20 S.D. 258 | S.D. | 1905
Early in 18S6 the defendant Frances L. Tousley and R. C. Tousley, her husband, who resided in Turner county, Dakota Territory, now one of the counties of this state, and who owned certain real property therein, executed and delivered to J. M.' Dunn, a loan broker of De Mars, Iowa, a note for $1,000, payable to the order of P. "M. Dunn, the wife of J. ’M. Dunn, at Boston on May i, 1891, and the following instrument, which was duly acknowledged and recorded in the proper county: “This indenture, made this 15th day of March, 1886, by and between Frances D. Tousley and R. C. Tousley, her husband, of the county of Turner, territory of Dakota, party of the first part, and J. M. Dunn, of Le Mars, and state of Iowa, trustee, party of the second part, and P. M. Dunn, party of the third part, witnesseth: That said party of the first part for and in consideration of the sum of one thousand dollars, in hand paid by the said party of the third part, the receipt whereof is hereby acknowledged, have granted and sold, and do by these presents, grant, bargain, sell, convey and confirm unto the said party of the second part, or his successor in trust, forever, a certain tract or parcel of land situated in the county of Turner and territory of Dakota, described as follows, to-wit: * * * Provided, always, and these presents are upon the following express conditions, to-wit: That said party of the first part shall pay to the said party of the third part, his heirs or assigns, the sum of one thousand dollars, in gold coin of the United States, of present standard weight, value, and fineness, on the first day of May, A. D. 1891, with interest on said sum until paid, at the rate of seven'per cent, per annum, payable semi-annually, on the first days of November and May in each year, according to the tenor and effect of the promissory note and coupons attached, of the said first party, dated March 15, 1886, payable at Boston, Mass. * * * It is further agreed, that if the party of the first part shall fail to perform any of the covenants in the note or in this instrument, or do, or fail to. do anything whereby the security of this loan of money may be lessened, then this mortgage or trust deed shall become due and collectible at once at the option of the holder, and may be foreclosed for the full amount, "together with interest, costs, taxes, insurance, and any other sums advanced
On December 9, 1887, the Tousleys paid J. M. Dunn $1,074.10. to extinguish their obligation, receiving the fpllowing instrument,, which was duly acknowledged and recorded in the proper county on. December 12, 1887: “Release Deed. ■ Know all men by these presents, that I, J. M. Dunn, trustee, of the county, of Plymouth and state of Iowa,, for.and in consideration of one dollar, and for other good and. valuable considerations, the receipt whereof is confessed, do hereby remise, convey, release and quitclaim, unto Frances L. Tousley and husband, of the county of Turner and territory of Dakota, all the right, title, .interest,- claim, or. demand whatsoever I may have acquired in, through, or by a certain, trust deed, bearing date the 15th day of March, A. D..1886, and recorded in the. recorder’s office of Turner county, in the territory of Dakota, in Book K of Land Mortgages, page 23, to the premises herein described as follows, to-wit: The northwest quarter of. section No. bf'.c-en, in township ninety-nine, .north, of range No. fifty-four-west,.
Prior to the execution and recording of this instrument the note and. trust deed or mortgage had been transferred by the Dunns to John Jeffries & Sons, by them to Michael O’Brien, and.by him to Timothy O’Brien, the plaintiff’s testator; all of such transferees being residents of Massachusetts. Subsequent to the execution and recording of the trustee’s reconveyance or release — the instrument last above set forth — no assignment of the trust deed or mortgage having been recorded, the defendant. Vander Wilt acquired title to the mortgaged premises, and the defendant Bro-wn acquired title to a mortgage thereon for value, without notice of Jeffries & Sons’, Michael O'Brien’s, or Timothy O’Brien’s rights, except .as the same may have been disclosed by the records of the county where the land was situated. Thereafter this action was instituted to foreclose the trust deed or mortgage, resulting in a judgment in favor of the plaintiff, from which, and an order denying their application for a new trial, the defendants Vander Wilt and Brown appealed.
