Court Opinion

ID: 7981237
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:05:28.911697+00
Date Added: 2024-06-11T16:35:02.835994
License: Public Domain

Dibbll, J.
(dissenting.)
I dissent. I am unable bo> agree that the plaintiff’s possession was notice to the Iowa mortgage company that he was defrauded when he conveyed to the Bodgers company, a fact of which he was ignorant when the mortgage was taken and which he did not ascertain until five months later.
There is no question of actual notice to the mortgagee of the fraud practiced on the plaintiff, or of actual bad faith in taking the mortgage. Perhaps there might have been an issue on the question of actual notice; there is none here. The trial court did not find actual notice, or bad faith. It was of the opinion that because of the pos*51session of the plaintiff the mortgagee was charged with notice that he had been defrauded.
A mortgagee taking a mortgage of land in the possession of one other than the mortgagor, omitting to inquire about his claim, is ■charged with such notice as a fair inquiry would have disclosed. He is not an outlaw because he does not inquire; but if he does not he is charged with such notice as inquiry would have given.
That an officer of the mortgage company inspected the land some time before the mortgage was taken is not important on the question of constructive notice by possession. The date for consideration in determining whether there is notice by possession is the date when mortgage rights attach to the land. This was on or just a day or two prior to March 7, 1921.
The plaintiff traded Ms Eenville county lands for the Polk county lands. He gave a deed on February 23, 1921, and it was recorded March 1, 1921. At the time he gave the deed he took a lease of the Eenville farm, effective from March 1, 1921, for two years, but if the farm was sold before March 1, 1922, then for one year only. If the mortgage company had made inquiry of the plaintiff, it would have ascertained no adverse claim of title nor claim of fraud, for the plaintiff knew oif none and could assert none. He was satisfied and uncomplaining. He first ascertained that he had been defrauded, so the court finds, not earlier than August 1, 1921. In the five months’ interval he asserted no adverse title nor right of rescission for fraud. It is not the duty of a mortgagee, finding that the one in possession makes no claim against the title upon which the mortgage is to rest, to inquire into the circumstances under which he parted with his title, what he got in return, make such an investigation as will show that he was defrauded, if the fact be so, an investigation which under the facts of this case would have taken many days. The mortgagee is in no worse position than he would be had he inquired.
With the rule as to the effect of possession as notice there is no quarrel. With its application here I do not agree. The cases cited in the opinion illustrate various applications of it. The case of Mateskey v. Feldman, 75 Wis. 103, 43 N. W. 733, where the grantor remained in possession under an agreement with his grantor, for a *52month and a half, before he discovered the fraud, and his grantee in the meantime gave a mortgage, is in point on its facts. The Wisconsin court goes so clearly and directly, and to me it seems so correctly to the only point involved here that the case is worthy of citation and particular consideration. Other cases cited in the mortgagee’s brief are on the principle involved equally 'forceful and on their facts closely in point.