Day v. Brenton

• Decision Date: 27 May 1897
• Citation: 71 N.W. 538,102 Iowa 482
• Parties: JOHN M. DAY v. MARY E. BRENTON, CLIDE E. BRENTON, CHARLES R. BRENTON, EVA A. BRENTON, and CHARLES R. BRENTON, and CLIDE E. BRENTON, Executor, Appellants
• Court: Iowa Supreme Court

71 N.W. 538

102 Iowa 482

JOHN M. DAY v. MARY E. BRENTON, CLIDE E. BRENTON, CHARLES R. BRENTON, EVA A. BRENTON, and CHARLES R. BRENTON, and CLIDE E. BRENTON, Executor, Appellants

Supreme Court of Iowa, Des Moines

May 27, 1897

Appeal from Polk District Court.--HON. C. P. HOLMES, Judge.

SUIT in equity to foreclose a deed of trust, in the nature of a mortgage, made and executed by Pat and Mary Kenney, to Peter A. Johnson, covering certain land in Dallas county. Defendants, who are the widow and heirs at law of W. H Brenton, deceased, claim that decedent was a purchaser of the premises for value, and without notice, and that, at the time he purchased, the deed of trust was apparently satisfied and released of record by Peter A. Johnson, the trustee named therein. The lower court gave plaintiff a judgment and decree, and defendants appeal.

Reversed.

White & Clarke for appellants.

Dudley & Coffin for appellee.

OPINION

DEEMER, J.

The deed of trust in suit conveyed the property to Peter A Johnson, of Polk county, subject to these conditions "That if the said Patrick Kenney, his heirs, executors, or administrators, shall pay or cause to be paid to the Iowa Loan & Trust Company, their executors, administrators, or assigns, the sum of one thousand dollars, on or before the first day of November, 1886, and to James Lamb three hundred and eighty-six dollars and sixty-one cents on or before the twenty-first day of March, 1884, and sixty-three dollars and thirty-four cents accrued interest, and taxes for 1882, with interest thereon according to the tenor and effect of the promissory notes given to said Iowa Loan and Trust Company, given with the mortgage by James Lamb, and assumed by Johnson and Kenney, and to be paid by P. Kenney, as shown on said notes, then these presents to be void; otherwise to remain in full force." Appellee claims to be the owner, by indorsement, of the note referred to in these conditions, as payable to James Lamb; and this suit is for judgment on that note, and to foreclose the deed of trust. After the execution of the deed of trust, and on or about the thirteenth day of November, 1886, Peter A. Johnson, the grantee named therein, made a satisfaction piece, acknowledging that the same was "redeemed, paid off, satisfied, and discharged in full." This satisfaction was duly filed for record with the recorder of Dallas county. Johnson had no authority, express or implied, from appellee, who then held the Lamb note, to enter this satisfaction of record. Thereafter W. H. Brenton purchased the property, relying upon the recorded satisfaction of the mortgage, and believing that the Lamb note had been paid. Appellee contends that the deceased was not justified in relying upon the satisfaction for two reasons: (1) Because the authority of the trustee was expressly limited to an actual payment of the debts by Kenney to the person or persons who held the notes described in the instrument; and (2) because of a decree entered of record in a suit wherein Peter A. Johnson, by his next friend, was plaintiff, and Pat Kenney was defendant, wherein it was determined that, as between them, Kenney was bound to pay the notes secured by the deed of trust, and further decree "that upon the release of said mortgage to the Iowa Loan and Trust Company, and the payment of said note to James Lamb, or the release of the surety now on said note, that the clerk of this court enter satisfaction of the mortgage made by Pat Kenney and Mary Kenney to Peter A. Johnson, dated March 21, 1893."

To properly solve the questions presented, a further statement of the facts is necessary. It appears from the record that Lamb sold the land covered by the mortgage to G. I. Johnson, the father of Peter A. Johnson, and the father-in-law of Pat Kenney. At the time of the sale, the Iowa Loan and Trust Company held an unsatisfied mortgage upon the property. Johnson, the father, agreed to pay Lamb one thousand, four hundred and fifty dollars; one thousand dollars of which was covered by an assumption and agreement to pay the Iowa Loan and Trust Company mortgage, and the remainder to be paid to Lamb. He caused the land to be conveyed (by Lamb) to his son and son-in-law, and Kenney agreed to pay the consideration to Lamb. Kenney thereupon executed his note to Lamb for the amount stated in the deed of trust, and G. I. Johnson signed the same as surety. He also assumed and agreed to pay the mortgage to the Iowa Loan and Trust Company, and at or near the same time, and to indemnify G. I. Johnson and Peter A. Johnson, who owned one-half the property covered by the company mortgage, executed the deed of trust in suit. Afterwards some controversy arose between Peter A. Johnson and Kenney with reference to their rights in and to the premises, and Johnson brought suit against Kenney for partition, and for an accounting between them. In this suit it was decreed that Peter A. Johnson and Pat Kenney were each the owners of an undivided one-half interest in the land; that Kenney was individually bound to pay the mortgage to the trust company and the note in favor of Lamb; and that the mortgages, as between them, were liens upon the land set apart to Kenney, to be first paid therefrom; and further decreed that upon release of said mortgage to the trust company and payment of the note to Lamb, or the release of the surety on the note, the clerk enter a satisfaction of the mortgage made by Kenney and wife to Peter A. Johnson, being the mortgage or deed of trust in suit. Shortly after the execution of the note to Lamb, and before its maturity, he sold and indorsed it to plaintiff, and some time thereafter executed a formal assignment, referring to the mortgage in suit. Thereafter the loan and trust company foreclosed its mortgage, and sold the land under execution to Jennie A. Rivers, Rivers sold to Collins, Collins to Hoff, and Hoff to Brenton. Neither Collins, Hoff, nor Brenton had any notice of the mortgage in suit, except such as the record imparted, and some of these grantees expressly say that they relied upon the satisfaction appearing of record at the time they purchased. There is some doubt about Lamb's knowledge of the mortgage to Peter A. Johnson until after it was satisfied of record, but, as the case turns upon another proposition, we will not attempt a solution of the doubt.

As we view it, the case turns upon the authority or apparent authority of the trustee to satisfy the mortgage or deed of trust. In addition to the conditions to which we have referred, this instrument provided: "And it is further agreed that if default shall be made in the payment of said sum of money or any part thereof, principal or interest, or if the taxes assessed on the above-described real estate shall remain unpaid for the space of three months, and after the same are due and payable, then the whole indebtedness shall become due, and the said party of the second part, his heirs or assigns, may proceed by foreclosure or in any other lawful mode to make the amount of said note." It is not doubt true that Peter A. Johnson, the trustee, had no authority to release the deed of trust, except upon payment of the notes secured thereby; and it is conceded that, as between the parties, or persons having notice, a release executed by a trustee without authority of the cestui que trust, and without having received payment of the debt secured, does not discharge the lien. See Jones, Mortg section 957; Insurance Co. v. Eldredge, 102 U.S. 545, 26 L.Ed. 245; Williams...