Windsor v. Evans, 72 Iowa 692

Windsor v. Evans

72 Iowa 692 | Iowa | 1887

Beck, J.

*693i. bquitv: foreclosure: £sets.aIms *692I. The undisputed facts upon which the decis*693ion of the case turns are as follows-: J. M. Cobb and wife executed a mortgage upon several tracts of land to the Lombard Investment Company, to secure the payment of $2,500. Subsequently they executed to the same mortgagees a second mortgage upon forty acres of land, not included in the other mortgage, to secure $400 and interest. After the execution of these mortgages, they executed, a mortgage to plaintiff, to secure $1,159.13, upon all the lands before mortgaged, referred to above. This mortgage has been foreclosed, and the land sold thereon. Prior to the execution of the last-mentioned mortgage, but after the other mortgages above referred to were executed, Cobb conveyed forty acres of the land covered by the first mortgage to the Lombard Investment Company. Cobb failed to pay the mortgage debts, and abandoned the land. After this suit was commenced, he conveyed all the land, except the tract deeded to Evans, by quitclaim deed to defendant Haddock, who intervenes in this action. After the conveyance of the land to Evans, and the execution of the mortgage to plaintiffs, the mortgages to the Lombard Investment Company were transferred to plaintiffs.

II. Evans claims, and the court below so held and decreed, that the land conveyed to him shall be discharged upon the payment of $300 and interest, which he agreed to pay as a part of the consideration for the purchase thereof. Of this plaintiffs complain, and whether this condition of the decree be correct is the first question for our determination. In our opinion it is erroneous. It is the rule in this state that, when mortgaged lands are sold in several tracts, each must contribute ratably to the satisfaction of the mortgage debt; but, if a part of the land be not conveyed, such part should be first sold under the mortgage, or offered for sale, before the other part is offered for sale. Bates v. Ruddick, 2 Iowa, 425 ; Barney v. Myers, 28 Id., 472 ; Tufts v. Stanley, 42 Id., 628 ; Iowa Loam, & Trust Co. v. Mowery, 67 Id., 113. These rules are not denied ; but counsel insist, and *694tbe court below so held, that as plaintiff bad knowledge of tbe agreement between Evans and Oobb, which bound the first named to pay $300 on tbe mortgage debt, an equity arises which will exempt Evans’ land from the mortgage upon payment of the $300. If the question arose alone under the mortgage given to plaintiffs, possibly there might be some ground for urging this position, though we now discover no equity requiring us to so hold. But. this point we need not determine, for the reason that the question arises upon the mortgages given the Lombard Investment Company. It surely will not be claimed that it is competent for the mortgagor, and his grantee to whom he conveys a part of the land, to control or affect the rights of the mortgagee by any agreement or arrangement for the payment of a part of the mortgage debt. Plaintiff, as the assignee of the mortgages from the Lombard Investment Company, takes them with all the rights held by that company. Ilis remedy therein must be the same to which it was entitled.

III. Evans is entitled to have the laud other than his tract sold, or offered for sale, first. He is entitled to no other protection. But this equity rests upon and is subject to the performance by him of his agreement to pay $300 on the mortgage assigned to plaintiff. This agreement creates a personal obligation, enforceable by plaintiffs as holders of the mortgage. In case Evans fails to pay the $300 and interest, a personal judgment should be rendered against him, which should be declared a lien upon the land conveyed to him, junior and inferior to the mortgages held by plaintiff. If all the mortgages are paid by the sale of the land other than Evans’ tract, Haddock, as the grantee of Cobb, is entitled to the benefit of the judgment against Evans. If, after the sale of the other tracts, a sum remains unpaid, Evans’ land should be sold therefor ; and if, after such sale, a balance remains unpaid not exceeding $300 and interest, it should be enforced against Evans personally, as by a general judgment. In case a sum less than the $300 and interest is *695collected in this way. Haddock shall be entitled to the difference between such sum and the $300 and interest; the purpose and intent being that a part of the consideration for the purchase of the land shall primarily go to the plaintiffs, but, if they are paid without the necessity of applying the proceeds from the judgment against Evans to their debt, that judgment, or any part thereof remaining unpaid by Evans,, shall go to the benefit of Haddock.

2. —: -: and profits. IV. In accord with the provisions of the mortgage first given to the Lombard Investment Company, a receiver was appointed, who took charge of the property. The funds in the hands of the receiver must be applied to the payment of the mortgage debts. Undoubtedly, the purpose of the provision of the mortgage for the appointment of the receiver was to secure the proceeds from the profits of the land for the payment of the mortgage debt. These funds are to be added to the sums realized from the sale of the lands, as above described, and applied in the same manner ; and Evans’ liability and rights shall be the same, as to them, as though they were funds arising from the sale of the land.

The decree of the district court will be modified in accord with this opinion, and the cause is remanded to the court below for that purpose. The defendants will pay the costs of this appeal.

Modified AND AeeiRmed.