Curie v. Wright

119 N.W. 74, 140 Iowa 651

• Court: Supreme Court of Iowa
• Decided: January 12, 1909
• Status: Published

Opinion

McClain, J.

i. Mortgages: priority of liens: fraud.

— I. On the issue as to whether the mortgage was fraudulent as against appellant, the evidence sustains the finding of the lower court, which held against

appellant’s contention. It is true that the , i n i . , mortgage was executed only one day prior to the rendition of judgment against (x. laylor Wright in an action pending against him by the receiver; but, until the receiver recovered his judgment, he had no lien upon Wright’s property, and, unless the mortgage was taken for the purpose of defrauding him, the mortgagee acquired a prior lien. The burden of proving that the mortgage was fraudulent was on the receiver, and the evidence is not sufficient to establish that fact. The most that can be said is that the mortgage was taken by Engle as additional security because he feared .that by reason of the financial embarrassments of the mortgagor a prior mortgage which-he held on other property would be found insufficient to secure his claim. A creditor may without fraud secure priority by taking a mortgage on the property of his debtor, who is to his knowledge in financial straits.

a‘ change’s lien: judgment. II. Counsel for appellant rely, however, on the further claim that the title acquired by Elson as receiver under the mechanic’s lien foreclosure was superior to the

the lien of the mortgage, because the mechanic’s lien had attached to the property . . prior to the execution of such mortgage. The judgment in the mechanic’s lien, foreclosure suit, instituted by Petty against Wright, under which Elson, as receiver, acquired title to the mortgage property by buying in the certificate of sale thereon and taking a sheriff’s deed, was not rendered, as already indicated, until after the second mortgage in suit was executed; and unless it appears that the title of Elson related back to the date of the filing of the mechanic’s lien, his rights are inferior to those of plaintiff under such mortgage. Judgment of foreclosure of said lien recites that the lien is established from a prior date; but, as neither IVIary C. Wright nor plaintiff’s assignor was made party to the proceeding to foreclose the mechanic’s lien, the judgment in that foreclosure is not binding upon either of them. There is no allegation in Elson’s answer of any facts entitling him to priority on account' of any preexisting lien held by Petty, but he introduced evidence of the filing of the mechánic’s lien statement of a date prior to the mortgage, and, if this entitled him to priority over the mortgage, h'e no doubt should have his rights, if any, by virtue of such antecedent filing, protected by the decree in this case.

„ . 3. bAME: tore«verá! parcels1 m gross" Conceding, however, that there was such prior filing of the mechanic’s lien statement, still we think Elson has not shown himself entitled to any priority on that account. In the statement a lien was claimed in the sum $43 on the property covered by this second mortgage, and $82.83 on a parcel of property not included therein. When these liens were foreclosed in one action, Petty took judgment in a lump sum, and both parcels of property were bought in at a sale under that judgment for the amount thereof, with interest and costs, and Elson’s deed so recites. It is evident that Petty did not attempt at his foreclosure sale to buy in each parcel for the amount of the lien on that parcel, but elected to treat his judgment as a general judgment for such lump sum, and that such general judgment had become a lien on the two parcels together only when it was rendered. If Petty had desired to have his mechanic’s liens on these two parcels protected, he should have sold each under special execution for that portion of the judgment which was a lien on that parcel. It can not be that, by virtue of two separate liens on these two parcels, a judgment for a lump sum related back to tbe date of the statement, so that there was one lien in that sum from date as against both. Elson does not show any right by assignment or otherwise which antedates the mortgage, and the trial court therefore properly decreed that his rights under the sheriff’s deed were junior and inferior to the lien of plaintiff’s second mortgage. The decree is affirmed.