Harbach v. Colvin

• Decision Date: 21 December 1887
• Citation: 35 N.W. 663,73 Iowa 638
• Parties: HARBACH v. COLVIN ET AL.
• Court: Iowa Supreme Court

73 Iowa 638

35 N.W. 663

HARBACH

v.COLVIN ET AL.

Supreme Court of Iowa.

December 21, 1887.

Appeal from circuit court, Polk county.

The defendant, Almira Colvin, was the owner of a promissory note for $600 given by James W. Kelly, and which was secured by mortgage on real estate in the city of Des Moines. The indebtedness was for money loaned to Kelly by Mrs. Colvin. Kelly procured the loan through H. R. Creighton, who was a loan agent at Des Moines. Creighton sent the application to Smith & Tennant, at Westfield, in the state of New York, and they procured the money from Mrs. Colvin, who is also a resident of that state. When the indebtedness fell due, Creighton, who is also an attorney, instituted a suit in Mrs. Colvin's name for the foreclosure of the mortgage. This was done without any previous direction or authority from her; but, when she was informed that it was necessary for the enforcement of her rights to foreclose the mortgage, she delivered it and the note to Smith & Tennant, with directions to send them to some attorney for that purpose, and they sent them to Creighton. The plaintiff, L. Harbach, held a junior mortgage on the premises, and he was made a party defendant in the action. For the purpose of securing his own claim, he desired to pay Mrs. Colvin's debt, and procure an assignment of her note and mortgage, and he applied to Creighton to make the payment to him. It was agreed between them that plaintiff should pay the amount of the debt, and that the note and mortgage should be delivered to him, and that the action should be prosecuted to judgment in Mrs. Colvin's name, but for his benefit. He accordingly drew his check to Creighton on the Des Moines Savings Bank for the amount of the debt, and Creighton delivered the note and mortgage to him. Creighton deposited the check to his own credit in the bank in which he kept his account, and it was paid on presentation by the bank on which it was drawn. The action was subsequently prosecuted to judgment by plaintiff's attorney. The judgment entered in the cause is in favor of Mrs. Colvin, against Kelly, for the amount of the debt, and for the foreclosure of the mortgage, and it establishes the priority of her mortgage to the one held by plaintiff. Creighton did not pay over to Mrs. Colvin the money paid him by plaintiff, but converted the same to his own use. Plaintiff caused a special execution to be issued on the judgment, and at the sale thereunder he bid the amount of the judgment and costs, and his bid was accepted by the sheriff. He tendered to the officer, however, only the amount of the costs, which was rejected, on the ground that he did not, either by the terms of the judgment or by any assignment, appear to be the owner thereof, and the sheriff thereupon adjourned the sale for three days. At the adjourned sale, Mrs. Colvin bid in the property at the amount of the judgment and costs, and the sheriff gave her a certificate of purchase. Plaintiff thereupon brought this action in equity to establish, as against Mrs. Colvin, his ownership of the judgment, and to compel the sheriff to issue to him a certificate of purchase under the first sale of the property. The circuit court entered judgment in accordance with the prayer of the petition. Mrs. Colvin appealed.Millard & Fletcher, for appellant.

Phillips & Day and St. John & Whisenand, for appellees.

REED, J.

1. It is urged that the transaction between plaintiff and Creighton did not amount to a payment of the debt, for the reason that the latter had no authority to receive anything but money in payment. The general rule undoubtedly is that one who undertakes as agent for another to collect a money demand, in the absence of special instructions, has no authority to accept anything but money in payment. McCarver v. Nealey, 1 G. Greene, 360;Graydon v. Patterson, 13 Iowa, 256;Drain v. Doggett, 41 Iowa, 682. We have no occasion in the present case to determine whether such agent would have authority, where the usage was to pay by check, to accept a check in payment, but, for the purposes of the case, it may be conceded that he would not have such authority. If, however, he receives the money on a check which he has taken in payment, there can be no question that that would amount to payment. If the debt should not be satisfied by the acceptance of the check, it clearly would be by the receipt of the money thereon....