pond, when the water was level with the top | physical connection, such as bolts, nails, or of the spillway." spikes, unless it was in the top. On the top the boards went back to the dam. The boards were there; I saw them. top was put back on top. The planking on * * I think I distinctly remember that they didn't take off the top planking when they made the new The witness testified that Exhibit C, though without measurements, correctly represents a cross section of the dam as originally constructed: * * * Some of the old stuff on the under side was rotted. On the under side they took out the rotted part. That is what made them put a new front, part under to protect the dam. After they took out the front part, all of the dam was left except where the logs came out, and the gravel and timber was left. and gravel. He put on another apron, on top Another owner, Horton, put on timber, lumber, of the one that had been put on by Nye and Willing; put in timbers and then put in On cross-examination the witness swore: | apron, but left the old planking and spiked that onto it. * That the dam had not gone out since he came to Northwood in 1871; that the dam lowered some, but had never been washed out; "when I repaired the dam, the propping washed out in a certain place; that is, let it drop down 3 or 4 feet at the upper end; the whole middle part of the dam did not go out;" that Nye and Willing had repaired the dam by putting "a kind of a plank apron over the east side. The apron they put on was of plank. It was made of planking laid flatwise around in cribbs, and the back end of the apron was fill-boards that went up and down with the stream. ed with plank on top of each other. The front He shot crosswise and put planking down; was of flat plank, set back 2 inches every time made an apron on top of this other apron that they were laid on. * *Nothing was done got in bad shape, I would say. He did not reto the heavy timbering of the dam at that place any old timbers with new; just made a whole new concern clear across; made a time. The apron was built of itself under the dam. The timbers and gravel and stuff be- whole new apron." hind and back of it gave strength. I don't think there were any timbers driven in to which this apron was nailed. I don't think the apron was spiked to the timbers. Gravel and stuff was put in on the back side where the ends of the timbers had rotted off. It was connected with the main dam with gravel. There was no Exhibit D, which was identified as a fair representation of a cross section, when compared with Exhibit C, illustrates precisely what was placed in front of and against the dam to strengthen it: Cross-Section of Dam through Spillway as It was in 1905, showing Outlines of Cement Apron Built by Plaintiff. (175 N.W.) The dam as it had previously existed remained as originally constructed. A log which had decayed may have been replaced by another or gravel had replaced what had washed out, but such changes were made by way of repair. The successive aprons with the gravel underlaying cannot be said to constitute a new dam. They were not such, and, at the most, might be regarded as additions to the old one. The same must be said of the concrete apron replacing those made of plank. The plaintiff replaced the plank with concrete in 1907. A concrete abutment or ice break was constructed on the north side in 1910, and at some time a stone wall along the south side of the river. Be tween these two the dam 120 feet long remains with the cement apron as appears from Exhibit No. 1. [Photograph not obtainable.] Undoubtedly the construction of the plank aprons and later that of the concrete greatly strengthened the original dam, but none of these destroyed its identity. They were, as said, in the nature of additions thereto, or betterments, but not in any sense repairs, and, as the dam existing at the time the deed was executed was not destroyed, the right to profit à prendre was not terminated. Nor was there any substantial evidence that the dam, with its additions, was higher than the dam when originally constructed. We reach the conclusion that the original dam continues intact, notwithstanding the additions or betterments and that the right to take gravel from the gravel pit was not terminated. [8, 9] III. Though the description in the deed of the mill site, including the dam, does not designate the section, township, and range, these are readily ascertainable from the reference to the plat of Northwood, and the evidence shows that the township is 100 north of range 20 west of the 5th P. M., and that the 10.88 acres conveyed by L. and A. J. Dwelle to Nye and Willing, and through mesne conveyances to plaintiff, is wholly within section 32 of the same township. The description of this tract is the same in all the deeds and appears in the index of the several instruments as "10/88/100 acres in the N. 1⁄2 of N. E. 4 (and see record) 16, 500 Sec. 32, Twp. 100, Rng. 20." Seeing the record, however, would not inform the searcher of anything dehors the record, nor would any one examining the index of deeds conveying land in section 29 in the same township be required to ascertain at his peril the contents of the deeds relating to lands in some other section. Had these deeds been indexed as conveying right in common or profit à prendre in the S. E. 4 of section 29 appurtenant to the 10.88 acres in the N. E. 4 of section 32, doubtless this would have operated as constructive