Court Opinion

ID: 6734570
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:17:16.437412+00
Date Added: 2024-06-11T16:01:43.421471
License: Public Domain

Bartholomew, J.
(concurring.) I concur in the conclusion reached by the Chief Justice. I also concur in his reasoning. The exceptional facts in this case require the application of-intricate, and perhaps not very well settled, legal principles. For this reason I desire to call attention, as briefly as may be, to the presence of certain facts in the record, as well as the absence of certain facts, that have influenced my mind somewhat in reaching my conclusion. It is a trite remark, but true, that the object of all litigation is to secure justice, and that the substance must never be sacrificed to the shadow. We must, if possible, so order that no wrong or injustice may be done in this case. I do not think that it is possible to do so, on the record as it now stands. The case was not closely tried. Many important matters are left uncertain which the parties had it in their power to make certain. Both parties are somewhat in default in that direction, but I attach more blame to plaintiff. While the record does not disclose his occupation, yet it shows him to be a business man. He testifies that he drew several of the conveyances which were introduced in evidence, and that he had prepared an application for defendant to sign in order to procure a loan upon the land, but which was' never signed. It is evident that he fully understood the nature and legal effect of all ordinary conveyances. The defendant’s occupation was that of a farmer. He *36is a foreigner, and so poorly versed in the English language that he was obliged to testify through an interpreter. I deem it of importance to know the exact date of the quitclaim deed from the plaintiff Shelly to Percival. The last note given by defendant for the purchase price matured December 15, 1891. As stated by the Chief Justice, from that time the promise to pay and the promise to convey became interdependent. From that time the relations of the plaintiff and defendant were not different from what they would have been under an ordinary land contract wherein one jlarty promises to pay upon receiving a conveyance, and the other promises to convey upon receiving payment. Should the grantor in such a contract subsequently quitclaim his interest in the land to a third party, his conveyance would constitute an assignment of his interest in the contract; and no lawyer would claim that he could thereafter sue upon the promise to pay contained in the contract, unless it clearly appeared from testimony that he reserved his right to the purchase money, and that the granted in the contract knew of such reservation before he received and paid for a conveyance from the grantee in the deed. Nor would the sum paid for such conveyance in any manner concern the original grantor. These principáis.’ apply in full force, as against plaintiff, if his quitclaim to Eercival was subsequent to December 15, 1891. He was asked to fixed the date, and, while he might easily have obtained it, he fixed it no more specifically than to say that it was in November or December, 1891, or January, 1892/ Under these circumstances, I do not think it would be just to defendant, Mikkelson, to presume that it was prior to December 15, 1891.
Again, after the execution of the title bond, the relations of the parties were those of mortgagor and mortgagee. Jones, Mortg. § § 226, 1449, and cases cited. The plaintiff, Shelly, held the legal title, but only as security for the payment of the purchase money. I recognize fully the general doctrine that while a transfer of the debt carries with it the security, as an incident, an assignment of a mortgage does not necessarily carry with it the *37debt. But I believe the authorities sustain the proposition that when the parties intended that the assignment of the mortgage should include the debt, and when no adverse interest will be affected, the courts will enforce such intention. In Jones on Mortgages (section 805,) it is said: “But the beneficial interest in the debt is, however, generally included in an assignment of the mortgage, although the terms of the assignment embrace the mortgage alone. This would be the presumed intention of the parties in all cases where the debt had not already been transferred to another, and an adequate consideration is paid.” In Philips v. Bank, 18 Pa. St. 403, it is said: “The rule of common sense is the rule of law on this subject, and an assignment of the mortgage is an assignment, not only of the claim against the mortgagor, but of all the securities which the assignor may hold against him, or other parties, for the same debt.” In Olson v. Martin, 38 Iowa, 347, it is said: “It is urged that the agreement or instrument in question provides only for the transfer to Morse of the mortgages, and makes no stipulation affecting the transfer of the notes; that the notes carry with them the mortgages, and the instrument, not showing the transfer of the notes, was not admissable in evidence. But certainly a contract for the transfer of a mortgage would be evidence of an intention to transfer the debt it was given to secure, and would establish such intention, in the absence of conflicting proof.” In Merritt v. Bartholick, 36 N. Y. 44, a case which held that the transfer of the mortgage did not carry the debt, the court, in speaking on that point say: “So that, unless we are authorized to say that such was the intent of the parties, we cannot hold that it did.” I think these authorities sufficiently show that an assignment of a mortgage does carry with it the debt, if such was the intent of the parties. This intent in this case, as in others, must be gathered from the attending facts and conditions. When these are sufficient to raise a presumption of such intent, there must be proof that such intent did not exist; and knowledge of that fact must be brought home to the mortgagor before he deals with the assignee, otherwise the *38assignor should be bound. What were the attendant facts and circumstances in this case? Shelly held the legal title to the land. His beneficial interest in it consisted in his right to hold it as security for the payment of the purchase money. If, by his quitclaim to Percival, he conveyed the legal title only, he made his grantee a mere naked trustee, who could by no possibility receive any benefit from his purchase. This fact alone might not show the intent, but it has a bearing. The plaintiff, on the stand, in speaking of this transfer, says, “I simply quitclaimed my interest.” That means his entire interest, — his beneficial interest. If the quitclaim simply empowered the grantee to hold the legal title for Shelley’s benefit, i. e. until Shelly received the purchase money from defendant, then Shelly did not quitclaim his interest, but on the contrary he retained just the same beneficial interest that he held prior to the transfer. His own language contradicts any such reservation.
