Application of Proceeds-Redemption.

junior mortgagee was not a party, cannot, by a purchase of the premises at tax sale, acquire any right which will preclude such junior mortgagee from redeeming the premises by tendering the proper amount. Ibid.

238. Sale under unauthorized foreclosure. When the holder of negotiable notes secured by mortgage indorses the same in blank to an attorney for collection who in fraud of his client's rights forecloses the mortgage in his own name and obtains a decree thereon which he afterward assigns as collateral to a creditor of his who is sues execution thereon and buys in the mortgaged premises thereunder which he afterward sells to innocent purchasers, such purchasers will not be disturbed in their title at the suit of the owner of the notes who seeks to charge them with the result of his own misfortune or folly in thus indorsing the notes in blank. Stutzman v. Payne et al., 23 Iowa, 17.

242. While the surplus moneys arising from the sale of mortgaged premises in foreclosure, when remaining in the hands of the sheriff, or under the control of the court, belongs to subsequent lien-holders in the order of their priority, and should be so awarded by the court; yet when the execution does not direct the disposition of such surplus, and the sheriff, acting in good faith and without knowledge of subsequent liens, applies the money upon other executions in his hands against the mortgagor, he is not liable therefor to such lien-holders. The County of Polk, for the use of the School Fund, v. Sypher et al., 17 Iowa, 358.

243. Account: incumbrances. Chapter 118 of the Code of 1851 contemplates the taking of an account, the ascertainment of the amounts and dates of the several incumbrances on the mortgaged property, and the payment of the same in the order of their priority. Kramer v. Rebman, 9 Iowa, 114.

See title, APPLICATION OF PAYMENTS, vol. I, p. 65.

X. REDEMPTION.

a. By mortgagor.

(4) Application of proceeds. 239. Order of payment. In the absence of any legal or binding agreement, where a mortgage is executed to secure the payment of two or more notes, maturing at different times, the proceeds arising from a foreclosure of the mort244. A mortgagor, after foreclosure, has, ungaged premises should be applied to the pay-der the act of August 17, 1842, a right to rement of the notes in the order in which they fall due, whether in the hands of an original payee or assignee, and without reference to the order or time of their assignment. Isett & Brewster v. Lucas et al., 17 Iowa, 503.

240. Notes secured by the same mortgage should be paid out of the fund arising from the foreclosure of the mortgage, in the order in which they mature. Hinds v. Mooers et al., 11 Iowa, 211; Ruder v. Carey, 13 Ibid. 274; Massie v. Sharpe et al., 13 Ibid. 542; Grapengether V. Fejervary, 9 Ibid. 163; Rankin et al. v. Mayor, Ibid. 297; The Bank of the State of Indiana v. Anderson, 14 Ibid. 544; McClunn v. Burns, 16 Ibid. 591.

241. A debtor executed a mortgage to secure the payment of a sum six months after date, and a further sum two years after date. The mortgagee assigned a portion of the sum last mentioned to G., and the remainder of it to R. The proceeds of the foreclosure should be applied: 1. To the satisfaction of the sum first maturing. 2. To the satisfaction pro rata of the claims of the assignees of the sum last maturing. Ruder v. Carey et al., 13 Iowa, 274.

deem and may remain in possession for fifteen months, the time allowed to redeem. Jamason v. Folz, Mor. 490.

245. The mortgagee entered into the possession of a portion of the mortgaged premises under a decree of strict foreclosure made on the maturing of one installment of the mortgage debt, and remained in possession until the expiration of the time allowed for redemption. It was held that an action upon an installment subsequently maturing did not open the foreclosure, and revive the mortgagor's right to redeem. Wilson v. Wilson, 4 Iowa, 309.

246. When the mortgagee entered under a decree of strict foreclosure a part of the mortgaged premises and neither entered nor caused to be sold another portion, it was held that the latter portion fell back to the mortgagor, and that he was not entitled to be allowed any thing there for in an action on a subsequent installment maturing on the mortgage debt. Ibid.

247. Prior to Revision of 1860, mortgagor must redeem before sale. The sale of mortgaged property pursuant to an order of a court

Redemption - By Mortgagor.

foreclosing the mortgage, under the law as it 114; S. C., 15 Ibid. 604; Ten Eyck v. Casad & stood prior to 1860,* barred and cut off all equity | Rowley, Ibid. 524. of redemption. The mortgagor or any incumbrancer may redeem at any time before, but not after, sale, by paying to the mortgagee the principal debt, with interests and costs. Kramer v. Rebman, 9 Iowa, 114; Stoddard v. Hayes, 12 Ibid. 576; Stoddard v. Forbes, 13 Ibid. 296: Wagner v. Galyear, Ibid. 598; Martin v. Jones & Hildebrand, 15 Ibid. 246.

