Court Opinion

ID: 7104341
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:19:13.705814+00
Date Added: 2024-06-11T16:13:31.295285
License: Public Domain

Given, J.
I. Our first inquiry is whether at the time of the sale, and as a part thereof, it was agreed that Thompson should execute to Devin a mortgage on the lot to secure the seven promissory notes. We are entirely convinced that such was the agreement. Devin, - Mahlon Head and Albert Head each so testified, and they are corroborated by the facts that Devin and Thompson were strangers; that Devin had been informed by Mahlon Head that he did not understand that Thompson was worth a great deal of money; that credit was extended for the greater part of the purchase price, and on long time; and that Thompson was in possession of the very mortgage which Devin says he filled out and gave to him to be executed and sent to Mahlon Head for record. The language of the notes indicates such an agreement. The unsupported denial of Thompson cannot prevail against this weight of testimony.
„ 1. Statute of frauds: agreement to mortgage land for purchase money: II. Appellants contend that, as a mortgage on real estate is an instrument affecting the title thereof, or conveying an interest therein, it must be in , . writing, and, if not, that it comes within , the statute or frauds, and cannot be proved, 7 7 and hence that an agreement for such a mortgage, unless in writing, comes within the statute, and is invalid. The general provision of the statute is that no evidence of contracts for the creation or transfer of any interest in lands, except leases for a term not exceeding one year, is competent, unless it be in writing, and signed by the party charged, or by his lawfully authorized agent. To this general provision there is the exception that it shall not ‘ ‘ apply where the purchase money, or any portion thereof, has been received by the vendor, or when the vendee, with the actual or implied consent of the vendor, has taken and held possession thereof under and by virtue of the contract, or when there is any other circumstance, which, by the law heretofore • in force, could have *274taken the case out of the statute of frauds.” Code, secs. 3663-3665. Clearly, the consideration for which Thompson was to give the mortgage had been received by him. There was such a part performance of the agreement as takes it out of the statute of frauds, and renders it enforceable by courts of equity. .
' lien: agree-cute mort III. “The term ‘purchase money,’ as used in this statute, means the consideration.” Devin v. Himer, 29 Iowa, 298. The consideration for Thompson’s promise to give a mortgage was the sale and conveyance ot the lot to him, which consideration he fully received. That such a part performance will take the case out of the statute of frauds is so well established as not to require citation of authorities. It would • be grossly inequitable to leave Thompson to enjoy the fruits of the oral agreement, and deny to Devin what was promised to him in consideration therefor. The numerous authorities cited by counsel for appellants, relating to equitable mortgages by deposit of title deeds, are not applicable to a case where there has been an oral agreement to give a mortgage, that has been so far performed as to bring the case within the exception to the general statute. The agreement was to execute the mortgage prepared by Devin, in which it is provided that Thompson shall pay accruing taxes. This he failed to do, and Devin paid them to preserve his. security. We are clearly of the opinion that, as between Devin and Thompson, Devin is entitled to a lien, according to the terms of the mortgage prepared, and which Thompson agreed to execute, for the unpaid purchase money and interest, and for the taxes paid by Devin on the lot.
3 _._. orecfitOTs: priority. IV. It is contended, on behalf of appellants Barhydt & Co., that, though such a lien may exist as between Thompson and Devin, it is of no validity as to them; they having extended credit to Thompson on the faith of his property, and without any knowledge of such a lien. It is unquestionably true that they had no *275knowledge of this lien at the time they gave credit to Thompson, and we think it also true that they did not then know that Thompson had or claimed any interest in the lot in question. Both members of the firm were witnesses, and neither testified to having any knowledge of this lot, or that Thompson had any interest in it at the time they gave credit to him. The deed to Thompson was not filed for record until long after the date of the last item in the account upon which judgment was confessed. It is evident that they did not extend that credit to Thompson because of any interest he had in the lot.
