Court Opinion

ID: 6686171
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:32:52.966914+00
Date Added: 2024-06-11T16:00:58.584856
License: Public Domain

Fuller, J.
In this action by the holder of a deed to certain mortgaged premises against a corporate mortgagee and its assignee for an accounting and to cancel the'mortgage all facts were found in favor of the defendants, and plaintiff appeals from a judgment accordingly entered.
On the 30th day of August, 1892, Richard Ralph mortgaged to the Minneapolis Threshing Machine Company a complete threshing outfit as security for his promissory notes aggregating $2,150, and, after making certain payments, gave the company renewal notes for the balance, amounting to §1,584, additionally secured by the real estate mortgage in question, which was executed by himself and wife on the 18th day of December, 1895, and duly recorded in the office of the register of deeds. With notice of such incumbrance and a prior mortgage of §300, appellant secured his deed from the mortgagors, with*290out consideration, on the 15th day of July, 1897, and concerning the transaction the mortgagor and maker of the deed testified as follows: “Q. How did Spencer get title? A. I gave him a quitclaim deed. Q. What did he pay you for that deed? A. He did not pay me anything. The circumstances of my giving the deed were these: He came out there, and told me he had bought the mortgage, and he was going to foreclose if I did not give him a deed. He had the deed right with him. The mortgage he was going to foreclose was the $300 I had on the land. He claimed he had bought it of the South Dakota Loan and Trust Company. If he foreclosed. I was to have a year for redemption, and he agreed that he would give me a year if I gave him the deed. That condition was not put in the deed that I was to have the right to redeem. I got a slip of paper. I don’t know where it is now. I can’t remember to state any part of it. I guess it gave me a year’s time to redeem, as near as I can remember.” It was shown by the greater weight of convincing testimony that some months later, and before this deed was recorded, or in any manner brought to the attention of the machine company, Ralph sold for $300, and delivered' to such corporation, all the property described in the chattel mortgage, pursuant to an express agreement that such sum would be applied on the indebtedness secured by the real estate mortgage dated December 18, 1895. By crediting this $300 and all other payments ever made by or on behalf of the mortgagors, the indebtedness was reduced to $851 prior to the 30th day of September, 1898, at which time the corporate mortgagee, in consideration of $851, sold, assigned, transferred and delivered to respondent Forcht the' promissory notes upon which such amount remained due,- together with an assignment *291of the real estate mortgage given to secure the same; and he is still the owner and holder thereof, no part of which has been paid. It was shown by a fair preponderance of competent evidence that the real value of the property described in the chattel mortgage did not exceed $300 when the mortgagee, without notice of appellant’s unrecorded deed, purchased it all, and, conformable to an agreement with the mortgagor, applied the full purchase price on his indebtedness. Having paid nothing for the deed, there is no rule of equity which places the appellant in a more favorable position than the mortgagor and former owner of the land would occupy had the record title remained unchanged. Assuming that by virtue of a transaction which gave the owner and mortgagor the right to redeem the premises within a year appellant became a junior mortgagee, his failure to record his deed before the property described in the chattel mortgage was purchased in good faith by the machine company at its full value, and for the purpose of diminishing the d'ebt thus partially secured, precludes him from asserting that the entire debt must be considered satisfied because the property was taken without a foreclosure of the chattel mortgage. In their brief, counsel for appellant frankly concede that “a mortgagee has a perfect right to release the security he has, part or all of it, unless he knows at the time that he will injure some other person, who cannot protect himself;” and the undisputed evidence shows that the threshing machine company, when it bought the property, and credited the full value thereof upon an indebtedness with which such premises were incumbered, had no knowledge that appellant, by virtue of his unrecorded deed, claimed, or would ever claim, an interest in the premises. Respondents’ mortgage being a *292valid and subsisting lien upon the land, appellant obtained merely the equity of redemption, and acquired no interest in other securities held by the mortgagee. Such being this case, it is needless to consider an unwarranted state of facts by which appellant might be entitled to relief, and the remaining assignments of error require no notice.
The judgment appealed from is affirmed.