Hait v. Ensign

Seevers, J. i. PEAijD.mortgage:01 mortgagor, imdffuifseeechaserf111' — I. The appellee insists that this case is not triable anew in this court; but we think it is. The evidence shows that A. E. Hait, without authority, signed ^ie name of the plaintiff to the release. This was a forgery, an(f -the plaintiff is in no manner bound thereby. We do not understand this to be seriously disputed by counsel for the defendants. That portion of the judgment of the district court holding the release to be void is affirmed. J?HE SAME. II. The notes secured by mortgage were payable to bearer, and the plaintiff, who resided in New York, placed the same in the hands of A. E. Hait for the purpose of col- .... A lectmg the interest, which was payable annually. The plaintiff did not in so doing part with his interest'in the notes or mortgage. As we understand the evidence, A. E. Hait made an arrangement with Ensign to surrender the notes and mortgage, and Ensign was to convey the premises, in order to [726] prevent a foreclosure. It is not entirely clear to whom the conveyance was to be made, but it in fact was made to A. E. ITait, and he sui’rendered the notes and mortgage to Ensign, and executed a release of the mortgage as above stated. Afterward A. E. Hait executed a mortgage to the Phoenix Insurance Company, which was foreclosed, and the defendant, Hugo Huss, claims to own the mortgaged premises under the foreclosure proceeding. The plaintiff had no knowledge, except as hereafter stated, of the conveyance to A. E. Hait, and never authorized it to be made. Ensign knew, and so testified, that A. E. Hait did not claim to own the notes, and that he supposed they belonged to the plaintiff at the time the foregoing arrangement was made. He also testifies that he knew A. E. Hait was doing business for the plaintiff. Under these circumstances, it is clear to our minds that the plaintiff cannot be deprived of his property in the notes or real estate. The conveyance made by Ensign to A. E. ITait is void and of no effect as against the plaintiff. It is true, as we have stated, that the plaintiff knew of the arrangement to surrender the notes and mortgage to avoid a foreclosure. But it necessarily follows, as he did not intend to part with his interest in the property, that he supposed the conveyance by Ensign was to be made to him. The plaintiff sanctioned the surrender of the mortgage, under the belief that the legal title of the real estate .would be vested in him. He never gave, or agreed to give, A. E. Hait either the notes, mortgage or land, and at no time did he part with his title thereto, or agree to do so, with the expectation that he would be deprived of his property. A. E. Hait had no authority to take a conveyance of the land to himself, nor was Ensign authorized to make it. The court correctly determined that the conveyance from Ensign to A. E. Hait should be set aside, and as the title of Hugo Huss depends upon the validity of the Ensign conveyance, it follows that Huss has no title. [727] 2. decreeuuder general prayer. [728] 3iifSu£eme iCngdecreee!er" [726] III. Complaint is made that the amount found due on the [727] notes and mortgage is two great. One of the notes was for four hundred dollars, which was pledged for the repayment of one hundred dollars which was received by the plaintiff. The note was redeemed from the pledgee by the payment by A. E. ITait of the amount borrowed. As the plaintiff received the one hundred dollars, we do not think he is entitled to it again. The amount of principal due on this note should be regarded as three hundred dollars. We have some difficulty in determining when the plaintiff obtained knowledge of the arrangement to surrender the notes and mortgage to prevent a foreclosure.. Ensign made the conveyance in April, 1877, and the forged release of the mortgage was made in May thereafter. But we are unable to find that the plaintiff had knowledge of the arrangement in relation to the surrender, until 1878. Conceding that to be correct, we find that the plaintiff, fromdiis own evidence, did not expect to receive any interest on the notes after that time. As between him and Ensign, the arrangement amounted to a foreclosure, and, in pursuance of the arrangement, the title should have been vested in the plaintiff. The latter knew A. E. Hait was in possession of the land, and the plaintiff was entitled to the rents and profits. We do not think he should receive interest after that time. Ensign acted in the utmost good faith, and supposed the notes were -paid. The plaintiff believed this to be so. Because, however, ,of the fraud of A. E. Hait in having the conveyance made to himself, the plaintiff is entitled to have the mortgage foreclosed in order to protect his rights. We think the court erred in finding the amount due, because, as we understand, interest on the notes was allowed up to the time the judgment was entered, while we think no interest should be allowed after 1878. It is said a foreclosure of the mortgage is not asked, but there is a -prayer for general J ° relief. Under this prayer it has been held that there may be a foreclosure of a mortgage, if the facts stated justify such relief. Herring v. Neely, 43 Iowa, 157. As [728] the judgment will affect the title to real estate, it seems to us that the final judgment should be entered in the district court. We, however, recognize the right of either party to a judgment in this court, if such, course is deemed best. We h°weYeU remand the cause to the district court, with direction to enter a judgment in accordance with the opinion. The plaintiff must pay the costs in this court. Modified and affirmed.