Escher v. Simmons

Day, J. 1.mortgage: merger. ' I. The only question involved in the case is whether the plaintiff, either in virtue of a vendor’s lien or the mortgage, retains a lien which can be enforced against the property in question. The vendor’s lien was merged in and displaced by the mortgage. • Both cannot exist and be enforced at the same time. Stuart v. Harrison, 52 Iowa, 511. The existence of a vendor’s lien must, therefore, be regarded as entirely out of the case. 2.--: forestaiiment: lien. II. It has been held by this court that a foreclosure of a mortgage and sale of the entire mortgaged premises, for an installment due, passes to the purchaser the title and interest of both the mortgagor and mortgagee, discharged of the lien of the mortgage for the installments not due. Poweshiek County v. Dennison et al., 36 Iowa, 244. It has also been held that where real estate has been sold for part of a judgment, that the effect of the sale is to divest the lien of the judgment for the balance, and that the judgment debtor or his assignee may redeem from the sale upon the same terms as a creditor by reimbursing the purchaser the amount of his bid and interest. Clayton v. Ellis, 50 Iowa, 590. It is a logical result of these decisions that if Abraham Simmons had himself redeemed from the foreclosure sale, the property would not, in -his hands, have become liable to the mortgage. He would have held it simply as any other property, liable to be subjected to a judgment recovered upon the debt. His vendee holds it as the vendee of any property of a debtor, prior to the recovery of [276] a judgment. This rule works no hardship to the creditor. He ought not to be allowed to speculate upon the necessities of his debtor. He ought not to be allowed the opportunity of deriving an advantage from the bidding in of property for much less than its value. As was said in Clayton v. Ellis, supra, “ it shall be conclusively presumed, for the purpose of redemption, that the purchaser bid therefor all that the property was worth to him.” If he bids much less, and redemption is effected, he has no just ground of complaint, if he is placed upon the same footing as other simple creditors, without any lien. The question of fraud in the conveyance from Abraham to Sem Simmons we have not regarded as in the case. The gravamen of the plaintiff’s complaint is that, notwithstanding the former foreclosure and sale of the mortgaged premises, the lien of his mortgage or of his vendor’s lien, still subsists against the lands. The plaintiff has now obtained a judgment against Abraham Simmons for part of his farm, and may recover judgment for the balance, and will then have the same right as any other judgment creditor to proceed to subject the property to his judgment on the ground that the sale was with the fraudulent purpose of defeating his debt. All that we now determine is that the mortgage ceased to be a lien upon the property. III. It is claimed by the appellee that no decree of foreclosure was entered in the former suit. The facts respecting the decree are found in the 4th, 5th and 6th findings of the referee. Whilst the decree is somewhat informal, it cannot, in this proceeding, be regarded as a nullity, especially as the plaintiff has had the benefit of its enforcement. The legal conclusion of the court, from the facts found, that the lien of the mortgage still subsists, is erroneous. Reversed.