15. Validity and Construction What Constitutes a Mortgage. the payment of the same were executed at the same time and the mortgage contained the following stipulation, "but it is agreed that general execution shall not issue herein," it was held, that the instruments constitute but one contract, and that the mortgagee could not recover a general judgment on the note, his remedy being limited to the mortgaged property alone. Kennion v. Kelsey et al., 10 Iowa, 443. power to convey. The mort- 18. general judgment not authorized. gagor reserved in the mortgage the right, Where a promissory note and mortgage to secure when the value of the mortgaged property should exceed the amount of the debt secured, to dispose of such excess, the valuation to be determined by mutual agreement, or by a reference to three disinterested persons, as the parties might agree. Held, that the mortgagor could make such conveyance only after an agreement between the parties, or a report of referees, as provided by the contract; and that a conveyance made by the mortgagor upon his own valuation was not within the terms of the contract. Middleton Savings Bank v. The City of Dubuque, 19 Iowa, 467. 16. option in mortgagee to reconvey. A mortgage executed to secure the payment of bonds by a municipal corporation, provided that the mortgagees shall "not be held liable or responsible to the holders, or those who may hereafter become holders of the bonds of said city, or the interest thereon, for the payment of the same in any way, shape or manner whatever, but shall have free liberty to reconvey to said city any portion of the real estate herein described, and under any circumstances, and in any manner they deem expedient, without consulting in any manner the holders or owners of said bonds," etc. Held, that the mortgage stood as security for the payment of the bonds in the hands of the transferees, until the original mortgagees should act upon the reserved privilege by making a conveyance to the mortgagor; and that a mere transfer of the bonds did not operate to cancel the mortgage. Ibid. 17. power of attorney. The description in a mortgage was as follows: We, J. L. B. and B. his wife, sell and convey unto J. H., etc., the following described premises in Marshall county, Iowa, to wit: eighty acres of land bought of Rev. H. H., lying ten miles to the southward from Marshalltown, in Marshall county, Iowa, and so soon as the numbers of the above land | are obtained, we agree that they shall be inserted in the deed as our own voluntary act, and the recorder of Marshall county is instructed to do the same for us." After which the description was inserted and signed by the recorder. Held, that the deed was equivalent to a written power of attorney to the recorder to make such addition to the description. Harshey v. Blackmarr, 20 Iowa, 161. 19. Alteration of mortgage. Where a mortgage was executed by the husband and wife, and the husband, after it was signed by the wife, without her knowledge or consent, inserted therein the description of additional property, which was the homestead of the mortgagors, such alteration being noted by the officer who took the acknowledgment, in his certificate, as having been made after it was drawn; it was held: That as to the property described therein before the alteration was made it was valid; that it would be valid as to the additional property against the husband were it not that said property was a homestead, and a conveyance of the same by the husband alone was absolutely void; and that the execution of the mortgage not having been denied under oath, and it being nowhere alleged that the alteration was made after delivery, the burden of showing that the alteration avoided the entire instrument was upon the defendants or mortgagors. horn & Clark, admr., v. Bell, 11 Iowa, 465. Van Semble, that when it appears that an alteration in a mortgage has been made after delivery, it is incumbent upon the mortgagee to explain the circumstances under which the change was made. Ibid. b. What constitutes a mortgage. 20. Agreement to execute. An agreement to execute a mortgage conveying a certain lot to secure the payment of a debt as soon as the debtor secures a title is not itself a mortgage. Humphrey v. Snyder, Mor. 263. 21. Contract of sale. It is not necessary that a contract of sale should be in the form of a mortgage to preserve the lien of the vendor or his assignee. Notwithstanding a contract is not technically a mortgage, equity will recognize and sustain it as such, when it appears therefrom that it was so intended. Whiting v. Eichelberger et al., 16 Iowa, 422. What Constitutes a Mortgage — When a Deed is a Mortgage. 