Court Opinion

ID: 7093136
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:08:03.161222+00
Date Added: 2024-06-11T16:13:09.274758
License: Public Domain

Cole, J.
i. mokt-order oí payments. I. Independent of any legal and binding agreement, where a mortgage is executed to secure two or more notes maturing at different times, the proceeds aris-ing from a foreclosure of the mortgaged premises spou¡¿ be applied to the payment of the notes in the order in which they fall due. The different installments in a mortgage securing such notes are regarded as so many successive mortgages, each having priority according to the time of its maturity; and where, instead of one mortgage being executed to secure several notes given for the same indebtedness, a separate mortgage is given to secure each note, the rights of the parties are identical. The Bank of the United States v. Covert et al., 13 Ohio, 240; The State Bank et al. v. Tweedy et al., 8 Blackf., 447; Grapengether v. Fejervary, 9 Iowa, 163; Rankin et al. v. Major, Id., 297; Sangster v. Love et al., 11 Id., 580; Hinds v. Mooers et al., Id., 211; Reeder v. Carey et al., 13 Id., 274; Massie v. Sharp et al., Id., 542. "Whether the notes thus secured are retained *507by the payee and mortgagee, or are assigned to different parties, the right of priority of payment still attaches to them, nor does the time of, or order in which they are assigned, affect such right of priority.
2. Evi-parol, to’ vary mortgage. IL The legal effect, then, of executing two mortgages to secure installments of the same debt, being to give priority as to the proceeds of the mortgaged property to the installments first due, such legal effect cannot be . . altered or varied by parol testimony, any more than the language of the written instrument itself. Creery v. Holly, 14 Wend., 30; Barber v. Brace, 3 Conn., 9; La Farge v. Ricker, 5 Wend., 187; Thompson v. Ketcham, 8 Johns., 189. The parol testimony of Hall, therefore, as to the agreement between him and Patterson in relation to the two mortgages being equal liens, neither to have priority over the other, which is contrary to the legal effect of the mortgages themselves, is incompetent, and cannot be considered for the purpose of altering or varying such legal effect and priority.
s Jm>s-ass^nment: equities. III. The rule, that a judgment is an assignable chose in' action, which an assignee takes subject to and charged with dll the equities which could be asserted against it the hands of the assignors, was recognized, approved and applied by this court in the case of Burtis v. Cook & Sargent et al., 16 Iowa, 194; and is, therefore, the law in this State. The question,'then, is, whether this case comes within the rule, and, if it does, whether the facts, as proved, establish any equity in favor of plaintiffs, as against the assignor.
i.: — : Ap-the rule. The rule, as applied in the case of Burtis v. Cook & Sargent et al., cited above, was between one party to the judgment e. and the assignee of the other party to it; and such has been the relation of the parties in every case to which our attention has been called or given. The application of the rule in such cases is certainly very *508equitable, and without difficulty. But in this case the asserted equity is claimed, not by a party to the judgment, nor by a person claiming under or in privity with a party thereto, but by a stranger to such judgment, who claims adversely to both parties. Does the rule stated apply to such a case? It seems to the writer of this opinion and Lowe, J., while Weight, Ch. J., and DilloN, L, express no opinion thereon, that it does not, but that another rule applies, which is applicable to other unnegotiable but assignable instruments or evidences of indebtedness, to wit, the 5. — independent equities, rule that equities between the parties to such . x . 1 instruments or evidences of indebtedness, arising from other and independent transactions, are not available against such instruments, «fee., in the hands of the assignee. Neither the plaintiffs, Isett & Brewster, nor their assignor, Tufts, were parties to the judgment, and they were not, therefore, bound or concluded by it. The assignment of the judgment itself passed nothing as against them, oidy so far as such assignment carried with it the right to the claim upon which such judgment was rendered; and as to them, therefore, was only an assignment of such claim. Now, if the claim had been assigned before judgment, there is no question but the rule last stated would apply. But we have just seen that the judgment rendered upon the claim was not a judgment as to them; for they were not parties to it, and, hence, not bound or concluded by it. And, if they were not bound by it so as thattheirinterests could be prejudiced through it, ought they to be permitted to avail themselves of it to prejudice the interests of others? We think not; for, in such case, there would be no mutuality. And, further, the equities which, under the general rule as stated, attach to the judgment in the hands of the assignee, are those equities which have grown up against the judgment itself, as such, and not those which might, *509while intbe bands of the assignor, have been made available against the claim upon which the judgment was founded.
IY. But even if the rule contended for by the plaintiffs was applicable to their case, it is very questionable whether the facts proved by them would bring their case within the rule. It appears from the answer of Tufts, which was admitted as evidence, that at the time he took the note and mortgage as collateral security, and when they were finally set over to him, Patterson represented that he would surely redeem it, but if he did not, it was secured by three hundred and ten acres of valuable land which Tufts would get on foreclosure. Tufts did not know that there was another mortgage, nor did Patterson represent that there was not another. There was certainly no agreement that plaintiffs’ mortgage should have priority over the other, for the other was not mentioned. The other mortgage was upon record, and was notice to Tufts of its existence, and, doubtless, Patterson supposed'Tufts knew of it; and, supposing such fact, every direct statement set out in Tufts’ answer, as made by Patterson, is readily understood, and is consistent with truth. It may be doubtful, at least, whether the representations made to the witness, Col. Abbott, were made in the presence, or ever came to the knowledge, of Tufts; and, indeed, since Tufts himself does not state or claim that they ever did, it is reasonable to presume that they did not, and, therefore, they were not made the basis of the transaction, and, hence, not available in support of it. Again, it appears from the pleadings and evidence, that while Tufts took the assignment of the note and mortgage as collateral, before the assignment of the j udgment, it also appears that the final purchase of it by Tufts was made after Patterson had sold the judgment to Lucas, and, of course, when he could not prejudice the rights of Lucas by any representations or agreement he might have made. It also appears that some ot these representations by Patterson, (but which are not *510shown,) were made to Tafts when the note and mortgage “ were finally set over to him,” and, hence, after Lucas’s rights had attached. It is not shown by plaintiffs when Tufts became liable for the $2,500, part of the consideration for the final assignment of said note and mortgage, nor whether it was before or after the*assignment of the judgment to Lucas; if it was after, it must have been advanced subject to his rights.
Nor is it made to appear when or for what consideration the plaintiffs, Isett & Brewster, obtained the assignment of the note to them; nor whether they had any knowledge, at the time they acquired it, of the alleged representations by Patterson to Tufts; nor whether they took the same relying upon such representations. Without further discussing the facts of the case, we think the plaintiffs have not clearly established their equity as against Lucas, even if the rule obtained which is contended for by them. The judgment of the District Court is
Affirmed.