39 Iowa 200 | Iowa | 1874
1. The defendant, McElroy, on the 22d day of November, 1870, sold and conveyed the land covered by the mortgage which plaintiff seeks to foreclose, to Lytle, another defendant, who paid therefor $500 in cash, and executed the notes and mortgage in suit to secure the balance of the purchase money.
2. In December following McElroy transferred to plaintiff the notes and delivered the mortgage to him as collateral security for the payment of a note, for about $500 held by plaintiff, against McElroy.
3. On the 2d of March, 1872, Lytle re-conveyed the land to McElroy, who repaid the $500 advanced upon the first purchase. This conveyance was intended to satisfy the notes and mortgage given by Lytle, but he had no notice of the transfer of these instruments to plaintiff. The deed executed by him contained covenants of warranty against incumbrances, except-, ing therefrom the mortgage to McElroy.
4. On the 1st of October, 1872, McElroy borrowed of defendant, Josephine Cook, $3,000 and, to secure the payment, executed a mortgage upon the lands described in the mortgage and deed just mentioned. The mortgage was of record, but the deed at the time had not been recorded, although we understand from the abstract that Mi’s. Cook, or her agents, who negotiated the loan to McElroy, had knowledge of the deed and its contents. It was either delivered to them for record or filed in the recorder’s office by McElroy himself at the time he borrowed the money. McElroy represented to Mrs. Cook, or to her agents, that the notes secured by the first named mortgage were paid and the mortgage would be satisfied, but neither she nor they had notice that plaintiff holds the notes and mortgage or claimed any interest therein.
After the transaction with Mrs. Cook, McElroy entered of record satisfaction of the mortgage executed by Lytle to him.
Plaintiff claims that the mortgage to McElroy is paramount to the other mortgage executed by McElroy to Mrs. Cook. The Circuit Court so held, and by the decree provided that the lands be subject to the lien of the first mortgage to the extent
The only question involved in the case requires us to determine which of the mortgages is the superior lien.
- The facts before us differ.in but one respect from.those found; in The Bank of the State of Indiana v. Anderson et al., 14; Iowa, 544; McClure v. Burris, 16 Iowa, 591, and.Gornogv. Fuller et al., 30 Iowa, 212. In these cases notes secured by mortgages were transferred, and subsequently the mortgagees discharged the mortgages by proper writings upon the record. No-assignments" of the mortgages appeared of record. In the first two cases, subsequent mortgages, and .-in the third a subsequent' deed, were held to defeat the prior mortgages.' In each case the secured instruments were executed to parties who had no notice of the transfer of the notes, and that they were unpaid.. In the case at bar no satisfaction of the first mortgage was entered of record before the second was executed. The second mortgagee had no notice of the transfer of the note and there was no record of the assignment of the mortgage; the party executing the second mortgage, in this, as in the other cases, appeared by the record to be the owner of the land and empowered to execute the instrument. The satisfaction of the mortgages of record is the only fact that distinguishes those cases from this.
• The reason upon which this conclusion is based is this. If a mortgagee of land acquire the fee simple title, his mortgage
The decree of the Circuit Court is reversed and the cause is -remanded for a final decree not inconsistent with this opinion.
Reversed.