190 Iowa 1054 | Iowa | 1921
— P. C. Bond, son of A. J. Bond, was living on a farm which he had rented from Steckel & Son, and from his father. He had become, indebted to the Moulton State Savings Bank, which, wishing to have security for the indebtedness, asked the father to sign the notes, and talked about a mortgage on the live stock, by P. C. and wife. After some negotiations, the father, A. J., proposed to his son that he would sign, as surety, for the amount due the bank, which was $4,300, if the son would give him a mortgage, as security as such surety, and for an indebtedness to the father from the son of $1,200, evidenced by a note. This understanding between P. C. and A. J. was known by the officers of the Moulton bank. The agreement was made, and pursuant thereto, P. C. and wife, Joda, executed to A. J. the mortgage dated December 18, 1915. The consideration therein expressed is $5,500. The property mortgaged was 9 head of horses and 2 mules, 98 cattle, 425 sheep, and wool therefrom. The condition of the mortgage is: “If the said P. C. Bond shall pay the said A. J. Bond, his heirs, assigns, etc., his three promissory notes, dated January 31, 1914, December 16,1915, described as follows: One for $1,200, payable January 31, 1914; one for $2,300, payable June 16, 1916; one for $2,000, payable September 16, 1916, with interest,” etc.
The mortgage provides further:
“This mortgage is also expressly made to secure any claims held by mortgagee against mortgagors, or either of them, or any future loans, advances, or indebtedness accruing from said grantors, or either of them, and assigns to said grantee or his
Plaintiff’s mortgage is dated September 19, 1916, to secure a note of $1,850, both note and mortgage being signed by P. 0. Bond, without having his wife join therein. Some of the property is covered by both mortgages, but more is included in plaintiff’s mortgage, and the exempt property is included in plaintiff’s mortgage. The property is described with somewhat more particularity in plaintiff’s mortgage. Plaintiff placed its mortgage with defendant Dunlavy, and directed Mm to take possession of the property described in its mortgage, for the purpose of selling it, and to foreclose the mortgage. Dunlavy took pos: session of the property. At about that.time, and on November 16, 1916, a written agreement was entered into, signed by A. J. Bond, the cashier of plaintiff bank, Joda F. Bond, and P. C. Bond, which recites that P. C. Bond is indebted to A. J. and the Moulton bank, on which note to the Moulton bank A. J. is surety, and indebted to the plaintiff; that the amounts owed to these parties are secured by mortgages upon certain chattel property owned by P. C. Bond; that A. J. Bond had commenced proceedings to foreclose Ms mortgage, and that the sheriff has taken possession of the property, under said foreclosure proceedings. It was agreed, as the writing recites, by and between the parties who hold mortgages on said property that all property covered by said mortgages may be sold at public sale by the sheriff, November 29, 1916; that the proceeds be held by the clerk of the sale until the parties have adjusted priorities and claims, and determined the amount due each party secured by the mortgages, and then the proceeds to be paid to said parties according to their priority and claims to the proceeds; that the mortgage claims shall remain a lien upon the proceeds, the same as it then existed against the property. The real purpose of the mortgage to A. J. was to secure the two notes of $2,000 and $2,300 due the Moulton bank, and, of course, the $1,200 indebtedness of P. C. to A. J. Bond. The cashier of plaintiff bank had talked with P. C. about the amount, and the cashier was advised by P. C. of the amount due the Moulton bank, and the amount due P. C.’s father; knew
“It was competent for the plaintiff to show, as he did, by evidence, that, at the date of the execution of the mortgage, on October 1, 1885, the liability intended and understood to be secured by the mortgage was that on the then outstanding indorsed notes, and that there was no other liability to the plaintiff, the $1,000 mentioned in the condition being the amount of the two $500 indorsed notes. It was, therefore, a mistake, and an erroneous descrixotion of the notes intended to be secured, to state them as of the date of October 27, 1884, arising probably from the fact that the transactions between the plaintiff and Burleigh, the mortgagor, then commenced; but this would not invalidate the security, when it was shown that the liability of the plaintiff originated with them, and that the later notes were merely a substitution. Nor would it invalidate the plaintiff’s
In Magirl v. Magirl, 89 Iowa 342, 345, the only Iowa case cited, or that we are able to find on this subject, it was said:
“It is contended that the description of the debt was so indefinite as not to put creditors upon inquiry. We have already set out the conditions of the mortgage in this respect. It may be conceded that the better and safer practice is to specifically set out or to describe the indebtedness sought to be secured; yet the failure to do so does not of necessity render the mortgage of no effect as to creditors of the mortgagor. As is said by Dewey, J., in Henshaw v. Sumner, 23 Pick. 446, the use of a chattel mortgage ‘as indemnity for liabilities as sureties and indorsers must necessarily exclude the idea of great precision in the exact amount, of the incumbrance being made apparent on the face of the mortgage. There must be a sufficient general description to embrace the demands and liabilities intended to be secured, and to put the person examining the record upon inquiry, and to direct him to the proper source for more minute and particular information of the amount of the incumbrance’.”
There are numerous other eases on the subject, but we shall not review them. See Honaker v. Vesey, 57 Neb. 413 (77 N. W. 1100, 1101); Lierman v. O’Hara, 153 Wis. 140 (140 N. W. 1057); Warren v. His Creditors, 3 Wash. 48 (28 Pac. 257); Meeker v. Waldron, 62 Neb. 689 (87 N. W. 539); Richards v. Yoder, 10 Neb. 429 (6 N. W. 629) ; Pendery v. Allen, 50 Ohio St. 121 (33 N. B. 716). The Meeker case, supra, cites Cassidy v. Woodward, 77 Iowa 354, as holding that, under the statute,
It should be stated again, perhaps, that, under the written agreement to sell, before set out, A. J. Bond, the mortgagee, entered into the agreement for himself and the Moulton Savings Bank. The agreement itself so states.
■ We reach the conclusion that the trial court rightly decided the case, and its judgment and the decree are — Affirmed.