Crow, McCreary & Co. v. Vance

4 Iowa 434 | Iowa | 1857

Stockton, J.

The first assignment of error, is upon the ruling of the District Court, excluding from the jury the written instrument executed by Yance to Roe, on the ground that it was not an undertaking on the part of Yance, -to give to Roe a lien on the land for the payment of the money due on the note, but only for such money, labor and materials as should be furnished by him, to build the mill, subsequent to the date of the agreement. We can give no other construction to this agreement of Vance, than such as shall apply its meaning to all money, labor, or materials advanced by Roe, for the purposes contemplated by' the parties, before as well as subsequent to its execution. The language used, is certainly broad enough to comprehend both. Vance agrees that Roe shall hold a lien upon the land, for all money, labor and materials, paid for by Roe, for building the mill and other improvements on the land sold by Vance to Brewer. There is no rule of interpretation known to us, which will restrict the application of this language to subsequent, rather than to prior, advancements. It appears to us more reasonable to limit its operation to the past, than to confine it solely to the future.' The language is, “money, materials and labor paid for byBoef and not such as he is yet to pay for, or advance.

The second assignment of error, is upon the refusal of the court, to suffer evidence to be introduced, to show that the instrument of writing was intended by the parties to cover the amount due on the note, as well as future advances to be made by Roe. Ás we are of opinion that the court erred in its construction of the instrument- of writing, it will not, be necessary to notice the question raised by the second assignment of error, further than to say, that, as by our construction of the instrument, it expressly extends to any •advances previously made by Roe, to Brewer, for building the mill, the plaintiff need not prove aliunde, that such was the'intention of the parties.

We next inquire, whether, by the assignment of the note and mortgage of Brewer to plaintiffs, they acquired any fight, under the agreement of Vance, dated May 2d, 1850j to a decree, in this suit, against Vance, postponing any claim or lien he might hold against Brewer or the land, to the claim or lien held by plaintiffs. In other words, is their lien upon the land prior to that of Vance, by virtue of the assignment of the latter with Roe ? It does not very distinctly appear what interest in or claim upon the land, was retained by Vance after his sale to Brewer. By the answer of Yance, it is alleged, that Brewer owed Mm eight hundred dollars, a balance of-the purchase money unpaid; that the land was sold under a deed of trust, executed by Brewer and wife,-to secure the payment of this balance; - and.that the title under the sale passed to Yance. At what time this sale was -made, is nowhere stated. As the answer of Yance, as to the amount due to him from Brewer, for which he retained a lien, is not denied, we presume, it will be safe for us to assume, that the lien, retained by Yance.for this unpaid balance of the purchase money, was the extent of his interest in the land; and that his lien upon it, for this amount, was prior in point of time, to that accruing to Eoe, under the mortgage from Brewer. The agreement between Yanee and Eoe, in order that it may have its true effect and meaning, must receive its construction with reference to the state of faets existing between the parties, Brewer, Eoe and Yane®- The latter had sold and conveyed to Brewer, the land on whieh to erect the mill, retaining a lien upon the same for eight hundred dollars, a balance of-the purchase money* Brewer, anxious to complete the erection, of the mill, sought the assistance of Eoe, who agreed to furnish money, labor and materials for its «construction.. Having advanced $325.50, to seenre the payment- of whieh to him, the note and mortgage were executed by Brewer, he was unwilling to furnish any further means, until he could be assured that the lien of, his mortgage upon the property, should have priority over that held by Yance, under his deed of trust. In this state of affairs, the instrument of writing, set forth in the pleadings, and upon wMeh the controversy iu this cause has arisen, is signed by Yance, .and delivered to Eoe. By it, he agrees that. Eoe shall hold a lien for all moneys, materials and labor, furnished or paid for by him, for building the mill or other improvements-.on -the land. We have said that this agreement .of Vance, in its grammatical construction, refers more reasonably, to advances, already made, than to those he might thereafter make to Brewer. , Taking the.language «cited,: however^ In connection with-the subsequent part of the agreement, where it is provided that “ Roe agrees to furnish Brevier- such things to build the mill, as their contract calls forwe think it was intended' to- give a lien for all advances made by Roe, whether before or- after the daie of agreement..

But -what lien is it, that Roe is “ to hold Tf Why is the consent of Yance necessary to the consummation of any lien-that Brewer may wish to give to Roe on- the land ? The meaning evidently is, that Yance consents that Roe shall hold alien upon the premises, under the-mortgage of Brewer, prior to, and better than that- of Yance, under his deed of trust. Any other construction would take from the language of the agreement, all its meaning, and render it & nullity. The objection of the want of consideration for the agreement of Yance, we pass by, with the remark, that if it were necessary that such consideration should be shown, it may be found in the fact, that the means furnished by Roe were expended in erecting the mill, and in other improvements, upon the land, to which-the defendant’s lien attached', enhancing- its value, and thereby increasing his1 security. And this- same land was afterwards sold, and the title to it acquired by defendant, under the deed of trust given to secure- to- him the payment of his $800; the unpaid balance of the purchase money — whereby he has got back his; land, with all the improvements put upon it by Brewer. The fact that these improvements were- made, and this enhanced val-ue given to the land, with- the money and means furnished by Roe, is surely a sufficient reason and consideration-for the agreement of Yance, to give priority to the; lien of Roe’s mortgage.

