Mathias v. Leathers

Kinne, J. I. Appellant contends that, under the stipulation filed, the allegation of his answer to the effect that plaintiff fraudulently altered the mortgage is admitted. Such, in our judgment, is not a fair construction of the agreed statement of facts. It is therein provided that the allegations of the pleadings sliall be taken as true so far as the same are not denied by the pleadings of the other party; that the court shall consider gs evidence the'deposition of witness Farrer, so far as the same is consistent with the agreed facts. In division six of the agreed statement, it is said: “After the recording of the said mortgage to plaintiff, and after the execution and delivery of the defendant’s mortgage, and without the knowledge or consent of defendant Leathers or his assignor, and under the circumstances detailed by the witness Farrer, referred to in No. 2 above, the said mortgage was by the said Thos. Ross & Son, changed from ‘twenty-two hundred dollars’ so as to read ‘twenty-three hundred dollars.’ ’’ Taking the stipulation as a whole, it is clear that it is agreed that Ross & Son made the change in the mortgage. II. We do not, as a rule, discuss the evidence in equity cases, but state our conclusions reached after a full consideration of all the evidence. We find that neither Connable nor Farrar authorized or had any knowledge of the change made in the amount of Connable’s mortgage. Unless Ross & Son, who took the application for the loan, and who in fact made the change in the mortgage, can be said to have been [21] the agents of Connable, so as to bind him by their act, he is in no way a party to, or responsible therefor. Appellants do not seem to question the rule of law, that an alteration, although riiaterial, cannot invalidate a written instrument, when such alteration is made by a stranger to the contract. 1 Am. and Eng. Enc. Law, p. 505; 1 Greenleaf Ev. section 566; City of Orlando v. Gooding, 34 Fla. 244 (15 South Rep. 770); Murray v. Peterson, 6 Wash. 418 (33 Pac. Rep. 969); Kingan & Co. v. Silvers (Ind. App.) (37 N. E. Rep. 413); Murray v. Graham, 29 Iowa, 528. The real question, then, is: In taking the mortgage, did Ross & Son act as agents for plaintiffs’ intestate, and, in making said alteration, were they acting within the scope of their employment? It has often been held that no alteration or spoilation, done by an agent of one of the parties, will avoid the contract if the agent had no express or implied authority to do the act. 1 Am. and Eng. Enc. Law, p. 505, note 1. If, then, Ross & Son be deemed the agents of Connable, to take a mortgage for the amount of money loaned to Barrett, there is nothing in this record from which it can be said that they had any authority, either express or implied, to change or alter the mortgage after it had been executed and recorded. After this mortgage was executed and recorded, Ross & Son had no more right to alter it than had any stranger to the transaction. They thereafter became the mere vehicle for the transmission of the mortgage to Farrer, the agent of the mortgagee. Kingan & Co. v. Silvers (Ind. App.) (37 N. E. Rep. 413.) The facts in this case clearly distinguish it from Hollingsworth v. Holbrook, 80 Iowa, 156 (45 N. W. Rep. 561). But we need not place our conclusion wholly- upon the theory that, though Ross & Son were the agents of Connable, the latter was not chargeable with their wrongful act. From this record, we are [22] justified in assuming that the change was made in the mortgage, if not at the instance of, certainly with the consent of, Barrett. There is no question of fraud in the case. None of the parties intended any wrong. Appellant has not suffered by this unintentional wrong, and it would be most inequitable and unconscionable to permit him to defeat the lien of the Connable mortgage on a mere technical quibble, and thus place himself, as regards his lien, in a better position than he would have been had the Connable mortgage not been altered. Sometimes it is held that the person taking the application for a loan is the agent of the money lender. McLean v. Ficke, 94 Iowa, 283 (62 N. W. Rep. 753). It depends upon the facts. It does not appear in this case that Ross &'Son had been appointed as Connable’s agents, or that they ever before loaned any of his money, or that Connable relied upon them as to the character and amount of the security to be taken; nor is there any direct evidence that they were to see to the payment of the prior liens upon the land. We do not think that from the record it can be said that Ross & Son were the agents of Connable. The finding of the district court that, in making the alteration, Ross & Son were acting for the borrower, is not without support in the evidence. As was said in Murray v. Graham, supra, the act of alteration is in no just sense the act of Connable, and “he should not be affected by it otherwise than though it was the act of a stranger, or a spoliation by accident or mistake.” In this same case the court quotes approvingly from the case of U. S. v. Spalding, 2 Mason, 476 Fed. Cas. No. 16,365, wherein is said: “A doctrine so repugnant to common sense and justice, which inflicts on an innocent party all the losses occasioned • by mistake, by accident, or by the wrongful act of third persons, ought to have the unequivocal support of [23] unbroken authority before a court is bound to .surrender its judgment to what deserves no better name than a ‘technical quibble.’ ” Appellant, when he took his mortgage, took subject to all prior liens. The additional one hundred dollars went to pay liens ahead of his mortgage. He is in no position to ask a court of equity to set aside the lien of the Connable mortgage, and thereby permit him, so far as the land is concerned, to wipe out a just debt of two thousand two hundred dollars, which existed prior to the time the mortgage under which he claims was executed. When the learned district judge gave him the right to redeem he got all that he was entitled to. The decree below is affirmed.