Smith v. Swan

• Decision Date: 05 October 1886
• Citation: 29 N.W. 402,69 Iowa 412
• Parties: SMITH v. SWAN.
• Court: Iowa Supreme Court

69 Iowa 412

29 N.W. 402

SMITH

v.SWAN.

Supreme Court of Iowa.

October 5, 1886.

Appeal from Des Moines district court.

Action against a junior incumbrancer to foreclose a mortgage. There was a decree declaring plaintiff's mortgage to be the paramount lien, and providing that defendant be permitted to redeem therefrom upon the payment of the amount due upon plaintiff's mortgage, after deducting certain sums found to be the value of the rent of the land, the possession of which was held by him. The defendant appeals.T. B. Snyder and P. H. Smyth & Son, for appellant.

J. C. Power and Paul Guelich, for appellee.

BECK, J.

1. The undisputed facts of the case, as disclosed by the record, are as follows: (1) Uriah Foster, being the owner of the real estate in controversy, in 1877 executed to plaintiff the mortgage sought to be foreclosed against defendant in this action. (2) In May, 1878, Uriah Foster conveyed the property to S. S. Foster, who, by a clause in the deed, assumed to pay the incumbrances thereon. (3) In September of the same year defendant recovered a judgment against Uriah Foster, which remains unsatisfied. (4) In August, 1879, S. S. Foster reconveyed the real estate to Uriah Foster. (5) In the same month Uriah Foster conveyed the property to plaintiff, the deed declaring that the consideration therefor was the satisfaction of the mortgage. (6) In July, 1879, plaintiff commenced an action against Uriah Foster to foreclose the mortgage, which was dismissed in November of the same year upon motion of plaintiff; the record being in this language: “Now, on this day, on motion of J. C. Powers and Paul Guelich, attorneys for plaintiff, it is ordered by the court that this cause be, and the same is hereby, dismissed, at the cost of plaintiff, having been settled.” (7) The mortgage has not been satisfied upon the record, and it was not the purpose of plaintiff to acquire the property subject to other liens. At the time of the conveyance to the plaintiff it was worth about the amount due on the mortgage. It was clearly the purpose of the parties that the debt should be paid by the transfer of the real estate mortgaged, free from liens and incumbrances. (8) Defendant seeks to enforce his judgment against the property, claiming that the mortgage, by reason of the foregoing facts, is paid and discharged.

2. It is first insisted by defendant that plaintiff's mortgage was paid by the conveyance of the property to him, and thereupon the instrument became functus officiis, and under it plaintiff holds no rights which can be set up against defendant's judgment. It may be admitted that, as between the mortgagor and mortgagee, the conveyance operates as a payment within the terms and conditions upon which it was made. Under these terms it was the purpose of the parties that the conveyance of the property free of incumbrance should operate as payment. That such was the intention cannot for a moment be doubted. The property was worth about $1,000. The debt reached nearly that sum. Defendant's judgment is for $753. It is absurd to suppose that the parties intended that the debt should be paid by a sum less than $250. If the conditions of the transfer to plaintiff are disregarded, or are not performed, the debt cannot be regarded as paid. Therefore, if the defendant's judgment is a subsisting lien upon the property, these conditions are forfeited, and the debt stands unpaid. In that case, plaintiff is entitled to enforce the mortgage. Stimpson v. Pease, 53 Iowa, 572; S. C. 5 N. W. Rep. 760;Wickersham v. Reeves, 1 Iowa, 413;Lyon v. McIlvaine, 24 Iowa, 9.

3. Counsel for defendant insist that upon the conveyance of the property to plaintiff, the estate and interest held by him under the mortgage merged in the fee-simple title which he acquired under the deed executed by the mortgagor. The doctrine is well settled in this state that in such a case no merger will occur when the intention of the mortgagee is otherwise, and the merger is against his interest. Wickersham v. Reeves, 1 Iowa, 413;Lyon v. McIlvaine, 24 Iowa, 10; Stimpson v. Pease, 53 Iowa, 572; S. C. 5 N. W. Rep. 760;Woodward v. Davis, 53 Iowa, 694;S. C. 6 N. W. Rep. 74;Wilhelmi v. Leonard, 13 Iowa, 330;Vannice v. Bergen, 16 Iowa, 555;Rankin v. Wilsey, 17 Iowa, 463;Linscott v. Lamart, 46 Iowa, 312. In the case last cited the conveyance to the mortgagee was by a deed of warranty executed by the mortgagor, and the notes secured by the mortgage were surrendered. Like facts are relied upon in this case. But it was held that, in the absence of an intention to merge the mortgage estate in the fee-simple, it would not occur.

4. It is lastly insisted that the dismissal of the action to foreclose the mortgage, brought by plaintiff against the mortgagor, is, in effect, an adjudication which cuts off the right of plaintiff to prosecute this suit. There are two ready answers to this position: (1) The parties, the issues, and the remedies sought in this case and that are not identical. The judgment, therefore, in that action, will not bar recovery in this. This conclusion...