Wood v. Stevenson

• Decision Date: 04 September 1923
• Docket Number: 1061
• Citation: 30 Wyo. 171,217 P. 953
• Parties: WOOD v. STEVENSON
• Court: Wyoming Supreme Court

217 P. 953

30 Wyo. 171

WOOD v. STEVENSON

No. 1061

Supreme Court of Wyoming

September 4, 1923

APPEAL from District Court, Weston County; JAMES H. BURGESS, Judge.

Action by W. J. Wood against E. C. Stevenson, to enjoin the foreclosure of a mortgage and for a decree of satisfaction and other equitable relief. From a judgment of dismissal plaintiff appeals. The material facts are stated in the opinion.

Affirmed.

Raymond La Fleiche and Kem for appellant.

Amendments are permitted even after judgment, (5707 C. S. Lellman v Mills, (Wyo.) 87 P. 985.) The amendments desired, related to facts largely within the knowledge of defendant, and the trial court should have permitted the amendment of plaintiff's petition; a mortgagee consenting to a sale of the mortgaged property and accepting application of proceeds on his debt releases his lien, (27 Cyc. 1405). A grantee of mortgaged property, taking with the understanding that lien would be satisfied and without deduction of amount of lien from the purchase may defend against the lien for fraud. (Bennett v. Keehn, 15 N.W. 776; Ludington v. Harris, 21 Wis. 241; Samons v. Kearney P. Co., 110 N.W. 300; Woodward v. Jewel, 11 U. S. S.Ct. 784; Partridge v. Company, 78 N.W. 85.) The acceptance of sale proceeds by mortgagee discharges his lien. (Field v. Doyan, 25 N.W. 653; Pratt v. Waterhouse, 27 A. 855.) A purchaser of mortgaged premises is not obligated to see that the money is applied in discharge of the mortgage on property. (19 R. C. L. 368); mortgagee's consent to sale, need not be in writing. (Freek v. Milling Co., 32 P. 1103; New England Co. v. Company, 71 N.W. 130; Fredonia Bank v. Borden, 30 A. 975.) Stevenson placed himself in the position where he is now found. The sale from Andrews to Pyle was for a valid consideration. The chattel mortgage renewal affidavit, proved that respondent had given Andrews credit for the Pyle purchase; the evidence shows that Stevenson with the knowledge that Andrews had made the deal with Wood, sold the property to Pyle, credited the Andrews' debt with either $ 3900.00 or $ 4,000.00, and took the Pyle mortgage in payment of that sum; appellant is entitled to credit for the proceeds from the sale of the sheep; one holding liens upon two properties cannot release one to the prejudice of a junior lien-holder, who has a lien on only one of the properties. (Jordon v. Bank, 9 N.W. 656.) Appellant stands in the relation of a junior lien-holder and is entitled to the same remedy. (Johnson v. Johnson, 8 N. J. E. 561; Sexton v. Pickett, 24 Wis. 346; Worth v. Hill, 14 Wis. 559; Semes v. Boykin, 27 Ga. 47.) The doctrine of marshalling assets is one of common justice, and is resorted to, where two or more creditors have claims against a common debtor. (Hughes v. Shannon, 13 Ky. L. R. 782; Newby v. Fox, 133 P. 890; 26 Cyc. 927; Stowe v. Powers, 116 P. 576.) Where a part of the mortgaged premises have been sold, the lien-holder is compelled to exhaust the part remaining unsold before proceeding against the conveyed property. (Mills v. Kelly, 50 A. 144.)

Diefenderfer and Wakeman and W. K. Somers for respondent.

The memorandum opinion of the trial Court clearly sets forth the principles involved and application of the facts in the record; an examination of the authorities relied upon by appellant will show that they are not applicable to the facts established by the evidence in this case; a purchaser's title is taken subject to mortgage, and is no better than that of the grantor. (27 Cyc. 1337); the purchaser merely took grantor's equity of redemption. (Miller v. Williams, 59 P. 740; Kelly v. Staed, 58 Am. St. Rep. 648); a mere change of securities of equal dignity for a debt is not a novation of that debt or payment thereof. (19 R. C. L. 444; Dumell v. Terstegge, 85 Am. Dec. 470; Pollak Bros. v. Company, 35 L. R. A. (NS) 86; Lowe v. Blum, 43 P. 1063; Studebaker Co. v. Endom, 72 Am. St. Rep. 489; State Bank v. Company, 86 Am. St. Rep. 891; Terry v. Robbins, 83 Am. St. Rep. 663; Fidelity Co. v. R. R. Co., 19 Am. St. Rep. 858; Banta v. Vreeland, 82 Am. Dec. 269; Bachmann v. Hurtt, 184 P. 709; Bolln v. Stock Co., 196 P. 748.) Land charged with a debt can only be discharged therefrom by payment or intentional release. (American Co. v. Helgesen, 122 P. 26.) A judgment not supported by the pleadings is fatally defective, and facts proved at the trial, but not set up in the pleadings cannot sustain a judgment. (23 Cyc. 816, 820.) An amendment presenting new issues should be denied. (31 Cyc. 401; Wright v. R. R. Co., 42 A. 440); new issues cannot be introduced by amendments, (31 Cyc. 401-403); an agency to sell lands must be strictly pursued, (2 C. J. 611); sale must be on terms subscribed by owner and for cash, unless otherwise authorized. (6 C. J. 616-618.) A sale for less than authorized by owner, is not binding. (Bush v. Cole, 28 N.Y. 261, 84 Am. Dec. 343; Morton v. Morris, (Tex.) 66 S.W. 94; McGrath v. Vanaman, (N. J.) 32 A. 686; Bloom v. Sawyer, (Ky.) 89 S.W. 204; Kearns v. Nickse, (Conn.) 10 Ann. Cas. 420.) The judgment of the trial Court should be affirmed.

