Dilger v. Palmer

Seevers, J. The facts necessary to be stated are: That Thos. E., and Ann Palmer were married in 1816, and in August, 1873, they executed the mortgage sought to be foreclosed on the S. E. ¿ of the S. W. \ and the S. W. ^ of the S. E. ^ in section 20, township 72, range 21. The first named tract was their homestead at the time the mortgage was executed, and they have ever since then resided thereon. In 1873, after the execution of the mortgage, Thos. E. Palmer caused the homestead forty to be sub-divided into three lots, and platted and designated as lots Nos. one, two, and three. The house occupied as a home by the Palmers is situate on lot number two. Afterward, in 1873, Thos. E. Palmer and wife, for the expressed consideration of five thousand dollars, conveyed by warrantee deed the S. W. ^ of the S. E. ^ aforesaid, and lot number one of the homestead forty, to O. II. Palmer, and on the same day they conveyed by a similar deed, for the expressed consideration of three thousand dollars, lot number three to Anna L. Palmer. In January, 1875, Thos. E. Palmer and wife and O. H. Palmer and wife, executed to John H. Gear, trustee, a mortgage on the S. W. \ of the S. E. ^ aforesaid, and said lot number one, which mortgage was afterward foreclosed, and said premises sold on execution issued on the judgment of foreclosure to said Gear as trustee, and the sheriff, before the commencement [119] of this action, conveyed the premises aforesaid, to said Gear as trustee. In September, 1876, the Bank recovered a judgment against T. E., C. H. and Anna L. Palmer, upon which execution was issued and levied on said lot three, and the same was sold thereunder to the Bank, to whom the sheriff conveyed said lot three before the commencement of this suit. The relief asked in the cross-petition of Thos. E. Palmer and wife is, that the decree foreclosing the mortgage be so drawn that all the parcels of real estate aforesaid be sold before said lot two, and that it only be sold in the event the other tracts fail to bring a sum sufficient to satisfy the mortgage. The relief was denied and the court ordered that lot number two should be first sold, and, that the other tracts should be sold to make up the deficiency, if any there was. i.homestead: w?tüotRerOÍ oi'saie onforeute construed, All parties to the action are satisfied with the decree of the District Court, except the mortgagors, Palmer and wife. The questions for determination are: Fvrst. Where a mortgage is executed on the homestead and other real estate, and the latter is sold and conveyed to another by the mortgagor, can he insist that the property so conveyed should be first sold for the purpose of satisfying the mortgage? And, Second. When a mortgage is executed on the homestead and a part thereof is conveyed to another by the mortgagor, can the latter insist that the portion so conveyed should be first sold in satisfaction of the mortgage? The statute provides: “The homestead may be sold for debts created by written contract executed by the persons having the power to convey, and expressly stipulating that the homestead is liable therefor, but it shall not in such cases be sold, except to supply the deficiency remaining after exhausting the other property pledged for the payment of the debt in the same written instrument.” Code, § 1993. Counsel for the appellant insist: I. That the plain and evident meaning of the statute is, [120] that all other property pledged for the payment of the mortgage, whether owned by the mortgagor or not at the time of the foreclosure, must be exhausted before the homestead can be sold, and that, if a portion of the homestead has been sold and conveyed by the mortgagor to another person, such portion must be first sold before the remainder can be resorted to, and it is claimed that the mortgagor has the right to so insist. It seems to us that this argument proves too much. For by the same course of reasoning it can be as well said that a literal construction of the statute requires that all property described in the mortgage, other than the homestead, whether owned by the mortgagor or not when the mortgage was executed, must first be sold, and certainly this cannot be successfully claimed. The meaning undoubtedly is, that all property-pledged, other than the homestead on which the mortgage is a'valid lien, shall be first exhausted. One person cannot pledge the property of another for the payment of an indebtedness of the former. While it is true that the mortgage in question is a valid lien on all the property, it remains to be determined in what manner the lien shall be enforced. As between the mortgagor and mortgagee, the former has the. right to insist that all the property other than the homestead shall be first exhausted. The statute does not contemplate a case where a portion of the property may have been sold and conveyed by the mortgagor to-another person. The statutory thought is, that the title to the property remains as it was when the mortgage was executed, that no intervening rights have accrued, and that the mortgagor in justice and equity can insist, without injury to any one? that the homestead shall be last applied to the payment of the. debt. Ordinarily, when a person sells real estate, he receives what he deems to be its full value from the purchaser. Now to permit such person to insist that the real estate sold should constitute the primary fund for the payment of his indebtedness, is contrary to every recognized principle of justice and equity. Such a rule ignores [121] the fundamental principle that he who asks equity must do equity. It is not possible to draft a general statute which will embrace all possible cases to which it may be said to have been intended to apply. It is. the province of the courts, by construction, to so mould the statute, when it can be done without violence to the words employed, as to make it accord with justice and equity, with known and universally acknowledged principles, and embrace or omit from its operation, cases not contemplated. It cannot be presumed that the General Assembly intended that the property of one person should constitute the primary fund for the payment of another’s debt. The statute undoubtedly was enacted for the benefit of the owner of the homestead, and, like other provisions of law, may be waived by him. But it was never enacted to enable him to perpetrate a fraud. It is insisted that, if the statute is so construed as to mean that only the property owned by the mortgagor at the time of the foreclosure, other than the homestead, shall be first sold, words to that effect must be interpolated into the statute. We do not think this is so, but simply that a state of facts is presented, which was not contemplated when the statute was enacted. The homestead statute does not in the remotest degree contemplate that .the homestead may be abandoned, yet it has been held time and again that this may be done. Without doubt, if the homestead is sold, it would amount to an abandonment. It has also been held that, by a sale and conveyance of that portion of the premises upon which the house is situate, without an intent to erect a house and home upon the remainder of the premises and reside theron, the homestead right is lost, and such remainder becomes liable to be sold on execution for the payment of debts. Givans v. Dewey, 47 Iowa, 414; Windle v. Brandt, 55 Id., 221. In so holding, words were not interpolated into the statute; but because the General Assembly failed to contemple such a case, the courts were compelled by construction to so mould the stat [122] ute as to effectuate justice and equity. We think the Palmers are estopped from now insisting that property sold and conveyed by them since the execution of the mortgage, constitutes the primary fund for the payment of the mortgage. The true construction of the staute is that the property other than the homestead, which must be first exhausted, is such as is owned by the mortgagor at the time of foreclosure. We further hold that, by a sale and conveyance of a portion of the homestead premises, the homestead right thereto is lost, and the mortgagor cannot insist that such portion shall constitute the primary fund for the payment of the mortgage. II. Section 2281 of the Eevision is precisely like section 1993 of the Code, except that it provides: “But it (the homestead) shall not in such cases be sold except to supply the deficiency remaining after exhausting the other property of the debtor which is liable to execution.” Because of the difference between these sections, counsel for appellants insist that the construction we have adopted ignores the change made by the Code in the previous law. We do not think this is so. The Eevision required that all the property other than the homestead owned by the mortgagor, whether it was included in the mortgage or not, should be first exhausted, while the Code only requires that all of such property included in the mortgage shall be exhausted. The Eevision is broader than the Code, and the only object of the change made in the statute was to avoid the difficulty in determining in what manner property not included in a mortgage should or could be subjected as the primary fund to the payment of the mortgage. This will clearly appear from an examination of the Code Commissioners’ report. III. The conclusion reached is not based on the covenants in the conveyances made by the Palmers. The same result would have been reached if the conveyances had been quitclaim instead of warrantee deeds. Therefore the rights of Mrs. Palmer are not greater or better than the rights of her husband. Aeeirmed.