Court Opinion

ID: 8199571
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:23:16.244099+00
Date Added: 2024-06-11T16:40:52.565115
License: Public Domain

Fairchild, J.
{dissenting). The failure to accord full extent to the effect on the obligation of one party to a contract of a default by the other party is the basis of my objections to the decision. A contract is a plexus of mutual *167rights. It necessarily comprehends performance of various acts. Where the contract is executory on both sides and where the mutual promises are dependent, performance by one party cannot be required by the other party when in default amounting to a failure of consideration. 5 Page, Contracts (2d ed.), p. 5257, § 2977. In the case of Helbig v. Bonsness, ante, p. 52, 277 N. W. 634, we'dealt with a situation so similar to the facts now before us as to make the decision in that case a precedent here.
The majority in their opinion say: “A judgment on foreclosure does little more than determine that the mortgagor is in default.” When that important fact has occurred, we naturally require a redemption from the default before the one in default is to be accorded the benefit of the contract. The decision also says:
“Under our law, which recognizes only the lien theory of mortgages, it would seem that the clause, ‘during the lien of this indenture,’ must mean that period of time during which the lien of the mortgage persists, and that the release provision here construed will continue in force and effect so long as the lien of the mortgage exists.”
In the mortgage, specific provision is made as to what shall constitute a default, and it is expressly stipulated that there shall be excused certain delinquencies which ordinarily would constitute a default, but the obligations of the mortgagor are fixed and his failure to discharge his obligations deprive him of a right which he can establish only by relieving the default. The mortgage was given to' secure the payment of a debt. Terms were agreed upon evidently calculated to assist the mortgagor in paying this debt, and to this extent at least, benefiting both debtor and creditor. The real estate was pledged as security. The mortgagor is now in default, and the mortgagee has begun a foreclosure action, yet without relieving his default, the mortgagor seeks to benefit himself by compelling the mortgagee to submit to *168the imposition of terms which would give the mortgagor the privilege of freeing from the mortgage a portion of the pledged security at a price fixed under the terms of the mortgage when a default on his part did not exist and was not anticipated. The release clause is not to be viewed as independent of the other provisions of the mortgage.
The theory of partial release as expressed in well-reasoned cases is that the covenants of the mortgage with ré-spect to the payment of the mortgage debt and the privilege of partial release are not to be disassociated in the absence of specific provisions therefor. It therefore follows, it seems to me, that the breach of payment of sums due according to the terms of the mortgage and the permitting of the default to exist suspends the mortgagor’s rights arising under the release clause.
In the case of Baldwin v. Benedict, 111 Iowa, 741—743, 82 N. W. 956, the mortgagor requested the mortgagee to release certain parcels of land after an action had been commenced to foreclose the mortgage. At the time of the execution of the mortgage, the mortgagee executed a written agreement providing for partial releases as follows:
“I hereby agree to and with the said Geo. H. Benedict upon the payment to me of the purchase money, to wit, one hundred dollars per acre, I will release from said mortgage such portion so paid for at any time during the pendency of the above-described mortgage.”
The court was there of the opinion that it was too late after default for the defendant to demand the release. The court said: “True, the mortgage was pending, but not in the sense meant by this contract.” A similar case, Avon-by-the-Sea Land & Improvement Co. v. Finn, 56 N. J. Eq. 805, 807, 41 Atl. 366, dealt with a mortgage containing a covenant for a partial release. The court, in speaking of the *169covenant to release “at any time during the existence or continuance of the. mortgage,” said:
“If the peculiar language . . . may be interpreted to extend the covenant to a time after condition broken, it would hardly carry it beyond the filing of the bill to foreclose. So far as the mortgagee was concerned, that was a decisive step towards devoting the security to the debt.”
I am convinced that under the material events in this case, particularly the default and the foreclosure action, the contractual right to a partial release cannot be insisted upon without lifting the default. Ryan v. Rizzo, 114 Conn. 467, 159 Atl. 272; Reed v. Jones, 133 Mass. 116, 119; Clason’s Point Land Co. v. Schwartz, 237 App. Div. 741, 262 N. Y. Supp. 756, 759; City Bank Farmers Trust Co. v. Heckmann, 164 Misc. 234, 297 N. Y. Supp. 592, 595. The mortgagor’s right to a partial release under the terms of the mortgage prior to his default is distinct from the right he may have under sec. 278.14, Stats., after judgment and before sale in the discretion of the court.
I am authorized to state that Mr. Chief Justice Rose.n-berry concurs in this dissent.