Barry v. Stover

• Decision Date: 03 April 1906
• Parties: JOHN L. BARRY, Plaintiff and respondent, v. EZRA E. STOVER et al., Defendants and appellants.
• Court: South Dakota Supreme Court

20 S.D. 459

107 N.W. 672

JOHN L. BARRY, Plaintiff and respondent,

v.

EZRA E. STOVER et al., Defendants and appellants. South Dakota Supreme Court Appeal from Circuit Court, Aurora County, SD Hon. Frank B. Smith, Judge Reversed Fellows & Cook Attorneys for appellant. Gamble, Tripp & Holman Attorneys for respondent. Opinion filed, April 3, 1906

HANEY, J.

The plaintiff’s cause of action is thus stated in the complaint:

“(1) That on the 1st day of November, 1886, the defendants Ezra E. Stover and Eliza I. Stover executed and delivered to one P. M. Dunn their promissory note conditioned to pay to the order of said Dunn, $700, on the 1st day of November, 1891, with interest thereon at 7 per cent. per annum payable semiannually until due, and 10 per cent. per annum on the principal and interest after maturity.

(2) That for securing the payment of said ‘note the said Ezra E. and Eliza I. Stover executed and delivered to the said P. M. Dunn a mortgage or trust deed of the same date upon certain real property in the county of Aurora, described as follows, to-wit: The S. E. ¼ of section 35 in township 105 N. of range 64 W.

(3) That on the 12th day of November, 1886, the said mortgage or trust deed was recorded in the office of the register of deeds of Aurora county, in Book 16 of Mortgages, on page 479.

(4) That on the 21st day of March, 1888, the said Ezra E. and Eliza I. Stover conveyed the said real estate, subject to said mortgage, to the defendant, Peter McGovern, who thereupon agreed that the said note and mortgage should be paid at maturity.

(5) That no part of the principal or interest of the said note and mortgage or trust deed has been paid except interest for the first year.

(6) That the said Peter McGovern has, or claims to have, some interest or lien upon said real property, but that the same is subject to the lien of the said mortgage.

(7) That on the 6th day of November, 1886, for a valuable consideration, the said P. M. Dunn indorsed, assigned, and set over the said note and mortgage or trust deed to John Jeffries and sons, who immediately thereupon indorsed, assigned and set over the same to this plaintiff.

(8) That no proceedings have been had at law or otherwise for the recovery of the debt secured by said mortgage or any part thereof.”

Peter McGovern, the only defendant who answered, denies that the note was indorsed or transferred to Jeffries & Sons by or with authority from P. M. Dunn, the payee, alleges that it was nonnegotiable, and alleges that the obligation was extinguished April 16, 1888, by payment and the execution of a release of the mortgage by J. M. Dunn, the trustee named therein, which was recorded April 21, 1888. The lien here sought to be foreclosed was created by an instrument of substantially the same import as those involved in Langmaack v. Keith, 103 NW 210, and McVay v. Tousley,(1905), and for the reasons stated therein must be regarded as a mortgage.

The learned circuit court found: That the note and mortgage were delivered to J. M. Dunn at Le Mars, Iowa. That they were transferred to Jeffries & Sons for a valuable consideration, in November, 1886, after this indorsement was placed on the back of the note by P. M. Dunn: “Pay to the order of _________________ without recourse.” That at the time the papers were transmitted to Jeffries & Sons, J. M. and P. M. Dunn were husband and wife, living together as such ‘at Le Mars, Iowa, where the former was engaged in the business of a loan broker, at which time the latter knew her husband was taking such loans and papers in her name and transferring them as these were transferred. That the note was negotiable under the laws of Iowa. That it was not negotiable under the laws of Massachusetts, and “that under the laws of the state of Massachusetts, there was no obligation on the part of the said P. M. Dunn, Jeffries & Sons or this plaintiff to notify the defendants Stover or McGovern of the transfer of said papers to protect themselves or any of them as against any payment of this note, coupons or trust deed to said J. M. Dunn.” The evidence conclusively proves that the note and mortgage were delivered, at Plankinton, Dakota, (now South Dakota) but that fact is not material, because the note, by its terms, was payable at Boston, and the question of its negotiability is to be determined according to the law of the place where it was payable. Rev. Civ. Code, § 1255; 22 Am. & Eng. Ency. Law, p. 1345.

It is undisputed that the note and mortgage were delivered by J. M. Dunn to Jeffries & Sons, for a valuable consideration, November 6, 1886, and it is immaterial whether the note was indorsed by the payee or her husband, as the trial court found and the evidence disclosed, that the latter was authorized by his wife’s conduct to make such indorsement. The statement in the circuit court’s decision relative to plaintiff’s obligation under the law of Massachusetts, to give notice of the...