McKinley-Lanning Loan & Trust Co. v. Gordon

• Decision Date: 12 April 1901
• Citation: 113 Iowa 481,85 N.W. 816
• Court: Iowa Supreme Court
• Parties: MCKINLEY-LANNING LOAN & TRUST CO. v. GORDON ET AL.

113 Iowa 481

85 N.W. 816

MCKINLEY-LANNING LOAN & TRUST CO.

v.GORDON ET AL.

Supreme Court of Iowa.

April 12, 1901.

Appeal from district court, Mahaska county; A. R. Dewey, Judge.

Suit in equity to foreclose a mortgage executed by defendant Thomas Gordon and his wife, Georgia, to Mrs. C. M. Shaw. Mrs. Shaw transferred the note that the mortgage was made to secure and the mortgage itself to Lee Davis, one of the defendants, and it is claimed that Davis sold and assigned the same to plaintiff. Defendant Davis pleaded that plaintiff is not the owner of the note and mortgage, and that it is not the real party in interest. Defendant Failyer purchased the land covered by the mortgage from the Gordons, and assumed and agreed to pay the mortgage indebtedness. After the transfer of the note and mortgage to Davis, he (Failyer) paid Davis $300, which he wishes to have credited on the note in any event; and he also pleaded that Davis, and not the plaintiff, is the real owner of the note. On the issues thus joined the case was tried to the court, resulting in a decree dismissing plaintiff's petition, directing a credit of $300 on the note in favor of Failyer, and decreeing foreclosure in favor of Davis. Plaintiff appeals. Reversed.H. H. Sheriff, for appellant.

Bolton, McCoy & Bolton and B. W. Preston, for appellee Failyer.

B. W. Preston, for appellees Gordon and Davis.

DEEMER, J.

The real issue between plaintiff and defendant Davis involves the ownership of the note and mortgage, and between plaintiff and Failyer the effect of the $300 payment made to Davis after plaintiff claims to have purchased the note. The record, from which it appears that the evidence was duly preserved, shows without dispute that Mrs. Shaw sold and assigned the note and mortgage to defendant Lee Davis. The mortgage was assigned on the margin of the record, but the note, although payable to Mrs. Shaw or order, bore no indorsement. Davis took the note and mortgage with him to Nebraska, and it is claimed that he there exchanged the same for a tract of land situated in the last-named state, or that he deposited the same with plaintiff as collateral security for the balance of the purchase price of the land. This is denied by Davis, and the issue of fact thus presented lies at the very threshold of the case. It is admitted that defendant Davis went to Nebraska, and that he purchased a quarter section of land from W. H. Lanning, through his agent, one Sherwood. Two written contracts seem to have been drawn up regarding the sale, from one of which it appears that the note and mortgage in controversy, on which there was due the sum of $700, with interest, were turned in as so much cash, or taken as collateral security for the payment of $700 of the consideration; but in the other--the one signed by Lanning himself--no mention is made of the note or mortgage. Defendant Davis contends that that part of the first contract referring to the $700 note and mortgage was added after the instrument was signed, and is a forgery. We do not find it necessary to settle this dispute, as all concede that Davis left the note and mortgage with one Miller, the cashier of the bank at Oxford, Neb.; plaintiff says as part payment or as security for the purchase price of the land sold Davis by Sherwood, as agent for Lanning, while defendant Davis contends that he left them with the cashier for safe-keeping, with some other papers, delivered at the same time as collateral for a small loan. From a careful reading of the record we are constrained to hold that the note and mortgage were left with the cashier of the bank as collateral security for part payment of the consideration of the Lanning land, that Lanning held the land as trustee for the plaintiff, and that plaintiff has such interest in the note and mortgage as entitled it to sue thereon. It is not our custom to set out the evidence sustaining the conclusion reached, and we make no exception of this case. Suffice it to say that the...