22. Deed of trust is a mortgage in equity. In equity a conveyance of land to a trustee as security for the payment of a debt, with power to sell in default of payment, is treated as a nortgage. Newman v. Samuels et al., 17 Iowa, 528. 23. Whether mortgage or conditional sale. Cases involving the question of difference between a mortgage and conditional sale must each be determined under its own peculiar circumstances. The intention of the parties is the true test, and must be collected from the condition and conduct of the parties, as well as from the face of the written contract. Hughes and Dial v. Sheaff, 19 Iowa, 335. 24. Where it is doubtful whether a transaction was a conditional sale or mortgage, a court of equity will treat it as a mortgage. Trucks v. Lindsey et al., 18 Iowa, 504. 25. But it is competent for parties to make a purchase and sale of lands with a reservation to the vendor of a right to repurchase the same land within a given time at an agreed price. Ibid. 26. presumption in favor of mortgage. While in all doubtful cases the law will construe the contract to be a mortgage rather than a conditional sale, yet, when a conditional sale is clearly established, it will be enforced. Ibid. 27. I where debt is continued. Where the relation of debtor and creditor is continued between the parties as to the consideration of the conveyance, the transaction will be treated as a mortgage. Ibid. 28. when debt is extinguished. When the debt is extinguished by a fair [agreement, and the grantor has the privilege merely of refunding, if he pleases, by a given time, and thereby entitle himself to a reconveyance, the transaction is a conditional sale, and the equity of redemption does not continue. Ibid. 29. When the maker of a note executed for money borrowed, conveyed to the payee a tract of land by a deed absolute on its face, and received from such payee a bond for a reconveyance, upon the payment of the sum borrowed, of which time was made the essence; and at the maturity of the note, it was by agreement of parties delivered to the maker, and the bond was returned to the obligor for the purpose of having both canceled, and with the intent that the title to the land should vest absolutely in such grantor and obligor; it was held, that the parties did not thereafter sustain to each other the relation of mortgagor and mortgagee; and that after canceling the note and bond the maker of the note had no title to such land. Vennum v Babcock et al., 13 Iowa, 194. c. When a deed is a mortgage. 30. When absolute deed will be treated as a mortgage. Where a deed was given to secure the payment of money, and a bond was given to reconvey on payment of the money, the deed should have no greater force than a mortgage as between the parties to the transaction and their agents and attorneys, if they were actually cognizant of the facts. Hall v. Savill, 3 G. Gr. 37. 31. In order to authorize a court of equity to treat an absolute deed as a mortgage, it is necessary to show a debt existing between the parties at the time of the transaction, and that the title to the land passed from one to the other. Usher v. Livermore, 2 Iowa, 117. 32. evidence to establish. Record evi dence and even parol proof are admissible to show that a deed, absolute on its face, should have no greater effect than a mortgage. Hall & Cochrane v. Savill, 3 G. Gr. 37. 33. parol defeasance. A conveyance, absolute on its face, may be shown by parol evidence to have been intended only as a mortgage. Key v. McCleary, 25 Iowa, 191. 34. Oral evidence is not admissible to contra dict or vary a written instrument, but, under the exception to this rule, it may be shown by extraneous proof that a deed, absolute on its face, was intended as a mortgage. Roberts v. McMahan, 4 G. Gr. 34; Cooper v. Skeel, 14 Iowa, 578; Gardner v. Weston, 18 Ibid. 533; Trucks v. Lindsey, Ibid. 504; Holliday v. Arthur, 25 Ibid. 19; Maple v. Nelson, 31 Ibid. 322. 35. sufficiency of evidence. Where a party seeks to convert a deed of real estate, absolute on its face, into a mortgage, by a parol contemporaneous agreement, that it was received as a mere mortgage, and that he was to have the right to redeem, the evidence should be clear, satisfactory and conclusive, and not be made up of loose and random conversations. Corbit v. Smith, 7 Iowa, 60; Gardner v. Weston, 18 Ibid. 533. 