Federal Land Bank of Wichita v. Girtch
| Decision Date | 09 March 1940 |
| Docket Number | 34653. |
| Citation | 99 P.2d 768,151 Kan. 528 |
| Parties | FEDERAL LAND BANK OF WICHITA v. GIRTCH et al. |
| Court | Kansas Supreme Court |
Syllabus by the Court.
The primary rule in the construction of contracts, such as mortgages, is the intention of the parties as disclosed by the instrument as a whole.
Where ambiguity or uncertainty is involved in a contract, such as a mortgage, the intention Is not ascertained from punctuation alone or by resort to literal interpretation, but by considering all language employed, circumstances existing when the agreement was made, the object sought to be attained, and other circumstances, if any, tending to clarify the parties' real intention.
Where purchaser of mortgaged premises did not assume first and second mortgages in deed, but applied to mortgagee for extension of second mortgage under an accepted application providing that extension should not modify provisions of note and mortgage, except as expressly provided, nor rights or liabilities of any parties thereto or third parties, and that purchaser agreed to pay, at maturity of extension, all items extended thereunder, with interest thereon as provided by Emergency Farina Mortgage Act, and balance of indebtedness evidenced and secured by note and mortgage, holder of second mortgage was entitled on foreclosure to obtain a personal money judgment against purchaser under extension agreement. Emergency Farm Mortgage Act of 1933, 48 U.S.Stat. 41.
An agreement executed by purchaser of mortgaged premises and holder of second mortgage for an extension of the mortgage was not void for lack of consideration, where holder of second mortgage parted with legal right to foreclose its mortgage at a prior date.
1. The primary rule in construction of contracts is the intention of the parties as disclosed by the instrument as a whole.
2. Where ambiguity or uncertainty is involved, the intention is not ascertained from punctuation alone or by resort to literal interpretation, but by considering all language employed, circumstances existing when the agreement was made the object sought to be attained, and other circumstances, if any, which tend to clarify the real intention of the parties.
3. A money judgment rendered against a defendant, who was not a signer of the note or mortgage, and in favor of the holder of a second mortgage and cross-petitioner was proper, in view of a written extension agreement entered into at the special instance and request of that defendant.
4. The extension agreement contained in opinion considered, and held not void for lack of consideration.
Appeal from District Court, Morris County; Cassius M. Clark, Judge.
Action by the Federal Land Bank of Wichita against Frank F. Girtch the Federal Farm Mortgage Corporation, George D. Rathbun, and others, to foreclose a mortgage, wherein the Federal Farm Mortgage Corporation filed a cross-petition to foreclose a second mortgage. From an adverse judgment, George D. Rathbun appeals.
Judgment affirmed.
Geo. D Rathbun, of Manhattan, pro se.
Walter E. Hembrow, of Council Grove, and W. E. Pepperell, Conrad L Ball, J. P. Flinn, Edw. H. Jamison, and Donald L Mitchell, all of Wichita, for appellee.
This was a real estate mortgage foreclosure action. Neither the plaintiff, holder of the first mortgage, nor the mortgagors, are involved in this appeal. The controversy is between a defendant, a subsequent owner of the land, and the holder of the second mortgage. The latter, on its crosspetition, obtained a personal money judgment against the defendant, Geo. D. Rathbun, upon a written extension agreement. Only that defendant appeals.
A brief narrative of events may be helpful. The foreclosure action was instituted by The Federal Land Bank of Wichita, the holder of the first mortgage. In 1924, Frank F. Girtch and his wife obtained a loan of $5,200 from the plaintiff and gave as security therefor an amortization note, secured by a first amortization mortgage on 160 acres of land in Morris county. In 1933 they obtained a loan of $1,700 from the Land Bank Commissioner, acting pursuant to an act of Congress, and gave their note therefor. That note was secured by a second mortgage upon the same real estate. Subsequently, and on August 20, 1935, the title to the land was conveyed by Girtch and wife by warranty deed to the appellant, Geo. D. Rathbun. The deed recited it was made subject to the first and second mortgages, but it did not provide for an assumption of the mortgages by Rathbun. On December 15, 1936, Rathbun made written application to the bank as the agent of The Federal Farm Mortgage Corporation, which latter corporation was, by an act of Congress, the owner and holder of the second note and mortgage taken in the name of the Land Bank Commissioner, for an extension to August 1, 1937, of the the e within which to pay all installments, advancements and accumulated interest "which may be past due and owing to The Federal Farm Mortgage Corporation upon the date of the granting of the extension." The application for extension, recommendation and acceptance read:
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