Again, Mikkelson purchased subject to an existing mortgage. Thereafter Shelly stood in the position of a junior incumbrancer. In the meantime the senior incumbrance had been foreclosed, and Percival held the certificate of sale. At the time Shelly quit-claimed to Percival, the year for redemption had not expired. It had not less than one or more than three months yet to run. The evidence leaves the exact time uncertain. Shelly might have redeemed from the foreclosure sale, and thus rendered his security good. He did not choose so to do. If no redemption from that sale was made, then Shelly’s security became worthless. There were but two ways in which he could save himself, — one, by redeeming the land; the other, by selling his security before the time for redemption expired. He chose the latter. But it would aid him none to sell the naked legal title. That had no money value. If he desired to save himself, he must sell his beneficial and valuable interest. And I think that the time and circumstances of the sale, together with his own testimony, lead the mind, in the absence of all contradictory or explanatory evidence, irresistibly to the conclusion that he intended to sell, and *39Percival intended to buy, plaintiff’s beneficial interest in the land, and this necessarily included the debt for which he held the land as security. Had plaintiff been able to show' that he| received from Parcival but a nominal consideration, that fact] would have had a tendency to show that it was not the intention? to pass the beneficial 'interest or debt. But no such testimony was given. It is claimed, however, that defendant is not in a position to insist that plaintiff received a valuable consideration, because, when plaintiff, as a witness, was asked what consideration he received for the quitclaim, the court on defendant’s objection excluded the question. But the fact that plaintiff received only a nominal consideration, if such be a fact, was one that it was necessary for plaintiff to establish, in order to recover. The defendant called plaintiff as a witness to prove certain formal matters, and, while thus on the stand, plaintiff was asked by his own counsel, on cross-examination, concerning the consideration. The counsel for defendant objected on the ground that it was not proper cross-examination. It would have been improper, I think, to have permitted the plaintiff to establish his own case on his cross-examination as a witness for defendant. He did not otherwise attempt to prove the consideration.
It is urged, also, that the fact that Mikkelson, when he finally purchased from Percival, did not receive his notes, was notice to him that the debt-had not been transferred with the security. I readily admit that there is force in the suggestion, but I do not think it controlling. I can understand that Percival might well be indifferent about the notes. If he understood that the debt was transferred, he knew that under the terms of the bond he was perfectly secure. The land had been improved to the extent of $400 after the debts were incurred, and Mikkelson would be forced either to redeem from the foreclosure, and pay, under the provision of the bond, or subsequently purchase at Percival’s own terms, in order to save his improvements. The notes were not material to Percival, and Mikkelson may well have supposed, when he purchased from Percival, that he extinguished the debt. *40From that time forth he repudiated all liability on the notes. The bond recited that he should pay the purchase money to Shelly or his “assigns.” Business prudence might have suggested the propriety of obtaining the notes, yet the fact that he failed to do so ought not, in my judgment, to deprive him of his defense. If Shelly sold the debt to Percival at such a price as he and Percival agreed upon, it would be highly inequitable to permit him to collect it again from Mikkelson; and if the debt was so transferred, or if Mikkelson believed it was so transferred, and in good faith dealt with Percival on that basis, then he ought not to be required to pay again. On the other hand, if the debt was not transferred, and if Mikkelson believed, or had good reason to believe, that it was not so transferred, the fact that he allowed the foreclosure to ripen into full title, and afterwards purchased such title from Percival, and now needs- no further assurance of title either from Shelly or his “assigns,” would not relieve him from his obligations to pay the debt contracted with Shelly, because it was his duty to take up the first mortgage, and see that it did not ripen into a title that would cut off Shelly’s security. But, in my judgment, when the verdict was ordered the testimony did not establish this latter state of facts. For these reasons, also, I think the judgment must be reversed.