Court Opinion

ID: 5443372
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:06:41.818021+00
Date Added: 2024-06-11T08:32:05.695271
License: Public Domain

Patebson, J., dissenting.
I dissent. Allen held a mortgageable interest. (Civ. Code, sec. 2947; Jones v. Lapham, 16 Kan. 540; Laughlin v. Braley, 25 Kan. 147; Crane v. Turner, 67 N. Y. 437.) Pie mortgaged that interest to plaintiff for a valuable consideration. The mortgage was recorded April 7, 1871, nearly a year before Dresbach purchased. This record, and Allen’s request, while in possession, that Jackson should convey to Dresbach, gave the latter full notice of Houghton’s claim. He knew that Allen had mortgaged h'is interest in the property. He saw Allen in possession of the premises, and was bound to know what interest Allen held, and having notice of the facts, he could not defeat Houghton’s lien. Jackson could not have conveyed to Dresbach so as to deprive Allen of his interest under the contract, without Allen’s consent. Allen’s interest did not cease upon the failure to pay the installment due August 22, 1872. So long as Jackson was satisfied to allow Allen to remain in possession without payment of the installments, there was no determination of the interest held by Allen. After pledging all the rights he held under the contract to Houghton as security for the payment of his obligation, Allen could not in equity destroy the effect of that security by a voluntary surrender or waiver which had neither consent nor consideration to support it, so far as Houghton was concerned. Certainly the rights of Dresbach could not be enlarged over those of Jackson under the circumstances, in consequence of the deed from the latter to the former (Baker v. Bishop Hill Colony, 45 111. 264), and Allen, Jackson, and Dres*107bach “could not covertly, or without notice to them [mortgagees], defeat their mortgage, or rather deprive them of their equities.” (Sinclair v. Armitage, 12 N. Y. Eq. 177.) There can be no question that among the equities secured to Houghton by his mortgage is the right to have the property sold at auction to the highest bidder, and after payment of the balance due upon the contract, to have the overplus, if any, applied to the satisfaction of his mortgage. Plaintiff had the right to assume that the contract would be carried out in all respects, and the purchaser, not being in default at the time of the execution and delivery of the mortgage, could not, after receiving plaintiff’s money ($921.75), upon the faith and security of the contract, stipulate away this right. If Jackson had retained the ownership of the property, he would have been in duty bound to sell the lots at public auction for cash, and out of the proceeds retain the amount due him on the contract, with the expenses of sale; and the overplus, if any, would have been subject, in equity, to the satisfaction of Houghton’s lien. Dresbach stands in no better position than Jackson would under those circumstances; and if he stands in Allen’s shoes, he is not entitled even to be first paid out of the proceeds the purchase-money advanced.
Assuming his rights to be equal to those of Jackson, the decree should be modified so as to include lots 6,7, and 8, and to have the proceeds of the sale, or so much as may be necessary, applied to the satisfaction of plaintiff’s mortgage, after retaining out of the proceeds the amount which was due on the contract at the time of the purchase by Dresbach, together with interest and the expenses of sale. The execution of such a decree would be a substantial compliance with the terms of the contract and secure the rights of all parties without further litigation.