Court Opinion

ID: 7093241
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:08:13.428901+00
Date Added: 2024-06-11T16:13:05.167430
License: Public Domain

Wright, Ch. J.
1. School Fund: note. It will be observed that tbe ruling below is placed upon the ground that the commissioner was not authorized to receive this note in payment of $500, owing by Martin; that Martin was still liable to said fund, and, as a consequence, there was a want of consideration. There is no suggestion that the note was not passed as an executed contract to said commissioner, or that it was not to be so treated and regarded until tbe mortgage was also made and delivered. And we suppose (being left to infer tbe grounds of the ruling, in the absence of any argument on the part of the appellees) that the want of power to take this note was held to result from' the failure to demand or receive a mortgage to secure the same.
The correctness of this conclusion we are not prepared to admit, and especially in view of the circumstances of this case. Martin was a defaulter to this fund. Barrick was his debtor. The case stands as though Barrick had paid Martin, Martin had paid the school fund, and Barrick had then borrowed tbe same. The money did not pass, but each party obtained the benefit of tbe transaction as made precisely as though it bad, if plaintiff is allowed to recover in this action.
Tbe note was executed and delivered, and we cannot understand wby.the defendants can resist its payment because they did not secure it by mortgage. And this is as true, treating Martin as tbe surety of Barrick, as though he was the principal debtor. It was as much his duty, so far as it relates to the question of power, to see that this security was given, as the school fund commissioner — a proposition, we may remark, equally applicable to the other maker, who clearly occupies the relation of surety. (State v. Wiley, 15 Iowa, 155.) And upon an analogous principle, see Horsman v. Todhunter, 12 Iowa, 230. There is no claim of fraud, or a loss resulting from the state-*393merits or representations of the county agent. He did not undertake to obtain the mortgage and attend to filing the same for record. It is his duty, we admit, in loaning the school fund, to have it secured by mortgage on real estate appraised at double the value of the money loaned. If he failed to take such security, it was competent for the proper authorities to repudiate the act, and hold him and his sureties liable for the same. But it was equally competent to adopt and ratify the same, and after such adoption and ratification the borrower and his surety could not object that he had not given all the security required by the law.
We have, thus far, treated the transaction strictly as a loan. When it is remembered, however, that Martin was already a debtor to this fund, and that this note was taken to arrange and pay, pro tanto, this indebtedness, the case is relieved of all possible difficulty. In this liability we have a valid and sufficient consideration. As to the fund and this liability, the. other maker may be treated as his surety. And we find nothing in the statute, nor are we aware of any principle, which prohibits the county authorities from saving and securing to this fund, in the best manner possible, any defalcation on the part of those intrusted with its disbursements.
Reversed.