Stowe v. Powers

• Citation: 19 Wyo. 291,116 P. 576
• Decision Date: 14 June 1911
• Docket Number: 633
• Parties: STOWE ET AL. v. POWERS
• Court: Wyoming Supreme Court

116 P. 576

19 Wyo. 291

STOWE ET AL. v. POWERS

No. 633

Supreme Court of Wyoming

June 14, 1911

ERROR to the District Court, Big Horn County, HON. CARROLL H PARMELEE, Judge.

The material facts are stated in the opinion.

Affirmed.

William C. Snow, for plaintiffs in error.

Upon the pleadings and affidavits in the case, the quit claim deed of Stowe must be considered a prior lien upon the premises therein described. But whether or not Powers or Stowe have a first lien thereon is immaterial here, for in either case Stowe had the right to foreclose by advertisement. The first ground upon which the injunction was applied for, viz: that the foreclosure notice offers for sale only part of the property covered by the Stowe mortgages, it is merely necessary to refer the court to the notices of sale, which are attached to the petition. From them it will appear that all of the property included in Stowe's mortgages was offered for sale. To have advertised in each advertisement all of the property described in each mortgage for sale would have offered some of the property for sale twice where the same was included in both mortgages. But a mortgagee may offer for sale upon foreclosure such part only as he desires--unless by so doing the best price for the whole might not be obtained. The complaint seems to be that the mortgagee proposes to offer for sale more than is necessary to satisfy his debt, not less.

It is complained that only the land covered by the Powers mortgage is being offered for sale. A copy of the advertisement shows the fact to be otherwise. It is contended on behalf of Powers that Stowe ought not to be allowed to first resort to the doubly incumbered property. That raises substantially the only question in the case, which is entitled to serious consideration. It is the general rule that if a mortgagee has other security for his demand, and another creditor has a lien upon one of the funds only, the former must resort in the first place to that security upon which no one other than his debtor has any claim. (2 Jones on Mort. (2nd Ed.) Sec 1628.) The mortgagee is not obliged to resort to the singly incumbered fund in the event that by doing so he will be delayed or inconvenienced. (4 Pomeroy's Eq. (3rd Ed.) Sec. 1414; Jones v. Zollicoffer, 2 Hawks, 623, 11 Am. Dec. 795.) Or where the money could not be realized so quickly as from other land. (2 Jones on Mort. (2nd Ed) Sec 1628.) Or where there is any doubt that the singly charged fund is sufficient to satisfy the debt. (Hudkins v. Ward, 30 W.Va. 204; 8 Am. St. 22.) Or where the senior creditor is willing to turn over to the junior creditor all securities on the payment of his debt. (Hudkins v. Ward, supra; Willcocks v. Hart, 1 Paige, 185; Brinkerhoff v. Marvin, 5 Johns. Ch. 321.) The burden of proof to show that none of the exceptions to the general rule exists rests upon the plaintiff. To authorize a marshaling of assets it must be clear that the creditor can sustain no loss thereby, and will not be in any way delayed nor have his claim subjected to any additional peril. (Ins. Co. v. Ins. Co., 10 Md. 517, 69 Am. Dec. 174; Farwell v. Bigelow, 112 Mich. 285; 19 Ency. L. 1265.) All the rights of Powers would be amply protected by an order subrogating him to the rights of Stowe, after the latter's debt had been satisfied. When subrogation will promote justice no injunction is necessary. (Canal Co.'s App., 38 Pa. St. 512; Dickson v. Back (Ore.), 51 P. 727.) The junior creditor has a right to be subrogated on paying off the senior's equity. (Bispham's Eq., (4th Ed.) Secs. 335-338; 2 Jones on Mort. (2nd Ed.) Sec. 1628.) In the absence of fraud, and unless it is shown that the foreclosing lienholder is governed by mere caprice alone in seeking satisfaction out of the doubly incumbered fund, equity will not enjoin. (Jones v. Zollicoffer, supra; Dickson v. Back, supra.) In most cases subrogation will accomplish justice. (Bispham's Eq., Secs. 340-341.) To entitle the plaintiff to the relief sought the petition should have alleged that the plaintiff had offered to pay the debt due Stowe from Worland, and that Stowe had declined to turn over his securities. The right of one to foreclose his mortgage by advertisement is a substantial one, and cannot be taken from him. The object of the power is to afford a speedy remedy without the delay of a suit. (Jones on Mort. (2nd Ed.) Sec. 1797.) The mere fact that Stowe is willing to assign to Powers all his securities upon the payment of his debt, is sufficient to dispose of the case. The fact that it is apprehended that the foreclosure sale would result in clouding the title is not such a threatened injury as to authorize injunction. (2 Jones on Mortgages (2nd Ed.) Sec. 1815.) Should the hotel property be sufficient to satisfy the debt due Powers then it would follow that he is not entitled to an injunction. The allegation of the petition is insufficient to show that such property would not cover the plaintiff's debt.

