Whipple v. Fowler
| Decision Date | 18 September 1894 |
| Docket Number | 5614 |
| Citation | 60 N.W. 15,41 Neb. 675 |
| Parties | ORIN P. WHIPPLE v. LUCY D. FOWLER |
| Court | Nebraska Supreme Court |
ERROR from the district court of Lancaster county. Tried below before TIBBETS, J.
AFFIRMED.
Mockett Rainbolt & Polk, for plaintiff in error, contending that the release discharged the lien of the mortgage and that the mortgaged premises cannot be subjected to the payment of the notes held by plaintiff, cited: Executors of Swartz v Leist, 13 O. St., 419; Torrey v. Deavitt, 53 Vt. 331; Fox v. Wray, 56 Ind. 423; Reeves v Hayes, 95 Ind. 532; Thomas, Mortgages [2d ed.], sec. 421; Jones, Mortgages [4th ed.], secs. 472, 791, 820, 878, 967; Ahern v. Freeman, 24 Am. St. Rep. [Minn.], 206; Blight v. Schenck, 51 Am. Dec. [Pa.], 478.
The defendant is liable for damages caused by executing the release and permitting it to be filed. (1 Jones, Mortgages [4th ed.], sec. 814; Thomas, Mortgages [2d ed.], sec. 358; Fox v. Wray, 56 Ind. 423; Lincoln v. Purcell, 73 Am. Dec. [Tenn.], 196; Ferris v. Hendrickson, 1 Edwards' Ch. [N. Y.], 132.)
The court erred in admitting the evidence of George M. Traver on the question of value. The witness had not shown himself competent to testify. (Missouri P. R. Co. v. Coon, 15 Neb. 232.)
Ricketts & Wilson, contra:
A deed deposited in escrow, to be delivered on conditions named, does not become the deed of the maker until the conditions have been complied with; and any delivery of the deed prior to the performance of the conditions, or any placing thereof of record prior to the performance of the conditions, does not give to the deed any validity whatever. (Stanley v. Valentine, 79 Ill. 544; Smith v. South Royalton Bank, 32 Vt. 341; People v. Bostwick, 32 N.Y. 450; Everts v. Agnes, 4 Wis., 356; Black v. Shreve, 13 N. J. Eq., 458; Dyson v. Bradshaw, 23 Cal. 536; Ogden v. Ogden, 4 O. St., 191.)
When the defendant in error had transferred the debt secured by the mortgage, she had no power to release the mortgage of record, and any attempt at release would be a nullity.
The sale and delivery, before maturity, of mortgage notes carry with them an assignment of the real estate security; and satisfaction of the mortgage by the payee, after he sold and delivered the notes, is a mere nullity, and can neither weaken the security of the notes sold, nor strengthen the title of the party who afterwards buys the land. Parties buying mortgaged premises must at their peril ascertain who owns the notes and whether the same have been actually paid. (Lee v. Clark, 1 S.W. [Mo.], 142; Vandercook v. Baker, 48 Iowa 199; Scott v. Field; 75 Ala. 419; Martindale v. Burch, 57 Iowa 291; Brayley v. Ellis, 32 N.W. [Ia.], 254; Treadwell v. Brooks, 50 Conn. 262.)
The record of the mortgage was sufficient to lead a prudent man to inquire as to the payment of the notes. Wright was not a bona fide purchaser. (Burhans v. Hutcheson, 25 Kan. 625; Campbell v. Vedder, 3 Keys [N. Y.], 174.)
A vendee who has notice of adverse rights before payment is not a bona fide purchaser. (2 Pomeroy, Equity Jurisprudence, 715; Kitteridge v. Chapman, 36 Iowa 348; Roseman v. Miller, 84 Ill. 297; Haughwout v. Murphy, 21 N. J. Eq., 118.)
The facts are stated in the opinion.
This was an action to recover damages for the wrongful releasing of record of a certain real estate mortgage by Lucy D Fowler, the mortgagee, after she had transferred to the plaintiff, Orin P. Whipple, two of the promissory notes secured by said mortgage, and before said notes had been paid. Upon a trial to the court there was judgment for the defendant, to reverse which the plaintiff prosecutes error to this court.
