Hakes v. Myrick
| Decision Date | 17 June 1886 |
| Citation | 28 N.W. 575,69 Iowa 189 |
| Parties | HAKES v. MYRICK AND OTHERS. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Jones district court.
Action in equity for the foreclosure of a mortgage. It is alleged in the petition that on the fifteenth day of July, 1881, plaintiff sold and conveyed certain real estate to S. B. Ireland, who gave his promissory note for $400 of the purchase price thereof, and to secure the same gave a mortgage on the premises; also that said note and mortgage, although they were still the property of plaintiff, and had never been assigned or transferred by him, had been wrongfully delivered to H. L. Ireland, who now holds possession of the same. It is also alleged that Charles T. and Theresa P. Myrick claim some interest in the property, but that their interest therein is junior and inferior to plaintiff's mortgage. H. L. Ireland and the Myricks are joined as defendants, but S. B. Ireland is not made a party. The relief demanded is that H. L. Ireland be required to surrender the note and mortgage to plaintiff; that the amount of the indebtedness be ascertained; that the mortgage be adjudged to be a lien upon the premises superior to the claim of the Myricks; and that the same be foreclosed, and the property sold for the satisfaction of the mortgage debt. The district court entered judgment for plaintiff in accordance with the prayer of the petition. Defendants appealed.Remley & Ercanbrack, for appellant.
Keeler & Bush, for appellee.
There is but little controversy as to the facts of this case. In the year 1877, D. M. Hakes was indebted to plaintiff in about the sum of $2,000, and, for the purpose of securing such indebtedness, he conveyed to plaintiff a number of tracts of real estate, situated in Jones county, and among them the tract in question. The conveyance was in form an absolute deed, but there was a parol agreement between the parties that the proceeds of the property, as it should be sold, should be applied in satisfaction of the debt, and that if any portion of it should remain undisposed of when the indebtedness should be extinguished, plaintiff would reconvey the same to D. M. Hakes. Plaintiff is a resident of the state of New York, and he appointed D. M. Hakes (who resides at Anamosa) his agent to collect the rents of the property, to make the necessary repairs and improvements on the property, and pay the taxes thereon. The agent has collected the rents accruing on such of the property as has been leased to other parties, and has expended the money so collected in paying taxes and making repairs and improvements on the property. He has occupied one of the tracts of property continuously, since the conveyance to plaintiff, as a residence and place of business. A new building, costing about $2,000, has been erected on this property since the conveyance. The cost of this building was paid with money which was borrowed for that purpose. The negotiation for the loan was conducted by D. M. Hakes, or an attorney employed by him; but the loan was made with plaintiff's knowledge, and he gave his notes for the amount, and secured the same by a mortgage on the premises. D. M. Hakes superintended the work of erecting the building, and has occupied and used it since its completion, but has not paid any rent therefor. In 1881 the property in question was sold to S. B. Ireland. The negotiation for the sale was carried on by D. M. Hakes, but Ireland knew at the time that the title to the property was in plaintiff, and he received a conveyance from him, and executed to him his promissory note for a portion of the purchase price, and a mortgage on the premises securing the same. This note and mortgage were left in the hands of D. M. Hakes, who had authority to collect the same at maturity.
In 1883, S. B. Ireland sold the property to H. L. Ireland. This sale was made with the knowledge of D. M. Hakes, and he agreed, as an inducement to H. L. Ireland to make the purchase, that he would release the mortgage given by S. B. Ireland on the property, and accept his (H. L. Ireland's) note for the amount of the purchase price due from S. B. Ireland, and surrender the promissory note given by the latter therefor; and he accordingly did surrender said note to H. L. Ireland, and accept his note in lieu thereof. He also entered satisfaction of the mortgage on the margin of the record thereof, signing the entry as agent for plaintiff. At the time of this transaction H. L. Ireland paid to him in cash the amount of the interest on the S. B. Ireland note up to that date. The note was not then due, but it bore interest from date, and the interest was payable annually. A few days after this transaction H. L. Ireland sold the property to the defendant C. T. Myrick. Before making the purchase Myrick inquired of D. M. Hakes whether the S. B. Ireland mortgage was satisfied, and was informed by him that it was fully satisfied, and that he had canceled it of record. Some months after the sale to Myrick, H. L. Ireland executed to plaintiff a conveyance of a certain other tract of land. This conveyance was executed in pursuance of an agreement between Ireland and D. M. Hakes. It was delivered to the latter, and he entered a credit of $225 on the H. L. Ireland notes, that being the amount at which he agreed to take the real estate.
Plaintiff was not informed of the surrender of the S. B. Ireland note, and the cancellation of the mortgage given to secure it, or of the execution of the conveyance from H. L. Ireland, and the entry of the credit on the note given by him, until a short time before the institution of this suit. One of the other tracts of real estate conveyed to plaintiff by D. M. Hakes has since been sold. The negotiations for the sale were carried on by D. M. Hakes, but the money received from the purchaser was paid over to plaintiff, and the sale was made with his knowledge and consent.
The question in the case is whether the act of D. M. Hakes, in surrendering the S. B. Ireland note, and canceling...
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