Wyoming Inv. Co. v. Wax

• Decision Date: 31 January 1933
• Docket Number: 1770
• Citation: 18 P.2d 918,45 Wyo. 321
• Parties: WYOMING INV. CO. v. WAX ET UX
• Court: Wyoming Supreme Court

18 P.2d 918

45 Wyo. 321

WYOMING INV. CO. v. WAX ET UX

No. 1770

Supreme Court of Wyoming

January 31, 1933

Rehearing denied June 13, 1933.

APPEAL from District Court, Laramie County; VOLNEY J. TIDBALL Judge.

Action by the Wyoming Investment Company against Louis Wax and wife Judgment for plaintiff, and defendants appeal.

Affirmed as Modified.

For the appellant there was a brief by Charles E. Lane, and oral arguments by Mr. Lane and by W. O. Wilson, of Cheyenne, Wyoming.

The payee of the note secured by collateral is the trustee of the payor of the principal debt. 49 C. J. 985; Dibert v. D'arcy, (Mo.) 154 S.W. 1124; Butterworth v. Beach, 30 Wyo. 46; Sec. 74-204, R. S. 1931; Bank v. Gagnon, (Mont.) 48 P. 762, 8 C. J. 506. An acknowledgment before a disqualified notary is an illegal execution. Harney v. Montgomery, 29 Wyo. 363. A mortgage must be recorded before it may be foreclosed. 46-28 C. S. A mortgage illegally executed is not entitled to record. There is no legal presumption that Mrs. Wax signed the note. Studebaker v. Hanson, 24 Wyo. 251. But one attorney fee is allowed even though there be several trials. 15 C. J. 117; Bostick v. Cox, 28 Ark. 566; Bennett v. Co., (Wash.) 105 P. 825; Tompkins v. Drenunder, (Ala.) 10 So. 638; Perry v. Seals, (Ala.) 65 So. 151; Lewis v. Sutton, (Ida.) 122 P. 911. The Negotiable Instrument Act: Sec. 74-402 et seq., defines a holder in due course: Glendo v. Abbott, 30 Wyo. 107. The acknowledgment of the mortgage was illegal. Harney v. Montgomery, supra; Boswell v. Bank, 16 Wyo. 161. A holder of collateral may enforce payment at least to the amount for which it is held. George v. Emery, et al., 18 Wyo. 361. For the manifest errors disclosed by the record, the judgment below should be reversed.

For the respondent there was a brief by Lee & Lee, of Cheyenne, Wyoming, and oral argument by Ray E. Lee, of Cheyenne, Wyoming.

The respondent has moved to strike the abstract of record and dismiss the appeal. Both motions are based upon Supreme Court Rule 37. The abstract fails to comply with the rule, in that it contains no reference to the pages of the record nor a brief statement of the contents of the pleadings, judgment, motion for new trial and other essential parts of the record. We submit the following authorities on the merits. Much of appellant's brief relates to matters immaterial to this case. The case of Yellowstone Bank v. Gagnon cited by appellant does not apply to the present case on the facts. Plaintiff is not responsible for the acts of LaFontaine or any advice given by him to the defendant. 27 C. J. 67, 12 R. C. L. 399. The rule stated in 8 C. J. 499 applies to this case. There is no merit in the defense in this case, that Hartney had no title to the note and mortgage in suit. Voss v. Chamberlain, 117 N.W. 279; Osborne v. McClellan, 1 N.E. 644; Pennager v. Bank, 35 Wyo. 319. The transfer of the note can be attacked by the maker for irregularity. 8 C. J. 1058. There was no error in the judgment allowing attorney's fees. 15 C. J. 118. Where an attorney is employed, it is unnecessary to show an agreement to pay him a reasonable compensation. Bank v. Crosby, 39 Wyo. 454. The acknowledgment was not shown to be illegal. La Fontaine took the acknowledgment but it was not proven that he was a partner or claimed an interest in the note or mortgage. Brown v. Bank, 38 Wyo. 469; Quealy Co. v. George, 36 Wyo. 268; Huber v. Bank, 32 Wyo. 357; Conradt v. Lepper, 13 Wyo. 473; Frank v. Hicks, 4 Wyo. 502; Boswell v. Bank, 16 Wyo. 161. The case of Harney v. Montgomery, 292 P. 378, cited by appellant, differs on the facts. The title record was regular when examined by respondent's representative. There is evidence in the record to support the findings and judgment and it should be affirmed.

BLUME, Justice. KIMBALL, Ch. J., and RINER, J., concur.

OPINION

BLUME, Justice.

