DocketNumber: No. 45420.
Citation Numbers: 297 N.W. 307, 230 Iowa 317
Judges: Oliver, Hale, Mitchell, Sager, Bliss, Miller, Garfield, Wennerstbum, Stigeb
Filed Date: 4/8/1941
Status: Precedential
Modified Date: 11/9/2024
DISSENT: Stiger, J. This is an action in equity to determine the priority of liens of plaintiff-appellee, Arthur McCarty, and defendant-appellant, Leonore Hunting, upon real estate consisting of a house and lot in Cedar Rapids, Linn county, Iowa, owned by defendant Eugene H. Kane, husband of defendant Sarah Kane. Plaintiff-appellee is the payee and holder of a $2,000 mortgage upon this property, made by the Kanes. The lien of defendant-appellant, Hunting, had its inception in a mortgage given to her by the Kanes upon other real estate in Keokuk county. In connection with the foreclosure of that mortgage by Mrs. Hunting, she procured an attachment in the sum of $1,500 to issue out of the district court of Keokuk county, and attached the aforementioned Linn county residential property. In the Keokuk county suit the mortgage on the real estate *Page 319 in that county was foreclosed and the attachment upon the Linn county residence was confirmed. There was a deficiency judgment against the Kanes and Mrs. Hunting later bid in the Linn county residence at sheriff's sale upon special execution thereunder. Upon trial of the case at bar the court decreed plaintiff's lien to be superior to that of defendant Leonore Hunting, and she appeals.
[1] I. Appellant's attachment upon the Linn county real estate was levied October 30, 1936. Appellee's mortgage was executed February 11, 1937, and recorded February 16, 1937. However, appellee contends and the trial court found that, in January 1934, it was orally agreed between appellee and the Kanes that in consideration of advancements to be made them by him, the Kanes would give appellee a mortgage to secure the same upon the residential property in question as soon as they acquired title to said property; that pursuant to said agreement appellee loaned the Kanes $2,000; that the Kanes thereafter acquired title to said real estate and gave appellee the $2,000 mortgage here in controversy. Based upon this factual finding the court held that the lien of the mortgage related back to the agreement and, therefore, was effective prior to appellant's attachment.
It should be here noted that an attaching creditor is not a purchaser for value and that the lien of an attachment upon real estate reaches only the actual interest of the defendant in the property and is junior to a prior mortgage thereon even though the attaching creditor may have no actual or constructive notice of the mortgage. Rea v. Wilson,
Appellant does not dispute the foregoing rule. Her contention is that the record is insufficient to justify the factual findings upon which was based the conclusion of the trial court that the lien represented by appellee's mortgage took effect prior to her attachment in October 1936.
There was evidence that, in January 1934, the property was owned by Mr. Kane's mother and occupied by her and the defendants Kane and their children; that she was very old and in poor health; that it was understood the property was to belong *Page 320 to defendants Kane when she was gone; that defendants Kane agreed with appellee that if he would loan them the money "that when we came into possession of this property we would give him a mortgage upon it"; that appellee understood they would give him "a mortgage upon this home as soon as they got squared around"; that "on the strength of that" he loaned them a total of $2,000 between January 1934 and June 1936; that Mr. Kane's mother died testate in October 1935, leaving the home to Mr. Kane and his sister; that this sister conveyed her one-half interest in the home to Mr. Kane in October 1936; and that in January 1937, the Kanes carried out their agreement by giving appellee the $2,000 mortgage on the property.
The trial court stated there was nothing in the circumstances tending to impeach or discredit the witnesses who testified to the agreement; that the "agreement is established by clear, definite and satisfactory testimony and that it has met the close scrutiny of the court in that respect"; that it vested an equitable right or interest in appellee at the time the agreement was made and that when the mortgage was made it related back to said agreement and was superior to subsequent attachments by creditors.
It is necessary that a contract of this character be established by clear, convincing and satisfactory proof. Osborne v. Osborne,
In so finding we do not overlook appellant's contention that Mr. Kane expected to acquire only a one-half interest in the property from his mother and that there is no showing that he had then arranged to acquire the interest his sister would receive from the mother. However, the evidence was that the Kanes would give a mortgage on the property. The subsequent acts of the parties indicate this was their understanding. We think the record fairly indicates that the agreement contemplated *Page 321 the giving of a mortgage to appellee for the entire interest which Mr. Kane would thereafter acquire in the home.
The rule concerning contracts to mortgage is based on the maxim that equity regards that as done which ought to be done. 19 R.C.L. 275. As said by Justice Story, in Mitchell v. Winslow, 2 Story 630, 644, 17 F. Cas., No. 9673, 6 Law Rep. 347:
"* * * wherever the parties, by their contract, intend to create a positive lien or charge, either upon real or upon personal property, whether then owned by the assignor or contractor, or not, * * * it attaches in equity as a lien or charge upon the particular property, as soon as the assignor or contractor acquires a title thereto * * *."
A case discussing this and other propositions here involved is Rutherford Nat. Bank v. Bogle,
[2] II. But appellant does not base her claim to priority solely upon the attachment itself. She says her attachment fixed the date of the impression of her lien upon the property, but she relies principally upon an act performed by her during the pendency of this suit: To wit, the purchase of the property at sheriff's sale on special execution under her Keokuk county judgment, which, she says, made her a purchaser for value. Ettenheimer v. Northgraves,
With this contention we do not agree. We think the pending suit served as a bar. It directly involved the respective rights of the two liens. Rider v. Kelso,
Appellant relies upon Keefe v. Cropper,
Neither of the foregoing cases is in point on the facts nor does either announce a rule which would justify subordinating *Page 323 appellee's lien to that of appellant. We conclude the trial court correctly decreed the lien of appellant to be the superior.
Wherefore, the decree is affirmed. — Affirmed.
HALE, C.J., and MITCHELL, SAGER, BLISS, MILLER, GARFIELD, and WENNERSTRUM, JJ., concur.
STIGER, J., dissents.