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https://www.courtlistener.com/api/rest/v3/opinions/3431827/ | This action was instituted in 1935 by the holders of certain drainage bonds issued by Osceola county, for joint drainage district No. 3, Dickinson and Osceola counties, Iowa. The defendants are the members of the Board of Supervisors, the Auditor and the Treasurer of Osceola county.
The action is in equity, the principal relief demanded being a writ of mandamus to require the Board of Supervisors to make a new apportionment of drainage taxes and issue additional bonds thereon to cover shortages in the bond fund.
Drainage district No. 3 was established in 1916 by the joint boards of Dickinson and Osceola counties. In 1918 the Board of Supervisors of Osceola county levied special assessments on lands of the district in Osceola county aggregating $158,525 for the payment of the proportionate share of the cost of the improvement located in said county. Part of that assessment appears to have been paid in cash. The balance, $130,434 was to be paid in installments. In 1919 the Board of Supervisors of Osceola county issued $130,400 of 5 3/4-percent bonds, payable out of the proceeds of the $130,434 of special assessments. These bonds matured at the rate of about $13,000 per year from 1924 to 1933, inclusive. At the time of the trial $111,200 of the bonds and interest thereon had been paid *Page 821
and plaintiffs held the remaining $19,200, which had matured in 1932 and 1933, and on which interest had been paid to 1932 or 1933. Later $6,300 was paid to apply on the principal of $9,000 of these bonds leaving $12,900 principal of the original issue unpaid.
In 1921 there had been an additional 10 percent ($15,852) levy to cover deficit in cost of construction and also repairs and maintenance. Said levy was partly paid in cash, the deferred balance being represented by a second bond issue of $8,400 at 6 percent made in 1922, with maturities from 1927 to 1936, inclusive; $2,500 of this bond issue is unpaid. However, this bond issue is not directly involved in this suit.
All special assessments covering both issues of bonds have been paid in full, except those upon two certain tracts of land of 160 acres each, which, for convenience, will be here designated by the numbers of the respective sections in which the same were located, to wit: 23 and 26. Both of these tracts were bid in by the Board in trust for the district at scavenger tax sale for general taxes and unpaid installments of the drainage assessments and subsequently tax deeds were secured therefor.
Tract 23 was bid in at scavenger tax sale in 1924 and tax deed was secured in 1927. On this tract the original assessment was $16,022.22, the second assessment $1,602.22. Apparently, the landowner paid no taxes or special assessments after 1918 or 1920. Consequently, there was a loss of the entire amount of the special assessments plus interest. The district also paid general taxes aggregating $2,567.67, and still holds this land which the parties have stipulated to be valued at $5,000.
Tract 26 was bid in at scavenger tax sale in 1930, and tax deed secured in April 1933. On this tract the landowner paid the first three installments of the original assessment, which fell due in 1924, 1925, and 1926. This left an unpaid balance of $6,281.80 on the original assessment and, apparently, the entire second assessment of $897.40. The district also paid general taxes of $938.42, and about $300 for expenses incurred in perfecting the title. Tract 26 was subsequently sold and *Page 822
the district eventually received $6,539.75 in principal and interest. The district collected rentals upon tract 23 to the time of trial and upon tract 26 during the period of ownership, aggregating $7,767.67.
After the district bought the two properties at tax sale it apparently paid all the remaining installments of the assessments against said properties for the original bond issue. These payments were made by warrants drawn upon the consolidated fund of the district and since said payments were then credited to the same fund, the debit and credit items were equal and resulted in no actual change in the account. Some installments of assessments for the second issue of bonds were also thus paid but others were later canceled, apparently in reliance upon Fergason v. Aitken,220 Iowa 1154, 263 N.W. 850.
All the funds of the district were kept in one consolidated account in which was placed all moneys belonging to the district such as receipts from the sale of both issues of bonds and from the portion of the original assessments not included in the bonds, together with funds belonging to the bondholders such as principal and interest upon assessments pledged to said bonds. Payments of expenses of the construction and operation of the district, as well as principal and interest on bonds were made from said fund. This consolidated account was necessarily complicated and plaintiffs secured an audit, which, among other things, purported to segregate the various accounts.
It is agreed that had the original assessment been collected in full it would have been sufficient to care for the bonds. Indeed, if we correctly interpret the audit, there was an excess of $4,763.08 in the interest spread, over the coupons issued. However, the computations of both sides indicate a net loss of considerably more than $20,000, on account of the failure of the owners to pay the assessments on the two tracts. This figure results from adding loss in principal, interest (apparently to 1933), expenses in connection with selling tract 26 and general taxes on both tracts paid to 1938, and subtracting therefrom rents collected to 1938, the sale price received for tract 26 and the $5,000 estimated value of tract 23. *Page 823
Plaintiffs have appealed from the decree of the trial court which denied the relief demanded and dismissed the petition.
[1] I. One question for solution is whether the Board may be required to reassess the other lands in the district, which have paid their assessments in full, to pay the balance owing on the bonds resulting from the failure to collect the assessments levied upon the two tracts. Although there is no charge of fraud in the spreading of the assessments, appellants suggest that the assessments against the two tracts exceeded their actual value. It is sufficient to say it does not appear that at the times the assessments were spread and the bonds issued the values of the properties were not sufficient to support the assessments spread upon them. This court takes judicial notice of the great shrinkage of real estate values which occurred thereafter. Bankers Life Co. v. Emmetsburg, 224 Iowa 1287, 278 N.W. 311.
Nor is it contended that the Board proceeded illegally or improperly in securing the tax titles and handling the land. Its actions in this connection were legal and were indicative of due diligence and good faith. Sections 7589 and 7590, Code of 1939.
These drainage bonds were issued under the provisions of chapter 2-A, sections 1989-a1 to a60, of the 1913 Supplement to the Code of 1897. Section 1989-a27 provides that each bond shall show that it is to be paid only by a tax assessed, levied and collected on the land within the district. Obviously, such bonds are not general obligation bonds. The section also provides:
"In no case shall the amount of bonds exceed the benefits assessed."
As above noted the amount of these bonds did not exceed the assessments.
Said section also provides in part:
"Should the cost of such work exceed the estimates, or shouldthe proceeds of the tax when collected be insufficient to pay theprincipal and interest of bonds sold, a new apportionment *Page 824
of the tax may be made and other bonds issued and sold * * * to meet such excess of cost or shortage in the proceeds of tax * * *." (Italics supplied.)
Apparently the cost of the work did exceed the estimate and the second issue of bonds was made in part to meet such excess of cost. That portion of the quoted provision is not in question in this case.
It is the italicized portion of the statute that here concerns us. More particularly it is the interpretation of the clause "theproceeds of the tax when collected." If possible, this clause should be interpreted to give effect to all of the language used. Presumably, the words "when collected" were used advisedly. The word "when" has been variously defined. It is frequently used as referring to time and meaning, at which time, or at the time. Williams v. Washington Life Ins. Co., 31 Iowa 541, 544. If this definition be adopted, the clause might be read "the proceeds of the tax at the time collected." However, the words "at the time collected" add nothing to the meaning of the clause. "The proceeds of the tax at the time collected" means no more than "the proceeds of the tax." As thus defined the words "when collected" would be redundant and useless. That the legislature intended this result will not be presumed.
The word "when" is also frequently employed to express conditional limitation with a meaning equivalent to the word "if." State v. Haberle, 72 Iowa 138, 33 N.W. 461. Adoption of this meaning would result in the clause reading "the proceeds of the tax if collected." Thereby effect would be given to all the words in the clause. We think this is a reasonable interpretation of the language used when considered in connection with the context.
However, appellants contend that the securing by the district of the property taxed constituted a collection of the proceeds of the tax. With this contention we do not agree. Instead of the collection of the proceeds of the tax, the action of the district amounted to no more than the taking over of the *Page 825
taxed property for the benefit of the bondholders. The proceeds of the tax if collected would have been sufficient to pay the bonds. In this situation the statute does not permit a reassessment upon lands which have paid the original levy.
Loss by those holding securities dependent on realty values has been a common experience. Bankers Life Co. v. Emmetsburg,224 Iowa 1287, 1303, 278 N.W. 311. In the absence of statutory requirement, no good reason appears why the property owners who have paid their assessments in full should be required to make good any loss sustained by bondholders resulting from the decrease in market value of other lands in the district.
Appellants point out that the italicized portions of the statute were amendatory to the original act which already contained the provision, "In no case shall the amount of the bonds exceed the benefits assessed." They say that in view of the foregoing provision of the original act, the amendment added nothing to the statute unless it be interpreted as requiring a new levy under the circumstances of this case. But we think the amendment did have purpose and effect other than as argued by appellants in that it provided a procedure which could be followed in case the principal and interest of bonds issued exceeded the original levy made to pay the same. This conclusion finds support in the fact that both of these provisions still appear in the drainage law (Code sections 7505 and 7509) although, as hereafter noted, section 7509 provides for additional assessments to pay outstanding bonds, only if the original levy was not sufficient.
Section 1989-a27 [Code Supp., 1913] and other parts of the drainage statutes were superseded by similar provisions in the Code of 1924, with changes in language and arrangement. Section 7509, Code of 1924, and subsequent Codes, supersedes the provision here in controversy and provides in part:
"If any levy of assessments is not sufficient to meet the interest and principal of outstanding bonds * * * additional assessments may be made * * *." *Page 826
We think this language clearly limits the right of the board to make additional assessments for the benefit of outstanding bonds to cases in which the original levy was insufficient.
In comparing the statutes it must be remembered that the new statutes largely represent rearrangements of the old rather than new enactments. Therefore, variances in language are not necessarily indicative of changes in meaning. We think the change in the language of section 7509 [Code, 1924] as compared to section 1989-a27 [Code Supp., 1913] was by way of clarification only, that it effected no material change in the meaning of the parts here in question and that under neither statute could a relevy be required in the instant situation. Western Boh. Frat. Assn. v. Barrett, 223 Iowa 932, 274 N.W. 55.
In this connection it may be noted that certain subsequently enacted statutes relative to defaulted drainage bonds (chapter358.2, Code of 1939) do not differentiate between those issued under the former and the present statutes. This chapter appears to recognize the rule that one who has fully paid his share of a levy sufficient to meet a bond issue is not liable for deficiencies resulting from the failure of other lands to pay the tax. Other provisions of the drainage statutes give rise to the same inference. We agree with the trial court that the board could not be compelled to require landowners to pay double assessments to take care of the deficit thus caused.
It may be well to say that the tax deeds extinguished the special assessments on tracts 23 and 26, and, therefore, that said tracts may not be subjected to a deficiency levy for the benefit of said bonds. Fergason v. Aitken, 220 Iowa 1154, 263 N.W. 850.
[2] II. Appellants also complain of the refusal of the trial court to require the board to levy an assessment to replace, in the bond fund, amounts allegedly paid therefrom for repairs and other general expenses of the district. It will be remembered all the district funds were intermingled in a consolidated account. That the district was without sufficient funds to pay outstanding bonds and warrants is conceded. However, *Page 827
all the bonds maturing prior to 1932 were fully paid, without substantial delay.
Appellees attribute the financial difficulties of the district solely to the substantial shortage in the bond fund resulting from the failure of tracts 23 and 26 to pay their assessments. This shortage in the bond fund started in 1919 or 1921 and continued to increase in amount. By 1931 the actual cash shortage occasioned thereby must have been in the neighborhood of $20,000 or $30,000. During these intervening years the district managed to meet the interest payments upon all the bonds and to retire maturing bonds. Obviously such payments must have been made in part by borrowing from other funds. Whether this caused delay in paying warrants and consequent increase of interest burden to the district, the record does not show.
An accountant, employed by appellants, reported that the adverse financial condition of the district was due entirely to the failure of the owners of tracts 23 and 26 to pay their bond assessments. Appellants say this statement was an inadvertence and not in accordance with the facts shown in the record and audits. Another accountant reported to appellants: "The adverse condition of the district is due principally to assessments lost and taxes paid upon the two tracts." Without attempting to set out computations we will say that said loss appears to exceed the amount of the unpaid bonds and to be the cause of the deficit in the bond fund.
Appellants would figure the matter from another angle. It was stipulated that there had been expended out of the consolidated fund $176,861.21 of warrants for construction, maintenance and repairs to November 14, 1938. These figures exclude taxes paid by the district on account of the original drainage assessment and leave as a matter of computation an excess of $2,484.71 over theoriginal taxes and the ten percent relevy, which aggregated$174,377.50.
Assuming the correctness of $176,861.21 as the stipulated expenditure figure, it is necessary to determine what funds were received by the district from which said expenditure could *Page 828
properly have been made. The stipulation covers only the original taxes and 10 percent relevy aggregating $174,377.50. But this is not the total amount received by the district and properly applicable to general expenses. The audit of appellants' accountant shows the following additional receipts in this account: interest $395, miscellaneous refunds $170.95, transfer of district funds from Dickinson county $5,500. Adding these figures to tax receipts of $174,377.50 results in a total several thousand dollars in excess of said expenditures. No diversion of bond funds was shown. It follows that the trial court correctly refused the order of mandamus predicated upon that theory.
[3] III. The County Treasurer was made a party to the suit upon the charge that he had wrongfully paid $3,355 to cover principal and interest of bonds maturing in 1933 thereby withdrawing this amount from the funds available for the payment of bonds maturing in 1932, and entitled to priority. Appellants prayed an order requiring him to restore the funds of the district or for judgment against him upon his failure so to do. The defendants attacked the petition by motion to dismiss on the ground of misjoinder of parties and causes of action. The motion having been overruled the same objection was raised by the answer of the treasurer. In the finding order and decree the trial court found, among other things, that there was a misjoinder of parties and causes of action, sustained the motion to dismiss and dismissed the cause.
The action was in mandamus. As against the officers of the district, it sought an order requiring them to levy drainage taxes. The Treasurer was not an officer of the district. Western Boh. Frat. Assn. v. Barrett, 223 Iowa 932, 935, 274 N.W. 55. Nor was he a proper party to said cause of action. The suit against the Treasurer was for his alleged wrongful payment of bond funds to third parties. Mandamus to require him to make restoration was not proper and appellants in argument say such relief was not sought. No other defendant was involved in this cause of action or was a proper party to it. The causes of action were separate and distinct and were against different defendants. Therefore, the dismissal of the action *Page 829
against the Treasurer was proper. McPherson v. Commercial Bldg. Sec. Co., 206 Iowa 562, 218 N.W. 306.
Other defenses urged by appellees need not be considered. The decree of the trial court is affirmed. — Affirmed.
RICHARDS, C.J., and MITCHELL, SAGER, HAMILTON, STIGER, and BLISS, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431828/ | Section 598.14, Code, 1946, is as follows:
"Alimony — custody of children — changes. When a divorce is decreed, the court may make such order in relation to the children, property, parties, and the maintenance of the parties as shall be right.
"Subsequent changes may be made by it in these respects when circumstances render them expedient."
Prior to August 19, 1946, the parties were married and lived with their minor daughter, Marilyn, in Sioux City, Iowa. On said date, on petition of plaintiff, a decree of divorce from defendant was granted plaintiff on the ground that defendant had been guilty of such inhuman treatment as to endanger the life of plaintiff. The decree in accord with the written stipulation of the parties provided that it should constitute a complete adjudication that plaintiff should "have the sole care, custody and control of the minor child, Marilyn, with leave to the defendant to see and visit said child at reasonable times and places." The stipulation and decree provided that defendant, on each Monday should pay to the clerk of the district court of Woodbury County, Iowa, the sum of $11, for the use and benefit of plaintiff in supporting said child, until she attained her majority, or until further order of the court. The decree provided that neither party should marry within one year from the date of the decree.
A few days after the entry of the decree, plaintiff, with her child, went to the little town of Gray, Iowa, less than one hundred miles from Sioux City, where her mother, sisters and other close relatives lived, to make her home. She testified, without any denial from defendant, that although she would have preferred remaining in Sioux City, she left because defendant threatened violence to herself and Marilyn if she did not get out of Sioux City.
In February 1947, defendant married his present wife at Ponca, Nebraska. On July 31, 1947, under the statutory provision *Page 47
quoted above, defendant filed his application praying for such modification of the divorce decree "as to the court may seem just and right in the premises relative to his rights to see his said minor child." The only ground for the relief and the only change or circumstance subsequent to the divorce decree alleged in the application which might have any tendency to render a modification "expedient" is the following: "That since the entry of said decree the plaintiff has moved to Gray, Iowa, and that upon the defendant making trips to Gray, for the purpose of seeing his minor child, the plaintiff has refused to permit defendant to see his child."
In the resistance filed by the plaintiff this allegation is expressly denied. In addition plaintiff made numerous affirmative allegations charging that after the divorce defendant had threatened to kill her, and that on his last visit to Gray he told plaintiff that he had beat her out of money in the divorce case; that he was now going to take the little girl away from her and that if he got the child she would never see her again, and that as long as she and the child lived both of them would be in his way. She alleged that defendant was neither a fit nor proper person to have the custody of the child for any period of time.
Defendant filed no reply denying these allegations. There was much testimony, not only by plaintiff, but from other witnesses, amply sustaining the allegations of the resistance. Defendant was a witness, but he denied none of this testimony.
The evidence establishes that plaintiff lived with her relatives for a time and clerked in a grocery store. In September 1947, she began teaching in a country school, but lived in Gray with Marilyn in a comfortable home with modern conveniences. Marilyn attends school in town. In 1946-1947 she was in the kindergarten grade, and at the time of the trial she was in first grade and on the Honor Roll. She is happy, healthy and carefree. There is evidence that before the divorce his conduct toward the child was such that she was afraid of him.
He made three trips to see the child. The first time Marilyn was at her grandmother's home, the little girl on seeing him enter the yard ran crying into the house and hid in a bedroom. *Page 48
The grandmother was gracious to him and tried to coax the child to come out, and then asked defendant to go into the bedroom and see Marilyn, but he declined. The next time defendant called he went to plaintiff's aunt's home where she and Marilyn were living. He testified that the aunt and uncle treated him with much courtesy and asked him to come in, and then they called plaintiff and Marilyn, and that while he saw Marilyn, she cried and would not visit with him. On his third visit, which was a day or two before her birthday in August 1947 — after this proceeding was started — he and his wife drove to the aunt's home in Gray. Marilyn was at the store with her mother. On this occasion she came to him to get his presents, but, he testified that she was crying, trembling and frightened.
On each occasion when he called there was no hindrance by plaintiff or any of her family to his seeing the child. The difficulty was the child's fear of him. There is no evidence that plaintiff or her sisters, mother or aunt ever tried to turn the child against her father. The evidence is all to the contrary. Each time he came without notice to plaintiff.
The trial court modified the divorce decree by ordering that defendant should have Marilyn for one week during the Christmas holidays and for two weeks during the summer vacations.
[1] I. The power of the trial court or of this court under said Code section 598.14 should be exercised only when there is a material and substantial change of condition or circumstance respecting one or both parties since the entry of the original decree, rendering a modification therein expedient. The original decree is a binding finality upon both parties with regard to their then existing circumstances. This has been the uniform holding of this court from Blythe v. Blythe, 25 Iowa 266, 268, 269; Fisher v. Fisher, 32 Iowa 20-22, down through Crockett v. Crockett, 132 Iowa 388, 391-395, 106 N.W. 944; Kinney v. Kinney,150 Iowa 225, 227-229, 129 N.W. 826; Youde v. Youde, 136 Iowa 719
-722, 114 N.W. 190 — particularly applicable to the case before us, as is also Hullinger v. Hullinger, 133 Iowa 269-271, 110 N.W. 470; Keyser v. Keyser, 193 Iowa 16, 17, 18, 186 N.W. 438; Goodrich v. Goodrich, 209 Iowa 666, 669-672, *Page 49
228 N.W. 652; Morrison v. Morrison, 208 Iowa 1384, 1386-1389, 227 N.W. 330; Metzger v. Metzger, 224 Iowa 546, 549-552, 278 N.W. 187; Schneider v. Schneider, 207 Iowa 189-191, 222 N.W. 400; Jensen v. Jensen, 237 Iowa 1323, 1324 et seq., 25 N.W.2d 316.
[2] The only matter to be determined on the appeal on defendant's application is whether conditions have so changed since the original decree as to bring it within said section598.14. Defendant's pleading and proof fall short of establishing such a case. The burden was on him to do so. He presented neither a printed nor an oral argument in this court. The threats of defendant against the plaintiff, his express purpose to deprive her of the child, and the latter's fear of the defendant convince us that placing her in his sole custody even for the short periods granted by the court might be a grave injustice and of serious harm to her. We have many times held in proceedings of this kind that the welfare and best interest of the child are fundamental and paramount considerations. It is a prime factor on the issue of expedience. Lindquist v. Lindquist, 148 Iowa 259, 263, 126 N.W. 1109; Neve v. Neve, 210 Iowa 120, 122, 125, 126, 230 N.W. 339; Horn v. Horn, 221 Iowa 190, 195, 196, 265 N.W. 148; Crockett v. Crockett, supra, 132 Iowa 388, 392, 106 N.W. 944; Slattery v. Slattery, 139 Iowa 419, 422, 423, 116 N.W. 608; Bennett v. Bennett, 200 Iowa 415, 417-419, 203 N.W. 26; Freese v. Freese, 237 Iowa 451, 457-459, 22 N.W.2d 242; Axline v. Axline,237 Iowa 1051, 1057, 24 N.W.2d 443; Vierck v. Everson, 228 Iowa 418, 421, 291 N.W. 865; Goodrich v. Goodrich, supra, 209 Iowa 666, 671, 228 N.W. 652; Jensen v. Jensen, supra, 237 Iowa 1323, 1324, 1325, 1332, 25 N.W.2d 316; Ladd v. Ladd, 188 Iowa 351, 355, 356, 176 N.W. 211; Ostheimer v. Ostheimer, 125 Iowa 523, 525, 101 N.W. 275.
[3] Because of the modification in the supplemental decree of the adjudication in the original decree of divorce that the plaintiff should have the sole care, control and custody of the minor daughter, Marilyn, with leave of defendant to see and visit the child at reasonable times and places, the supplemental decree is reversed with respect to said modification, and the *Page 50
district court is directed to make proper order striking said modification and to reinstate the decree of divorce in every respect as originally entered.
II. With respect to plaintiff's application for a modification of the original decree of divorce by increasing the payments by defendant, for the use and benefit of plaintiff in supporting Marilyn, from $11 a week to $22 a week, it is our conclusion that there has been no such changes in the circumstances of the parties since the entry of the original decree to justify modification and increase. The supplemental decree insofar as it denied said application is therefore affirmed.
The supplemental decree is therefore reversed in part and affirmed in part, as herein set out, with the costs in the court below and on the appeal taxed to the defendant. — Reversed in part and affirmed in part.
All JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431830/ | This proceeding in this court finds its origin in an application for order filed by the petitioner through his attorney in the respondent court on the 9th day of October, 1929.
It appears that the petitioner, John R. Hoskins, on the 9th day of October, 1929, and for some time prior thereto, was an inmate of the State Penitentiary of Iowa at Ft. Madison, Iowa, under a life sentence, having theretofore entered his plea of guilty to an indictment for murder in the first degree for the felonious killing of his wife, Hulda Hoskins, and was thereupon committed, under the judgment entered February 20, 1919, by the trial court, to said penitentiary for the period of his natural life. The indictment in said cause was returned January 20, 1919, and his plea of guilty thereto was entered January 22, 1919.
The petitioner's application further alleges that on January 20, 1919, John R. Hoskins was indicted for the murder of one Gladys Campbell (daughter of Hulda Hoskins) and was also indicted for the murder of one Ray Campbell (son of Hulda Hoskins); that said indictments have not been made public nor has the defendant been apprehended or arrested thereunder. It is further recited in the petition of Hoskins that his attorneys have requested the county attorney of Adams County, Iowa, and the Clerk of the District Court of Adams County, Iowa, to file said indictments so that defendant might file pleadings in said causes, but that said county officers have refused to file the same or allow counsel for defendant to see the same. It is further recited in petitioner's application that the said indictments for the murder of Gladys Campbell and of Ray Campbell were illegally returned in this: That the grand jury which returned said indictments was illegally selected, drawn, impaneled, and sworn, and that the members thereof were not certified by the judges of election, and that without the filing of said indictments by the clerk and the entering of same on the appearance docket, this defendant is unable to make proof to the court showing that said indictments are void, as there is no case docketed under which pleadings may be filed. It is further recited that it is the duty of the court to quash the indictments against the defendant for the murder of Gladys Campbell and of Ray Campbell for the reason that said indictments are void *Page 267
and that this defendant desires immediately to file motions directed at said indictments, and that defendant is willing to file said motions within such reasonable time as the court shall fix and to have an immediate hearing thereon.
The prayer of said application is that the court enter an order requiring the clerk of the District Court of Iowa in and for Adams County to file the two indictments to which reference has heretofore been made, and to enter the same on the appearance docket.
Subsequently, to wit: November 21, 1929, a second application was filed by the petitioner John R. Hoskins for an order to be entered by the respondent Judge of the District Court of Iowa in and for Adams County, directing the Warden of the said State Penitentiary to have and produce Hoskins in court at the time of the hearing on the first application.
On November 25, 1929, the applications of the petitioner came on for hearing, and on said date the following entry was made:
"It is ordered and adjudged that the District Court of the State of Iowa in and for Adams County hereby refuses and declines to hold any hearing in said cause, and denies a hearing to the defendant at this time, and denies the application of defendant for an order on the warden of the penitentiary to produce the defendant. To all of which the defendant excepts."
This was an appealable order or judgment, and it is a well recognized legal principle in this jurisdiction that when an aggrieved party has a remedy by appeal, certiorari does not lie. It results that the writ heretofore issued by this court must be and is dismissed.
All Justices concur. *Page 268 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431832/ | Appellees have filed no brief and argument and we have been to the labor of ascertaining whether there exist any rules of law in this state which sustain their contention. We have found none.
Appellees' claim is accurately stated by appellants in argument as follows: *Page 845
"The Plaintiff Appellees object in particular to that part of the ordinance which requires that they deliver to the consumer or his or their agent, a City weight ticket, before any of the commodity, produce or other article or articles of merchandise is removed from the vehicle; said weight ticket showing:
"1. The commodity, the date, the name of the weighmaster, the name and address of the person, firm or corporation for whom the weighing was done, the name of the driver of the vehicle bringing such commodity to the scales, the kind of vehicle, the name and address of the purchaser or consignee, the total or gross weight of the commodity weighed and the conveyance in which it is loaded together with the driver and any other person who may be on the vehicle when weighed, the tare weight of the vehicle including driver and any other person who may have been on the vehicle when weighed, the net weight of the commodity.
"In order to obtain the above information, because of the nature of the Plaintiff Appellees' business, it does become necessary for them to unload at a city scales in order to get the tare weight of their vehicle and then of course, they must reload to make the delivery."
That the city had power to enact an ordinance along the general lines proposed by the one in question is affirmatively established by a reading of section 5768 of the Code. That it has the power to appoint a sealer is declared by section 3255 of the Code.
The power of cities to enact ordinances of this kind has frequently been before the courts, and we, dealing with the subject, said, in Miller v. City of Webster City, 94 Iowa 162, at page 165, 62 N.W. 648, 649, this:
"As the statute expressly confers upon the city the authority to establish markets and to provide for the weighing of commodities, and contains no limitations upon the powers granted, the time, manner, and expediency of its exercise are left to the discretion of the corporation; and the judgment of its officers upon such matters cannot be controlled by the courts, so long as they act within the scope of their authority. The discretion of a municipal corporation, within the sphere of its powers, is as wide as that possessed by the government of the state, subject, however, to the general rule that the ordinances must be *Page 846
reasonable. The action of the city council in the exercise of expressly delegated powers cannot be questioned upon the ground that it is in conflict with public interests."
See also, Davis v. Town of Anita, 73 Iowa 325, 35 N.W. 244; State of Iowa v. Smith, 123 Iowa 654, 96 N.W. 899.
Having thus found that cities have the power to enact ordinances of this kind if reasonable in scope, we have next to examine whether the one under investigation exceeds the power of the city council to enact it in the terms in which it is couched. Before turning to the legal aspects of that question, it is not out of place to call attention to appellees' own admission, speaking through Huss, one of the appellees. His testimony may disclose the reason why this ordinance was passed. Huss and his associates were engaged in trucking coal from mines to various citizens of Creston, and delivering the same within the city limits. As above indicated, they object to having their loads weighed to determine the tare before making deliveries. Appellee Huss said, in speaking of the methods followed in dealing with their customers:
"I go down and unload whatever they want, the nearest we can guess that * * *. When I have two loads on or sufficient coal for two people or two orders, when I unload the first order, we guess at the amount of pounds he paid me for. * * * I do not give him a weight ticket at that time. I guess it somewhere near the amount he is supposed to get."
The foregoing would seem to indicate a justification for an ordinance of the kind under consideration; and it should be sustained unless compelling reasons forbid.
This precise question has been considered by the supreme court of the United States in Hauge v. City of Chicago,299 U.S. 387-392, 57 S. Ct. 241-244, 81 L. Ed. 297, and an ordinance of this kind has been sustained. The headnote to that case, which accurately states the sense of the opinion, is as follows:
"A municipal ordinance requiring, under penalty, that merchandise sold in load lots by weight, delivered by wagon, truck, or other vehicle within the city, be weighed by a public weighmaster whose certificate stating the gross weight, the tare weight of the vehicle, and the net weight of the load, shall be *Page 847
delivered to the purchaser, is not so unreasonable as applied to one trucking coal from a mine outside the city where it is weighed on state-tested scales, who to comply therewith must unload and reload to permit his empty vehicle to be weighed, as to violate the due process clause of the Fourteenth Amendment; nor does it unduly discriminate against him in favor of dealers with yards in the city."
The decision in the last-cited case is based upon reasoning so sound as to admit of no argument against it. Since it fits precisely the case before us we are compelled to and do hold that the trial court was in error in its decree. Its ruling is, therefore, reversed. — Reversed.
STIGER, C.J., and HAMILTON, DONEGAN, RICHARDS, KINTZINGER, and MILLER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431833/ | On December 10, 1926, the defendant Joe Cordaro was indicted by a Polk County grand jury for the crime of uttering a forged instrument. Thereafter, during the January, *Page 226
1927, term of the Polk County district court, Cordaro was convicted by a jury, and later, the district court sentenced him to serve a term of 15 years in the penitentiary and pay a $1,000 fine. The appeal bond was fixed at $1,000. Cordaro appealed from the Polk County district court to the Supreme Court, and executed a bond therefor, as principal. Wilbert J. Smith, defendant and cross-petitioner and appellee, signed that bond, as surety. As a result of the appeal, the Supreme Court, on March 13, 1928, affirmed the judgment of the district court. Hence, the principal and surety on the appeal bond became liable for the $1,000 fine and costs, according to the conditions of that bond. This proceeding was then instituted by the State against the principal and surety on the bond, to recover the $1,000 fine and costs. Whereupon, Wilbert J. Smith, the surety, defendant in the State's action to recover on the bond, became a cross-petitioner against the cross-defendant and appellant, Vernon W. Lynch.
In the cross-petition, the appellee Wilbert J. Smith asked judgment against the appellant, Vernon W. Lynch, for any amount of money which the said Smith might, under the foregoing appeal bond, be adjudged liable for by the district 1. EVIDENCE: court. The basis for recovery set forth in the materiality: cross-petition was that Lynch, the appellant, immaterial- had agreed to indemnify and save the appellee ity of Smith harmless from any liability on the bond. receipt Judgment was entered against Cordaro and Smith under in favor of the State. No appeal is taken issues. therefrom, and therefore the same has become a finality. Furthermore, the jury returned a verdict in favor of the appellee Smith against Vernon W. Lynch, appellant, on the issues raised by the cross-petition, and judgment thereon was entered accordingly. From this Vernon W. Lynch has appealed, and the matters involved in the cross-petition are the only issues now before us.
Many reasons are assigned by the appellant, Lynch, as to why the judgment of the district court should be reversed; but we find it necessary to consider but one of them, and that one relates to the action of the district court in admitting in evidence an exhibit known in the record as "3," which, in words and figures, is as follows: *Page 227
"EXHIBIT 3
"No. 108. 9/17, 1926. Received of George Cordaro Thirty-nine Hundred and no/100 Dollars to be used for the purpose of settlement with Surety Companies $3900.00. Sgn. Vernon W. Lynch."
Vernon W. Lynch, who signed the foregoing exhibit, is a practicing attorney in Des Moines, and the appellant here. Appellant was the attorney for the defendant Cordaro in the Polk County district court and the Iowa Supreme Court, respectively, during the trial and appeal of the case above-mentioned, known as "State of Iowa v. Joe Cordaro." Accordingly, appellant prepared and procured the appeal bond aforesaid, on which the appellee Smith was the surety. For his cause of action against the appellant in the cross-petition, the appellee states, among other things:
"* * * 3. That to induce this defendant [the appellee] to sign said bond [the appeal bond above-mentioned], said defendant [appellant] Vernon W. Lynch orally stated, represented, and promised to this defendant [appellee] that he, the said Lynch [appellant], had collected from said defendant Joe Cordaro [the principal on the bond] ample funds and security to pay said fine ($1,000) imposed by the district court of Polk County, Iowa, and all costs that might be taxed against said Cordaro in the event of an affirmance of his said conviction by the Supreme Court of the state of Iowa; that this defendant [appellee] need never worry about paying said bond; that he, the said Vernon W. Lynch [appellant], would see to it that said bond would be paid, and that this defendant [appellee] would be indemnified and saved harmless. That this defendant [appellee], in consideration of, and relying upon said inducements, statements, representations, promises, and agreements of the said defendant Vernon W. Lynch [appellant], and at the special instance and request of said Lynch [appellant], thereupon signed said bond as surety for said defendant Joe Cordaro.