This is an action brought by the plaintiffs, respondents herein, against the defendants, appellants herein, on a promissory note purporting to have been executed by the defendants on April 22, 1929, made to John W. Hartney for the principal sum of $ 1776.00, due on or before five years after date with interest at the rate of 7% per annum payable semi-annually, and providing that in case of suit upon the note the makers thereof should pay 10% additional as attorney fees. The note was secured by a mortgage also sought to be foreclosed herein, made to John W. Hartney, which also is dated on April 22, 1929, duly acknowledged before R. N. LaFontaine, Notary Public, and duly filed for record on May 9, 1929, conveying as security the west sixteen feet of the north forty-four feet of Lot 3 in Block 175 in the City of Cheyenne, Wyoming. The mortgage states that it is a second mortgage and that a first mortgage for the sum of $ 4000 is held by the Investors Snydicate of Minneapolis, Minnesota. It further provides that:

"In case default shall be made in the payment of the above sum hereby secured, or in the payment of the interest thereon, or any part of such principal or interest, when the same shall become due, or in case default shall be made in any of the covenants and agreements hereof, then the whole indebtedness hereby secured, with the interest thereon shall become due and payable, and the mortgagee may proceed, pursuant to law, to foreclose on and sell said property, and out of the proceeds of such sale they shall pay all sums due hereunder, together with all costs of sale and foreclosure, including One Hundred Dollars as attorney's fee."

On May 14, 1929, the plaintiff and respondent herein, the Wyoming Investment Company, made a loan to John W. Hartney. The note of $ 1776 made by the defendants was pledged as collateral thereto, and endorsed to the plaintiff on the back thereof. At the same time John W. Hartney made and executed to the plaintiff an assignment of the Wax mortgage, duly acknowledged and filed of record on the 14th day of May, 1929, and on the same day John W. Hartney also executed to plaintiff an agreement showing that the note and mortgage heretofore mentioned had been duly assigned as collateral security, and that it should be security for the payment of all and any liabilities due or to become due to plaintiff or that might thereafter be contracted, and that the collateral, in case of default, might be sold at public or private sale without notice, with the right of the plaintiff to become purchaser at such sale. The officers of the plaintiff corporation testified that on May 15, 1929, the following letter was sent, duly stamped and addressed and deposited in the postoffice, as follows:

"Louis Wax & Anna Wax,

321 West 16th Street,

Cheyenne, Wyoming.

Dear Sir & Madam:

This will notify you that we have your note for $ 1776.00 dated April 22, 1929, payable to the order of John W. Hartney and secured by a certain real estate mortgage; this note has been pledged with us as security for a loan made to Mr. Hartney. This is to inform you that any payments made to apply on principal or interest on this loan must be made at our office."

The note heretofore mentioned, made by Hartney to plaintiff, dated May 14, 1929, is for the principal sum of $ 1573.00, payable $ 50 on the third day of each succeeding month. Twenty payments were made, the last on January 3, 1931, making the total of payments on the note the sum of $ 1000, and showing the principal amount due thereon as of that date the sum of $ 573.00, but an additional loan seems to have been made to Hartney, the facts of which do not clearly appear in the record, evidenced by a note of October 7, 1930, for $ 352.50, payable at the rate of $ 27 on the third day of each month thereafter. On this last note no payments were ever made, and the note of $ 1573 was in default after February 3, 1931. In accordance with the power of sale conferred upon the plaintiff it advertised the Wax note and mortgage for sale, and a sale of the collateral pledged by Hartney to the plaintiff was accordingly made on March 12, 1931, to the plaintiff herein. It is alleged by the defendants that the sale was illegal, but no evidence to that effect was introduced. Prior to that time, and on February 14, 1931, plaintiff also advised the defendants by letter, as well as orally, that in view of the fact that no payments had ever been made on their note of $ 1776, the entire amount had become due, and requesting a settlement. Nothing being done by the defendants, this action was instituted on March 12, 1931.

The defendants pleaded that the note and mortgage in suit were never executed, or if executed were obtained from the defendants, who are illiterates, by fraud perpetrated by one R. L. LaFontaine, and that whatever paper was executed by them as requested by LaFontaine was represented by the latter to be a contract for the purchase of property. The origin of the indebtedness by the defendants herein appears to be as follows: On November 22, 1927, the Barksdale Realty Company or John W. Hartney and R. L. LaFontaine, were the owners of the property mentioned in the mortgage in suit in this case. They had theretofore made a contract of sale for such property to F. M. Burrill. The latter desired to dispose of his interest, and Morris Wax, son of the defendants herein, desired to acquire a home and to purchase that property. On November 22, accordingly, Burrill and his wife assigned the contract, which he held, in blank, in the presence of Morris Wax, of Max Wax, also a son of the defendants, and of Annie Wax, one of the defendants herein, paying Burrill the sum of $ 500 for his interest in the property, which sum was paid by Max Wax. The contract was payable at the rate of $ 50 each month and payments of that sum were continued to be made each month up to April 22, 1929. At...