Miller v. Berry

• Decision Date: 12 July 1905
• Citation: 104 N.W. 311,19 S.D. 625
• Parties: MILLER v. BERRY et al. (KUNZ, Intervener).
• Court: South Dakota Supreme Court

104 N.W. 311

19 S.D. 625

MILLER v. BERRY et al. (KUNZ, Intervener).

Supreme Court of South Dakota

July 12, 1905

Appeal from Circuit Court, Hand County.

Action by William Miller against Franklin J. Berry and another (Mary Kunz, intervener). From a judgment in favor of plaintiff intervener appeals. Reversed.

S. V Ghrist, for appellant. J. H. Cole (M. M. Cady, of counsel) for respondent.

CORSON P. J.

This is an appeal by Mary Kunz, intervener, from a judgment and order denying a new trial in favor of the plaintiff, William Miller. The action was commenced by the plaintiff to foreclose a mortgage executed by the defendant Berry, and D. Rhomberg was made defendant, as claiming some interest in the property. Mary Kunz, the intervener and appellant, claims the property by virtue of an assignment made to her of the mortgage executed by Berry, and an indorsement of the note which the mortgage was given to secure, made by the defendant Rhomberg as a partner in the firm of Walker & Rhomberg, who were carrying on the business of loan and investment agents at Dubuque, Iowa. Berry, the original mortgagor, did not appear in the action. The mortgage and note were executed by Berry in February, 1884, to F. T. Walker, who was then a partner of Rhomberg's. Subsequently, in March, 1884, the note and mortgage were sold and transferred to one Martin Byrne. The note and coupon were indorsed by F. T. Walker in blank, and Walker also executed an assignment of the mortgage on the back of the same, and also an assignment by a separate instrument. Byrne remained in possession of the note and mortgage until June 1, 1892, when they were repurchased by the firm of Walker & Rhomberg; and, as the note had been indorsed in blank, he simply handed it back, without indorsing it. When the assignment was returned with the note, Rhomberg erased the name of Byrne, and some time thereafter inserted the name of the appellant, Mary Kunz, and also wrote her name in the blank indorsement of the note, and the note and mortgage were transferred to her on account of a prior indebtedness due her from the firm of Walker & Rhomberg. This assignment to Mrs. Kunz was not recorded until about the time of the commencement of this action. Rhomberg was a brother-in-law of the appellant, and was her financial agent; and after this assignment he placed the note and mortgage in the safe of Rhomberg & Walker, and kept them there for her, and they were never actually delivered to her, except as being retained by Rhomberg as her agent. In 1888 Walker died, leaving all his property to his widow, as sole legatee, and the business of the firm seems to have been continued after his death in the name of Walker & Rhomberg. Mrs. Walker seems to have had some connection with the firm after the death of her husband, and made a loan to it of $10,000 or more; but precisely what connection she had with the firm does not seem clear, as Rhomberg denies that she was a partner. In 1896 Mrs. Walker, as sole legatee and executrix of the will of her late husband, made an assignment of the said mortgage to the nephew of her husband, John P. Walker, without consideration, who subsequently assigned the same to one Myer, who subsequently assigned the same to the plaintiff in the action. The assignment to John P. Walker and from Walker to Myer and from Myer to the plaintiff and respondent herein were recorded at about the time they purported to be executed. Neither Mrs. Walker, John P. Walker, Myer, nor the respondent have had the note or mortgage in their possession. The assignments were made on separate instruments, and in neither of the assignments to Walker, Myer, or the respondent was there any mention of the note or indebtedness which the mortgage was given to secure; the assignment being simply of the mortgage itself. The appellant filed exceptions to several findings of the court, and proposed findings stating the facts substantially as heretofore narrated, but which were refused by the court. The court stated its conclusions of law in favor of the respondent Miller, and entered judgment thereon, foreclosing the mortgage in his favor. The question, therefore, presented is, which of the parties--the respondent or the intervener--was the owner of the note and mortgage originally executed by Berry? It will thus be seen that the facts in the case are substantially the same as those presented in Richards Trust Company v. Julia Rhomberg (decided at the present term of this court) 104 N.W. 268.

It is contended by the appellant (1) that Mrs. Walker had no authority to transfer the mortgage as the legatee and executrix of the estate of her deceased husband; (2) that as her assignment only purported to transfer the mortgage, and not the note or indebtedness which the mortgage was given to secure, the assignment was a nullity; (3) that the respondent, in taking the assignment of the mortgage from one who had not the possession of either the note or mortgage could not claim as a bona fide purchaser as against the intervener, notwithstanding her assignment had not been recorded at the time the plaintiff claims to have purchased the mortgage;...