The remedy asked for is the equitable one of specific performance. The letter which, as a contract, is sought to be enforced by specific performance does not, on plaintiff's own evidence, correctly express the agreement and intent of the parties, which were that defendant "would agree to repurchase or take it [the security sold] back at any time if the same became in default;" not, "if this mortgage is ever foreclosed, * * * we will repurchase * * *" Neither the agreement as it was made nor the letter sued upon as the contract, when properly interpreted, as it seems to me, purports, or can be fairly said to be intended, to have authorized the extinguishment of the personal liability of the maker and assumptors of the obligation sold, or to bind defendant to purchase the real estate in lieu of the personal obligations of the mortgagors and assumptors after such obligations in the mortgage have been by the plaintiff voluntarily extinguished. The contract is one for breach of which the common-law remedies are well settled and adequate. If the contract sued upon were of such a nature that equity might grant specific performance of it, still plaintiff has not brought itself within the conditions on which equity will grant that remedy.
Defendant sold to plaintiff mortgages and other securities. The number of the transactions does not appear. Among them was a sale by defendant to plaintiff of the mortgage note and interest coupons in suit. This mortgage is upon real property in Minnesota. The petition is based upon a contract alleged to have been evidenced by a letter dated November 6, 1919, from defendant to plaintiff, as follows:
"Gentlemen: We have this day sold to your company a certain Farm Mortgage, signed and executed by Milo D. Morse and wife, Cecile Morse, dated October 1st, 1915, for $8000.00 — secured by 160 acres of land in Mower County, Minn., described as the Northeast Quarter of Section 10, Township 102, Range 14. Said note secured thereby drawing your Company 5 1/2 per cent interest.
"In consideration of the purchase of this mortgage by your company, the Central Trust Company agrees to collect all interest and remit to your Company, without charge and generally *Page 293 look after the loan the same as if our own. We further agree in the case this mortgage is ever foreclosed for non-payment that we will repurchase mortgage for its face value plus all interest and costs on same; said mortgage being recorded in Book 51, Page 60, of the records of Mower County, Minnesota."
Defendant attacks the validity of the agreement. I assume, for the purpose of this case, that this attack may not be sustained, and that the agreement is binding upon defendant. I therefore confine my discussion to a consideration of the question whether the plaintiff is entitled to the remedy of specific performance.
The makers of the note and mortgage made default in payment. Plaintiff thereupon presented the paper to defendant, with a demand for its repurchase. Defendant repudiated the agreement evidenced by its above-mentioned letter, and refused to recognize liability upon it. The plaintiff then foreclosed the mortgage according to the laws of Minnesota, by notice and sale. The foreclosure was not in court, and plaintiff got no personal judgment. At the sale, plaintiff purchased the mortgaged property for the full amount owed, including interest and costs. Meantime, the real property had been twice conveyed, the purchaser in each instance assuming payment of the mortgage. No action was taken to enforce the personal liability of the maker of the note or of the assumptors. At the expiration of the year allowed in Minnesota for redemption, the plaintiff became invested with the legal title to the mortgaged premises. The sale was had May 16, 1925. Petition in this suit was filed August 29, 1925. On October 29, 1926, and May 13, 1927, plaintiff paid taxes on the mortgaged premises for the years 1924, 1925, and 1926, for which, in addition to the amount of the principal and interest on the note and the costs of foreclosure, plaintiff seeks to recover. Plaintiff tenders to defendant the sheriff's certificate of sale under which the legal title to the mortgaged premises is now, as stipulated, vested in plaintiff, and abstract of title.
The property sold by defendant to plaintiff was incorporeal, personal property. It is described in the letter upon which the suit is founded as "a certain mortgage * * * dated October 1, 1915, for $8,000, secured by 160 acres of land in Mower County, Minnesota." The agreement further refers to it as the "said *Page 294 note secured thereby drawing your company 5 1/2 per cent interest." The agreement further designates the property sold (and the property to be repurchased) as follows:
"In consideration of the purchase of this mortgage by your company the Central Trust Company agrees to collect all interest * * * and generally look after the loan * * *"
The agreement to repurchase is this:
"We further agree in case this mortgage is ever foreclosed for non-payment that we will repurchase mortgage for its face value plus all interest and costs."
