Court Opinion

ID: 8807698
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:53:33.444737+00
Date Added: 2024-06-11T17:04:09.876321
License: Public Domain

WALKER, Circuit Judge.
By a deed bearing' date December 3, 1906, the appellee, William Hurt, sold and conveyed to W. H. Garrett 85,844.95 acres of land in Texas at the price of $343,379.80, of which $50,000 was paid in cash, $106,058.80 was to be paid to the holders of a lien on all the land, to -which appellee’s title was subordinate, the debt secured by that lien being assumed by appellee’s vendee, and $181,321, evidenced by the vendee’s 10 notes, was secured by a vendor’s lien and by the vendee’s deed of trust covering the” land sold. This was a suit by Hurt to foreclose the liens in his favor on the part of the land covered thereby which had not been released before the suit was brought. Twelve defendants, each of whom acquired part of the unreleased, land with constructive notice of the above-mentioned liens, appeal from a decree in favor of Hurt, which adjudged $78,935.23 to be the amount due to him on the purchase-money notes, and decreed the foreclosure and sale of the unreleased land.
[1] The deed of trust to the appellee contained the following provision :
“Xliis conveyance in trust is made with the express agreement and understanding that a tulJ release of this trust, as well as a ful] release of the vendor’s lien, will be executed and delivered to the said W. H. Garrett, his heirs or assigns, as io any quantity or parcel of land embraced in this conveyance not less than 040 acres upon payment of such part of the entire unpaid purchase money as is prorated, owing and unpaid on the land for which such release may be demanded.”
■ An evident purpose of this provision was to enable the purchaser, or any one who might succeed him in ownership, to subdivide the land and sell parcels of it freed of the liens on the whole. The language of the provision gave notice to any subsequent purchaser of a part of the land that the existence of the right to have such part released from the liens on the whole was dependent upon the payment oí a pro rata part of the entire unpaid purchase money, including as well what was payable to the appellee’s lien creditors as what was payable to himself. When the appellants made their several purchases, not long after the appellee’s sale and conveyance, they had constructive notice of what was required to be done to clear the land they bought of the liens covering that and other land. No one of the appellants undertook to comply with the provision quoted until years after his purchase was made. That provision may be regarded as an offer by the appellee to subsequent purchasers of subdivisions of not less than 640 acres of the tract sold to release such subdivisions from the liens in favor of the appellee upon the payment to him of a pro rata part of the entire purchase money owing and unpaid. Evidently it was contemplated that the privi-*32Jege was to be exercised when the subdivisions should he sold and conveyed. Delay in the exercise of the privilege was likely to, and did, mean delay in the payment of part of the purchase price contracted for by the appellee. In so far as.the appellee sustained loss by that delay, he should be compensated for it. The allowance of interest is the appropriate method of compensating for unwarranted delay in the payment of money. Appellants would escape the duty of doing equity if the provision in question is given the effect of entitling them to get their lands released now upon the payment of the same amounts they would have had to pay, if they had exercised the privilege accorded them when they made their purchases 10 years ago. As the result of payments on the purchase price made by others, the amount decreed in appellee’s favor is less than the aggregate of what was required to obtain releases of the subdivisions foreclosed when the right to. do so accrued, with interest added from the dates of the accrual of that right to the several purchasers of such subdivisions. It is not made to appear that the appellee, by contract, estoppel, or otherwise, has lost the right to have the above-quoted provision of the deed of trust complied with by a subsequent purchaser of part of the tract sold, who seeks to get a release of his land from the liens securing the purchase price of the entire tract of which his land was a part.
[2] But for the above-quoted provision, there could be no question as to the appellee’s right to enforce his deed of trust, for the entire amount remaining due on the debt secured by it, against the whole or any part of the unreleased land. In' the absence of such a provision, a mortgagee could gratuitously release any of the land covered by the mortgage without affecting or impairing his right to enforce the mortgage against the part of the mortgaged land which was not released. It is suggested that the provision mentioned had the effect, not only of entitling the grantor in the deed of trust or subsequent purchasers of parts of the land embraced in it to have such parts released upon paying proportional parts of the whole purchase price of the incumbered land, but also of entitling a subsequent purchaser of part of the land to have the land he purchased released without complying with the conditions expressed in the deed of trust, if the appellee has released parts of the land purchased by others without exacting compliance by them with the conditions on-which they were entitled to releases. We are not of opinion that such effect properly can be given to the provision in question. It does not purport to put any restriction or limitation on the right of the appellee to release part of the land, gratuitously if he chooses, without affecting or impairing the right which the deed of trust gives him against the remainder of the land embraced by it. The provision granted the privilege of obtaining partial releases on stated terms. It did not purport to affect the appellee’s right to give releases on different terms. The appellants were not prejudiced by purchasers of other parts of the mortgaged land getting releases for nothing, or for less than the mortgagee was entitled to1 exact. That did not add to the amounts they were reqimed to pay to get their lands released. They have nothing to complain of so long as they are permitted to get their lands released on the terms stated in the deed of *33trust. Under the decree appealed from they had the benefit of all payments that had been made on the purchase price of the land embraced in the deed of trust. They will get all to which they a,re entitled under the above-quoted provision, if they are allowed to secure the release of their land upon payment of proportional parts of the entire purchase price still owing and unpaid. We are not of opinion that appel-lee’s acts in releasing other subdivisions from his liens had the effect of a release of the subdivisions bought by the appellants, or of giving to the latter the right to have their subdivisions released, not on the terms prescribed by the deed of trust, tot on the terms on which the appellee, without being bound to do so, released other subdivisions.
