Hampe v. Manke

Decision Date17 January 1912
Citation28 S.D. 501,134 N.W. 60
PartiesG. J. HAMPE et al., Plaintiffs and respondents, v. EMIL MANKE et al., Defendants and appellants.
CourtSouth Dakota Supreme Court

Appeal from Circuit Court, Pennington County, SD

Hon. Levi McGee, Judge


Buell & Gardener

Attorneys for appellants.

Robert Burton

Attorney for respondent.

Opinion filed January 17, 1912


This is an appeal by the defendants from a judgment entered in favor of the plaintiffs and from the order denying a new trial. The action was instituted by the plaintiffs to recover the sum of $500 due on a promissory note, executed by the defendants, bearing date of the 13th day of December, 1907. It is provided in the note, among other things, that the "principal and interest are secured by a first mortgage deed which is the first lien on real estate in Knox county, Nebraska."

As the court found the facts substantially as set out in the answer as a defense to the action, we insert the court's findings instead of the answer. The court found, among others, the following facts:

"That at the same time and place of the making of said promissory note the said defendants, to secure the payment thereof, executed under their hands and seals, and duly acknowledged and delivered to the plaintiffs, a certain mortgage bearing even date with said note, whereby the said defendants mortgaged to the plaintiffs in fee a certain tract of land situate near the town of Bloomfield, in the county of Knox, and state of Nebraska, consisting of 40 acres, ... then, and at the time of the commencement of this action, of the fair and reasonable value of $1,500, which said mortgage contained the usual covenants, and was duly acknowledged and certified, so as to entitle it to be recorded in the office of the register of deeds of said Knox county, Neb., the county wherein said land was and is situated. That the agent of the plaintiffs, one Thomas Brown, of Muscatine, Iowa, prepared and forwarded by letter to the Pennington County Bank, of Rapid City, S. D., the deed and abstract of title for the land, and also prepared and forwarded by same letter the mortgage, notes, and coupon notes, and in such letter directed the said Pennington County Bank to deliver the deed to the property executed by the plaintiffs to the said defendant Emil Manke, upon the payment by said Emil Manke of the sum of $300, and upon the execution by Manke and his said wife of the mortgage, note, and coupon notes and delivery of same to the bank; and when the deal was so consummated directed said bank to forward said $300, the mortgage, note, and coupon notes to him (the said Brown) at Muscatine, Iowa, who stated in his letter that he would forward the mortgage to the register of deeds in and for said Knox county, Neb., for record. That the said Pennington County Bank, at the time of the closing of said transaction, exhibited said letter to the defendants, and said defendants at that time paid the said bank for the plaintiffs the said sum of $300, and executed and delivered to said bank the said mortgage, note, and coupon notes, whereupon the said bank forthwith forwarded said mortgage, notes; coupon notes, and $300 to said Thomas Brown at Muscatine, Iowa, in the regular course of mail, and pursuant to his request. That at the time of the closing of said transaction the defendants stated to the bank that said land had been purchased for speculation, and for that reason they might wish to sell the land at any time, and requested the said bank to have the said mortgage recorded immediately, whereupon said bank promised said defendants that said mortgage would be forwarded for record at once, and thus and thereby impart constructive notice of the existence of said mortgage and the lien thereof on said land, and defendants relied upon the letter of said Brown promising to record said mortgage, and relied upon, the promise of said bank that the same would be forthwith recorded, and believed and relied upon the plaintiffs recording said mortgage, and afterwards, and in the month of May, 1908, sold said lands to one Mitchell in reliance thereof. That, as a part of the consideration of the sale of said land by the defendants to said Mitchell, said Mitchell orally agreed to and did assume and agree to pay the said mortgage when the same should become due, and thereupon the defendants executed a warranty deed to the said Mitchell for said premises, and said defendants assumed and believed that the plaintiffs had placed on record the said mortgage. That the plaintiffs failed to record said mortgage in said Knox county, and in fact never did file or record said mortgage in said Knox county. That after defendants had so executed a deed to said premises to said Mitchell, and during the month of August, 1907, and as soon as defendants learned that said mortgage had not been recorded, they notified plaintiffs by letter that they had sold and conveyed said land to said Mitchell, and that said Mitchell had assumed the payment of said mortgage indebtedness, and demanded that said plaintiffs forthwith record said mortgage in the office of the register of deeds in and for said Knox county, lest the said Mitchell should convey said premises to an innocent purchaser, and, notwithstanding such notice and demand, plaintiffs neglected to record said mortgage, and thereafter, and on the 14th day of November, 1908, the said Mitchell conveyed the said premises by warranty deed to a third party, who had no knowledge of the existence of said mortgage, but believed, upon examination of the record, that said premises were not incumbered with a lien of said mortgage. That, had the plaintiffs recorded said mortgage, the mortgage indebtedness could have been collected from the said mortgage security, and, as the defendants have been unable to collect from said Mitchell, the said indebtedness must be made from said defendants, or not at all."

The court's first conclusion of law is as follows:

"That the defendants, nor either of them, have not made any...

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