"4. That this defendant [appellee], except for the inducements, promises, and representations of said defendant Vernon W. Lynch [appellant], would not have signed said bond as aforesaid. * * *" *Page 228
Those allegations of the cross-petition were denied by the appellant.
I. During the trial, the appellee, in order to prove the aforesaid averments of the cross-petition, offered, and, over appellant's objections, introduced in evidence, the Exhibit 3 above set forth.
George Cordaro, named in Exhibit 3, was Joe Cordaro's father, and Jim Cordaro, hereinafter mentioned, is Joe's brother. It is to be recalled that Exhibit 3 declares that the receipt of money there acknowledged by appellant was from George Cordaro. Likewise, that exhibit specifically states the reason the appellant was intrusted with the money: to wit, "for the purpose of settlement with the surety companies." Under the record, it fairly appears that "surety companies," before the receipt was given, had signed certain bonds wherein Joe Cordaro was principal. Resulting from that transaction appears to have arisen an obligation on Joe Cordaro's part in favor of said surety companies. Then, for the purpose of discharging that obligation, the $3,900 amount named in the receipt, Exhibit 3, was given to the appellant. Nothing in the receipt or in the entire record, however, indicates that the said $3,900 came from Joe Cordaro. Nor is it shown by that instrument or the whole record that such money could be used by Lynch for any other purpose than to settle with the surety companies. Appellee Smith, in his cross-petition, it is to be recalled, as a foundation for a cause of action, stated that appellant had obtained sufficient money from the aforesaid defendant Joe Cordaro (not George or Jim Cordaro) for the express purpose of satisfying any contemplated liability on the appeal bond. Although the exhibit indicates that the money named therein came from George Cordaro, yet it appears in that part of the record relating to appellant's evidence that said funds may have belonged to Jim Cordaro, Joe's brother. Such evidence was produced subsequent to the introduction of the exhibit, and after appellee had rested his case. Perhaps the money did not belong to George Cordaro, but this does not mean that it was the property of the defendant Joe Cordaro. The inference to be drawn in this regard is that the money was the property of Jim Cordaro. Moreover, that portion of the exhibit which limited the use of the money to the settlement of the surety companies' cases is still unimpeached. Nothing in the *Page 229
record suggests that the funds named in the exhibit could be used for any other purpose. Appellee Smith had the burden of showing the materiality of the exhibit, and failed to do so.
Consequently Exhibit 3 fails to support any allegation in the cross-petition; for the receipt, considered with the whole record, shows that the money was obtained from George or Jim Cordaro, rather than Joe, and that it was to be used for the purpose of settling with certain surety companies, and not to secure the appellee from loss on the appeal bond in question. So there are at least two reasons why the exhibit does not support the allegations of appellee's cross-petition. They are: First, that the money named did not come from Joe Cordaro; and second, that it should be used for a specific, definite purpose, which was to settle with the surety companies. That exhibit, therefore, furnished no support whatever for appellee's cause of action, and hence was not admissible, because immaterial.
II. But it is said by the appellee that the appellant did not make proper objections to the introduction of the exhibit. Appellant did object when the offer was made, and at the close of all the evidence, he moved the court to withdraw 2. TRIAL: the exhibit from the jury's consideration. Both reception of the objection and the motion were overruled. Two evidence: grounds are named in the objection to the objections exhibit. Generally stated, they are that the "incompetent exhibit shows on its face that it is incompetent and and immaterial, because not tending to prove any immaterial:" issue in the case. Irrelevancy was not sufficiency. specifically named in the objection, and the appellee contends that immateriality was not sufficient to exclude the exhibit. With this, under the facts here presented, we do not agree. "Immaterial," is defined by Webster's New International Dictionary to mean, "of no substantial consequence; without weight or significance; unimportant." Another definition, given by the Kentucky Court of Appeals, in Ray v. Commonwealth,207 Ky. 96 (268 S.W. 804), is:
"* * * the word `material' simply means `of consequence,' or `not to be dispensed with * * *.'"
Also, the Supreme Court of Washington, in Hansen v. Sandvik,128 Wash. 60 (222 P. 205, 207,) on page 63, said:
"`Material' is defined as `important,' `more or less *Page 230
necessary,' `having influence or effect,' etc. Black's Law Dictionary. And `a material fact is one that is essential to the claim or defense, application, etc., without which it could not be supported.' Black's Law Dictionary. The word `materially' means and is understood the same in the ordinary vernacular as in its technical definition."
To the same effect is a discussion by the Oklahoma Supreme Court in Connecticut Fire Ins. Co. v. George, 52 Okla. 432
(153 P. 116, 119), on page 441:
"`Webster defines "material" to be something "of solid or weighty character; substantial; of consequence; not to be dispensed with; important; specific; especially law, such as does or would affect the determination of a case, the effect of an instrument, or the like; constituting a matter that is entitled to consideration; such as must be considered in deciding a case on its merits."' (Thompson v. State, 6 Okla. Crim. 50, 117 P. 216.) `Evidence offered in a cause, or a question propounded, is material when "it is relevant and goes to the substantial matters in dispute, or has a legitimate and effective influence or bearing on the decision of the case." (8 Ency. of Ev. p. 550.)'"
Also, see Faulkner v. Bridget, 110 Mo. App. 377 (86 S.W. 483).
As to the decisions of this court, it is found that we said inCrouch v. National Livestock Rem. Co., 205 Iowa 51, on page 60:
"The objection that testimony is incompetent and immaterial is sufficient, where the grounds of objection are discernible."
On many occasions, this court has sustained the exclusion of evidence because it was not material. Boileau v. Records Breen,165 Iowa 134 (local citation 140); Campbell v. C., R.I. P.R.Co., 45 Iowa 76; Jones v. Hopkins, 32 Iowa 503 (local citation 505); Walthelm v. Artz, 70 Iowa 609 (local citation 610);Sullivan v. Herrick, 161 Iowa 148 (local citation 150).
There is a distinction between materiality and relevancy, and we are not here confusing the two meanings, as generally used in discussing evidence. Without a holding, however, that materiality and relevancy are equivalent, it is apparent that the objection here interposed was sufficient. If the exhibit was not *Page 231
material or competent under the issues, it should not have been admitted. Obviously it was not material, because the contents of the receipt furnished no support of any kind or nature for the allegations in appellee's cross-petition. Recalling again the definition of "immaterial," it is remembered that, according to the universal meaning, it signifies the following: "Of no substantial consequence; without weight or significance; unimportant."
Therefore, if the exhibit offered, when considered in relation to the cross-petition, had no "substantial consequence, was without weight, had no significance, and was unimportant," it was inadmissible. Appellant's objection, therefore, although not including the word "irrelevant," was broad enough to exclude the evidence. The objection contained two grounds, to wit, incompetency and immateriality. Over that objection, the evidence should not have been admitted.
III. Furthermore, appellee contends that the objection was so general as not to require the trial court's recognition. During our discussion in Crouch v. National Livestock Rem. Co. (205 Iowa 51), supra, on page 59, the following language appears:
"We have recognized, as a general rule, that the objection that evidence is `immaterial, irrelevant, and incompetent' is not sufficient to raise a specific objection upon appeal."
Manifestly, however, the opinion in the Crouch case does not purport to lay that principle down as a rule affecting all cases. Contrary to that, the opinion expressly recognizes exceptions in these words:
"But there are exceptions to this general rule. InInternational Harv. Co. v. Chicago, M. St. P.R. Co., 186 Iowa 86, we said: `The value and sufficiency of the general and all-inclusive objection "incompetent, immaterial, and irrelevant" depends largely upon the nature of the evidence against which it is urged. * * * Thus, if the grounds of objection are perfectly obvious, and the evidence is wholly inadmissible for any purpose, the general objection is sufficient.' * * * The objection that evidence is incompetent is sufficient where the evidence is incompetent for any purpose. * * * The objection that testimony is incompetent and immaterial is sufficient where the grounds of objection are discernible. * * * Where evidence is immaterial, an *Page 232 objection to it as immaterial is sufficiently specific." (The italics are ours.)
In the case at bar, the objection was specific, and pointed out that the exhibit showed upon its face its incompetency and immateriality. The effect of the objection was to call the court's attention to the fact that the exhibit did not sustain the allegations of appellee's petition because: First, the money therein named did not come from Joe Cordaro; and second, it was given for the purpose of settling with the surety companies, as distinguished from indemnifying the appellee.
This point urged by appellee, therefore, is without merit.
IV. Nevertheless, appellee continues to argue that the exhibit in question was material because of the following excerpts from appellee Smith's testimony:
"Q. What, if anything, was said [by the appellant]as to the amount of funds that Mr. Lynch [appellant] had to take care of the fine and costs under the bond, Exhibit 1? A. He told me that he had taken a mortgage on Cordaro's home, — 3. EVIDENCE: that is, on Joe Cordaro's home, — and that he materiality: had received around $5,000. From 1925 to 1927, materiality there was no other lawyer acting for my mother of receipt. and me. Our papers were left with him [appellant]. I reposed confidence in Mr. Lynch [appellant] at that time. Q. Now, when Mr. Lynch [appellant] spoke about the money that he had gotten, was there anything said by him as to where it came from? A. Yes, sir. He stated it came from the Cordaro family. George Cordaro is Joe Cordaro's father. Exhibit 3 is in Vernon Lynch's [appellant's] handwriting. Q. Mr. Smith [appellee], did Mr. Lynch ever say anything to you about an effort made on his part to settle with some surety company in respect to Joe Cordaro's case? A. Yes, sir. Q. What did he [appellant] say as to whether or not he had made settlement with the surety company? A. He said he could not settle with them. Q. And what, if anything, was said by Mr. Lynch [appellant] as to his having turned back to the Cordaros money that they had paid to him for that purpose? A. He said that the Cordaros had paid him that amount to try to settle with the bonding company, and that he had been unable to reach a settlement with them. Q. What, if anything, was said [by appellant] about the money that he had *Page 233
[thus] received? A. And that he was retaining that money as security for any costs and fines that might accrue."
Basing his contention upon the last answer, appellee insists that the exhibit was admissible. To bring about that result, appellee emphasizes the words "fine or costs that might accrue." His theory is that those words relate to the fine and costs under the bond for which he was surety. Clearly, however, there is no basis for appellee's conclusions in that regard. Even according to the appellee's version of what the appellant said upon the occasion in question, the words "fine or costs that might accrue" obviously referred to the surety companies' case, which appellant had attempted to settle. According to the questions and answers above set forth, no other idea was expressed. Appellee Smith was asked: "And what, if anything, was said by Mr. Lynch [appellant] as to his having turned back to the Cordaros money that they had paid to him for that purpose?" He answered that appellant said the same was being retained "as security for any fine or costs that might accrue." Accrue where? Plainly, in the surety company case about which the appellant was talking. No other case there is mentioned. It is to be remembered that the money named in the exhibit has not been shown to be the property of Joe Cordaro, the defendant. Also, the exhibit positively indicates that the money was for the surety companies' cases. A conversion would result, therefore, if appellant used the money belonging to some person other than Joe Cordaro for a purpose not intended by the owner.
Surely, then, the statements of appellant did not, under the circumstances, make the exhibit admissible.
V. Finally, appellee Smith asserts that the exhibit was corroborative of the evidence tending to prove appellant's receipt of $5,000 from the Cordaros. As a foundation for that claim, appellee Smith refers to his own answer to the following question above quoted, and, for convenience, repeated here:
"What, if anything, was said [by the appellant] as to the amount of funds that Mr. Lynch [appellant] had to take care of the fine and costs under the bond, Exhibit 1? A. He told me that he had taken a mortgage on the Cordaros' home, — that is, on Joe Cordaro's home, — and that he received around $5,000."
Although the appellant at this place in the record did say *Page 234
that he had received the $5,000 for the purpose of taking care of the fine and costs on the appeal bond, yet Exhibit 3 would not become material; for the $5,000, according to the answer, was received from Joe Cordaro, or from the Cordaro family, for the express purpose of settling any loss on the appeal bond, while there is nothing to show that the money named in the exhibit came from Joe Cordaro at all, nor does it appear from the instrument, or otherwise, that the money therein named, even if delivered by George or Jim Cordaro (Joe's father and brother, respectively), could be used for anything except to settle the surety company cases. So the exhibit is not corroborative of the $5,000 transaction.
Under no stretch of the imagination, then, could it be said that the appellant had gotten the money named in the exhibit to secure appellee. Thus it is seen that the exhibit did not in any way corroborate a material issue, was immaterial, and should not have been admitted into the record. Prejudice is presumed because the district court committed this error. Manifestly, the jury would get the idea that Exhibit 3 corroborated in some way appellant's claim in reference to the security which appellee claims appellant was holding for him, to protect against loss under the appeal bond. Undoubtedly, the jury would be misled.
Wherefore, so far as it relates to the issues raised on the cross-petition, the judgment of the district court should be, and hereby is, reversed. — Reversed.
MORLING, C.J., and EVANS, FAVILLE, and GRIMM, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431834/ | The controversy involved herein is a continuation of one which was adjudicated by this court in 1931. For our former opinion, see Kurth v. Continental Life Ins. Co., 211 Iowa 736,234 N.W. 201.
In our former opinion, we pointed out that the suit is based on a life insurance policy containing a provision for the payment of one tenth of the face of the policy each year and the waiver of premiums, during such time as the insured should furnish satisfactory proof that he has been wholly disabled by bodily injury or disease for a period of not less than sixty days, that such disability is presumably permanent and that he will be wholly and continuously prevented thereby from pursuing any gainful occupation. The provisions of the policy are set out verbatim in 211 Iowa at page 737, 234 N.W. at page 201, of said opinion. In construing such provisions, this court states in211 Iowa at page 738, 234 N.W. at page 202:
"There appears to be no ambiguity in these provisions, and they should cause no particular difficulty in construing them, except as respects the starting point. As said before, the contingency insured against is: that the insured has been wholly disabled for a period of not less than 60 days, and that such disability so suffered is presumably permanent, and that he will be wholly and continuously prevented thereby from pursuing any gainful occupation. This may be clarified by analysis in this manner: If the insured has been wholly disabled (a) for a period of not less than 60 days, and (b) such disability as has existed for not less than 60 days is presumably permanent, and (c) the insured will be wholly and continuously prevented by the disability that has existed for a period of not less than 60 days, which disability is presumably permanent, from pursuing any gainful occupation. It would thus appear that these three separate factors were combined, and that upon the combination only are the benefits to accrue."
At page 739 of 211 Iowa, 234 N.W. at page 202, this court also states:
"The words, `permanently' and `continuously,' standing alone, would imply that the disability was a lasting and absolutely fixed condition; but when these words are taken in connection with the language used in other provisions of the contract, *Page 244
the only fair construction to be placed on such words is, not that the disability which has existed during 60 days must exist forever, but that such disability has existed for a period of not less than 60 days and by a fair presumption will continue for a future period."
The provisions of the policy in reference to payment of disability benefits after the disability contemplated by the policy has been established, are as follows:
"After accepting proofs of disability under this policy the company shall have the right at any time thereafter, but not more frequently than once a year, to require proof of the continuance of such disability; and if the insured shall fail to furnish such proof, or if it appears that the insured has so far recovered as to be able to engage in any gainful occupation, the company's obligation to pay the premium and installments shall cease."
In construing the provisions last above quoted, this court states in 211 Iowa at page 739, 234 N.W. at page 202, as follows:
"By the insertion of the foregoing clause in the contract, it is obvious that the disability by which the benefits may accrue and become obligations of the company is not absolutely expected to be absolutely permanent and absolutely continuous and to absolutely prevent the insured during his after lifetime from engaging in any gainful occupation; because this insertion was intended to govern when and if such presumably permanent disability might be removed by some means or other, and the company desired what benefits it might have by reason of such removal."
On the former trial before this court, appellant relied upon the decision of this court in the case of Hurley v. Bankers Life Co., 198 Iowa 1129, 199 N.W. 343, 37 A.L.R. 146. In commenting upon such decision, this court states in 211 Iowa at page 741,234 N.W. at page 203, as follows:
"It will be noticed particularly in the Hurley case that thetime element is not a factor, — that is, the continuance of thedisability in the future. To become entitled to the waiver *Page 245
of premiums in that case, the insured must perforce become totally, permanently, and incurably disabled, and, by the very language, precluded from any possibility of a recovery in any degree. * * * In the case at bar, this court is not confronted with the time element, except as it applies to the period forwhich the claim is being made; and we must hold that the disability suffered by the appellee is affected only by the timebetween the starting or commencement of the disability and thedate the decree was rendered in his favor by the lower court."
Again at page 749 of 211 Iowa, 234 N.W. at page 207, this court states:
"It is plain that the established total disability for a period of not less than 60 days is required by proof, but also the absolute permanency and continuance of such disability must beestablished by later proofs; that, upon the furnishing of the first proof, the insured is entitled to a temporary grant of benefits promised."
The opinion of this court on the first appeal affirmed a decree which determined that, under the provisions of the policy, the plaintiff was entitled to waiver of the premium due July 9, 1928, and the sum of $500, one tenth of the face of the policy accruing December 17, 1928. The petition of plaintiff in this case seeks recovery of additional sums of $500 claimed to have become due on December 17th in the years 1933, 1934, 1935, 1936 and 1937, with interest to the date of judgment and waiver of annual premiums which would otherwise have been due on July 9th of each of said years, after 1933.
The pleadings in this case are quite voluminous. Some matters are controverted in the pleadings, but are not controverted in the testimony and proof. In order that the apparent issues raised by the pleadings may be disregarded and the actual issues be more clearly understood, we undertake to state first the matters about which there is no dispute in the record.
The policy here sued upon was originally issued to the plaintiff by the First National Life Insurance Company of Pierre, South Dakota, under date of July 9, 1923. It provided for 20 annual premiums of $188.95 each, was in the principal sum of $5,000 and contained the provisions in reference to *Page 246
waiver of premium and total disability benefits above referred to.
On April 3, 1924, the plaintiff's policy was reinsured by the Continental Life Insurance Company of St. Louis, Missouri, and an assumption of policy liability was endorsed by such company upon plaintiff's policy.
On March 8, 1928, while plaintiff was employed as manager of a lumber yard at Lennox, Iowa, he received an accidental injury by falling backwards from a runway in a lumber shed, a distance of 7 or 8 feet. The circumstances of this original injury are again fully recounted in the record herein. The testimony is substantially the same as that offered at the first trial, and, as the facts are quite fully set forth in the former opinion of this court, it is not necessary for us to repeat them.
Plaintiff brought suit against the Continental Life Insurance Company, which had reinsured his policy, and recovered judgment and decree, which was affirmed by this court. Such decision adjudicated that the policy was in force at the time of his injury, that, as a result of the injury he had sustained disability within that contemplated by the provisions of the policy which entitled him to the sum of $500 on December 17, 1928, and reimbursement for the annual premium, paid after his injury, which the company should have waived because of such disability.
The judgment was paid and the company endorsed waiver of premium upon the policy in accordance with the decree. Plaintiff was also paid annual installments of $500 claimed as of the dates of December 17, 1929, 1930, 1931 and 1932, and the payment of premiums was waived for those years. On June 9, 1933, the Continental Life Insurance Company forwarded blanks to the plaintiff for filing of claim for continuation of total and permanent disability benefits under his policy, asking for a statement by claimant and his attending physician, and for a return of the same in order that the claim committee might have ample time to consider the case before July 9, 1933, which was the due date of the annual renewal premium. The blanks were filled out and returned by plaintiff, and on July 13, 1933, the Continental Life Insurance Company wrote plaintiff as follows: *Page 247
"This is to advise that we are today waiving payment of the 1933 annual renewal premium due under your Policy No. FN16169, thereby placing this policy in force to July 9, 1934."
Thereafter, in September, 1933, plaintiff was examined by a number of physicians at the request of the company, and, on December 18, 1933, the company wrote the plaintiff as follows:
"Concerning your claim for Disability Benefits under your Policy No. FN-16169, recent investigation made by this Company, discloses that you are no longer so totally and permanently disabled as defined in your policy contract and this is to give you formal notice that your claim is therefore cancelled. We are discontinuing the payments under this policy and it will be necessary that you resume the payment of premiums, commencing with the premium due July 9, 1934 under this policy.
"This is in no sense a repudiation of your policy, on the contrary, we recognize the existence and continuance of your policy."
No further payments have been made to plaintiff and no further waiver of premium endorsements have been executed in reference to his policy. The company became financially involved, was placed in the hands of a receiver, and, on July 25, 1936, the circuit court of the city of St. Louis adjudged the said Continental Life Insurance Company was insolvent and that a continuation of certain orders of rehabilitation theretofore entered by the court would be futile. It terminated such orders and authorized, directed and empowered the superintendent of the insurance department of the State of Missouri to settle and wind up the affairs of the company. On the same day, to wit, July 25, 1936, plaintiff's insurance policy was reinsured by the Kansas City Life Insurance Company, appellant herein, which company executed a certificate of assumption whereby it assumed and agreed to perform the obligations of the Continental Life Insurance Company under said policy, subject to the provisions and conditions of the contract of sale and reinsurance. This suit was instituted in the district court of Scott county, Iowa, against both the Continental Life Insurance Company and the appellant, Kansas City Life Insurance Company, but, by reason of the insolvency and dissolution *Page 248
of the Continental Life Insurance Company, and the reinsurance of its obligations by the appellant herein, we will treat the appellant as though it were the only insurance company involved.
The petition, as amended, alleges, in addition to many of the facts herein reviewed which are undisputed, that the plaintiff has been disabled within the meaning of the total permanent disability provisions of the policy continuously since March 8, 1928, and, notwithstanding such disability, has been refused payment of the indemnity falling due in December, 1933, and December of each year thereafter. Plaintiff also alleges that the denial of liability by the Continental Life Insurance Company, under date of December 18, 1933, was in violation of the provisions of the policy, and in violation of the terms of the decree, which was affirmed by this court in 1931. Plaintiff prayed that the court construe its former decree and the policy referred to therein and determine that appellant's obligation to pay the premiums and installments has not ceased; that appellant company be ordered to endorse waiver of premium upon the policy, and that appellant be ordered to pay the sum of $500, as the same became due on December 17, 1933, 1934, 1935, 1936 and 1937, with interest thereon, and that the decree also bind appellant to pay the sum of $500 each year thereafter during the life and continued disability of plaintiff and enter a specific waiver of premium on said policy on or before July 15th of each year until and unless appellant company require plaintiff to furnish proof of the continuance of his disability and plaintiff fail to do so or appellant cause it to appear that plaintiff has so far recovered that he is able to engage in some gainful occupation and that the court retain jurisdiction of the cause for the purpose of making such further orders as equity may require during the life of plaintiff and the continuation of his disability.
The answer of the appellant company admitted some of the allegations of the petition and denied others and prayed that the petition be dismissed. The real issues in this case are the following: (1) Whether plaintiff was continuously disabled within the meaning of the total permanent provisions of the policy; (2) whether the decree, which this court affirmed in 1931, made any adjudication beyond the date of judgment; *Page 249
(3) whether the court in the present suit could adjudicate future liability of appellant to the plaintiff and whether it was proper for the court to retain jurisdiction of the cause during the lifetime and continued disability of the plaintiff to enter such future orders as equity might require.
[1] The trial court decided all of these issues in favor of the plaintiff and entered decree accordingly. Appellant has appealed and, as this case is in equity, it is now triable in this court de novo, both as to the facts and the law.
I. On the first issue, whether or not the plaintiff has been continuously disabled within the contemplation of the policy here sued upon, the record is voluminous, to say the least. The scope of the inquiry in the trial court started with the original injury of March 8, 1928, and included testimony regarding plaintiff's physical condition right up to the minute that the evidence was closed. Plaintiff's witnesses included, in addition to plaintiff, his wife and daughter, and five licensed chiropractors, all of whom appear to be connected with the Palmer School of Chiropractic, and one of whom is president of that institution. The defendant called an X-ray specialist and six physicians and surgeons. The testimony of these witnesses covers 156 pages of the abstract. For the purposes of this opinion, we can do no more than present a general summary or review of the principal facts testified to by the witnesses for each side.
Plaintiff's witnesses testified to the following facts: Plaintiff can only go about on crutches; his left leg is paralyzed and useless; his right leg buckles on him at times so that he must always be on crutches; he has more or less continuous pain in the lumbar region of his back; he has severe headaches; his condition has not changed since the first trial; his condition is thought to be due to the fact that, at the time of his fall on March 8, 1928, he must have suffered a hemorrhage into the substance of the spinal cord which must have produced a blood clot. This blood clot, after organization through coagulation, gradually dissolved, leaving mineral deposits and scar tissue, which impair the functions of the nerves by causing pressure on them. The principal nerves affected are those pertaining to the left leg, particularly from the knee down. Plaintiff has subluxation of the lumbar, upper lumbar and cervical vertebrae. The headaches, of which the plaintiff now complains, are apparently *Page 250
due to emotional crises and physical exertions. He is totally disabled because any continuous strain brings on the headaches. The condition of the leg itself would not disable him from work, but any steady, close attention, mental work, would produce headaches and prevent plaintiff from doing any work that required close application and steady concentration. The plaintiff's condition is permanent and there is no cure for it.
The testimony of plaintiff's witnesses is sharply controverted in its entirety by the witnesses for defendant. Defendant's witnesses interpret the various X-rays as showing no misalignment, rotation, luxation or subluxation of the vertebrae of plaintiff's spine. Plaintiff's history shows that he at no time had any difficulty in his urinal habits. That is impossible in case of paralysis from the hips down, as described by plaintiff immediately following his injury. Defendant's doctors performed numerous tests in the course of various examinations during the years 1930, 1933, 1934, 1937 and 1938. As a result of such tests, all of the doctors testify that there is no evidence of paralysis in plaintiff's left leg. In the course of examination, he did not cooperate. When he was unable to move his leg, it was because he made no effort to move it. The temperature of the two legs is the same. Such atrophy as appears in the left leg is due to disuse, not paralysis. There is no difference in the flaccidity of the two limbs. The condition of the skin on the left leg is similar to that on the right, and is not the condition that would be present if plaintiff was suffering from paralysis. Plaintiff's claim that he cannot walk is a conscious, deliberate fraud on his part. He has no physical disability. He could walk if he would try, and could engage in a gainful occupation if he would make the effort. There is no dependable evidence of injury to his head that would cause him to have headaches. In the course of examining him while blindfolded, he was induced to stand on both feet without support of crutches, an act which he contended he could not perform. There is no evidence of a blood clot having been formed in the spinal cord. Plaintiff's reflexes are normal, a situation which would not exist if he were suffering from paralysis. Plaintiff has a pretty fair tone in the muscles of his left leg. This would not be true if he had paralysis. The *Page 251
nerves of his left leg are functioning. He was able to bend his left thigh on the abdomen and extend his left leg with the thigh in walking. Plaintiff's ability to work can only be determined after he tries to. What he thinks he can do, he can do much better than what he thinks he cannot do. While there are symptoms of traumatic neurosis or neurasthenia in the complaints as to headaches and loss of use of the leg, there is too much falsification about them for them to qualify as symptoms of neurosis. The tests in reference to the condition of the left leg below the knee indicated that plaintiff was not cooperating and his statements could not be true. Several doctors testified that they saw plaintiff make use of his left leg in the course of the examinations, and one testified that he saw plaintiff use his left leg while walking on the street. All testify to the effect that plaintiff's complaints are not made in good faith, that they are false, that plaintiff has no physical or mental disability, is not disabled from work, and that the only thing that prevents him from engaging in a gainful occupation is the fact that he does not want to.
At first impression, it might appear that the wide difference of opinion between the two groups of experts who testified in this case presents a situation that defies explanation. We do not so read the record. One apparent explanation might be that the witnesses represent different schools of thought. While this may have some significance, it is in no way controlling in our judgment. As we read the record, the thing that accounts for most of the variation between the expert witnesses is the fact that one group was convinced that plaintiff's complaints are bona fide and asserted in good faith, while the other group, by reason of the tests which they made, were unanimously of the opinion that many, if not all, of plaintiff's complaints are false and willfully made with a fraudulent intent.
One of defendant's doctors frankly states: "I think many of Mr. Kurth's statements to me are false. My conclusion would be the other way if his statements to me regarding his sensations and his paralysis were true, and I was satisfied they were true." And again: "Headache is a subjective symptom, and may exist without an objective symptom. By subjective I mean something that only the patient himself can *Page 252
tell you. By objective I mean something a third person can see or feel." The symptom of headaches is recognized by plaintiff's doctors as being more important in determining whether or not plaintiff is totally disabled than the condition of the leg, about which most of the testimony was developed.
[2] In determining whether or not plaintiff was totally and continuously disabled for the period for which he seeks the payment of disability benefits and the waiver of premiums, it is first necessary to determine whether or not the plaintiff's complaints are bona fide and made in good faith, or false and made in bad faith. The trial court, with the witnesses before him, was obviously in a better position to determine this question than this court, which is limited to the printed record. The record shows that, toward the close of the evidence, the plaintiff was induced by his counsel to walk across the room so that the judge might see at first hand, what the witnesses for several days had been describing from the witness stand. He was also asked to stand without the aid of crutches, and the record shows that, when he undertook so to do, he fell. The trial court saw him walk and saw him fall. All we know is that he did walk and did fall. The trial court determined that plaintiff's complaints are bona fide and made in good faith. There is substantial evidence to support this finding. Had the trial court determined otherwise, there would be ample evidence to support such finding. Because of the fact that the trial court was in a far more favorable situation to determine the good faith and integrity of the plaintiff, we do not feel that, under the peculiar facts and circumstances shown by the record herein, we would be justified in disturbing his finding on that issue. Accordingly, we hold that the decree of the trial court, insofar as it determines that plaintiff was totally disabled, within the contemplation of the provisions of the policy here sued upon, during the period extending from July 9, 1933, to December 17, 1937, and entitled to waiver of premiums falling due within that period and the payment of $500 per year disability benefits accruing within that period, must be affirmed.
[3] II. The other issues decided by the trial court are definitely related to each other, and will be considered together. As heretofore stated, these issues are the following: Whether *Page 253
the decree, which this court affirmed in 1931, made an adjudication beyond the date of judgment; whether the court in the present case could adjudicate future liability of appellant or retain jurisdiction of the cause, during the lifetime and continued disability of the plaintiff, for the purpose of entering such further orders as equity might require. We are of the opinion that the trial court erred in deciding these issues in favor of the plaintiff.
A somewhat analogous situation is presented by the case of United States Fidelity Guaranty Co. v. McCarthy, 8 Cir.,33 F.2d 7, 70 A.L.R. 1447. Said decision was made on appeal from the district court for the southern district of Iowa. The appellee McCarthy had a policy of accident insurance with the appellant company, providing for indemnity at the rate of $250 per week during total disability and a lesser amount for partial disability. Appellee was a surgeon. He received an injury on December 6, 1922, resulting in injury to the median nerve of his right hand, which disabled his right hand and formed the basis for his claim that he was totally disabled from performing the duties of a surgeon. The company paid him weekly indemnity for one year amounting to $13,000. It then denied further liability, suit was brought and judgment recovered for $26,077.69, based on continuous disability for the period from December 6, 1923, to October 22, 1925. This judgment was paid without appeal therefrom. Thereafter, a second suit was brought and judgment recovered for $32,641.55, representing indemnity payments for the period October 22, 1925, to February 23, 1928. In entering such latter judgment, the district court sustained appellee's motion for a directed verdict. One of the grounds for sustaining the motion was that the first judgment, from which there was no appeal, constituted an adjudication in reference to the period for which payments were ordered by the second judgment. On appeal, the judgment was reversed. The court, speaking through Judge Kenyon, states in 33 F.2d at page 11, 70 A.L.R. 1447, as follows:
"The matters in issue determined and ended in the former case were: The issuance of the policy, payment of the premium, occurrence of the accident, the injury to the hand, that appellee was totally disabled from such injury under the terms of the policy for a period of time from December 6, 1923, up to the *Page 254
22d day of October, 1925. * * * The evidence introduced in the former case did not establish permanent total disability, nor that total disability would continue over the period for which indemnity is claimed in this suit. The question litigated was continuous total disability during the period for which recovery was sought. The period of time covered in this case was then in the future. As the burden there was upon appellee to show continuous total disability for the period involved, the same burden rests upon him to show such continuous total disability for the period here involved, and the right under the terms of the policy is in the appellant to contest the question of such total disability for every period of time provided by the terms of the policy."
