Lawton v. St. Paul Permanent Loan Co.

• Decision Date: 30 January 1894
• Citation: 57 N.W. 1061,56 Minn. 353
• Parties: LAWTON ET AL. v. ST. PAUL PERMANENT LOAN CO.
• Court: Minnesota Supreme Court

56 Minn. 353

57 N.W. 1061

LAWTON ET AL.

v.ST. PAUL PERMANENT LOAN CO.

Supreme Court of Minnesota.

Jan. 30, 1894.

(Syllabus by the Court.)

1.The defendant made a loan to one L. of $2,000, secured by a real-estate mortgage, containing covenants of title.There being certain tax titles on the premises, defendant and L., as part of the transaction, executed a written agreement, by which defendant was to retain $500 from the amount of the loan, the $500 to be paid to plaintiffs whenever the title of the mortgaged premises was freed from all claims arising under the tax titles, or upon payment of the mortgage in full, and until the occurrence of one of these events the $500 to be retained as security for the payment of the mortgage debt.The title to the premises has never been freed from the tax title, but upon default in the condition of the mortgage debt, the defendant, under a power, sold the mortgaged premises, itself bidding them in for the full amount of the debt,-$2,000, and interest.In an action by the plaintiffs to recover the $500, claiming that the mortgage has been paid in full by the foreclosure sale, held, that the writing was a contract, and not a mere receipt, and that, although plaintiffs were not a party to it, yet, being the basis and measure of their right of recovery, the rule that a written instrument cannot be varied by parol is applicable.

2.Held, also, that the $500 stood as additional security for the payment of the mortgage debt, and not as security for the performance of the covenants of title in the mortgage, and hence did not pass to the defendant as purchaser at the mortgage sale; that what defendant bought at the sale, and for which it made its bid, was the land, as warranted by the covenants, without reference to other securities held by it for the payment of the mortgage debt.

Appeal from district court, Ramsey county; John W. Willis, Judge.

Action on a contract by A. M. Lawton and others against the St. Paul Permanent Loan Company.There was judgment for plaintiffs, and defendant appeals.Affirmed.

Walter L. Chapin, for appellant.

Henry C. James, for respondents.

MITCHELL, J.

The defendant made a loan to one La Croix of $2,000, and took as security therefor from him a mortgage, with covenants of title.There being certain city assessments or tax titles on part of the mortgaged premises, defendant and La Croix, as part of the same transaction, executed the following written agreement: “Exhibit C: Whereas, the St. Paul Permanent Loan Company has made a loan of two thousand dollars to Peter La Croix, and has taken as security therefor from said La Croix and wife a mortgage upon the west half of lot fourteen, in block seven, of Marshall's addition to West Saint Paul, according to the recorded plat thereof, on file and of record in the office of the register of deeds of Ramsey county, Minnesota, and upon the undivided half of the east half of said lot; and whereas, certain city assessments or tax titles are held by the estate of Edward Langevin upon said undivided half of the east half of said lot: Now, the said company, by agreement of all parties, has retained in its possession five hundred dollars ($500.00) from the amount of said loan, said sum of five hundred dollars ($500.00) to be paid over to Henry C. James and A. M. Lawton whenever the title of said La Croix to said undivided half of said east half of said lot is free from all claims arising from the said or any assessment or tax titles, and said mortgage is made superior of record to any claims, or upon the payment of said mortgage in full; and, until the occurrence of one of said events, the said five hundred dollars is to be retained as security for the payment of said mortgage debt.[Signed] -.”In accordance with this agreement, the...