Gilmore v. Shearer

• Decision Date: 11 March 1924
• Docket Number: No. 35814.,35814.
• Parties: GILMORE v. SHEARER ET AL.
• Court: Iowa Supreme Court

197 Iowa 506

197 N.W. 631

GILMORE

v.SHEARER ET AL.

No. 35814.

Supreme Court of Iowa.

March 11, 1924.

Appeal from District Court, Cerro Gordo County; Jos. J. Clark, Judge.

Suit in equity to foreclose a real estate mortgage. The defendants named were Esslinger, Scott, and Shearer. Esslinger was the mortgagor. Scott and Shearer were subsequent and successive grantees of land who, as alleged, assumed to pay the mortgage sued on. Only defendants Scott and Shearer defended. They denied personal liability for the mortgage debt on various grounds. There was a decree for the plaintiff against all defendants. Scott and Shearer have appealed. Affirmed.E. B. Stillman, of Clear Lake, and Charles H. Hall, of Nevada, Iowa, for appellants.

Blythe, Markley, Rule & Smith, of Mason City, for appellee.

EVANS, J.

A brief chronology of events transpiring between April 1, 1919, and March 1, 1920, may be here stated. The mortgaged land consisted of a quarter section located in Cerro Gordo county, Iowa. In April, 1919, Kline, the owner thereof, contracted to sell it to Gilmore, plaintiff herein, for a consideration of $28,000. Shortly thereafter Gilmore contracted to sell it to Esslinger for $32,000. Within a few weeks Esslinger contracted to sell it to Scott for $35,200. Within a few weeks thereafter Scott contracted to sell it to Shearer at a still further advance in price. All of these successive contracts provided for a conveyance and settlement on March 1, 1920. The contract between Gilmore and Esslinger provided that a first mortgage of $22,000 and a second mortgage for $3,000 should be given at the time of settlement. In the contract between Esslinger and Scott, a like provision was contained. Shortly prior to March 1, 1920, it was tentatively arranged between Esslinger and Scott and Gilmore that a conveyance should be made direct from Kline to Scott, and that Scott should execute the two mortgages for $22,000 and $3,000 respectively. Scott executed the mortgages and sent them on for delivery. He was unable, however, to meet the cash payment of $8,700 due from him on March 1st. Such failure delayed the settlement, which delay Kline refused to tolerate. Thereupon Scott's mortgages were returned, and a conveyance was made direct from Kline to Esslinger, and the two mortgages provided for were executed by Esslinger. At the same time, Esslinger executed a deed for delivery to Scott. The covenants of this deed were made subject to the two mortgages by description thereof as follows:

“Subject, however, to a certain mortgage now on said land for $22,000, due March 1, 1927, with interest thereon at 5 1/2 per cent. from March 1, 1920, and also another certain mortgage now on said land for $3,000 due March 1, 1922, with interest thereon at the rate of 6 per cent. per annum from March 1, 1920, * * * which grantees assume as a part of the purchase price thereof.”

The mortgage in suit is the one for $3,000, described in the foregoing quotation.

About April 1, 1920, Scott made the payment due from him and received such deed. Esslinger testified that the deed was complete in form at the time of its execution by him, and that the name of Scott was written therein as grantee; whereas Scott testified that the deed was executed in blank form as to a grantee, and that he received it in such form and delivered the same to Shearer as a grantee. Upon that particular point we do not deem it very material as to which contention should prevail. The deed delivered by Scott to Shearer was the deed which had been executed by Esslinger. Scott's name, therefore, does not appear in the record chain of title. Both Scott and Shearer deny liability, and each makes a separate defense. We shall consider first the defense of Scott.

[1] I. Scott's evidence is that “the deed was to be in blank and to deed straight across so that there would be no liability on me.” His contention in argument is based upon the foregoing evidence. Manifestly, he was testifying to a legal conclusion so far as the question of liability was concerned. The method adopted had no legal effect whatever as relieving him from liability for the obligations assumed by the grantee in the deed. It is thoroughly settled in this state that such a deed carries to the purchaser the equitable title and lays upon him every obligation which he would have assumed if his name had been written into the blank space. In the case of Liljedahl v. Glassgow, 190 Iowa, 827, 180 N. W. 870, we said:

“The law is settled in this state that the equitable title passes by the delivery of a deed blank as to the name of the grantee, to a purchaser for a valid consideration (Bossingham v. Syck, 118 Iowa, 192;Logan v. Miller, 106 Iowa, 511), and that, by accepting a deed containing a clause by which the grantee assumes and agrees to pay incumbrances, such purchaser becomes liable for the payment thereof, the same as he would if his name were written in the instrument (Beeson v. Green, 103 Iowa, 406; Bossingham v. Syck, supra; Marble Sav. Bank v. Mesarvey, 101 Iowa, 285; Bennett Sav. Bank v. Smith, 171 Iowa, 495; Santee v. Keefe, 127 Iowa, 128;Gray v. Bricker, 182 Iowa, 816;Logan v. Miller, 106 Iowa, 511). * * * Counsel for appellee, it seems to us, gives too narrow a meaning to the word ‘grantee.’ Of course, it usually refers to the one to whom the conveyance is made; but, if the name is not written in the instrument, and the deed is passed in that form from one owner to another, the term must be used in that connection in the sense of purchaser, and we think that is the interpretation that should be given it in this case. It was the purchaser who was to assume and pay the incumbrance.”

The defendants rely upon Peters v. Goodrich, 192 Iowa, 790, 185 N. W. 903, as holding contrary doctrine. But this is a mistaken conception of our holding in the...