The undisputed facts, as disclosed by the record, may be summarized thus: M. C. and A. A. Hazard on the 16th day of October, 1888, executed and delivered to the defendant their thirty-four promissory notes, aggregating the sum of $ 7,000; one for the sum of $ 500, due February 12, 1889, $ 100 maturing March 12, 1889, and the remaining thirty-two notes for the sum of $ 200 each, one payable on the 12th day of April, 1889, and one falling due on the 12th day of each month thereafter. To secure the payment of the said several notes, the Hazards executed and delivered to the defendant a mortgage on lots 841, 842, and 843, in the town of Shenandoah, Page county, Iowa, which instrument was duly recorded in the recorder's office of the said county on November 13, 1888. Subsequently the mortgagee, Lucy D. Fowler, sold and transferred several of the said notes to different parties,--the two maturing May 12, 1890, and June 12, 1890, respectively, being transferred by her, by indorsement without recourse, to the plaintiff, Orin P. Whipple, on the 4th day of December, 1888. No formal assignment of the mortgage to the plaintiff was made. The remaining twenty-two notes secured by said mortgage, and being the ones last falling due, which were held and owned by the defendant, were sold and transferred by her to one T. J. Evans on the 29th day of December, 1888, and on the same day, without the knowledge and consent of plaintiff, she executed and acknowledged a written release, or satisfaction, of said mortgage, which was filed for record in the office of the recorder of said Page county on January 21, 1889. Afterwards, on the 13th day of July, 1889, the Hazards conveyed the lots covered by said mortgage to one W. H. Wright, which conveyance was recorded on the 15th day of the same month. The two notes transferred to the plaintiff remain wholly unpaid, although judgment has been recovered thereon against the makers, and execution has been issued on such judgment, which was placed in the hands of the sheriff and the same has been by him returned wholly unsatisfied. At the time of the release of the mortgage the Hazards were insolvent, and so have been ever since. The sum of $ 2,600 was due on the mortgage prior to the notes transferred to and held by plaintiff. It is admitted by both parties that there is upon record a mortgage of $ 5,000 on the property, given by one Parks to one Kennedy, which is wholly unpaid, and which is prior in point of time to the said mortgage of the Hazards to Fowler. The foregoing facts appear without controversy. In fact the only substantial conflict in the testimony is upon two points, namely, the value of the mortgaged premises, and the facts and circumstances surrounding the execution of the release of the mortgage in controversy, which will be adverted to hereafter.
We will notice the several errors relied upon for a reversal of the judgment, although we will not attempt to follow the order in which they are discussed in the brief of plaintiff. We will first consider the objection urged to the allowing the defendant to amend her answer during the trial to correspond to the evidence introduced. The plaintiff had alleged in his petition in the court below, which the original answer when first filed admitted to be true, that by the laws of the state of Iowa the transfer of one of several notes secured by the same mortgage operates as a transfer pro rata of said mortgage. After the plaintiff had rested, the defendant, when making out her case, introduced, without objection, the opinion in the case of Walker v. Schreiber, reported in 47 Iowa 529, for the purpose of showing that under the laws of that state, where a mortgage secures several notes, which are transferred to different persons, each holder of the note takes a pro tanto interest in the mortgage, and the note first maturing must be the first paid. The defendant was thereupon permitted by the court, over plaintiff's objection, to withdraw her said admission in the answer and to amend her pleading to conform to the evidence. This was proper and in accordance with a familiar and just rule in this state of long standing, that where testimony is received without objection, the court may permit the pleadings to be amended to conform to the facts proved. (Keim v. Avery, 7 Neb. 54; Catron v. Shepherd, 8 Neb. 308, 1 N.W. 204; Brown v. Rogers, 20 Neb. 547, 31 N.W. 75; Ward v. Parlin, 30 Neb. 376, 46 N.W. 529.)
Error is assigned upon the ruling of the court below in admitting the testimony of the defendant's witness, George M. Traver, on the question of the value of the mortgaged premises. It is insisted that the witness had not shown himself competent to testify upon that subject. We are satisfied that the criticism upon the ruling referred to is not without merit, and that Traver's testimony was incompetent and should have been excluded; but it does not follow that the judgment should be disturbed for that reason. It is the established doctrine of this court that the admission of incompetent testimony, where the cause is tried to the court without a jury, is not sufficient ground for the reversal of the case. (Enyeart v. Davis, 17 Neb. 228, 22 N.W. 449; Willard v. Foster, 24 Neb. 205, 38 N.W. 786; Richardson v. Doty, 25 Neb. 420, 41 N.W. 282; Ward v. Parlin, 30 Neb. 376, 46 N.W. 529; Stabler v. Gund, 35 Neb. 648, 53 N.W. 570.) The reason for the rule given in the opinion in the cases cited need not be now restated. These authorities control the decision in the case before us upon the question under consideration.
Errors were likewise assigned upon the admission, over the objection of plaintiff, of the testimony of several of the witnesses; but these rulings require no special attention, since they fall within the rule stated above.
It is urged that the judgment is unsupported by the evidence and is contrary to...
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