Mowbray v. Simons

183 Iowa 1389
CourtSupreme Court of Iowa
DecidedJune 27, 1918
StatusPublished
Cited by10 cases

This text of 183 Iowa 1389 (Mowbray v. Simons) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mowbray v. Simons, 183 Iowa 1389 (iowa 1918).

Opinion

Stevens, J.

i. mortgages : " assumption of ation consia<?r" Irene and John H. Simons, wife and husband, on March 17, 1914, executed and delivered a note for $3,350, antedated November 25, 1913, and payable March 1, 1916, to plaintiffs. The consideration for this note, was a part of the purchase price A for a tract of land. Payment of the note was secured by a mortgage on the land. The reason assigned for antedating the note was that interest was to commence on the indebtedness on November 25, 1913, instead of on the date on which the note and mortgage were executed. Both the note and mortgage provided that a failure to pay the interest when due would cause the whole indebtedness to at once become due and payable. The mortgage erroneously described the note as of even date therewith. Prior to November 9, 1914, L. C. Mtegow acquired title .to the land, and on that date conveyed the same, by warranty deed, to Thomas G. Wat ter son, appellant herein, .subject to the above mortgage. The interest on the note was not paid on November 1, 1914, and on December 8th, appellees demanded payment of the full amount of the indebtedness from the appellant. Appellant lived some distance from the [1391]*1391home of appellees, and, in reply to their demand for payment, wrote them that, according to the mortgage, the interest would not become due until March 1, 1915. Upon receipt of this letter, original notice of suit to foreclose the mortgage was placed in the hands of the' sheriff for service upon appellant; but, before service'thereof, and on December 16. 1914, the contract in writing which forms the basis-of plaintiffs’ claim against appellant, was entered into between the parties hereto, by which appellees agreed to extend the time of payment to March 1, 1915, in consideration of the assumption and agreement upon the part of appellant to pay the mortgage indebtedness on that date.

Subsequently, appellant sold the land to a purchaser who failed to pay the note on March 1,1915, whereupon suit was brought upon the note, and a decree of foreclosure entered. Appellant was joined as defendant in the suit, and judgment was demanded against him on the contract for the full amount of the mortgage indebtedness. The premises were sold under special execution for $2,500. General execution was then issued and levied upon certain real estate belonging to Simons; but, before sale, the execution was re turned, and an agreement entered .into between plaintiff and Simons, releasing the latter from further liability on the judgment. Appellant appeared in the foreclosure suit and filed answer, reciting the history of the transaction, and, among other defenses, alleged: First, that the contract imposed upon him the liability of a surety only, and that, by the settlement with Simons, the principal debtor, he was released from liability on the contract; and, second, that the contract was executed without consideration. As these are the principal defenses relied upon, and the only matters discussed in argument, we will not refer to other issues tendered.

I. Counsel for appellant does not seriously contend that the note did not become due, according to its terms, on [1392]*1392November 25, 1914, because of the nonpayment of interest; but, as we understand' it, their position is that, in the absence of notice to the contrary, the statement in the mortgage that the note was of even date therewith is controlling, and, therefore, the suit to foreclose the mortgage, in which the original notice was delivered to the sheriff for service, but not served, was premature, and the agreement to extend the time of payment to March 1, 1915, did not operate as an extension of time, and, therefore, the contract was without consideration. In this connection, it should be stated that there was an error in the description in the deed from appellee to Simons and from appellant’s grantor to him, and the contract provided for the correction of these errors by the exchange of quitclaim deeds, which deeds were executed, as agreed. This is also relied upon by appellees as a consideration for the contract.

2. Bills and fflct^between gage aaftomortmaturity. It has been generally held by the courts that the provisions of the note and of the mortgage given to secure the payment thereof, must be construed together and enforced accordingly, where this is possible. It is ° * a*so general, if not universal, holding ^hat, where there is a conflict between the terms of the note and mortgage as to the maturity of the former, its provisions must control. This proceeds upon the theory that the mortgage, executed for the purpose of securing the payment of the note, is an incident thereto, and not the primary obligation. Jones on Mortgages (7th Ed.), Section 351; State Bank v. Tweedy, 8 Blackf. (Ind.) 447 (46 Am. Dec. 486); Ferris v. Johnson, 136 Mich. 227 (98 N. W. 1014); Kennedy v. Gibson, 68 Kan. 612 (75 Pac. 1044); Owings v. McKenzie, 133 Mo. 323 (33 S. W. 802); San Gabriel Valley Bank v. Lake View Town Co., 4 Cal. App. 630 (89 Pac. 360).

It therefore follows that the indebtedness, payment of which was secured by the mortgage, fell due on November [1393]*139321, 1911, because of the nonpayment of interest; and, if title had remained in the mortgagor, it would not be contended that the mortgage could not then be foreclosed. Appellant, it is true, did not assume, or agree to pay, the mortgage indebtedness, and, unless by the terms of the contract, was not personally liable for the debt; but the land was conveyed to him subject thereto. The note was antedated by mutual arrangement between the maker and appellees; and while the recitals in the mortgage may have misled appellant and caused him to default in the payment of the interest, the' note, nevertheless, as between the-maker and the appellees, became due according to its terms. Nothing appears in the record from which it may be inferred that the delivery of the original notice to the sheriff for service upon appellant was not in good faith, or that appellees did not believe they had a right to foreclose the mortgage. The commencement of a suit to foreclose the mortgage made it necessary for appellant to incur the expense of making defense thereto; and, in the event plaintiff succeeded, the land would be sold under special execution.

It may be assumed that appellant found it inconvenient, or undesirable, to pay the indebtedness, or to contest the suit to foreclose the mortgage, and that an extension of time until March 3., 3915, was beneficial to him. It is obvious that the contract was executed for the purpose of securing this extension, and perhaps also to obtain the execution of a quitclaim deed, correcting the description in his deed from Megow. The conveyance to him was subject to the mortgage for the payment of which the land was the primary fund. By the terms of the contract, he assumed and agreed to pay the same in consideration of an extension of time therefor until March 3, 3915. Plaintiffs agreed to forbear the foreclosure of the mortgage, and to extend the time as provided in the contract. The most that appellant can claim is that there was a fair controversy as to the right of the holder to [1394]*1394foreclose the mortgage. Appellees’ agreement to forbear further foreclosure proceedings and to extend the time furnished a good consideration for the contract by which appellant bound himself for the full amount of the mortgage indebtedness. Koon v. Tramel, 71 Iowa 132; Robertson v. United States L. S. Co., 164 Iowa 230;

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183 Iowa 1389, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mowbray-v-simons-iowa-1918.