252. The general rule is, that a mortgagee in possession is not entitled to be paid, or allowed for improvements, as he is for necessary repairs in cases of redemption; yet under some circumstances he may be allowed for valuable and lasting improvements which increase the value of the estate. Ibid.

253.

When a mortgagee in possession of 248. There is no redemption of mortgaged mortgaged premises, in consequence of the property after sale in foreclosure; and in a de-lapse of time is unable to render an account of cree of foreclosure no particular words cutting the rents and profits, he should be charged with off the equity of redemption are necessary. Stoddard v. Forbes et al., 13 Iowa, 296.

a fair occupying rent, which should be set off against the debt, and limited to the property as it was, exclusive of the improvements. Ibid.

The

254. When right to redeem accrues. right of action to redeem from a mortgage does not accrue to the mortgagor, until the mortgagee has taken possession of, or began to hold the premises for the purpose of foreclosure. Ibid.

255. The time when a mortgagee takes possession of the property, or began to hold the premises for the purpose of foreclosure, must be determined from the acts of the mortgagee, and all the circumstances of the case. Ibid.

256. When the mortgagee in possession is allowed for improvements made upon the premises, and required to account for the rent, the rent is to be calculated by the improvements themselves, as well as on the land. Ibid.

257. Tender. In a petition for the foreclosure of a junior mortgage, and to redeem against a senior mortgage it is not necessary to tender the amount due under the senior mortgage when the petition alleges that the senior mortgagee is in possession and prays an account of rents and profits and for waste committed, and proffers to pay the balance which may be found due on the senior mortgage, after making proper deductions for such rets, profits and waste. Anson v. Anson, 20 Iowa, 56.

251. Mortgagee in possession: improvements: rents and profits. In an action to redeem from a mortgagee, it appears that the mortgagee had been in possession of the premises for a period of nearly ten years; that he made valuable and lasting improvements thereon; and that the mortgagor must have known that the mortgagee was making the improvements; and there was no evidence to show that the former interposed any objection to the erection of such improvements; the mortgagee was allowed the value of his improvements, he accounting for the rents. Montgomery v. Chadwick, 7 Iowa, *Under the Code of 1851, previous to the passage of chap. 103, Laws of 1860, and giving to mortgagors the right to redeem, there was no redemption from sales in foreclosure of mort-debtor to have his real estate sold on execution subSEC. 3371. It shall be lawful for any judgment ject to redemption as is provided by law, and in case he so elects before a levy on the same by the officer having control of the writ, and files his notice in writing, of election, with the clerk of the court issuing the writ, the officer shall proceed to sell, subject to redemption, and shall execute to the purchaser a certificate of purchase.

gages.

The rule, therefore, recognized in the adjudications previous to 1860, under the Code was changed by the following sections of the appraisement act, Rev. 1860, page 610, to wit: SECTION 3360. Be i enacted by the General Assembly of the State of Iowa, That no goods, chattels, land's or tenements shall be sold on execution issued from any court, for less than two-thirds of the fair value

258. Under Laws of 1860. The provisions of an "act to provide for redemption of real esthereof, at the time of sale, exclusive of all liens, mortgages or incumbrances thereon, except as hereinafter provided.

By Subsequent Incumbrancer.

sequent mortgagee acquires no right to redeem. Shricker v. Field et al., 9 Iowa, 366.

265. Amount to be paid. A junior incumbrancer can redeem property upon which his lien attaches from a sale made in the foreclosure of a preceding mortgage, only by paying the amount due on the mortgage debt. It is not sufficient to pay the amount for which the prop

By Mortgagor tate sold on foreclosure of mortgages" (chap. 103, Laws 1860, p. 870, Rev. 1860), are so far as they affect contracts entered into before its enactment, unconstitutional and invalid. Rosier v. Hale, 10 Iowa, 470, and the authorities there cited; Maloney v. Fortune et ux., 14 Ibid. 417. 259. From conveyance absolute on its face. A conveyance, though absolute on its face, if intended as a security, will, in equity, be consid-erty was bid off at the foreclosure sale, when ered a mortgage, from which he who executed the conveyance may redeem, upon payment of the sums advanced with interest. Holliday v. Arthur, 25 Iowa, 19.

260. A transaction involving a conveyance of real estate to secure the repayment of money loaned in equity, is a mortgage from which the equity of redemption is inseparable. Richardson v. Barrick, 16 Iowa, 407.

