Harrison v. LeGore

• Decision Date: 27 October 1899
• Citation: 80 N.W. 670,109 Iowa 618
• Parties: MARGARET A. HARRISON et al., Executors, Appellants, v. CLARA A. LEGORE, HANNA H. SMITH et al
• Court: Iowa Supreme Court

80 N.W. 670

109 Iowa 618

MARGARET A. HARRISON et al., Executors, Appellants, v. CLARA A. LEGORE, HANNA H. SMITH et al

Supreme Court of Iowa, Des Moines

October 27, 1899

Appeal from Greene District Court.--HON. Z. A. CHURCH, Judge.

ACTION to foreclose mortgage. The defendants pleaded payment. Petition dismissed, and the plaintiffs appeal.

Affirmed.

Rose & Henderson for appellants.

Russell & Toliver for appellees.

OPINION

LADD J.

The mortgage on which this action is based was executed by the defendants to the plaintiffs, October 15 1888, for one thousand seven hundred dollars, due January 1, 1894, with the privilege of paying one hundred dollars, or any multiple thereof, when any interest coupon fell due. This appears to have been on the 1st of July and January of each year. On May 9, 1892, Harrison, who conducted the business of the executors, wrote concerning this loan to A. M. Head: "We will release the 80 acres of Smith on payment of three hundred dollars or more;" and on 18th day of October, 1892, three hundred dollars on principal and five dollars and fifty cents accrued interest thereon was paid to Head, for which the plaintiffs gave credit. On July 5, 1893, the defendants, through Legore, paid the balance of the mortgage, one thousand four hundred and forty-three dollars and ninety-two cents, to Head, who failed to forward it to the plaintiffs. This was by assigning to him a certificate of deposit in the Greene County State Bank of one thousand two hundred dollars, payable on demand, and handing him the difference in cash. At that time there was money to Head's credit in the bank. He held the certificate till July 14th, but in the meantime had overdrawn his account several hundred dollars. That day he presented it for payment, and received credit for the full amount on the books of the bank. This was precisely the same as though he had drawn the money, and then deposited it to his credit. If that had been done, it could have been claimed by no one that he had not been paid in money. But such an idle ceremony would have added nothing to the transaction had which was equivalent to payment in cash. Hare v. Bailey, 73 Minn. 409 (76 N.W. 213); Harbach v. Colvin, 73 Iowa 638, 35 N.W. 663.

II. But was Head authorized by the mortgagees to receive this payment? The executors, as will be seen, are mistaken in saying he was their agent for no purpose whatever. Their testimony, in this respect, is important only as excluding the possibility of an oral arrangement between them and Head; otherwise, his relation to them must be determined from their course of dealing and correspondence. Bradstreet Co. v. Gill, 72 Tex. 115 (9 S.W. 753). For many years prior to 1887, Mahlon Head had been the trusted agent of George Harrison, of Albany, N. Y., in loaning and collecting money for him. That year the business was transferred to A. M. Head, and in the following year Harrison died. His executors continued to negotiate loans through A. M. Head, until his death, in 1894. During that time he had forwarded to them applications of borrowers, which were accepted, amounting to more than thirty thousand dollars, on which money was sent to him by draft, which he deposited in the bank in his own name, and paid the borrowers therefrom by his checks, upon the execution of proper securities. It was his duty to see that the papers were properly executed, that the titles were perfect, and that the mortgages were first liens on the hypothecated real estate, before turning the money over to the borrowers. In these matters he was the agent of the executors. He was also their agent in bidding in lands mortgaged to them, at tax sales, on which taxes had not been paid, and in renting and finding a purchaser for a piece of land on which he procured title for them in foreclosure proceedings while acting as their attorney. All the money collected by them on these loans in Greene county, amounting to thirty-four thousand two hundred and fifty-four dollars principal and fifteen thousand seven hundred and two dollars and sixty-three cents interest, was paid to Head, and by him forwarded to them. Often, before remitting, he retained the money received several weeks or months, until it aggregated a large sum. To this practice no objection was made. Sometimes notes and coupons were forwarded to him for collection; but more frequently payments were made to him, and sent to the executors. When only in part payment, receipts were returned to him; and when in full, the papers and releases. The executors never took occasion to warn any of the borrowers that Head was not acting as their agent. On the contrary, Harrison frequently urged him to greater diligence in obtaining interest payments. Thus, on September 17, 1891, he wrote: "There is a considerable number of coupons overdue on your loans, and you have remitted nothing in several months. If you do not care to continue our business, you should say so, and not compel us to write disagreeable letters every time we feel it necessary to hear from you." Again, on April 25, 1893: "I sent you a list of unpaid coupons some time ago, and will repeat it now. * * * We would like to have all these collected as soon as possible." Nearly a dozen similar letters were written. As other letters mention inclosure of coupons, it is only fair to infer they were not inclosed in these, and this is in accord with Harrison's testimony. The collection of the principal on several notes was expressly authorized. December 19, 1892, Harrison wrote: "We do not care to make the Brock loan of $ 1,800 unless he will include the other 40 acres in the mortgage. If he does not want to do so, you may collect the loan." Again, October 12, 1893: "We prefer not to renew the George W. Hall loan, and would like to have it collected as soon as possible." October 11, 1892: "We do not care to renew the...