Bardsley v. German-American Bank

• Decision Date: 31 January 1901
• Citation: 84 N.W. 1041,113 Iowa 216
• Parties: J. G. BARDSLEY, Appellant, v. GERMAN-AMERICAN BANK etl al., Appellees
• Court: Iowa Supreme Court

84 N.W. 1041

113 Iowa 216

J. G. BARDSLEY, Appellant, v. GERMAN-AMERICAN BANK etl al., Appellees

Supreme Court of Iowa, Des Moines

January 31, 1901

Appeal from Council Bluffs Superior Court.--HON. E. E. AYLESWORTH Judge.

SUIT in equity to cancel and set aside a mortgage.Defendants filed an answer and a cross petition asking the foreclosure of the mortgage.There was a trial to the court, resulting in a decree dismissing plaintiff's petition and foreclosing the mortgage.Plaintiff appeals.

Affirmed.

John P Organ, H. L. Robertson and W. H. Killpack for appellant.

Harl & McCabe and Stone & Tinley for appellees.

OPINION

DEEMER, J.

May 30, 1898, Henry Bruhn and wife executed the mortgage in controversy to the defendant bank.It was acknowledged before one James A. Hunter, who, it is claimed, was interested in the mortgage.Bruhn conveyed the land to plaintiff, subject to another mortgage, and it is contended that plaintiff had no notice, either actual or constructive, of the mortgage executed to the bank.The case turns on the validity of the acknowledgment of the Bruhn mortgage.Plaintiff contends that the bank was, at the time of the execution of the instrument, a co-partnership, composed of C. R. Hannan and James Hunter; that Hunter, in addition to being a partner, was cashier of the bank; that at the time he took the mortgage he was in fact the owner of the land; and that, in any event, he had direct interest in the bank mortgage to the extent of $ 300.Each and all of these matters, except that Hunter was cashier of the bank, are denied by the defendants.The law relating to the subject is well settled and generally understood.One having an interest, direct or contingent, in a conveyance or its subject matter, cannot take and certify an acknowledgment thereof, and the record of an instrument so acknowledged does not impart notice to third persons of the mortgagee's interest thereunder.As between the parties, however, the mortgage is valid and enforceable.Wilson v. Traer, 20 Iowa 231;Smith v. Clark, 100 Iowa 605, 69 N.W. 1011;Bank v. Radtke, 87 Iowa 363, 54 N.W. 435.The mere fact that one is an officer of a corporation or an agent of a co-partnership does not disqualify him from taking the acknowledgment of an instrument made to his principal.It is only when he has an interest in the subject-matter of the contract or the contract itself that he is disqualified.This interest need not appear on the face of the instrument; for a cestui qui trust, although not named or disclosed in the instrument itself, cannot take the acknowledgment thereof.

Let us now look to the facts disclosed by the record, aided by an examination of a transcript that has come to us under the rule.While Hunter at one time had an interest in the profits of a co-partnership doing business under the name of the "German-American Bank," yet it clearly appears that at the time the mortgage in controversy was executed he had no such interest.At that time he had the title of cashier and was receiving a fixed salary, hat in no wise depended on the profits of the business.He was nothing more than an employe, and as such was not inhibited from taking acknowledgments of instruments running to the bank.Was he directly or indirectly interested in the loan?It appears that a man by the name of Dunn owned the land prior to May 30, 1898.It was then incumbered by mortgage in the sum of $ 1,400.Hunter agreed to buy the land for the sum of $ 2,100, and drew a draft on the German-American Bank for $ 700, with which to make the cash payment; he having agreed to assume the $ 1,400 mortgage as part consideration for the land.The name of the grantee was either left blank or the deed was apparently executed to Bruhn, the...