Court Opinion

ID: 6587433
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:50:11.587484+00
Date Added: 2024-06-11T15:57:14.205540
License: Public Domain

Conaway, Justice.
On December 3, 1880, defendants in error, Edgar P. Snow and Elizabeth Snow, executed their joint and several promissory notes for $5,000,00, payable to the order of Swan Brothers one year after date, with interest at one per cent, per month from date till paid. To secure payment they at the same time executed a mortgage upon Lots Nos. 7 and 8 in Block No. 231, and Lot No. 4 in Block No. 417, all in the city of Cheyenne, Laramie County, Wyoming. They further secured the payment of *50the note by a mortgage of the same date upon property in Cass County, Iowa. In these mortgages Alexander H. Swan, Thomas Swan, constituting the firm of Swan Brothers, were the grantees. The mortgage on the Cheyenne property was filed for record the day after its execution, and was duly recorded.
The note is indorsed by “Swan Brothers,” and was delivered to plaintiff in error on or about December 22, 1880.
An assignment of the mortgage of the property in Cheyenne by Swan Brothers to plaintiff in error, written upon the back of the mortgage, was made at the time of the delivery of the note to her. This assignment was not acknowledged or filed for record.
Another assignment of the same mortgage was made by Alexander H. Swan and Thomas Swan to plaintiff in error, of date December 30, 1880. This assignment was acknowledged on the 17th day of May, 1888, and filed for record on the 4th day of June, 1888, and was recorded.
On May 22, 1883, Alexander H. Swan and Thomas Swan made to Edgar P. Snow and Elizabeth Snow a release of Lot 4 in Block 417. This release was acknowledged on May 22, 1883, and filed for record on June 6, 1883. This release recites that it was made upon the payment by the said Snow to the said Swans of three thousand dollars of the debt secured by the mortgage. There is no credit of' any portion of this amount on the note, and Alexander H. Swan testifies that Swan Brothers did not have possession of the note after its delivery to plaintiff in error, on or about December 22, 1880.
On August 6, 1886, suit was commenced in the district court for Cass County, Iowa, by plaintiff in error against Edgar P. Snow and Elizabeth Snow for the recovery of the amount of the note and for the foreclosure of the mortgage of the Iowa property. To this action Edgar P. Snow and Elizabeth Snow appeared and pleaded payment of three thousand dollars. Such proceedings were had in said action that afterward, on May 1, 1889, plaintiff in *51error obtained judgment and decree for the full amount of said note, not allowing the offset of three thousand dollars or any portion of it, and for the foreclosure of the mortgage of the Iowa property. This property was sold and the proceeds applied to the satisfaction, pro tanto, of the judgment.
On July 14, 1885, defendants in error, Edgar P. Snow and Elizabeth Snow, made their promissory note of that date, payable to the order of Mary E. Stark, the other defendant in error, due one year from date, with interest at twelve per cent, per annum from date till paid. On the same day Elizabeth Snow, to secure the payment of this note, gave a mortgage to Mary E. Stark of Lots 7 and 8 in Block 231, in Cheyenne, Wyoming, This mortgage was acknowledged the next day and filed for record December 23, 1885. These lots are the property of Elizabeth Snow and claimed by her to be her homestead.
This action was brought by plaintiff in error as plaintiff below, to recover the unpaid balance of the Iowa judgment, and to foreclose the mortgage on the Cheyenne property, and to have Lots 7 and 8, in Block 231, sold and the proceeds applied in payment. This is the relief sought as against Edgar P. Snow and Elizabeth Snow. As against Mary E. Stark, it is sought to make her mortgage lien subordinate to that of plaintiff in error.
Edgar P. Snow, by his separate answer, merely claims that he paid the interest on the note mentioned to Swan Brothers up to May 22, 1883, and on that date paid to them the further sum of three thousand dollars upon said note, and that he did not at that time have any notice or knowledge of any kind that the note and mortgage had been transferred by Swan Brothers to plaintiff in error. He asks only credit for these payments.
Defendant in error, Elizabeth Snow, by her separate answer, claims that she executed the note and mortgage as surety for her husband, defendant in error Edgar P. Snow, which the Swan Brothers well knew, and that the interest on the note was paid up to the 22d of May, 1883, *52in payments by Edgar P. Snow to Swan Brothers, who then had possession of the note and mortgage; and that at this time Swan Brothers, for a valuable consideration, paid to them by Edgar P. Snow, agreed to release and afterward did release from the operation of the mortgage Lot 4 in Block 417, in Cheyenne, the value of which was then more than sufficient to pay the entire amount due on the note, without her knowledge or consent; and that neither she nor Edgar P. Snow had any notice or knowledge of the assignment or transfer of the note and mortgage. She asks, generally, for such judgment as by this court shall be deemed meet and proper.
The trial court held that the amount due upon the note was res judicata. This is clearly correct. But the trial court admitted the defense of suretyship by Elizabeth Snow as against the mortgage, evidently found that defense established by the evidence, and denied a foreclosure of the mortgage, but gave judgment against Edgar P. Snow and Elizabeth Snow for the uncollected balance of the Iowa judgment.