Lonabaugh & Wenzell, for defendant in error.

An order sustaining or overruling a demurrer is not a final order which can be made the basis of a proceeding in error prior to final judgment. (Turner v. Hamilton, 10 Wyo. 177.) By calling their pleading a motion instead of demurrer the plaintiffs in error are not in a position to question the legal sufficiency of the petition in this proceeding. He who has two funds for the satisfaction of his claim shall not, by electing to resort to the doubly charged fund, disappoint him who has that fund only to resort to. (Sternberger v. Sussman, 60 A. 195.) The doctrine of marshaling assets is not founded on contract but rests solely on equitable principles. (Loan & Trust Co. v. Kip, 85 N.E. 59.) The doctrine has its exceptions. (Cooper &c. Co. v. Irvin, 120 N.W. 430; Mulhern v. Porter, 58 S.E. 60.) On the motion to dissolve the injunction no such issue could be tendered and judicially determined as that attempted to be presented by the affidavits of Stowe relative to the titles to the property and water rights. That is a matter to be determined upon final hearing. It is true that in some instances a court of equity will subrogate the subsequent incumbrancer to the rights of the prior, and permit the prior to proceed with the sale, and if the court should so determine in this case on final hearing, there would be no objection to such a judgment. On the question of the sufficiency of the advertisements and the right of Powers to have all the property therein described sold, it is here urged that the advertisements under the first mortgage entirely omits several tracts which a court of equity would require to be sold, and on these tracts Powers has no lien whatever. It is only fair, if Stowe is to foreclose his mortgage, that he be required to sell all the property described therein. The failure to include all of the property in the foreclosure advertisements shows such a disregard of the rights of Powers as to warrant the granting of a temporary injunction.

POTTER, JUSTICE. BEARD, C. J., concurs. SCOTT, J., did not sit.

OPINION

POTTER, JUSTICE.

This is a proceeding in error for the review of an order of the District Court in Big Horn county denying a motion to dissolve a temporary injunction. The material facts are as follows: E. A. Powers, defendant in error, is the holder of two promissory notes for $ 6000 and $ 1500 respectively, executed and delivered to him by the Worland Hotel Company, a corporation, and Charles H. Worland. The first note is dated July 9, 1906, and the second, October 15, 1906. The interest on the first note is represented by interest notes executed by the same parties. To secure the first note the Worland Hotel Company executed and delivered to Powers a mortgage of the same date as the note covering certain lots in the town of Worland in said county of Big Horn, and Charles H. Worland executed and delivered to him a mortgage upon 240 acres of land in said county, described as the west half of the S.W. quarter of section 26, the west half of the N.W. quarter of section 35, and the east half of N.E. quarter of section 34 in township 47, range 93 west of the sixth principal meridian. To secure the second note Worland executed and delivered to Powers another mortgage of the same date as the note covering the same lands described in his mortgage above mentioned, together with all water rights, ditches, flumes, laterals, etc., conveying water to and upon said lands and particularly all interest, right, title in and to any stock, shares or equity in the two canals known as the Big Horn and Bluff canals.

The plaintiff in error, Edward E. Stowe, holds a note for $ 6000 dated November 4, 1905, executed and delivered to him by said Charles H. Worland, and two mortgages and a quit claim deed executed by Worland to secure the same. One of the mortgages and the quit claim deed bear the same date as the note, and the former covers the same lands described in the mortgages executed by Charles H. Worland to Powers, with the exception of the S.W. quarter of the S.W. quarter of section 26, and in addition thereto, the N.E. quarter of the S.E. quarter of section 27, and three small tracts described by metes and bounds and to be known as certain specified lots in the town of Worland when platted, one of said tracts being located in the S.E. quarter of the N.W. quarter of section 26, and the others in the N.E. quarter of the S.W. quarter of said section, all in the township and range aforesaid. That mortgage also includes the water rights, and describes them in substantially the same manner as they are described in the second mortgage of Worland to Powers. The quit claim deed describes 320 acres of land in section 27, said township and range, and the S.W. quarter of the S.W....