notice of the dam owner's right to use the gravel pit in the S. E. 4 of section 29. But this was not done, and therefore the defendants who purchased separate and distinct parcels of the land in section 29 of L. and A. J. Dwelle after the conveyance by them in 1875 took without constructive notice of any of the dam owners' claims to the gravel pit. Nor do we think they were charged with actual notice, though some of them may have known of the location of the gravel pit; for nothing about it or its use indicated that it belonged to any other than the owner of the fee. If the owners of the mill site hauled gravel from the pit, the same is true of the public generally. All they might do was to use it by taking gravel therefrom for the repair of the dam, and, for all that appears, their use was not different than that of others who hauled away gravel. Neither the condition of the land nor the manner of using the gravel pit was such as to put any one on inquiry as to any right to the gravel in the tracts sold out of the N. E. 4 of section 29, after the execution of the deed in 1875. As well say that the circumstances that teamsters haul coal from a mine or stone from a quarry charges the public with notice that some of the teamsters have an interest in the mine or quarry. Our statute declares that "No instrument affecting real estate is of any validity against subsequent purchasers for a valuable consideration, without notice, unless recorded in the office of the recorder of the county in which the same lies, as hereinafter provided." Section 2925 of the Code. That the deed conveying the incorporeal hereditament described affected real estate is fully settled by the authorities. Jones on Easements, § 118; Joy v. St. Louis, 138 U. S. 1, 11 Sup. Ct. 243, 34 L. Ed. 843; Whitney v. Union R. Co., 11 Gray (Mass.) 359, 71 Am. Dec. 715; Shannon v. Timm, 22 Colo. 167, 43 Pac. 1021; Brewer v. Marshall, 19 N. J. Eq. 537, 97 Am. Dec. 679. As the instrument was not properly indexed, the purchasers referred to were not charged with constructive notice, and we find that they had no actual notice such as to put them on inquiry. See Nellis v. Munson, 108 N. Y. 453, 15 N. E. 739; Treadwell v. Inslee, 120 N. Y. 458, 24 N. E. 651; Willoughby v. Lawrence, 116 Ill. 11, 21, 4 N. E. 356, 56 Am. Rep. 758; Sellers v. Texas Cent. Ry. Co., 81 Tex. 458, 17 S. W. 32, 13 L. R. A. 657. [10, 11] IV. No question as to notice could arise between the parties, and the conveyance of the use of the gravel pit as between them was valid. Its location might have been somewhat uncertain, but that is certain which can be so made, and the physical fact of the existence of the gravel pit in the land of the grantor at about the place designated and the circumstance that there was no (Supreme Court of Iowa. Jan. 20, 1920.) 1. BILLS AND NOTES 226-EVIDENCE419 (15)-NEITHER NEGOTIABLE INSTRUMENTS ACT NOR PAROL EVIDENCE RULE PRECLUDES INDORSER FROM SHOWING WANT OR FAILURE OF CONSIDERATION. "pit," according to Webster's New Interna- STATE SAV. BANK OF LOGAN v. OSBORN tional Dictionary, is meant "a cavity or hole et al. (No. 33070.) in the ground, natural or artificial; a large hole from which some mineral deposit is dug or quarried, as a gravel pit, a stone pit." A "gravel pit" is an excavation from which gravel is removed for some purpose, and the words are so employed in common parlance. In 1875 this pit was but a few rods in diameter, but has since expanded to an area of about two acres. The grant was of a right to use the gravel pit, and this must have meant to remove gravel therefrom. Such removal of necessity enlarged the pit, and the mere fact that it has expanded to a larger area than formerly must have been anticipated by the parties to the deed. The evidence tended to show that the surface of the entire tract was underlaid with gravel Neither the Negotiable Instruments Act nor the rule against parol evidence to vary the terms precludes pleading or proof by defendant, inof a writing, as between the original parties, dorser of the note in suit, of no consideration or failure of consideration for the indorsement. 2. BILLS AND NOTES 90-CONTRACTS ~47 -NECESSITY FOR CONSIDERATION FOR INDORSEMENT. To be valid and legally enforceable as between the parties, an agreement or undertaking of any kind must be supported by consideration, a rule to which commercial paper, in its indorsement, as well as its execution, affords no exception. 3. APPEAL AND ERROR 919-MOTION TO STRIKE ADMITS TRUTH OR SUSCEPTIBILITY TO On appeal from judgment for plaintiff NOMINAL PAYEE ON INDORSEMENT WITHOUT Where plaintiff bank agreed to purchase all 226-EVIDENCE SHOW ING FAILURE OF CONSIDERATION FOR ACCOM- Where defendant indorsed to a bank anoth er's note to him on independent consideration, consisting of assurance of bank that it held mortgage security on maker's property in excess of debt, and would apply first money realized from security to debt, and bank did collect sufficient to pay note, but used it for payment of other debts of maker, leaving note unpaid, consideration for defendant's indorsement failed, WEAVER, C. J., and EVANS, PRESTON, and defendant may plead failure when sued by and SALINGER, JJ., concur. bank. