Kilmer v. Hannifan

Waterman, J. [281] One Cornelius Hannifan, the owner-of a half section of land in Harrison county, died intestate-in the month of January, 1889, leaving surviving him a: [282] widow ánd) ten children. The widow and two of the children executed to plaintiff the mortgage and note in question; the mortgage by its terms, covering the respective interests of the signers. After the execution of the mortgage the real ■estate was, by proper proceedings on the part of the admintrator, sold to pay the debts of Cornelius ITannifan, and plaintiff was the purchaser thereof. There was a surplus after the debts were paid, and it is sought in this action to enforce the mortgage lien againt this surplus. The defendant Luce claims to have purchased the interests ■of defendants without notice of plaintiff’s lien. Some other facts will be given as we proceed, in connection with the issues upon which they have a bearing. I. It is contended that plaintiff has lost his lien through his purchase of the mortgaged premises. It is a well-sett-led rule of equity jurisprudence that a purchase by a mortgagee of the mortgaged premises does not merge the mortgage is the legal title, when it is to the interest of the mortgagee that it should be kept alive, if the right of third persons are not thereby prejudiced. Vanice v. Bergen, 16 Iowa 556; Delaware R. Const. Co. v. Davenport & St. P. Ry Co., 46 Iowa, 406; Bank v. Elmore, 52 Iowa, 541; Fuller v. Lamar, 53 Iowa, 477; Patterson v. Mills, 69 Iowa, 755; Gray v. Nelson, 77 Iowa, 63. The evidence here is that plaintiff intended) to keep his mortgage alive; that he tried to use it in payment for the land he purchased. And it is manifest that it was not to his interest either to have his lien merge, or his purchase operate as a. payment. We next take up the question as to how far the rights of Luce; who purchased the interests of defendants, will operate to defeat the application of the rule stated. The mortgage was on record when Luce purchased, and; without setting out the testimony, we may say his purchase was made with knowledge of plaintiff’s claimed, rights thereunder.' We do not understand it to be disputed that, if plaintiff is entitled [283] to a lien, be may enforce it against tbe.surplus in tbe bands of tbe administrator. II. We bave treated tbe legal questions presented first. Tbe main defense on tbe facts is tbat defendants nevSr exe>cuted tbe mortgage on tbe real'estate, tbát tbe understanding between tbeon and plaintiff was .tbat tb© mortgage should cover chattels only, tbat tbe instrument was. executed in blank, and that plaintiff wrongfully and without their knowledge or consent inserted a description of the. real estate. We are satisfied tbe trial court found correctly on -this branch of tbe case. While there was 'talk at first óf a chattel mortgage, tbe preponderance of tbe testimony shows that, before tbe instrument was executed, plaintiff,' who was advancing money on tbe strength óf tbe security, refused to let go puless be was given a mortgage on real estate. This was assented to by all tbe defendants,, and tbe instrument then' duly executed. Tbe decree of tbe trial 'court is'correct, 'and it is affirmed.