Gray v. Nelson

• Decision Date: 30 January 1889
• Citation: 41 N.W. 566,77 Iowa 63
• Parties: GRAY v. NELSON ET AL.
• Court: Iowa Supreme Court

77 Iowa 63

41 N.W. 566

GRAY

v.NELSON ET AL.

Supreme Court of Iowa.

Jan. 30, 1889.

Appeals from district court, Audubon county; H. E. DEEMER, Judge.

Action in equity by George Gray to foreclose a mortgage upon certain real estate. The defendants Deere, Wells & Co. are creditors of the defendant L. H. Nelson, the mortgagor, and the cause involves the rights of the plaintiff and Deere, Wells & Co. to subject the land to the payment of their claims against the mortgagor. There was a full trial upon the merits, and a decree was entered which was not satisfactory to either party, and both appeal.H. W. Hanna, John M. Griggs, and Chas. S. Fogg, for plaintiff.

Smith & Hare, for defendants.

ROTHROCK, J.

1. The defendant L. H. Nelson was the owner of the premises in controversy, and in January, 1880, he executed the mortgage in suit to his father, James Nelson, and on the 19th day of October, 1883, he executed a warranty deed to his father for the land. This deed was not delivered to James Nelson until the 24th day of November, 1883. On the 19th day of the same month Deere, Wells & Co., who were creditors of L. H. Nelson, commenced an action against him upon their claim, and levied an attachment upon the land. Judgment was subsequently rendered upon the claim, and Deere, Wells & Co. afterwards commenced an action to set aside the deed from L. H. Nelson to James Nelson as fraudulent and void, and also claiming that in any event their attachment was paramount to the deed. It was determined in that action that the attachment was good as against the deed, but the question as to the right of James Nelson to interpose his mortgage as a paramount lien was left undetermined. That case is reported in 73 Iowa, 186, 34 N. W. Rep. 809. After the decree was entered in the district court in that case, James Nelson assigned his mortgage, and note given in connection therewith, to George Gray, the plaintiff herein.

The above are the facts in the case as they appear on the face of the record. There are some minor questions presented in the pleadings, and argued by counsel, which we will first determine without much elaboration. It is claimed by defendants that the assignment of the note and mortgage from Nelson to Gray was fraudulent and without consideration, and that the plaintiff is not the real party in interest. This claim has no foundation in the evidence. The assignment was valid, and it transferred to the plaintiff all the rights which Nelson had under the note and mortgage. It was alleged by Deere, Wells & Co. that there had been divers payments made and credits given to L. H. Nelson on the indebtedness which were not shown in the plaintiff's petition. This claim is also without foundation. It affirmatively appears that L. H. Nelson never made any payment upon the debt. It appears that one Stewart commenced an action against L. H. Nelson, and attached the land before the deed was delivered, and obtained judgment, and bought the land at sheriff's sale on special execution, and assigned the sheriff's certificate of sale to Deere, Wells & Co. It is claimed by Deere, Wells & Co. that this is a valid lien upon the premises. But it appears by competent evidence that a redemption was had upon the sale. The cause was presented to the court below in a very elaborate manner. There is much more in the record than was necessary to determine the equities of the contending parties. There are other minor questions presented which we do not think proper to mention. The real questions in the case are but few, and we will now proceed to consider them.

The district court held that the mortgage in suit was not merged in the deed made by L. H. Nelson to James Nelson. This is the main question in the case, and the defendants contend that the decree in this respect is a grievous error. It has long been settled in this state that, where a mortgagee takes a conveyance of the mortgaged property from the mortgagor, the mortgage is not merged in the deed, where it is the intention of the mortgagee and to his interest to still hold the mortgage as a lien. Wickersham v. Reeves, 1 Iowa, 413;Vannice v. Bergen, 16 Iowa, 555; Linscott v. Lamart, 46 Iowa, 315; Woodward v. Davis, 53 Iowa, 697, 6 N. W. Rep. 74; and other cases. In some of the cases it was held that there was no merger, even where the mortgage was satisfied of record. The same rule as to merger has been adopted by all courts in all civilized countries. The counsel in this case have made this plain by citing a very large number of authorities. We may say that when a principle is so well settled that it is “laid up among the fundamentals,” a mere reference to the principle is sufficient. But counsel for the defendants contend that while it is to be presumed that James Nelson intended, when he took the conveyance of the land, to hold the mortgage lien, if it should be to his interest to do so to protect himself against conflicting liens, yet that presumption is overcome by the testimony of James Nelson in the case between the parties above cited. It is true that in that case he claimed that he intended to take the whole title to the land, and he claimed it under the deed. This is the intention of every mortgagee who takes title in satisfaction of the mortgage. He intends, as between himself and the mortgagor,...