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexe (175 N. W.) Appeal from District Court, Harrison Coun-I was held as contemplated. One Joy, an offity; E. B. Woodruff, Judge. cer of the bank, served as clerk and took the Action at law upon a promissory note. notes, making them all payable, as agreed, Judgment for plaintiff against the defendant direct to the bank, except one note, given by Osborn, for $374.70. In making settlement Davis, who appeals. Reversed. with Osborn, Joy, contrary to the agreement Robertson & Havens, of Logan, for appel- between appellant and the bank, inserted the lant. J. A. Murray, of Logan, for appellee. WEAVER, C. J. The note in suit appears upon its face to have been made by Osborn to the appellant, Davis, who is alleged to have indorsed it to the plaintiff bank. De fendant denies liability. The answer filed is unconscionably long, verbose, and involved in its statements, and had the trial court stricken it on that account, giving defendant opportunity to replead his defenses in better form, we should have no difficulty in affirming the order. Stating the defenses on which reliance is placed, in briefer terms, they are as we understand them about as follows: First, denial made in general terms; second, want of consideration for the appellant's indorsement of the note; third, failure of consideration for the indorsement; fourth, payment of the note by Osborn; fifth, that there was never any delivery of the indorsed note to the plaintiff or that the delivery was at most conditional; and, sixth, that the note was indorsed in consideration of a representation by the bank that it held a mortgage on Osborn's property of sufficient value to secure payment of all his debts to the bank, including the note in question and that if appellant would indorse said note, the bank would proceed to collect the same from the proceeds of the sale of said mortgaged property and would apply the first money received on such sale to the payment of said note; that said promise and agreement were never performed and were never intended to be performed, but were made with the fraudulent intent and purpose to entrap the appellant into an indorsement of the note, and that plaintiff did in fact collect enough from the security held by it to pay the note but failed to apply it upon such indebtedness as agreed. name of appellant as payee of the note without appellant's knowledge or consent. At some time after the note of Osborn had been so taken by Joy, the latter requested appellant to indorse the note as a matter of temporary accommodation only; and upon the promise that the note so indorsed should not be considered delivered as between appellant and the bank, and that the bank should hold it in possession only temporarily, until it could get a new note and security from Osborn for all his indebtedness to the bank, including said note, appellant did make the indorsement. Later, as we understand the answer, the bank did obtain a new note from Osborn, stamped the first note "Paid," and delivered it to Osborn. Thereafter the appellant, at the request of the bank, indorsed the new note it had theretofore obtained from Osborn. The pleading further shows that, to obtain said indorsement, the bank, by the officer having the matter in charge, stated and represented to the appellant that it held a chattel mortgage on the property of Osborn to the value of more than $500, and that, if plaintiff would make the indorsement requested, the bank would credit and apply the first moneys collected from Osborn, or from the said security, to the payment of said note, and that, relying upon said representation and promise, appellant did indorse the note; that thereafter the bank did collect from the sale of said mortgaged property more than enough money to pay and discharge said note, but in violation of its agreement it applied or credited such collections upon other claims held by it against Osborn. The narrative of these alleged facts is restated and repeated in various forms and with various embellishments, but what we have said is sufficient, we think, to enable us to get at the meat of the controversy on which we are asked to pass. The amended and substituted answer, setting up the defense or defenses to which we referred, was not demurred to; but plaintiff moved the court to strike out substantially everything contained in the pleading (except mere denials) as being "incompetent, irrelevant, and redundant matter." The motion was sustained, and, defendant excepting to the ruling and declining to further plead, judgment was rendered against him for the amount of the note. In entering the ruling the court explained its action by saying: The alleged facts on which these various defenses are sought to be founded are substantially as follows: The appellant, Davis, a farmer, was about to hold a public sale to dispose of a considerable quantity of personal property. Preparatory to such sale, he entered into an agreement with the bank by which said bank was to purchase all the promissory notes given by purchasers of the property so sold, and to that end, and to satisfy itself of the financial responsibility of the makers of the notes, the bank was to be represented at the sale by one of its officers, who was to act as clerk and take the notes, "This answer suggests what might raise sevpayable directly to itself, without indorse-eral issues, but it seems to the court that under ment or guaranty by the appellant. The sale the Negotiable Instrument Law the indorse ment by the defendant upon the original note, [ some consideration other than the original of which the note in suit is but a renewal, would agreement. And if, as