It will be noted that the court recognized that, before there could be an adjudication of liability as to a given period of time, it was necessary that there be evidence establishing such disability for that specific period. In speaking on this question, the court makes an observation in 33 F.2d, at page 13, 70 A.L.R. 1447, which might have some significance under the record herein, to wit:
"Disability is not entirely a physical matter. Will power and condition of the mind enter into it. A person may be disabled today, and in a year from now, without any change in the physical condition, not be disabled."
It also is apparent, from reading the opinion in that case, that the court determined that the first judgment could not constitute an adjudication as to the period covered by the second judgment because, at the time that the first judgment was entered, the claim for indemnity based upon the second period had not yet accrued. At page 13, of 33 F.2d 70 A.L.R. 1447, the court states:
"The ultimate fact in the previous suit as to disability was total disability during the period for which indemnity was sought. The ultimate fact here is total disability for an entirely separate and definite period of time. That question was not in issue, and could not have been litigated in the former action. Each case stands upon its own bottom."
The McCarthy case involved a policy of accident insurance, *Page 255
but the rule applied in that case has been recognized as applicable to the disability provisions of a life insurance policy. An illustrative case is that of Summers v. Prudential Ins. Co., 319 Pa. 270, 179 A. 78, 79. In that case, the plaintiff sought waiver of premium and monthly disability payments claimed to be due under a policy of life insurance which afforded such protection in the event of continuous total and permanent disability. In passing upon the accrual of the cause of action, the court states:
"It is apparent that plaintiff's rights to the installments accrued from month to month, and that upon defendant's refusal to pay any one of them when due he could institute suit for that payment. Neither a single default nor a number of defaults would amount to a breach of the entire contract. Each default would only affect the rights and liabilities of the parties with respect to the specific payment involved. Thus it is clear that, at the institution of the present suit, plaintiff's cause of action comprised only the payments which had already become due; for the payments accruing after that time plaintiff may maintain another suit. The same is true with respect to the payments of premiums made after suit was brought. That the recovery must be so confined is conclusively established by the decided cases: B. O. Employees' Relief Assn. v. Post, 122 Pa. 579, 15 A. 885, 2 L.R.A. 44, 9 Am. St. Rep. 147; Robinson v. Exempt Fire Co.,103 Cal. 1, 36 P. 955, 24 L.R.A. 715, 42 Am. St. Rep. 93; Commercial Cas. Ins. Co. v. Campfield, 243 Ill. App. 453; Bonslett v. N Y Life Ins. Co. (Mo.Sup.) 190 S.W. 870; Cardwell v. Employers' Liab. Assur. Corp., 105 W. Va. 197, 141 S.E. 789."
Another case, involving analogous provisions of a life insurance policy, is that of Black v. Jefferson Standard Life Ins. Co., 171 S.C. 123, 171 S.E. 617, 619, wherein the court states as follows:
"This was not a liquidated demand, one which the circuit judge could say was fixed and would continue during any given time, whether up to the date of the trial or during the entire life of the insured. The development of medical and surgical science in the past few years has been such that many persons afflicted with apparent total disability have been restored to *Page 256
normal health. The provision in the policy was to permit the insurance company to avail itself of any benefit which might be derived from this provision should the circumstances of the individual case permit. We are therefore convinced that the recovery of disability payments should have been limited to that period of time between February 4, 1931, when the proofs of disability were filed, to April 30, 1931, when the action was commenced."
All of the cases, so far quoted from, were actions at law, whereas this suit is in equity. A somewhat different rule applies in equity. This is recognized by the South Carolina court in the case last quoted from, the court stating as follows:
"To sustain the position taken by the circuit judge, the respondent relies upon the case of Puckett v. Smith, 5 Strob. 26, 53 Am. Dec. 686. The doctrine announced in that case has been sustained in the later case of Southern Railway Co. v. Gossett,79 S.C. 372, 60 S.E. 956, to the effect that, where the damage is continuous, a court of equity may assess the damage up to the time of the trial. This is a perfectly reasonable rule in equity, and contemplates a final determination of the controversy between the parties by the decree. One reason for the rule is that another suit, one for the recovery of damages from the commencement of the suit to the date of the decree, will be avoided."
The equity rule in Iowa is recognized by this court in the case of Gribben v. Clement, 141 Iowa 144, at page 150, 119 N.W. 596, wherein the court states:
"The old rule which required an action to be abated, merely because prematurely brought, has been borne down by the trend of modern decisions. Under the later decisions, if the plaintiff's cause of action is complete and mature before it comes to ahearing, he will ordinarily be permitted to try it out on its merits."
Many other authorities could be cited, but, as the rule is definitely established, this opinion should not be further prolonged by such discussion. This is particularly true since the opinion in this court, on the first appeal, is binding upon us, not only under the doctrine, stare decisis, but also under *Page 257
the rule, res adjudicata. As heretofore pointed out, in the first opinion, this court states that it was not confronted with the time element "except as it applies to the period for which claim is being made," and we held that the disability suffered by the plaintiff, "is affected only by the time between the starting or commencement of the disability and the date the decree was rendered in his favor." We further held that "continuance of such disability must be established by later proofs", and that the furnishing of the first proof merely entitled plaintiff to "atemporary grant of benefits promised." We hold that the language used in the first opinion definitely established that, at the time of the entry of the first decree, the only claims that had accrued were those pertaining to waiver of premium due July 9, 1928, and disability benefit of $500, accruing December 17, 1928. As those were the only claims that had accrued when the first decree was entered, they were and could be the only matters adjudicated by the first judgment and decree.
[4] While the language of the trial court's decree herein is subject to a different interpretation, the form of judgment entered accords with our present holding. Trial was had herein in January, 1938, at which time the cause was submitted and taken under advisement, with consent of both parties to render decision thereafter, either in vacation or at any subsequent term of court. At the time that the trial was completed and the evidence closed, the last premium unpaid was that falling due July 9, 1937, and the last disability payment accruing was that falling due December 17, 1937. The court's decree was not entered until December 23, 1938. If the court had the power to enter judgment for benefits accruing after the close of the evidence, it would have passed upon the premium due July 9, 1938, and the disability benefit to be claimed on December 17, 1938. The court did not undertake to enter any judgment in reference to the 1938 premium or the 1938 disability benefit. We hold that it could not adjudicate these matters because the claims in reference to them had not accrued when the evidence was closed. We also hold that it was error for the court to purport to retain jurisdiction of this cause for the purpose of adjudicating the rights and liabilities of the parties, which might accrue subsequent to the date of the trial herein.
By reason of the foregoing, the decree of the trial court *Page 258
is affirmed insofar as it adjudicates that plaintiff was totally disabled, within the contemplation of the policy, during the period between July 9, 1933, and December 17, 1937, and that appellant company was obligated to waive the premiums falling due on the policy during that period, and to pay the annual installments of $500 each accruing on December 17th of each year during such period. The decree is reversed insofar as it undertakes to adjudicate that the former judgment and decree, affirmed by this court in 1931, adjudicated the rights of the parties as to periods subsequent to the date of the first trial. The decree is also reversed insofar as it purports to adjudicate future liability of the parties and undertakes to retain jurisdiction for the purpose of making further orders in reference thereto. The cause is remanded for the entry of a decree in conformity with this opinion. In the event either of the parties so desire, upon proper application being made to this court, decree will be entered here. — Affirmed in part; reversed in part.
MITCHELL, BLISS, SAGER, HALE, and STIGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431835/ | This is the third occasion upon which this appellant has invoked the jurisdiction of this court herein. For our prior decisions, see State v. Ferguson, 222 Iowa 1148, 270 N.W. 874; Ferguson v. Bechly, 224 Iowa 1049, 277 N.W. 755. The facts developed at the trial herein are so similar to those developed on the first appeal that it is only necessary to briefly review them herein.
On July 5, 1935, the county attorney's information was filed, charging appellant with stealing eleven head of cattle belonging to one Vernie Braden, in violation of section 13015 of the Code. Appellant was tried and convicted in the district court of Mahaska county. On appeal to this court, the conviction was reversed, solely because of errors in excluding certain testimony and refusing an instruction, it being determined that the evidence of the state, if believed, was abundantly sufficient to sustain a conviction. See State v. Ferguson, supra.
Procedendo was sent down from this court on January 25, 1937. The case was assigned for trial on February 17, 1937, for March 1, 1937. Ten days later appellant objected to trial because of the pendency of his petition for rehearing in this court, and also moved for a change of venue. On March 1, 1937, when the cause came on for trial, the plea to the jurisdiction, because of the pendency of the petition for rehearing, was *Page 363
overruled, but the motion for change of venue was sustained, and the cause was transferred to Jasper county for trial.
An April 9, 1937, the procedendo from this court was recalled. On May 8, 1937, the petition for rehearing was overruled, and a second procedendo issued from this court May 12, 1937. On September 20, 1937, the case was assigned for trial in the Jasper district court. Appellant then filed a motion to dismiss, contending he had been denied a speedy trial as provided by section 14024 of the Code. The motion was overruled. Appellant applied for and secured a writ of certiorari to review such ruling. The writ was annulled by this court on February 15, 1938. See Ferguson v. Bechly, supra.
The cause again came on for trial in Jasper district court on March 5, 1938, at which time appellant filed a second motion to dismiss, again asserting that he had been denied a speedy trial as guaranteed him by the Constitution (Article I, sec. 10) and as provided by sections 14024 and 14025 of the Code. Resistance was made on the ground that the position taken by this court in the proceedings in certiorari were conclusive against the motion. The state also filed a motion to strike appellant's motion, asserting that the question had been fully determined by the opinion of this court in the certiorari proceedings. The trial court ruled that, while appellant was prosecuting the writ of certiorari, the State was not in a position to proceed with trial until that question was decided by this court and sustained the State's motion to strike appellant's motion to dismiss. The cause proceeded to trial, resulting in appellant's conviction. From such conviction, appeal was perfected to this court, asserting nine assignments of error.
[1] I. Appellant's first assignment of error challenges the correctness of the ruling of the trial court, sustaining the motion to strike appellant's motion to dismiss. Careful examination of the opinion of this court in the certiorari proceedings, Ferguson v. Bechly, supra, convinces us that the position there taken by us was conclusive upon the trial court and decisive of appellant's first assignment of error. There is no merit therein.
[2] II. In the course of the trial, appellant did not take the witness stand in his own behalf. In the opening argument by the State, the county attorney commented on that fact. Counsel for appellant objected on the ground that it was error *Page 364
for the county attorney to make such comment and to convict appellant on such an argument would be contrary to and in violation of section 9 of Article I of the Constitution of Iowa, which provides that no person shall be deprived of life, liberty or property without due process of law, and contrary to section 13890 of the Code, which provides that defendants in all criminal proceedings shall be competent witnesses in their own behalf, but cannot be called as witnesses by the State. Appellant's objection was overruled. Such ruling is made the basis for appellant's second assignment of error.
In determining whether or not the provisions of section 13890 of the Code, to the effect that a defendant in a criminal proceeding shall be a competent witness in his own behalf but cannot be called as a witness by the State, forbids the county attorney commenting upon the fact that the defendant has not seen fit to avail himself of the privilege of testifying in his own behalf, it is necessary to briefly consider the legislation in this State on the right of a defendant to testify.
Originally, a defendant in a criminal case was not competent to testify in his own behalf. Section 2390 of the Code of 1851 provided that no person who had a direct, certain, legal interest in the outcome of a suit was a competent witness unless called by the opposite party. Said section of the Code of 1851 was modified by section 3980 of the Revision of 1860, which provided that a party to an action was both competent and compellable to give evidence, except as otherwise provided. Section 3981 of the Revision of 1860 provided that nothing contained in the preceding section should render a defendant in a criminal proceeding competent or compellable to give evidence, either for or against himself. The same provision was contained in section 4556 of the Code of 1873. The statutory provision, rendering a defendant in a criminal case incompetent to testify in his own behalf, was recognized and enforced by this court. State v. Laffer, 38 Iowa 422; State v. Bixby, 39 Iowa 465. With the defendant in a criminal case declared to be incompetent to testify in his own behalf, obviously his failure to testify would not be a matter upon which the county attorney could comment.
Section 1 of chapter 168 of the Acts of the 17th General Assembly, which is codified as section 5484 of the Code of 1897, provided that defendants in criminal proceedings should be competent witnesses in their own behalf, but could not be called *Page 365
by the State, and, should a defendant not elect to become a witness, such fact should not have any weight against him on the trial, and, should the county attorney comment on such fact, it would be error in and of itself sufficient to entitle the defendant to a new trial. The fact, that the failure to testify should not have any weight against the defendant on the trial, in and of itself, was sufficient to prohibit comment thereon by the county attorney. Wilson v. U.S., 149 U.S. 60, 13 S. Ct. 765,37 L. Ed. 650.
In the Code of 1924, the first clause of section 5484 of the Code of 1897, to the effect that defendants in criminal cases shall be competent witnesses in their own behalf, but cannot be called as witnesses by the State, was made a separate section, to wit: section 13890, and this is still the law of this State, being section 13890 of the Code of 1935. The second clause of section 5484 of the Code of 1897 to the effect that, should a defendant not elect to become a witness, that fact shall not have any weight against him, nor be the subject of comment by the county attorney, appears as section 13891 of the Codes of 1924 and 1927, but was repealed by chapter 269 of the Acts of the 43d General Assembly, in 1929.
In the case of State v. Stennett, 220 Iowa 388, 395,260 N.W. 732, 736, this court was called upon to construe the effect of the action of the 43d General Assembly, ch. 269, in repealing section 13891 of the Code. We there state:
"It is further insisted that the jury were guilty of misconduct in their deliberations because they discussed the fact, brought out in the county attorney's argument, that the defendants, and each of them, objected to testifying in their own behalf; and that the county attorney pressed this question home to the jury in a very forceful way. This objection is not tenable because of the fact that the remarks of the county attorney are not made of record and no objection was made thereto at the time of the argument. Secondly, while there are numerous cases under a pre-existing statute that hold that it is reversible error for the county attorney to refer to the fact that a defendant has not taken the witness stand or testified in his own behalf, the statute (Code 1927, section 13891) which was the basis of these holdings was repealed by the Forty-third General Assembly (chapter 269), and it is now no longer error for the *Page 366
prosecuting attorney to refer to the fact that the defendant has not taken the witness stand to testify in his own behalf."
Appellant contends that the interpretation this court makes of the legislative history on this subject was dictum because of the fact that the remarks of the county attorney were not made of record. Conceding, for the purposes of this case, that the above language of this court should be so construed, nevertheless, we now hold that the interpretation of the legislative history there made by us is sound and we now adhere to it. Accordingly, in so far as the statute law of this State is concerned, there is no merit in appellant's second assignment of error.
This brings us to the question whether or not section 9 of Article I of the Constitution of this State, providing that the right of trial by jury shall remain inviolate, and no person shall be deprived of life, liberty or property without due process of law, prohibits the county attorney from commenting upon the fact that a defendant in a criminal case has not testified in his own behalf. This constitutional question was not raised in the case of State v. Stennett, supra, and we are unable to find any prior decision of this court passing upon the question. This is doubtlessly explained by the legislative history above reviewed which, until 1929, prohibited the county attorney from commenting upon the failure of a defendant to testify in his own behalf. Since then, apparently, the bar of this state has considered the matter one to be determined by our statute law. Hence this is the first case to require us to interpret section 9 of Article I of the Constitution of this State in its possible bearing upon the right of a county attorney to comment upon the failure of a defendant to testify in his own behalf.
Since the provisions of section 9 of Article I of our Constitution are quite similar to the latter provisions of the 5th Amendment to the Constitution of the United States, it might be considered that the decisions of the supreme court of the United States would include some construction of the 5th Amendment analogous to the construction we are now asked to make. However, Congress has enacted that, in criminal proceedings, the defendant shall, at his own request but not otherwise, be a competent witness and his failure to make such request shall not create any presumption against him. Act of *Page 367
March 16, 1878, Chapter 37, 20 Stat. 30; 28 U.S.C.A. section 632. This statute is similar to section 5484 of our Code of 1897. The fact, that the failure of the defendant to testify in his own behalf creates no presumption against him, is sufficient to prohibit the district attorney commenting upon a defendant's failure to testify in his own behalf. Wilson v. U.S., supra. This federal statute explains the absence of any decision of the supreme court of the United States, construing the 5th Amendment, in so far as it might possibly have any bearing upon the right of a district attorney to comment upon the failure of a defendant, in a criminal case in federal court, to testify in his own behalf.
However, the 14th Amendment to the Constitution of the United States, also contains a provision to the effect that no person shall be deprived of life, liberty or property without due process of law by any state. If appellant's contention, that section 9 of Article I of our Constitution forbids the county attorney commenting upon the failure of appellant to testify in his own behalf, is sound, it would seem obvious that the same construction would be required of the 14th Amendment to the Federal Constitution. Accordingly, we consider that the decision of the supreme court of the United States, in the case of Twining v. New Jersey, 211 U.S. 78, 29 S. Ct. 14, 25, 53 L. Ed. 97, has an important bearing upon the decision here required of us.
In the Twining case, the defendant had been convicted in a criminal proceeding in the courts of New Jersey. He had not availed himself of the privilege of testifying in his own behalf. The trial court, in accordance with the decisions of the courts of New Jersey, commented upon the fact that the accused had not testified in his own behalf. On appeal to the supreme court of the United States, it was asserted that the comments so made violated the 14th Amendment. The supreme court reviewed quite exhaustively its decisions in regard to the meaning of due process of law, and held that such comment did not constitute denial of due process. After making such review of its decisions, the supreme court states as follows:
"Even if the historical meaning of due process of law and the decisions of this court did not exclude the privilege from it, it would be going far to rate it as an immutable principle of *Page 368
justice which is the inalienable possession of every citizen of a free government. Salutary as the principle may seem to the great majority, it cannot be ranked with the right to hearing before condemnation, the immunity from arbitrary power not acting by general laws, and the inviolability of private property. The wisdom of the exemption has never been universally assented to since the days of Bentham, many doubt it to-day, and it is best defended not as an unchangeable principle of universal justice, but as a law proved by experience to be expedient. See Wigmore, Ev. § 2251. It has no place in the jurisprudence of civilized and free countries outside the domain of the common law, and it is nowhere observed among our own people in the search for truth outside the administration of the law. It should, must, and will be rigidly observed where it is secured by specific constitutional safeguards, but there is nothing in it which gives it a sanctity above and before constitutions themselves. Much might be said in favor of the view that the privilege was guaranteed against state impairment as a privilege and immunity of national citizenship, but, as has been shown, the decisions of this court have foreclosed that view. There seems to be no reason whatever, however, for straining the meaning of due process of law to include this privilege within it, because, perhaps, we may think it of great value. The states had guarded the privilege to the satisfaction of their own people up to the adoption of the 14th Amendment. No reason is perceived why they cannot continue to do so. The power of their people ought not to be fettered, their sense of responsibility lessened, and their capacity for sober and restrained self-government weakened, by forced construction of the Federal Constitution. If the people of New Jersey are not content with the law as declared in repeated decisions of their courts, the remedy is in their own hands. They may, if they choose, alter it by legislation, as the people of Maine did when the courts of that state made the same ruling. State v. Bartlett, 55 Me. 200; State v. Lawrence, 57 Me. 574; State v. Cleaves, 59 Me. 298, 8 Am. Rep. 422; State v. Banks,78 Me. [490] 492, 7 A. 269; Rev. Stat. chap. 135, § 19."
The New Jersey rule, which was involved in the Twining case, is illustrated by the decision in the case of State v. Rubenstein, *Page 369
136 A. 597, 5 N.J. Misc. 387. In that case, the appellant challenged the following instruction of the trial court:
"The law of our state in regard to defendants taking the stand is that a party in a case is competent, but not compellable, to be a witness in his own behalf, but his failure to do so raises no presumption of his guilt. Where, however, there is direct evidence to connect the accused with the crime, and by his own testimony he could have established an alibi or denied the allegations, his failure to do so may be considered by the jury as an inference against him."
In holding that there was no error, the court states as follows:
"The pertinent part of this charge is identical with the charge approved by this court in the case of State v. Schilling, 95 N.J. Law [145] 154, 112 A. 400. The situation where you have a right `to draw inferences against him.' So, to the same effect is Parker v. State, 61 N.J. Law [308] 314, 39 A. 651. These cases are cited, on this point, with approval, in the case of State v. Kisik, 99 N.J. Law [385] 387, 125 A. 239, by the Court of Errors and Appeals. In that case, it was said, the doctrine of the Parker Case has come to be the settled law in this state. There the words `a strong inference' are used by Chief Justice Magie."
It will be noted from the foregoing that the New Jersey rule differs from the rule announced in Wilson v. U.S., supra. Under the federal statute, which provides that failure to testify shall not create any presumption against the defendant, the United States supreme court has held that no comment upon the failure to testify may be made to the jury. The New Jersey court, however, holds that, while no presumption of guilt is created by the failure to testify, nevertheless, there is an inference against the defendant which is proper subject for comment to the jury. Notwithstanding the fact that the New Jersey rule is different from that of the federal courts, the United States supreme court held that such difference of opinion is warranted and that the comment made to the jury does not constitute denial of due process.
The legislative history in the state of Maine, which is referred to in the above quotation from the Twining case, is *Page 370
briefly reviewed by the Maine court in the case of State v. Banks, 78 Me. 490, 492, 7 A. 269, 270, as follows:
"In 1864, for the first time, a person charged with commission of a criminal offense, was made, `at his own request and not otherwise, a competent witness.' St. 1864, c. 280. After this statute took effect, county attorneys, when the accused did not elect to testify, were allowed in argument to comment on the fact to the jury. State v. Bartlett, 55 Me. [200] 220; State v. Lawrence, 57 Me. 574; State v. Cleaves, 59 Me. 298, [8 Am. Rep. 422]. This practice continued for 15 years; and, while it operated favorably for innocent persons, it resulted disastrously to the guilty who would not add perjury to the crime charged. Thereupon the legislature, believing that the constitutional provision which declares that `the accused shall not be compelled to furnish or give evidence against himself,' (Declaration of Rights, § 6,) like the rain descending upon the innocent and guilty alike, and looking to a more careful protection of this right, enacted that `the fact that the defendant in a criminal prosecution does not testify in his own behalf shall not be evidence of his guilt.' St. 1879, c. 92, § 1; Rev. St. c. 134, § 19. We think the intent of the statute is that the jury, in determining their verdict, shall entirely exclude from their consideration the fact that the defendant did not elect to testify — substantially as if the law did not allow him to be a witness. Com. v. Harlow, 110 Mass. 411; Com. v. Scott,123 Mass. [239] 241 [25 Am. Rep. 87]."
The action of the 43d General Assembly, ch. 269, in repealing section 13891 of the Code of 1927, would seem to demonstrate that the legislature of Iowa agreed with the supreme court of Maine rather than the Maine legislature. At the time that the legislature of Iowa assumed such position, there was considerable discussion by the bar of this country on this question. In 1931, the American Law Institute approved the following provision: "The judge, the prosecuting attorney and counsel for the defense may comment upon the fact that the defendant did not testify." 9 Proc. Am. L. Inst. 202-218.
The same year, the American Bar Association approved a resolution, proposed by the section on criminal law and criminology, which read as follows: *Page 371
"That by law it should be permitted to the prosecution to comment to the jury on the fact that a defendant did not take the stand as a witness; and to the jury to draw the reasonable inferences." 56 Reports of A.B.A. 137-152.
The proceedings of the American Bar Association report a vigorous debate presenting both sides of this question. In 1932 and 1933, two articles on this question appeared in the Michigan Law Review. One of them was written by Robert P. Reeder, an attorney in the Department of Justice for the State of Pennsylvania, and was intended to demonstrate that the position of the Law Institute and the Bar Association was contrary to the general rule on the question. 31 Mich. Law Review 40-58. The other article was written by Andrew A. Bruce, Professor of Law, Northwestern University, former Chief Justice of the supreme court of North Dakota, and defended the position taken by the Institute and the Bar Association. 31 Mich. Law Review 226-235. Both of these articles agree that the difference in the rule in the various states is due entirely to the difference in the provisions of the various constitutions and statutes of the several states. Mr. Reeder refers to the rule, prohibiting comment upon the failure of the defendant to testify, as the "general rule", and summarizes the holdings of the various states, at pages 43 and 44, as follows:
"At the present time the laws of forty-two states provide that the failure of the accused to testify shall not create any presumption against him or that it shall not be subject to comment, or contain both such provisions.
"The states which do not conform to the general rule are: Georgia, where the accused is not a competent witness; Iowa, New Jersey, and Ohio, where the constitutions clearly do not prevent comment upon the silence of the accused; Nevada, where the court may not comment upon his silence unless he requests it to instruct the jury upon his right to refrain from testifying; and South Dakota, where a rule which had prevailed since 1879 was changed in 1927 to provide that the failure of the accused to testify in his own behalf was a proper subject of comment by the prosecuting attorney."
The statute, which Mr. Reeder refers to as having been adopted by the legislature of South Dakota, has been declared *Page 372
to be unconstitutional. State v. Wolfe, 64 S.D. 178,266 N.W. 116, 104 A.L.R. 464. However, the provision of the South Dakota constitution, upon which the opinion is based, was not the due process clause, but rather section 9 of Article VI, which provided that no person should be compelled, in any criminal case, to give evidence against himself. No such constitutional provision appears in the Constitution of the State of Iowa.
Appellant urges upon us the decision of the South Dakota court in State v. Wolfe, supra, along with numerous other decisions which Mr. Reeder refers to as supporting the "general rule". We have carefully and laboriously examined all of the decisions cited by counsel for appellant and the amici curiae. The decisions all construe statutory provisions and constitutional provisions which are not similar to the statutes and Constitution of Iowa. It would unduly prolong this opinion to attempt even a brief review of such decisions. Suffice it to say that we have found no decision from any court holding that the due process clause of a state or the federal Constitution, corresponding to section 9 of Article I of the Constitution of Iowa, prohibits comment upon the failure of a defendant in a criminal case to testify in his own behalf.
[3] Due process of law requires that the accused be properly charged by an indictment or information and be given adequate information in regard to the nature of the charge against him, that he be accorded representation by counsel, a jury trial in open court, and that the state introduce such competent evidence which, if believed, would be sufficient to establish a defendant's guilt beyond a reasonable doubt, without compelling the defendant, against his will, to testify against himself. When this has been accomplished, the defendant must be accorded full opportunity to introduce his evidence to meet that introduced by the State. Defendant may choose to introduce no evidence. He may choose to offer only witnesses other than himself. He may choose to testify in his own behalf. The choice, in each event, is that of the defendant. Having made his choice, if he chooses not to testify in his own behalf, the effect of such choice, as an inference or presumption of guilt, does not come within the contemplation of what constitutes due process of law. If the effect of such choice is to be determined by Constitutional provision, it must be determined by some provision other than the due process clause. If the Constitution *Page 373
contains only the due process clause, as does our Constitution, then the effect to be given the failure to testify is a matter for the legislature to determine. Were we to sustain appellant's contention herein, the result would be that, under the guise of construing the due process clause, we would, in effect, re-enact section 13891 of the Code of 1927, which the 43d General Assembly, ch. 269, in 1929, chose to repeal. This we cannot do. There is no merit in appellant's second assignment of error.
III. Appellant's third assignment of error complains of the refusal of the court to give requested instructions Nos. 29, 30 and 35. The purpose of each of these instructions was to require the court to instruct the jury, upon the effect of appellant's failure to testify in his own behalf. The requests were properly refused in view of our disposition of appellant's second assignment of error.
[4] IV. Appellant's fourth assignment of error complains of the failure of the trial court to act when the jury bailiff presented to him a memorandum as follows: "Why did Mr. Ferguson not take the witness stand? Why didn't the attorneys for the defendant argue the case?" This memorandum was not addressed to the court, nor to anyone in particular. The court instructed the bailiff to ignore it. There was no error in so doing.
V. In appellant's fifth assignment of error, appellant complains of the fact that the county attorney commented upon the fact that appellant's co-defendant, Ben Ferguson, and his sons, Cleo and Cope Ferguson, did not testify in appellant's behalf. This assignment of error is disposed of by the holding of this court in reference to appellant's assignment No. 2. In addition to that fact, we have been unable to find that the complaint, made by appellant in his fifth assignment of error, was presented to the court below.
VI. Appellant's sixth assignment of error complains of the trial court's instructions No. 13 and No. 14. We have carefully examined said instructions and find that there was no error committed by the court in giving them.
[5] VII. Appellant's seventh assignment of error attacks the court's instruction No. 19. This instruction, of course, must be considered in the light of the other instructions given by the court. When so considered, no error on the part of the trial court appears to have been made. *Page 374
[6] VIII. Appellant's eighth assignment of error complains of the refusal of the court to give requested instructions No. 37 and No. 28. The instructions Nos. 11 and 12, given by the court, properly covered the questions involved under the record made herein.
IX. Appellant's ninth assignment of error complains of certain testimony which was offered by the state in connection with the tracing of the cattle involved herein, in an effort on the part of the state to establish that the cattle were the cattle referred to in the information filed herein. We find no error in the introduction of such testimony.
As above stated, we have carefully examined all the assignments of error presented by appellant. The record has been voluminous and we have had the added burden of reading the transcript, in view of a dispute between the parties regarding what the record is. Appellant had a fair trial. The trial court committed no error. The judgment is affirmed. — Affirmed.
MITCHELL, C.J., and STIGER, HALE, BLISS, SAGER, and OLIVER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431836/ | The grand jury of Osceola county returned an indictment against the defendant-appellant charging him with the *Page 1322
crime of larceny from a building in the nighttime under section 13008 of the 1931 Code. The defendant was tried and convicted of the included offense of larceny, was sentenced to the state reformatory for five years, and appeals from such conviction and judgment.
The indictment charges the larceny of many articles of merchandise from the Melvin Mercantile Company. The testimony discloses that a large quantity of merchandise was stolen from the store of the Melvin Mercantile Company in Melvin, Osceola county, Iowa, on the night of October 5 and 6, 1933. Later, many of the items of merchandise so stolen were found in the possession of the defendant. The defendant attempted to explain his possession of the stolen property by testifying that he purchased some of it from one Fred Besgrove and some of it from a merchandise establishment situated in another town. At the time a search of his premises was made by a Mr. Bangert, one of the owners of the stolen merchandise, and the sheriff of Osceola county and the sheriff of O'Brien county, he refused to permit a search of his premises until a search warrant was procured. After the search warrant was procured, many articles of the stolen property were recovered from the premises and the possession of the defendant. Besgrove testified for the state that he had purchased two of the stolen articles from the defendant paying him a nominal price therefor, and he later turned these articles over to the sheriff because, as he and his wife testified, a brother-in-law of the defendant and one Guy Miller had made repeated efforts to obtain the articles which Besgrove had purchased from the defendant, stating at the time that they figured these articles were the worst evidence they had against the defendant. Upon an investigation by the officers at the merchandise establishment in another town at which the defendant claimed to have purchased many of the articles, it was disclosed, and is shown by the record, that no such articles were kept for sale in said store, and that at no time did the defendant purchase the same therefrom. The defendant also testified that he purchased some of the stolen articles from Besgrove and later sold some of them back to him.
An attempt was made to impeach the witness Besgrove, and defendant's testimony in reference to his explanation of the possession of the stolen articles was corroborated to some extent, but upon the whole record a question of fact was presented and this was submitted to the jury under proper instructions and, as we have indicated, the jury found against the contentions of the appellant. *Page 1323
[1] The first error assigned and argued by the defendant is that the court erred in overruling defendant's objections as to the value of each article of the alleged stolen merchandise, for the reason that the witness testifying to such values was not qualified to testify in reference thereto. The answer to this contention may be found many times in the record. The witness, who was one of the owners of the merchandise, was asked to state the reasonable market value of each of the stolen articles, and in every instance the question was answered without an objection on the part of the defendant. Later, when the article identified, and upon which the witness had fixed the value, was offered in evidence, the objection was made that it was incompetent, irrelevant, and immaterial, and not properly identified. In some instances, the objection to the introduction of the exhibit included the ground that the witness had not been qualified to testify as to reasonable value; but this was only included in the objections to the introduction of the various exhibits and did not go to the question as to the value of the various articles. We are constrained to hold that the record fairly shows that the witness was qualified even though a proper objection had been made on that ground, and that the testimony fairly established the reasonable market value of the merchandise which was the subject of the larceny.
Another of appellant's contentions is "that the defendant produced enough evidence to raise a reasonable doubt as to his guilt", and, further, the state failed to prove that the crime was committed by the defendant. These were purely questions of fact and were properly submitted to the jury and the defendant cannot complain in this regard.