36. Sheriff's deed recognized as a mortgage. Where R. undertook to advance sufficient money to satisfy two judgments, against M., and as security for such advance and twenty per cent When a Deed is a Mortgage - The Rights of the Parties. interest, it was arranged that R. should bid off the land under execution in his own name and receive the rents therefrom, and when the rents received amounted to more than enough to refund the money advanced and twenty per cent interest thereon, it was held that the transaction shows an intention to create and secure an indebtedness from R. to M., and that the sheriff's deed to R. should be regarded as a mortgage, which was satisfied by the rents collected. Roberts v. McMahan, 4 G. Gr. 34. 37. Recital in deed. An absolute deed of real estate reciting that the deed was executed to secure the payment of a loan of money will be treated as a mortgage. Montgomery v. Chadwick, 7 Iowa, 114. 38. Construction of deed. Where M. entered lands in his own name with the money and for the use of H., and afterward conveyed the same to H. by a deed which was never recorded; and H. mortgaged the same to a third party who assigned the mortgage to M., who afterward acquired possession of the unrecorded deed and destroyed it. Held, that M. was a mortgagee merely, and could divest H. of his title only by foreclosure. Hull v. McCall et al., 13 Iowa, 467. 39. - rights of mortgagor's creditors. A conveyance absolute in form, but which is executed for the purpose of securing a debt due from the grantor to the grantee, will, as against the latter, and subsequent purchasers chargeable with notice, be regarded as a mortgage, and the premises embraced therein, or the proceeds thereof, may, to the extent of the surplus remaining after the satisfaction of the debt intended to be secured, be subjected to the payment of a debt held by a creditor against the grantor. Allen v. Kemp et al., 29 Iowa, 452. 40. Where it appeared that such creditor, prior to that time, but after the execution of the deed to such grantee, entered into an arrangement with the different parties interested in the property, including said grantee, in respect to a mortgage existing on the property, executed by a former owner, to the effect that such creditor should buy in the property and then quit-claim to the owners of the different parts including such grantee, which was accordingly done, it was held, in the proceeding by the creditor to subject the land to the payment of his debt against the grantor, that he was not estopped by such facts from denying the abso lute title of the grantee, and asserting that he only held it in the capacity of a mortgagee. Ibid. 41. A deed absolute on its face, which was intended merely as security, will, in equity, be declared a mortgage. Wilson v. Patrick et al., 34 Iowa, 362. 42. - inadequate consideration: evidence. That the consideration for the conveyance was grossly inadequate is a strong circumstance to support the claim that it was intended to operate as a mortgage instead of absolutely. (Trucks v. Lindsey, 18 Iowa, 504; Holmes v. Grant, 8 | Paige's Ch. 243; Conway v. Alexander, 7 Cranch, 268; Morris v. Nixon, 1 How. 126; Russell v. Southard, 12 Ibid. 139; Davis v. Stonestreet, 4 Ind. 101; West v. Hindsey, 28 Ala. 226; Vernon v. Bethell, 2 Edw. Ch. 110; Oldham v. Holly, 2 J. J. Marsh. 114; Kemp v. Eays, 7 Ired. Eq. 167; Steel v. Black, 3 Jones' Eq. 427; Crews v. Treadwell, 35 Ala. 334; Selks v. Sealcup, 7 Ired. 13; Burley v. Phelps, 2 W. & M. 436.) Ibid. 43. So, also, the fact that the grantor remained in possession of the premises is a fact to be considered as tending in the same direction. Ibid. III. THE RIGHTS OF THE PARTIES. a. In general. 44. Mortgage may be foreclosed though suit is pending on note. A mortgage can be foreclosed though a suit at law is pending on the note; but a payment of one will be a satis faction of both. Knetzer v. Bradstreet, 1 G. Gr. 382. 45. - And in such case the note secured by mortgage need not be made a part of the bill to foreclose the mortgage, if produced in court subject to an order of cancellation. Ibid. 46. Foreclosure after judgment. The mortgagee may proceed in equity against the mortgagor and other incumbrancers of mortgaged property to determine the priority and amount of such incumbrances, and to foreclose the mortgage, after recovering a judgment in an action at law on the note secured by the mortgage. Semble, that when there are no other incumbrances the mortgagee must abide by his judg ment at law. Code of 1851, §§ 1210, 1226, 1227, construed. Wahl v. Philips, 12 Iowa, 81. 