Court Opinion

ID: 7095388
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:10:21.912009+00
Date Added: 2024-06-11T16:13:13.822853
License: Public Domain

Beck, C. J.,
dissenting.
I. I concede that if the release of the mortgage had been made through mistake it would be the duty of a court of equity to disregard it and set it aside. But the mistake must be of some matter leading to and influencing the execution of the release. If it was as to a matter which did not affect the action of the party it cannot be the basis of equitable relief. Now it is claimed in the foregoing opinion that the ignorance of plaintiff of the existence of the second mortgage was an element which influenced his action in assenting to the release. Here is the fact constituting the alleged mistake. The fact is established in the minds of my brothers by inference alone. It is not pretended that there is a particle of proof to be found in the record tending to establish the position that plaintiff was in any way influenced by a belief or supposition that the instrument canceled was the only mortgage on the property or that he would not just as readily have assented to the release had he possessed full knowledge of the second mortgage. It is intimated in the opinion of the majority that such a course would have been unreasonable and wanting in ordinary prudence. Such it may have been. Are we to pre*163sume that the acts of men in business affairs which are unreasonable and imprudent are always the result of mistakes ? The rules of neither equity nor law are woven into any such mantle of charity to cover the carelessness, blunders or stupidity of men in business transactions. That there was in fact a mistake in the transaction is made to rest, in the foregoing opinion, upon the simple inference that plaintiff would not do a thing so against his interest, unless he was mistaken. Now this very inference is in conflict with our own experience upon this bench. We well know that men often knowingly do things in conflict with their best interests, for upon just such transactions arise many of the disputes which are finally settled here.
But I deny that, under the well-established rules of equity, a mistake may be established upon such inference. Before this court can relieve against a mistake, it must be clearly made out by satisfactory proof. 1 Story’s Eq., § 157; Ring v. Ashworth, 3 Iowa, 452. I do not claim that the mistake must be expressly proved, but if it may be fairly implied from the nature of the transaction, it will be considered established. 1 Story’s Eq., § 162. To my mind there is not a fair and reasonable inference to be based upon the evidence, that plaintiff executed the release solely because of his ignorance of the second mortgage.
It is not pretended that the release itself was made through mistake or procured by fraud. That it was made in pursuaneé of the wishes of plaintiff and all the parties concerned, and under an agreement to that effect, I have no doubt. This will clearly appear from the evidence upon this point found in the record. The only evidence thereon is the testimony of Bobbins and the plaintiff. Bobbins states that being indebted to plaintiff he agreed to transfer his claim on Hudson. He then states, using his own language, “ I did not want to sign them (the notes and mortgage) over to Bruse, and Bruse said he would rather have the mortgage run directly to him; so I went *164with Bruse to Hodson, and they agreed to make a new mortgage. The mortgage to me was then on record. I told Mr. Bruse and Mr. Hodson that when the new mortgage was made to Bruse and he was satisfied, I would cancel the old one. Afterward Bruse told me he was satisfied. Hodson exhibited the new notes and mortgage to me. I then canceled the old one.”
Plaintiff in his evidence states that Bobbins being indebted to him, in payment gave him the notes of Hodson secured by the mortgage. He further testifies in these words: “ Hodson agreed to give new notes and mortgage for $2,000, if I would loan him $131 and surrender to him the old notes and mortgage. Under that agreement these notes and mortgage were executed. ” He also -states “ When Hodson gave me the new notes and mortgage, I gave the old notes and mortgage up.”
The foregoing is all the evidence as to the understanding and agreement of the parties leading to the execution of the writing in satisfaction of the mortgage. It very satisfactorily appears that the parties agreed and intended to satisfy and discharge the mortgage, and I am not authorized to infer that they misapprehended the effect of this act. We are not warranted in the conclusion that either plaintiff or Hodson intended to keep alive the lien of the old mortgage; on the contrary, we are explicitly informed by the evidence that they desired it to be canceled. Certainly if such were their intentions and they have been carried out by the written release, this court cannot restore the lien of the canceled instrument.
II. It is insisted that Nelson had notice of the facts constituting plaintiff’s equity and right of priority before he completed the purchase of the notes and mortgage given to Lamb. It is proved that at the time he entered into the contract to pay the debt owed by Hodson to another, he had no other knowledge on the subject than that the mortgage to Bobbins was satisfied of record. *165Before consummating the transaction, he learned that Bruse claimed his mortgage was a prior lien, and was informed by Bobbins of the character of the understanding and agreement between the parties touching the execution of the second mortgage. It may be admitted that he had full notice of this agreement. As we have seen, it was to the effect that the mortgage should be canceled. He was fully authorized to presume the parties would abide by their agreement, and that the instrument would now be regarded by them as a lien upon the land. With such knowledge he could not have been warned by prudence not to purchase the notes secured by the second mortgage.
III. But it is urged, the evidence establishes the fact that Bruse, when he agreed to the cancellation of the first mortgage, had no knowledge of the subsequent incumbrance. But that mortgage was on record, and he is chargeable with constructive knowledge as of any other subsequent incumbrance. His ignorance of a fact which, with the exercise of common prudence, he could have known ought not to prejudice the rights of others. Nelson purchased the Lamb mortgage on the faith of the validity of the cancellation of the first mortgage, which was authorized by plaintiff’s express agreement. Surely he ought not now to be defeated of his rights by the fact that plaintiff was in ignorance of a matter, the knowledge of which may have influenced him to insist upon keeping alive the lien of the first mortgage. Equity does not relieve against ignorance and mistakes of this character.