[3] The notes secured by the foreclosed deed of trust provide for the payment of an attorney’s fee of 10 per cent., if placed in the hands of an attorney or collected by suit. The only tender made by any of the appellants before the suit was brought was of less than "he was required to pay to be entitled to a release of his land. This being so, ap-pellee had the right to bring suit for the. foreclosure of his liens, and to make the appellants defendants to that suit. The costs and attorney’s fees to which he is entitled are chargeable against any unreleased land against which he was justified in enforcing his liens by suit. The lands of the appellants were in that category. The appellants had not, before the suit was brought, done that which worrld make appellee’s enforcement of his lien by suit wrongful or unjustifiable as to them. Appel-lee did nothing that can be given the effect of forfeiting his contract right to be allowed an attorney’s fee. The appellants are not entitled to be relieved of their proportionate part of the expense, including the attorney’s fee stipulated for, of the suit, the institution of which against them was justified by their defaults.
[4] It is not so clearly made to appear by the record that the amount of the secured debt found to be due was more than was actually due as to justify the setting aside of the finding of the trial court. The record contains a statement of evidence adduced by the opposing parties, which their respective counsel certified was “examined and found correct.” This statement was not approved by the court or judge, pursuant to equity rule 75 (198 Fed. xl, 115 C. C. A. xl). Nothing in it shows that it contained all, or the substance of all, the evidence adduced. The contrary not appearing, it is to be presumed that the court’s findings were supported by evidence other than that which the record on appeal discloses. Furthermore, even on the evidence which is set out, it does not seem to be permissible to make the appellee’s book entries conclusive against him. The payments on the secured debt were made by or through the O. W. Kerr Company, the seller of the land in parcels. It was to the interest of that company to get the benefit of all payments made. A statement made by it not long before the suit was brought indicated that more was unpaid on the secured debt than the amount found to be due.
[5] The assignments of error made by the 12 appellants are joint and not several. One of those assignments complains of the failure of the court to decree on what was called a cross-bill filed by 3 of the appellants. The sole party defendant to that so-called cross-bill was *34the First International Bank of South Bend, Wash. That hank filed an answer disclaiming any interest in the land, an alleged cloud on the title to which created by a mortgage to it was sought to' be removed, and consenting for the court to enter any decree desired by the three parties who filed the cross-bill, provided costs were not taxed against it. The record does not indicate that the cross-bill was thereafter called to the attention of the court, or a decree on it sought. Some of the appellants who join in the assignments of error are without any interest In the fate of that collateral proceeding. It is not made to app'ear that the institution and pendency of that proceeding were even brought to the notice of the appellee, or that he resisted, or was interested in resisting, the granting of the relief it sought. It seems that the answer filed by the only party defendant to that proceeding was by itself enough to dissipate the alleged cloud complained of. In the circumstances stated, the decree appealed from is not to be reversed because of the court’s failure to make disposition of the cross-bill.
[6] The conclusion is that the decree appealed from would not deprive the appellants of any'right to which they are entitled, if it is so modified as to permit each of them to prevent the ordered sale of his land by paying his proportionate part of the amount decreed in favor of the appellee, including costs, the amounts to be paid by the several appellants to be in the same ratio to the whole amount decreed that the several tracts bought by them bear in acreage to the larger tract foreclosed and decreed to be sold. Whatever right the appellants and others in like situation have under the above-quoted provision of the deed of trust to have land embraced therein released is a derivative one, resulting from their occupying the status of assigns of the grantor in that instrument. If that grantor had not conveyed to others the lands still unreleased, his privilege of having part of that land released would have been conditioned upon his “payment of such part of the entire unpaid purchase money as is prorated, owing and unpaid on the land for which such release may be demanded.” He would not have been entitled to such an allotment of less than pro rata parts of the unpaid purchase money against the several subdivisions of not less than 640 acres each as would result in leaving a part of it unsecured by the land remaining subject to the deed of trust. His assigns, as a class or separately, have not acquired a privilege of having their lands released on such terms as would lead to the result just mentioned. In the argument of the case in this court the counsel for the appellee expressed a willingness for the above-indicated modification of the decree to be made. Such modification is accordingly ordered, with direction that the amount required to be paid by each appellant to secure a release of his land be ascertained and stated, and 30 days thereafter allowed to the several appellants to pay such amounts into the registry-of the court. Subject to compliance with this order, the decree is affirmed, with costs against appellants.
Modified and affirmed.