Rankin v. Major

StocktoN, J. The defendant, Major, executed to A. Bridgman & Co., two promissory notes for the sum of $597,83 each, one payable in six, and one in twelve months from date; and to secure the payment of the same, mortgaged to A. Bridgman, a tract of land in Wapello county. Suit is brought to foreclose this mortgage, by the plaintiffs, J. W. Rankin, and A. Bridgman & Co., and the petition alleges that “ the note due twelve months after date, has, by the assignment of A. Bridgman & Co., become the property of the said John W. Rankin, who is also, by the said assignment, and by agreement with the said mortgagees, the equitable owner of so much of said mortgage as secures the payment of said notes so assigned to him, and that the joint right of foreclosure passed to him by such assignment and agreement; that the other note is still the property of said Bridgman & Co., and is unpaid.” The prayer is for the foreclosure of the defendant’s equity of redemption, and a [299] sale of tbe mortgaged premises to pay tbe amount found due on tbe notes. The defendant demurred to tbe petition on tbe ground that tbe interests of tbe plaintiffs were several and distinct, and they could not join as plaintiffs in one action. Tbe demurrer was sustained, and plaintiffs appeal. Tbe demurrer, in our opinion, was rightly sustained. Where a mortgage is given to secure the payment of several promissory notes falling due at different times, upon a foreclosure of tbe mortgage and sale of tbe mortgaged premises, tbe proceeds are to be applied to tbe payment of tbe notes in tbe order of time in which they fall due. Tbe note first due is to be first paid. If tbe proceeds are not sufficient to pay all tbe notes, it cannot be claimed that they shall be paid pro rata. Grapengether v. Fejervary, ante. By virtue of tbe assignment to him of tbe second note, tbe plaintiff Rankin became entitled to all tbe security of the mortgage, after tbe payment of tbe first note. And be was entitled to maintain an action on tbe mortgage in bis own name, to have tbe benefit of bis security. Crow, McCreary & Co. v. Vance, 4 Iowa 434. But not if tbe property mortgaged is amply sufficient to pay both tbe notes, nor even by virtue of tbe alleged agreement of tbe mortgagees, that tbe assignee of tbe second note was tbe equitable owner of so much of tbe mortgage as would secure tbe payment of tbe note assigned, and that the joint right of foreclosure passed to tbe assignee by tbe assignment — can tbe plaintiffs, Ranldn, and Bridgman & Co., maintain an action in their joint names for tbe foreclosure of tbe mortgage. Tbe indebtedness of defendant has been severed, and tbe rights of tbe plaintiffs as tbe holders each of a note given by defendant and secured by tbe mortgage, are distinct and separate. There is nothing in their relations to each other, growing out of tbe assignment of one of tbe notes, and tbe agreement consequent thereupon, which enables them to join in a prayer for tbe foreclosure of defendant’s equity of redemption and a sale of tbe mortgaged premises to pay their two notes. Their relations are not substantially [300] different from wbat they would be, if they held distinct mortgages upon the same property executed by defendant to secure distinct promissory notes. In arriving at this conclusion, we do not wish to be understood as holding that the plaintiffs may not both be parties to an action for the foreclosure of a mortgage, nor that in a decree in a suit brought by one of them for the foreclosure of the mortgage and a sale of the mortgaged premises, provisions may not be made for the payment of both the notes, or for the application of the proceeds of sale to the payment of both notes, at least as far as the same will go for that purpose. If the suit is brought by Bridgman & Co., they may make Bankin a defendant, and the latter may, by cross bill, assert his right under the assignment and under the alleged agreement of his assignor, and have the same provided for by the- decree. And so, if suit is brought by Rankin, the same proceedings may be had. The court may decree a sale of the mortgaged premises, and direct the application of the proceeds according to the rights of the present plaintiffs, as affected by their agreement. Decree affirmed.