Gilbert v. Sanderson

• Decision Date: 15 June 1881
• Citation: 56 Iowa 349,9 N.W. 293
• Parties: GILBERT v. SANDERSON.
• Court: Iowa Supreme Court

56 Iowa 349

9 N.W. 293

GILBERT

v.SANDERSON.

Supreme Court of Iowa.

Filed June 15, 1881.

Appeal from Clay circuit court.

Action at law. A demurrer to the answer was sustained, and defendant appeals.Robinson & Milchrist and C. L. Ward, for appellant.

Lot Thomas, for appellee.

SEEVERS, J.

S. S. Warner executed certain notes to Homer A. Smith, and secured the same by mortgage on real estate. The notes and mortgage were assigned to the plaintiff. There was a foreclosure and sale of the mortgaged premises, but only a portion of the indebtedness was realized. This action was brought to recover the amount of the indebtedness remaining unpaid. The action was based on the following written instrument:

“SIOUX RAPIDS, IOWA, January 13, 1876.

I, James Sanderson, do hereby agree to settle a mortgage now held against the N. 1/2 of the N. E. 1/4 and the S. W. 1/4 of section eight, (8,) township ninety-three, (93,) range thirty-six, (36,) west of the fifth principal meridian, when due; said mortgage of seven hundred dollars ($700) held by Homer A. Smith, and due in seven annual payments of one hundred dollars ($100) each.

JAMES SANDERSON.

For a valuable consideration, I hereby assign to A. L. Gilbert the foregoing contract, and all my right and interest therein, with full power to enforce the same, and commence and prosecute suit thereon in his own name.

S. S. WARNER.”

The defendant pleaded the mortgage had been fully satisfied and discharged by the foreclosure and sale of the mortgage premises; and, also, “(3) for a further defence to the claims of the plaintiff, defendant states that on or about the_______ day of ________, A. D. 1876, and before said S. S. Warner had assigued the said obligation to plaintiff, and before plaintiff or his assigns had any knowledge thereof, and while the same was owned and held by said Warner, and before said notes and mortgage, executed and delivered by said Warner, were transferred to plaintiff, and while the same were held and owned by said Smith, payee thereof, that defendant and said Warner entered into an agreement,--not in writing,--whereby defendant agreed to surrender to said Warner all the claim and interest of defendant in said mortgaged premises, including a deed therefor, executed by said Warner to defendant, and not recorded, and certain certificates of the sale of said premises for delinquent taxes, duly executed by the treasurer and auditor of Buena Vista county, and said Warner agreed to release defendant from all further liability on account of said written obligation of defendant, and to cancel the same and hold it for naught. Defendant further states that he executed said agreement on his part, and surrendered to said Warner said deed, and transferred to him said certificates of tax sale, and performed on his part all the requirements of said agreement; that said Warner accepted said deed and certificates, and entered into the possession of said premises, and defendant thereby became released from all liability on account of said obligations.”

The demurrer assailed the sufficiency of the foregoing portions of the answer, and the questions discussed by counsel will be now considered.

1. The appellant insists there could not be a second foreclosure of the mortgage, and therefore it was “settled” or discharged within the meaning of the writing upon which the action is based when the foreclosure was obtained and the premises sold. In this view we do not concur. The clear import of the writing is that the defendant would pay, or cause to be paid, the indebtedness secured by the mortgage; the object being to thus, in so far as the parties could, release Warner from all personal liability, or at least to indemnify him from loss in case the mortgaged premises were insufficient to pay the indebtedness. If this was not the object and intent of the parties to this contract, they went through a useless form and ceremony.

2. Conceding the mortgagee, Smith, or the plaintiff, his assignee, could avail themselves of the benefits conferred by the contract, the remaining question is whether the mortgagor, Warner, for a valuable consideration, could release and discharge the defendant from the obligation if done before the mortgagee or his assignee had knowledge of or accepted the contract, or whether it was irrevocable unless the mortgagor or the plaintiff assented to the revocation.

The authorities are not...