[2] Another of appellant's contentions is that the court erred in not properly defining the included offense of "petty or simple larceny", and that the court erred in instructing the jury that they could find the defendant guilty of larceny in the daytime as distinguished from larceny from a building in the nighttime, and that there was prejudicial and reversible error in submitting the charge of larceny as an included offense. The court properly defined the crime of larceny as well as the crime of larceny from a building in the nighttime, and in instruction No. 5 1/2, of which the appellant complains, the court properly defined what was meant by larceny from a building in the nighttime, and further instructed that if the jury entertained a reasonable doubt as to the defendant's guilt of *Page 1324
the crime of larceny from a building in the nighttime, but entertained no reasonable doubt as to the fact that the defendant committed a larceny, then they should find him guilty of larceny only. We can find no error in the court's instructions in regard to the matters complained of. The appellant cites as authority for the proposition that simple larceny is not an included offense under the charge of larceny from a building in the nighttime, State v. Henderson, 239 N.W. 588. The opinion in the case referred to was filed December 16, 1931. It was withdrawn in March, 1932, and in June, 1932, an opinion was filed affirming a conviction of the crime of larceny from a building in the nighttime; the latter opinion being reported in 215 Iowa at page 276, 243 N.W. 289. We have repeatedly held that larceny is an included offense under a charge of larceny from a building in the nighttime under section 13008 of the 1931 Code, and also larceny from a building in the daytime under section 13009. Larceny is defined by section 13005, and the punishment provided therefor in sections 13006 and 13007. We have held that these three sections, that is, sections 13005, 13008, and 13009, do not relate to separate and distinct offenses, but to one only, that is, the crime of larceny. The first of these sections defines the crime of larceny, and the punishment is prescribed in the succeeding sections 13006 and 13007 when there are no circumstances of special aggravation, and the other two sections, 13008 and 13009, merely point out certain circumstances which are an aggravation of the offense, but the crime denounced in all three sections is that of larceny. The facts as to the value of the goods and the time and place of the commission of the offense affect only the degree of punishment. State v. Elsham, 70 Iowa 531, 31 N.W. 66; State v. Murray, 55 Iowa 530, 8 N.W. 350; State v. Nordman,101 Iowa 446, 70 N.W. 621; State v. Haywood, 155 Iowa 466, 136 N.W. 514.
[3] The appellant's last contention is that the court erred in not sustaining defendant's motion for a new trial on the ground of newly discovered evidence. Affidavits are attached to the motion for a new trial to the effect that the affiants would testify that the witness Besgrove offered to sell the affiants certain so-called "hot" merchandise soon after the commission of the larceny which is the subject-matter of this case. Such testimony would have been material upon the trial only as additional or corroborating testimony on the question of the impeachment of the witness Besgrove. It *Page 1325
would not in any way tend to connect the witness with the commission of the crime, but might have been considered on the question of his credibility. We have held that the granting of a new trial on newly discovered evidence rests largely in the sound discretion of the trial court, and that unless an abuse of such discretion is shown we will not reverse on that ground. Newly discovered evidence is not a statutory ground for a new trial in a criminal case, and the recognition of such ground in a criminal case is discretionary with the trial court. State v. Pell,140 Iowa 655, 119 N.W. 154; State v. Maupin, 196 Iowa 904, 192 N.W. 828, 195 N.W. 517; State v. Pavey, 193 Iowa 985, 188 N.W. 593; State v. Barrett, 197 Iowa 769, 198 N.W. 36; State v. Howard,191 Iowa 728, 183 N.W. 482; State v. Friend, 210 Iowa 980, 230 N.W. 425.
[4] The court omitted to include in its instructions a definition of the crime of larceny from a building in the daytime, which was also an included offense, but for this omission the appellant cannot complain, as the punishment for such crime is slightly greater than for that of the crime of simple larceny. The court submitted a special interrogatory which the jury were required to answer in the event they found the defendant guilty of the crime charged or of the included offense, and in this interrogatory the jury were required to fix the value of the merchandise stolen. As we have indicated, the jury found the defendant guilty of the included offense of larceny, and in answer to such interrogatory fixed the market value of the goods at the time and place they were stolen at $28.35. So far as we have been able to discover by a careful examination and consideration of the record, the defendant had a fair trial and no grounds for reversal appear. The motion for a new trial was properly overruled. It follows that the judgment of the court below must be, and it is affirmed. — Affirmed.
PARSONS, RICHARDS, HAMILTON, KINTZINGER, POWERS, DONEGAN, and MITCHELL, JJ., concur. *Page 1326 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431838/ | The appellant in this action has been for several years the general sales representative of Wilson Co., the appellee. It appears that Wilson Co. is a Kansas corporation, engaged in the meat packing business, and that it employed the appellant as its representative in the state of Iowa. His duties included soliciting orders from stores, butcher shops, bakeries, etc., where the products of the appellee could be sold or used. He solicited these orders and sent them in to the appellee company, and the company would ship the produce, usually billed to itself, and the appellant would supervise its delivery to the customers. Appellant would collect from his customers and remit to the appellee company. He had been a salesman in the same line previous to his connection with Wilson Co. In April of 1926, when he had negotiations with Wilson Co. leading up to his employment, their offer as to the amount of salary was not satisfactory to him, and it was then agreed between the parties that he was to receive a bonus in addition to his salary, to be based on the volume of sales on certain different products and on the number of items in orders taken. It seems that this arrangement worked satisfactorily until March 5, 1932, when he was discharged, and the appellant commenced this action in the municipal court of Des Moines, Iowa, to recover damages for the breach of his contract. The appellant has divided his petition into seven counts. The appellee company filed an answer and counterclaim, denying that it was indebted to the appellant in any amount, and claiming that the appellant was indebted to the appellee, due to his failure to account for certain collections made by him of accounts belonging to the appellee. To the answer and counterclaim the appellant filed a reply and then a motion to produce records, which motion was sustained by the court. And thereupon the appellee filed a motion to transfer to equity. The transfer to equity asked for transfer of the entire cause. To this motion to transfer, the appellant filed a resistance. Same was submitted to the court, and the court sustained the motion to transfer to equity. Under the ruling *Page 397
and order of the court the case was transferred to equity. From said ruling the appellant has appealed to this court.
The appellant has divided his petition into seven counts. It nevertheless appears that six of the counts in the petition are for compensation, which he alleges is due him, consisting of expense money, bonuses, and a share of all profits made by the appellee company during a period of six years, under his contract of employment. As his contract of employment ceased prior to the commencement of this action, all of the claims under the contract had accrued prior to the commencement of this action, and he does not have a separate cause of action for each item of compensation to which he may be entitled, but has only a single cause of action upon the entire contract. The other count of his petition, which is a claim for damages, is based upon an allegation in said count that the appellee entered into a combine with other packing companies doing business in the territory in which the appellant represented the appellee company, whereby certain special list prices were made and agreed upon by the various packing companies, and that, due to these special prices agreed upon between the appellee company and the other packing companies, the appellant was not able to meet the competition and lost sales thereby; that the appellant had been a salesman in said territory for twenty years, selling meats and other packing company products, and had established a clientele that was of great value to him; and that, due to this agreement the appellee company entered into with the other packing companies to fix the price, he lost this clientele and suffered damage in the sum of $2,000. By an amendment to his petition he sets up the fact that the appellant is unable to state definitely when the combine was perfected, for the reason that there was a combine on different commodities at different times, such as fresh pork sausage, refinery products, and smoked goods, and that at the time of trial said times can be ascertained by the records of the tonnage of the appellant's sales, which were directly affected thereby.
Section 10947 of the 1931 Code is as follows:
"10947. Equitable issues. Where the action has been properly commenced by ordinary proceedings, either party shall have the right, by motion, to have any issue heretofore exclusively cognizable in equity tried in the manner hereinafter prescribed in cases of equitable proceedings; and if all the issues were such, though none *Page 398
were exclusively so, the defendant shall be entitled to have them all tried as in cases of equitable proceedings."
It is fundamental that a court of equity has jurisdiction to hear and determine an account, when the same consists of mutual items and when it is so complicated as that the machinery of a court of equity, because of the complicated nature of the account, is designed to give more adequate relief. This is not because no relief exists at law, but because the relief in equity is more adequate and complete.
In the case of Burt v. Harrah, Administrator, 65 Iowa 643, 22 N.W. 910, wherein an action at law was brought against an administrator on an involved account upon motion of the defendant the same was referred to a referee, pursuant to the statute which now appears as section 11521 of the 1931 Code of Iowa. Inasmuch as the propriety of such a reference depends on whether or not the case is one of equitable cognizance, this decision is in point upon the cause now at bar. In holding that such an action is in substance an accounting suit, of which equity has jurisdiction, this court says:
"It is said, however, that a compulsory reference of an action at law is a denial of the right of trial by jury, and that the statute is therefore unconstitutional, if held to apply to actions at law. It is provided by article I, section 9, of our constitution that `the right of trial by jury shall remain inviolate.' This right of trial by jury does not obtain in cases which are of equitable cognizance. The question, then, is, has a court of chancery jurisdiction of cases like this? In McMartin v. Bingham, 27 Iowa 234, it is held that the statute now under consideration correctly specifies what was of equitable cognizance in matters of account. We think it is very clear that the claim filed and the answer thereto show that there are mutual demands between the parties which will require an examination, and in such cases the issue is one of which a court of chancery always has jurisdiction. 1 Story, Eq. Jur. section 459. It is true, as is said in Fowle v. Lawrason's Ex'r, 5 Pet. 495 [8 L. Ed. 204], that `it cannot be admitted that a court of equity may take cognizance of every action for goods, wares, and merchandise sold and delivered, or for money advanced when partial payments have been made, or of every contract, express or implied, consisting of various items, on which sums of money have become due, and different payments have been made.' But when there is great perplexity in *Page 399
the accounts between the parties, and an examination of them by a jury is impracticable, a court of chancery will exercise jurisdiction. The statement of the account in this case makes it very plain that it would be exceedingly difficult to have an intelligent trial of the issue before a jury. In Blair Town Lot Land Co. v. Walker, 50 Iowa 376, — a case very much like this, — it was said that a trial before a jury in that case `would be a mockery.' In this case, the great length and complicated nature of the accounts are such that it ought not to be submitted to a jury." Pages 644, 645 of 65 Iowa, 22 N.W. 910, 911.
And this court in the case of Blair Town Lot Land Co. v. Walker, 50 Iowa 376, on page 382 said:
"The account or transaction out of which the profits, on the defendant's theory, have accrued, is exceedingly complicated. Conceding the contract to be established before the profits of the venture can be ascertained a series of calculations must be made. The lands were purchased at different times; the amount paid for each parcel was not the same; the taxes paid on each tract may or may not be the same; and interest must be calculated not only on each purchase, but also, we think, on each payment of taxes.
"When the contract is established, and the amount of money paid out thereunder is ascertained, there remains a series of calculations to be made before the profits can be determined. Surely such calculations, and all matters connected therewith, can be much better made and ascertained by a competent referee than by a jury of twelve persons not versed therein.
"In section 457, Story's Equity Jurisprudence, it is said: `Another and more general ground has been asserted for the jurisdiction, and that is, not that there is no remedy at law, but that the remedy is more complete and adequate in equity; and, besides that, it prevents a multiplicity of suits.'
"An examination of the accounts introduced in evidence by the defendant satisfies us that to try this case before a jury would be a mockery. The time required to try the case before a jury, and the fact that it can be more expeditiously done before a referee, and a correct result more nearly attained, satisfies us, under all the circumstances of the case, that the court did not err in making the reference, because the remedy is `more complete and adequate,' and for that reason, if no other, equity has jurisdiction." *Page 400
And in 1 Corpus Juris, 619, 620, the general rule is stated as follows:
"The jurisdiction (of equity) in the case of complicated accounts is based upon the inadequacy of the legal remedy, as where there is an embarrassment in making proof, the necessity for a discovery, or the production of books and papers, or where it would be difficult, if not impossible, for a jury to unravel the numerous transactions involved, and justice could not be done except by employing the methods of investigation peculiar to courts of equity. This would seem to be the true foundation and spirit of the rule, for while the cases lay it down in general terms that mere complication of accounts confers jurisdiction and there need be no necessity for a discovery, or an entire absence of legal remedy, the complexity, if the accounts are not mutual, or if the case does not come within the peculiar class over which the court has undoubted jurisdiction, must be substantial and material. While these conditions exist, however, no other equitable element need be involved, the jurisdiction being founded upon the very necessity of the case."
Applying the law as set out in the above cases and in the quotations from Corpus Juris to the case at bar, the appellant is seeking to recover from the appellee covering a period of six years of employment. He was to receive a stipulated salary, and, in addition to that, he was to receive a bonus of one-fourth cent per pound on certified hams and bacon; one cent per pound on all certified sliced bacon sold in excess of 100 pounds weekly; one-fourth cent per pound on all boiled hams and sausages in excess of 500 pounds weekly; a bonus of 10 per cent on all profits made in plaintiff's territory as shown at the end of each fiscal year of the appellee's business, being October 31st; 20 cents each on all orders consisting of ten or more items, up to twenty orders, and 40 cents each on all orders of twenty or more items each. In addition to this, the appellant alleges that the appellee conspired, contrary to the appellant's contract, with other packers, to fix the price of packing products in the state of Iowa, and that, due to the price-fixing combine, the appellant was not able to meet the competition and lost sales, and the clientele which he had built up covering a period of twenty years in the meat business was destroyed, and that he was entitled to damages in the amount of $2,000. By amendment he states he *Page 401
will prove the combine by the records of the tonnage of business done in the state of Iowa.
Thus we are confronted in this case with an accounting covering a period of six years, an accounting which would mean that every pound of sausage or boiled ham or sliced bacon sold would have to be gone over, for, under the appellant's petition, he was entitled to compensation during the period of six years upon sausage and other various items which the appellee company sold in this territory. Every single order that appellant wrote during that six-year period, every single bill of lading which was used in shipping out the merchandise sold by the appellant, every record of the appellee company covering sales in Iowa, would have to be gone over to ascertain what amount, if any, the appellant was entitled to by way of his contract for a bonus or commission upon the sale of certain merchandise. And, in addition to this, the appellant claims a 10 per cent bonus on the profits made by the appellee company during this period of time, to wit: six years, on sales made in the state of Iowa.
From all of this, it is made apparent that the appellant claims an accounting which involves an examination of the appellee company's records of sales made during a period of six years, so that his bonus might be computed in accordance with a complicated schedule, which he sets out in the petition; that all of the records of the appellee company be examined concerning the business done by the appellee company in the state of Iowa during the six-year period in question so that an accounting might be had of the appellant's share of the profits made by the appellee company, if any. A computation of the profits of course involves a computation of all expenses incidental to the appellee's conduct of its business throughout the entire state of Iowa during that six-year period. It also involves the examination of every remittance made by the appellant to the appellee during this six-year period to determine whether any of them were double remittances, and that an accounting be had of each item.
It is impossible to conceive of a more general accounting of the business of a large industry than is prayed for by the appellant in his petition in this case. He asks that the appellee company be required to account for every item of business conducted by it during the period of six years in the entire state of Iowa. Not only an accounting of the business, but the appellee company must also show *Page 402
what profit, if any, was made in the state of Iowa, because the appellant claims a share of the profits. The jurisdiction of courts of equity is well established to entertain such suits for an accounting where the items involved are extremely complicated and complex, as the machinery of equity is more adequate to give complete relief than the conventional trial at law before a lay jury.
From the claims set forth in plaintiff's petition it is plain that it would be exceedingly difficult to have an intelligent trial of the issues before a jury. The length of time involved, to wit, six years, the method of figuring the bonus or commission claimed by plaintiff, to wit, so much a pound on the various items sold, and the terrific number of records that would have to be submitted, are such that the case should not be submitted to a jury. The lower court was right in its ruling upon the motion to transfer.
Judgment and decree of the lower court must be, and it is hereby, affirmed.
CLAUSSEN, C.J., and STEVENS, ANDERSON, and KINTZINGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431839/ | [1] Anna Kubin, a resident of Tama county, Iowa, died February 3, 1941, leaving as her sole blood relative and heir at law her grandson, George Kubin, appellee herein. She carried a life insurance membership for $1,000 in Western Bohemian Fraternal Association, a fraternal beneficiary association of Iowa. The beneficiary named in the certificate was her son, Edward Kubin, appellee's father, who predeceased Anna Kubin 23 days. The certificate and the by-laws of the fraternal association provide that when the beneficiary dies before the member, and no change of beneficiary is made by the member, *Page 1036
the amount provided for to the predeceased beneficiary shall be paid to the blood relatives and legal heirs of the deceased member. Upon that basis appellee instituted this action to recover the proceeds of said certificate as sole beneficiary.
The principal defendant and only appellant is Anna Mary Kubin, the surviving second wife of appellee's father, as executrix of his estate. She claims for the estate of said Edward Kubin an equitable interest in or lien upon the proceeds of the certificate on account of assessments and dues paid by Edward for his mother, Anna.
Chapter 402, Code of 1939, governing fraternal beneficial associations is here applicable. Code section 8789.2 provides that no beneficiary may obtain any vested interest in the proceeds of a certificate until the certificate has become due and payable and that the member shall have the right at all times to change the beneficiary in accordance with the rules, etc., of the society.
Code section 8792 provides:
"Change in beneficiary notwithstanding contract. No contract between a member and his beneficiary that the beneficiary or any person for him shall pay such member's assessments and dues, or either of them, shall deprive the member of the right to change the name of the beneficiary."
Substantially the same statutory provisions were considered in Sovereign Camp W.O.W. v. Russell, 214 Iowa 39, 241 N.W. 395. We there upheld the right of the member to change his beneficiary notwithstanding his contract not to do so in consideration of the contracting beneficiary's agreement to pay (and subsequent payment of) future assessments.
In Kohler v. Kohler, 9 Cir., Mont., 104 F.2d 38, the court considered the effect of the statutory provision that no beneficiary may obtain a vested interest in the benefit until the certificate becomes due and payable. It was there held that a contract not to change the beneficiary, "insofar as it purported to give appellant a vested interest in the death benefit * * * was illegal and void."
The death of Edward Kubin made appellee the beneficiary under the certificate without affirmative action upon the part *Page 1037
of Anna Kubin. In view of the specific provisions of the statute that the interest of a beneficiary does not vest until the certificate is due and that the member may at any time change the beneficiary, the estate of Edward Kubin may not complain of this change in the beneficiary.
Reliance is had upon certain additional matters in the record. Anna Kubin was drawing old-age assistance from the state. In 1938, she and Edward made an assignment of the certificate to the state board of social welfare. This assignment was apparently intended to conform to statutory provisions, now section 3828.026, Code of 1939. It also recited that Edward Kubin had a first lien on the proceeds to be received from the policy upon the death of Anna Kubin, by reason of an equitable interest due him by virtue of premium payments made by him, amounting to $1,186.72. Only the remainder of the proceeds above $1,186.72 was covered by the assignment. After the death of Anna Kubin, the state board of social welfare made a disclaimer of any interest in the certificate, delivered the certificate to the clerk of the district court, and by order of court was relieved from responsibility in connection therewith.
[2] Appellant asserts the recital relative to premiums paid by Edward gave him a vested interest in the proceeds to be received from the policy upon the death of Anna Kubin. It is sufficient to say the statutes heretofore cited do not permit a beneficiary to obtain a vested interest in the proceeds or a certificate based upon his payment of the member's assessments and dues. The disclaimer of the state board of social welfare makes it unnecessary to consider its rights, if any, under the assignment. It may be noted that section 3828.026 provides its interest under such assignment shall be vested and valid, any other statute to the contrary notwithstanding. However, this provision would not cause the interests of beneficiaries joining in the assignment to vest.
[3] Appellant also contends the act of Edward Kubin in joining in the assignment containing the recital estopped him from asserting the invalidity of his own claim, and that said estoppel also applies to appellee, the heir of Edward. This contention is without merit. Appellee became the beneficiary *Page 1038
not as an heir of his father but as the heir and blood relative of the member, Anna Kubin. Thomas v. Locomotive Engineers' Assn.,191 Iowa 1152, 1181, 183 N.W. 628, 641, 15 A.L.R. 1240.
[4] Finally, it is suggested that after the death of Edward Kubin, Anna Kubin took action sufficient to change the name of the beneficiary from Edward Kubin to Anna Mary Kubin. In the policy itself, and upon the records of the association, the name of Edward Kubin at all times appeared as the beneficiary. It is not contended Anna Kubin followed the procedure necessary to make a formal change of beneficiary. The evidence shows only that Anna Kubin expressed the desire to make such change of beneficiary and told a representative of the fraternal association she would do so upon her recovery from her illness. This proof is wholly insufficient to bring the case within any of the exceptions to the rule requiring compliance with the procedure prescribed by the contract to effectuate a change of beneficiary. Holden v. Modern Brotherhood, 151 Iowa 673, 132 N.W. 329; Thomas v. Locomotive Engineers' Assn., supra; Jacobs v. Abraham Lincoln L. Ins. Co., 223 Iowa 1157, 274 N.W. 879.
It follows that appellee is entitled to all the proceeds of the certificate. — Affirmed.
All JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431840/ | The note in suit is for $3,000, was executed April 15, 1922, by appellees to A.W. Richardson, and became due in one year after date. On January 20, 1924, the note was transferred by A.W. Richardson to J.M. Richardson by appropriate indorsement on the back thereof. This action was commenced June 3, 1924, in the name of J.M. Richardson as plaintiff. Some months later, the plaintiff J.M. Richardson filed an amendment to the petition, alleging that the note was in fact the property of A.W. Richardson, and that same had been transferred to him only for the purpose of collection. On or about the same date, the plaintiff moved the court for an order *Page 1372
substituting A.W. Richardson as plaintiff. The record does not disclose affirmatively that the motion was ever ruled on, but, during the course of the trial, counsel for the defendant admitted that an order of substitution was made, and the case was apparently tried upon that theory.
The answer admitted the execution of the note, and, among other allegations, averred that the action is not prosecuted in the name of the real party in interest. Before trial, an amendment to the petition was filed by A.W. Richardson, as substituted plaintiff, alleging the reassignment of the note to him, and incorporating in said amendment a separate written instrument, dated November 1, 1924, to that effect.
At the conclusion of plaintiff's case, the defendant moved the court to dismiss the petition, upon the grounds (a) that the action was not prosecuted in the name of the real party in interest; (b) that the evidence showed affirmatively that A.W. Richardson is not the owner of the note; and (c) that the alleged written assignment thereof by J.M. Richardson to A.W. Richardson is of no validity or effect. The motion was sustained, and the petition dismissed.
During the trial, appellant sought to introduce parol evidence to show that the purpose of the original transfer of the note by appellant to J.M. Richardson was for collection only. This testimony was excluded by the court, upon the objection of appellees. This ruling is not assigned as error. The court, however, also excluded the written assignment, upon the theory that title to a negotiable note, once transferred by indorsement, cannot be transferred by the execution of a separate written instrument.
An action is not abated by the transfer of any interest therein during its pendency, and new parties may be brought in if necessary. Section 10991, Code of 1924; Bank of Commerce v.Timbrell, 113 Iowa 713; Jordan v. Ping, 32 Iowa 64; ChickasawCounty v. Pitcher, 36 Iowa 593; Kreuger v. Sylvester, 100 Iowa 647; Markley v. Western Union Tel. Co., 159 Iowa 557.
Substitution of parties plaintiff may, and should always, be granted unless the defendant will be in some way prejudiced thereby. Ferry v. Page, 8 Iowa 455; Fannon v. Robinson, 10 Iowa 272; Emerson v. Miller, 115 Iowa 315; Kringle v. Rhomberg,120 Iowa 472; Mayo v. Halley, 124 Iowa 675. This rule *Page 1373
applies to actions upon promissory notes, as well as to other choses in action. Allen v. Newberry, 8 Iowa 65; Howey v.Willtrout, 10 Iowa 105; Wahl v. Phillips, 15 Iowa 478. The party substituted is placed in the same position as the original party to the action, assuming the burdens and receiving the benefits thereof. Crary v. Kurtz, 132 Iowa 105.
Appellees are in no position to complain that the written assignment of the note by J.M. to A.W. Richardson was without consideration. The assignee was fully bound thereby and concluded thereby. Moreover, there is nothing in the record to indicate that appellees were in any way prejudiced by the substitution of appellant as plaintiff. The note was past due when originally transferred, and was subject to all defenses in the hands of either appellant or J.M. Richardson when this action was begun. Payment of a judgment rendered on the note in favor of A.W. Richardson as substituted plaintiff would fully discharge appellees from further liability on the notes. First Tr. Sav.Bank v. Johnson, 202 Iowa 799.
None of the grounds of the motion to dismiss the petition were good, and it should have been overruled. Execution of the note was admitted, the written assignment should have been received in evidence, and, in the absence of any testimony by appellees to sustain some defense thereto, judgment should be entered for appellant. — Reversed.
EVANS, C.J., and FAVILLE and VERMILION, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/7247153/ | Saris, C.J.
INTRODUCTION
Plaintiff Kimberly Sheppard was fired by Defendant 265 Essex Street Operating Company, LLC ("Essex") on January 5, 2015. She brought this action against Essex, two of her former supervisors, Frank Silvia and Beth Fearon, and HealthBridge Management Company.1 See Docket No. 8 at 1.
In her original complaint, Sheppard alleged she was wrongfully terminated in violation of public policy-specifically, in retaliation for her internal complaints of ongoing Medicaid fraud. She also brought a promissory estoppel claim, alleging that she accepted employment in reliance on a promise by Essex that she could work a flexible schedule, and that two years later that promise was violated. Essex moved for summary judgment on both counts, arguing that (1) a retaliation claim over reports of Medicaid fraud must be brought under the Massachusetts False Claims Act ("MFCA"), not as a common-law wrongful termination claim; and (2) an at-will employee is not indefinitely entitled to a flexible schedule, notwithstanding accommodations for two years. Docket No. 49 at 1-2.
This Court granted Essex's motion for summary judgment (Docket No. 49) on September 18, 2017, as to the promissory estoppel count, and deferred on the retaliation count, "pending plaintiff's decision on whether to file a motion to amend" under the MFCA. Docket No. 59.
On September 25, 2017, Sheppard filed a motion for leave to amend her complaint (Docket No. 61). She included with her motion a proposed amended complaint. See Docket No. 61-1. In her proposed amended complaint, Sheppard alleges that Essex violated several specific provisions of the MFCA, including Sections 5B(1), 5B(2), and 5B(8), and brings her action "on behalf of the Commonwealth of Massachusetts" as permitted by Mass. Gen. Laws ch. 12, § 5C(2). Docket No. 61-1 ¶ 49. Sheppard also alleges her termination was wrongful and "in violation and retaliation of [the] False Claims Act," without citing Section 5J of the MFCA, which deals with individual *281retaliation actions. Docket No. 61-1 ¶ 55.
The motion to amend (Docket No. 61) is ALLOWED IN PART and DENIED IN PART, and the motion for summary judgment (Docket No. 49) is DENIED AS MOOT as to the common-law claim of wrongful termination.
FACTUAL BACKGROUND
The relevant factual background is taken from the summary judgment record, as the Court must consider the record when a motion to amend is filed at this stage of litigation. See Resolution Trust Corp. v. Gold, 30 F.3d 251, 253 (1st Cir. 1994). The facts are not in dispute except where stated.
In June 2012, Sheppard began working at Essex, a skilled nursing facility, as a Minimum Data Set ("MDS") Coordinator on an at-will basis. See Docket No. 51-3 at 2. As an MDS Coordinator, Sheppard's employment duties included "reporting missing documentation on [Certified Nursing Assistant] flow sheets, nursing treatment sheets as well as reporting missing documentation and errors that occur in the care plans, and other required MDS documentation." Docket No. 55 at 9; accord Docket No. 51 ¶ 15. The Wage and Benefits Summary, which she signed, noted that all employee wages, benefits, and other working conditions would be subject to change at any time at Essex's sole discretion. See Docket No. 51-3 at 2. Sheppard understood that, as an at-will employee, she could be terminated at any time, for any reason, with or without notice, and that the terms and conditions of her employment were subject to change at any time. Sheppard Dep. at 48:7-52:1.
Things heated up in the fall of 2014. In early fall 2014, Sheppard was asked to, and did, perform the job duties and responsibilities of a Management Minutes Questionnaire ("MMQ") Coordinator because the position was vacant. Docket No. 51-1 ¶ 11. Sheppard's Performance Appraisal, dated October 13, 2014, says that "[Sheppard] is taking on the role of MMQ," Docket No. 51-8 at 1, but Sheppard disputes that she actually accepted the position of MMQ Coordinator, which dealt with Medicaid reimbursements, Sheppard Dep. at 112:21-113:22; Docket No. 51-1 ¶ 12.
In October or November of 2014, Sheppard told Darlene Morris, the regional clinical reimbursement specialist, that she would not participate in Morris's "upscoring" of patients. Sheppard Dep. at 56:2-20. Upscoring "means to change the criteria of the MDS/MMQ reports so that a patient appears to need more services and [Essex] will be eligible for additional funding." Docket No. 51-5 at 13. Additionally, in an email from Stephen Hopkins, a medical records clerk, to Silvia, the administrator, dated October 31, 2014, Hopkins wrote that Sheppard "said that [Morris] has been going through the Medicaid charts and taking out documents that conflict with nursing as far as reimbursement so she doesn't lose points on the audit." Docket No. 51-13. At some point in time, Marcie Zarella, the regional director of clinical reimbursement, told Sheppard not to put any of her findings in an email because Essex was being audited by the Massachusetts Attorney General's Office for Medicaid fraud. Docket No. 51-5 at 17. Based on that directive, Sheppard entered her findings in a Word document, which she gave to her supervisors. Docket No. 51-5 at 17.
On October 13, 2014, Sheppard received a positive performance review for her job as MDS Coordinator. Docket No. 51-8. But, around the same time, Morris shared concerns with Zarella about Sheppard's performance. Docket No. 51-1 ¶ 16. On November 18, 2014, Essex presented Sheppard with a Performance Warning *282and Plan for Improvement ("PIP"), Docket No. 51-1 ¶ 20, which she did not sign because she disagreed with the way Essex characterized her responsibilities with respect to the MMQ project, Sheppard Dep. at 111:4-113:22. Sheppard's PIP expressly states that her failure to immediately improve her performance could lead to termination. Docket No. 51-9 at 2.
On November 30, 2014, the biannual internal audit of the MMQ documentation conducted by Morris revealed numerous deficiencies, which Sheppard failed to report, as required by the PIP. Docket No. 51-1 ¶ 22. Sheppard was then "re-educated on the process for completing and correcting the monthly nursing summaries." Docket No. 51-1 ¶ 23. The audit further showed that, on December 3, 2014, Sheppard had not completed her required tasks. Docket No. 51-1 ¶ 24.
Sheppard was suspended pending investigation on December 5, 2014. Docket No. 51-10. The reason indicated on the form was "Performance," and her job title as listed on the suspension form was "MMQ Coordinator." Docket No. 51-10.
On December 8, 2014, Sheppard wrote a letter to Essex disputing her suspension and arguing she had been unfairly suspended. Docket No. 51-11 at 1. In the letter, Sheppard indicated that Essex retaliated against her "because [she] would not agree to the 'overscoring' of certain residents." Docket No. 51-11 at 2. She also wrote that she had "been told to 'look away' while [Morris] marked up a nursing summary." Docket No. 51-11 at 2.
Upon receiving the letter, Zarella and Robert Clark undertook an investigation into Sheppard's allegations of fraudulent conduct by Morris. Docket No. 51-1 ¶ 29. Essex's investigation revealed no support for Sheppard's allegations. See Docket No. 51-1 ¶ 34.
Sheppard's employment was terminated on January 5, 2015. See Docket No. 51-14. The proffered reason for the termination was her "failure to meet expected performance standards." Docket No. 51-14. Sheppard maintains, however, that she was terminated in retaliation for reporting Morris's alleged Medicaid reimbursement manipulation. See Docket No. 51-5 at 17.
LEGAL STANDARD
Courts "should freely give leave [to amend pleadings] when justice so requires." Fed. R. Civ. P. 15(a)(2). However, courts may deny leave to amend for several reasons, including "futility of amendment." United States ex rel. Gagne v. City of Worcester, 565 F.3d 40, 48 (1st Cir. 2009) ; accord Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (motion for leave to amend may be denied where there is "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.").
If a plaintiff seeks leave to amend a complaint prior to the close of discovery, courts apply the motion to dismiss standard of Fed. R. Civ. P. 12(b)(6) to decide whether amendment would be futile. Hatch v. Dep't for Children, Youth & Their Families, 274 F.3d 12, 19 (1st Cir. 2001). However, when leave to amend a complaint is sought after discovery is complete and a party has already moved for summary judgment, a plaintiff must meet a more rigorous standard. See id. (citing Resolution Trust Corp., 30 F.3d at 253 ) (stating that, in that situation, "the proposed amendment must be not only theoretically viable but also solidly grounded in the record"). Here, since the discovery deadlines have passed, and there is a motion for summary judgment on the docket, Sheppard's amendments will be deemed *283futile "unless the allegations of the proposed amended complaint are supported by substantial evidence." Id. (citing Resolution Trust Corp., 30 F.3d at 253 ).
