Parsons v. Fairbanks

Norton, J. delivered the opinion of the Court—Cope, C. J. and Crocker, J. concurring. On the twenty-second day of June, 1857, T. H. O. Walton sold an undivided half interest in the Oregon Creek Ditch to George W. Walton, who in part payment agreed from the proceeds of said interest to pay five thousand dollars upon two promissory notes, executed by T. H. O. Walton and Stanford Hall, to the plaintiff, Parsons. On the twelfth of February, 1858, G. W. Walton sold this interest in the ditch to G. Y. Fairbanks for $10,500 27, of which $2,700 was paid at the time, and a mortgage given for the balance, of which three hundred and fifty dollars was paid subsequently. Yo part of these payments was applied on the Walton and Hall notes. Afterwards, G. Y. Fairbanks sold this ditch property to Jonathan Fairbanks, but upon what terms does not appear. At this stage of the transactions G. W. Walton gave to Parsons a written acknowledgment and statement, that he had bought the interest in the ditch from T. H. O. Walton upon condition to pay $5,000 of the proceeds of the property to Parsons on the Walton and Hall notes, and that afi moneys due to him on his sale to Fairbanks were due and payable to Parsons, until said sum of $5,000 [346]should be fully paid. The sale from G. W. Walton to G. Y. Fairbanks was effected by a writing which is held to constitute a conveyance, and a mortgage back to secure the purchase money. On the first of June, 1859, after the giving of this acknowledgment, Parsons transferred the Walton and Hall notes to Jonathan Fairbanks and took from him his note for $5,000, secured by a mortgage on the ditch.

This action is brought by Parsons to foreclose the mortgage given to him by Fairbanks. G. W. Walton is a party, and claims a prior lien by virtue of the mortgage executed to him by G. Y. Fairbanks. The decree, in effect, adjudges that the Walton and Hall notes in the hands of Jonathan Fairbanks are a set-off to and a satisfaction of the mortgage held by G. W. Walton to the extent of $5,000, and that the balance of his mortgage has priority over the mortgage of Parsons. From this decree Parsons appeals.

The mortgage of Walton being of prior date to that of Parsons, the decree is of course correct so far as it rests upon these two instruments alone. But Parsons claims that by virtue of the acknowledgment in writing made to him by Walton, founded upon or in consequence of the agreement existing between G. W. Walton and T. H. O. Walton, that the former should pay $5,000 on the Walton and Hall notes held by Parsons, he became an assignee to the amount of $5,000 of the mortgage executed by G. Y. Fairbanks to G. W. Walton, and that the note and mortgage executed to him by Jonathan Fairbanks was a mere renewal in his favor of the debt of $5,000 evidenced by the Walton and Hall notes and mortgage lien. On the contrary Walton claims, in effect, that the written acknowledgment given by him to Parsons did not constitute any transfer of his mortgage or any legal obligation upon him, and that if it could be considered as such a transfer, it was only as a security for the payment of the Walton and Hall notes to the extent of $5,000, and that when Parsons took the note and mortgage of Jonathan Fairbanks, and transferred to him the Walton and Hall notes, he voluntarily parted with his claim on the security of the Walton mortgage, and took in its stead the security of the note and mortgage of Jonathan Fairbanks of a subsequent date.