Farmers' National Bank v. Fletcher

Adams, J. I. The land was attached by Loomis, and the attachment duly noted in the incumbrance book before the execution of the plaintiff’s botes and mortgage. Such being the fact, it is claimed by Loomis that the plaintiff had constructive notice of his claim. x. notice : inSook'attackment. But where an equitable interest in land, which does not appear of record, is attached, and a statement thereof is entered in the incumbrance book, the book does not constitute constructive notice to a vendee or mortgagee of the person holding the legal title. The law provides for no index to the land described in the incumbi’ance book, nor could a seiwiceable index be made. Incumbrances are to be discovered in any given case through the names of the defendants in the attachment suits. If we should hold that the incumbrance book constitutes constructive notice of an attachment, entered therein, of an equitable interest not apparent of l'ecord, to a vendee or mox’tgagee of the legal interest, every person about to become such vendee or mortgagee would find it necessary for his safety to read the whole incumbrance book. Such was not the design of the statute. When Loomis had attached the land in question as the property of James Montgomery, if it was true, as he claimed, [255] that Emily J. Montgomery, James’ wife, held the legal title with intent to defraud her husband’s creditors, he should have instituted a suit in equity against her to charge her as trustee, and restrain her from disposing of the property in consummation of the fraud. • 2. us ran--, to'grantee. II. It is claimed by Loomis that the plaintiff is affected by a lis pendens. At the time plaintiff acquired the notes and mortgage there was a suit pending to which Mrs. Montgomery was a party, in which Loomis’ claim upon the land was distinctly asserted. The suit, to be sure, was brought by her, but Loomis’ claim was set up in 'it by cross petition, and that too before the notes and mortgage passed to the plaintiff. Without stopping to inquire whether a grantee is affected by a lis pendens, where the grantor is plaintiff, and the claim with which the land is sought to be charged.is made in a cross petition, we will observe that at the time the deed was made to Fletcher the suit in question had not been commenced: As plaintiff’s interest was derived through Fletcher, plaintiff was noc affected by any suit brought against Fletcher’s grantor later than the conveyance to Fletcher. But it is said'that Fletcher is a myth, and being such the mortgage which purports to be made by him is at best but a mortgage made by Emily J. Montgomery, and that if plaintiff bought a mortgage virtually made by^her he would be affected by any suit against her to chai’ge the land pending at the time he bought. - Whatever the fact may be, however, in regard to the mythical character of Fletcher, it is not pretended that the plaintiff knew anything about it, and in examining the record in regard to the validity of the mortgage, the plaintiff had a right to assume that Fletcher was a real person. 3.vEH-BOEana standing out" equities. III. ■ Without regard to the question of lis pendens the counsel for Loomis, if we understand them, take the. broad groun<i that the evidence clearly establishes the ^a(lt that Tames Montgomery was the real owner 0f £[ie ¡and tpe ftine w]ien Loomis recovered judgment against him in the Circuit Court of Jones county, [256] and that if he was the owner, the deed to Fletcher being made subsequent to the rendition of the judgment, must be regarded as subject to it. Such, however, we think is not the law. Whoever purchases real property of the person holding the legal title, and takes a conveyance of the property without notice of outstanding equities, and pays a valuable consideration, takes it divested of such equities, and of course of all liens on such equities. 4 mortsa*»;hofaer^mAmities. IY. It is further claimed that the evidence shows that Mrs. Montgomery, the mortgagee, was not a bona fide holder of notes and mortgage, and that no purchaser of them could stand in any better position than she did. The counsel for appellant rely upon’ Sims v. Hammond, 33 Iowa, 368. But a careful examination” of that case will show, we think/that the court did not intend to announce the doctrine contended for. In that case a mortgage was held to be subject to another mortgage which was executed and recorded later. But the later mortgage was given for the purchase money, and the mortgagee in the first mortgage had knowledge that the later mortgage was to be given. Besides the earlier mortgage was executed before the acknowledgment and delivery of the deed through which the mortgagor derived title. While, therefore, the earlier mortgage had been sold and assigned to a person who had no actual notice of the later mortgage, yet as the assignment was made after the later mortgage was recorded, it was thought, as we infer, that the assignee was charged with constructive notice. The decision is based upon English v. Waples, 13 Iowa, 57, which turned upon constructive notice to the assignee. This court has never announced the broad doctrine that the bona fide assignee of a mortgage for value takes it subject to all the infirmities which attached to it in the hands of the mortgagee. In Preston, Kean & Co. v. Morris, Case & Co., 42 Iowa, 549, the plaintiffs, as indorsees of a negotiable promissory note, secured by a mortgage made by the defendant Case, brought'suit to foreclose the mortgage. Case set up a want of consideration. It was held that such defense could not be allowed as against the plaintiffs. See, also, Car [257] penter v. Longan, 16 Wallace, 273; Sawyer v. Prickett, 19 Id., 166; Taylor v. Page, 6 Allen, 86; Moore v. Metropolitan National Bank, 55 N. Y., 41. 5. —: assignestoppei. Y. Finally it is contended that if Fletcher was a myth no title passed from Mrs. Montgomery, and plaintiff acquired nothing by the mortgage. But if Mrs. Montgomery executed a deed of the land to a fictitious person and caused a mortgage upon it to be executed to herself in the name of such person, and transferred the mortgage to an innocent purchaser for value, in a suit to foreclose the mortgage in which she should be defendant, she would.be estopped from averring that her grantee and mortgagor had no existence. In the transfer of the mortgage she asserted its validity, and as against her it would constitute a lien. If it would not constitute a lien as against others, it would be because such others had for some reason a superior equity. Is Loomis’ equity superior to the plaintiff’s? We think not. Loomis holds at most only a general lien. The plaintiff’s is a specific lien. On the strength of it plaintiff parted with its money. Affirmed.