Mowbray v. Simons

• Decision Date: 27 June 1918
• Docket Number: No. 31942.,31942.
• Citation: 168 N.W. 217,183 Iowa 1389
• Parties: MOWBRAY ET AL. v. SIMONS ET AL.
• Court: Iowa Supreme Court

183 Iowa 1389

168 N.W. 217

MOWBRAY ET AL.

v.SIMONS ET AL.

No. 31942.

Supreme Court of Iowa.

June 27, 1918.

Appeal from District Court, Black Hawk County; H. B. Boies, Judge.

Suit in equity to foreclose a mortgage upon real estate and against appellant upon a contract by which he assumed and agreed to pay the mortgage indebtedness. Decree as prayed. Affirmed.J. G. Mitchell, of Greene, and Paulsen & Wood, of Waterloo, for appellants.

Edwards, Longley, Ransier & Smith, of Waterloo, for appellees.

STEVENS, J.

Irene and John H. Simons, wife and husband, on March 17, 1914, executed and delivered a note for $3,350 antedated November 25, 1913, and payable March 1, 1916, to plaintiffs. The consideration for this note was a part of the purchase price for a tract of land. Payment of the note was secured by a mortgage on the land. The reason assigned for antedating the note was that interest was to commence on the indebtedness November 25, 1913, instead of the date on which the note and mortgage were executed. Both the note and mortgage provided that a failure to pay the interest when due would cause the whole indebtedness to at once become due and payable. The mortgage erroneously described the note as of even date therewith. Prior to November 9, 1914, L. C. Megow acquired title to the land, and on that date conveyed the same, by warranty deed, to Thomas G. Watterson, appellant herein, subject to the above mortgage.

The interest on the note was not paid November 1, 1914, and on December 8th appellee demanded payment of the full amount of the indebtedness from the appellant. Appellant lived some distance from the home of appellees, and, in reply to their demand for payment, wrote them that, according to the mortgage, the interest would not become due until March 1, 1915. Upon receipt of this letter, original notice of suit to foreclose the mortgage was placed in the hands of the sheriff for service upon appellant, but, before service thereof, and on December 16, 1914, the contract in writing, which forms the basis of plaintiff's claim against appellant, was entered into between the parties hereto, by which appellees agreed to extend the time of payment to March 1, 1915, in consideration of the assumption and agreement upon the part of appellant to pay the mortgage indebtedness on that date.

Subsequently appellant sold the land to a purchaser who failed to pay the note March 1, 1915, whereupon suit was brought upon the note and a decree of foreclosure entered. Appellant was joined as defendant in the suit, and judgment was demanded against him on the contract for the full amount of the mortgage indebtedness. The premises sold under special execution for $2,500. General execution was then issued and levied upon certain real estate belonging to Simons, but before sale the execution was returned, and an agreement entered into between plaintiff and Simons releasing the latter from further liability on the judgment. Appellant appeared in the foreclosure suit and filed answer reciting the history of the transaction, and, among other defenses, alleged: First, that the contract imposed upon him the liability of a surety only, and that by the settlement with Simons, the principal debtor, he was released from liability on the contract; and, second, that the contract was executed without consideration. As these are the principal defenses relied upon and the only matters discussed in argument, we will not refer to other issues tendered.

I. Counsel for appellant does not seriously contend that the note did not become due, according to its terms, on November 25, 1914, because of the nonpayment of interest, but, as we understand it, their position is that, in the absence of notice to the contrary, the statement in the mortgage that the note was of even date therewith is controlling, and therefore the suit to foreclose the mortgage in which the original notice was delivered to the sheriff for service, but not served, was premature, and the agreement to extend the time of payment to March 1, 1915, did not operate as an extension of time, and therefore the contract was without consideration. In this connection it should be stated that there was an error in the description in the deed from appellee to Simons and from appellant's grantor to him, and the contract provided for the correction of these errors by the exchange of quitclaim deeds, which deeds were executed as agreed. This is also relied upon by appellee as a consideration for the contract.

[1][2] It has been generally held by the courts that the provisions of the note and mortgage given to secure the payment thereof must be construed together and enforced accordingly where this is possible. It is also the general, if not universal, holding that, where there is a conflict between the terms of the note and mortgage as to the maturity of the former, its provisions must control. This proceeds upon the theory that the mortgage executed for the purpose of securing the payment of the note is an incident thereto, and not the primary obligation. Jones on Mortgages (7th Ed.) § 351; State Bank v. Tweedy, 8 Blackf. (Ind.) 447, 46 Am. Dec. 488;Ferris v. Johnson, 136 Mich. 227, 98 N. W. 1014;Kennedy v. Gibson, 68 Kan. 612, 75 Pac. 1044;Owings v. McKenzie, 133 Mo. 323, 33 S. W. 802, 40 L. R. A. 154;San Gabriel Valley Bank v. Lake View Town Co., 4 Cal. App. 630, 89 Pac. 360.

[3] It therefore follows that the indebtedness, payment of which was secured by the mortgage, fell due on November 21, 1914, because of the nonpayment of interest, and if title had remained in the mortgagor, it would not be contended that...