35 Iowa 208 | Iowa | 1872
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The demurrer admits the facts pleaded in the answer, and for the purposes of the demurrer they are to be taken as true.
The law is well settled, that a mortgage given to secure a debt, and not the note or bond or other evidence of it, remains a lien on the mortgaged property until the debt is paid; that no change in the form of the evidence or the mode or time of payment, nothing short of acstual payment of the debt, or an express release, will operate to discharge the mortgage. The mortgage remains a lien
The most frequent and familiar application of the principle is that a mortgage made to secure a promissory note will remain security for any new note given in payment or renewal of the former one, unless there is an intention to the contrary, and it has been held that the taking of a new note and mortgage to secure the same debt will not, even when the first mortgage is canceled, operate to discharge the lien of the first mortgage. Packard v. Kingman, supra; Smith v. Stanley, 38 Me. 11; Burdett v. Clay, supra. In Massachusetts where the taking of a negotiable note is held to prima facie payment of the debt for which it is given (which is different from the rule in this and most of the other American States), it is held that a new note, given in place of an old one which is secured by mortgage, unless intended as payment, is subject to the same security as the former note. Watkins v. Hill, 8 Pick. 522; Pomroy v. Rice, 16 Pick. 22; Bruse v. Nelson, ante.
The execution of the note sued on, at least to the extent of the amount of the old note, did not operate as a satisfaction or payment of the debt evidenced by the first note unless it was so agreed between the parties. It was not so agreed; on the contrary it is averred in the answer
The admissibility of parol evidence to show the relation of principal and surety is within the rule that admits such evidence to show that the written instrument is void either for the want or failure of consideration, and this is no infringement of the rule excluding parol contemporaneous evidence to contradict or vary the terms of a written instrument. 1 Greenl. ón Ev., § 284. Evidence showing this relation, when it does not appear on the face of the instrument, is not in contradiction of the contract but collateral thereto. It is the showing a fact of which the parties had knowledge, and the existence of relations between them which imposed duties upon the party to be benefited by the contract of suretyship, which would not arise where the relation of surety does not exist; and it is the failure on the part of the beneficial party to perform such duties that may operate to discharge the surety from his contract;, but the contract, as expressed in the writing, is neither varied or contradicted by such evidence.
II. It is alleged in the answer that at the time of the execution of the note sued on, it was agreed by the parties that the mortgage should stand, and be held as security for the additional sum then loaned as well as for the amount of the previous loan, and that this agreement formed the only consideration for the defendants signing the note.
It was competent for the parties to make the contract alleged, and if it formed the only consideration for the making of the note by defendant Robbins, parol evidence is admissible to prove that fact, and also that the consideration has failed, when the action is by a holder with notice. Such evidence is ho infringement of the rule before referred to, excluding parol evidence to vary or contradict a written contract. 1 Greenl. on Ev., § 284.
The facts stated in the answer, if true, and they will be
Tbe judgment of tbe court below is
Reversed.