The case of Hulelt v. Whipple, 58 Barb. 224, relied upon by appellants, is identical with this in many of its facts, yet differing in several important particulars. In that case, at the time of the conveyance and delivery of the notes, the purchaser promised that he would give security “at any time thereafter, or would at any time thereafter give-him security on the land;” thus leaving it with the vendor to demand security when he desired it. No demand was made, and hence the vendor was held to have waived the security. In this case, the security was to be given as soon as Thompson could go to his home, and have his wife join in the mortgage. There was nothing remaining for Devin to do to entitle him to the mortgage. In that case, as in this, defendants, without knowledge of the unrecorded lien, gave credit, but, unlike this, did so after an examination of the records, and upon the faith of the vendee’s apparent, unincumbered, record title. In that case, as in this, the vendor prepared the deed, but he did not prepare a mortgage to be given, as Devin did; in that, the vendor received the money and notes without requiring or demanding a mortgage, — “he consented to take Cressey’s notes, and let him go.” With no right to expect a mortgage until demanded, he waited two years and nine months without making his claim known. Devin waited, supposing his mortgage had been executed, and sent to Mr. Head, and was upon *276record. The court says in that case: “It may be laid down as a sound rule of equity that a judgment creditor who advances his money on the faith of unincumbered title upon the record, without notice, is entitled to the lien acquired thereby, in preference to the secret unrecorded lien of the vendor for a part of the purchase money.” This case is not within that rule, because credit was not given to Thompson upon the faith of his title.
4 _._. mentSbySh" solvency and assignment, Y. Appellants contend that, at most, Devin has but a mere vendor’s lien, and that this became extinguished by the conveyance from Thompson Y Brown, assignee, under the provisions of section 1940, Code, which provides that “no vendor’s lien for unpaid purchase money shall be recognized or enforced, in any court of law or equity, after a conveyance by the vendee, unless such lien is reserved by conveyance, mortgage or other instrument, duty acknowledged and recorded.” It was held in Prouty v. Clark, 73 Iowa, 55, that an assignment by an insolvent was a conveyance, within the meaning of this section. In Porter v. City of Dubuque, 20 Iowa, 442, it is said : “ The right to a lien in favor of a vendor upon the real estate sold to a vendee is not based upon contract, nor is it property an equitable mortgage; neither can it be regarded as a trust resulting to the vendor by reason of the vendee holding the estate with the purchase money unpaid. It is a simple equity, raised and administered by courts of chancery.” Devin’s lien is not such- a lien.. It -is not a simple equity, but a lien based upon a contract, — a contract, as we have seen, such as courts of equity will enforce. Hence section 1940 does not apply. The assignee takes the property of his assignor subject to all the equities ■ existing against it in favor of third. parties. He stands in the shoes, and succeeds only to the rights, of the assignor. Roberts v. Corbin, 26 Iowa, 316. Counsel claim, on the authority of Cutler v. Ammon, 65 Iowa, 281, that defendants’ judgment is entitled to priority. *277It was held in that case that the lien of a judgment takes precedence of a prior vendor’s lien, but it does not hold that the judgment would take precedence over a lien created by contract.
b. bankktjptct: 5en against property1-8 limitation. YI. It is provided in section 5057, Revised Statutes, United States, that no suit shall be maintained in any court between the assignee in bankruptcy and the person cl aiming an adverse interest, touching any property or rights of property, transferable to or vested in such assignee, unless brought within two years from the time when the cause of action accrued for or against such assignee. Appellants contend that the plaintiff Devin’s cause of action accrued when the first note fell due, January 1, 1879, and that, as defendants’ action was not brought within two years thereafter, nor within two years after the last note fell due, January 1, 1882, the action is barred. Goodnow v. Oakley, 66 Iowa, 658, is relied upon. That was an action against the assignee to recover for taxes paid upon lands owned by the bankrupt, and to have the same declared a lien upon the land. Subsequent to the bringing of the action, the assignee conveyed the land to other persons, who, by proper amendments to the petition, were made defendants. It was held that the plaintiff came within the express language of the provision, as one claiming an adverse interest touching property, or rights of property, vested in such assignee. This case is distinguishable from that, in the fact that this conveyance was to the plaintiff, and that the assignee is not a party to this action. While it is true that, in a certain event, relief is asked against Thompson and wife, yet it is not a case wherein plaintiff is claiming an interest adverse to the assignee, touching property or rights of property vested in him. The read controversy is between Devin and Barhydt & Co., and not within the statute cited. We find nothing in any of the cases referred to in conflict with this view.
*2786 equity • relief: laches, *277Yl'I. Appellants’ further contention is that plaintiffs are estopped by their laches from asserting their *278lien. Having consummated bis lien by securing the conveyance of the assignee, there was no cause for action upon the part of Devin until be was disturbed by Barbydt & Co.’s execution, and, when this occurred, this action was brought. He is guilty of no laches.
VIII. It is also contended by appellants that Devin cannot recover taxes, because there was no agreement in writing entitling him to recover the same. The mortgage which Thompson agreed to and should have executed provides for the payment of taxes. Hence Devin’s right to a lien for unpaid purchase money covers the taxes. Our conclusion is that the decree of the district court is right, and should in all respects be
Affirmed.