v. Freeman, 13 Pickering, 165, upon which appellants rely, was decided upon the ground that the alteration was fraudulent.

3 _. mortgage. IV. It is claimed that the court erred in decreeing the foreclosure of the mortgage, the note, which it was executed to secure, having been rendered void by a materiai alteration. We think this action of the court was right. See Vogle v. Ripper, 34 Illinois, 100; Sloan v. Rice, 41 Iowa; 465.

V. It is further claimed that the court erred in allowing the plaintiff six per cent interest on the sum of two hundred dollars, when it found from the evidence that the loan was usurious. The court rendered judgment for two hundred dollars only, and ordered that the judgment bear interest at the rate of six per cent per' annum. In this there was no error. A judgment should draw the statutory rate of interest, although it may be rendered upon an usurious contract. The contract becomes merged in the judgment, which is free from any taint of usury. We discover no error in the record.

Affirmed.