Dimmitt v. Johnson
| Decision Date | 07 April 1925 |
| Docket Number | No. 36520.,36520. |
| Citation | 199 Iowa 966,203 N.W. 261 |
| Parties | DIMMITT ET AL. v. JOHNSON ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Wapello County; W. M. Walker, Judge.
Action by plaintiffs, as mortgagees, to foreclose a mortgage with prayer for a deficiency personal judgment against the defendant W. L. Johnson and wife, Ida Johnson, as mortgagors, and W. B. Bonnifield and the M. B. Hutchison estate, as purchasers of the mortgaged land. The opinion states the pleaded facts. From a ruling of the trial court sustaining a demurrer to that part of the petition seeking a deficiency judgment against the defendants, the plaintiffs appeal. Affirmed.Roberts & Webber and Jones & White, all of Ottumwa, for appellants.
Heindel & Hunt, of Ottumwa, for appellees.
Jones & White, of Ottumwa, for cross-petitioners.
DE GRAFF, J.
May a plaintiff prove by parol an allegation in the petition which contradicts the terms of a written contract pleaded by him in the same petition? That is the question in this case. To ascertain our latitude and longitude and thereby determine the locus of the plaintiff, let us examine the facts.
The defendants W. L. and Ida Johnson, husband and wife, executed the mortgage in suit to the plaintiffs to secure two promissory notes of even date of $15,000 each, and thereafter sold the land to the other defendants in this action. The petition is an ordinary one to foreclose a mortgage, and sets out the two notes and a copy of the mortgage. It alleges that the defendants, other than W. L. Johnson and wife, have some title or interest in the lands, and after reciting the breach of conditions in the mortgage prays a foreclosure, the appointment of a receiver, and asks, in the event that the land should not sell for a sufficient amount to satisfy plaintiffs' judgment, interest, and costs, that a personal judgment for any deficiency be rendered against both the mortgagors and the purchasers of the mortgaged property. The purchasers of the mortgaged property are the defendants W. B. Bonnifield and the M. B. Hutchison estate. For the purpose of this opinion, since there is no controversy concerning the relation of the parties, we will speak of the defendants Johnson and wife as the mortgagors, and all other defendants as the purchasers of the real estate covered by the mortgage.
It is beyond question that the original petition did not state a ground for a deficiency judgment against the purchasers. Prior to the ruling of the court to a demurrer to the petition, an amendment was filed which set out the contract of purchase signed by W. B. Bonnifield and the Hutchison estate. There can be no dispute that the amendment to the petition did not show any right in the plaintiffs to a deficiency judgment against the purchasers, and, before a demurrer to the petition as amended was ruled, the plaintiffs filed a second amendment which so far as material to the controversy between the parties hereto stated:
“That the agreed purchase price for said premises was the sum of fifty thousand five hundred ($50,500.00) dollars * * * that at the time of the conveyance of said real estate there was a mortgage upon said premises for the sum of thirty thousand ($30,000.00) dollars, held by these plaintiffs, as alleged in their petition * * * that the defendant W. B. Bonnifield and the M. B. Hutchison estate retained out of the said agreed purchase price of fifty thousand five hundred ($50,500.00) dollars the sum of thirty thousand ($30,000.00) dollars, with which to pay the mortgage of these plaintiffs.”
The amendment also alleged the manner of paying the balance of the purchase price and attached copy of the deeds of conveyance. It further contains considerable argument to prove the quoted allegation, supra, but the argumentative matters are of no importance in reaching a decision. A cross-petition was filed by the mortgagors, W. L. Johnson and wife, praying for a judgment against the purchasers, but no appeal was taken from any ruling on the cross-petition.
This appeal is from the ruling of the court sustaining the demurrer of the purchasers as to the right of the plaintiff to a deficiency judgment, and involves the one question whether the petition as amended states a cause of action entitling plaintiffs to a deficiency judgment as against the purchasers of the mortgaged property. The plaintiff-appellants, as mortgagees, contend that they should have been allowed to introduce evidence to prove their allegations upon the theory that, when land is sold subject to a mortgage and the amount of the mortgage debt has been deducted and retained by the purchaser out of an agreed purchase price, the purchaser will be held liable to the mortgagee to the same extent as though he assumed the mortgage under the terms of an express contract.
[1] Clearly, if money is placed in the hands of A by B. for the purpose of discharging B.'s debt by A. when it becomes due, there is at least an implied contract, if not actually an express one, that A. will discharge that debt. Certainly A. is bound in law personally to do so either because he has made a contract with B. for the benefit of a third party or because he has in his hands money that rightfully belongs to B.'s creditor. The true criterion as to whether there is a contract between A. and B. that A. shall discharge B.'s debt is the intent of the parties. The result is the same whether B. actually placed the money with which to pay the debt in A.'s hands or whether A. originally owed B. a sum equal to the debt and was allowed to retain the same for the purpose of discharging that debt. The intent or promise in the second case is more difficult of proof than in the former, because the retaining of the money would be equivocal, whereas B. placing the cash in A.'s hands would be more nearly unequivocal. Whether A. promised and was obliged to perform because of a contract with B. would depend upon the intent of the parties. There is considerable difficulty, however, in implying a promise when the facts on which the implication is based are in dispute.
[2] In the abstract, the appointment to pay a given sum for property upon which there is a mortgage, and the retention of a sufficient amount of that given sum for the purpose of discharging that mortgage would, if conclusively shown, raise an implied promise between the parties for the benefit of the mortgagee. The fundamental element in both cases is the intent of the parties. The retention of part of the purchase price is merely evidence tending to prove the intent, but there is no difference in the obligation that arises by a purchaser expressly assuming and promising to pay a mortgage and the implied agreement that he shall pay, except in the one case the promise is expressed and in the other it is implied. The mere retention of the money alone is not conclusive proof from which the intent could be implied. It must, in addition, be retained for the purpose of paying the mortgage. How can any one say what the purpose of the retention is unless at the time it was retained there was an agreement between the parties as to that purpose? This is the same as saying that the promise (the purpose) is also expressed, and in either event the liability to the mortgagee arises out of a contract made for the benefit of a third party. Such an obligation should not be confused with that class of cas...
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