Port v. Carpenter (In re Snyder)

• Decision Date: 20 January 1908
• Citation: 138 Iowa 553,114 N.W. 615
• Parties: IN RE SNYDER. PORT ET AL. v. CARPENTER.
• Court: Iowa Supreme Court

138 Iowa 553

114 N.W. 615

IN RE SNYDER.PORT ET AL.

v.CARPENTER.

Supreme Court of Iowa.

Jan. 20, 1908.

Appeal from District Court, Jones County; B. H. Miller, Judge.

Suit to establish a lien against certain real estate in the name of the assignee was dismissed. Claimants appeal. Reversed.Jamison & Smyth, for appellants.

Park Chamberlain and F. O. Ellison, for appellee.

LADD, C. J.

On December 13, 1905, E. E. Snyder, who operated the Bank of Olin as a private bank, executed a general assignment for the benefit of creditors with L. M. Carpenter as assignee. Lot 12 and the south half of lot 16 of Highland Park in the city of Des Moines was part of the estate, but the deed to E. E. Snyder, under which he acquired title, had been deposited with F. W. Port under the following circumstances: In 1903 Snyder having a portion of the funds of the county deposited in his bank executed a bond conditioned to hold the county treasurer harmless by reason of such deposit or deposits, as exacted by section 1457 of the Code, with Port, Lamb and others as sureties. At the same time, to protect all the sureties against losses, the principal delivered to Port and Lamb, as security, several promissory notes, together with the above-mentioned deed accompanied with this writing: “Olin, Iowa, Nov. 25, 1903. The inclosed papers are deposited with K. T. Lamb, et al., to secure them against any loss by reason of signing my bonds as a county depository. This includes the Des Moines property, which is pledged to them as above stated. Edwin E. Snyder.” Afterwards Port turned them over to Lamb. A new bond with the claimants herein as sureties was executed in 1904. Then Lamb, upon ascertaining that he had been released from liability on the former bond, turned over the notes, deed, and writing to Port who handed them back to Snyder. The latter then made a list thereof, and delivered the list with the papers to Port, again saying, “You keep them as security the same as you did last year.” The claimants have repaid the county the money deposited by it in the bank, and have collected some of the notes deposited with Port as security. The sum of $3,123.19 is still owing them, and in this suit they ask that a lien therefor be established against the Des Moines lots.

1. The doctrine that an equitable mortgage may be created by depositing the title deed to land with a creditor had its origin in England, being first definitely announced in Russel v. Russel, 1 Brown Ch. Cas. 270, 18 Ruling Eng. Cas. 26. That decision has been regretted since as being in plain disregard of the statute of frauds, but consistently followed, with care, however, not to extend the doctrine. Ex parte Hopper, 19 Ves. 477; Norris v. Wilkinson, 12 Ves. Jun. 192. In that country the possession of the title deeds is evidence of ownership, as no one is supposed to have a right to retain them without having an estate or interest in the land they convey. They pass to the purchaser upon a sale, and are examined by the solicitor of the parties much as abstracts of title are examined in this country. This is for the reason that, until the recent partial adoption of the Torrens system, save in some counties, there were no registries, where a search could be made to ascertain the title to lands, other than copy held titles which are recorded in the manor courts. The only proof which the purchaser seems to have for the validity of the title in his grantor is the exhibition of the deeds which establish it. So, after a deposit of his evidence of title with his creditor as security, the debtor cannot well dispose of his land without first satisfying the indebtedness secured, for, until this is done, he is not in a situation to obtain possession of his title papers either at law or in equity. Under our system of registry, however, possession of title deeds is of no real importance to the owner of the estate. He cannot convey the land without them. They are not necessary in order to ascertain the condition of the title. For all practicable purposes, certified copies of the record copies will serve as well as the originals. The conditions which lead to the recognition of the doctrine in England are entirely wanting in this country. It is not in harmony with our system of conveyancing and registry. The object of that system is to afford security to titles by a public record, which parties dealing with land may, and for their own protection must, examine, and on which they may rely. Secret transfers and liens are sought to be prevented thereby. For some or all of the foregoing reasons the courts of this country have quite generally rejected the doctrine, as will appear from an examination of the following authorities: Probasco v. Brooks Johnson, 2 Disn. (Ohio) 96; VanMeter v. McFaddin, 8 B. Mon. (Ky.) 435;Gardner v. McClure, 6 Minn. 250 (Gil. 167); Gothard v. Flynn, 25 Miss. 58;Meador v. Meador, 3 Heisk. (Tenn.) 562; Lehman v. Collins, 69 Ala. 127; Bloomfield State Bank v. Miller, 55 Neb. 243, 75 N. W. 569, 44 L. R. A. 387, 70 Am. St. Rep. 381;Shitz v. Dieffenbach, 3 Pa. 233. In the last case decisions in several states often cited to the...