Jenks v. Shaw

• Decision Date: 27 October 1896
• Citation: 99 Iowa 604,68 N.W. 900
• Parties: JENKS v. SHAW ET AL.
• Court: Iowa Supreme Court

99 Iowa 604

68 N.W. 900

JENKS

v.SHAW ET AL.

Supreme Court of Iowa.

Oct. 27, 1896.

Appeal from district court, Allamakee county; W. A. Hoyt, Judge.

Action in equity, commenced September 2, 1891, to recover judgment against the defendant Shaw upon a promissory note for $500, executed by him, payable to Laura M. Shaw, or order, “September 2, 1881, after date,” with 10 per cent. interest per annum from date, payable annually. Also for decree foreclosing a mortgage on certain real estate, given to secure the payment of said note. The note set out is indorsed, “Without recourse. Mrs. Laura M. Shaw,” and plaintiff alleges that for a valuable consideration she purchased said note and mortgage, and is now the owner and holder thereof. A. H. Woodruff was made a defendant, as having some interest in the land, but he failed to appear or answer. Plaintiff, by an amendment to her petition filed January 1, 1892, made Anna E. Hartley a party defendant, as claiming some interest in the land, which plaintiff alleged to be junior to her mortgage. An original notice was served on Mrs. Hartley December 31, 1891. On May 6, 1892, the defendants Shaw and Hartley filed separate answers. The defendant Shaw admitted the execution of the note and mortgage in suit, and denied that plaintiff had any interest therein, and alleged as defense, in substance, as follows: That about July 10, 1879, he was owing Mr. H. P. Lane $2,244, for which he executed his notes and a mortgage covering the land in question and other lands; that on September 2, 1878, he had executed the note and mortgage in suit to his wife, and that, to further secure Mr. Lane, she assigned to him, as collateral to his notes and mortgage, her said mortgage and the two notes secured thereby, one of which is the note in suit, under an express agreement that when $1,000 was paid on Lane's note and mortgage he would return said notes and mortgage to Mrs. Shaw; that said sum of $1,000 was fully paid to Lane; that the real estate in question was sold by defendant Shaw and wife to Francis Hartley for the sum of $900, all of which was paid to Lane, whereupon he executed a release of his mortgage as to the land bought by Hartley; that Lane consented to the sale, and verbally agreed with Mr. Hartley that he had no further claim on the land bought by Hartley. Defendant Shaw alleges that, whatever interest the plaintiff had in said note and mortgage was acquired after the same became due, and with full knowledge that Lane assigned the same to her in fraud of the rights of the defendant Anna E. Hartley and her grantor, and of the fact that said Lane held said note and mortgage only as collateral security, as above stated. The defendant Anna E. Hartley answered, denying generally the allegations of the petition, and alleging, in substance, as follows: That the note and mortgage sued upon were fully paid; that this action is barred; that her grantor, Francis Hartley, purchased said land from Shaw and wife with full covenants of warranty in which both joined; that Mrs. Shaw was the owner of the mortgage sued on, and that the same appeared of record in her name; that Francis Hartley paid D. L. and L. M. Shaw $900 cash for said land, and took possession thereof under claim of right and color of title; and that neither this defendant nor her grantor ever had any notice that plaintiff owned said note or mortgage, or any interest therein. She also alleges that Mr. Lane held the note and mortgage in suit as collateral security upon the conditions as stated in the answer of defendant Shaw, and that the $1,000 had been paid on the mortgage to Lane, and the $900 paid by Francis Hartley for said land was paid directly to H. P. Lane, and applied on the mortgage to him. Judgment was entered as follows: “Wherefore it is adjudged and ordered by the court that the plaintiff have and recover from the defendant D. L. Shaw judgment for $1,584.61, interest 10 per cent. on $500 and 6 per cent. on balance; to which he excepts. Decree of foreclosure refused as to Anna E. Hartley, to which plaintiff excepts. Judgment against D. L. Shaw for $55.85 attorney fee, to which he excepts. Judgment in favor of Anna E. Hartley for costs, to which plaintiff excepts.” Plaintiff alone appeals. Affirmed.Stilwell & Stewart, for appellant.

J. H. Trewin, for appellee.

GIVEN, J.

