Court Opinion

ID: 3434179
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:03:11.267176+00
Date Added: 2024-06-11T13:43:16.735235
License: Public Domain

The serious question in the case is whether the description contained in the mortgage is such that the record thereof imparted constructive notice to an innocent purchaser. The plaintiffs do not contend that the defendant had actual notice of their mortgage. They do contend that the recording of their mortgage in Tama County operated as constructive notice to all persons. The mortgage described the cattle both "as kept" and "to be kept" upon the farm of the mortgagor, three miles south of Garland, in Tama County, Iowa. The mortgagor was the owner of a farm three miles south of Garwin, in Tama County, Iowa. There was no "Garland" in Tama County. I disregard this error in the mortgage, for the purpose of this dissent. The description in the mortgage became misleading at this point, and in that sense became a misdescription, because at no time were these cattle ever on the mortgagor's farm. When this mortgage is read in the light of the circumstances and after events, it is quite evident that the mortgage was not intended, between the parties thereto, to become effective as to third parties, until the description contained in the mortgage should be rendered true and correct by the transportation of the cattle to the mortgagor's farm. The mortgage was actually made in Omaha. The description written into it was intended to be fulfilled by a transportation of the cattle to such farm. If that purpose had been carried out, then the cattle in such location would fulfill the description in the mortgage. The cattle were shipped over the Chicago  Northwestern Railway, *Page 1151 
and were delivered to Plumb Bros., at Marshalltown, in Marshall County. Before such delivery, however, they had been carried as far as Montour, in Tama County, and from there back to Marshalltown, without previous unloading or delivery to any one. Plaintiff's mortgage was recorded in Tama County at 1 P.M., March 22d. The car of cattle reached Montour at midnight of the same day. The argument for the appellants is that the recording of the mortgage became effective as constructive notice, the moment that the car of cattle reached Tama County. It does not contend that constructive notice was imparted at any prior time. The argument of the majority opinion is, in substance, that, if the alleged innocent purchaser had gone to the farm of the mortgagor in Tama County, he could have ascertained all the facts pertaining to this shipment. I submit that the effect of this argument is to make a misdescription in a mortgage as effective for the purpose of constructive notice as a correct description. If the defendant purchaser had had actual notice sufficient to put him upon inquiry, then the argument of the majority would be pertinent at this point. The distinction between the duty of inquiry which is cast upon one having actual notice, and the legal presumption raised as against one having only constructive notice, is recognized and illustrated in many of our cases. Plano Mfg. Co.v. Griffith, 75 Iowa 102; Coleman v. Reel, 75 Iowa 304; AmericanWell Works v. Whinery, 76 Iowa 400; Cole v. Green, 77 Iowa 307;Luce v. Moorehead, 77 Iowa 367; Citizens' Nat. Bank v. Johnson,79 Iowa 290.
I submit that, where the description in a recorded mortgage is affirmatively misleading, and amounts thereby to what we have heretofore termed a "misdescription," no duty of discovery is cast upon an innocent purchaser, who is charged only with constructive notice. Such a purchaser is not charged with constructive notice of any material mistake or misdescription in the mortgage. He is not chargeable as to any property which is outside of the terms of the mortgage, even though its exclusion were the result of mistake.
We have heretofore adopted a liberal rule in sustaining broad and general description of chattels in a mortgage, without requiring specific description of each separate chattel. We have been able, however, to adopt and sustain such liberal rule by laying stress upon the descriptive value of possession and *Page 1152 location of the mortgaged chattels. If, in this case, we may treat as immaterial the statements of the mortgage as topossession and location, we almost dispense with the necessity of description at all. If it be assumed, however, that, if themisdescription be disregarded, then sufficient remains, independent thereof, to describe the cattle, this does not solve our problem. We have no right to treat a misdescription as surplusage, and thereby to charge an innocent purchaser with constructive notice of a fact which was completely contradicted by the misdescription thus ignored. I submit, therefore, that, as between the mortgagee and the innocent purchaser, themisdescription in his mortgage becomes a verity, as against the mortgagee, and that he may not correct his mistake at the expense of the innocent purchaser.
The distinction between a merely defective description and amisdescription has been recognized in our cases many times. A few excerpts from our cases will show that we have had this question before us repeatedly. In Ivins v. Hines, 45 Iowa 73, we said:
"The mortgage under which intervener claims described the cows intended to be included in it as `branded with a star on right horn.' The cattle turned out to plaintiff were not so branded. * * * The chattel mortgage in question, instead of indicating or suggesting inquiry, was calculated to suppress all inquiry. It contained a specific designation of the property included within it, `fourteen cows, branded with a star on right horn.' When the property was offered to plaintiff containing no such brand, he certainly had a right to conclude that the mortgage did not refer to it."
