Head Bros. v. Newcomb

Gtven, J.

The appellants contend that, as the note and mortgage in question were assigned to the appellees after due, they hold the same subject to any defense which might be made, if suit were brought by the indorser, and that as said note and mortgage were given without consideration, and to defraud the appellants as judgment creditors of Sarah A. Newcomb, the appellees are not entitled to recover thereon. The appellees concede the general rule to be as stated, but contend that under the facts the appellants are estopped, by reason of their laches, from maintaining said defense as against the appellees. The facts as shown by the evidence are these: The appellants each obtained judgment in the district court against John Foley as principal and Elizabeth A. Foley as surety, November 27, 1886. On June 1, 1889, execution upon each judgment was returned “satisfied in full by the sale of land levied upon.” The court'records thus stood until the following entry was made:

Appearance No. 2,043, Sarah A. Newcomb against J. H. Black, sheriff, Alexander Boyd and Edward Caughlin. Defendants appeared by J. A. G-allaher, their attorney. Plaintiff appeared by J. D. Howard, her attorney. And now, to wit, on this first day of May, A. D. 1890, this ease comes on to be heard on the motion of Boyd and Caughlin to correct the decree herein, and reinstate their judgment against the plaintiff, and the court, being fully advised, finds that the original judgment against plaintiff, and in favor of said defendants Boyd and Caughlin, was satisfied and can-celled by the application of the proceeds of land that this plaintiff owned, and by authority of executions issued therefor. That afterwards, that is to say, after February, 1890, term of this court in this action, said levy and sale were set aside and held to be naught by the court, as said land so sold was held to be the homestead of this plaintiff and exempt from execution. Therefore said motion is sustained, and this order adjudged and decreed by the court that the said original judgments be, and they are hereby, reinstated, and the clerk of this court is directed to enter upon judgment docket against said judgments the fact that they are now reinstated, and are now in full force and effect, as though said sale and payments had never been made.”

It does not appear when this motion was filed, nor when, “after February, 1890, term,” said levy and sale were set aside. According to the time fixed for the terms of that court in 1890, of which we take judicial notice, the next regular term after February commenced April 28; hence we conclude that the levy and sale were set aside on or after that date, and before May 1. The note and mortgage in question were assigned to the appellees oh March 11, and the assignment filed for record on March 17, 1890. It will be observed that at the date on which the appellees purchased the note and mortgage the appellant’s judgments appeared to be fully satisfied. There is no evidence that the appellees had any other notice concerning these judgments than that imparted by the record. It will also be observed that the appellants permitted their judgments to thus appear to be satisfied for nearly one year, and that their motion to reinstate them was not until some time after the appellee’s assignment was filed for record; and that, notwithstanding the record of the assignment to the appellees, no notice was given to them of the application to reinstate the judgments. There is no question but that the appellees purchased the note and mortgage in good faith, for value, and without any information that would cause them to doubt the. correctness of che record showing appellant’s judgments to be satisfied.

It is argued that, as the land sold under the execution was the homestead of. the execution defendant, and not subject to levy and sale, the sale was no satisfaction of the judgments, and that they stood reinstated by operation of law. Let this be conceded, yet it does not appear that the appellees knew that the land sold was the homestead. We infer from the record entry copied above that it was questioned whether or not it was the. homestead of Sarah A. Newcomb, and there is nothing’ shown that would have put the appellants upon inquiry, or have required them to decide that controverted question. We are in no doubt but that the appellees purchased and paid full value for the note and mortgage in the belief that there were no prior judgment liens upon the mortgaged property, and that, if the appellants had proceeded with reasonable promptness to have the satisfaction of their judgments appearing of record set aside, and the judgments reinstated, the appellees would not have so purchased the note and mortgage. “A court of equity will never interfere in opposition to conscience or good faith. * * * It will never be called into activity to remedy the consequences of laches or neglect, or the want of reasonable diligence. '* * * A court of equity applies the rule of laches according to its own ideas of right and justice. Every case is governed chiefly by its own circumstances. Whether the time the neglect has subsisted is sufficient to make it effectual is a question to be observed by the sound discretion of the court.” Withrow v. Walker, 81 Iowa, 651, and cases there cited. It is a familiar and invariable principle of equity that, where one of two innocent persons must suffer, he who is the cause of the loss must bear it. Concede to these judgment creditors the right to make any defense against this note which the maker might interpose, yet, like the maker, the right -to defend may be barred by laches. Applying the principles of equity mentioned above, it seems to us entirely clear that these appellants have no right “in equity to question the appellees’ right to recover on this note and mortgage. It would be inequitable and unjust to hold that the appellees, who were led to purchase the note in good faith, and for full value, by reason of appellants’ neglect to have their judgments reinstated, may be defeated by the defense set up by the áppellants.

This view of the case renders it unnecessary that we inquire whether the note and mortgage are without consideration, and fraudulent, as alleged. The decree of the district court is aefibmed.

Friday, January 19, 1894.