The property which by the decree the defendant is compelled to repurchase is the real property described in the mortgage. Plaintiff's position is that, under the terms of the agreement, it was required to proceed to foreclose the mortgage, and that, after it had purchased the mortgaged premises at foreclosure, the defendant was required to purchase them of plaintiff, at face value and interest on the mortgage note, with costs of foreclosure and taxes paid by plaintiff on the mortgaged premises after foreclosure. Otherwise stated, plaintiff contends that, though it purchased (incorporeal) personal property, defendant bound itself to purchase from it real property; that, though plaintiff purchased the personal obligation of the mortgagor, and acquired, incidentally to it, the personal obligations of subsequent purchasers of the mortgaged premises, defendant is bound to repurchase the mortgaged premises at the price placed upon them at the foreclosure sale by the plaintiff, stripped of the personal obligations of the mortgagors and subsequent grantees, which, as is conceded, have been discharged as a result of the foreclosure sale.
By the agreement sued upon, plaintiff was given the option to require defendant to repurchase. Plaintiff was not bound to resell. Defendant reserved no right to compel a resale. Defendant's agreement, therefore, in this particular was merely one giving plaintiff an option to resell to defendant. Wilson v.Holub, 202 Iowa 549; Engen v. Sheridan County State Bank,163 Minn. 1 (203 N.W. 434). Until plaintiff exercised its option, there was no contract of resale. The evidence is that plaintiff did, upon the mortgagor's default, and before foreclosure, *Page 295 exercise its option, and accordingly demanded of defendant that defendant repurchase the property. The property was then still personal in form. On the exercise of the option and making of the demand, the defendant (we may assume) was legally bound to perform its covenant to repurchase. The relationship between the parties then was that of seller and purchaser, under an executory contract by defendant to purchase the securities from plaintiff. The plaintiff's remedies for defendant's refusal to purchase were: (1) To store or retain the property for the defendant and sue defendant for the entire purchase price; (2) to sell the property, acting as agent of the defendant for this purpose, and recover the difference between the contract price and the price obtained on such resale; (3) to keep the property as plaintiff's own property, and recover the difference between the market price at the time and place of delivery and the contract price. Dustanv. McAndrew, 44 N.Y. 72, adopted by this court in Hamilton v.Finnegan, 117 Iowa 623. The law laid down in these cases was reaffirmed and applied to an agreement similar to that under consideration (between these same parties) in Hawkeye Sec. FireIns. Co. v. Central Tr. Co., 208 Iowa 573, decided since the rendition of the judgment here appealed from. Plaintiff's position, however, is that, under the terms of the agreement involved here, the defendant was bound to repurchase only after foreclosure, and that plaintiff was required to foreclose.
Particular attention has been called to the terms of the agreement. It variously refers to the subject of the sale as "a mortgage," as "said note," as "the loan." The property in fact consisted of a promissory note and farm mortgage securing it, and incidental documents and rights. The clause "we further agree in case this mortgage is ever foreclosed for non-payment that we will repurchase the mortgage" literally is an absurdity — a self-contradiction. "Foreclosure" of the mortgage would extinguish it. The mortgaged premises would be sold. The purchaser at foreclosure would acquire title. The lien of the mortgage would be at an end. The mortgage itself (and the note secured by it) would become defunct, — worthless paper. Clearly, the defendant did not agree to purchase a foreclosed and defunct mortgage (or note) for its face value and interest, nor does plaintiff claim that such was the agreement. Plaintiff's *Page 296 contention, in effect, is that the defendant agreed to purchase the farm on which the mortgage debt was formerly a lien, and which plaintiff has since acquired; and it is the purchase of the farm acquired by plaintiff at foreclosure, not the purchase of the mortgage (or note and mortgage), that plaintiff by this suit is seeking to compel the defendant to make. The agreement does not say that defendant will purchase of plaintiff the mortgaged premises or the farm in lieu of the note and mortgage which defendant sold to plaintiff, nor would such an agreement be reasonable. The mortgage is dated October 1, 1915. When it matured, is not shown. The agreement sued on is dated November 6, 1919. There is no limitation on the time within which defendant agrees to repurchase. On the contrary, the agreement is that, if the mortgage "is ever foreclosed for non-payment," defendant will repurchase. Literally, it might be allowed to run; it might be extended or renewed indefinitely. The improvements might be destroyed; the land might go to waste. Conditions might happen utterly destructive of its value, and, though the defendant never in terms agreed to purchase the farm, it might, according to plaintiff's theory, be compelled, on plaintiff's exercise of an option in the indefinite future, to purchase a piece of depreciated land for the amount of the principal of the note sold by defendant to plaintiff and an indefinite amount of interest and costs, and though the value of the paper as it was at the time the contract was made, had been utterly and voluntarily by plaintiff destroyed.
