City Bank of Boone v. Radtke

Kinne, J. i. aoknowledg-. ínteréstedOTe party, valid I. Some errors are assigned upon the admission of evidence, which, we do not deem it necessary .to consider. The evidence shows without conflict that the notary, J. C. who took the acknowledgment of the plaintiff’s mortgage, was at the time a partner in the plaintiff, which was a copartnership. This being the case, the ackowlédgment of the plaintiff’s mortgage was void, and the mortgage not entitled to be recorded; hence the record of it in fact máde was not constructive notice to the defendant. „ defective acmenT:pr!¿rity: estoppel. II. The controlling question in the case is, did the defendant, by taking the second mortgage of November 8, 1886, become estopped from assert-her right to the property in controversy by virtue of her first mortgage, September 4,1885! If she did, then the judgment of the lower court was right. The defendant’s mortgage dated September 4, 1885, described the property as follows: “(36 head of cattle.) Twenty two year old steers; sixteen one year old steers. All of the above property is now in our possession, and are our sole and individual property, and are free from all incumbrance. To obtain credit we make this statement.” In her mortgage of November 8, 1886, the property is described as “all the steers we now own,” etc. This mortgage also recites: “This mortgage is given as additional security for the note hereinafter described, and in addition to another mortgage securing the same note, given by us to Annie Radtke, September 4, 1885; and is a first mortgage upon said steers, except as to the yearling steers, and the eighteen two year old steers, by us mortgaged to the City Bank of Boone, Iowa, February 23, 1885.”. [366] We think, at the time the defendant took her second mortgage, she had actual notice, through her -attorney, of the plaintiff’s mortgage; hence, as to it, it is immaterial as to whether the acknowledgment of the plaintiff’s mortgage was sufficient to impart notice. But there is no claim that at the time she took her first mortgage she had any actual notice of the plaintiff’s mortgage, and, by reason of the illegal acknowledgment, she certainly did not have constructive notice of it. If, then, she actually took possession of the property under and by virtue of her first mortgage, she has the better right thereto, unless the taking of the second mortgage worked an estoppel as against her. We are unable to see any reason whatever for holding that the act of taking the second mortgage, in which was a clause recognizing the plaintiff’s, mortgage, should operate to estop the defendant from taking and holding the steers under the first mortgage. The law is well settled “that the taking of a second mortgage for the same debt, upon the same or other property, does not, of itself, extinguish the first, or operate as -a cancellation of it, so as to let in an intervening mortgage to take precedence of the first, unless the second mortgage either expressly, or by direct implication from its terms, releases the first.” Jones on Chattel Mortgages, section 644. Authorities in our state might be cited to the same effect. Such being the case, how can it be said that the defendant, by taking a second mortgage to secure the same debt, placed herself in a position where she can not take advantage of her prior mortgage. There is nothing in the last mortgage to suggest the thought that, in taking it, it was her purpose to in any way abandon the first. On the contrary, the recitals in the last mortgage, it appears to us, clearly show that she was taking it as additional security for the debt. It must be remembered that the last mortgage covered property in addition to that described in the first one, [367] and this was no doubt the chief! reason for taking it. The last mortgage says it was ‘ ‘given as additional security for the note,” not as a substitute for the first mortgage; that it was given “in addition” to the first mortgage. In fact, so far as appears from the language of the last mortgage, the idea of it being in lieu of or superseding the first one is expressly negatived. Counsel, in his able argument, cites us to no authority which justifies the contention that this last, mortgage should, from its recitals, be deemed to supersede the prior one. The evidence of witness Harrington, which is not contradicted, shows that when he, as attorney for defendant, took the second mortgage, he supposed “there were two sets of steers.” This fact explains why it was that a second mortgage was taken on the same property upon which the plaintiff already held a first one; also the statement in the second mortgage as to its being a “first mortgage upon said steers, except,” etc. _ III. The plaintiff contends that the defendant is estopped also by her conduct from asserting a right to the cattle under her first mortgage. Now, we think it is questionable whether any estoppel in pais is pleaded. Such an estoppel may exist where one has said or done something upon which another has a right to rely and on the faith of which the latter has acted to his detriment. If, however, this question is in issue, the evidence falls far short of establishing such an estoppel. In the first place, if Harrington, in response to the demands of plaintiff’s officers as to his right to take the property, as attorney for the defendant, exhibited her last mortgage, and claimed the steers thereunder, that could not be urged as an estoppel. At that time it is undisputed that her first mortgage, covering all these steers in controversy, was duly executed, and of record in Boone county, Iowa. There is no pretense that there was any disclaimer by [368] tbe plaintiff of her rights under the first mortgage at that time, unless the mere taking of the property on the second would be such. Even if it should be conceded that Harrington, the defendant’s attorney, did and said all.that the plaintiff claims, still there is no evidence whatever that the plaintiff, by reason thereof, was led to do anything other than it would have done regardless of what he said or did. It is not averred in the pleadings that, by any act of the defendant, the plaintiff was misled, or induced to act in anywise to its detriment. For all that is disclosed by this record, the plaintiff’s action was in no way based upon, or controlled or influenced by, anything the defendant did. The essential elements of an estoppel by conduct have not been established, even if pleaded; and we may say that the evidence satisfies us that the defendant took the cattle in controversy under her first mortgage. 4t __. merger g*>ge in see?" omi' IV. Claim is also made that the first mortgage of the defendant has, by the acts of the defendant, and recitals in the second mortgage, become merged in the latter. We can not enter into a detailed discussion of the evidence touching this claim. We have referred to some of it already. It is a general rule that a merger will not be held to have taken place (in the absence of express provisions therefor) when it is against the interest of the person in whom it is claimed the two estates are merged. 1 Jones, Mortg., sections, 848, 857. Whether or not there has, in a given case, been a merger, depends largely on the intention of the parties. In the case at bar it is clear that a merger of the securities would be against the intent of the defendant, and it is certain from the recitals in the mortgage itself that there was no intention by either of the parties to the second mortgage that the first one should become merged therein. In our judgment the testimony in this case fully and satisfactorily establishes the fact that the [369] plaintiff’s mortgage was not legally acknowledged; that the defendant, when she took her first mortgage, had no notice, actual or constructive, of the plaintiff’s mortgage; that she took possession of the steers in controversy under and by virtue of her first mortgage; that the taking of the second mortgage was not intended to he an abandonment or merger of the first one. In-our view, the plaintiff failed to establish any right to-these steers, and the defendant is clearly entitled to them. Y. The case has once before been in this court, but upon questions not now before us. 79 Iowa, 215. It is said we should sustain the findings and judgment of the district court, as its finding stands as the verdict of a jury. But the evidence does not, in our judgment, sustain the finding of the court. Had a jury tried the case on the same evidence which was submitted to the court below, and found a verdict for the plaintiff, we should have felt compelled to reverse this case, for want of evidence sufficient to sustain the verdict. The judgment of the district court is bevebsed.