Raymond, La Fleiche and Kem in reply.

Counsel for respondent have overlooked Sec. 5860 C. S. and decisions construing it. (Chicago B. & Q. R. R. v. Pollock, 93 P. 847.) The amendment requested by plaintiff was within the ruling; respondent has offered no argument upon the question of marshalling assets; respondent's repudiation of a solemn engagement has drawn an innocent party into litigation to his loss; he should not be permitted to consent to a sale of property, upon which he held a lien and thereafter repudiate the sale to his own advantage, and the loss of an innocent purchaser.

BLUME, Justice. POTTER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action brought by W. J. Wood, plaintiff in the case below and appellant here, against E. C. Stevenson, defendant below and respondent here, to enjoin the defendant from foreclosing a mortgage given, as mentioned below, by one Andrews to respondent; also to declare said mortgage satisfied and for other equitable relief. The case was tried to the court without a jury; judgment was rendered against the plaintiff, his petition dismissed, and he appeals.

The material facts are substantially as follows: On the 16th day of October, 1919, one Albert Andrews was the owner of lots 7 and 8 in block 3 of the First Addition in Moorcroft, Wyoming. On that date, probably to secure the purchase price of some sheep, he and his wife executed to the defendant E. C. Stevenson a mortgage on the said premises in the usual form securing an indebtedness of $ 8610.00, the correct amount of which, by reason of an error in the counting of sheep, was, however, in fact $ 8010.00. Appellant says that respondent continued to claim the full amount of $ 8610. The record, however, is silent as to that, or, at least, that fact does not appear plainly. On the same date the mortgagors aforesaid also executed to said Stevenson a chattel mortgage on some personal property, which was duly filed for record, and which was made to secure the same indebtedness above mentioned. Subsequently on April 27, 1920, said Andrews and wife entered into a written contract with the plaintiff Wood for the sale of the premises in question, free of incumbrance, for the consideration of $ 2750.00, of which $ 850.00 is acknowledged to have been paid, and requiring the payment of the balance of $ 1900, to be made July 1st, 1920. The respondent Wood knew at this time of the existence of the mortgage above mentioned. Considerable dispute appears in the record as to whether Stevenson consented to or authorized the foregoing contract. Appellant claims that he did; respondent denies this. To this matter we shall revert later. It is clear, however, that the appellant himself never had any talk with respondent in reference thereto, and relied wholly upon what Andrews told him. The contract was not acknowledged. Subsequent to the making of the contract above mentioned, and without knowledge apparently of the appellant, said Andrews and wife, totally ignoring the previous contract with respondent Wood, conveyed, by warranty deed, the premises in question to one Luther E. Pyle, said deed containing the following recital:

"This conveyance being made subject to a first mortgage lien in the amount of $ 8610.00 as shown by a certain mortgage deed of record in the records of the county of Crook, State of Wyoming, and wherein the above named grantors are mortgagors and E. C. Stevenson is mortgagee."

The evidence shows that this transaction took place with the full knowledge of the respondent Stevenson; that in fact it was brought about by his efforts, and he testified, in which he is corroborated by other testimony in the record, though disputed by other witnesses, that while he had some knowledge of a deal for the property between said Andrews and the appellant, said Andrews had stated, in effect, at the time of the making of the deed to Pyle, that the transaction with appellant had been terminated, and that he, the respondent and Pyle had relied on such statement of Andrews. The sale price of the premises to Pyle was $ 3900.00, and Pyle in addition to that was to pay to the respondent the sum of $ 100.00 as commission. No money was, however, ever paid. The total consideration of the sale was to be paid over to the respondent, and accordingly the purchaser Pyle, in order to secure the purchase price, executed to the respondent a mortgage for $ 3900.00 on the property in question and some 320 acres of land in section 15 T 56 N. R. 69, the value of the land being about $ 3200.00 with a first lien of $ 800.00 against it. This mortgage was subsequently duly recorded. A credit of $ 3900.00 was thereafter...