Pickford v. Peebles

• Decision Date: 15 June 1895
• Citation: 63 N.W. 779,7 S.D. 166
• Parties: PICKFORD, Plaintiff and appellant, v. PEEBLES, F. M. Tomlinson, W. B. Dunn, J. M. Dunn and P. M. Dunn, Defendants and respondents.
• Court: South Dakota Supreme Court

7 S.D. 166

63 N.W. 779

PICKFORD, Plaintiff and appellant,

v.

PEEBLES, F. M. Tomlinson, W. B. Dunn, J. M. Dunn and P. M. Dunn, Defendants and respondents. South Dakota Supreme Court Appeal from Circuit Court, Clay County, SD Hon. D. Haney, Judge Affirmed R. J. Gamble and R. B. Tripp Attorneys for appellant. Joy, Hudson, Call & Joy Attorneys for respondent. Opinion filed June 15, 1895

CORSON, P. J.

This action was brought in the circuit court of Clay county to foreclose a mortgage given by the defendant F. M. Tomlinson on land now owned and occupied by the defendant Peebles. The facts, as they appear from the record, are substantially as follows: One of the defendants, J. M. Dunn, resided in the city of Le Mars, statc of Iowa, from the year 1883 to 1890, and was engaged in the business of loaning money on real estate and chattel security. P. M. Dunn, another of the defendants, was his wife, and during this period assisted him in his busines, and in his absence had charge of it. Quite a large part of the business of J. M. Dunn was done in the name of his wife. W. B. Dunn, another of the defendants, was J. M. Dunn’s brother, and resided at Grinnell, Iowa, and was engaged in farming. Some of the loans made by J. M. Dunn were made in the name of his brother, but it seems this was done without the knowledge or consent of this brother, and against his wishes. On the 20th of June, 1885, the defendant F. M. Tomlinson negotiated a loan of J. M. Dunn of $1,000 and delivered to him a note for that amount, made payable to P. M. Dunn, the wife. To secure the note Tomlinson executed a trust deed on land situated and lying in Clay County, S. D., which is the land in controversy, to W. B. Dunn, as trustee, for the benefit of P. M. Dunn; and soon after the execution of the note and mortgage, J. M. Dunn sent the paper to brokers residing in Boston, Mass., for negotiation, and it was sold to the plaintiff for value. The note was executed by the defendant F. M. Tomlinson to one of the defendants, P. M. Dunn. The trust deed to secure it was executed by Tomlinson and his wife, the defendant, Clara C. Tomlinson, to P. M. Dunn as beneficiary, and W. B. Dunn was named the trustee. The note and intcrest coupons attached were endorsed and delivered to Jeffries & Son, the brokers in Boston, who at once for full value indorsed them to the plainitiff in this action. The trust deed or mortgage, as soon as it was recorded, was delivered to the plaintiff. On the 16th day of July, 1886, Tomlinson sold the land in controversy to Peebles, the respondent, for value, and agreed that he would give him a perfect title. On the same day Tomlinson made an application to J. M. Dunn for a release of the mortgage in controversy, and for that purpose gave J. M. Dunn a temporary duebill for the amount due on the prior note secured by the trust deed. Thereupon J. M. Dunn, in the presence of Tomlinson, executed a release of the mortgage, signing the name of W. B. Dunn to the instrument, and acknowledging it by himself as a notary public. This release was recorded in Clay county, and purported to have been executed by the trustee. At the time the note was given by Tomlinson for the release, J. M. Dunn did not have the notes for which the security was given in his possession, nor were they given up to the defendant Tomlinson, nor have they ever been so delivered. The plaintiff brings this action to foreclose his trust deed or mortgage, and in his prayer asks for a sale of the land. Peebles was the only defendant that answered. Upon the hearing the court below held that the release, given as stated above, operated to discharge the security, and denied the plaintiff a decree of foreclosure. From that judgment this appeal is taken.

The counsel for the respective parties, in their briefs and in their oral arguments, discussed at some length the question as to whether or not the note given by Tomlinson to Mrs. Dunn, and transferred to the plaintiff was negotiable; but in the view we take of the case, a discussion of this question is not necessary as between the plaintiff and, the defendent Peebles. As between thcse parties the question is as to the priority and validity of the release or discharge of the trust deed. That when Peebles purichased the property there was no assignment, in any form, of the trust deed or mortgage of record in the office of the county recorder of Clay County is conceded; and it was not shown and it is not claimed, that Peebles had any notice or knowledge of the transaction between Tomlinson and the Dunns, or between. the Dunne and the plaintiff, other than that disclosed by the county records. The court finds that Peebles was a purchaser in good faith for value and without notice. This being so, the only question to be considered is, was Peebles justified in relying upon the discharge made in the name of W. B. Dunn, trustee, of the trust deed that was executed and recorded at about the time he purichased and paid for the property? So far as the records disclose, Mrs. Dunn was apparently the only...