In the view we take of the case it is unnecessary to decide several legal questions discussed by counsel. The rule as to the defense of suretyship by one of several joint makers of an instrument under seal is the same as in the case of several joint makers of a promissory note. The suretyship may be shown by parol, but in all such cases the creditor must have knowledge of the suretyship. Am. & Eng. Enc. of Law, pages 723 and 724, notes 5 and 1. There is no evidence tending to show such knowledge on the part of Swan Brothers or plaintiff in error, or notice of any kind' to either of them, but the contrary. Elizabeth Snow testifies that she never said anything to Swan Brothers about the matter of her suretyship. Hannah Frank testifies that she never had any knowledge or notice of such suretyship, and exhibits a letter of Mrs. E. P. Snow, in which the latter designates the note as ‘ ‘ that note of myself and husband.” This letter is dated August 18, 1888. Up to this time and 'for a considerable time *53afterward, it does not appear that anything was said by any of the parties about suretyship. Indeed, the first that appears upon this matter is in the separate answer of Elizabeth P. Snow in the case at bar. This defense was not interposed by her in the action in Iowa. And Mrs. Snow does not testify that she signed either note or mortgage as surety. When asked the question directly and in leading form by her counsel whether she signed the note as principal or as surety for her husband, her reply was “Ido not understand.” In response to further leading questions she says she received no money from Swan Brothers at the time she signed the note, and received no benefit from Swan Brothers at the time she signed the mortgage. On her cross-examination she testifies that her husband got the money. And this is the substance of all the evidence tending to establish the fact of suretyship. It appears to be evasive and unsatisfactory at least. And, as already stated, there is no evidence whatever tending to show any notice of the surety-ship of Mrs. Snow to either the grantees or assignees of the mortgage. The evidence shows that there was no such notice.
The rights of Mary E. Stark remain to be considered. She took her mortgage upon Lots 7 and 8, in Block 231, with record notice that the mortgage executed in favor of Swan Brothers upon those lots, and Lot 4 in Block 417 had been released as to Lot 4 in Block 417, and that three thousand dollars had been paid upon the debt of five thousand dollars secured by such mortgage. She had a right to rely upon the record. She is also bound by it. Plaintiff, in error, by her negligence, in not getting an assignment of her mortgage properly executed and filed for record until after Mary E. Stark took her mortgage, placed it in the power of Swan Brothers and Edgar P. Snow to perpetrate the fraud which deprived her (plaintiff in error) of her mortgage security upon a valuable property without securing to her any compensation for the loss of this security. The evidence shows, satisfactorily, that *54Edgar P. Snow had early notice of the assignment of the note to plaintiff in error, and tends strongly to show that Elizabeth Snow also had early notice of such assignment, and long before the payment of $3,000.00 to Swan 'Brothers and the release of Lot 4, in Block 417, from the lien of the mortgage. But if plaintiff in error must lose in consequence of her negligence, or Mary E. Stark lose without fault or negligence, then plaintiff in error must bear the loss.
From a careful examination of the record it is apparent that, by an error in computation, the judgment in favor of plaintiff in error is too large by one thousand dollars with interest for several years, but that taxes paid by her since the date of the Iowa judgment are not included in the judgment. The judgment should therefore be reduced one thousand dollars, with the said interest, and to the reduced amount should be added these taxes with interest from the dates of payment. As so modified the money judgment of plaintiff in error will stand affirmed. She is also entitled to the foreclosure of her mortgage and the sale of the mortgaged property in controversy. As against Mary E. Stark three thousand dollars of the the debt of Edgar P. and Elizabeth Snow is to be considered paid as of date May 22, 1883. This will more than satisfy the judgment of plaintiff in error as against Mary E. Stark’s mortgage, except as to the portion founded upon the taxes paid. The proceeds of the sale of the mortgaged property in controversy should be applied; first, to the payment of costs; second, to the repayment to plaintiff in error of the taxes paid by her upon the mortgaged property in controversy, with interest; third, to the payment- of the debt due to Mary E. Stark, for which she should have judgment; fourth, to. the payment of the judgment of plaintiff in error; fifth, any surplus should be paid to Elizabeth Snow.
The cause is remanded, with directions to the trial court to modify its judgment and decree in accordance with this opinion.
*55Justice Potter, having been of counsel in this cause, did not sit. Judge Hayford, of the second judicial district, was called in by the remaining justices, and sat.

Decree Modified.

GROBSBeck, C. J., and Hayford, Dist. J., concur.