McDonald v. Johnson

48 Iowa 72 | Iowa | 1878

Day, J.

The land in controversy is the northwest quarter of the northwest quarter of section thirteen, township eighty, range fifteen.

i. judicial sale: fraudulent mortgage, On the 18th day of December, 1869, W. H. McDonald executed to his mother, the plaintiff, a mortgage upon this land, and also upon the northeast quarter of the northwest quarter of the same section, township and range, to secure four promissory notes, each for the sum of $500.

On the 4th day of January, 1873, W. J. Johnson recovered a judgment against W. H. McDonald and Henry McDonald for the sum of $40.50, with interest at ten per cent and costs.

On the 17th day of June, 1875, execution was duly issued upon this judgment, and on the 2d day of August, 1875, it was levied upon the land in controversy. At the time of this levy the mortgage above named was upon record, and there was apparently due thereon about $2,400. There were other liens upon said land, prior to Johnson’s judgment, amounting to about $100.

The other forty covered by the mortgage was W. EL McDonald’s homestead. McDonald was notified to select an appraiser for the land, but neglected to do so. The deputy sheriff, who had the execution in hand, thereupon appointed W. A. Vernon and P. P. Raymond to appraise the land. A statement was furnished to them showing the amount of incumbrances upon the land. They refused to consider the incumbrances, and appraised the land at $600, which is shown to be about its actual cash value. The deputy sheriff, acting under the advice and direction of Clark Varnum, Esq., the attornej of Johnson, disregarded this appraisement, and other appraisers were selected who appraised the land, subject to the incumbrances, at one dollar.

Before the sale, to-wit: on the' 20th day of August, 1875, Phebe McDonald commenced an action against W. H. McDonald on the notes and mortgage, making W. J. Johnson a party defendant, asking a judgment against W. H. McDonald for $2,400, and that the lien of her mortgage be declared superior to that of Johnson’s judgment.

On the 4th day of September, 1875, the land in controversy was sold at sheriff’s sale to Johnson, for $19.30.

At the October Term, 1875, Johnson answered in the foreclosure suit, alleging that the notes and mortgage were wholly without consideration,' and were made for the purpose of hindering, delaying and defrauding the creditors of W. EL McDonald.

On the 7th day of October, 1875, the Poweshiek District Court entered a decree in said cause, finding the allegations in the answer of Johnson to be true, and dismissing plaintiff’s petition in so far as it sought a foreclosure of the mortgage upon the land in controversy.

Phebe McDonald recovered judgment against W. EL McDonald, on the notes, and in settlement of that, he deeded to her the land in controversy. Thereupon the plaintiff brought this action to set aside the sheriff’s sale.

It is claimed that the appraisement was irregular, and that the sale was for a grossly inadequate sum. The real cash value of the land, at the time of the sale, without reference to incumbrances, is shown to have been about $600. This land, in connection with another forty, was covered by a mortgage, which, including interest, amounted to about $2,400. The other forty was the homestead of the mortgagor, so that the forty in question was' primarily liable for the whole debt. It was subject to an incumbrance of record, and which to all appearance was valid, amounting to four times its value. The value of the land, subiect to the incumbrance, was nothing. If the sheriff had sold the land under the first appraisement, he would have been authorized to sell it for such sum as, added to the prior incumbrances, would amount to two-thirds the value of the property, as ascertained by the appraisement. Sargent v. Pittman, 16 Iowa, 469. The land sold for much more than that. It becomes immaterial to-inquire into the validity of the second appraisement, for it is apparent that the execution defendant sustained no prejudice therefrom. • The difficulty under which the plaintiff and the execution defendant labor, arises from the fact of their placing upon record a fraudulent mortgage upon the land, amounting to much more than its value. Purchasers at the sheriff’s sale had a right to regard- this mortgage as a valid lien. Barber v. Tryon & Pierce, 41 Iowa, 349. In fact the evidence shows that plaintiff and the execution defendant-were both present at the sale, and that plaintiff warned every one present that whoever bought the land must discharge her mortgage before he could get a deed. The marketable-value of the land was depreciated, because of the mortgage which plaintiff and the execution defendant placed upon the land. If the mortgage had been valid, it cannot be questioned that the land sold for more than it was worth. But now that the mortgage has been declared fraudulent, plaintiff seeks to-avail herself of that fact, and to set. aside the sheriff’s sale, because the land sold for an inadequate price. A court of equity will not permit her to make this claim for this purpose. So far as this sale is concerned, this mortgage must be considered what it appeared to be at the time of the sale, a valid lien upon the property sold.

The other allegations of the petition are not sustained by the proof. The execution defendant was notified that the sale would occur at the door of the postoffice in Malcolm.

II. There is a further insuperable objection to the sustaining of the decree of the court below. The evidence shows that the land in controversy was sold -to J. Weaver before this action was commenced. He has not been made a party to this suit.

The petition of plaintiff should have been dismissed.

Reversed.