Harvison v. Griffin
| Decision Date | 29 November 1915 |
| Citation | 155 N.W. 655,32 N.D. 188 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Stutsman County, Coffey, J. From a judgment in plaintiff's favor, defendant J. I. Case Threshing Machine Company appeals.
Affirmed.
Knauf & Knauf and Upham, Black, Russell & Richardson, for appellants.
Where one has a mortgage on several tracts of land, and subsequent thereto the mortgagor mortgages a portion thereof to another party, and the first mortgagee has notice of the interest and mortgage of the subsequent mortgagee, the law places upon the first mortgagee the duty to so conduct himself with reference to his first mortgage as not to impair the security of the subsequent incumbrancer. Rev. Codes 1905, §§ 4690, 6140, Comp. Laws 1913, §§ 5218, 6716; Union Nat. Bank v. Moline, M. & S. Co. 7 N.D. 201, 73 N.W 527; 3 Pom. Eq. Jur. 1414; Gotzian v. Shakman, 89 Wis. 52, 46 Am. St. Rep. 820, 61 N.W. 304; Irvine v. Perry 119 Cal. 352, 51 P. 544, 949.
As a purchaser of a portion of the premises covered by the first mortgage, the right of appellants was to have the property sold on foreclosure in satisfaction of such mortgage in the inverse order of its alienation. Merced Security Sav Bank v. Simon, 141 Cal. 11, 74 P. 356; Civil Code, §§ 2899, 3433; Kent v. Williams, 114 Cal. 537, 46 P. 462; Woodward v. Brown, 119 Cal. 283, 63 Am. St. Rep. 108, 51 P. 2, 542; Mack v. Shafer, 135 Cal. 113, 67 P. 40; Re Levin Bros. 139 Cal. 350, 63 P. 335, 73 P. 159; Orvis v. Powell, 98 U.S. 176, 25 L. ed. 238; National Sav. Bank v. Creswell, 100 U.S. 641, 25 L. ed. 714.
Where a mortgagor of land sells part of it to one, and afterwards the residue to another, the mortgage rests upon the last conveyed. Chase v. Barnard, 64 N.H. 615, 17 A. 410; Merchants' State Bank v. Tufts, 14 N.D. 238, 116 Am. St. Rep. 682, 103 N.W. 760; Howser v. Cruikshank, 122 Ala. 256, 82 Am. St. Rep. 76, 25 So. 206.
At the time Baylies obtained the deed to the land, and for a long time prior thereto, appellant company had the right to insist that the lands in section 33 be first sold under the mortgage. Under the sheriff's deed the purchaser acquired all the rights which were held by the mortgage. That being a right held by the mortgage, it is still a right in the company, under its deed. 3 Pom. Eq. Jur. 1225, and note; Northwestern Land Asso. v. Harris, 114 Ala. 468, 21 So. 999; 2 Jones, Mortg. 5th ed. 1620; 2 White & T. Lead. Cas. in Eq. 297; Whittaker v. Belvidere Roller Mill Co. 55 N.J.Eq. 674, 38 A. 295; Irvine v. Perry, 119 Cal. 352, 51 P. 544, 949.
Geo. W. Thorp and Russell D. Chase, for respondent.
The mortgagee, after becoming the purchaser for the full amount of the indebtedness, cannot claim any rights by virtue of the mortgage, after having extinguished the same and putting himself in the same position as any other purchaser. Ledyard v. Phillips, 47 Mich. 305, 11 N.W. 170.
The purchaser at a foreclosure sale takes the same title that the mortgagor had at the time of the execution and delivery of the mortgage foreclosed, and subject to the liens. North Dakota Horse & Cattle Co. v. Serumgard, 17 N.D. 466, 29 L.R.A.(N.S.) 517, 138 Am. St. Rep. 717, 117 N.W. 453; 27 Cyc. 1492; Rev. Codes 1905, § 7467, Comp. Laws 1913, § 8087; Grove v. Great Northern Loan Co. 17 N.D. 352, 138 Am. St. Rep. 707, 116 N.W. 345.
Such purchaser is only concerned with the state of the title at the date of execution and delivery of such mortgage. Nichols v. Tingstad, 10 N.D. 172, 86 N.W. 694; Kuhnert v. Conrad, 6 N.D. 215, 69 N.W. 185; Belleville Sav. Bank v. Reis, 136 Ill. 242, 26 N.E. 646; 27 Cyc. 1383, 1488.
"A mortgage is a lien upon everything that would pass by a grant of the property, and upon nothing more." Rev. Codes 1905, § 6162, Comp. Laws 1913, § 6738.
"The sale of any property on which there is a lien in satisfaction of the claim secured thereby extinguishes the lien thereon." Rev. Codes 1905, chap. 74, § 6145, Comp. Laws 1913, § 6721.
"Where property is sold subject to a prior lien such property stands charged with its satisfaction." Lyons v. Godfrey, 55 Neb. 755, 76 N.W. 464.
