Bankers' Life Ass'n v. Engelson

• Decision Date: 16 June 1910
• Citation: 126 N.W. 951,148 Iowa 594
• Parties: BANKERS' LIFE ASS'N v. ENGELSON ET AL. NELSON ET AL. v. ENGELSON ET AL.
• Court: Iowa Supreme Court

148 Iowa 594

126 N.W. 951

BANKERS' LIFE ASS'N

v.ENGELSON ET AL.

NELSON ET AL.

v.ENGELSON ET AL.

Supreme Court of Iowa.

June 16, 1910.

Appeal from District Court, Winnebago County; J. J. Clark, Judge.

The first of these cases as originally instituted was an action to foreclose a mortgage on 280 acres of land described as three tracts, one of 160 acres, another of 80 acres, and a third of 40 acres. In this action there was a cross-petition asking a foreclosure of a second mortgage on the same land. The second action was to foreclose a mortgage covering the 160-acre tract and the 80-acre tract. It being made to appear to the court that the 40-acre tract was the homestead of Betsy Engelson, wife of the principal defendant who had joined in the execution of the mortgages, the two cases were consolidated in order that the proceeds of the sale of land might be properly apportioned among the respective lienholders, and a decree was entered providing for such apportionment and directing that the homestead be not sold save for any deficiency after subjecting the other property to the payment of liens existing against such other property, which also covered the homestead. This decree provided for special execution, and such execution was issued on March 3, 1909. Before a return of this execution, Betsy Engelson, in whom was then the legal title as well as the homestead right in the 40-acre tract, conveyed the same by warranty deed to Lasell subject to the mortgages which had been liens thereon; whereupon Nelson, Wilson, and Boley, who held liens by foreclosure on the other two tracts subordinated to the mortgage liens on the three tracts, filed a supplemental petition asking that the decree be so modified that the 40-acre tract which had formerly been Betsy Engelson's homestead be subjected first to the satisfaction of the mortgages covering the three tracts, and that the two tracts on which the petitioners had liens subordinate to the liens of the mortgages on the three tracts be subjected to the payment of such prior mortgages only to the extent necessary to satisfy such mortgages after the 40-acre tract had been fully applied to their satisfaction. Lasell, the grantee from Mrs. Engelson of the 40-acre tract, demurred to this supplemental petition, and his demurrer was sustained, whereupon the supplemental petitioners appealed. Affirmed.C. H. Tenney, T. A. Kingland, and Oliver Gorden, for appellants N. C. Nelson, Claud Wilson, and Joel Boley.

H. A. Brown, for appellees.

McCLAIN, J.

From the foregoing statement, which recites only such facts as are deemed essential to an understanding of the question of law raised on this appeal, it is apparent that appellants, holding liens under foreclosure on two of the three tracts, such liens being subordinate to other liens under foreclosure on the three tracts, are seeking to take advantage of the conveyance by Mrs. Engelson to Lasell of the homestead tract by having the burden of the two prior liens thrown primarily on that tract in order that the surplus in the proceeds from the other two tracts may be saved to them; their theory being that by the sale of the 40-acre tract Mrs. Engelson lost her homestead right therein, and that the tract thereupon became equally liable with the other two tracts to the satisfaction of the senior liens, and that for the protection of appellants' junior liens which were upon the two tracts only the 40-acre tract should be first applied to the satisfaction of the superior liens.

It is practically conceded by counsel for appellees that if the 40-acre tract had not been the homestead of Mrs. Engelson at the time the original decree was entered, that decree should have provided for the subjection of the property to the various liens in the method now contended for by appellants; that is, the 40-acre tract should have been subjected first to the satisfaction of the superior liens in order that so much as possible of the proceeds of the sale of the other two tracts might be saved for the satisfaction of the liens of appellants on those two tracts. But the contention for appellees is that, in view of the existence of the homestead right in the 40-acre tract at the time the original decree was entered, such decree was proper under the provisions of Code, § 2976, that the homestead be subjected to the payment of mortgage liens thereon only to the extent of the deficiency remaining after subjecting to the payment of such...