Bristol Sav. Bank v. Stiger

• Decision Date: 15 October 1892
• Citation: 86 Iowa 344,53 N.W. 265
• Parties: BRISTOL SAV. BANK v. STIGER ET AL.
• Court: Iowa Supreme Court

86 Iowa 344

53 N.W. 265

BRISTOL SAV. BANK

v.STIGER ET AL.

Supreme Court of Iowa.

Oct. 15, 1892.

Appeal from district court, Worth county; GEORGE W. RUDDICK, Judge.

Plaintiff, as mortgagee, brought this action in the Worth district court, to foreclose a mortgage upon certain real estate in that county, executed to plaintiff September 20, 1886, by the defendant H. J. Stiger, to secure the payment of $1,400, with interest. Plaintiff also asks personal judgment against the defendants H. J. Stiger, A. S. Wilcoxen, and Lowry Goode. The defendant Stiger answered, admitting his liability, and the defendants Wilcoxen and Goode each answered, denying any personal liability. The decree was entered in favor of plaintiff, foreclosing the mortgage, and rendering personal judgment against the defendants Stiger, Wilcoxen, and Goode, from which judgment the defendants Wilcoxen and Goode appeal.C. C. & C. L. Nourse, for appellants.

G. R. Struble and L. S. Butler, for appellee.

GIVEN, J.

1. The leading issue upon this appeal is as to the personal liability of the defendants Wilcoxen and Goode. The case was submitted upon an agreed statement of facts, which shows the following: On September 20, 1886, the defendant Stiger executed the mortgage in question to the plaintiff to secure the payment of $1,400, with interest. On November 11, 1887, Stiger entered into a written contract with Wilcoxen for the exchange of the mortgaged property for certain real estate in Deuel county, Dak. That agreement recites that Stiger has sold to Wilcoxen the land in Worth county, “and agrees to convey by warranty deed, with abstract of good title to date hereof, except the certain loan mortgage thereon of $1,400, with interest thereon at six per cent. from date thereof.” In consideration of this, Wilcoxen was to convey the property in Dakota “by warranty deed, and abstract of good title to date.” No price is fixed on either of the properties in the agreement. On the same day--November 11, 1887--Stiger and wife executed and delivered to Wilcoxen a deed for the Worth county property, wherein the consideration is stated to be “the sum of three thousand and four hundred dollars, in hand paid by A. S. Wilcoxen.” Next after the description of the land is the following: “Subject to a loan mortgage of $1,400.00, which is a part of above-named consideration.” The covenant of warranty contains these words: “They are free and clear of all liens and incumbrances whatsoever, except as above stated,” and warrants “against the lawful claims of all persons whomsoever, except as above stated.” Wilcoxen at the same time executed to Stiger a deed for the property in Dakota. The said written contract and deeds constitute all of the agreement or transaction between Stiger and Wilcoxen relative to said properties. On the 16th day of January, 1888, Wilcoxen conveyed said mortgaged property to the defendant Goode, “in settlement of their partnership affairs,” by a deed containing the same language as that herein quoted from the deed of Stiger to Wilcoxen. This deed recites that it was “in consideration of the sum of three thousand dollars, in hand paid by Lowry W. Goode.” The agreed statement of facts shows that it was expressly agreed between Wilcoxen and Goode that Goode should not assume the payment of plaintiff's mortgage, but should take the property subject thereto. On December 18, 1888, Goode conveyed said Worth county property to L. M. Mann under an agreement that Mann should not assume the payment of plaintiff's mortgage. Mann held the legal title to, and was in possession of, the land at the commencement of this action. As no personal judgment is asked against Mann, the conveyance to him need not be further noticed. The defendant Goode paid the interest due upon plaintiff's note and mortgage September 20, 1888. Plaintiff's mortgage and all of said deeds were duly filed for record and recorded soon after their respective dates.

2. We first inquire as to the liability of Wilcoxen. As the contract and deeds between him and Stiger “constitute all of the agreement or transaction” between them, we are to look to those instruments alone. Appellee contends that they show that the amount of the mortgage debt was deducted from the purchase price of the mortgaged land, and cites authorities holding that in such case the purchaser becomes personally liable for the mortgage debt. Other authorities are cited to the effect that the purchase of real property subject to a mortgage “raises upon the conscience of the grantee an implied promise to discharge the mortgage debt.” Such is not the rule in Iowa. In Aufricht v. Northrup, 20 Iowa, 61, it is said: “The sale and conveyance of a tract of land without covenants of general warranty, subject, however, to a prior mortgage, does not itself, and without further showing, amount in law to a promise by the grantee to pay such incumbrances and discharge the mortgage debt.” Appellants contend that the only instances in which a grantee has been held liable to discharge the mortgage debt is where there is an absolute express promise on his part, as where the recitals in the deed, or an oral or written promise made at the time of the sale, shows such agreement, or “where there is a fixed consideration to be paid by the grantee, and he has by agreement retained the amount of the mortgage debt for the purpose of discharging it.” The authorities cited, as well as others which we have examined, are in harmony in holding that where the purchase is subject to a mortgage, and the amount of the mortgage has been retained by the purchaser out of the purchase price, he will be held to have assumed the payment of the mortgage, and is liable in an action to the mortgagee, under the familiar rule that, “where a person makes a promise to another for the benefit of a third person, such...