DISCUSSION
I. Qui Tam Claim
A qui tam action on behalf of the Commonwealth of Massachusetts alleging violations of the MFCA must meet the special pleading requirements of Fed. R. Civ. P. 9(b). See Lawton ex rel. United States v. Takeda Pharm. Co., 842 F.3d 125, 132 (1st Cir. 2016) (" Rule 9(b)'s heightened pleading standard generally applies to state law fraud claims brought in federal court."). That rule requires parties alleging fraud in a complaint to "state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b). In the context of a qui tam action, the relator "must specify the 'time, place, and content of an alleged false representation.' " United States v. Univ. of Mass., Worcester, 80 F.Supp.3d 296, 302 (D. Mass. 2015) (quoting Gagne, 565 F.3d at 45 ). Despite these requirements, there is some "flexibility for relators to leave some questions unanswered," so long as the complaint demonstrates sufficient particularity overall. Id. at 303.
Essex argues Sheppard's motion to amend is futile because Sheppard has not met the particularity requirement of Rule 9(b) for a qui tam action. The Court agrees. Sheppard has failed to identify which employees or types of employees at Essex actually filed false claims against the government, the content of such claims, when such claims were filed, the patients involved, or how much money was falsely claimed-all of which are required elements when a plaintiff asserts that a defendant submitted false claims. See id. at 302-03. Even when Sheppard is granted the "flexibility... to leave some questions unanswered," her proposed amended complaint is not pleaded with sufficient particularity.
Moreover, a qui tam action also must comply with the procedural requirements of the MFCA: a plaintiff must file her complaint under seal and must serve the Attorney General. Mass. Gen. Laws ch. 12, § 5C(3). In this case, Sheppard did not fulfill either procedural prerequisite.
Sheppard's proposed amended complaint satisfies neither Fed. R. Civ. P. 9(b) nor the procedural requirements of Mass. Gen. Laws ch. 12, § 5C(3). Accordingly, she may not amend her complaint to bring a qui tam action on behalf of the Commonwealth.
II. Individual Retaliation Claim
Sheppard also seeks to bring an individual retaliation claim under Section 5J of the MFCA. There is little case law construing the MFCA's provisions. See Scannell v. Attorney Gen., 70 Mass.App.Ct. 46, 872 N.E.2d 1136, 1138 n.4 (2007). But "the MFCA was modeled on the similarly worded Federal False Claims Act" ("FCA"), and therefore courts "look for guidance to cases and treatises interpreting the [FCA]" when interpreting the MFCA. Id.; cf. Univ. of Mass., Worcester, 80 F.Supp.3d at 304 n.9 (describing scope of protected conduct under retaliation provisions of MFCA and FCA as "nearly identical").
As a preliminary matter, retaliation actions under the analogous FCA provision "need not meet the heightened pleading requirements of Rule 9(b)." United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 238 n.23 (1st Cir. 2004) (interpreting a retaliation claim under 31 U.S.C. § 3730(h) ), abrogated on other grounds by Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662, 128 S.Ct. 2123, 170 L.Ed.2d 1030 (2008). Furthermore, retaliation actions *284under the analogous FCA provision "are not subject to the [FCA] procedural requirements" of filing in camera and serving the government. United States ex rel. Pilon v. Martin Marietta Corp., 60 F.3d 995, 1000 (2d Cir. 1995). As such, Sheppard's failure to meet the particularity requirement of Fed. R. Civ. P. 9(b), and her noncompliance with the procedural requirements of Mass. Gen. Laws ch. 12, § 5C(3), do not-on their own-make her motion to amend to include a retaliation claim futile.
The retaliation provision of the MFCA mandates that an employee shall be entitled to be made whole if she is terminated "because of lawful acts done by the employee... in furtherance of an action under [the MFCA], or other efforts to stop a violation of [the MFCA]." Mass. Gen. Laws ch. 12, § 5J(2). Thus, to prove a retaliatory termination, a plaintiff must demonstrate that (1) she engaged in conduct protected by the MFCA; (2) her employer knew that she was engaged in that conduct; and (3) her employer took an adverse employment action against her because of the protected conduct. See Maturi v. McLaughlin Research Corp., 413 F.3d 166, 172 (1st Cir. 2005) (citing Karvelas, 360 F.3d at 235 ) (setting out elements of a retaliation claim under the FCA).
As to the first element, the First Circuit has interpreted the analogous FCA provision to protect only that conduct "that 'reasonably could lead' to an FCA action." United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52, 59 (1st Cir. 2017) (quoting Karvelas, 360 F.3d at 237 ). Internal reporting and objecting to employer directives fall within the scope of protected conduct if they are related to the submission of false claims. See id. at 59 n.8 ; United States ex rel. Lokosky v. Acclarent, Inc., 270 F.Supp.3d 526, 533 (D. Mass. 2017). The second element-the employer's knowledge-can be established with any action by the employee that would give the employer notice that an FCA action is "a reasonable possibility." Maturi, 413 F.3d at 173. Finally, if a plaintiff is able to make an initial showing of causation for the third element, the burden will shift to the defendant to state a legitimate, nonretaliatory reason for the termination. See Harrington v. Aggregate Indus. N.E. Region, Inc., 668 F.3d 25, 31 (1st Cir. 2012) (holding that McDonnell Douglas burden-shifting framework applies to FCA retaliation claims). If the defendant articulates such a reason, the plaintiff has the additional burden of showing that the reason is mere pretext for retaliation. Id.
On its face, Sheppard's proposed amended complaint pleads all of the elements of a retaliation claim under Mass. Gen. Laws ch. 12, § 5J. See, e.g., Docket No. 61-1 ¶¶ 48-64. She alleges that she complained about possible Medicaid fraud to her supervisors and was subsequently suspended and terminated because of that protected conduct. See, e.g., Docket No. 61-1 ¶¶ 48-64. But the Court must, at this juncture, go further and determine whether those allegations are supported by "substantial evidence" in the record or are futile. Hatch, 274 F.3d at 19.
First, there is evidence in the record that Sheppard was engaged in protected conduct in the autumn of 2014. Sheppard produced an email from Stephen Hopkins to Silvia, dated October 31, 2014, which states that Sheppard "said that [Morris] has been going through the Medicaid charts and taking out documents that conflict with nursing as far as reimbursement so she doesn't lose points on the audit." Docket No. 51-13. Under First Circuit law, this internal reporting qualifies as protected conduct. See Booker, 847 F.3d at 59 n.8 ; Karvelas, 360 F.3d at 236-37. In addition, Sheppard's letter in response to her suspension, dated December 8, 2014, *285expressed her concern that managers retaliated against her "because [she] would not agree to the 'overscoring' of certain residents." Docket No. 51-11 at 2. When asked at her deposition when she first experienced retaliation, Sheppard testified: "When [Morris] wanted me to do the MMQ stuff and I told her no, the upscoring, I won't do it." Sheppard Dep. at 56:2-7. The conversation between Sheppard and Morris in which Sheppard resisted upscoring occurred in October or November 2014. Sheppard Dep. at 56:2-20. Objecting to employer directives regarding the submission of false claims is protected conduct. See Booker, 847 F.3d at 59 n.8. Sheppard's internal complaints of Morris's manipulation of Medicaid charts and Sheppard's objections to Morris's upscoring in the autumn of 2014 substantially support an allegation of protected conduct.
Second, there is evidence that Sheppard's supervisors knew of her protected conduct. Employees whose "job responsibilities involve overseeing government billings or payments" face a heightened burden for notifying their employers that they are engaged in protected conduct. Maturi, 413 F.3d at 173. It is undisputed that Sheppard's job involved reviewing documentation for government reimbursement purposes. See Sheppard Dep. at 99:19-101:13. She sent biweekly emails to the administrator, director of nurses, and unit managers to report "[m]issing documentation" and "inaccurate documentation" in the files she reviewed. Sheppard Dep. at 99:19-101:13.
But there is evidence that Sheppard's supervisors knew that, by autumn 2014, she was reporting suspected instances of Medicaid fraud, not just missing or inaccurate documentation. The most important evidence is the email from Hopkins to Silvia, which outlined Sheppard's reports of Morris's intentional concealment of Medicaid records on October 31. See Docket No. 51-13. In her interrogatory responses, Sheppard stated that Zarella told her "not to put any of her findings in an email as the company was being audited by the Massachusetts Attorney General's Office[ ] for Medicaid fraud," Docket No. 51-5 at 17, indicating that Zarella was aware of Sheppard's complaints and the danger they posed for Essex.2 Moreover, Essex knew about Sheppard's allegations of fraud and resistance to upscoring by December 8, 2014, at the very latest. See Docket No. 51-11. This was after Sheppard's suspension, but prior to her termination.
Because Sheppard directly accused Morris of upscoring to multiple supervisors at Essex, there is admissible record evidence to support a finding that Sheppard satisfied the notice requirement. See Dineen v. Dorchester House Multi-Serv. Ctr., Inc., No. 13-12200-LTS, 2015 WL 3616087, at *2 (D. Mass. June 9, 2015) (denying summary judgment where plaintiff presented admissible evidence that she told community health center's president that center's "Medicare Part B billing constituted fraud").
Finally, the record supports Sheppard's proposed amended allegation that she was suspended and terminated because of her protected conduct. According to the record, Sheppard engaged in protected conduct in October or November 2014. See Sheppard Dep. at 56:2-20; Docket No. 51-13. She was presented with a PIP on November 18, 2014. Docket No. 51-9. She was then suspended on December 5, 2014, Docket No. 51-10, and subsequently terminated on January 5, *2862015, Docket No. 51-14. Causation can be inferred from temporal proximity between protected conduct and an adverse employment action. See Harrington, 668 F.3d at 32. A one- to two-month period is sufficiently brief to allow that inference. See Lokosky, 270 F.Supp.3d at 534-35 (denying motion to dismiss when complaint alleged retaliation occurred four to six months after protected conduct). Sheppard's proposed amended complaint is supported by sufficient record evidence to make out a prima facie case.
Essex has presented facts to support a legitimate, nonretaliatory reason for Sheppard's suspension and termination: poor performance. See Docket No. 51-1 ¶¶ 16-27; Docket No. 51-14. But there are also facts in the record that indicate Essex's proffered reason is pretextual. See Harrington, 668 F.3d at 31. "[D]eviations from standard procedures, the sequence of occurrences leading up to a challenged decision, and close temporal proximity between relevant events" can demonstrate pretext. Id. at 33. Here, Sheppard received a PIP roughly one month after her protected conduct. What is more suspicious, however, is that Essex barely gave her any time to improve her performance. As a result of deficiencies observed during an audit on November 30, 2014-just twelve days after the PIP was issued-Sheppard was "re-educated on the process for completing and correcting the monthly nursing summaries." Docket No. 51-1 ¶ 23. But she did not have time to put that re-education into action: Sheppard was suspended only five days later. Docket No. 51-1 ¶ 27. On the record as a whole, temporal proximity and a lack of any meaningful opportunity to remedy job performance could support an inference of pretext. See Dineen, 2015 WL 3616087, at *1.
Essex conducted an investigation into Sheppard's complaints of fraud by Morris and found that "there had not been any inappropriate conduct by Ms. Morris and that Ms. Sheppard's claims were unsubstantiated." Docket No. 51-1 ¶¶ 28-34. But even if the company believed that there was no actual fraud by Morris, the investigation's findings do not resolve Sheppard's retaliation allegations. See Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409, 416, 125 S.Ct. 2444, 162 L.Ed.2d 390 (2005) (stating that plaintiff "need not allege that the defendant submitted a false claim" to state FCA retaliation claim).
This Court therefore finds that Sheppard's proposed retaliatory suspension and termination claim under the MFCA would not be futile.
III. Motion for Summary Judgment
Because the Court allows Sheppard to amend her complaint as described above, Essex's motion for summary judgment on the common-law wrongful termination claim is moot and will be denied.
ORDER
Plaintiff's motion to amend (Docket No. 61) is ALLOWED with respect to the retaliatory suspension and termination claim only. Defendant's motion for summary judgment (Docket No. 49) as to the claim of wrongful termination in violation of public policy is DENIED AS MOOT. Any claims against Beth Fearon, Frank Silvia, or HealthBridge Management Company are dismissed for lack of service.
An initial pretrial conference will be held on March 29, 2018 at 11:00 a.m.
SO ORDERED.
Almost two full years into the case, there is no indication that Fearon, Silvia, or HealthBridge Management Company have been served. For this reason, all claims against those parties are dismissed.
Zarella does not refute Sheppard's interrogatory response in her affidavit. See Docket No. 51-1. | 01-03-2023 | 07-25-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/3431841/ | At about 10 o'clock on the evening of May 16, 1940, appellant was seated at the south end of the Corner Cafe in the town of Doon. While there, the prosecuting witness, Kersbergen, and Bernard Mann, hereinafter referred to as Red, came in and took seats in booths arranged along one side of the restaurant. Shortly after the arrival of Kersbergen and Red, appellant walked to the bar opposite the booths in which the former were seated, and bought a glass of beer. Appellant and the others had been friends for 25 years or more. Notwithstanding this, it is the claim of Red and of the prosecuting witness that without any provocation, and, to use the expression of one, "out of a clear sky," appellant called them a vile name, whereupon both of them jumped up. Red reached appellant first and gave orders to Kersbergen to stay out of it.
Red grabbed appellant by the neck and slapped him with such force as to knock him over into a booth. Whether Red helped him up or dragged him out is not clear but he led appellant to the door, meanwhile striking him in the face with his fist once or twice. The last blow was struck in the cafe *Page 865
[EDITORS' NOTE: SKETCH IS ELECTRONICALLY NON-TRANSFERRABLE.] *Page 866
as they reached the door and appellant stumbled or fell out onto the steps or to the sidewalk. Red estimates the number of times that he struck appellant was the slap with the open hand and four times with a clenched fist. Appellant made no effort to defend himself or to strike back. Getting on his feet he started to run to the northeast across the street toward the Bauer home. For convenience of reference a photostatic copy of a plat used in evidence, Exhibit 3, is here inserted. Red started in pursuit with Kersbergen close behind. Whether the appellant was knocked down in the street before he reached the Bauer building or stumbled is not clear. Red testified that he (appellant) stumbled just as he grabbed appellant. All of the witnesses for the prosecution who testified on the subject say that appellant was lying on the ground in the street begging that he not be hit any more.
Getting to his feet, with or without assistance, appellant, in the grasp of Red, was then led back to the Corner Cafe for the purpose or on the pretext of getting his cap. Red thus refers to appellant's condition at that time:
"A. Well, I thought his face was all bloody and his clothes was bloody, and I thought I had to wash him off so he would look a little respectable. Q. The blood had trickled down to his coat and shirt and trousers? A. I don't know about his trousers. His neck was all blood."
Red's professed desire to wash up appellant could well have been carried out at the Corner Cafe where appellant had been at the beginning. Instead he took appellant west across the street and down to what is marked on the plat, Cosmo Cafe, keeping hold of him all the time, parading him down the street so that his bruised and battered condition might be seen by the crowd.
When they reached the Cosmo Cafe appellant expressed himself as not wanting to go in whereupon Red proposed that he take him to the fountain located at the northwest corner of the intersection near the building marked Farmers Hardware on the plat. To accomplish this appellant was *Page 867
walked in the gutter while Red kept to the sidewalk. Coming to the southwest corner of the intersection Red started to lead appellant diagonally across the intersection. When they got part way across appellant broke away from Red and started back to the south in the direction of his car which was parked near the place marked on the plat as the "back door" of the Corner Cafe. At this point Red seemingly having concluded that appellant had been maltreated enough, expressed the purpose of letting him go.
But at this point the prosecuting witness, Kersbergen, who had followed close behind appellant and Red throughout, took a hand. He had been ready to assault appellant in the beginning and would have done so except that he was ordered by Red to keep out.
Before continuing with the record dealing with the prosecuting witness' activities, it will be of interest to note Red's attitude. After testifying to the vile name he alleges appellant used towards Red and Kersbergen (though no one else in the cafe heard it), he then narrates in part his treatment of appellant:
"Q. You just got right up and slapped him, didn't you? A. That's right. Q. How hard did you slap him? A. Pretty hard. Q. Just about as hard as you could? A. Yes, sir. Q. Which hand was it? A. Right hand. Q. Was it your open hand? A. Yes, sir. * * * Q. You didn't temper that blow one bit because you had known him for twenty years, did you? A. Well, I wouldn't say so; no. Q. You didn't have a bit of mercy on him? You just slapped him just as hard as you could? A. I probably did. Q. And what happened to him when you landed this `hay maker' on him? A. He slipped and fell in the booth. Q. Slipped toward you, then? A. Slipped in the booth behind me. Q. He was over here at the counter, wasn't he, at the bar, on the east side? A. Yes, sir. Q. How did he get over here into the booth, then? A. I don't know how he got over there. I know he was in there. Q. After you got through hitting him? A. Slapped him the first time; yes. Q. And he went right down on the table, didn't he? A. Well, partially: yes. *Page 868
* * * Q. But he didn't get quite down to the floor? A. No, sir. Q. So you got hold of him? Whereabouts? A. By the collar. Q. And you grabbed him by the collar with your right hand or left hand? A. Left hand. Q. And you kept your right hand free to use again? A. That's right. I used it, too. Q. And about how many times did you use it, Mr. Mann? A. Well, I think I hit him three times. Slapped him once and hit him twice, in the cafe. Q. And what effect did this have on Mr. Miller as you hung on to his collar and slugged him with your right hand? A. He was still tough. Q. He was still tough. Did he say anything to you? A. I don't recall that he did. Q. He was quite silent about the slugging? A. No. He started to run outside. Q. Well, he didn't say anything to you, did he? A. I don't remember. * * * Q. And you got hold of his collar and hung right on to it as he was going out the door? A. That's right. Q. And you don't remember hitting him more than twice between there and the door? A. No. Q. Now, when you got him to the door did you slug him again, or did you give him a shovel? A. We went outside together."
After telling how appellant went down on the steps at the Corner Cafe the witness continued:
"Q. You knocked him down? A. After we got out on the sidewalk, yes. Q. You knocked him down. And where did he fall? A. On the sidewalk."
After some further testimony not necessary to be set forth, Red continued:
"Q. And will you tell the jury what you did to Mr. Miller after you got him out on the sidewalk? A. I hit him a couple of times. Q. Where did you hit him? A. In the face. Q. What part of the face? A. I couldn't say. Q. You were hitting him so fast you didn't pay much attention to just where you hit him? A. No, it didn't make much. Q. You were pretty angry at him? A. Yes, sir. Q. And you didn't care if you did do some serious damage to him? A. No. Q. In fact, you were trying to do a good job on him? A. He asked for it. Q. What do you mean, `he asked for it?' A. Well, he did. He called me a ______, so he was asking for it." *Page 869
Elaborating somewhat as to what happened at the door of the Corner Cafe, Red said:
"Q. What happened to Mr. Miller when you slugged him in the face on the sidewalk here? Did he go down? A. Part way; yes. Q. And staggered? A. Yes. Q. Did he go down on his knees? A. No. Q. How far down did he get? A. Just with his hands. Q. His hands touched the pavement? A. I think his hands touched the blocks of the steps. Q. His hands touched the blocks of the steps? A. Yes. Q. And did you help him up? A. No, he got up and he run. Q. And you right after him? A. Yes. Q. Did you get hold of his collar again? A. That's right. You bet I did." (This has reference to appellant's attempt to escape when he ran over towards the Bauer home.)
Red was asked: "Q. What was the reason that you followed him across there when he was trying to run away from you?" He answered: "I thought maybe he wasn't satisfied yet. I was still mad."
As indicating something more of the attitude of Red we quote the following from the transcript:
"Q. You did just about as thorough a job on Mr. Miller as anybody could do on another man and not kill him, isn't that a fact? A. I'll guess with you. Q. How was that? A. I'll guess with you. * * * (Question read by the Reporter: `You did just about as thorough a job on Mr. Miller as anybody could do on another man and not kill him, isn't that a fact?') A. Well, he had more parts of his body left, I guess. Q. You think you missed some spots? A. A few."
It should be said that Red was a tractor operator, 36 years old, weighing 187 pounds; and Kersbergen a former garage operator, 53 years old, weighing 160 pounds. Appellant was past 60.
We return to the prosecuting witness' part in this affair. This witness as has been pointed out followed close behind Red during all the abuse to which appellant was subjected. When appellant finally escaped from Red and started for his car, the prosecuting witness took up the chase and followed him on the *Page 870
run to the car. Appellant not being able to open the front door because of a button locking it on the inside, made a "dive" into the back of the car. The prosecuting witness followed and made what was described as a "flying tackle", getting appellant around the legs, and tried to drag him out. During this time appellant lay face downward and twice demanded that whoever it was that had a hold on him, let go; the third time he announced that unless his assailant let go, he would shoot; Kersbergen hung on and appellant did shoot, one ball hitting Kersbergen along the ear and the other breaking his arm. This completes the story as far as it needs to be told now except that Red was at hand and started for Miller just before the shooting began and proceeded to beat appellant further to a point where he was so disfigured as to be unrecognizable by his own doctor. Both the prosecuting witness and Red repeatedly expressed themselves as having at no time any fear of the appellant, but on the contrary rather boastfully acknowledged their ability to take care of themselves and of him.
During all the transactions we have narrated, and others which might be set out, appellant made no assault or attempted assault on anyone nor did he seek to defend himself, except in flight which proved of no avail, until, having escaped to his car and being partly in it, he shot through the door as has just been detailed. Even had he used the vile epithet about which Red and his fellow laborer testified, this was no justification for the assault. Citation of authority is scarcely needed to support this but see State v. Davis, 209 Iowa 524, 228 N.W. 37. We have purposely confined our discussion of the evidence to the testimony of the prosecuting witness and Red. Out of their own mouths they have made a clear case of self-defense for appellant; and we can imagine no case to which this language of Weaver, J., in State v. Borwick, 193 Iowa 639, 643, 187 N.W. 460, 462, would more aptly apply:
"* * * if he did use a deadly weapon (as we must assume he did) to repel his assailant, no just-minded man could draw therefrom an inference of the malice essential to a finding of guilt of murder. The undisputed facts sufficiently rebut the inference or presumption of malice which might otherwise arise from the mere use of a deadly weapon." *Page 871
We do not overlook the arguments and citations of appellee but there are none among them which require a result different than that here announced. These are the cases cited as justifying the ruling on appellant's motion to direct: State v. Kneeskern,203 Iowa 929, 210 N.W. 465; State v. Bingaman, 210 Iowa 160,230 N.W. 394; State v. Mitchem, 217 Iowa 152, 251 N.W. 46; State v. Woolman, 218 Iowa 967, 255 N.W. 524, 257 N.W. 318; State v. Brewer, 218 Iowa 1287, 254 N.W. 834; State v. Griffin, 218 Iowa 1301,254 N.W. 841; State v. Clay, 222 Iowa 1142, 271 N.W. 212. None approaches this case in its facts and we doubt very much whether a case like this can be found. We conclude that the court should have sustained appellant's motion to direct a verdict.
In order to make sense out of what has gone before, it should be stated that there are many features contained in the transcript that are not here set down. The testimony of the prosecuting witness and of Red does not square with ordinary experience, their abuse of appellant seeming to be without motive and without excuse. The fact is, if we have read the record correctly, that there had been some previous discussion of war matters wherein the president and Hitler were mentioned and the prosecuting witness and Red, with superheated patriotism, sought to demonstrate their loyalty by beating up appellant and parading him up and down the street, covered with blood, for the entertainment of bystanders.
The conclusion announced makes it unnecessary that we discuss the other assignments of error found in the briefs.
The judgment of the court below is accordingly reversed and the cause remanded with directions to sustain the motion. — Reversed and remanded with directions.
CHIEF JUSTICE and all JUSTICES concur. *Page 872 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1817627/ | 440 F.Supp. 8 (1977)
Henry LEVNO, Gladys L. Levno, Albert Swanson, Eva Swanson, Verner King, Polly King, Soren Jacobson and Charlene Jacobson, Plaintiffs,
v.
UNITED STATES of America, Internal Revenue Service, and District Director for the District of Montana, Defendants.
No. CV-75-123-BLG.
United States District Court, D. Montana, Billings Division.
August 15, 1977.
Wayne M. Graham, Kansas City, Mo., Eugene A. Lalonde, Kurth, Felt, Speare & Lalonde, Billings, Mont., for plaintiffs.
Roger M. Olsen, Tax Div., Dept. of Justice, Washington, D.C., for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
BATTIN, District Judge.
The above-entitled action was tried before the Court, sitting without a jury, on *9 May 9, 1977. Upon the conclusion of testimony and the submission of evidence, the Court took the issues and facts, as presented, under advisement and ordered counsel to file proposed Findings of Fact and Conclusions of Law. Each of the parties has filed proposed Findings of Fact and Conclusions of Law with supporting legal briefs. After consideration of all of the materials before the Court, I find:
I.
This civil action was instituted as a result of a proceeding on behalf of the United States of America to enforce a provision of the Internal Revenue Code.
II.
The plaintiffs named above are cash-basis, individual, taxpaying citizens of the United States. The tax liability subject to question in this case involves the years of 1971, 1972, and 1973.
III.
During every year in issue, the respective plaintiffs were each engaged in the raising of livestock in Montana.
IV.
In each of the years in issue, each plaintiff entered a separate agreement with S & H Sheep Company, a Montana corporation, and a livestock dealer, for the sale of cattle at a price to be determined at auction through the Sidney Livestock Market Center, a Montana corporation. Each of the contracts entered into by the respective plaintiffs with S & H Sheep was memorialized on a preprinted form.
V.
The effect of each contract was to defer to the following tax year taxable income from the sale of livestock made the subject of the contract to sell.
VI.
The chronology of events leading to the signing of the written agreements entered into by the respective parties followed the same general pattern.
VII.
Each plaintiff desiring to sell his cattle made an arrangement with the S & H Sheep Company to sell his cattle to that licensed broker.
VIII.
In each of the years in question, S & H Sheep Company was fully owned by the same three shareholders who were the sole shareholders of the Sidney Livestock Market Center.
IX.
S & H Sheep Company had no separate business offices or employees.
X.
A check-in slip was prepared and executed when the livestock were transferred to the Sidney Livestock exchange.
XI.
A State of Montana Brand Inspection Report and Tally was prepared by an employee of the State of Montana working in Sidney, inspecting the brand of all cattle sold at Sidney Livestock Market Center.
XII.
A bill of sale was prepared and executed at the Livestock Center brand inspection station and forwarded by the Brand Inspector to the Brand Enforcement Division of the State of Montana.
XIII.
When the livestock were auctioned and sold, the net proceeds were determined by deducting all the various fees, expenses and charges from the auction price.
XIV.
The fact that the livestock were sold by S & H Sheep Company and not the taxpayer did not result in any difference in any of the underlying fees and charges for the sale at the Sidney Livestock Market Center, nor did it affect the manner and method of auctioning the livestock.
XV.
Any trucking charges incurred in the transportation of the cattle to the Sidney Livestock Market were costs deducted from the gross sale price received for the cattle.
*10 XVI.
On the date of sale, or within one day thereafter, the Sidney Livestock Market executed checks payable to S & H Sheep Company in the amount of the net proceeds.
XVII.
Ownership of the cattle passed to the S & H Sheep Company prior to the sale at auction.
XVIII.
The farmer-ranchers involved in the contracts in question retained no power to stop the sale of their cattle or to receive their money, except as provided in the agreement with S & H Sheep Company.
XIX.
The contracts involved in these deferred payments were written.
XX.
The contracts were executed at arm's length.
XXI.
Each of the plaintiff-taxpayers retained no unqualified right to receive payment in the years in which the contract was executed and the cattle delivered for sale.
XXII.
The intent of the parties when deferred payment was agreed upon by contract was to provide average income in any given year.
XXIII.
Each of the plaintiff-taxpayers filed a penalty claim for refund of taxes assessed by the Internal Revenue Service when audited and when the deferred contracts were disallowed.
XXIV.
The amounts claimed by each taxpayer are not in dispute.
XXV.
In each instance of the deferred-payment contract, the particular taxpayer received payment for the sale of his cattle in the calendar year subsequent to the year in which the sale was made, and pursuant to the terms of the deferred payment contracts.
XXVI.
The S & H Sheep Company was not an agent for any of the respective plaintiffs for purposes of the contracts which are the subject of this action.
CONCLUSIONS OF LAW
I.
Jurisdiction exists in this Court by virtue of 28 U.S.C. § 1346(a)(1) and 26 U.S.C. § 7422(a), as well as 28 U.S.C. § 1340.
II.
Venue in this Division is appropriate by virtue of 28 U.S.C. § 1402(a)(1).
III.
The agreements entered into between the plaintiff-taxpayers and S & H Sheep Company were valid and binding contracts, completed at arm's length.
IV.
The parties are entitled to the benefits or obligations provided under the respective contracts. A cash-basis taxpayer is properly subject to tax upon income only when he "receives" an item of income.
V.
The income in question in these cases was not constructively received by the taxpayers.
VI.
The proceeds received from the sale of the cattle and held by the S & H Sheep Company were subject to substantial qualifications and restrictions.
VII.
The income from each particular sale was properly deferrable and should have been treated as income in the year of actual receipt by the taxpayer and not the year of sale. The principles articulated in the following rules and cases are relevant and analogous to the facts of this case:
Revenue Ruling 58-162, Cum.Bul.Rev. Rul. 58-162, 1958-1 at 234;
Revenue Ruling 69-358, Cum.Bul.Rev. Rul. 69-358, 1969-1 at 139;
Patterson v. Commissioner of Internal Revenue, 510 F.2d 48 (9th Cir. 1975); *11 Oliver v. United States, 193 F.Supp. 930 (D.C.Ark.1961).
VIII.
The taxpayers contracting with the S & H Sheep Company on deferred payment contracts retained no rights of ownership after the execution of the contracts.
IX.
Upon the execution of the agreements the taxpayers had neither the right to the return of the cattle, if they were not sold, nor the right to withdraw the cattle from the auction ring at any time prior to their sale at auction.
X.
After execution of the agreement between the taxpayer and the S & H Sheep Company, any risk of death or injury was borne by the buyer, S & H Sheep Company.
XI.
The plaintiffs are entitled to a tax refund as claimed, together with interests on the amounts claimed.
XII.
The Civil Rights Attorney's Fees Awards Act of 1976, Public Law 94-559, Title 42 U.S.C. § 1988, allows an award of reasonable attorney's fees as a part of the costs of this action.
XIII.
Title 42 U.S.C. § 1988 permits the award of attorney's fees irrespective of whether the United States is the complaining party in the action or proceeding.
XIV.
The prevailing party in a tax dispute may be either a plaintiff or a defendant.
XV.
The status of a party as a plaintiff or as a defendant is not relevant with respect to the award of attorney fees pursuant to 42 U.S.C. § 1988 in a tax case or proceeding.
XVI.
Reasonable attorney's fees in this case are Three Thousand Three Hundred Fifty Dollars ($3,350.00) with the addition of Eighty-one Dollars and Forty-three Cents ($81.43) for costs of counsel incurred in the presentation and preparation of this case.
IT IS ORDERED that the plaintiffs named above be, and the same hereby are, granted a tax refund as follows:
HENRY and GLADYS L. LEVNO:
1971, $1966.49 plus interest at 6%;
1972, $2195.19 plus interest at 6%;
1973, $1861.72 plus interest at 6%.
ALBERT and EVA SWANSON:
1971, $1243.20 plus interest at 6%;
1972, $526.55 plus interest at 6%;
1973, $25.12 plus interest at 6%.
VERNER and POLLY KING:
1972, $1624.47 plus interest at 6%;
1973, $374.84 plus interest at 6%.
SOREN and CHARLENE JACOBSON:
1973, $1228.01 plus interest at 6%.
IT IS FURTHER ORDERED that the defendant pay to the plaintiffs the amount of Three Thousand Three Hundred Fifty Dollars ($3,350.00) for attorney's fees, and Eighty-one Dollars and Forty-three Cents ($81.43) as costs, assessed pursuant to Title 42 U.S.C. § 1988.
IT IS FURTHER ORDERED that the Clerk enter by separate paper a judgment granting the plaintiffs the relief set forth above. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3218131/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
____________________
NO. 09-16-00191-CR
____________________
KARIM ISAM ANABTAWI, Appellant
V.
THE STATE OF TEXAS, Appellee
_______________________________________________________ ______________
On Appeal from the 260th District Court
Orange County, Texas
Trial Cause No. D150390-R
________________________________________________________ _____________
MEMORANDUM OPINION
On May 2, 2016, the trial court sentenced Karim Isam Anabtawi on a
conviction for driving while intoxicated. Anabtawi filed a notice of appeal. The
trial court signed a certification in which the court certified that this is a plea-
bargain case, and the defendant has no right of appeal and has waived the right of
appeal. See Tex. R. App. P. 25.2(a)(2). The district clerk has provided the trial
court’s certification to the Court of Appeals. On June 1, 2016, we notified the
parties that we would dismiss the appeal unless the appellant established grounds
1
for continuing the appeal. No response has been filed. Because the trial court’s
certification shows the defendant does not have the right of appeal, we must
dismiss the appeal. See Tex. R. App. P. 25.2(d). Accordingly, we dismiss the
appeal.
APPEAL DISMISSED.
________________________________
CHARLES KREGER
Justice
Submitted on June 28, 2016
Opinion Delivered June 29, 2016
Do Not Publish
Before McKeithen, C.J., Kreger and Horton, JJ.