The phrase "ever foreclosed for non-payment," on which plaintiff relies, is contrary to the agreement to "repurchase mortgage * * * said mortgage being recorded in Book 51 * * *" It is not only unreasonable to suppose that the word intended to be used was "foreclosed," but the actual agreement, as testified to by plaintiff's vice president in his direct examination, in support of plaintiff's main case, is that defendant "would agree to repurchase or take it back at any time if the same became in default." He says the sewer bonds were bought "under a similar guaranty." Plaintiff is seeking, therefore, equitable enforcement of a contract in a sense which plaintiff's own evidence shows is absurd, and was different from defendant's verbal agreement. It may be inferred (though the evidence does not so show) that the letter on which the suit is based was dictated *Page 297 or written by defendant's official. Even so, on plaintiff's evidence it did not express the true agreement, and it had no right, as it claims to have done, to rely on what it knew to be the incorrect and unreasonable language used, and so specifically enforce it. 36 Cyc. 605, 608.
Specific performance, as plaintiff well argues, is awarded "because of the inadequacy of the remedy at law, and because equity can `do more perfect and complete justice'" than a court of law. Fisher v. First Tr. Sav. Bank, 206 Iowa 1105. See, also, Richmond v. Dubuque S.C.R. Co., 33 Iowa 422, 480; 4 Pomeroy's Equity Jurisprudence (4th Ed.) 1401. In ordinary cases founded on contracts of sale of personal property, the remedy at law for damages is adequate. McGraw Co. v. Zonta Tire RubberCo., 194 Iowa 685. Specific performance is not a matter of right, except in such cases as are brought within the conditions upon which equity (usually case of sale of real property) awards it.Lockie v. Baker, 206 Iowa 21; Wilson v. Holub, 202 Iowa 549;Shisler v. Catholic Cem. Assn., 207 Iowa 306. The contract, before equity will specifically enforce it, must be found to be unambiguous, clear, and certain, and its terms such that it cannot reasonably be misunderstood. Fenton v. Clifton, 204 Iowa 933; Donovan v. Murphy, 203 Iowa 214; Lockie v. Baker, 206 Iowa 21; Shisler v. Catholic Cem. Assn., 207 Iowa 306; In re Estate ofShinn, 207 Iowa 103; Schmidt v. Barr, 333 Ill. 494 (165 N.E. 131); Adcock v. Shaw, 167 Ga. 710 (146 S.E. 478). Neither the pleadings nor the evidence suggest any reason why the remedy at law was not adequate, complete, and speedy. In Fisher v. FirstTr. Sav. Bank, 206 Iowa 1105, decided since the trial below, this court applied these principles to a suit for specific performance of contract to repurchase note and mortgage denying that remedy. Here, the court is asked to compel the defendant, not to repurchase the note and mortgage, but to purchase the mortgaged property. It is asked to do so after the plaintiff has released the personal responsibility of the makers of the notes and the owners of the land who have assumed payment, and after plaintiff has destroyed the possibility of even negotiating with the debtors. It is asking the court to enforce a contract which its own evidence shows was different from the one actually made. Plaintiff, by transforming the property which was the subject *Page 298 of the contract into an entirely different property, elected to treat and keep it as its own. Plaintiff has thereby debarred itself from recovering the purchase price, and therefore from maintaining its suit for specific performance. Hawkeye Sec. FireIns. Co. v. Central Tr. Co., 208 Iowa 573. It seems to me that the judgment should be reversed.
De Graff and Wagner, JJ., join in this dissent.