Frick Co. v. Ketels

Mobtgage op Homestead and Other Real Estate — Right of Mortgagor. Where a mortgage upon the homestead and other real estate is being foreclosed, the mortgagor has the right, as against the mortgagee and all other creditors and lien-holders whose rights are not prior or superior to those of the holder of the mortgage, to require that before the homestead shall be resorted to for the purpose of satisfying the mortgage debt, all the other mortgaged property shall first be exhausted.

Error from Douglas District Court. This was an action brought in the district court by the Merrimack Savings Bank and against Enut Ketels, Catherine Margaretta Louisa Ketels his wife, Julius Ketels, Mary Ketels his wife, Carl Ketels, The Frick Company, a corporation organized and existing under the laws of Pennsylvania, and Erick & Company, another .corporation existing under the laws of Pennsylvania, the Kansas Loan & Trust Company, E. M. Sheldon and T. B. Sweet, upon certain promissory notes, and to foreclose a real-estate mortgage executed to secure such notes. The defendants answered separately, and replies were filed by a portion of the defendants, and upon the issues as thus presented, at the May term, 1887, the case was tried before the court without a jury, and the court made the following findings and conclusions, to wit: “On the 23d day of December, 1885, at the October term of this court for that year, commencing October 12,1885, the defendants Frick & Company, a corporation organized under the laws of Pennsylvania, duly recovered a judgment for money against the defendant Knut Ketels for the sum of $1,021.61 debt and $20.25 costs. This judgment was rendered for a balance due upon the sale of a traction engine and appliances connected therewith made by Frick & Company to Knut Ketels on the 19th day of March, 1884, and for a threshing-machine and attachments sold on the 3d day of July, 1884. On November 1, 1882, the lands described in the petition were conveyed to the defendant Knut Ketels, in consideration of the sum of $6,050, of which he paid $700 in cash and secured the balance by his promissory notes together with a mortgage on the lands conveyed, copies of which are set out and contained in the plaintiff’s petition. This mortgage was recorded in the office of the register of deeds of this county, and together with said notes was assigned to the plaintiff on the 9th day of April, 1884. At the date of said conveyance, November 1, 1882, the defendant Julius Ketels was 221-years of age and the defendant Carl Ketels was 19J years of age, both being the sons of the defendant Knut Ketels and his wife said Catherine M. Jj. Ketels, and both resided with their father and mother as members of the family. Shortly before said conveyance the father proposed to the sons that he would buy a farm if they, the sons, would remain with him and continue to work faithfully as they had done in the past, and that they should have part of the farm for their services. To this the sons assented, and accordingly this farm in question was purchased, the father then promising the sons that they should have the south half, and they promised to remain at home and work for their father and help pay off the mortgage, their wages to go into the payment for said south half. No definite agreement was made as to the rate of wages, only the father promised to allow as much as they could earn elsewhere, and there was agreement as to the time from which wages were to be computed; neither had any accounts of such wages been kept before, nor were such accounts kept afterward. The family continued to live together as they had heretofore done, the sons working for and under the directions of the father on the farm and in the winters in the woods cutting and sawing timber and cutting wood. This continued as to both Julius and Carl until March 1, 1886, when Julius married and moved away. Carl still continues in the same relation and service. “On October 13, 1885, Knut Ketels and wife conveyed by warranty deed the south half of said farm to wit, the S. E. ¿ S. 15, T. 13, R. 18, to said Julius and Carl Ketels, they at the time agreeing to pay $1,500 on said purchase-money mortgage executed to said Robinson, assignee. At that time it was agreed between them that their wages amounted to $2,000, and should be applied in part payment for said south half; the balance being said $1,500 so to be paid on the mortgage. In arriving at said sum of $2,000, Julius’s wages were allowed and computed from the time he was 15 or 18 years of age at $15 per month until he was 18; after that $18 per month until he was 21, and then at $20 per month. In like manner Carl’s wages