2 | 01-03-2023 | 06-29-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431896/ | This suit was commenced by the plaintiff, Mary Calendro formerly Mary Fracobins. Subsequently, Lorenzo Natalini intervened, claiming an assignment from the plaintiff. As their rights are identical in so far as the fund here sought is concerned, we will consider the case as though the original plaintiff were the only plaintiff involved.
The petition alleged that on August 19, 1935, the defendant, American and Foreign Insurance Company, issued to plaintiff a policy of fire insurance in the sum of $1,200 on plaintiff's dwelling house; on January 25, 1938, the building was totally destroyed by fire; it was worth $1,200 at the time of the loss, plaintiff has complied with the provisions of the policy; judgment was prayed in the sum of $1,200 with interest and costs.
The answer of defendant company was a general denial. Subsequently, it tendered the sum of $1,000 and court costs to the date of tender in full settlement of plaintiff's claim. *Page 832
Plaintiff filed an acceptance of the offer and the defendant paid into court $1,000 together with $11.75 to cover court costs.
Between the date of the acceptance of the offer and the payment of the money, the Hartford Fire Insurance Company intervened, asserting that on February 16, 1935, it issued a policy of fire insurance to the plaintiff on the same property in the sum of $950 with a loss payable clause in favor of the Home Owners' Loan Corporation, mortgagee of the property; the policy provided it should be void if the insured "shall hereafter procure any other contracts of insurance, valid or invalid, on the property covered * * * by this policy"; plaintiff's policy with the defendant company was thereafter procured in violation of such provision and, on account thereof, the Hartford's policy became void; after the loss occurred, the Hartford denied liability to the HOLC, purchased the note and mortgage held by it, and now holds the same as assignee of the HOLC; the mortgage provided for fire insurance and for a lien upon any fire insurance that plaintiff might place on the property; the Hartford, as assignee of the note and mortgage, is entitled to enforce the same and to establish a lien against the proceeds of defendant's policy. The prayer of the petition of intervention was for the establishment of such lien.
The plaintiff answered the petition of intervention of the Hartford by asserting that the Hartford did not issue to plaintiff any policy of insurance but executed and delivered to the HOLC a certificate evidencing insurance coverage on the premises, and insuring the interests of plaintiff and the HOLC against loss by fire for a period of 3 years from February 16, 1935, to February 16, 1938; said certificate contained no provision prohibiting additional insurance and the agreement between plaintiff and the Hartford, or the HOLC and the Hartford, did not prohibit such additional coverage; plaintiff had no notice or knowledge as to the terms and conditions of the certificate; plaintiff's policy with defendant company was taken for the sole benefit of plaintiff and neither the HOLC nor the Hartford have any interest in the proceeds thereof; the provisions for insurance coverage in plaintiff's mortgage with the HOLC were fully complied with by the policy with the Hartford; plaintiff's procurement of insurance with defendant company did not forfeit plaintiff's right under the certificate procured from the *Page 833
Hartford; the payment by the Hartford to the HOLC was made in payment of a loss sustained under the certificate, constituted a satisfaction of the note and mortgage, extinguished plaintiff's liability thereon, and the Hartford acquired no rights of subrogation under the purported assignment thereof; by making claim to the proceeds of defendant's policy, the Hartford waived its right to claim that its policy was void and this constituted an election which bars the Hartford from claiming a violation by plaintiff of its certificate of insurance or a forfeiture thereof. Plaintiff prayed that the petition of the Hartford Fire Insurance Company be dismissed, that the note and mortgage asserted by such intervener be canceled, and that plaintiff have judgment against the intervener for costs.
At the trial, the adverse parties were the plaintiff and the intervener, Hartford Fire Insurance Company, the latter of whom assumed the burden of proof. The evidence showed that the Hartford entered into negotiations with the HOLC with reference to insuring properties upon which the latter corporation had mortgages. As a result of such negotiations, a written contract was entered into on August 21, 1933. This contract provided that the HOLC should have the privilege of executing orders for insurance on all properties where it had an insurable interest, the order to set forth the amount of insurance on each building, and the liability of the Hartford should automatically become effective and attach in accordance with the requirements set forth in the order for insurance. The Hartford should arrange forms for the use of the HOLC. Where the interest of the HOLC was other than that of owner, and a loss should occur, it should be adjusted with the owner of the property, it being agreed that the terms and conditions of the standard mortgage clause should apply to any property insured. The insurance as to the HOLC should not be invalidated by any act or neglect of the mortgagor, and, in the case the mortgagor neglected to pay any premium, the HOLC would, on demand, pay the same. The Hartford reserved the right to cancel a policy at any time, as specified by its terms, but in such case, the policy should continue in force for the benefit only of the HOLC for 10 days after notice to the HOLC; whenever the Hartford should pay the HOLC any sum for loss or damage under the policy and claim that, as to the mortgagor, no liability *Page 834
existed, the Hartford, to the extent of such payment, would be subrogated to all of the rights of the HOLC, as mortgagee, and the Hartford might, at its option, pay the HOLC the mortgage in full and receive an assignment of the mortgage. The contract also provided that, where the conditions of the agreement conflicted with the conditions of the standard fire policy or statutes of any state, the standard policy and the statutes of such state should govern the construction of the agreement.
Pursuant to this contract, the Hartford issued a master policy in each state. The master policy for Iowa was known as Policy No. Iowa-5000, was an Iowa standard fire insurance policy, adopted pursuant to section 9018 of the Code, which includes the following provision:
"IV. Unless otherwise provided by agreement of this company this policy shall be void:
"a. If the insured now has or shall hereafter procure any other contract of insurance valid or invalid on the property covered in whole or in part by this policy."
This master policy was kept in the possession of the Hartford, at the request of the HOLC.
When the plaintiff's insurance on the property covered by her mortgage with the HOLC was about to expire, a notice was sent to her of such expiration. After the expiration, plaintiff was notified by the HOLC as follows:
"We have been obliged to order the insurance described below because you have failed to provide us with acceptable coverage to be held as collateral to your mortgage.
"The premium for this insurance is due and payable at once. Prompt remittance is requested."
The amount of the premium statement enclosed was $11.50.
In the meantime, on April 25, 1935, the HOLC had sent to the Hartford an order for insurance on plaintiff's property from February 16, 1935, in the amount of $950 for a term of 3 years, the coverage to include fire and to be, "subject to the stipulations, provisions and conditions contained in the special agreement, the loss, if any, is payable to the assured named herein and the Home Owners' Loan Corporation, Mortgagee, as its interest may appear." Thereafter, the HOLC sent the *Page 835
Hartford a disposition order to issue a certificate of insurance pursuant to the order of April 25, 1935.
Pursuant to the instructions from the HOLC, given as aforesaid, the Hartford issued a certificate which provides as follows:
"In consideration of Eleven and 50/100 dollars premium the Hartford Fire Insurance Company of Hartford, Conn., does hereby insure Home Owners' Loan Corporation, Mortgagee, and Mary and Angello Fracobins as their interests may appear for indemnity against loss or damage by Fire, Lightning, Windstorms, Cyclones, Tornadoes and Hail for the term of Three Years from the 16th day of February, 1935, at 12 o'clock noon to the 16th day of February, 1938, at 12 o'clock noon to the amount of Nine Hundred Fifty and No/100 dollars as follows: (Then follows description of property insured) This certificate is issued by the Hartford Fire Insurance Company and accepted by the Home Owners' Loan Corporation, under Open Policy No. Ia. 5000 and is subject to the terms thereof. Subject to the stipulations, provisions and conditions contained in the open policy, the loss, if any, is payable to the assured named herein and the Home Owners' Loan Corporation, Mortgagee, as its interest may appear."
At the time that this certificate was issued, the Hartford also issued a complete insurance policy which contained the standard provisions set forth in the master policy Iowa-5000, contained a loss payable clause to the HOLC and, in the provision for additional insurance, was typewritten the word "None". This later policy was not delivered to the HOLC, but was retained in the files of the Hartford. The HOLC knew that that was the procedure followed by the Hartford. The premium for this insurance was charged by HOLC to plaintiff and was paid by plaintiff. The plaintiff at no time reported to the HOLC or the Hartford that she had taken out insurance with the defendant company, although plaintiff had been notified by the HOLC that all insurance on the mortgaged property should be submitted to the HOLC.
On January 29, 1938, the HOLC sent to the Hartford a notice of loss by virtue of the destruction of plaintiff's property by fire on January 25, 1938. The notice included the following: *Page 836
"1. The amount of our loan is $941.54. This loan was closed on the . . . . . . day of June 1934, and embraces the property which is described below, viz.: Lehigh, Iowa.
"2. Claim is made on account of the Dwelling insured for $900. under the above numbered certificate."
Negotiations were then had by the HOLC and the Hartford. The Hartford denied liability under its certificate but paid the amount of the note and mortgage on August 17, 1938, and received from the HOLC an assignment without recourse of the plaintiff's note and mortgage. The mortgage contains a provision that the mortgagor shall keep the buildings insured against loss or damage by fire under a mortgage clause in form approved by the HOLC and in the event any sum of money becomes payable under such policy or policies, the HOLC, its representatives or assigns "shall have the right to receive and apply the same on account of the indebtedness hereby secured."
The court found that the allegations of the Hartford's petition of intervention were true, and that it was entitled to the relief demanded; that plaintiff bound herself to keep the buildings insured under a mortgage clause, and gave the right to the HOLC to do so if she did not; the HOLC did this; the policy contained the provision, prescribed by our statute, that it would be void if, unless otherwise provided by agreement, the insured procured any other contract of insurance; such provision is valid and must be observed to avoid forfeiture; by taking the additional insurance in the defendant company, without the consent of the Hartford, plaintiff terminated the Hartford's insurance and was then in the position of holding a policy payable to herself without a loss payable clause in favor of the HOLC, but under the terms of the mortgage, the HOLC would be protected by said policy to the amount of its mortgage; the HOLC assigned its mortgage to the Hartford, which it had a right to do, and the Hartford was bound to take the assignment under its contract with the HOLC; by the assignment, the Hartford became subrogated to the rights of the HOLC and was entitled to be paid the amount due on the mortgage. The amount of the Hartford's lien was determined to be $856.15 with interest at the rate of $.11433 from August 17, 1938, which was decreed to be a specific lien upon the $1,000 in the hands of the clerk, and the clerk was ordered to pay the *Page 837
same to the Hartford. Any balance remaining after the payment of said sum and the court costs was directed to be delivered to plaintiff's assignee. It was further directed that the note and mortgage, given by plaintiff, be canceled and turned over to the clerk as a condition precedent to the payment to the Hartford of the sum ordered. Costs were taxed against the plaintiff in the sum of $30.65. From this decree the plaintiff and her assignee have appealed to this court, asserting various grounds for reversal of such decree.
[1] I. One of the propositions urged by appellants is that the provision prohibiting additional insurance was not properly included in the insurance contract of the Hartford. We find no merit in this contention. The contract is evidenced by the certificate hereinbefore quoted from. As there pointed out, this certificate specifically refers to the open policy No. Iowa-5000, and is subject to the terms thereof. This open policy was specifically provided for in the contract between the Hartford and the HOLC, paragraph 22 of which provided:
"This contract dated this 21st day of August 1933, shall be attached and made a part of open policies of each state or territory where this contract is to be performed."
The open policy Iowa-5000 merely sets forth the standard fire insurance policy for Iowa, which has been adopted pursuant to section 9018 of the Code. This section of the Code is an open policy, containing all of the provisions necessary for an insurance contract except the names of the parties, the description of the property insured, the period of the insurance, and the premium to be paid. Section 9019 of the Code provides that any company violating section 9018 shall be guilty of a misdemeanor, subject to the payment of a fine and, until the payment of such fine, shall be disqualified from doing any insurance business in this state. The contract between the Hartford and the HOLC also provided that the standard policy and statutes of each state shall govern the construction of the agreement. We must presume that the Hartford and the HOLC intended to obey the law. The evidence demonstrates conclusively that they undertook to comply with the statutes of this state and intended that any policy on property situated in this state should contain the provisions required by section 9018 of the Code. We hold that the instruments executed by the Hartford and the *Page 838
HOLC must be construed together, and that, construing them together, the requirements of section 9018 of the Code are a part of the contract in reference to plaintiff's dwelling house. Accordingly, the provisions of paragraph IV, sub. a of section 9018 of the Code are properly considered a part of the contract and the trial court correctly construed the contract in this regard.
[2] II. Appellants also contend that the record is fatally deficient in that no evidence was introduced to show the execution of plaintiff's contract with the defendant, American and Foreign Insurance Company. There is no evidence in the record, but the record includes the pleadings as well as the evidence. In the pleadings, plaintiff asserts that the policy was issued on August 19, 1935, in the sum of $1,200 on plaintiff's dwelling house. The petition of intervention asserts that the plaintiff took out additional insurance with the American and Foreign Insurance Company "on said house in the sum of $1,200." Plaintiff's answer to such petition of intervention re-asserts the allegations of the petition. Construing the pleadings as a whole, we are satisfied that they present no issue requiring the introduction of evidence in reference to the policy of the defendant company. Under the pleadings, the parties are in agreement that the policy was issued on August 19, 1935, in the sum of $1,200 and that it covered the same property that was covered by the insurance contract of the Hartford and the mortgage of the HOLC. There is no error in the findings of the trial court on this proposition.
[3] III. Plaintiff asserts that the payment by the Hartford to the HOLC constituted an extinguishment of the note and mortgage held by the HOLC. The trial court held otherwise, and correctly so. The payment was made pursuant to an express contract between the parties that, in the event any act of the mortgagor should render the insurance void as to him, the Hartford should purchase the note and mortgage and secure an assignment thereof which would be enforceable against the mortgagor. The parties did not intend to extinguish the note and mortgage. They intended to preserve it and to assign to the Hartford all beneficial interest therein. The trial court correctly so held.
[4] IV. It is claimed by appellants that the additional insurance with the defendant company did not constitute a *Page 839
forfeiture of the coverage afforded to the plaintiff by the Hartford. One contention in this regard is that the evidence fails to show that the defendant's insurance policy was valid and collectible. This contention is based upon the fact that the defendant denied liability and thereafter compromised the case pursuant to the provisions of sections 12676 to 12679 of the Code. However, plaintiff contends that the policy of the Hartford was valid and collectible. The record shows that the Hartford also denied liability and thereafter purchased plaintiff's note and mortgage from the HOLC. We are of the opinion and hold that the policy of the defendant was valid and collectible as to the plaintiff to the extent of the amount paid into court, and that the policy of the Hartford was valid and collectible as to the HOLC to the extent of the amount paid to secure an assignment of plaintiff's note and mortgage.
[5] It is also contended that there was no forfeiture because the breach of the Hartford's policy by the plaintiff was not a wilful, knowing and intentional breach thereof. The cases relied upon by appellants involve the avoidance of a policy because of the misrepresentation of a fact existing at the time the policy is issued. The record here involves the breach of the terms of the policy after it had been issued. Also, the cases relied upon by appellants were decided by this court prior to the enactment of section 9018 of the Code. Appellants also rely upon decisions of this court to the effect that an insurance policy is to be interpreted most strictly against the company issuing the same. These cases have no application to the interpretation of a standard form of policy required by legislative enactment. Under the plain and unambiguous terms of paragraph IV, sub. a of section 9018 of the Code, the additional insurance procured by the plaintiff rendered the policy of the Hartford void as to the plaintiff, unless the Hartford agreed to such additional insurance. The record shows that it did not even know of it and plaintiff does not claim that it agreed thereto. The court correctly held that the Hartford's policy was void as to the plaintiff. See Cornett v. Farmers Mut. Fire Ins. Assn., 208 Iowa 450,224 N.W. 524.
[6] V. By reason of the foregoing, the Hartford is the owner of the note and mortgage originally given by the plaintiff to the HOLC, and is entitled to enforce the same. This *Page 840
brings us to the question whether or not, by virtue of its position as mortgagee, the Hartford is entitled to collect the amount of the mortgage from the fund paid into court by the defendant company. The defendant's policy was not introduced in evidence. From the pleadings, however, and from the arguments of counsel filed in this court, it appears to be conceded that the policy did not contain any clause making the proceeds thereof payable to the mortgagee. The trial court held that, notwithstanding this, under the terms of the mortgage, the HOLC was protected by the policy to the amount of the mortgage and that the Hartford, as assignee, was entitled to the same protection. Accordingly, the court adjudged that the Hartford had a lien against the proceeds of the policy for the amount of the mortgage. In this the court erred.
To sustain the holding of the court in this regard, counsel for appellee cite and rely upon our statement in the case of First Trust Joint Stock Land Bank v. Duroe, 212 Iowa 795, 799,237 N.W. 319, 321, to wit:
"It is well settled, that, when the mortgagor is bound by the terms of the mortgage to keep the premises insured for the security of the mortgagee, as between the mortgagee and the mortgagor an equitable lien arises in favor of the mortgagee for the money received upon the policy to the extent of the mortgage indebtedness, regardless of whether or not the policy is in express terms payable to the mortgagee, or whether or not it contains a mortgage clause making the same payable to the mortgagee, as his interest may appear. See Johnson v. Northern Minnesota Land Investment Company, 168 Iowa 340 [150 N.W. 596]; Dunlop v. Avery, 89 N.Y. 592."
It will be noted that the above pronouncement was made in reliance upon our holding in the case of Johnson v. Northern Minnesota Land Investment Co., 168 Iowa 340, 344, 150 N.W. 596,598, wherein we state:
"It seems to be settled that a mere mortgagee has no interest in a policy of insurance issued to a mortgagor upon the mortgaged property, unless such interest be created by some covenant or condition between mortgagor and mortgagee in relation thereto.
"In the absence of such covenant, the contract of insurance *Page 841
is strictly personal between the insurance company and its patron. Ryan v. Adamson, 57 Iowa 30 [10 N.W. 287].
"On the other hand, it is equally well settled that where a mortgagor covenants to maintain insurance for the benefit of the mortgagee, then a policy of insurance held by him will inure to the benefit of the mortgagee as a matter of equitable right, regardless of whether the policy was in express terms payable to the mortgagee or not. Heins v. Wicke, 102 Iowa 396 [71 N.W. 345]; Swearengen v. Hartford Ins. Co., [56 S.C. 355] 34 S.E. 449."
It will be noted that, in the quotation last above set forth, we recognize that a mortgagee has no interest in a policy of insurance on the mortgaged property unless he is given such interest by some covenant or condition in the policy of insurance or the mortgage. In the absence of such covenant or condition, the contract of insurance is strictly personal between the insurance company and its patron. This proposition was expressly recognized by us in the Duroe case. In that case, the contract of insurance did not contain a loss payable clause in favor of the mortgagee. The mortgage did contain a provision for insurance for the benefit of the mortgagee. However, the insured under the policy was a subsequent purchaser of the property and the deed did not contain any assumption clause. This court held that the provision in the mortgage did not constitute a covenant running with the land; that the insured was not obligated by the provision in the mortgage to procure insurance for the benefit of the mortgagee, and, since he had procured a policy for his protection alone, he was entitled to collect the proceeds to the exclusion of the mortgagee.
As above-stated, the defendant's policy contained no clause making its proceeds payable to the mortgagee. The Hartford, as mortgagee, must prevail, if at all, because of the covenants in the mortgage. Plaintiff claims that the covenant in the mortgage was complied with by the procurement of the Hartford's insurance, the premium for which was paid by plaintiff, and, since the plaintiff has complied with the covenant in the mortgage, there is no basis for establishing an equitable lien in favor of the mortgagee against the proceeds of defendant's policy. It seems to us that the position taken by us in *Page 842
the Duroe case and in the Johnson case, hereinbefore quoted from, sustains plaintiff's position in this regard.
When plaintiff's home was destroyed by fire, a loss occurred which, under the record, constituted proper basis for claims against both of the insurance policies involved. Under plaintiff's mortgage, she was obligated to provide insurance for the benefit of the HOLC. She had discharged the obligation of such covenant in the mortgage by providing the Hartford's policy, which, under the record herein was valid and collectible as to the HOLC to the extent of the mortgage indebtedness, but was void as to the plaintiff. Plaintiff's policy with defendant company must be held, under the record herein, valid and collectible as to the plaintiff to the extent of the amount paid into court. However, the policy contained no covenant or condition making the proceeds available to the HOLC, and, since the plaintiff had discharged the obligation imposed upon her by the covenant in the mortgage by providing the Hartford's policy for the protection of the HOLC, there was no basis for the establishment of an equitable lien in favor of the HOLC against the proceeds of the defendant's policy. The HOLC was entitled to recover the full amount of its loss against the Hartford. It had no right upon which to base recovery against the defendant's policy. The plaintiff must be held under the record to have made proper claim against the defendant. She made no claim whatever against the Hartford until this action was brought. The HOLC made its claim against the Hartford. There is no showing that it ever made a claim against the defendant company.
When the mortgage was assigned to the Hartford, it received and was subrogated to all the rights of the HOLC but none other. In the case of Boyce v. Farmers Mut. Ins. Assn., 209 Iowa 11, 14,227 N.W. 523, 524, we state:
"Preliminary to a discussion of the major propositions, it is convenient to recognize the general rights of an assignee. Such rights can rise no higher than those of the assignor. Union Bldg. Assn. v. Rockford Ins. Co., 83 Iowa 647 [49 N.W. 1032, 14 L.R.A. 248, 32 Am. St. Rep. 323]; Steltzer v. Chicago, M. St. P.R. Co., 156 Iowa 1 [134 N.W. 573, L.R.A. 1915E, 1017]."
Since the HOLC had no equitable lien against the proceeds *Page 843
of the defendant's policy, the Hartford, as its assignee, likewise has no such lien. In holding otherwise, the court erred.
The court properly sustained the validity of the Hartford's assignment of the mortgage as against the plaintiff, but should have awarded the proceeds of defendant's policy to the intervener Natalini, as assignee of the plaintiff, free from any lien in favor of the Hartford. Accordingly, the decree is affirmed on the appeal of the plaintiff, Mary Calendro, but is reversed on the appeal of the intervener, Lorenzo Natalini, and the cause is remanded for the entry of a decree in harmony with this opinion. — Affirmed on appeal of plaintiff, Mary Calendro; reversed on appeal of intervener, Lorenzo Natalini.
STIGER, SAGER, HALE, and BLISS, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431879/ | The appellant here is the paving contractor who constructed the paving improvement. By its contract with the city, it agreed to accept the assessment certificates to be levied by the city council in full payment for its work, and to waive claim for any part of the compensation to be paid out of the general fund of the city. The nature of its complaint is that the city council assessed certain 7 lots at $100 each, which assessment was in excess of 25 per cent of the value of the lots. From the evidence it appears that 6 of these lots were worth not to exceed $25 each, and the seventh, not to exceed $50. Manifestly, such certificates, delivered to the appellant and charged against it as payment pro tanto for its work, cannot be of greater value than the value of the lots. It does not appear that the lot owners prosecuted any appeal or made any complaint. So far as appears, they submitted to the confiscation of their little properties.
The appellant claims the right to appeal from such assessment, pursuant to the provisions of Section 6063, Code of 1924, which provides as follows:
"Any person affected by the levy of any special assessment for street improvements or sewers may appeal therefrom to the district court. The person appealing shall be designated as plaintiff and the city or town as defendant."
Its contention is that it is a "person affected by the levy," within the meaning of the foregoing statute. The question presented, therefore, is one of construction of this section of the statute. Manifestly, it must be construed in the light of its context and its associated sections. The appeal permitted by this section is from the action of the city council, had upon objections made before it, pursuant to the statute. Section 5995 provides:
"The council shall fix the time for the consideration of the proposed resolution of necessity, at which time the owners ofproperty subject to assessment for the proposed improvement * * * may appear and make objection to the boundaries of the proposed district, to the cost of improvement, to the amount *Page 663
proposed to be assessed against any lot, and to the passage of the proposed resolution."
Section 6064 is as follows:
"Said appeal must be perfected:
"1. By serving upon the mayor or clerk, in the manner in which original notices in ordinary actions are served, within fifteen days from the date of said levy, a written notice of appeal, signed by the plaintiff or by his agent or attorney, directed to the defendant, and designating with reasonable certainty the assessment appealed from and the property of plaintiff affectedthereby."
It will be noted that Section 6063 and Section 6064 provide for an appeal, and the method of it, from the action of the city council had pursuant to proceedings provided in Section 5995. These three sections, construed together, disclose clearly that the appealing party within the contemplation of the statute is the "property owner." To expand these statutes so as to include within their scope persons who have no interest in the title to the property and no interest in the property, as such, would be the equivalent of legislative amendment to the statute.
We are not holding that the appellant has no grievance, nor holding that it is without a remedy. We hold only that it is not within the contemplation of Section 6063.
For this reason, the order of the district court is affirmed. — Affirmed.
De GRAFF, C.J., and ALBERT and MORLING, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431846/ | In the beginning, a suit was commenced in equity by W.S. Anderson, a stockholder of the J.J. Dunnegan Construction Company, against the executrix of the will of J.J. Dunnegan, and said construction company to recover, in behalf of the corporation, moneys to which, it was claimed, the construction company was entitled, and for which it refused to sue. In a petition of intervention, the intervenor, McDaniel, alleges that he is a stockholder in the construction company, and adopts the allegations of the petition of plaintiff. A claim was filed by W.S. Anderson for the construction company against the estate of J.J. Dunnegan. The suit in equity and the claim in probate were consolidated and tried together and are submitted in this case upon a single record. The appeals have been docketed in the office of the clerk of this court under Nos. 41488, 41666, and 41667, and are all disposed of in this opinion.
The amount involved in these actions is large; the pleadings are voluminous, embracing nearly 200 pages of the record, and a great mass of evidence was taken upon the trial, which when abstracted has produced a record of over 250 pages in addition to the exhibits which have been certified to this court. In consequence of this we can do little more than state our conclusions concerning the proper disposition of the appeals.
Prior to the year 1919, J.J. Dunnegan had been engaged in the construction of public works on a small scale. Dunnegan was not able to finance large jobs, and for the purpose of creating an organization capable of handling larger work Dunnegan cast about for associates who could supply credit. In that year a partnership was organized by him under the name of Dunnegan
Company, consisting of himself, E.S. Welsh, R.G. Berry, A.W. Murphy, E.A. Read, and E.H. Mitchell. In 1921 Mitchell sold his interest to appellant Anderson, and a new partnership was formed with Anderson as a member in the place of Mitchell under the name of J.J. Dunnegan *Page 674
Construction Company; the partnership contract reciting that the former partnership was continued with Anderson as a partner in the stead of Mitchell. On March 6, 1925, a Delaware corporation was organized by the members of the last-named partnership under the name of J.J. Dunnegan Construction Company. In view of the contentions of the parties, we will only say that substantially all, if not all, of the property of the partnership was taken over by the corporation and 3,000 shares of its stock were issued in blocks of 500 shares to each of the six partners.
In 1924, while the organization was still a partnership, the J.J. Dunnegan Construction Company bid on a large job in the city of St. Louis, which is referred to as the River des Peres job. It was not awarded the contract. The successful bidder failed in the performance of the work, and ultimately a proposition was made to Mr. Dunnegan by the officers of the city that the work be performed under a plan by which a percentage was paid beyond the actual cost, with a guaranty to the city that the cost would not exceed the amount of the bid. In December of 1924 Dunnegan signed a contract on that basis for the construction of a section of the improvement, between the city of St. Louis and the J.J. Dunnegan Construction Company. Attention is directed to the fact that the contract was entered into in the name of the construction company, because that fact is given great significance by appellants. Later on another contract was entered into by Mr. Dunnegan with the city of St. Louis for the construction of another section of work of the improvement, which also ran to the construction company. Both of these contracts were performed and a substantial profit was earned, due to the fact that by means of the second contract allowances were made for cleaning out silt and debris deposited by storms on the work undertaken in the first contract. About the time of the execution of the first contract Dunnegan discussed the proposition with three, and in all probability four, of his partners, each of whom questioned the advisability of taking the contract on account of the water hazard attending the work, and Dunnegan told each of them that he would take the work for Dunnegan Briggs. Regardless of whether such discussions occurred prior or subsequent to the execution of the first contract, the contract was made in the name of J.J. Dunnegan Construction Company, and the record suggests, if it does not establish, that the second contract was made in the name of the construction company so that payment could be made under it for work which was necessarily *Page 675
incident to the construction of the work covered by the first contract and for which no payment could be made under the first contract. The work under both contracts was done by the Dunnegan Briggs organization. At the time work was commenced, or very shortly thereafter, Dunnegan ordered a drag line dredge, a concrete mixer, and certain batch boxes belonging to the construction company, and a pump, owned by Dunnegan Briggs and the construction company, sent on the work, and they were duly shipped and used on the work. At about the time work was commenced, Dunnegan drew a check on the construction company's account in a Chicago bank, payable to the First National Bank of St. Louis, and deposited this check in the name of the construction company in the First National Bank of St. Louis, and later on he drew and deposited another check in the same manner. The total amount of such checks was $11,000. Payments made for work done under the contracts were deposited in this account in the First National Bank of St. Louis and checks were drawn on the account as the work progressed. While the work was without question done by the Dunnegan Briggs organization, the account was carried in the name of the J.J. Dunnegan Construction Company. It has been noted that the performance of both contracts resulted in a profit, and, without dispute, none of such profit was ever distributed through the construction company either as a partnership or corporation.
These actions seek to recover such profits for the corporation. It is contended by appellants that the corporation is entitled to such profits on account of the following facts:
1. The contract was made in the name of the J.J. Dunnegan Construction Company, and while the company was a partnership when the first contract was made, upon the organization of the corporation it took over all the property of the partnership and consequently became the owner of the contract.
2. The work was financed with construction company's money.
3. The work was done with construction company's machinery.
It will be well to consider the second and third claims of appellants before proceeding to the discussion of the first. As before stated the River des Peres work was done by the Dunnegan Briggs organization. When the work was begun the construction company owed Dunnegan Briggs over $40,000. The checks totaling $11,000, with which this work was carried on, were credited on the books of the construction company on its debt to Dunnegan
Briggs. Concerning *Page 676
the power of J.J. Dunnegan to draw the checks, as he did, for application on the account of Dunnegan Briggs, the record leaves no question. The contention that the River des Peres work was financed by construction company's money is conclusively negatived by the record. Concerning the contention that the work was done with construction company's machinery, the situation is this: In the first instance a dredge, a mixer, and certain batch boxes, owned by the construction company, and a pump, owned in equal shares by the company and Dunnegan Briggs, were installed on the job. This machinery was purchased by Dunnegan Briggs and paid for. There is nothing in the record to cast suspicion on the bona fides of the purchase. The sale of equipment among the organizations seems to have been a very common thing. Appellant Anderson purchased equipment from the company, and the record discloses other sales of machinery back and forth. The price at which the property was purchased was the subject of discussion between the parties, and the record indicates that the prices paid were approved by appellant Anderson; this is certainly true concerning the batch boxes and the mixer. There is no evidence concerning the value of the machinery purchased. In this situation there is no merit in the contention that the machinery used on the job was construction company's machinery.
Adverting now to the circumstance that the contract was executed in the name of the construction company, it becomes necessary to consider appellants' claim that Dunnegan occupied a fiduciary relationship to them as partners and stockholders, in consequence of which he was not at liberty to divert the work from the construction company to Dunnegan Briggs. Without particular attention to refinement in meaning, it may be conceded that a partner occupies a position of trust so far as the business of the partnership is concerned, and that a fiduciary relationship exists between partners. Such concession does not aid in the determination of this case. The work in question was undertaken while the company was a partnership; it was completed after the organization of the corporation. The concession in regard to the character of the relationship of the parties does not aid in the solution of this case for the reason that, subject to the rights of third persons and the restraints of statutory law and general public policy, partners may create such relations between themselves as they see fit. The relations between J.J. Dunnegan and his partners were unusual. At the time of the *Page 677
organization of the partnership none of the individuals taken in by Dunnegan contributed any money or property to the partnership. When Anderson became a member of the organization he contributed nothing to the capital of the partnership, although he did buy out Mitchell's interest and assumed his liability for a deficit. The agreement drawn up at the time Anderson came in recites that the partnership is continued with Anderson as a member in lieu of Mitchell. During the existence of the original partnership Dunnegan continued his association with others in contract work. When Anderson came in, the matter of Dunnegan's salary was discussed by the partners, Anderson being present, and by specific oral agreement of the partners Dunnegan was permitted to continue his relations with others in construction works, and such relations were continued openly and with the knowledge and without objection on the part of any partner. In annual reports appellant Anderson suggested the advisability of disbanding the other organizations and taking the keymen into the construction company organization on a profit-sharing basis, but his representations never extended beyond recommendations that this be done. On a number of projects the construction company was associated with another Dunnegan organization in the execution of the work. It is quite evident from the record as a whole that Dunnegan had a peculiar genius for procuring work and that he procured work for the various organizations during all the years of the existence of the construction company either as a partnership or a corporation, with the knowledge and approval of his associates. We may be permitted to suggest that such approval may have been induced by recognition, on the part of the associates, of the great ability of Dunnegan and to have been bottomed on the belief that objection on their part would have meant that Dunnegan would have left their organization. In any event, there is no doubt concerning the power which was actually his. He distributed the work as his judgment dictated. In signing the contract for the River des Peres work in the name of the construction company and having the work done by Dunnegan
Briggs, Dunnegan was not exceeding his power. He was using a power that was his. It is true that such power is not incident to the relations existing between partners, or a partner and a partnership. The possession of this power by Dunnegan was due to the fact that it had been conceded to him by his associates. It has been suggested that these concessions were made as a necessary cost of retaining J.J. Dunnegan *Page 678
in the organization. The wisdom displayed by the associates in making the concession is demonstrated by the fact that the construction company quite uniformly earned large sums of money, and went out of business when Dunnegan's health no longer permitted him to be active in the affairs of the company. It is undoubtedly true that the partners could have prevented Dunnegan from acquiring such power and could have stripped him of it at their pleasure. These things were never done, and of necessity the validity of Dunnegan's acts in relation to the River des Peres work must be determined in the light of the power actually had by him. The record convinces us that at about the time the contract for this work was signed Dunnegan discussed the work with all of his associates except Anderson, and that each one rather dissented against the work being undertaken. To each Dunnegan stated that he would take the work for Dunnegan
Briggs. Whether he meant by this that he would take the contract for Dunnegan Briggs, or would take the work off the hands of the company for Dunnegan Briggs, we have no way of knowing, in view of the fact that the record leaves doubt as to whether the conversations were before or after the contract had been signed. In any event, if the conversations took place after the contract had been signed, Dunnegan was in a position in which he could take the work off of the company's hands for his other organization. And if this is what was done, it was done with the assent of four of the five other partners.