We next inquire as- to the effect of the assignment of th© note to the plaintiffs, and whether such assignment carried! with it, as a necessary incident, a lien upo-n the land, superior to that- of Yance, and such as re-ndbred Yance’s interest in the land, liable to foreclosure and sale, to satisfy the debt. It is a settled doctrine in equity, that the assignment of a promissory note, secured by mortgage, carries the mortgage with it; and tl^e assignee may maintain- an action upon it in his own name, to enforce the hen. Mortgages are not now considered as conveyances of land, within the statute of frauds. The right of the mortgagee is a mere chattel interest, inseparable from the debt it is intended to secure, and transferable by a mere assignment of the debt, without deed or writing. The debt is the principal thing. The right of the mortgagee in the land, is an incident attached to the debt, and ceasing when the debt is discharged. Green v. Hart, 1 Johnson, 590; Southerm v. Mendum, 5 N. H. 420, 432; Rigney v. Lovejoy, 13 Ib. 247 ; Burdett v. Clay, 8 B. Monroe, 294; Dick v. Maury, 9 Sm. & Mar. 448; Henderson v. Herrod, 10 Ib. 633. This doctrine rests upon the well established principles of courts of equity, which, under circumstances closely analogous, entitle a surety who pays the debt, to every remedy which the creditor has against the principal debtor; to enforce every security, and all means of payment; to stand in the place of the creditor; to have all securities transferred to him; and to avail himself of them against the debtor. This right is stated as depending, rather upon a principle of equity and natural justice, than upon contract. Craythorne v. Swinebrne, 14 Vesey, 160 ; Hayes v. Ward, 4 Johns. 123; Matthews v. Aiken, 1 Comstock, 595 ; Clawson v. Morris, 10 Johnson, 524. So, on the same equitable principles, it has been held, that the creditor is entitled to the benefit of the securities taken by a surety from his principal, for his own indemnity. The creditor may have them applied in discharge of his debt. Dick v. Maury, 9 Sm. & Mar. 448 ; Bank of Auburn v. Throop, 18 Johnson, 505 ; Waring, ex parte, 19 Vesey, 345; Curtiss v. Tyler, 9 Paige, 431. So, as a general rule, sureties are entitled to the benefit of all securities which may have been taken by any one of them, to indemnify himself against their joint liabilities for their principal. The security taken by one, enures to the benefit of all. Elwood v. Deifondorf 5 Barbour, 398. In the present case the mortgage, as well as the note, was assigned to the plaintiffs. There can be no question, but that all the rights of Roe to the debt, and all his lien, under the mortgage from Brewer, to secure the payment of the debt, passed to plaintiffs by the assignment.

Whether the assignment carried with it, also, the right which Roe obtained, by the agreement of Yance, to the prior lien on the land, is a more difficult question. This agreement was not transferred to plaintiffs by indorsement. It is in their possession, however, and it is assumed that it came there lawfully, at the time of the assignment of the note and mortgage by Roe. By the assignment of the debt, the assignee is entitled to use all the remedies, the assignor might have used, to enforce the lien of the mortgage against the debtor. Does his right extend further and may he enforce a lien which the assignor held against another person? Although the agreement executed by Yance, is not assigned by Roe, there seems to have been an obvious intention on his part, to transfer to the plaintiffs, the note he held against Brewer, with all its qualities and incidents, and to clothe them with all the rights to collect it, and to enforce all the liens given to secure its payment, that he possessed himself. The priority accorded to Roe’s mortgage, by the agreement of Yance, was in the nature of an additional security acquired by him, which continued an incident of the debt, after it passed from his hands by assignment. Yance did not become surety for Brewer, nor did he guaranty the payment of his note to Roe. Holding a deed of trust upon the land, he does, however, agree to waive his lien, and postpone its admitted priority in favor of Roe.

We do not see why this agreement of Yance, should not be held, upon the well established principles of equity, to impart a quality to the debt which passed to plaintiffs by the assignment, and which entitles them, in this suit, to a decree postponing the lien of Yance to theirs, and subjecting his interest in the land, so far as the same may be necessary to the payment of their claim against Brewer. We have not been cited by counsel, to any other authority to this question,- nor in the consideration we have given to the cause, have we met with any that can be deemed directly in point. The case of' Curtiss v. Tyler, 6 Paige, 431, is, however, so nearly analogous, that we may receive it as authority for our judgment in this case. It was there ruled by Walworth, Chancellor, that the assignor of a bond and mortgage, will be held, on a principle of equity, to be a surety for their payment, in such a sense, that any collateral security held by him for the payment of the debt, will enure to the benefit of the holder of the bond and mortgage; and on a bill filed to foreclose the mortgage, in which the party giving such collateral security, was made a party for the purpose of obtaining a decree over against him, in case of any deficiency upon a sale of the mortgaged premises, and in case such deficiency could not be collected from the mortgagor; on demurrer by the collateral guarantor, it was held that the complainant was entitled to the decree prayed for against him.

Upon principle and authority, then, we are of opinion that the plaintiffs are entitled to the relief prayed for against Vance. And the judgment of the District Court will be reversed, and the cause remanded, with directions' to that court to award a new trial upon the issue joined with Vance, and for other proceedings not inconsistent with this opinion.

Judgment reversed.