In Packers Nat. Bank v. Chicago, M.  St. P.R. Co., 122 Iowa 503, we said:
"The description in the mortgage was not simply indefinite or uncertain as to the brand, but it was positively misleading. * * * Under these circumstances, the mortgage was not constructive notice to the purchaser as to these animals, and the trial court was warranted in instructing the jury to return a verdict for defendants."
The mortgage in the foregoing case misdescribed a brand. In LeeCounty Sav. Bank v. Snodgrass Bros., 182 Iowa 1387, the mortgage described the mortgaged cattle as located on a certain farm. In that case, we said, in substance, that a chattel mortgage *Page 1153 
which distinctly describes the mortgaged property as located on a specifically described farm, without other recitals in the mortgage suggesting further inquiry, and without other suggestive knowledge on the part of the searcher, is not notice to one who actually reads the mortgage, that the mortgaged property is, in reality, situated on another separate and distinct farm belonging to the mortgagor and located in the same township, and that:
"The debtor could have property which was never on the place described in the mortgage. And a description which declares, without anything more that is a tangible aid to identification, that the property is on one farm, gives no notice that it covers property on a different farm. The appellees knew there was a mortgage, but that knowledge adds nothing to the mortgage."
In Adams v. Commercial Nat. Bank, 53 Iowa 491, the mortgage misdescribed the location of the mortgaged property. We said:
"Conceding the bank had notice of the mortgage and its contents, it clearly appeared from such description that the wheat mortgaged was not that in controversy. Not because it was not sufficiently described, but because of elements of description essentially different from the property in controversy. * * * This is not a case of imperfect or insufficient description of personal property, but just the reverse."
The same question was involved in Farmers'  Merch. Bank v.Stockdale, 121 Iowa 748. The mortgaged property involved therein was described as being in Section 29, whereas, in fact, the farm was in Section 20. The court said:
"The third mortgage, it may be conceded for the purposes of this case, contains a sufficient description of the property in the section and township named. But the property here in question, in point of fact, was in Section 20, and, if it is to be said that the record of the mortgage imparted notice that such was included in the conveyance, it must be because the provision `and in other places in said county' affords a sufficient description as to the location thereof. We have held repeatedly that the description of property in a chattel mortgage, to be sufficient as against third persons having constructive notice only, must be such as that the property can be identified by reference to the *Page 1154 
instrument itself, aided by such inquiries as may be indicated or directed thereby. * * * The corollary follows that the description in a mortgage which does not thus afford means of identification must be held to be insufficient. There should be a designation of the property conveyed, and of the place where it may be found. Not that it is necessary in all cases to describe each article in detail, but the description should be sufficiently specific to enable a third person to go to the place indicated and set the property apart. * * * It is not a sufficient location of property to say that it is in a county named."
It is not a proper answer to say that the innocent purchaser should have inquired of Weise, and that he should be charged with constructive notice of all that such inquiry might have disclosed. To say that the recorded instrument in Tama County charged the subsequent purchaser with a duty to search out the mortgagor and to make inquiry of him, would be to say that the disclosure of the name of the mortgagor in a recorded instrument is of itself sufficient to cure all errors of description, in that full information of facts could always be had by inquiry from the mortgagor. The name of the mortgagor necessarily appears on all mortgages. If, therefore, the disclosure of the name of the mortgagor is sufficient to charge the subsequent purchaser with the duty of inquiry of the mortgagor, and to charge him with constructive notice of the facts which such an inquiry would reveal, even though they be contradictory to the terms of the mortgage itself, then the duty and burden of a good description of the mortgaged chattels would be wholly lifted from the shoulders of the mortgagee, and transferred to the shoulders of the innocent purchaser. No chattel mortgage could fail to operate as constructive notice, regardless of all mistakes ormisdescription. Such is not the law.
If the defendant is to be held chargeable, it is not because of any actual notice or any bad faith or want of diligence on his part, but because, as a matter of law, he was bound to take notice at his peril of what was disclosed by the chattel mortgage record. He was not chargeable with any mistakes or misdescription
in the recorded instrument, nor was he chargeable with a duty of discovery of such mistakes or misdescription. If liability were predicated upon actual notice and want of diligence in inquiry, a different question would be presented. Evidence of actual *Page 1155 
notice challenges the diligence and good faith of the subsequent purchaser. But constructive notice is a creature of the statute, and is predicated strictly upon the terms of the recorded instrument itself.
I would affirm the judgment below.
JUSTICE FAVILLE joins in this dissent.