#### Andreas Baumgartner v. John Peterson, *et al.,*Appellants.

Principal and Agent: paying moktgage debt after assignment. G., who was not a banner, took a note and mortgage payable at 1 his office and endorsed them to B., that fact being also shown on the mortgage record. B. annually presented the note at said office, was paid interest by G., endorsed it on the note and took it away. The maker of the mortgage made various .payments upon it to G., mostly at the latter’s house, and always without the production of note and mortgage. These payments did not reach the assignee of the mortgage. G. died insolvent and the assignee, in ignorance of his rights against the mortgagor, filed a claim for the 2 note against G.’s estate, and, later, withdrew it. *Held,*the mortgagor must again pay the mortgage to said assignee.

*573*Appeal from Des Moines District Court.*— Hon. James D. Smyth, Judge.

Tuesday, January 29, 1895.

Action in equity to recover tlie amount of a promissory note, and to foreclose a mortgage on real estate given to secure its payment. There was a hearing on the merits, and a decree in favor of the plaintiff, as prayed. The defendants *appeal.*

Affirmed.

*Hedge*& *Blythe*for appellants.

*Kelley & Cooper*for appellee.

Robinson, J.

On the twenty-fifth day of August, 1886, the defendant John Peterson made his promissory note for the sum of five hundred and twenty-five dollars, payable one year after its date to Theodore G uelich, or order, at his office in Burlington, with interest at the rate of seven per cent, per annum, payable annually. To secure the payment of the note, which was given as a part of the purchase price of a lot in the city of Burlington, Peterson executed to Guelich a 1 mortgage on the lot. The mortgage was duly recorded. A short time after the note and mortgage were given, and probably on the same1 day, Guelich sold them to the plaintiff for the s-um of five hundred and twenty-five dollar's, and indorsed on the note the following: “Pay to Andreas Baumgartner. Theod. Guelich.” An assignment was written, on the mortgage, in words ajs follows: “For value received, I d'o hereby assign and transfer this mortgage-, as well as the note secured thereby, to Andreas Baumgartner. [Signed] Theod. Guelich.” The same assignment was *574also written on the margin of the record of the mortgage, and dated October 18, 1886. The note was not paid at maturity, but it was presented at the office oí Guelich, where was paid and indorsed thereon, the interest due for the first year. That was done each succeeding year, until an indorsement had been made on the note for the interest of each year to August 25, 1892. The maker of the note and the plaintiff were not acquainted with each other, and did not meet. All the payments and indorsements were made by Guelich. Peterson claims that he had no knowledge of the assignment; that .he paid the full amount due on the note to Guelich; that the latter was authorized to receive payment; and that nothing remains due on the note. The evidence shows that Peterson paid the note to Guelich, and we are required to' determine the effect of the payments iso- made. When the plaintiff purchased the note and mortgage, he took them into his possession, and never surrendered them to Guelich, nor authorized him to collect money due; but, at the end of each year, the plaintiff presented them to Guelich, and received the accrued interest, and then took them away.

Peterson, to support his claim that Guelich had, at least, apparent authority to receive payment, relies upon the fact that the note made the office of Guelich the place of payment, and the further fact that the plaintiff there received the interest paid to Guelich, and thus, it is claimed, ratified the acts of Peterson in making payments to him. But the facts stated do not alone show authority in Guelich to collect money oar the note. Nor do we think the evidence shows that Peterson made payments to Guelich as the supposed agent of the plaintiff only, it appears that, at the time or soon after the note and mortgage were given, Guelich gave to Peterson an account or pass book. The heading was as follows: “John Peterson, in Account with *575Theodore Guelich.” On the debit side was entered a memorandum of the mote, showing its date, amount, and the rate of interest it drew. On the other side were entered seventy-nine credits, on various dates, extending from September 23,1886, to August 17,1891, when the entry, “Bal. Cash, $3.60,” was made, and below were written the words, “This settles everything in full.” All the entries were in the handwriting of Guelich. Some of the credits were for money paid, and some were for work done. Nearly all of the payments were made at Guelich’s house. Peterson did not ask that any of them be indorsed on the note, although it is probable that he believed that they were being applied on the note. But he must be charged with knowing that his notla was made payable to Guelich or order, and that it was negotiable. He made the payments, without the production of the note, at his peril. *Tappan v. Morseman,*18 Iowa, 499; *Brayley v. Ellis,*71 Iowa, 156, 32 N. W. Rep. 254; *Security Co. v. Graybeal,*85 Iowa, 547, 52 N. W. Rep. 497.

It is not shown that Guelich was engaged in the banking business. On the note in suit is printed his card, indicating that he was in the “land, law, and loan business.” Therefore, the fact that the note was payable at his office did not authorize the payment of the note to him. *Callanan v. Williams,*71 Iowa, 363, 32 N. W. Rep. 383; *Englert v. White,*92 Iowa, 97, 60 N. W. Rep. 224.

In February, 1893, and before this action was commenced, Guelich died, insolvent.. Some reliance is 2 placed on the fact that, after .the adminis-tratar of his estate qualified and entered upon the discharge of his duties, the plaintiff filed a claim against the estate for the amount due on the note, and it is said he stated that he had no claim against any one but Guelich for the *576amount. Tbe plaintiff denies baying made sucb a statement, and as to that is corroborated by a witness who was present when tbe statement is alleged to have been made. Tbe claim was filed against tbe estate by tbe direction of a son of Guelicb, and was afterwards withdrawn. Tbe statements 'and acts of tbe plaintiff, which may be regarded as tending to show that be sought to bold'Guelicb’s estate liable for tbe amount due on bis note, occurred before be bad ascertained bis legal rights', and cannot justly be treated ais admissions that Guelieh was authorized to collect tbe note. Tbe plaintiff did not «peale or understand tbe English language readily, and we are satisfied that be made some statements without fully understanding their import, and that be was sometimes' misunderstood. Tbe hardship of requiring Peterson to pay tbe amount due on tbe note a second time is to be regretted, but be, rather than tbe plaintiff, is responsible for it. We conclude that tbe decree of tbe District Court is right, and it is *affirmed.*