47. Holder of note may waive foreclosure and maintain suit on note. The holder of a The Rights of the Parties note secured by mortgage upon real estate may waive a foreclosure, and maintain an action at law on the note alone. Banta v. Wood, 32 Iowa, 469. 48. Liability of mortgagee. In an action against a mortgagee and mortgagor to recover a balance due on a note secured by mortgage after applying the proceeds arising from the sale of the mortgaged premises in foreclosure, the note was payable to the mortgagee or bearer and transferred without indorsement. Held, that in the absence of the indorsement the mortgagee was not liable. Wood v. Sands, 4 G. Gr. 214. 49. Estoppel of third party. A mortgage may be received in evidence against a third party without proof of its being duly executed, acknowledged and recorded, if such party had actual notice of it, and consented that it might be executed upon the property in which such party was interested. Brewer's estate et al. v. Crow et al., 4 G. Gr. 520. 53. Liability on covenants: taxes. A mortgagor is not liable on the covenant of general warranty in his mortgage for taxes assessed after the execution of the mortgage; and while the mortgagee may, before foreclosure, pay such taxes to protect his security and recover the amounts so paid, with his debt, in foreclosure the right to recover the same against the mort gagor after foreclosure and sale is doubted. Ingalls v. Cooke, 21 Iowa, 560. 54. When mortgagor is bound to defend title. A mortgagor, in a mortgage containing covenants of warranty, is bound to defend the title of the mortgagee against all claims arising out of delinquent taxes existing on the land at the time of the execution of the mortgage. Porter v. Lafferty et ux., 33 Iowa, 254; Devin v. Hendershott, 32 Ibid. 192. 55. He cannot defeat the title of the mortgagee or of a third party who purchases the premises under foreclosure of the mortgage, by buying in the property at tax sale for such de would inure to the mortgagee or to the person purchasing at the foreclosure sale. Ibid. 50. Mortgage to secure note of third party. When one party executes a mortgage to secure the payment of the debt of another, the mort-linquent taxes. In such case, the tax title gagor becomes liable for the payment of the debt, and the same may be enforced by special execution against the mortgaged property and by general execution against his other property for the satisfaction of any balance remaining after exhausting the mortgaged property, unless v. the parties have otherwise stipulated. Deland Mershon et ux., 7 Iowa, 70. But see contra, Chittenden & Co. v. Gossage, 18 Iowa, 157, which is distinguished from the present one; § 207, post. 56. The same rule would apply to one who purchased the premises from the mortgagor, subject to the mortgage, and under the agreement on his part to discharge it. In such case he would be regarded as a privy in estate with the mortgagor and as standing in his place. Ibid. 57. Rights of junior mortgagee. The rights of a junior mortgagee cannot be defeated by any arrangement between a prior mortgagee and the mortgagor, or any adjudication of their respective rights to which the junior mortgagee was not a party, no matter in what form the transaction constituting the mortgage consisted whether in the form of an absolute deed, or 51. P., who was the owner of real estate, executed a mortgage upon the same "to be void upon the condition that I pay or cause to be paid a certain promissory note for $1,200 given by B, dated with this instrument and payable to A, or order, one year from date, with ten per cent interest." Held, that the mortgagor assumed only the liability of a secu-in one showing the absolute legal title to be in rity. Christner v. Brown et al., 16 Iowa, 130, following Kelley v. Gillespie, 12 Ibid. 55. 52. Execution of new note. When the holder of one of several notes secured by mortgage delivered up the note to the mortgagor and maker, and took a new note for a different amount, payable at another date and without any agreement that it should be secured by the mortgage, it was held that the holder lost his right to the security as against the holder of the other notes Vol. 2.-94 the first mortgagee. Davis & Watson v. Rogers, 28 Iowa, 413. b. Interest of mortgagor. 58. The mortgagor is considered the owner of the land, subject only to the lien of the mortgagee. Hall v. Savill, 3 G. Gr. 37. 