1. The following statement of the facts, which are undisputed or fairly established by the evidence, will be sufficient for the purpose of the questions to be considered: On September 2, 1878, defendant Shaw executed the note and mortgage, together with another note for the same amount secured by the same mortgage, to his wife, Mrs. Laura M. Shaw; the note in suit to fall due September 2, 1891. Shaw and wife, being indebted to one H. P. Lane in the sum of $2,244, executed to him a mortgage to secure said indebtedness on July 10, 1879, upon certain real estate, including that covered by the mortgage to Mrs. Shaw. At the same time, and as a further security to Mr. Lane, Mrs. Shaw indorsed the note in suit, “Without recourse,” and delivered the same to Mr. Lane, and also delivered to him the other note, secured by the same mortgage; Lane agreeing that when $1,000 was paid on the indebtedness of $2,244 to him he would return said notes and mortgage to Mrs. Shaw. It will be observed that this transaction was prior to the maturity of the note in suit. Some time in the fall of 1879, Lane, for a valuable consideration, transferred the note in suit by delivery to the plaintiff, who received it without knowledge or notice of the agreement by Lane to return the note and mortgage to Mrs. Shaw upon the payment of $1,000. This transfer, it will also be noticed, was before maturity of the note in suit. About the 16th day of March, 1881, Francis Hartley purchased the real estate in question from Mr. and Mrs. Shaw for the consideration of $900 in cash, paid to Mr. Lane, and received their warranty deed therefor. Mr. Hartley went into immediate possession of the land, and thereafter the title to the same was passed to the defendant Anna E. Hartley, who has ever since been in possession. There is some conflict in the evidence as to whether the $1,000 was paid to Mr. Lane upon the mortgage indebtedness to him. Shaw testifies that he had paid him $1,300, but is unable to give dates or amounts. He admits that part of the money paid by Hartley to Lane was used in paying taxes on the mortgaged land. Lane testifies that of the $900 received by him from Hartley but $167 was applied on the mortgage indebtedness to him, that the balancewas applied in payment of taxes amounting to $550 or $600, and that the only other credit given upon said mortgage indebtedness to him was $50. It appears that the other note secured by the mortgage sued upon was surrendered by Lane, but it is not clear when, nor why. We are inclined to think that it was surrendered as a part of the transaction at the time the $900 was received from Hartley. On November 26, 1884, judgment was rendered in favor of Lane against Shaw for $3,360.40, and this, we think, corroborates Lane in his statement as to the amounts that had been paid to him by Shaw, and leaves it quite clear to our minds that the amount of $1,000 had not been paid. Mrs. Shaw never made any assignment of the mortgage sued upon, and the record thereof showed it to be in her name. Neither Mr. nor Mrs. Hartley had any notice, at the time they took title, of the transfer of the note in suit to the plaintiff, but took title believing that it was free from all incumbrances. The contention on this appeal is solely between the appellant Mrs. Jenks and appellee Mrs. Hartley, and the question presented is whether appellant is entitled to a decree foreclosing the mortgage in suit as against appellee. Appellee states three reasons why appellant is not entitled to a foreclosure of said mortgage, namely: “As to this defendant the action is barred by the statute of limitations. Defendant and her grantor were innocent purchasers of the land for value from D. L. Shaw and L. M. Shaw, the only persons who, of record, had any interest in it. If Mrs. Jenks was the owner of the note and mortgage, she never placed any evidence of her ownership on record, and, as against the defendant, is estopped from setting up any claim to the property.”

2. Defendant Anna E. Hartley alleges in her answer “that said notes and mortgage were due September 3, 1881, and that this action was not commenced as to this defendant until January 1, 1892, and that plaintiff's cause of action is barred by the statute of limitations.” She now insists that the action was not commenced, as to her, until she was made a party thereto, and that, as that was more than 10 years after the maturity of the note sued upon, the action is barred as to her. Plaintiff does not dispute the claim that the action was not commenced as to Mrs. Hartley until she was made a party thereto, nor is it questioned but that this was after the lapse of more than 10 years from the maturity of the note. Plaintiff's contention is that the mortgage is merely an incident of the debt; that it follows the debt, and continues to exist so long as the debt is enforceable; and that, as this debt is not barred, the plaintiff is entitled to a foreclosure of the mortgage securing it. The action as against ...