So far as appellant Anderson is concerned, he testified that he aided in the preparation of the unsuccessful proposal for the River des Peres work in the name of the J.J. Dunnegan Construction Company. He knew that Dunnegan secured the work; that the Dunnegan Briggs organization was doing the work; and that none of the profits of the work came into the construction company coffers. He was in St. Louis and saw the construction company machines on the job. He undoubtedly knew of the terms of the sale of the machinery to Dunnegan Briggs. It is true that he stated that he first learned that the actual contract for the work was in the name of the construction company when he attended Dunnegan's funeral. He was active in the management of the affairs of the company. The record discloses extended annual reports made by him, in which he displays what seems to be comprehensive knowledge of the affairs of the company and the Dunnegan organizations. He made no objections *Page 679
and did nothing until after Dunnegan was dead. He has no special equities.
The extent of Dunnegan's powers in the partnership and the corporation are disclosed by the testimony of surviving partners. Appellant seeks to cast doubt upon their testimony by showing that some of them had executed a guaranty to Mrs. Dunnegan against loss through the outcome of these actions. The testimony of the witnesses, even in the light of their interest under such contract, is convincing on the question of the relations between Dunnegan and the company and his power, and is sustained by other facts and circumstances.
Appellant seeks to show a motive for wrongdoing on the part of Dunnegan in giving this work to Dunnegan Briggs, and to cast doubt on the testimony of some witnesses by proof of the fact that one Gilmore, who acted as superintendent on the work, was indebted in a large amount to a bank in Shenandoah, Iowa, in which Dunnegan and such witnesses were officers; that the payment of such indebtedness was guaranteed by Dunnegan and such witnesses; and that finally such indebtedness was paid by Gilmore out of his profits on the work. The inference which appellants want drawn from these facts is that Dunnegan threw the job to Dunnegan Briggs, so that Gilmore could pay his debt to the bank, and that the witnesses had a similar interest in the matter on account of their obligation on the guaranty and as officers of the bank. These facts have been given consideration and proper weight in reaching the conclusion hereinbefore expressed.
It will be remembered that one E.A. Read was an original partner. He and Dunnegan were interested together in many other ventures. Ultimately a settlement of such other ventures became necessary. In the negotiations between Read and Dunnegan, Read claimed and Dunnegan denied that Read was entitled to a portion of the profit on the River des Peres job. Ultimately a credit was allowed Read on that account, and with such credit it was still found that Read owed Dunnegan $33,000. It is contended that this is a recognition of the rights of the associates in the company to the profits. It is a circumstance to be considered, but in the light of the picture of Dunnegan painted by the record, the concession by him to an old associate becomes merely another example of his generosity to his old friends rather than evidence of corruption in the River des Peres contract. *Page 680
After the organization of the corporation a second contract was made by Dunnegan with the city of St. Louis for the construction of section B-1 of the River des Peres improvement. This contract was made in the name of the J.J. Dunnegan Construction Company. We gather from the record that the only purpose of the execution of the second contract was to create a situation in which payment could be made for the removal of debris and items of water damage to work on the first section, which were reflecting a loss on the work of the first section. The execution of the contract in the name of the construction company was an expedient by which a loss on the first section was recouped out of the second. The execution of the second contract was incidental to the execution of the work under the first contract, and disposition of claims based on it must follow that indicated for claims based on the first contract.
Appellants contend that in the discussions of the River des Peres work with his associates Dunnegan did not fully disclose the truth nor accurately portray the situation. We have carefully examined the record in the light of these contentions, but are unable to reach the conclusion that the associates were deceived as to the situation. The fact is that the work was extrahazardous, and that loss was only averted through the expedient of the second contract.
The fact that the account out of which this work was constructed was carried in the First National Bank of St. Louis in the name of the J.J. Dunnegan Construction Company is not a controlling circumstance. The record indicates that all money derived from sources other than the work was money rightfully paid and charged to Dunnegan Briggs. The work was done by Dunnegan Briggs, and funds paid out in doing such work belonged to Dunnegan Briggs. The work was financed with Dunnegan
Briggs' money, even though the account was carried in the name of J.J. Dunnegan Construction Company.
It is contended that certain machinery purchased for use on the River des Peres work was paid for by construction company's money, and that the company is entitled to the proceeds of its sale. Initial payments on such machinery were paid out of J.J. Dunnegan Company's account in a Chicago bank, but such payments were charged to the account of Dunnegan Briggs, to which firm the construction company was then indebted. The remainder of the purchase price was paid out of the funds in the First National Bank *Page 681
of St. Louis, which we have indicated were Dunnegan Briggs' money. Such machinery was neither bought nor paid for by the construction company, and consequently it is not entitled to the proceeds of the sale.
In 1926 J.J. Dunnegan personally entered into a contract with the city of Maplewood, Missouri, a city near St. Louis, for the construction of a sewer. It seems that Dunnegan really took the job to provide employment for a former associate named Corey. Dunnegan and Berry borrowed $50,000 from the First National Bank of St. Louis for the purpose of financing this work. The work was done by Mr. Corey, and no equipment or machinery of the construction company was used on the work. Appellant's claim to a share of the profits on the job is based principally on the fact that when the notes for $50,000 signed by Dunnegan and Berry were paid, payment was made out of the account of the River des Peres work carried in the First National Bank of St. Louis in the name of the construction company. We have noticed that such account was made up of funds charged to Dunnegan Briggs and sums paid for work done by Dunnegan Briggs, and have found that such funds were not the property of the construction company even though the account was carried in its name. Another contention is, in effect, that Dunnegan was not at liberty, by reason of his connection with the construction company, to take this work. This claim will have attention further on.
Dunnegan also personally entered into a contract with the city of St. Louis for the construction of a concrete bridge over the River des Peres on Southwest avenue. This work was carried on simultaneously with the River des Peres work and was financed out of the account in the First National Bank of St. Louis, to which reference has been made in preceding paragraphs. The claims of appellants in relation to the profits of this job are based on substantially the same grounds as their claims to profits on the Maplewood sewer.
In the year 1927 the construction company secured a contract for the construction of a large sewer in South Bend, Indiana. Shortly before the completion of this work J.J. Dunnegan signed a contract personally for the construction of a sewer that emptied into the one under construction by the company. Two checks were drawn by Dunnegan payable to himself on funds of the construction company in the Chicago bank and deposited in his name in *Page 682
a South Bend bank. Out of such funds Dunnegan financed the construction of the sewer. Some complaint is made by appellants concerning the way the second of said checks was charged on the books of the construction company, but we are satisfied that the amounts of the checks were properly drawn by Dunnegan, and were in no sense a misappropriation of company funds. The work was supervised by an associate, a Mr. Gilmore, who was during the time on the company payroll at a relatively small salary. Many of the employees engaged in the construction of the work were transferred from the company's pay roll. There is no claim made that the company's work suffered in any way on account of the attention given to the work by the superintendent or the transfer of the employees. It is contended that Dunnegan was an officer of the corporation, that the sewer built by him was an extension of the large sewer built by the corporation, and that it was Dunnegan's duty as an officer of the corporation to take the job for the corporation, and that he was not at liberty to take it for himself.
We have discussed the powers had by Dunnegan under the relations existing between him and his associates, while the construction company was a partnership. But the second River des Peres contract, the Southwest avenue bridge, the Maplewood sewer, and the South Bend sewer contracts were entered into after the construction company had been organized as a corporation.
Counsel for appellants cite, as authority to sustain their claims to the profits on these jobs, cases in which the relations between the officer and the corporation were not such as existed between Dunnegan and the corporation and his associates. An individual may put such price upon his services as he sees fit. It is optional with the other parties whether they will pay the price. A part of the price of Dunnegan's services to the corporation was his liberty to engage in contract work, alone and in connection with others. He retained this liberty when the partnership was formed. When the corporation was formed there was no change in the relations of the parties or in the management of the business, or in Dunnegan's activities. Dunnegan exercised his rights to contract outside the corporation, and his associates conceded his rights in that respect. As has been suggested in connection with partnership matters, Dunnegan's services probably would not have been available if the corporation or his associates had attempted to circumscribe his activities to the limits of the corporation. Without in any manner *Page 683
limiting the effect of the salutary rules of law that require loyalty and singleness of purpose on the part of officers of a corporation in the management of corporate affairs, it can and it must be conceded that an individual may make the reservation of personal rights in himself a condition to becoming an officer of a corporation. Those interested in the corporation are under no legal compulsion to concede such rights. But if such rights are conceded it is elementary that no complaint in behalf of the corporation can be made because the conceded rights are exercised. In the exercise of the conceded rights the officer violates no duty. Dating back to the time of the first association of these men, and seemingly at all times since, Dunnegan was engaged in contract work outside the construction company, not in a furtive or covert manner, but openly and with the knowledge and actual assent of his associates. The things which Dunnegan did in relation to the second section of the River des Peres work, the Southwest avenue bridge, the Maplewood sewer and the South Bend sewer, were not in violation of his duty to the corporation because they were done pursuant to conceded rights. It requires undue credulity to believe that appellant Anderson did not know that Dunnegan both claimed and exercised such rights, or that Anderson did not concede such rights to Dunnegan. In this situation Anderson cannot complain, nor can he complain in behalf of the corporation for which he assumes to speak. The corporation itself does not complain. It has answered and filed a cross-petition in which it is stated, in effect, that the things done by Dunnegan were done in the exercise of powers that were his, and it disclaims any interest in the profits sought to be recovered in the petition. The equities in the situation are elementary and axiomatic. The result is that we have been cited no authority directly in point.
The intervener, McDaniel, in his petition of intervention merely adopts the allegations of Anderson's pleadings. He neither alleges nor proves any facts which give him any standing superior to Anderson. The record and arguments present many intricate questions which are entirely immaterial in view of the conclusions we have reached from a consideration of the evidence in relation to Dunnegan's powers. The trial court dismissed the petition and claim, and the petition of intervention. This action was undoubtedly correct. The decree of the trial court will be affirmed. A motion to strike appellee's second amendment to and correction of abstract *Page 684
was submitted with the case. The motion is overruled. — Affirmed.
All Justices concur, except EVANS and STEVENS, JJ., who take no part. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431849/ | The plaintiff, Susie A. Converse, brought this action against the defendant, Charles C. Converse, for a divorce and alimony. The record shows that the parties were married on January 13, 1915, and continued to live together as husband and wife until May 21, 1936, and that at the time the petition was filed on May 28, 1936, they had six children, ranging in age from 19 years to 6 years. The petition alleged that, for the past five years, the defendant had become addicted to habitual drunkenness and that he had been guilty of such cruel and inhuman treatment of the plaintiff as to endanger her life. Upon the trial of the case, in addition to the plaintiff herself, all the children, and other witnesses who were not members of the family, testified in her behalf. The trial court found for the plaintiff on both grounds of the petition and entered a decree granting her a divorce, awarding her the custody of the six minor children, ordering the defendant to pay $20 per month for the support of four of said children until each of them respectively became 16 years of age, and decreed that plaintiff have a life estate in a 43.24 acre tract of real estate, on which *Page 1361
the family home was situated, and that upon her death the six children succeed to the absolute ownership thereof as joint tenants with right of survivorship. The decree also ordered the defendant to pay certain delinquent taxes and penalty on said tract of real estate and $48.55 past due alimony, and decreed that the plaintiff should be the owner of two milk cows, a mule team, a part of the pigs, some hay, straw, wheat, oats, corn, certain farm machinery, and all household goods and furnishings. Defendant was further ordered to pay the clerk of the district court $150 for plaintiff's attorney's fees for trial of the case in the district court. From this decree, the defendant has appealed.
[1] It is the contention of the defendant that the evidence presented in the trial of the case failed to establish either the ground of habitual drunkenness or the ground of cruel and inhuman treatment alleged in the petition. In addition to the plaintiff and the six children, four other witnesses, eleven in all, testified to the defendant's drunken condition on several different occasions. It is, of course, impossible to set out all of the evidence of the different witnesses, and we shall not attempt to do so. We have examined the record very carefully and we are satisfied the evidence presented by the plaintiff was abundantly sufficient to establish habitual drunkenness on the part of the defendant. The plaintiff and children were undoubtedly in a much better position than any of the other witnesses to know the defendant's habits with regard to the use of intoxicating liquor, and, while the specific instances of drunkenness described by them in detail in their testimony are necessarily limited, we think their evidence clearly establishes that the defendant had become so addicted to the use of intoxicating liquor that he was an habitual drunkard within the meaning of the divorce statute, section 10475, Code, 1935.
True, several witnesses testified for the defendant, but the result of their testimony amounted to little more than a showing that in their contacts with the defendant they had never seen him intoxicated. The evidence of several of these witnesses shows that their contacts with and knowledge of defendant's habits were so limited that their testimony is of very little, if any, value. Other witnesses were such that we think the trial court was justified in placing little credence in what they said. Still others indicated that their idea of drunkenness was that *Page 1362
a drunken man must be one who staggered around and fell over things and didn't know anybody or anything. As said by the trial court, in referring to the defendant's witnesses:
"Some of these were men who did not associate with him, some of them had the marks of dissipation on their own countenances, and they are not to be believed, while others would not think a man was intoxicated as long as he was able to stand on his feet."
In Bill v. Bill, 178 Iowa 1025, at page 1029, 157 N.W. 158, at page 159, in which the facts were somewhat similar to those in the instant case, we said:
"Direct testimony as to defendant's frequent intoxication is in the record, and, aside from his denials, he in a general way relies upon testimony from those who knew him before he left his wife, to the effect that they had not often seen him intoxicated, if at all. Such testimony is largely negative in character, and does not overcome the affirmative testimony of those who testified that they frequently saw him in an intoxicated condition. Richards v. Richards, supra [19 Ill. App. 465]; McGill v. McGill, supra [19 Fla. 341]; Murphy v. People, 90 Ill. 59. We shall not set out the testimony on which we base our conclusions. The trial court had the advantage of the presence of the parties and their witnesses, and the record itself is in support of the conclusion reached by it on this issue."
As to the proposition of cruel and inhuman treatment, we think the evidence is even more conclusive than on the question of habitual drunkenness. The evidence clearly indicates that the plaintiff is a hard-working and frugal woman; that, through her efforts in raising chickens and other produce, she provided for a large part of the family expenses; and that on only one occasion during her married life, which was at threshing time, was she given any additional help in the home. The record not only tends to show, but is sufficient to compel the conclusion, that the defendant, on numerous occasions, cursed and swore at both the plaintiff and the children, called her vile names, and threatened both her and the children. While there is no evidence of any physical violence used by defendant toward the plaintiff herself, there is evidence of his cruel and abusive treatment of some of the children in her presence. Not only this, but there *Page 1363
is evidence in the record that on several occasions he took some of his little boys with him into saloons and other places of questionable repute; that on one occasion when he was arrested and put in jail one of the children was with him, and slept all night in the automobile while the defendant was in jail; and that on another occasion he spent a large part of a night in a gambling place conducted by colored people and in which there were both men and women. Other instances of cruelty appear in the record and, in our opinion, amply justify the statement of the trial court that:
"A man who is in the habit of giving his little boys cigarettes, and then punishing the older ones because they smoke, who slapped the baby because she spilled milk and threw the glass across the room and shattered it, would stay out all night at places of the character to which the defendant went is not suitable to have the custody of children of the age of these."
[2] Serious complaint is made against the provision of the decree which gave a life estate in the 43.24 acre tract of land to the plaintiff and directed that, after her death, it go to the children then living as joint tenants with right of survivorship. The record shows that at the time of the trial the defendant was possessed of 337 acres of land in addition to the 43.24 acre tract; that this 337 acres was encumbered for about $15,000, and that the 43.24 acre tract was free from encumbrance. The record further showed that the defendant had considerable personal property in addition to that set over to the plaintiff, and that all of it was covered by a chattel mortgage, which, however, had been greatly reduced at the time of the submission of the case. It is argued that the real estate, other than the tract given to the plaintiff is not of sufficient value to meet the encumbrance thereon, and that the decree is unjust in stripping the defendant of practically all his property. It is true, of course, that a decree of divorce should not make the divorced husband and father destitute for the purpose of permitting the wife and children to live in idleness and luxury, but, on the other hand, so long as the divorced husband and father has property or income, the divorced wife and children of tender age should not be deprived of a decent home and decent support. The 43.24 acre tract given to plaintiff for life constituted the family home, and the personal property set over to her was *Page 1364
undoubtedly for the purpose of enabling her and the children to work the land and earn a part of their living expenses. As to the personal property given to plaintiff and the sums of money which defendant was directed to pay her, in view of the fact that defendant seems to have been able to greatly reduce the amount due upon the chattel mortgage, that he still has a large amount of personal property and still occupies and operates the 337 acres of land, it seems quite probable that he will be amply able to make the payments imposed on him without serious inconvenience.
[3] It is contended, however, that the trial court was without power to make the disposition of the 43.24 acre tract of land contained in the decree, and, without deciding the legal question involved, we think it doubtful, and unnecessary in this case, that the title to the remainder in the 43.24 acre tract of land, after the death of the wife, be taken from the defendant and given to the children, not for their support, but rather as a gift which may have no connection with their support and may not take effect until after they have reached an age when they would be amply able to provide for themselves. Appellee, in argument, apparently realizes the doubtfulness of the provision made in regard to this tract of land, and suggests that, if this court see fit, it may be modified, and that, instead of disposing of the entire title to the wife and children, the wife be given a life estate and the remainder left to the appellant. We believe the suggestion made would better meet the exigencies of the situation in this case than does the provision contained in the decree. We, therefore, direct that the decree be modified to the extent that the plaintiff be given a life estate in the 43.24
acre tract of land, and that the defendant be decreed to be the owner of the remainder, subject only to such life estate.
As thus modified, the decree of the trial court is hereby affirmed. — Modified and affirmed.
SAGER, C.J., and KINTZINGER, HAMILTON, STIGER, and MILLER, JJ., concur. *Page 1365 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431850/ | On November 2, 1933, the city council of the city of Des Moines passed an ordinance prohibiting the parking of automobiles for more than one hour upon streets within certain parts of said city. Guy A. Miller was charged with having violated said ordinance on four different occasions, to wit, January 2, April 4, April 5, and April 19, 1934. He pleaded not guilty, and, upon trial in the municipal court of the city of Des Moines, on the 24th day of April, 1934, he was found guilty and ordered to pay a fine. An appeal was taken by the defendant to the district court of Polk county, Iowa. The case was tried in the district court upon a stipulation of facts, and on December 27, 1934, the district court entered judgment affirming the findings and order of the municipal court. From such judgment, the defendant appeals to this court.
Only one question is presented by this appeal and that is, Was the ordinance which defendant is charged with violating in effect at the time of any of the alleged violations?
Section 5720, Code of 1931, is as follows:
"* * * All ordinances of a general or permanent nature, and those imposing any fine, penalty, or forfeiture, shall be published in some newspaper published and of general circulation in the city or town; but if there be no such newspaper, such ordinances may be published in a newspaper designated by the council and having a general circulation in such city or town, or by posting copies thereof in three public places therein, two of which shall be at the post office and the mayor's office. When the ordinance is published in a newspaper it shall take effect from and after its *Page 634
publication; when published by posting, it shall take effect ten days thereafter. It shall be a sufficient defense to any suit or prosecution for such fine, penalty, or forfeiture, to show that no such publication was made."
Section 5721, Code of 1931, provides:
"When any city or town shall cause or has heretofore caused its ordinances to be published in book or pamphlet form, such book or pamphlet shall be received as evidence of the passage and legal publication of such ordinances, as of the dates mentioned or provided for therein, in all courts and places, without further proof. When the ordinances are so published, it shall not be necessary to publish them in the manner provided for in the preceding section."
It appears from the stipulation of facts in this case that there are papers of general circulation published in the city of Des Moines; that the ordinance in question was never published in any such paper; that such ordinance was published along with the other council proceedings of the city council of the city of Des Moines for the month of November, in a pamphlet of which less than one hundred copies were printed in the early part of the month of December, 1933; that said ordinance was again published in a pamphlet described as ordinances of the city of Des Moines passed during the fiscal year ending March 31, 1934, which pamphlet, however, was not published until the 4th day of June, 1934; and that there never was any other publication of said ordinance except these two publications. It is apparent, therefore, that, since there was no publication in a newspaper, and since the publication in the pamphlet described as ordinances of the city of Des Moines passed during the fiscal year ending March 31, 1934, was not made until after the alleged violations with which appellant is charged, said ordinance was not in effect at the time of such alleged violations, unless its publication in the pamphlet containing the council proceedings for the month of November, which was printed in the early part of December, 1933, was a sufficient publication under the statutes above quoted.
Appellant contends that this publication of the ordinance among the proceedings of the city council was not such a publication as would make the ordinance effective; first, because this section does not dispense with the necessity of a publication in a newspaper of general circulation in the city of Des Moines; and, second, *Page 635
because the publication of the pamphlet containing the proceedings of the city council of the city of Des Moines for the month of November, in which this ordinance appeared, is not a publication of the city's ordinances in book or pamphlet form, within the meaning of section 5721 of the Code. Appellant cites the cases of Barrett v. Railway Company, 190 Iowa 509, 175 N.W. 950, 180 N.W. 670, and Hollingsworth v. Hall, 214 Iowa 285, 242 N.W. 39, as sustaining his contention that the publication by the city of its ordinances in book or pamphlet form does not dispense with the necessity of a newspaper publication, but merely makes such book or pamphlet prima facie evidence of the passage and legal publication of such ordinances, and that this prima facie case may be overcome by further evidence that there was no newspaper publication. However, in the view we take of this case, we need not and do not pass on the construction thus placed upon the statutes by appellant, because we think that the decision we reach as to appellant's second contention is decisive of the whole case. We, therefore, proceed to a consideration of the question as to whether the publication of the ordinance here in question among the proceedings of the city council of the city of Des Moines for the month of November was such a publication as is contemplated by section 5721 of the Code.
It will be noted that section 5721 provides that:
"When any city or town shall cause or has heretofore caused itsordinances to be published in book or pamphlet form, such book or pamphlet shall be received as evidence of the passage and legal publication of such ordinances, * * * (Italics are ours.)
It will be further noted that the publication in book or pamphlet form here referred to is a publication of ordinances. We think it quite apparent that what the legislature here had in mind was not a publication of a single ordinance, as it might appear in pamphlet form along with other proceedings of the city council, but the publication of a book or pamphlet in which the ordinances of the city were gathered together and published. If the legislature had intended that a publication in pamphlet form of the general proceedings of a city council, in which an ordinance might appear, would be a sufficient publication of such ordinance, it could, and we think it would, have used language to indicate that intention. The use of the plural, "ordinances," throughout the whole of section *Page 636
5721, was not, in our opinion, without some purpose, and it seems quite apparent that such purpose was to limit the application of the statute to a book or pamphlet in which the ordinances of the city were collected and published.
Appellee cites many cases in support of its contention that the publication of the ordinances in book or pamphlet form dispenses with any other publication. These cases, however, are not applicable to the proposition we are now considering. The question with which we are here dealing is whether the publication of this single ordinance among the proceedings of the city council for the month of November, 1933, would be a publication of its ordinances in book or pamphlet form as contemplated by the provisions of section 5721. Appellee also cites the case of Law v. People, 87 Ill. 385, as authority for the following statement:
"It has been held that it makes no difference whether the ordinance is published separately or with other council proceedings. (The fact that the ordinance is published in pamphlet form with other proceedings of the council will be a sufficient publication.)"
This case contains three separate opinions: The opinion of the court covering thirteen pages, the opinion of Justice Scott containing fifteen pages, and the dissenting opinion of Justice Dickey containing fourteen pages. We have searched through all of these opinions and have been unable to find the language quoted. The only place in which we find any reference to the requirements governing the publication of an ordinance is in the opinion of Justice Scott, wherein it is said:
"It is shown the appropriation ordinance was published in the corporation newspaper within a few days after its passage, and afterwards in a German newspaper, and in pamphlet form, with other proceedings of the city council. That was a sufficient publication, and the objection it was not published as anordinance seems hypercritical. What possible difference can it make whether it was published separately or with other proceedings of the corporation? In either case it would be published as an ordinance, and that is sufficient."
Nowhere in the opinion of Justice Scott nor in either of the other two opinions, so far as we can find, is there any statement as to the requirements of the statute covering the publication of *Page 637
ordinances. Without knowing the provisions of such statute, the language of the opinion cannot be considered as supporting the appellee's contention in this case, because it must be conceded that if a publication is made in compliance with the statute, it is sufficient.
As the ordinance here involved was not published in a newspaper; as the book or pamphlet in which the ordinances of the city of Des Moines for the fiscal year ending March 31, 1934, was not published until after the offenses charged had been committed; and because we hold that the publication of the ordinance in question among the proceedings of the city council for the month of November was not such a publication as is contemplated by section 5721 of the Code; we are constrained to hold that the ordinance under which it was attempted to prosecute the appellant was not in effect at the times when he is alleged to have violated its provisions. The judgment of the district court must be, and is, therefore, reversed. — Reversed.
ANDERSON, C.J., and ALBERT, MITCHELL, KINTZINGER, PARSONS, RICHARDS, and HAMILTON, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431851/ | M.H. Cohen, W.L. White heirs, and Len Harbeck are the owners of certain business property on one of the corners in the retail business section of the city of Des Moines. The assessor fixed the value of the property at $339,500. The plaintiffs, who are lessees of the said property, filed an objection with the defendant, board of review, which board heard the objections, and overruled the same. The plaintiff then appealed to the district court of Polk County, and that court, sitting in equity, reduced the assessment on said real estate by the amount of $50,000. The board of review has taken this appeal. It appears of record that Silverberg and Lince have a 99-year lease on the property in question, and they, in turn, have given a longtime lease to Chapman Brothers.
At the time of the appeal, and for some time prior thereto, Chapman Brothers were occupying the premises with a retail store. The Silverberg lease contains the following clause:
"Whenever any taxes or special assessments may be paid in installments, the lessee shall have the right to execute in the name of the lessor and as her attorney in fact, such agreement or agreements as may be required or permitted by law to secure the right or privilege of paying such taxes or special assessments in installments, and the lessee shall thereupon pay said installments before they become delinquent. The lessee shall pay, prior to the termination of this lease, all deferred installments of any such taxes or special assessments."
The said lease also contains the following clause:
"The lessee shall have the right to contest the validity of any tax or special assessment payable by him, which he deems to have been illegally levied or assessed against said premises, and for that purpose shall have the right to institute such proceeding or proceedings in the name of said lessor as he may deem necessary, provided that the expenses incurred by reason thereof shall be paid by lessee, and provided further, it is necessary to use lessor's name in carrying on such proceedings."
The lease also provides that, as additional rental, the lessee shall pay, before they become delinquent, all regular taxes, special taxes, rates, and assessments of whatsoever kind or nature, levied against the premises. *Page 306
The Chapman lease is in substantially the same form, and runs for a period of 25 years from September 1, 1923. The assessment was made on the 6th day of January, 1927. The objections which were filed, signed by Silverberg and Lince and Chapman Brothers, state, among other things:
"Comes now the undersigned, owner of the following described real estate, to wit: [describing it] and complains that the assessment * * * is excessive and inequitable and unjust, and is not in proportion to the assessment made on other and similar property in the same taxing district, and alleging that the assessed value should not exceed $225,000."
I. The appellant contends that the notice of appeal to the 1. TAXATION: district court was not sufficient. It was levy and addressed to the chairman of the board of assessment: review, naming him, and other members of the review and board. Service was accepted by the chairman. A correction: sufficient answer to the contention is that the appeal: board of review appeared in court, by its defective attorneys, and contested the appeal. This was a notice: general, not a special, appearance. appearance: effect.
II. The appellant also contends that the lessees had no authority, under the law, to contest the assessment in their own names. Section 7132 of the Code of 1927 reads as follows:
"Complaint to Board of Review. Any person aggrieved by the action of the assessor in assessing his property may make oral or written complaint thereof to the board of review, which shall consist simply of a statement of the errors complained of, with such facts as may lead to their correction, and any person whose assessment has been raised or whose property has been added to the assessment rolls, as provided in the preceding section, and any member of the board of review aggrieved by any action of the board of review of which he was, at the time complained of, a member, shall make such complaint before the meeting of the board for final action with reference thereto, as provided in said section."
Section 7133 is as follows:
"Appeal. Appeals may be taken from the action of the board with reference to such complaints to the district court of *Page 307
the county in which such board holds its sessions, within twenty days after its adjournment. Appeals shall be taken by a written notice to that effect to the chairman or presiding officer of the reviewing board, and served as an original notice."
We have here a case in which the original lessees have a 99-year lease, which specifically provides that, as an additional rental, the lessee shall pay all taxes of every kind and character assessed against the property. These 2. TAXATION: original lessees filed the complaint and took levy and the appeal to the district court, and they are assessment: appellees here. The sublessees, with a somewhat contesting similar lease, joined in the original complaint validity: and in the appeal to the district court, and right of they too are appellees in this cause. For the lessee. purpose of the consideration of the question involved, we may properly deal only with the rights of the original lessee. It is true, the owners granted to the lessee the right to use the name of the owner in any proceedings which the lessee might see fit to take in connection with taxation against the property involved, but the lease also gave definite authority to the lessee to contest the validity of any tax payable by him (the lessee) under the terms of the lease. There is here, then, a complete grant of power and authority by the owner to the lessee to do everything which the lessees did in this case, and more, because the owners authorized the lessee to proceed in the owner's name. The question is: Must the lessees, under such circumstances, proceed in the name of lessors, or may the lessee, as a "person aggrieved by the action of the assessor," file a complaint and prosecute the appeals? In First Nat. Bank ofIndependence v. City of Independence, 123 Iowa 482, the plaintiff bank filed its complaint before the board of review, and appealed to the district court, in the name of the bank, against an assessment on the shares of stock in the bank, which assessment was made against the stockholders, and not against the bank. The question was raised that the bank was not a proper party to file the objections or take the appeal. The court held that the bank was a proper party. An eminent authority has said, in speaking of who may make the complaint and take the appeals:
"If only `a person aggrieved' may apply, it means those *Page 308
whose pecuniary interests are or may be adversely affected." 3 Cooley on Taxation (4th Ed.) 2421, Section 1207.
"A tenant under a perpetual lease or under a lease for 99 years or more, subject to payment of a ground rent, may be considered the owner for purposes of taxation * * *." 26 Ruling Case Law 358.
See, also, Penick v. Atkinson, 139 Ga. 649 (77 S.E. 1055).
This court has said:
"It is undoubtedly the general rule that the person who is in possession of land, claiming ownership and receiving the rents and profits thereon, is primarily liable for the payment of taxes. * * * And this is so whether he holds the legal title or only an equitable title." Mitchell v. Mutch, 189 Iowa 1150.
Under the record in this case, the parties who held the 99-year lease on the property in question were proper parties to make the complaint and perfect the appeal.
III. The appellant complains of the reduction in the assessment. The plaintiff introduced two witnesses who qualified as realtors, with years of experience and observation in the matter of the valuation of real estate of the 3. TAXATION: kind and character involved here, in the city of levy and Des Moines. These witnesses considered nine assessment: different pieces of property in the immediate discrimina- vicinity of, and of a similar character to, the tion between property in question. Manifestly, no two pieces similar of property could be found exactly alike. properties: However, the properties considered were in the reduction. retail district of Des Moines, and used for retail purposes, and near the property in question. These witnesses placed a value on each of these nine properties. The assessed valuation placed on each of said properties was then shown, and the ratio of actual value to assessed value was obtained. This ratio in each case was applied to the actual value of the property in question, and a resultant assessed valuation was calculated for the property in question. These results varied from $167,000 to $230,000. The average of the assessed valuations thus computed was less than $192,000. The assessor fixed the value for assessment purposes at $339,500. The court reduced the assessment to $289,500. The defendants offered no evidence on the question of valuation. *Page 309
Under the present taxation laws, the theory is that all property shall be assessed at actual value. According to the testimony of the witnesses referred to, some pieces of property in the immediate vicinity of that in question were worth more than a million dollars, and assessed at less than $400,000. One piece of property, worth $800,000, was assessed at $259,000. Manifestly, the property in question was assessed for more, in proportion to its value, than other similar properties in the same assessment district. The court, in fixing the assessed valuation, was abundantly fair to the board of review. The case is — Affirmed.