59. The rule of the common law that by a mortgage of real property the legal title is conveyed to the mortgagee, who is vested with the Interest of Mortgagor — Interest of Mortgagee — Revivor of Mortgage. legal estate of freehold and inheritance, is not 65. Upon the death of a mortgagee his interrecognized by the weight of American author-est is to be regarded as personalty, and descends ities. In this country it may be considered the rule that the mortgagor is the owner of the lands mortgaged, and retains the inheritable estate therein. (Lessee of Perkins v. Dibble, 10 Ohio, 433; The King v. St. Michaels, 2 Doug. 629; Runyan v. Mersereau, 11 Johns. 535; Goodwin v. Richardson, 11 Mass. 470; Huntington v. Smith, 4 Conn. 235; Fernald v. Lenscott et al., 6 Me. 235; Souhterin v. Mendum, 5 N. H. 420; Kennett v. Plummer, 28 Mo. 142; Wilson v. Shomberger's Exr., 31 Penn. St. 295; Wilson v. Hooper et al., 13 Vt. 653; Ralston v. Hughes, 13 Ill. 469; The Miami Ex. Co. v. The Bank of U. S. et al., Wright, 249; City of Norwich v. Hubbard et al., 22 Conn. 587; Cooper v. Davis, 15 Ibid. 556; Glass v. Ellison, 9 N. H. 70; 4 Kent's Com. 160; Runyan v. Mersereau, 11 Johns. 534; Wilkins v. French et al., 20 Me. 111; 1 Smith's Lead. Cas. (Hare & Wallace's Notes) 570; Den v. Dimon et al., 5 Halst. 156; Lessee of Perkins v. Dibble, 10 Ohio, 433.) White v. Rittenmyer, 30 Iowa, 268; Courtney v. Carr, 6 Ibid. 239. 60. Before entry and foreclosure the mortgagor is the owner in law and equity of the mortgaged premises. Ibid. 61. A mortgagor is the freeholder of the mortgaged premises, and may maintain a real action for the land against a stranger, and the mortgage cannot be set up as a defense thereto. Ibid. to his representative instead of to his heirs, but the heirs of the mortgagor, upon the death of the latter, take the estate. White v. Rittenmyer, 30 Iowa, 268; Bates v. Ruddick, 2 Ibid. 423; Newman v. DeLorimer, 19 Ibid. 244; Burton v. Hin trager, 18 Ibid. 348. 66. Where a person erects improvements on real estate under a parol contract for its purchase, he thereby acquires an interest in the land to the extent of such improvements; and this interest is, under our statute, a mortgageable one. White v. Butt, 32 Iowa, 335. c. Interest of mortgagee. 67. Interest of mortgagee. real estate has no interest therein subject to A mortgagee of attachment or other levy. Courtney v. Carr, 6 Iowa, 238. 68. Chattel interest. The interest of the chattel interest, and follows the debt or prinmortgagee in the mortgaged property is but a cipal thing for which it stands security. Bur ton v. Hintrager, 18 Iowa, 348. 69. Passes to personal representative. The mortgagee's interest in real property passes, on his death, to his personal representative. Shields v. Keys, 24 Iowa, 298; White v. Rittenmyer, 30 Ibid. 268; Baldwin v. Thompson, 15 Ibid. 504; Burton v. Hintrager, 18 Ibid. 348. d. Revivor of mortgage. 62. Stipulation for entry on default: waiver 70. Surrender of mortgage obtained by fraud. of. A mortgage with a stipulation for entry by On the 7th of April, 1857, H. V. and A. V. the mortgagee upon conditions broken, confers loaned to B. the sum of $2,000, for which he no greater right upon the mortgagee than the executed to each a note for $1,000, to secure law gives in the absence of such stipulation. the payment of which he also executed a mortThe right, it seems, exists under the law, with-gage, conveying to them certain real estate, out such provision. Ibid. 63. Whatever effect upon the rights of the parties an entry may have, it may be waived by restoring the possession again to the mortgagor upon his claim of ownership. Ibid. which mortgage was duly recorded; February 19, 1859, G. T. & Co. recovered a judgment against B.; in February, 1860, H. V. bought the note executed to A. V., and agreed with B. to take the property mortgaged in satisfaction 64. Estate of mortgagor may be conveyed of both notes, B. representing as an inducement or levied upon. The estate of the mortgagor thereto, that there was no subsequent incum in the land is real property, and may be con- brances upon said property, whereupon a deed veyed and taken upon legal process as such. containing covenants against such incumbrances (1 Smith's Lead. Cas. (Hare and Wallace's Notes) was executed by B. to H. V.; A. V. entered 571; Miami Ex. Co. v. Bank of U. S. et al., satisfaction of the mortgage as to the note exeWright, 249; Jackson v. Willard, 4 Johns. 41; cuted to himself on the mortgage record August Wellington v. Gale, 7 Mass. 138; Ford v. Phil-7, 1860; after all of which G. T. & Co. caused pot, 5 H. &. J. 312; Ewen v. Hobbs, 5 Metc. 3; execution under their judgment to be issued Davis v. Anderson, 1 Kelly, 177.) Ibid. and levied upon the property, and at the sale |