First Trust Joint Stock Land Bank of Chicago v. Stevenson
| Decision Date | 22 November 1932 |
| Docket Number | 41421 |
| Citation | 245 N.W. 434,215 Iowa 1114 |
| Parties | FIRST TRUST JOINT STOCK LAND BANK of Chicago, Appellant, v. FRANK M. STEVENSON et al., and M. S. COOPER, Intervenor, Appellees |
| Court | Iowa Supreme Court |
REHEARING DENIED MARCH 20, 1933.
Appeal from Lucas District Court.--ELMER K. DAUGHERTY, Judge.
Action in equity upon a promissory note and to foreclose a real estate mortgage. Judgment on the note and decree of foreclosure. Prayer for the appointment of a receiver and possession of the mortgaged premises denied. From the latter ruling, the plaintiff appeals.
Affirmed.
W. L Cohrs, R. M. Uhl, Ben J. Gibson and Livingston & Eicher, for appellant.
H. V Levis, for appellee Frank M. Stevenson.
Johnston & Shinn, for other appellees.
The note and mortgage in suit was executed by the appellee Frank M. Stevenson and his wife, now deceased, and this action to foreclose said mortgage was commenced June 30, 1931. Subsequent to the execution of the foregoing instruments and prior to June 30, 1931, appellee Stevenson conveyed the mortgaged premises, subject only to the mortgage, to the Knoxville Investment Company, one of the appellees herein. On March 2, 1931, the grantee, in writing, leased the mortgaged premises to appellees Perry and Long for one year ending March 1, 1932, for an agreed rental of $ 300, which was evidenced by a promissory note for said sum. On the same day, a second lease was entered into by the grantee with one Dennison for a term of one year, commencing March 1, 1932, for an agreed rental of $ 450, which was also evidenced by a promissory note for that amount. Both leases were on June 11, 1931, assigned by the lessor to M. S. Cooper, intervenor herein, to whom the rent notes were at the same time transferred. The controversy in this court is therefore between the appellant and the intervenor. The issues joined between these respective parties present the only questions for decision.
I. The mortgage pledged the rents and profits as security for the payment of the mortgage debt, and provided that, in case of foreclosure, the holder of said mortgage shall be entitled to have a receiver appointed to take possession of the property and to collect the rents and profits during the period of redemption and apply the same to the payment of the debt. It will be observed that the respective leases were assigned and the rent notes transferred to intervenor prior to the commencement of this action. At the time of these transactions, the crops had been planted, but appellant had no lien thereon. The lien, if any, in favor of appellant, attached at the time of the commencement of the action and the request for the appointment of a receiver. Whiteside v. Morris, 197 Iowa 211, 197 N.W. 56; Haning v. Dunlop, 203 Iowa 48, 212 N.W. 351; Kooistra v. Gibford, 201 Iowa 275, 207 N.W. 399; Rodgers v. Oliver, 200 Iowa 869, 205 N.W. 513; Bunting v. Berns, 212 Iowa 1127, 237 N.W. 220; Virtue v. Teget, 209 Iowa 157, 227 N.W. 635.
Intervenor was the assignee of the lease and the transferee of the notes in good faith prior to the commencement of appellant's action to foreclose the mortgage. His lien upon the crops was therefore prior and senior to that of appellant. First Nat. Bank v. Security T. & S. Bk., 191 Iowa 842, 181 N.W. 402; Hanson v. Sheffer, 205 Iowa 1191, 219 N.W. 529; Smith v. Cushatt, 199 Iowa 690, 202 N.W. 548; Hakes v. North, 199 Iowa 995, 203 N.W. 238; Goldstein v. Mundon, 202 Iowa 381, 210 N.W. 444.
II. The mortgage also contained the following provision:
"And the said parties of the first part do--further covenant and agree that in case of default in payment of said principal sum of money, or of any amortization installment thereof, or of interest thereon, or in the performance of any of the covenants or agreements herein contained, then, or at any time thereafter during the continuation of such default, the said party of the second part, or its successors or assigns, may, without notice, declare the entire debt hereby secured immediately due and payable, and thereupon the said party of the second part, or its successors or assigns, shall be entitled to the immediate possession of said premises and the appointment of a receiver, as above provided, and may proceed to foreclose this mortgage; and in case of foreclosure, such sum as may be lawful shall be allowed by the court for attorney's fee and all costs and expenses incurred by said Bank or its attorneys, and be included in the judgment or decree."
The question at this point is: What is the right of appellant under the foregoing and latter provision of the mortgage? Was appellant, upon default in the payment of the interest, immediately entitled to enter into possession of the mortgaged premises independent of and without the appointment of a receiver? The mortgagor retained possession of the mortgaged premises prior to default. In the absence of stipulation to the contrary, the mortgagor, in this state, of real estate retains the legal title and possession thereof. Section 10053, Code 1931.
There is considerable diversity of decision in this country as to the exact relationship to the mortgaged premises of the mortgagor and mortgagee. The question is, however, well settled in this jurisdiction that the mortgagee, in the absence of stipulation to the contrary, acquires no title or estate in the mortgaged premises, and that he acquires only a lien thereon as security for the payment of the debt. Courtney v. Carr, 6 Iowa 238; Newman v. DeLorimer, 19 Iowa 244; McHenry v. Cooper, 27 Iowa 137; Adams v. Holden, 111 Iowa 54, 82 N.W. 468. This is true, notwithstanding we have held that the holder of a real estate mortgage is within and for the purpose of the recording laws deemed a purchaser. Porter v. Green, 4 Iowa 571; Seevers v. Delashmutt, 11 Iowa 174, 77 Am. Dec. 139; In re Estate of Gill, 79 Iowa 296, 44 N.W. 553, 9 L. R. A. 126.
The precise question involved at this point has not previously been passed upon in this state. The right of the...
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