261. It is a rule in equity that a right of redemption necessarily and conclusively attaches to every grant made as a security. Trucks v. Lindsey et al., 18 Iowa, 504.

262. When right to redeem revives. The correction of a mistake in a mortgage after foreclosure in such manner as to make it embrace property, not described in the original mortgage, revives the right of the mortgagor to redeem : aliter, when an agreement was made between the parties that the decree should be entered with stay of execution, after which it was agreed that the plaintiff should take the property in

satisfaction of his debt and costs and receive a

title by a sale under the decree, the parties at the time not knowing that any mistake had occurred, and the agreement being made with reference to the entire property as described in the corrected mortgage. Provost v. Rebman et al., 21 Iowa, 419.

263. Amount necessary to redeem. When the defendant, a mortgagee in equity, had paid an incumbrance on plaintiff's land. Held, that before plaintiff can redeem, he must refund the amount of said incumbrance with interest thereon, provided defendant shall cancel the note and mortgage, and cause proper satisfaction to be entered of record. Holliday v. Arthur, 25 Iowa, 19.

b. By subsequent purchasers and incumbrancers. 264. Purchaser cannot redeem after decree. Where the right of a subsequent mortgagee to redeem has been barred by a decree foreclosing a senior mortgage, a purchaser under such sub

such amount is less than the mortgage debt. Johnson v. Harmon, 19 Iowa, 56; Knowles v. Rablin et al., 20 Ibid. 101.

266. Where the prayer of a petition filed by a junior incumbrancer prayed for leave to redeem the incumbered property from the lien of the senior mortgage, it was held, that a decree ordering a sale of the property by a commissioner, and a further decree confirming the sale made by such commissioner to the junior incumbrancer, for a sum less than the amount of the mortgage debt, and ordering, that upon payment to the senior mortgagee of the sum bid for the property at the sale, the satisfaction of the senior mortgage should be entered upon the proper record, were White v. Hampton et al., 13 Iowa,

erroneous.

260.

267.

rents and profits. A senior mortgagee, who has taken possession of the mortgaged premises under a sale of foreclosure, will, on redemption by a junior mortgagee, who was not a party to the foreclosure proceeding, be required to account for the rents and profits accruing during the time which he held the same in possession. Ten Eyck v. Casad & Rowley, 15 Iowa, 524.

268. Right of junior incumbrancer to redeem not absolute for ten years. The right to redeem mortgaged premises from a sale made in the foreclosure of a senior mortgage, at any time within ten years after the sale, is not secured to a junior mortgagee, who was not a party to the foreclosure proceeding, and cannot be set up as a defense to a proceeding to compel such junior mortgagee to redeem or to bar his right of redemption. Ibid.

269. Purchaser of part must redeem the whole. A purchaser of part of the mortgaged premises can redeem only by paying the whole of the debt secured by the mortgage. Douglass et al. v. Bishop, 27 Iowa, 214; Street v. Beall & Hyatt, 16 Ibid. 68; Massie v. Wilson, Ibid. 390; Knowles v. Rablin et al., 20 Ibid. 101.

By Subsequent Incumbrancer.

party, but before a sale thereunder, has, it would seem, under the statute, by virtue of the lien of his judgment on the mortgagor's interest in the mortgaged premises, the right to redeem at any time before sale. But, if this right is not exercised before sale, it will thereby be as 275. Assignor may redeem. A junior mort effectually barred as if the creditor had been gagee, having assigned the mortgage as collat- | made a party to the foreclosure proceeding, or eral security for a debt of his own, may redeem | subsequently brought in for the purpose of cutthe mortgaged premises from a sale made in the ting off his right. Ibid. foreclosure of a senior mortgage; and such redemption will inure to the benefit of the assignee of the junior mortgage. Manning v. Markel et al., 19 Iowa, 103.

Deeds of Trust What constitutes a deed of Trust: Validity and Force of.

285. Relation between debtor and creditor. A creditor taking a conveyance of real estate from his debtor, under an arrangement that it was to be sold and proceeds applied to his debt 291. But a deed made by a sheriff under a after paying prior mortgages, does not occupy foreclosure proceeding, by notice and sale pursuch a trust relation to his debtor as prevents suant to chapter 118 of the Code of 1851, is not him from realizing the full amount of one of of itself prima facie evidence of the regularity such mortgages bought at a discount before the of such proceeding, nor of the truth of the reexecution of said conveyance to him. First Na-citals in such deed contained. Seevers v. Drentional Bank of Marshalltown v. Owen, 23 Iowa, 186.