First National Bank of Nevada v. Bryan

Day, Ch., J.

I. The appellant insists that the answer does not set up that the note and mortgage were obtained by duress. *and practice • ^evidence.'* The appellees filed an amended abstract, setting forth that the defendant, under leave of court, filed an amended answer to meet the evidence, formally setting up that the note and mortgage were made under duress. The appellant denies that such amendment was filed. We have examined the transcript, and do not find any reference to such amendment. However, we regard this question as immaterial. The original answer sets up facts sufficient to present the defense of duress, in view of the fact that the evidence was admitted without objection.

*44 ii. It appears from the evidence that Solon Bryan had a contract for erecting a school lionse in Harlan; that he pur 2. ditbess : . tuting. chased the bricks therefor from P. F. Nelson, and that, to secure $945 of the purchase price, he executed a chattel mortgage upon one hundred and fifty thousand of the bricks; that he failed in the execution of his contract, and turned over his contract, together with the bricks mortgaged to Nelson, to the sureties on his bond for the performance of his contract; and that they assumed and completed the erection of the building. It further appears that the sureties had knowledge of the existence of the mortgage when they took the assignment of the contract. -The attorney of Nelson locked Solon Bryan in his office, and demanded a mortgage to secure the balance due on the bricks, which was then $645, and represented that unless he executed the mortgage he was liable to prosecution, and would jirobably be prosecuted for selling and disposing of mortgaged property. The attorney also procured a letter to Mary E. Bryan from her husband for a description of the homestead property. She at first refused to furnish a description without seeing her husband. The attorney of Nelson told her that she could not see her husband, that he was locked up in his office and could not come out; that Bryan had sold mortgaged property; and that they had a warrant for his arrest, and that if she would give a description of the homestead lor a mortgage it would save his arrest; that it was a penitentiary offense to sell mortgaged property, and that if she did not. give the description they would send him to the penitentiary. Mary E. Bryan went to the office of the attorney and was admitted, and her husband then told her that they had got him into some trouble, and that by giving a mortgage upon the homestead for a short time it would help him out. It seems that the note and mortgage were executed at that time and place. Mary E. Bryan testifies that she was induced to sign the mortgage by what the attorney had said, that it would save Mr. Bryan’s arrest, and that they would straighten it up before the mort *45 gage was due. Ve are satisfied that tbe execution of tbe mortgage was not tbe voluntary act of Mary E. Bryan, and that it was obtained by duress, under tbe doctrine of Green and Densmore v. Scranage, 19 Iowa, 461 .

III. The most important question in tbe case is as to whether the plaintiff, an innocent bolder of tbe note before maturity, is entitled to a foreclosure of tbe mortgage. It 3>_. ob°ahSdGby: holder!11 has been held by this court that a bona fide in-dorsee before maturity of a note secured by a mortgage, without notice of infirmities, tabes tbe mortgage as be takes tbe note, free from tbe defenses to which it is subject in the bands of tbe mortgagee. Preston, Kean & Co., v. Morris, Case & Co., 42 Iowa, 549 ; The Farmers’ National Bank of Salem v. Fletcher, 44 Id., 252; Clasey v. Sigg et al., 51 Id., 371. In all of these cases the mortgages were voluntarily executed upon tbe property of tbe persons who executed tbe notes. Beyond the doctrine of these eases we do not feel justified in going, in tbe apjdication to mortgages of tbe principles which pertain to negotiable paper. In Burbank v. Warnich, 52 Iowa, 493 , when no note was delivered with tbe mortgage to tbe mortgagee, it was held that an asignee of the mortgagee took it subject to all equities between tbe original parties. In Tabor v. Foy, 56 Iowa, 539 , where tbe note accompanying the mortgage was forged, it was held that tbe asignee of tbe mortgagee took it subject to all defenses existing against it in tbe bands of tbe mortgagee, notwithstanding tbe admission of the mortgagor that she signed tbe mortgage. This case differs from all those which have heretofore been determined in this court. In this case the mortgaged property belongs to Mary E. Bryan, who did not sign tbe note, and tbe mortgaged property is her homestead. Her execution of tbe mortgage was procured by duress, and was not her free and voluntary act. Section 1990 of tbe Code requires tbe concurrence of both tbe husband and wife to a conveyance or incumbrance of the homestead. Mary E. Bryan did not legally concur in this conveyance. As between *46 her and tbe mortgagee, the mortgage was void. Mortgages are not intended to circulate as commercial paper, and we do not think that the interests of commerce require that the principles applicable to negotiable paper shall be extended to a mortgage executed under such circumstances as the mortgage in question. The judgment of the court below is

Affirmed.