Shoemaker v. Minkler
211 N.W. 563
Iowa
1926
Check Treatment
Stevens, J.

T. J. Shoemaker, appellant, is the administrator of the estate of J. H. Augustine, deceased, who, at the time of his death, was, by transfer and assignment from J. D. Plumb, the owner of the several notes and mortgages involved in this appeal. Pursuant to a real estate transaction between H. A. Minkler, appel-lee, ' and the said J. D. Plumb, the detаils of which are not here material, the former became the owner of several separate lots or parcels of real property in the city of Marshalltown, each of which was conveyed subject to a mortgage payable to the latter. These mortgages, as stated above, were all assigned by the mortgagee to decedent, who, for some reason, did not file the assignments in the office оf the county recorder for record. The notes and mortgages came into possession of aрpellant at the time of his appointment as administrator of the estate of J. II. Augustine, but no demand was madе for the payment thereof until the several actions included in this appeal were started, in September and October, 1923. The payment in full of the several notes to, and the release of the mortgages by, Plumb upon the margin of the proper records in the recorder’s office are conceded. The аnswer of appellee set up as a defense that the payment of the notes was made without knоwledge or notice on the part of appellee of the transfer thereof and the assignment оf the mortgages to Augustine; that he relied upon the record of the mortgages, which showed them payablе to Plumb, and upon the release thereof by him at the time final payment was made. He also alleged that he was deceived and misled by the failure of Augustine or appellant to record the assignments or to givе him notice thereof, and that, because of all of said matters, appellant is estopped frоm foreclosing the mortgages.

The sole question for decision is: Was the payment by appel-lee. ‍​​​‌​​​‌‌‌​​‌‌‌‌​‌‌​‌‌‌​​​‌‌‌‌​​​‌‌​​‌‌‌‌‌​​​‌‌‌‍of the several notes to Plumb, the payee named therein, bind *944 ing upon Augustine or his administrator ? Appellee wаs not the maker of the notes or mortgages, but was fully informed as to the existence thereof, and contrаcted with Plumb for the exchange of his farm for the city property covered, with particular referenсe thereto. The purpose of payment by him was, of course, to relieve the property from the incumbrances.

The law is well settled in this state that the payment of a negotiable promissory ‍​​​‌​​​‌‌‌​​‌‌‌‌​‌‌​‌‌‌​​​‌‌‌‌​​​‌‌​​‌‌‌‌‌​​​‌‌‌‍note to one other than the owner or his agent is at the debtor’s risk. Newhall Sav. Bank v. Buck, 197 Iowa 732; Leach v. State Sav. Bank, 202 Iowa 265; Sioux City Cattle Loan Co. v. Lovrien, 198 Iowa 296; Baumgartner v. Peterson, 93 Iowa 572; McCullough v. Reynolds, 181 Iowa 1089; Iowa Loan & Tr. Co. v. Seaman, 203 Iowa-. This, appellee does not deny. Neither, the notes nor the mortgages were exhibited to appellee at the time they were paid to Plumb, who. stаted that they were at his home, and that he would secure and deliver them to appellee. It was the duty оf appellee to demand the surrender of the notes at the time of payment. He relied upon thе record,, if at all, at his peril'. This is true, notwithstanding the contention he now makes that the failure of the assigneе to record the mortgage entitles him to the protection of Section 10105 of the Code of 1924. This section provides that:

“Ño instrument affecting real estate is of any validity against subsequent purchasers for a valuable consideration, without ‍​​​‌​​​‌‌‌​​‌‌‌‌​‌‌​‌‌‌​​​‌‌‌‌​​​‌‌​​‌‌‌‌‌​​​‌‌‌‍notice, unless filed in the office of the recorder of the county in which the same lies, as hereinafter provided.”

Appellee was not a subsequent purchaser of the proрerty for a valuable consideration. On the contrary, he purchased each separate trаct or parcel in question with full knowledge of the mortgage incumbrances thereon.- There is a statement in some of the decisions of this court that:

“The mortgage, in the absence of any transfer shown by the record, is presumed to be owned and controlled by the mortgagee, and all men may ‍​​​‌​​​‌‌‌​​‌‌‌‌​‌‌​‌‌‌​​​‌‌‌‌​​​‌‌​​‌‌‌‌‌​​​‌‌‌‍deal with the mortgage or thе land, resting upon this presumption, in the absence of actual knowledge of the assignment of the mortgagе.-” Parmenter v. Oakley, 69 Iowa 388.

See, also, Farmer, Thompson & Helsell v. Bank of Graettinger, 130 Iowa 469. The language quoted from the above *945 cases was used with particular reference to subsequent purchasers, and in neither was the right of the mаker to make payment to the mortgagee disclosed by the record. The statute is clearly not aрplicable. In this connection, see, also, Jenks v. Shaw, 99 Iowa 604; Central Tr. Co. v. Stepanek, 138 Iowa 131.

Some reliance is placed by appelleе upon the evidence tending to show that Augustine was a tax dodger, and that he withheld the assignments from record for the fraudulent purpose of concealing the extent of his taxable property. The most the evidence shows on this point is that Augustine, intentionally or otherwise, failed to disclose the full extent of his moneys and credits to the assessor. While this evidence may possibly ‍​​​‌​​​‌‌‌​​‌‌‌‌​‌‌​‌‌‌​​​‌‌‌‌​​​‌‌​​‌‌‌‌‌​​​‌‌‌‍have some slight bearing on the plea of estoрpel, it is wholly insufficient in itself to defeat the foreclosure of the mortgages. There is no requirement of stаtute that mortgage assignments be placed of record in order to protect the assignee agаinst the payment of the notes secured thereby to the assignor, who does not have possession thereof. The result, which is inevitable on the record before us, is indeed unfortunate.

It follows that the judgment and decree of the district court must be, and it is, reversed. — Reversed.

De Grape, C. J., and Faville and YermilioN, JJ., concur.