Capital Sav. Bank & Trust Co. v. Swan

• Decision Date: 27 January 1897
• Citation: 100 Iowa 718,69 N.W. 1065
• Parties: CAPITAL SAVINGS BANK & TRUST CO. v. SWAN.
• Court: Iowa Supreme Court

100 Iowa 718

69 N.W. 1065

CAPITAL SAVINGS BANK & TRUST CO.

v.SWAN.

Supreme Court of Iowa.

Jan. 27, 1897.

Appeal from district court, Woodbury county; George W. Wakefield, Judge.

Action in equity to recover the amount due on a promissory note, and for the foreclosure of a mortgage given to secure its payment. Judgment was rendered by default against the defendant, F. C. Swan. The judgment and default were set aside on his application, and he filed an answer, to which the plaintiff demurred, and the demurrer was overruled. The plaintiff elected to stand upon its demurrer, and judgment was rendered in favor of Swan for costs, and the plaintiff appeals. Affirmed.Lohr, Gardiner & Lohr, for appellant.

Geo. M. Pardoe, for appellee.

ROBINSON, J.

The plaintiff is the owner of a promissory note, of which the following is a copy: “$800.00. Sioux City, Iowa, November 10th, 1891. On or before five years after date, we promise to pay to the order of W. E. Higman eight hundred dollars at our office in Sioux City, value received, with interest at eight per cent. after maturity. If this note is not paid at maturity, the undersigned agree to pay reasonable expenses of collection, including attorney's fees. Merchants' Loan & Trust Company, Sioux City, Iowa, by W. E. Higman, President. F. C. Swan, Sec'y & Treas.” The mortgage given to secure this note was on a lot in Sioux City, and was signed in substantially the same manner, and by the same persons, as was the note. The mortgage was duly recorded. In November, 1892, the payee of the note transferred it to the plaintiff by an indorsement thereon in words as follows: “Protest waived. W. E. Higman,”--and at the same time assigned to the plaintiff the mortgage. That provided that, in case of default in the payment of interest due on the note, the whole indebtedness should become due. Interest due on the 10th day of November, 1893, not having been paid, this action was commenced to recover the entireamount of the note, and to foreclose the mortgage. Notice of the action was served on the Merchants' Loan & Trust Company, on Higman, and on Swan. The notice to Swan was served on the 3d day of August, 1894, and contained the following: “You are hereby notified that on or before the 17th day of August, 1894, a petition will be filed by said plaintiff, * * * claiming of you the sum of nine hundred ten and 10/100 dollars * * * on your promissory note in writing for $800.00, dated Nov. 10th, 1891, and due Nov. 10th, 1896, said note having become due because of default in payment of interest, * * * and that, unless you appear thereto and defend before noon of the second day of the next term of said court, * * * commencing on Monday, the 27th day of August, 1894, default will be entered against you, and judgment rendered thereon.” The petition was on file in due time. On the 31st day of August, 1894, Swan having failed to appear, his default was entered, and judgment rendered against him for the amount claimed in the petition. On the 8th day of October, 1894, he filed a motion to set aside the judgment and default, supported by the affidavits of himself and Higman, and accompanied by an answer to the petition. The affidavits show the following facts: When Swan was made secretary and treasurer of the Merchants' Loan & Trust Company, he was an employé of Higman, who was president of the company. That his duties as said employé had no connection with the company, except to sign papers when directed to do so by the proper officers, and that he did not receive any salary as secretary and treasurer. It was always understood between himself and Higman that the latter should always attend to all the business of the company, and that Swan need not devote any time or attention to it. Numerous papers in relation to the company had been served on Swan before the original notice in this case was served, and had been attended to by Higman. When the note and mortgage in suit were signed, Swan was but 22 years of age, was unacquainted with legal business, and supposed that he was signing them only as secretary and treasurer of the company, and did not intend to make himself personally responsible for anything. He supposed that the word “by,” placed before Higman's name, referred to him as well as to Higman, and had no personal interest in the transaction. When the notice was served on him, he saw that it related to the company, and, supposing that Higman would attend to the matter, did not give it any further thought. He was busy at the time, and did not notice that a personal claim was made upon him. Higman states that he wrote the word “by” before his signature, and intended that it should refer to the secretary and treasurer as well as to himself. The mortgage recites that it is to secure a promissory note of the Merchants' Loan & Trust Company. The youth of Swan, and the fact that he was not acquainted with legal business, would not,...