Townsend v. Studer

• Decision Date: 04 October 1899
• Citation: 80 N.W. 210,109 Iowa 103
• Parties: FREDERICK B. TOWNSEND, Conservator for Daniel Pierce, a Person of Unsound Mind, v. FRANK STUDER et al
• Court: Iowa Supreme Court

80 N.W. 210

109 Iowa 103

FREDERICK B. TOWNSEND, Conservator for Daniel Pierce, a Person of Unsound Mind, v. FRANK STUDER et al

Supreme Court of Iowa, Des Moines

October 4, 1899

Appeal from Kossuth District Court.--HON. W. B. QUARTON, Judge.

SUIT in equity to foreclose a mortgage.Defense, payment of the note secured thereby to one Lund, who it is claimed was the agent of plaintiff to receive the amount due.Defendant Neilson who purchased the premises subject to the mortgage, filed a cross petition against Lund and one J. J. Ryan, who it is claimed were in partnership at the time the payment was made to Lund, in which he asks that, in the event the payment to Lund is held not to have extinguished the mortgage, he have judgment against Lund and Ryan for the amount paid to Lund.The trial court dismissed the petition, and plaintiff appeals.

Affirmed.

Corey & Bemis and E. V. Swetting for appellant.

Clark & Cohenour for appelleesFrank Studer, Frances Studer, Jacob Neilson, and Elizabeth Neilson.

Sullivan & McMahon and Frank Farrell for appelleeJ. J. Ryan.

OPINION

DEEMER, J.

On and prior to January 1, 1891, C. L. Lund was in business at Algona, Iowa, as a real estate and loan agent and continued in that business to the time of his death, July 2, 1896.The defendantFrank Studer, being the owner of the land described in plaintiff's mortgage, and desiring to effect a loan of eight hundred dollars thereon, applied to Lund for such loan.The application was forwarded to Daniel Pierce, residing in DeKalb county, Ill., and then transacting his own business.The application was accepted, and the loan made, for which the defendants Frank and Frances Studer on the first day of January, 1891, executed their promissory note for eight hundred dollars, payable to Daniel Pierce, or order, at Algona, Iowa, on or before January 1, 1896, with eight per cent. interest, as per five coupon notes attached, and reasonable attorney's fees for collection.They at the same time executed their mortgage on said land to secure the payment of said note and interest, which mortgage was duly recorded.C. L. Lund and W. L. Joslyn indorsed said note as follows: "For value received, we hereby guaranty the payment of principal and interest of this bond.Algona, Iowa, July 2, 1891."It is upon this note and mortgage that the plaintiff asks judgment and foreclosure.On October 13, 1893, the defendantJacob Neilson purchased said land from Frank Studer; receiving a warranty deed therefor, except as to plaintiff's mortgage, which he(Neilson) agreed to pay.In the spring of 1893 C. L. Lund and the defendantJ. J. Ryan formed a co-partnership for the transaction of business as real estate agents, which partnership continued until the spring of 1895.There is a dispute as to whether the business of that co-partnership included the loaning of money.Shortly prior to December 15, 1894, Jacob Neilson applied to Lund & Ryan for a loan of three thousand dollars, to be secured by mortgage on said land and other lands owned by him.Neilson's object in securing this loan was to pay off plaintiff's mortgage and certain other liens against the land.The loan of three thousand dollars was procured from the Connecticut Life Insurance Company, the draft for which was made payable to Jacob Neilson.Neilson indorsed this draft and delivered it to Lund, and at the same time executed to Lund, or to Lund & Ryan, his promissory note for two hundred and forty-nine dollars and seventy cents,--a sum which, added to the three thousand dollars, was equal to the amount of the mortgages to be paid, and the expense of procuring the loan.This note Neilson afterwards paid in full.Lund failed to apply any of the proceeds of said draft and note to the payment of the plaintiff's mortgage, or to remit any part thereof to the plaintiff.To clear the record for the three thousand dollar loan, Lund caused a forged satisfaction of plaintiff's mortgage to be entered upon the record.There is no dispute whatever that Neilson thus paid to Lund the full amount of the note sued upon, and that Lund converted that sum to his own use.The defendant Neilson alleges that "C. L. Lund was, in 1891, and from that time until the date of his death, July 2, 1896, continued to be, a general agent of Daniel Pierce and his conservator, the plaintiff herein," and therefore contends that plaintiff is bound by the payment made to Lund.The defendant Studer pleads that Neilson fully paid and discharged said debt.

The controlling point in the case is Lund's authority to receive payment of the note held by plaintiff.The loan represented by that note was procured through Lund.The evidence shows that Studer applied to Lund to procure him a loan, and signed an application therefor, which Lund forwarded to Pierce, whom he knew or supposed to have money to loan, and to whom Lund had previously sent similar applications.Pierce having signified his willingness to make the loan, the note, interest notes, and mortgage were executed and forwarded with an abstract of title; and, these being approved and retained by Pierce, he sent a draft for the amount of the loan, payable to Studer, to Lund, to be delivered to Studer.As the interest matured, Studer (up to the time he sold the land) paid the amount to Lund, who forwarded the same to the plaintiff, receiving in return the interest note paid, which he afterwards delivered to Studer.Neilson paid the interest maturing after he purchased the land, in the same way.This business was transacted entirely by correspondence, and the following expressions in plaintiff's letters are especially relied upon as showing the agency: "I want you to get some one to take the six loans I still have that you made to me.What have you done about the loans you made for me there?Report about taxes on the land on which you made loans for me.I hope you will, without delay, get all the loans paid you made for me."If it be conceded that these statements show authority to Lund as agent for the plaintiff, to make the loan, it does not follow that he had authority to collect it.As to whom Lund was agent for, seeSecurity Co. v. Graybeal, 85 Iowa 543, 52 N.W. 497.Our inquiry being whether Lund had authority to receive the payment, we do not determine for which partyhe was agent in making the loan.There is certainly nothing in the manner in which the loan was consummated to show authority to Lund to collect the debt.

As the authority of Lund is shown entirely by correspondence, we quote therefrom as follows: Under date of January 24, 1891 Townsend wrote Lund as follows: "I will take the loan on the Danforth land for $ 800.00, and release any mortgage, and pay the difference.If I understand you right, the land was sold for $ 30.00 per acre.Do you have many sales at that price?You may...