Clasey v. Sigg

51 Iowa 371

• Court: Supreme Court of Iowa
• Decided: June 11, 1879
• Status: Published

Opinion

Servers, J.

1. promissory note: bouafide holder. — I. That the bona fide assignee of a note and mortgage, without notice of infirmities, was not affected thereby, was held in Preston, Kean & Co. v. Case, 42 Iowa, 549. This case was followed in Farmers National Bank v. Fletcher, 44 Id., 252. In both of these cases, ag well as the one at bar, the notes secured by the mortgages were negotiable and had been transferred before due. There is no distinction in principle in these cases. The learned counsel for the appellant, in an ingenious argument, attempts to make one, but in our opinion he has signally failed.

English v. Waples, 13 Iowa, 57, and Sims v. Hammond, 33 Id., 368, were referred to in the case last cited and distinguished. We are content with what is there said, except it may be remarked that the effect of the negotiability of the mortgage debt was not considered, for the reason that no such question could under the facts arise.

2. ces. ‘ II. Spielman borrowed of the bank two hundred dollars, and the note and mortgage were delivered as collateral secutherefor. Subsequently, and after plaintiff’s mortgage had been recorded, he borrowed two hundred dollars more. Afterward these loans were combined in a note for four hundred dollars, and the mortgage was held by the bank as collateral therefor. When the note and mortgage were delivered to the bank there was no agreement made as to future advances, but the president of the bank testified they were left with the bank as security for what Spielman “owed or might owe.” This evidence was in no manner contradicted or impeached.

It is insisted in no event is the bank entitled to priority except as to the two hundred dolíais first loaned. The argument amounts to this, that the bank was bound by what appeared of record at the time each advance was made. When the bank obtained the note and mortgage there was nothing of record impeaching the mortgage in any respect. Its title thereto was, therefore, perfect and complete, and we are not prepared to say it could not make with safety future advances thereon. There was no reason to suppose anything could be placed on record that could affect the validity of the security held by it. To so hold would be requiring an unusual degree of diligence and care. The only authority cited by counsel, in support of the claimed doctrine, is English v. Waples, before cited. We do not understand the point to have been considered, much less determined, in that case.

Aeeirmed.