Standish v. Dow

Wright, J. i. dee» of cree: árestruction. The priority of the lien under which plaintiff claims is not controverted. Nor is there any claim that the trust-deed was fraudulent; that it had been paid or discharged : nor that for any reason it was invalid. Price ivas a prior incumbrancer, his debt not being due at the time Brown commenced his foreclosure proceeding. Brown’s mortgage was taken subject to the Price lien, and in his petition he expressly waives any personal claim against such prior incumbrancer. The decree of foreclosure was taken yrro confesso. The petition upon which it was predicated did not assert or claim any priority, nor ask that the lien of the trust-deed should be postponed. The prayer was to bar the equity of redemption, and for general relief. Phis equity, or any claim of defendants in law or equity, was declared barred from the time of the sale. Before the sale under the special execution, there was a sale under the trust-deed. Thus we have at a glance the positions of the respective parties. Our opinion is, that Price was a proper, but not a necessary, party. If there had been any pretense that this prior lien had been paid, that it was fraudulent or invalid for any cause, of course the propriety of making the holder thereof a party would be even more manifest. But having made him a party, in view of the prayer of the petition and the'facts upon which [366] it was predicated, the question is, what effect shall the decree as rendered have upon him or plaintiff, who claims under him ? Though Price was a proper, though not a necessary-party (Story’s Eq. P., § 193; Heimstreet v. Winnie, 10 Iowa, 430; Veach v. Scharp, 3 Id., 194), it is equally true, upon the facts stated in the foreclosure proceeding, that his interests could not be touched in such suit, as they were clearly paramount to those of the mortgagee or plaintiff therein. The petition concedes the validity of this prior lien, or at least asserts nothing against it as a complete and subsisting incumbrance. In addition to this, the Brown and Paulsen mortgage, under which the defendant (Dow) claims, recognizes the priority of the trust-deed, and it was expressly made subject to it and the mortgage to Seth Twitchell. The petition of Brown did not ask to postpone this trust incumbrance, but expressly prayed that “ defendants and all persons, claiming under defendants subsequent to the commencement of said action, should be barred and foreclosed of all equity of redemption.” The. order, therefore, in the decree or judgment, that defendants should, as to the lands sold, after the sale thereof, be barred and foreclosed from redeeming the same or setting up any claim thereto, must be understood in connection with the facts stated in the petition, and the prayer based thereon. And especially so, as the decree was rendered pro confesso, and without any appearance on the part of Price, the beneficiary under the trust-deed. And when thus understood it is but too plain that there was no claim of priority on the part of the junior mortgagees or their assignee; and that the point which appellant claims was ruled in that proceeding, was not, nor pretended to be, in issue therein. And following this is the proposition, that a judgment or decree is only final for its proper object and purpose, [367] and this object or purpose is derivable, primarily, from the case made by the pleadings. Then, again, as already suggested, the petition itself, in the foreclosure ease, concedes that the trust-deed of 'Price was a paramount lien upon this land. As to this there was no controversy; and we have yet to find any case which upon principle or analogy holds that the language of the decree above quoted, and found in the statement of the case, would operate to postpone such paramount lien. In the first place the order barring the rights to redeem amounted to nothing as to the trust incumbrance; for the holder thereof is in no position to be required to redeem in order to keep good his lien. Then the order barring defendants “ from setting up any claim thereto,” could legitimately apply to Seth Twitchell, for his mortgage had been paid. It could not consistently nor rightfully apply to the Price incumbrance, for nothing had been alleged, either impliedly or expressly, against its validity. And as the petition, by force of its averment and prayer, would not have entitled the petitioner to a decree postponing the lien of the trust-deed if the holder thereof had appeared and answered, much less would it when there was no appearance and there was a decree pro oonfesso. In .other words, Price, as defendant, by failing to appear and answer, admitted the distinct and positive allegations of the bill, and not those indefinite and uncertain. Nor did he, of course, concede petitioner’s right to a decree, which by intendment or indirect words would be in plain violation of the admitted facts of the bill. And before a decree thus inconsistent with the bill and in violation of its whole theory (and this is the effect of this decree according to appellant’s theory), can be regarded as postponing the lien of a senior incumbrance, and concluding the rights of the holder thereof, it should settle and adjudicate these rights, and [368] recognize the priority of the junior incumbrance in language other and different, freer front doubt and uncertainty, than that employed in this instance. Plaintiff occupies, in effect, the position of Price, if he was in court prior to the sale to Dow, seeking to foreclose his trust-deed. For it must be remembered, that the trustee sold, as he had a right to do by the terms of the deed, without the order of court, prior to' any sale under Brown’s foreclosure. The foreclosure order only undertook to cut off any claim of Price after the sale. And now suppose, before such sale, Price had sought the aid of the court, asking a judgment recognizing the priorty of his lien, would any one claim that the decree in favor of Brown had the effect of giving him any other or better lien than that given by his mortgage % This decree conferred no title, but simply recognized or confirmed his right to his lien. But this of course was subject to prior undisputed liens. And if Price had, by order of court making Brown a party, foreclosed prior to the sale, there could be but one opinion as to the priority of his right. He did foreclose in the manner .pointed out and provided for in the contract of the parties. Brown being a junior incumbrancer, was bound to take notice of prior liens being properly recorded, and of the rights and powers of the parties thereunder. Lowe v. Grinnan et al., 19 Iowa, 193, and cases there cited. Of course we are not to be understood as saying that a sale by the’trustee would as necessarily conclude and cut off all antecedent rights as would a sale under a decree in court. But what we mean is, that, as the trust instrument authorized a sale by notice as therein specified, Brown took his lien subject to the terms of this power, and with a knowledge that the equity of redemption could be thus foreclosed. And it being thus foreclosed before any sale, the purchaser was alike bound by the terms and conditions of the power. [369] Under these circumstances, the case of Cooley v. Brayton (16 Iowa, 10), relied upon by appellant, is against rather than for him. And see generally the authorities-cited in appellee’s brief, and especially the New York and New Jersey cases. murrer.Q ^ Appellant’s position that the ruling of the court on plaintiff’s demurrer to his answer, should have been appealed from, and that the final decree is in conflict with that ruling, we give but little weight. The demurrer admitted the fact as stated, so far, as well pleaded. The testimony on the final hearing did not show, as alleged in said answer, that the Price incumbrance “ was fully paid and satisfied at the time of said foreclosure suit.” Then, again, there was no final decree on overruling said demurrer. There was a simple order overruling the same, plaintiff excepted, and the cause was afterward heard upon the issues joined. The ruling upon the demurrer therefore did not conclude plaintiff from showing the true and exact rights of the respective parties. 3. title ¡action to Tüet. That plaintiff might go" into equity for the purpose of quieting his title, we entertain no doubt. Appellant was setting up a claim to this land, which was in plaintiff’s possession, and giving out and pretending that he had title to the same. It was entirely, competent for plaintiff to ask of equity to quiet his title against appellant’s claim, and to remove the cloud cast thereon by the foreclosure proceedings. To adjudicate and settle just.such controversies is peculiarly within the province of a court of equity. Courts of equity not only grant -remedial justice, hut it is one of its boasts that it jprevents injustice. 1 Story Eq. Jur., § J00, and note 2; Key City Gas-light Company v. Munsell, 19 Iowa, 304; Dunham v. Isett, 15 Id., 284; Savery v. Browning, 18 Id., 246. Affirmed.