If the mortgagor pays off the mortgage, or if the parcel remaining in his hands is sold in full satisfaction of it, he cannot call upon his grantees for any reimbursement. Equality of equities destroys all right and liability of rateable contribution. 3 Pom. Eq. Jur. 3d ed. § 1224; 2 Jones, Mortg. §§ 1091, 1092, 1620, 1621.
The rule is that if one party has a mortgage or lien upon two pieces of property, and another party has a mortgage or lien upon one of such pieces of property only, the latter has a right in equity to compel the former to resort first to the property upon which he has an exclusive lien, for its satisfaction, if that course is necessary, for the satisfaction of the claims of both parties, whenever such course will not trench upon the rights or operate to the prejudice of the first party. 1 Story, Eq. Jur. § 633.
But, in such case, the party complaining must show damages. Union Nat. Bank v. Moline, M. & S. Co. 7 N.D. 201, 73 N.W. 537.
Where a creditor who has his debt secured by two funds has received full satisfaction out of either, equity will not interfere. Before assets or securities can be marshaled, the necessity for so doing must appear. Franklin v. Warden, 9 Minn. 124, Gil. 114; Hull v. Carnley, 17 N.Y. 202; State v. Weston, 17 Wis. 108; Manning v. Monaghan, 23 N.Y. 539; Duester v. McCamus, 14 Wis. 308; Quinnipiac Brewing Co. v. Fitzgibbons, 73 Conn. 191, 47 A. 130; 4 Pom. Eq. Jur. 3d ed. § 1414.
"The rule of marshaling does not prevail except where both funds are in the hands of the common debtor of both creditors." 26 Cyc. 932; Carter v. Neal, 24 Ga. 346, 71 Am. Dec. 136; Citizens' State Bank v. Iddings, 60 Neb. 709, 84 N.W. 78; Lee v. Gregory, 12 Neb. 282, 11 N.W. 297.
And such rule applies only as between different creditors. 26 Cyc. 936.
When a mortgagee takes possession under a mortgage, and sells the property, the amount realized at the sale is conclusive on all parties as to the value of the property, and the amount to be applied on the indebtedness. First Nat. Bank v. Northwestern Elevator Co. 4 S.D. 409, 57 N.W. 77.
The rights of others, and of the prior lienholder, cannot be prejudiced by the marshaling of securities. 27 Cyc. 1366.
Every conveyance by deed, mortgage, or otherwise of real estate, etc., shall be void as against any subsequent purchaser in good faith, or as against any attachment, . . . or judgment.
The notice referred to as having been given, and of which respondent knew, as appellant claims, is not authorized by statute, and the recording of the same did not constitute constructive notice to anyone. Sarles v. McGee, 1 N.D. 365, 26 Am. St. Rep. 633, 48 N.W. 231; 2 Devlin, Real Estate, 3d ed. §§ 711, 715; Wade, Notice, § 119, and cases cited.
The party seeking the marshaling of securities must make a demand for such relief, and that the same be done under the statute. The mere recording of a notice is not sufficient. Rev. Codes 1905, § 6140, Comp. Laws 1913, § 6716; 26 Cyc. 935.
Notice to an agent to bind the principal must be notice with reference to some duty within the agent's authority; it must be given to the agent for the benefit of the principal during the existence of the agency. 31 Cyc. 1587, P 4.
A conspiracy cannot result from an agreement between two parties to perform a legal act. 8 Cyc. 645-647.
The burden of proof is on the party alleging fraud. Abbott, Proof of Facts, p. 496; 20 Cyc. 120.
The right of appellant here is the same as that of a stranger or outside party. 2 Jones, Mortg. § 1622; Kellogg v. Rand, 11 Paige, 59.
This litigation arose in the district court of Stutsman county and comes here for trial de novo. The question for decision is whether defendant, J. I. Case Threshing Machine Company, possesses the right which it attempts to assert of compelling plaintiff to marshal the securities covered by his mortgage. None of the material facts are in dispute. Briefly stated, they are as follows: On December 26, 1906, defendants Louisa B. and Thomas P. Griffin being the owners of all of section 33, and the S.E. 1/4 and S. 1/2 of N.W. 1/4 of section 27, township 137, range 67, mortgaged the same to one J. J. Nierling to secure the payment of $ 5,000 and interest. Nierling assigned such mortgage on March 11, 1907, to Amus H. Lamp, who on October 14, 1911, assigned same to the plaintiff, who seeks by this action to foreclose the same. On March 12, 1907, the Griffins mortgaged all of such lands to J. J. Nierling to secure the payment of $ 900, and on October 3, 1910, Nierling assigned the same to the Case Company. On September 10, 1907, the Griffins mortgaged to the Case Company the S.E. 1/4 and the S. 1/2 of N.W. 1/4 aforesaid to secure the payment of $ 2,895. After executing the three mortgages aforesaid, the Griffins on March 11, 1910, conveyed to F. A. Baylies by warranty deed, all of section 33, such grantee assuming and agreeing to pay a certain proportion of the encumbrances against said section 33. Such agreement is contained in the deed, and is as follows: ...
To continue reading
Request your trial