Bankers Trust Co. v. Knee
| Decision Date | 15 December 1936 |
| Docket Number | 43063. |
| Citation | 270 N.W. 438,222 Iowa 988 |
| Parties | BANKERS TRUST CO. v. KNEE, Sheriff, et al. |
| Court | Iowa Supreme Court |
Appeal from District Court, Dallas County; D. W. Hamilton, Judge.
Action to enjoin Sheriff from issuing a deed on a certificate of sale in a mortgage foreclosure. The district court dismissed plaintiff's petition, and from this order appeal is taken.
Reversed and remanded.
Gamble, Read & Howland, of Des Moines, for appellant.
Helsell, McCall & Dolliver, of Fort Dodge, and Casper Schenk of Des Moines, for appellees.
It is conceded that at all times involved herein Addison M. Parker and Hugh M. Schuler were partners. It is also conceded that the property involved herein was partnership property from the time same was acquired, regardless of the fact that some of the property was in the name of one partner and some in the name of the other.
In the year 1920, this partnership was indebted to three banks in the sum of approximately $78,000, and to secure the same, a trust indenture was duly executed and recorded in Dallas county, Iowa where the land in controversy was located. By this trust deed conveyance was made to the Bankers Trust Company, as trustee, of the land involved herein, together with other lands. Among the other powers conferred upon the trustee was the right to * * *" This trust indenture bears date of the 15th day of August, 1927. As to all the property described in the trust deed, it is provided that the conveyance is made " subject, however, to all existing liens or encumbrances or leases, or prior assignments or transfers, either as to the whole or any part thereof, or as to any undivided interest or right therein, and subject also to any and all unpaid taxes, or tax sales unredeemed." The trust was accepted by the trustee and possession of the property was taken.
As to the land involved in the foreclosure herein referred to, the following is its history: The title originated in one Daniel E. Luther. (This is known in the record as the " Luther land." ) It was encumbered by two mortgages amounting to approximately $27,000. On the 17th of February, 1920, this land was purchased from Luther by E. W. Broderick. The deed provided that the conveyance was made " subject" to the aforesaid mortgages. On the 28th day of February, 1920, Broderick and wife conveyed an undivided two-thirds of the premises unto Addison M. Parker, " subject" to the aforesaid encumbrances. On the 18th of February, 1925, Parker and wife conveyed the undivided two-thirds interest that had been conveyed to them by Broderick to H. M. Schuler, but, as stated above, this interest in the aforesaid land was at all times the property of the partnership. The notes and two mortgages above referred to were payable to the Webster County Trust & Savings Bank of Fort Dodge, Iowa, and from that bank M. H. Thatcher purchased the same. Thatcher died, and the executors of his estate brought an action in equity in 1925 to foreclose said mortgages. In that action, among numerous other defendants, were Addison M. Parker and H. M. Schuler, named as individuals. A stipulation was made by the parties for a continuance of the case until March, 1926, containing an agreement that judgment might be entered for any deficiency as to the sale of the mortgaged premises against the defendants Addison M. Parker and H. M. Schuler. On October 28, 1925, a decree was entered against the defaulting defendants, and as to Addison M. Parker and H. M. Schuler the above stipulation was made. On January 7, 1927, a supplemental judgment and decree was entered against Addison M. Parker and H. M. Schuler, and each of them, on the Luther land, in the sum of $15,626.01. Judgment was entered against Addison M. Parker and H. M. Schuler on said notes and foreclosing said mortgages. At the sale of this property by the sheriff there was a deficiency of $6,817.39. On October 12, 1933, a general execution was issued to make this deficiency against the property of " Addison M. Parker, H. M. Schuler," and levy was made on what is known in the record as the " Hoskins land." This execution was later returned by the sheriff, reporting the sale en masse to nine named members of the Thatcher family, and sheriff's certificates of purchase were issued to them.
The action at bar is against the sheriff and the named purchasers at the aforesaid sheriff's sale, and asks against all the defendants, except Knee (the sheriff), that they be and for general equitable relief.
It will be noticed that the judgment of foreclosure was entered on the 7th of January, 1927, and that the trust deed hereinbefore referred to bore date of August 16, 1927, and was duly recorded. It will also be noticed that in this foreclosure proceedings the partnership of Parker and Schuler is not named as a defendant. There is no showing in the record that notice was served on the partnership, and there is no reference in the petition or the proceedings as to the partnership of Parker and Schuler. The primary question at this point is whether or not a judgment was obtained against the partnership of Parker and Schuler, or, if not, whether or not the judgment actually obtained was a lien on the partnership property.
It is conceded that if the decree of foreclosure created a lien upon the land in controversy at the time of its entry, then the plaintiff's rights are junior and inferior to the rights of the defendants, under the trust deed. The plaintiff concedes this to be the situation, and states it as follows: " If, as a matter of law, the judgment (decree) did attach as a lien on the interest of the partnership in the Hoskins farm, without question it was and is a prior lien as against the rights of plaintiff arising under the trust agreement."
The question, therefore, first to be decided is whether or not the decree in the equity foreclosure became a lien on the land in controversy.
We have many times announced the rule in this state to be that where land is encumbered and...
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