Citation Numbers: 63 Iowa 352
Judges: Rothrock
Filed Date: 4/24/1884
Status: Precedential
Modified Date: 7/24/2022
The mortgage now owned by the plaintiff was made by E. W. Stone to Chauncey L. Cook in February, 1878. It was made as security for a loan of $1,000. Cook was a non-resident, and 'had no personal connection with the loan. Brown & Binford, attorneys at law at Marshall-town, were his loan agents, and negotiated the loan for him.
It appears that C. W. Stone had formerly owned two city lots. He sold them to E. W. Stone, and held a mortgage upon them in the sum of $3,000 to secure purchase-money. It is quite satisfactorily shown from the evidence that C. ~W. Stone, the owner and holder of the $3,000 mortgage, called upon Brown and Binford, and negotiated for the $1,000 loan, and that he represented to them that he held the $3,000 mortgage, and agreed with them that it should not be filed for record until after the mortgage to Cook should be filed. In other words, it was agreed that the Cook mortgage should have priority over the $3,000 mortgage, and that it should so appear from the record. Under this promise and inducement, Brown & Binford made the loan. In violation of this agreement, C. ~W. Stone caused the $8,000 mortgage to be filed for record before the Cook mortgage. Both were filed on the same day and within a short time of each other, and Brown & Binford supposed that the Cook mortgage was first filed, until long afterwards.
If the controversy were between C. W. Stone and the present holder of the Cook mortgage, the rights of the parties would be easily determined. Stone could not be allowed to practice such a fraud, and this mortgage would be held to be the jimior lien. But it appears that C. "VY. Stone was indebted
The question to be determined is, did Lucas, before purchasing the interest of Kirby, have notice of the agreement that the Cook mortgage should be the prior lien, or did he have knowledge of such facts as should have put him upon an investigation which would have resulted in notice.
It is claimed that C. W. Stone was agent of Lucas in the transaction of the transfer of the cause of action from Kirby to Lucas, and that the knowledge of the agent is the knowledge of the principal. But we-do not think that such agency
J. M. Parker appeared as attorney in the defense of the action brought by Kirby. It appears that Lucas called upon Parker and advised him of his intention to buy out Kirby’s right of action, and requested Parker to look it up for him. Parker knew of the allegations of the petition to the effect that the Cook mortgage was the prior lien. Parker made an examination of the records, and found that the Cook mortgage was junior to the $3,000 mortgage. Lucas also had Childs, an attorney who was in Parker’s employment, to make an examination of the matter. Childs examined the record two or three times to assure himself that he was not mistaken, and he discovered that the $3,000 mortgage was filed for record at eleven o’clock, and the Cook mortgage at one o’clock of the same day. In addition to this, Childs testifies that, after making an examination in the recorder’s office, he went to Brown & Binford, and met Mr. Brown at the foot of the stairs leading to his office, and asked him why he averred in the Kirby petition that the Cook mortgage was prior to the other, and he replied “ because the records showed it was and upon Childs, telling him that it was the reverse of that, Brown blamed one Marldey for misinforming him of the record; and on this information Lucas made his-purchase. Childs testifies that after this interview he returned to Parker’s office and reported his conversation with Brown, and the result of his examination of the records. It is true that Brown in his testimony denies having such a conversation with Childs, and says that he has no recollection of ever having any conversation with Mr. Childs at any time or place upon the subject of the priority of the Cook mortgage, and if he had such conversation he believes he would have remembered it. Both of the witnesses are credible, and we incline to think that Childs cannot be mistaken. He was seeking for information from the very source from which it was reasonable to expect-it could be obtained. When he found the Cook
Affirmed.