Byington v. Fountain , 61 Iowa 512 ( 1883 )

Day, J.

— The case will be best understood by a chronological statement of the material facts. On the twenty-sixth day of January, 1867, E. H. Paddock, being the owner of the land in controversy, executed a mortgage thereon to the Amana Society, to secure the payment of two notes of $50 each, and one note of $500, payable in one, two, and three years. On the thirty-first day of October, 1867, Eobert IT. Paddock deeded said land to Bush Clark and George J. Boal, they at the same time executing to him a bond, reciting that the conveyance was in consideration of moneys advanced and professional services rendered, and agreeing to deed back the premises upon payment of all sums justly due, and interest at ten per cent. On the twenty-fourth day of January, 1868, for the consideration of $1,050, Paddock assigned his interest in this bond to Charles McCallister, as trustee of the children of Le Grand and Mary Byington, and authorized him to receive the deed for the land, and the rents and profits from the date of the assignment. On the first day of February, 1868, Charles McCallister assigned this contract to Seymour L. Byington, one of the children mentioned in the assignment to him. On the twenty-ninth of April, 1869. Clark and Boal conveyed said premises to John Campbell by a deed warranting the title, except against the mortgage to the Amana Society. On the twenty-third day of October, 1869, the Amana Society assigned the notes and mortgage in question to Seymour L. Byington.

In November, 1870, the plaintiff, by his duly appointed guardian, brought suit to foreclose said mortgage against Robert H. Paddock and wife, making George J. Boal and Rush Clark parties defendants as subsequent encumbrancers, but not making Campbell a party, who, at that time, had succeeded to all the interest of Clark and Boal.

On the twentieth day of February, 1S72, the defendants withdrew all claim for affirmative relief, and Clark and Boal admitted the allegations of the petition, and judgment was rendered in favor of the plaintiff for $771 and costs.

On November thirteenth, 1879, Campbell and wife reconveyed all their interest in said property to William J. Haddock and Mrs. Mollie A. Boal, and on October twenty-eighth, 1880, William J. Haddock and his wife, and Mollie A. Boal and George J., her husband, executed two deeds, each conveying an undivided half interest in the land to the defendant, Andrew J. Fountain.

July ninth, 1880, the property was sold upon execution under the mortgage foreclosure to L. G. and S. L. Byington for $1,438.35. The certificate of purchase was assigned to plaintiff, and a sheriff’s deed was executed to him July 11, 1881.

On the ninth day of September, 1881, this action was commenced, the plaintiff praying in his petition that the original foreclosure proceedings may be completed; that defendants-’ equity of redemption from said original mortgage may be foreclosed, and that they may be estopped from asserting any title adverse to petitioner, and that petitioner’s title may be quieted.

As Campbell, who, at the time of the foreclosure of the senior mortgage executed -to the Amana Society, had succeeded to the rights of Clark and Boal, was not made a party to that foreclosure proceeding, the object of this action is to compel those who have succeeded to his rights to redeem from the Amana mortgage, and, in the event of their failure to do so, to bar them of any interest in the property.

Both parties to this controversy concede that the deed from Paddock to Clark and Boal, in connection with the bond for a reconveyance, constituted a mere mortgage from Paddock to Clark and Boal. Paddock, then, was the owner of the land, encumbered by a senior mortgage to the Amana Society, and a junior mortgage to Clark and Boal. It was the legal duty of Paddock to discharge both of these mortgages, or, more properly speaking, the land was held by him burdened with both of these claims, and liable to be subjected to the payment of both of them. When the plaintiff succeeded to the rights of Paddock in this land, he took it just as it was held by Paddock, burdened with the payment of both mortgages. As between the plaintiff and the Amana Society and Boal and Clark, it was the duty of plaintiff to pay off both mortgages out of the land'. When the plaintiff procured an assignment from the Amana Society of „the notes and mortgage, this at once operated as an extinguishment of the mortgage. The mortgage came into possession of the party who was under obligation to pay it, at least to the extent of the value of the mortgaged land, and the same party thus becoming creditor and debtor, the debt was extinguished. By the assignment of the title bond from Paddock, the plaintiff became possessed of the equity of redemption from the Amana mortgage itself. In Vannice v. Bergen, 16 Iowa, 555 (562), it is said: “ As to the general propostion, that if the mortgagee purchases the equity of redemption from the mortgagor, the mortgage, as well as the mortgage debt, is extinguished, there is, of course, no doubt. For, ordinarily and legally, the effect of such an .arrangement is to .vest the mortgagee with the whole estate, and such an entire interest is inconsistent with his claim under the mortgage. Wickersham v. Reeves & Miller, 1 Iowa, 413. If, however, it was the intention to keep the mortgage alive, or if it is to the interest of the mortgagee, and it can be done without prejudice to the rights .of the mortgagor or third persons, the doctrine of merger, as between them, will not apply.” See also Rankin v. Wilsey, 17 Iowa, 463; First National Bank of Waterloo v. Elmore, 52 Iowa, 541; Woodward v. Davis et al., 53 Iowa, 694. The intention to keep the mortgage alive, however, will avail only when it can be done without prejudice to the rights of third parties.

As against the plaintiff, the holders of the Clark and Boal mortgage have a right to have their mortgage satisfied out of the property in controversy. It is apparent that they will, •or may, be deprived of this right, if they are compelled to redeem from .the Amana mortgage. It is not competent for the plaintiff to. purchase the Amana mortgage, and assert it in such manner as to prejudice the rights of the holders of the Clark and Boal mortgage, or deprive them of their right to have their debt satisfied out of the land. The court did not err in dismissing the plaintiff’s petition.

Affirmed.