. . This so-.called trust deed is substantially the same, in form, as the one in Langmaack v. Keith, 20 S. D. 103 N. W. 210, concerning which this court said: “The writing signed by the owner of the land is only evidence of what the parties intended. It is immaterial what name may have been given such writing. The parties ■made a contract, The contract was a mortgage, and it must be governed by the rules of law applicable to such a contract. The owner :of- the land was the mortgagor, the payee of the bond or original owner of the indebtedness was. the mortgagee, and the transferee of the indebtedness must be regarded as. the assignee of the mortgage.” So in this case Mrs. Tousley must- be regarded as the mortgagor,. Mrs. Dunn as the mortgagee, Jeffries & Sons, Michael O’Brien and Timothy O’Brien as transferees in the order named, and J. M. Dunn-as an unnecessary, and unfortunate party to the paper, upon •the extent of whose authority depends the solution of the perplex-ing problems presented, by .this and other actions, resulting -from .his .misconduct. . When J. M. Dunn .'received the mortgagor’s money
But what were his powers and duties in the event of payment? The mortgage declares: “A reconveyance of the premises, is to be made at the expense of the party of the first part on full payment of the note.” By whom? Evidently the trustee. Though-, title did not pass, and no reconveyance was necessary, the mortgage lien was created by words purporting to convey the title, and authority to reconvey should be construed as authority to release the lien. Inapt and inappropriate language was employed to create the lien and to provide for its extinguishment, but there can be no, doubt as to the real intent of the parties and the legal effect of the contract. A mortgage was made by the purported conveyance of the premises to a trustee, and was to be released by a purported re-conveyance of the same. So it follows that the trustee was authorized by the terms of the mortgage to extinguish the lien upon ■full payment of the indebtedness, and, if the owner of the indebtedness had received the amount paid by the Tousleys, the mortgage certainly would have been properly satisfied. In other words, the mortgage lien was released of record in the manner authorized by the instrument which gave it existence, and the record upon which
Can the assignee of the mortgage, the owner of the indebtedness, be heard to say, as against purchasers and incumbrancers for value, that the debt was not in fact paid? Purchasers and incum-brancers for value, without notice other than is given by the records, are protected by the satisfaction of a mortgage executed by the mortgagee, where there is no assignment of the mortgage on record, though the debt was transferred prior to the recording of such satisfaction and the transferee has not been paid. Citizens’ Bank v. Shaw, 14 S. D. 197, 84 N. W. 779. This is so because the. record discloses a discharge of the mortgage by one appearing from the record itself to be authorized to discharge it. It is a just rule because the assignee of a mortgage may protect his rights by recording an assignment. “Where one of two innocent persons must suffer by the act of a third, he by whose negligence it happened must be the sufferer.” Rev. Civ. Code, § 2442. Any other rule would render the recording of satisfactions ineffectual and valueless. “Where the reason is. the same, the rule should be the same.” Id. § 2410. The record upon which appellants relied disclosed a mortgage which had been satisfied by the person and in the manner authorized by the instrument itself. Had Timothy O’Brien received the money paid to Dunn, the record would have been the same. It, was not so received. Who shall suffer ? Had no trustee been named, and P. M. Dunn, the mortgagee, had executed the release, the as-signee could not enforce the lien because he failed to record an assignment, because the mortgage was released by the person appearing to have authority to release it. Langmaack v. Keith, supra. This plaintiff cannot enforce the lien, because it was discharged by the person appearing of record to have authority to' discharge it. Having accepted security which clothed J. M. Dunn with authority to release it, and having provided the opportunity for him to make a record which induced the appellants to' part with their property, the assignee of this mortgage should now be estopped from claiming any lien upon the premises in question. It is therefore immaterial whether the mortgagée in fact authorized the release, or wheth
It appears from the decision of the learned circuit court that the Tousleys, in consideration of $1,650, conveyed the mortgaged premises by warranty deed to Truman Hall, December 8, 1887, which deed was recorded December 9, 1887; that Hall and wife, in consideration of $3,000, conveyed the- premises by warranty deed to Edward J. Gotthelf, May 6, 1899, which deed was recorded May 6, 1902; that Gotthelf and wife, in consideration of $3,500, conveyed the premises by warranty deed to C. Van de Steog, Jr., July, 26, 1899, which deed was recorded August 9, 1899; that Van de Steog, Jr., and wife, in consideration of $2,750, mortgaged the premises to E. J. Gotthelf, July 26, 1899, which mortgage was recorded August 9, 1899; that Gotthelf, in consideration of $2,750, assigned said mortgage to C. W. Davis, March 23, 1900, which assignment was recorded March 24, 1900; that Davis, in consideration of $2,000, assigned said mortgage to- the defendant and appellant Brown, March 15, 1901, which assignment was recorded March 45, 1901; that Van de Steog, .Jr., and wife,, in consideration of $3,500, conveyed the premises by warranty deed to H. Van Pelt March 14, 1900, which deed was recorded March 17, 1900.; that Van Pelt and wife, in consideration of $4,000, conveyed the premises by warranty deed to the defendant and appellant Vander Wilt, December 24, 1900, which deed was recorded December 29, 1900; and “that at the time the said Truman Hall and other grantees and mortgagees under him, above named,-took their conveyances, .mortgage, and assignments thereof, none of-them had any notice .of the rights- of the said Michael O’Brien or his assigns, -plaintiff’s .testator, other than as was-disclosed by .the--public records-of this
Hall, the immediate grantee of the mortgagor, may not have been a bona fide purchaser because his rights were acquired prior to the executing and recording of the release, but the appellants- and all the parties, subsequent to -Hall, through whom appellants’ rights were derived, purchased for .value,, relying upon the recorded release, -without notice..of the;outstanding equity now sought.to be
But the precise question here involved is not one of constructive notice. The notice of pendency of action provided -for by our statute (Rev. Code Civ. Proc. §§ 108, 109) is merely intended to afford a convenient and effectual method of enforcing the common-law doctrine of lis pendens, the theory of which is “that there can be no, innovation in the proceedings so far as to prejudice the rights of the plaintiff.” Eis pendens is simply a rule to give effect to the rights ultimately established by the judgment. Kohn v. Lapham,
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