18 Kan. 415 | Kan. | 1877
In this case the defendants in error, defendants below, seem to concede the plaintiff’s right to relief, but deny that he has pursued the proper remedy. The action was for. an injunction, to restrain a sale upon execution. A temporary restraining order was granted, which upon motion was thereafter dissolved. The allegations of the petition were, in substance, that at the September term 1875 of the Lyon county district court, the defendants Strong and Burt recovered a money-judgment against one A. S. Smith for a large sum of money, which judgment is still unsatisfied; that thereafter, and on 18th October 1875, the said Smith was indebted to the Emporia National Bank, in about the sum of $350, which was evidenced by Smith’s note, and was secured by the pledge, as collateral security, of a note from E. P. Dixon, which last note was secured by a mortgage upon certain real estate in Lyon county; that on said 18th of October, an arrangement was entered into between the Emporia National Bank, (through its president, the plaintiff in error,) A. S. Smith, and E. P. Dixon, whereby in substance it was mu-, tually agreed between the said several parties that Dixon should convey to the said Smith two lots in the city of Emporia, Lyon county, in consideration (principally) of the said Smith’s procuring and surrendering up to the said Dixon the-note and mortgage executed by Dixon, and assigned to the bank as collateral to Smith’s note; that the bank, through its president, agreed to surrender up this Dixon note and mortgage to Smith, to enable him to procure the ‘conveyance of these lots to himself, on condition that Smith should upon. the conveyance of these lots to himself make a new note to the plaintiff in error for the use of the bank, and secure the same by a mortgage on the lots so to be conveyed to Smith; that this new note and mortgage were for the purpose of securing the indebtedness of Smith to the bank; that said agreement was carried out on said 18th of October, to the extent that the Dixon note and mortgage were surrendered to Dixon, and
Upon these facts the order was made restraining the sale. That the mortgage to the plaintiff is to be deemed a mortgage for the purchase-money, seems to be settled by the-case of Nichols v. Overacker, 16 Kas. 54; and that a mortgage for the purchase-money has preference over a prior judgment against the purchaser, is prescribed by statute. (Gen. Stat. 582, § 4.) Such doubtless would be the rule independent of statute. Curtis v. Root, 20 Ill. 53; Cake’s Appeal, 23 Penn. St. 186; Freeman on Judgments, 323. And we do not understand the learned counsel for defendant as disputing these propositions. But their claim is, that, conceding the priority of plaintiff’s mortgage, his action should not have been to restrain the sale, but to determine the priority of liens, for the mortgagor’s interest in the property was unquestionably subject to seizure and sale in satisfaction of the judgment, and that to restrain the sale absolutely, was to deprive Strong and Burt of their right to have this interest thus seized and sold. It is said, that parties might have been willing to give
We think therefore, that upon the showing made the plaintiff was entitled to a restraining order. While the order should be such as to restrain the sale as threatened, it should be so worded as to leave the judgment-creditors free to proceed under the sections cited to a sale of the mortgagor’s interest in the property. The order of the district court will therefore be reversed, and the case remanded for further proceedings in accordance with the views herein expressed.