were allowed and computed from the time he was 14 or 15 years of age at the same rates allowed Julius; very little if any deductions were made for clothing or anything else, and in fact no accounts had been kept between father and sons. Some small sums had been paid to the sons to pay their admissions to shows and the like, but no credit was claimed or allowed. It appears that Julius claimed a team of horses when the land was bought, one of which was raised on the farm. He also owned a pair of horses and harness in 1885. The sons attended school part of the time until 15 or 16 years of age. .They remained in the family working under the direction of the father after they were 21 in the same manner as they had done before that time; he furnishing their clothing in the usual manner between father and son. “At the time of the conveyance to his sons, Knut Ketels owned some personal property, but it appears that all of his property, except the lands in question, was mortgaged to its full value. At the date of purchase of said engine and machinery Knut Ketels signed a property statement in order to obtain credit therefor, in which he represented that he owned all of said real estate in fee simple, subject only to said purchase-money mortgage. The northeast quarter of said section 15, T. 13, R. 18, was at the time said debt to Frick & Company was contracted and ever since has been occupied by said Kuut Ketels and Catherine M. L. Ketels his wife, and family as a residence, and was and is their homestead under the laws of Kansas. “The Frick Company, also a Pennsylvania corporation, has since the commencement of this suit succeeded by assignment to all the rights and causes of action of the plaintiff herein. There is due the Frick Company on said notes and mortgage set out in the petition the sum of $5,077.24, and there is due to Frick and Company upon their judgment the sum of $1,142, from defendant Knut Ketels. At the commencement of the trial the said Frick Company moved to dismiss their said foreclosure proceedings as to the east half of the southeast quarter of section 15, township 13, range 18, parcel of said mortgaged premises, to which the defendant Knut Ketels objected, and moved that in the decree of foreclosure and sale to be made under said mortgage that the said southeast quarter of said section 15 should be first sold and his homestead last sold to satisfy said mortgage. Both motions were reserved for consideration and determination with the merits of the whole case after hearing the evidence. It also appears that on the day of the trial, but before commencing the same, the said Frick Company by John H. Mahan, its attorney, entered a formal release of said E. J of S.E. J S. 15, T. 13, R. 18, on the margin of the record thereof in the office of the register of deeds signed, ‘The Frick Company, by John H. Mahan, its attorney.’ But the mortgagors did not consent thereto, and objected to such release being considered or allowed. No consideration whatever appears for such attempted release.” Whereupon, the court found as conclusions of law: “1. The Frick Company as assignees of fhe plaintiff are entitled to judgment against Knut Ketels for said sum of $5,077.24, and for an order for the sale of said mortgaged premises to satisfy the same. The said mortgage is the first lien upon all of said lands. “2. The said judgment of Frick & Company was and is a lien upon the southeast quarter of section 15, T. 13, R. 18, from the 12th day of October, 1885, prior and superior to any interest of Julius Ketels and Carl Ketels in said lands, and subject only to the lien of said mortgage. [To which conclusion the said defendants Julius and Carl Ketels duly except.] “3. The equity of the family in the homestead is superior to the equity of the judgment creditors, {La Rue v. Gilbert, 18 Kas. 222,) and this cannot be defeated by the attempted release of a part of the mortgaged premises without the knowledge or consent of the mortgagor. Therefore the motion of the defendant Knut Ketels to have the homestead last offered for sale to satisfy the mortgage debt is sustained, and the judgment will so provide. For the same reason, and upon the same authority, the motion of the Friok Company to dismiss the foreclosure proceeding as to the east half of the southeast quarter of said section 15 is overruled. [To both of which rulings and conclusions the said Frick Company and Frick & Company duly and severally except.]” Judgment was rendered in accordance with the foregoing findings and conclusions; and the Frick Company and Frick & Company, as plaintiffs in error, bring the case to this court, making all the other defendants below, defendants in error.