counsel say, the bank not admit of oral evidence to explain such in- paid for the note at the same rate and in the dorsement." same manner as it paid for the other notes, Is there anything in the Negotiable In- it only did what it had bound itself to do. struments Act which precludes the defense Still assuming the truth of the answer, it which appellant pleaded? Counsel for ap- must be said the notes, when taken, and all pellee lay much stress in argument for an of them, including the Osborn note, were all affirmance upon the proposition that defend- alike the property of the bank from the moant by its answer set up a plea of fraud in ment of their execution and delivery to Joy the procurement of his indorsement, and it is for the bank. It was not within the power of said that the matters so pleaded are at most Joy or the bank to avoid this result by inmere promises to be performed in the future, serting the appellant's name as payee in the and that a failure to so perform does not Osborn note, without his knowledge or conamount to fraud. As a general abstract sent. Under such circumstances the appelproposition this is no doubt true. It is also lant was charged with no duty or obligation true that the answer indulges very freely in to take upon himself the liability of indorser. the words "fraud" and "misrepresentation," He was in such case no more than the nomibut, when shorn of its unnecessary and lux-nal payee of the note, and if under such ciruriant verbiage, we still have left a fairly in- cumstances, without some new or additional telligible plea of want of consideration and consideration, he did indorse the paper for failure of consideration for the appellant's no other purpose than to pass title thereto indorsement. to the bank, or solely as a matter of tempo of the bank, then his plea of want of consideration would present a legitimate defense to any action upon his indorsement. [1] There is nothing in the Negotiable In-rary accommodation to serve the purposes struments Act (Acts 29th Gen. Assem. c. 130), or in the familiar rule against parol evidence to vary the terms or legal effect of a writing, which, as between the original parties, precludes plea or proof of no consideration or failure of consideration. Farmer's Bank v. Hansman, 114 Iowa, 49, 86 N. W. 31; 7 Cyc. p. 690; Bank v. Robinson, 24 Me. 274, 41 Am. Dec. 385; Trust Co. v. Carlucci, 264 Pa. 226, 107 Atl. 693; Coughlin v. May, 17 Cal. 515. [6] Appellee says in avoidance of this defense that, even if this be true as to the note and indorsement first made, it has no relevance at this time, because this action is upon a new note and new indorsement. Without taking time to consider other features of the answer bearing upon the proposition so urged, we think it quite clear that appellant does plead a failure of consideration as to this indorsement also, as we have before pointed out. The answer alleges that this last indorsement was made upon the as [2] The general principle of the law of contracts, that to be valid and legally enforceable as between the parties thereto an agreement or undertaking of any kind must be supported by a consideration, is too ele-surance and promise of the bank that it held mentary to call for citation of authorities. To that rule commercial paper affords no exception. [3-5] This is not a case in which the plaintiff occupies the relation of an innocent purchaser of the paper or as a holder in due course, if the allegations of the answer be true, and for the purposes of the appeal they must be accepted as true, or at least as being susceptible of proof. The allegation is to the effect that the bank had entered into an agreement to purchase all the notes taken at the sale and assure itself of the sufficiency of such notes by having its own officer act as clerk, make settlement with the purchasers and take their, notes direct to the bank itself, without the assumption of any personal liability thereon by the appellant. According to the pleading, the appellant never at any time had possession of or exercised any dominion over the note. It was taken by the bank and was at all times held by it, and the indorsement was made, not by way of negotiation of the paper to the bank, but was a subsequent act or independent transaction, which, if the answer be true, would require security by chattel mortgage upon the property of Osborn to a value in excess of this debt, and would apply the first money realized from such security to its payment. It is also alleged that, having thus secured the defendant's indorsement, the bank did collect and receive from said security an amount of money sufficient to pay off the note, but, instead of so applying it as agreed, it used the money in payment of other claims against Osborn, leaving the note in suit still unpaid. If this be true, and for present purposes it must be so taken, then there was a palpable failure of consideration for the endorsement and appellant may plead it in defense. Bank v. Hausman, 114 Iowa, 49, 86 N. W. 31. The foregoing is sufficient to indicate our view that the trial court erred in striking the defendant's answer, and that the judgment rendered against him must be reversed, and new trial ordered. What we have said in this opinion in relation to matters of fact will, of course, be understood as having reference to the sufficiency of the answer, and not to the merits of the dispute between the parties. That is a subject to be considered |