ALBERT, C.J., and EVANS, FAVILLE, and KINDIG, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431853/ | I. The record situation in this case is: This petition was 1. CORPORA- filed on the 21st day of February, 1927. On TIONS: March 4th following, defendant entered an foreign appearance by his attorney, demanded a jury corpora- trial, and the case was duly assigned for trial tions: right at 9 o'clock A.M., April 4, 1927. On the latter to sue. date, the court made the following entry:
"Now on this day, case being called for trial, plaintiff appearing by Raymond M. Hedinger, its attorney, and defendant failing to appear, is declared to be in default for want of attention."
Five days later, on April 9th, judgment was entered against the defendant for $41.66, with interest and costs. On April 18, 1927, defendant filed an unverified motion to set aside default judgment, and as grounds therefor alleges: (1) That the judgment was fraudulent and void, because the plaintiff is a foreign corporation, organized under the laws of the state of New Jersey, and has not complied with Chapter 386, Code of Iowa, 1924, and has no right to sue in the courts of this state upon a contract made within the state; (2) "that this defendant has a good defense to the above named action."
On April 18, 1927, defendant filed his affidavit, in which he recites that, on or about the 21st day of March, 1927, he employed C.E. Bellew, an attorney, to represent him in a suit wherein the Service System, Incorporated, of Newark, New Jersey, had sued *Page 1166
him for a balance of $46.12 on account of advertising matter which defendant contracted for from an agent of plaintiff's. The affidavit further states:
"I informed my attorney, after he had entered an appearance in the case, that I was settling the matter with the plaintiff's attorney, and failed to inform him that we could not reach an agreement, and to continue the case. That I have a good defense to said action; that the amount sued upon does not represent the true amount of said account."
On April 25, 1927, defendant filed an answer in two counts. In the first count, he admits that he owed the plaintiff the sum of $25.80. In the second count, he alleges that, on information and belief, the defendant is a foreign corporation, and has not complied with Chapter 386, Code of Iowa, 1924, and the court has not jurisdiction in the hereinabove entitled matter.
Resistance was filed to defendant's motion to set aside the default judgment, and, on the 17th day of May following, the court overruled the motion, but later, on May 21st, on a reconsideration of the matter, made the following order:
"The court finds that the plaintiff is a foreign corporation which has not obtained a permit to do business in the state of Iowa, as by statute provided, and that, under the law, it is prohibited from maintaining an action in court. That the court had no jurisdiction to render judgment or of the subject-matter of this case. Therefore, the judgment is vacated and case is dismissed at plaintiff's costs."
The matter involved herein being less than $100, it comes to us on a certificate from the trial judge, certifying the question of the jurisdiction and power of the trial court to make said final ruling in this cause, under Chapter 386, and especially Section 8427, Code of 1924.
It appears from the record that the defendant was engaged in the radio business in the city of Des Moines; that the subject of contract between these parties was certain advertising matter to be used by the defendant in connection with his business. The plaintiff is a corporation organized under the laws of the state of New Jersey, with its principal place of business at Newark, in that state. *Page 1167
On April 9, 1924, a salesman for the plaintiff corporation solicited the defendant for an order for goods, which order was in writing, and is a part of the record in the case. It specifies the amount and character of the goods, and provides that it is subject to acceptance by the Service System, Incorporated, and is signed by the defendant. The order was forwarded presumably by mail to the plaintiff, was filled on May 5th following, and shipped to the defendant over a common carrier. The goods were received by the defendant, and he made payments thereon in the amount of $45.20.
Briefly stated, the question here involved is whether or not the ruling of the court, based on Chapter 386, Code of 1924, is controlling. This chapter, generally speaking, provides for the making of applications by foreign corporations to the secretary of state for permits to do business in this state. Section 8427 thereof provides:
"No foreign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state unless prior to the making of such contract it shall have procured such permit."
The question, therefore, is, Was this contract a contract made in the state of Iowa? The lower court seems to have been of the opinion that it was, and that, therefore, plaintiff could not maintain this action. With this conclusion we cannot agree.
In the case of Tegler Co. v. Shipman, 33 Iowa 194, the suit was on a promissory note given at Jefferson, Greene County, Iowa, for intoxicating liquor. The plaintiff requested the following instruction:
"The jury are instructed that, if they believe from the evidence that the order or orders, some or all of them, on the plaintiffs were procured by their agent for procuring orders in the state of Iowa, and that said orders were given by the defendant on the plaintiffs, who were doing business at Rock Island, in Illinois, subject to their approval or disapproval, then no sale would take place until the orders were accepted or approved by them in Rock Island, and the place of contract would not be by such order determined to be in Iowa; that the mere giving of an order does not fix the place of contract." *Page 1168
In that case, the lower court was reversed for failure to give this instruction. This case announces the general rule that, where an order for goods or merchandise is taken in one state and forwarded to another which is the home office of the corporation or of the principal of the agent who took the order, and such order is subject to acceptance or approval by the principal, the contract is not a contract of the state where the order is taken, but is one of the state where the principal resides. This rule has been consistently followed in this state in the following cases: Adae Co. v. Zangs, 41 Iowa 536; Second Nat. Bank v.Curren, 36 Iowa 555; Taylor Co. v. Pickett, 52 Iowa 467; Engs Sons v. Priest, 65 Iowa 232; Gipps Brew. Co. v. De France,91 Iowa 108; State v. Colby, 92 Iowa 463; Wind v. Iler Co.,
93 Iowa 316; Gross v. Feehan, 110 Iowa 163; Sachs Sons v. Garner,111 Iowa 424; Brown Sons v. Wieland, 116 Iowa 711; Hamilton v.Schlitz Brew. Co., 129 Iowa 172; Bowlin Liquor Co. v.Brandenburg, 130 Iowa 220; State v. Davis, 62 W. Va. 500
(60 S.E. 584, 14 L.R.A. [N.S.] 1142).
The inevitable conclusion from this line of cases, as applied to the facts of this case, is that, while the order for these goods was taken in the state of Iowa, it was approved and accepted in the state of New Jersey, and hence the contract was a New Jersey, and not an Iowa, contract. This being true, the aforesaid sections of the Iowa statute are not controlling, because the prohibition in the aforesaid Section 8427 only forbids foreign corporations from bringing an action in the courts of this state "upon any contract made by it in thisstate." It is quite apparent, therefore, that, this being a New Jersey contract, the aforesaid section of the statute is not controlling, and the plaintiff had the right, regardless of that section, to bring and maintain this action.
II. It is urged, however, that the motion to set aside the default judgment was not filed within the time provided by statute in such cases. The judgment was entered 2. MUNICIPAL in the lower court on the 9th day of April, COURTS: 1927, and the motion to set aside the same was default: filed on the 19th day of April following. It is timely apparent, therefore, that the motion was filed motion to within the time provided by Section 10681, Code set aside. of 1927 *Page 1169
For the error pointed out, the case is reversed. — Reversed.
STEVENS, C.J., and De GRAFF, MORLING, and WAGNER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431854/ | Trial was had on a county attorney's information, accusing the defendant, Albert Grimm, and one Eugene Toney of the crime of assault on Glen H. Sweet, with intent to inflict great bodily injury. Grimm was tried separately, the trial resulting in a verdict of guilty, as charged. The trial court, however, submitted in the instructions the included offenses of assault and battery, and simple assault.
The primary contention of the appellant is that:
"If any crime at all was committed, it could not possibly have been more than either simple assault, or assault and battery."
At this point it may be stated that no objections or exceptions were taken to the instructions given to the jury by the trial court. A defendant in a criminal case waives error on appeal in every instance where proper exceptions are not taken below. Statev. Jackson, 205 Iowa 592, with cases cited.
Exceptions were taken to rulings made by the trial court in sustaining objections of the State to the following questions, asked upon the cross-examination of the prosecuting witness, Glen H. Sweet:
"Q. Those are scratches on your face at this time, aren't they? Q. You are ordinarily able to take care of yourself, are you not? Q. Were you an officer on the 21st day of May? Q. Do you have a permit to carry a gun?"
Objections to these questions included immateriality, not proper cross-examination, and calling for opinion and conclusion of the witness. Clearly, the reference to scratches on the face of the witness, whether the prosecuting witness was an officer on the evening of the assault, and whether he had a permit to carry *Page 1180
a gun, were immaterial. The question whether the witness was "ordinarily able to take care of himself" was subject to all of the objections entered. The permissible range of cross-examination of a witness is a matter largely within the sound discretion of the trial court. We have repeatedly reaffirmed the application of this rule. Further, the matters to which the inquiries were directed on cross-examination do not constitute a basis for impeachment, since they were immaterial and irrelevant.
We now turn to the challenge of the insufficiency of the evidence to sustain the verdict. It may be conceded that the crime of assault with intent to inflict great bodily injury is not susceptible of exact definition, although 1. ASSAULT AND the crime of assault has a fairly well defined BATTERY: meaning, in the realm of criminal law. The gist intent to of the major offense is the intent of the person inflict assaulting, at the time of the assault. This great bodily intent is disclosed by the circumstances injury. attending the assault, together with all relevant facts and circumstances antedating the assault. State v.Schumann, 187 Iowa 1212; State v. Steinke, 185 Iowa 481. Assault to do great bodily injury is not circumscribed or limited per se
by the fact that the accused, at the time of the assault, used simply his fists.
There is no burden placed upon the State to prove that the defendant charged with the major offense, as in this case, used a club, billy, or other means or instrument whereby a more grievous injury could have been accomplished. It is said in Statev. Steinke, supra:
"One may have the intent to inflict great bodily injury, without inflicting any injury at all, or he may intend only assault and battery, but go further than intended, and actually inflict a great bodily injury."
The quantum of injury may be taken into consideration by the jury in determining the defendant's intent, but it is not, in itself, determinative of that intent. See, also, State v.Brackey, 175 Iowa 599; State v. Sayles, 173 Iowa 374; State v.Dickson, 200 Iowa 17.
With these applicable legal principles in mind, let us examine the record evidence. The prosecuting witness, Glen H. Sweet, was an "under cover" in the employ of the state and Federal agencies for the enforcement of the prohibitory liquor *Page 1181
law. He was in the performance of his duties in Jasper County, Iowa, during the time immediately preceding the date of the assault, to wit, May 21, 1927. On May 20, 1927, he had arrested the two brothers of the defendant Albert. On the following day, the defendant, Albert Grimm, went from Newton to Des Moines, to secure appearance bonds for his brothers, but was unsuccessful. About 8 o'clock on that evening, the defendant and Eugene Toney were sitting outside a pool hall in Newton, where a casual conversation was had with W.E. Horn, a police officer in the city of Newton. The subject of this conversation involved Glen H. Sweet. Toney made inquiry of the whereabouts of Sweet, referring to the latter as Horn's friend. Apparently Horn did not understand to whom the reference was made, and to the question said: "What do you mean?" Toney said: "The stool pigeon, — the fellow that was with you last night." Horn made answer: "That is a state man." Whereupon Grimm said:
"Well, I will tell you that it doesn't make any difference whether that fellow was walking up the street with you, — I am going to whip him. When I get through with the G__ d__ ___, he never will be able to buy any more liquor."
The assault on Sweet happened about 15 minutes later. Sweet's version of the affair is as follows:
"When they got there [when they met Sweet on a street in Newton], Grimm rushed me and shoved me and hit me at the same time. He said, `I'll fix you, you dirty stool pigeon, so you won't bother my brothers again,' and started hitting me, and Toney started kicking me."
At this point, Sweet pulled his gun, placed his attackers under arrest, and proceeded with them to jail. On the way to the jail, Grimm remarked that "it wasn't over yet; that the next time he [Grimm] would fix it so I [Sweet] wouldn't get my gun."
Sweet was 27 years old, 5 feet 4 1/2 inches tall, and weighed 162 pounds. The defendant Grimm was about 6 feet 4, and weighed about 220 pounds. His companion, Toney, was about 6 feet tall, and weighed about 180 or 200 pounds. It is obvious that these two physical giants had the ability to inflict grave bodily injury upon Sweet, and the disposition to do so is shown *Page 1182
by the evidence. It was the gun in the hands of Sweet, after the initial stages of the assault, that caused the curtain to fall on the scene enacted in the peaceful town of Newton.
The triers of the facts in the instant case have spoken, as to the intent of the defendant Grimm in the commission of the assault as charged. The jury was entitled to take into consideration the discrepancies in weight of the parties attacking and the party attacked, and also what was said by the attacking parties immediately prior and subsequent to the assault. State v. Dickson, supra. We are constrained to hold that a jury question was presented.
One further proposition urged by the appellant involves the correcting of the judgment entry by the trial court. It appears that the defendant, in the first instance, was sentenced to an indeterminate period of five years in the 2. CRIMINAL penitentiary. The trial court, on the same day LAW: as the date of judgment entry, — to wit, judgment: October 13, 1927, — discovered the error, allowable and, in the absence of the defendant, and correction. without notice to either defendant or his counsel, "erased the word `five' from the calendar entry, and inserted the word `one' in lieu thereof." A bill of exceptions was signed by the court in this particular, upon the request of the defendant.
In correcting the entry in the manner as stated, the trial court simply made the penalty conform to statutory provision. A person convicted of the crime of assault with intent to inflict great bodily injury "shall be imprisoned in the county jail not exceeding one year, or be fined not exceeding five hundred dollars, or be imprisoned in the penitentiary not exceeding one year." Section 12934, Code of 1924. Clearly, no prejudice resulted to the defendant by reason of this correction. State v.Herzoff, 200 Iowa 889. Under the statute, this court is privileged to examine the record, without regard to technical errors or defects which do not affect the substantial rights of the parties, and render such judgment on the record as the law demands. Section 14010.
The record before us contains no reversible error, and the judgment entered is — Affirmed.
STEVENS, C.J., and ALBERT, MORLING, and WAGNER, JJ., concur. *Page 1183 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431855/ | There is presented on this appeal a controversy as to the extent of the liability of plaintiff insurance company for taxes for the year 1934. During that year numerous residents of Iowa paid to plaintiff varying amounts in consideration of receiving plaintiff's written undertakings to pay annually to such persons, respectively, while living, an agreed sum of money. The aggregate amount so paid to plaintiff was $209,362.62. During 1934 plaintiff also realized a further sum of $3,828,770.08, which was due plaintiff upon contracts that both parties concede were life insurance policies. Upon this larger amount plaintiff admits, and has satisfied, its tax liability. The specific question is whether the item of $209,362.62 derived as above indicated, should have been included in computation of the tax for 1934 imposed by section 7022, Code 1931, the material portions of which are the following:
"7022. Foreign companies — tax on gross premiums. Every insurance company incorporated under the laws of any state of the United States other than the State of Iowa * * * shall, at the time of making the annual statements as required by law, pay into the state treasury as taxes two and one-half per cent of the gross amount of premiums received by it for business done in this state, including all insurance upon property situated in this state and upon the lives of persons resident in this state during the preceding year."
At all times that are material plaintiff was incorporated under the laws of Wisconsin with power granted in its articles of incorporation to make and offer insurance pertaining to or connected with life risk, and to grant and purchase annuities. Plaintiff admits it is amenable to the provisions of section 7022, but contends that there is nothing in this statute to justify defendants' demand for payment of the tax upon the item of *Page 335
$209,362.62. Plaintiff denominates the contracts from which the $209,362.62 was derived as contracts for annuities, and says they are to be distinguished from contracts for life insurance. So distinguishing, plaintiff's claim is that section 7022 exhibits a legislative intent that there be taxed only premiums received from the business of insurance, and that consequently revenues received as considerations for annuity contracts are not taxable. The contrary contention of defendants is that the legislative intent was to tax the gross amount of all premiums received by plaintiff for business done in this state and that the making of annuity contracts was a part of the business done in this state and that the amounts received in consideration for such contracts were premiums within the intendment of section 7022.
The contracts for which the $209,362.62 was paid to plaintiff were quite simple in their terms, plaintiff undertaking in each such contract to pay to the other party to the contract an agreed sum annually during the then remaining lifetime of such other party, the latter paying at the time of the execution of the contract an agreed amount as the full consideration for plaintiff's such undertaking. There were but two parties to each of these contracts, no third party being named as entitled to any recovery in event of a cessation of a human life. We are not here confronted with a form of contract in which the terms may appear to contemplate both life insurance and provisions for annuities. We think it is obvious, without discussion, that it should be conceded to plaintiff that these contracts, from which the $209,362.62 was derived, lacked some of the essentials of, and in other respects differed from, life insurance contracts in the ordinary usage of those words, and were in fact undertakings for the payment of annuities, and were not life insurance contracts. See Hult v. Home Life Ins. Co., 213 Iowa 890, 240 N.W. 218.
Such concession opens the way to plaintiff's next proposition. It is based on the premise that the word "premiums" in this statute has such a definite and restricted meaning that the word is applicable solely to considerations paid for contracts of insurance. Therefrom plaintiff concludes that, because the word "premiums" is used, there is no intention expressed in the statute that considerations realized from annuity contracts be taxed. To establish such premise plaintiff cites several cases in which it is said in substance that the definition of the word "premium" *Page 336
as used in the law and business of insurance is the consideration paid for a contract of insurance. Plaintiff relies on this definition. But a mere definition is not always a safe foundation for correct conclusions. One reason is that, except in mathematics, it is difficult to frame exhaustive definitions of words. Local Bd. v. Lee, 1 Ex. D. 336, loc. cit. 343. Consequently, unless the authority offering the definition has undertaken the difficult task of framing a definition that is exhaustive, and has succeeded in such undertaking, error may result if there be reliance upon the element of exhaustiveness. Plaintiff's point depends on acceptance of these definitions as being exhaustive. But such they were not in our opinion. To illustrate, among cases cited are State v. Pittsburgh C.C. L. Ry. Co., 68 Ohio St. 9, 67 N.E. 93, 64 L.R.A. 405,96 Am. St. Rep. 635, and Northwestern Life Assn. v. Stout, 32 Ill. App. 31, which are cited by plaintiff because in each case the definition, in substance, is found. But in neither case does there appear any reason that the court should have attempted an exhaustive definition. On the contrary, the issue was whether an insurance business was being conducted. Upon that issue there was discussion of the fact that premiums are considerations for insurance contracts and if shown are material on the question whether an insurance business is being carried on. Such was the subject matter being considered in these authorities at the time of the pronouncements. Definitions differ in their character according to the nature of the thing defined. Warner v. Beers, 23 Wend. (N.Y.) 103, loc. cit. 142. Looking upon these definitions as having been pronounced primarily for application to the issues and facts these courts had in hand, we are unable to agree with plaintiff that these courts intended to go any further, or to consider a question not in issue, that is whether the word "premium" may not in fact also be applied to contracts other than those for insurance. We think the definitions in the two above cases were intended to be used in pointing out the obvious, that is, that amounts paid for life insurance are premiums.
But if we could be in accord with plaintiff that the definitions from other jurisdictions were undertakings to frameexhaustive definitions, nevertheless there is still the question, in view of the conceded facts before us, whether we can agree that such courts successfully did so. This is because it is the record in this case that the word "premium" is in fact used in a more *Page 337
general sense than that urged by plaintiff. The forms of the annuity contracts issued by plaintiff, the contracts that are the subject of this controversy, are in evidence. In all of these contracts is found the recital of the parties that "in consideration of the payment of a single premium of (the agreed amount) the receipt of which is hereby acknowledged, the Northwestern Mutual Life Insurance Company promises to pay * * * a life annuity * * *." (Italics ours.) In argument plaintiff frankly admits that it does so use the word "premium" in its annuity contracts. Plaintiff further concedes that "most other companies" do likewise. From this record it is our opinion that in interpreting the words chosen by the legislature for use in this statute, it would be hardly within reason to hold that there was an impossibility that the legislature could adopt and intend to use the word "premiums" in the same manner in which it was concededly and commonly used by the insurance companies themselves upon whom the tax is imposed. It might well be that in taxing insurance companies the legislature sought to talk their language. To hold that the alleged definition is in fact exhaustive of the uses of the word "premium" would be arbitrary and inconsistent with the facts in this case. We are unable to adopt plaintiff's premise that the word "premium" is necessarily inapplicable to annuity contracts.
There remains the query whether the legislature actually did intend to use the word "premiums" in the broader sense. Plaintiff, urging that the answer should be in the negative, quotes and italicizes a phrase found in section 7022 in the following manner: "including all insurance upon property situated in this state and upon the lives of persons resident in this state during the preceding year." The italicizing by plaintiff is to make clear its contention that this statute defines the legislative intent to tax only premiums received from the business of insurance. This intent, says plaintiff, is indicated by the fact that the quoted phrase refers specifically to allinsurance and thus shows that it was the intention of the legislature in enacting the statute to tax premiums received for the business of insurance. In other words, plaintiff's thought seems to be that because insurance alone was mentioned in the quoted phrase it is fair to assume that only insurance was in the legislative mind when the statute was enacted. The judging of the soundness of the proposition requires careful reading of the quoted phrase on *Page 338
which the proposition is founded. Such reading leaves no doubt concerning the end sought in the enactment of the phrase. Such end, or purpose was to bring within the purview of the act policies of insurance upon properly in this state and upon lives of residents of this state, although the contract of insurance may have been executed outside our borders. Plaintiff so concedes. If such was the purpose of the phrase, then plaintiff's thought, above mentioned, is lacking in appeal unless life insurance policies and contracts for annuities are in their essentials so identical that there was no room for exercise of legislative discretion as to making the omission, and consequently the legislature as a matter of course would have included annuity contracts in the phrase, had such contracts been in mind when the statute was being enacted. But (and plaintiff so claims) life insurance contracts and contracts for annuities are two different things, with more or less distinct characteristics, and we are not willing to say that there was no room for exercise of legislative discretion whether the purposes of the quoted phrase to reach out and draw in for taxation should be, or could successfully be, applied to annuity contracts executed without the state in the same manner as to insurance policies. It may have been in the exercise of a discretion that annuities were omitted from the phrase rather than as explained by plaintiff. But whatever of substance there may be in plaintiff's theory it does not outweigh other matters, which we proceed to mention, indicating the legislative intent.
The tax imposed by section 7022 partakes of the nature of a tax on business and of a license tax or condition required of corporations to enable them to continue business in this state. It is not a property tax. Scottish U. N. Ins. Co. v. Herriott,109 Iowa 606, 80 N.W. 665, 77 Am. St. Rep. 548. As a prerequisite to transacting business in Iowa in 1934, plaintiff was required to pay as taxes a certain percentage of the gross amount of premiums received by it for business done in this state. That these words "business done in this state" were inclusive of the granting and selling of annuities was made definitely certain by legislative enactment prior to the year 1934. That is, the legislature had identified the granting and selling of annuities as a part of the business permitted and anticipated to be done in this state by insurance companies in the enjoyment of their business licenses. Reference is to chapter 147 of the Acts of the Forty-fifth General Assembly which added to chapter 398 of the 1931 Code, *Page 339
section 8673-a, which provides that "any life insurance company organized on the stock or mutual plan may grant and sell annuities." This act was applicable to insurance companies of the class to which plaintiff belongs.
It is contended, however, by plaintiff throughout its argument that this conclusion is too broad and that because of the use of the word "premiums" in the statute the expression "business done in this state" should be construed as meaning "insurance business done in this state." In way of comment as to the reasonableness of such construction, it would cause the result that if a foreign insurance company engaged only in the annuity business, it would not only be exempt from taxes but would become a source of loss to the state to the extent of the expense of its supervision. Without discussing what may have been the situation prior to the act passed by the Forty-fifth General Assembly, we are satisfied that the specific designation contained in that Act, together with what has already been said as to what is in the record with respect to the common use of the word "premiums", compels the conclusion that the legislature intended that the granting of annuities was taxable as a part of the business done in Iowa by insurance companies of plaintiff's status, for the year 1934.
Plaintiff also urges that the intention of the legislature that annuity premiums were not to be taxed is shown by the construction of section 7022 over a period of years by officials of the insurance department, acquiesced in by the legislature. The evidence pertaining to that issue has to do with a period prior to the Forty-fifth General Assembly and consequently is not material nor of assistance with respect to a subsequent and materially changed status of the laws of the legislature. Accordingly we think we should refrain at this time from discussing the merits of the proposition.
It is not feasible to review the many cases that have been cited, but mention should be made of the two on which plaintiff especially relies. One is People v. Knapp, 193 A.D. 413, 184 N YS. 345, 346, affirmed 231 N.Y. 630, 132 N.E. 916. The question was whether moneys received by an insurance company for granting annuities were to be regarded as "premiums" in the computation of a franchise tax. From the majority opinion: "The tax to be laid, therefore, is exclusively a tax on insurance corporations, upon corporations `doing an insurance business *Page 340
in this state,' and it is to be measured by `all premiums' received `on all policies, certificates, renewals, policies subsequently canceled, insurance and reinsurance.'"
The opinion then distinguishes between life insurance and contracts for annuities, quotes dictionary definitions of "premium" similar to the one we have already discussed, and then states: "It is quite evident that within these definitions a contract for an annuity is not a contract for insurance, and that the price paid for annuities is not a premium paid for an insurance policy." With this majority opinion but one of the five justices of the court fully concurred. It became a majority opinion because another justice concurred in the result, but for reasons other than those expressed by the majority opinion. In the special concurring opinion that justice said: "I cannot find that any other term has been used to designate the amount paid for an annuity contract than the word `premium'. * * * It seems to me that the legislature must have understood that this word `premiums' covered the income from the sale of annuities; otherwise, this branch of the business would have been specifically exempted from the provisions of the statute." The two remaining justices dissented and stated it was their opinion that the legislature, with reasons, considered the business of granting annuities as a life insurance business, and the consideration for it a premium. The result was that a majority of the members of the court rejected the proposition that the word "premium" did not have application to amounts realized from granting annuities.
The other case is Commonwealth v. Met. Life Ins. Co., 254 Pa. 510,98 A. 1072. One question was whether amounts received by an insurance company for granting annuities were taxable. The statute imposed the tax upon the entire amount of premiums of every character and description received in money or in the form of notes, credits, or other substitutes for money. The opinion distinguishes between insurance and annuity contracts and makes the somewhat qualified statement that the consideration for an annuity contract is not generally regarded as a premium. The opinion then points out that the Pennsylvania legislature appears to have supposed that the power to make insurance does not confer authority to grant annuities, and that the power to make insurance contracts and grant annuities seems to be recognized as entirely distinct in the Pennsylvania *Page 341
statute providing for the incorporation of insurance companies. The Court reached the conclusion that the insurance company was not liable for taxes upon money received for granting annuities. It should be noted that in interpreting the statute the court relied largely on the attitude of the Pennsylvania legislature that power to make insurance does not confer authority to grant annuities. As pointed out the attitude of the Iowa Legislature is the opposite. We do not find in these two cases that which leads to a conclusion other than that above stated.
A somewhat analogous case, cited by defendants, is Mutual Benefit Life Ins. Co. v. Commonwealth, 227 Mass. 63,116 N.E. 469, 470. The statute involved imposed an annual tax of one-fourth of one per cent upon the net value of all policies in force upon December 31 of the year preceding that in which the tax was payable. The issue was whether under such statute annuity contracts should be included in computation of the net value of all policies in force. After a discussion of the statute and of the fact that a company that makes contracts conditioned on the continuance or cessation of human life is an insurance company within the statutory definition, there was the conclusion that: "We are accordingly of opinion that by the words `all policies in force on the thirty-first day of December of the year preceding that in which the tax is payable,' the legislature intended to include all contracts of every description issued by life insurance companies doing business in this commonwealth which are based upon the `continuance or cessation of human life.'"
The district court erred in holding that plaintiff was not liable for the tax upon the item of $209,362.62. The case is reversed and decree should be entered in the court below in accordance herewith. — Reversed and remanded.
PARSONS, STIGER, SAGER, HAMILTON, KINTZINGER, ANDERSON, and DONEGAN, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431857/ | Plaintiff and A.C. McMinimee were married November 14, 1943. He died March 8, 1946. Each had been previously married, had children, and owned substantial property. Decedent's first wife, mother of defendants, appellants herein, died April 6, 1943; plaintiff's first husband, March 25, 1931.
It is conceded by all that there was an oral antenuptial contract between the parties by the terms of which each made some renunciation of rights in the property of the other. Defendants claim it was absolute as to all property of each. Plaintiff contends that in event of Mr. McMinimee's death she was to have the right to occupy the homestead as long as she lives, and ownership of the contents of the home, consisting of furniture, household equipment, and wearing apparel.
Approximately two months after their marriage the parties executed an instrument which recited the making of an oral antenuptial contract whereby each had agreed, in event of the other's death, to waive and relinquish (as surviving spouse), "all right in and to the property" of the other. This written instrument referred to the consummation of the subsequent marriage and (ironically, in view of the present litigation) expressed a desire "to confirm and put in writing said agreement so that no further difficulties or questions might ever arise about the true agreement made between the parties hereto prior to the time of said marriage." Whether there had already arisen "difficulties or questions" does not otherwise appear. *Page 1289
This instrument made no exception in plaintiff's favor as to homestead rights or as to ownership of the contents of the home. Plaintiff prays that she nevertheless be decreed to have such rights and ownership, and alternately, that if necessary, "said prenuptial agreement" (presumably the written instrument evidencing it) be reformed for that purpose. Defendants, by appropriate pleadings, joined issue on both propositions. The trial court held the instrument as drawn would preclude plaintiff from claiming such rights but decreed reformation. The defendants appeal.
I. Assuming (but not deciding, as the point is not raised here) that equity has power to reform such an evidentiary instrument as we have described, we first inquire into the sufficiency of the evidence to support the decree.
The quantum and character of proof necessary to justify reformation has been variously described in Iowa decisions as "clear and satisfactory," "clear, full, and decisive," "clear, convincing, and satisfactory," "clear, convincing, satisfactory, and free from doubt," "more than mere preponderance," "beyond a reasonable doubt," etc. Citation of the various cases is unnecessary. See 16 Iowa Digest 559 et seq.
We have here, as bearing on the issue of reformation, the testimony of plaintiff, of the attorney who drew the instrument, and of another witness who testified as to declarations of Mr. McMinimee; also some slight evidence as to the possible financial situation of the parties.
[1] Plaintiff first consulted the attorney alone. She testified, over appropriate objection, to the terms of the oral agreement and what she told the attorney to put into the proposed writing. Clearly, she was incompetent to testify directly or indirectly to the transaction wherein the oral contract was made. While her evidence, so far as pertinent and material, was admissible to prove the transaction between her and the attorney, it could not be used to prove the transaction between her and decedent.
Later the husband and wife went to the attorney's office and signed the instrument the latter had in the meantime drawn. The testimony of the attorney is far from clear or satisfactory. It does not differentiate between what was discussed *Page 1290
on the first visit and what was later said by decedent or in his presence. It is not clear whether the discussion as to homestead right and ownership of the contents of the home related to the terms of the previous oral agreement or only to what the parties presently wanted incorporated into the writing.
The attorney testified:
"My best recollection was that each was, they were to have no rights in the property of the other. They both had children and I remember her discussing that part of it. She wanted her children to have her property and he wanted his to have his, and neither one wanted any part of the other. Now, with reference to the homestead, I can't remember exactly what was said about it. I do remember that the question of living in the home was discussed and my best recollection is that I was told to do, to include that in the contract, but I remember at the time when I was drawing this contract it troubled me as to whether it would be possible to make a contract after their marriage which would be valid, and I know it took some time and I finally ran across a couple of cases that said you could draw a valid contract confirming a contract made before marriage. At that time it is my recollection that I ran onto the homestead question and when they came to my office to sign it that question was put to me. I don't know whether they read the contract or not, I don't remember that at all, but I know that question was brought up and it is my recollection that I told them I thought under the law it wouldn't make any difference anyway. It was my understanding of the law that the widow would have the right to occupy the homestead under the terms of this contract and that was true of the exempt property in the home, it was discussed. That is all I can recall about it. I have ransacked my mind for weeks trying to remember all the details and looking for our notebooks and our files.
"The property in the home was discussed along with the right to occupy the homestead, that it wouldn't make any difference anyway, she would get it anyway."
On cross-examination: *Page 1291
"I certainly tried to draw this agreement as they wanted it * * * I don't think the right to occupy the homestead was thought of as being during the period of administration. I think * * * that they were concerned about the right to live there for the rest of her life. * * * I don't remember the details but it is my best recollection that I told them under this agreement she could occupy the homestead and that was based on my conception of the law as to the rights of the widow and not on any language in this instrument and that is my recollection as to the property in the home. I think the talk was when they were standing there, ready to hand it to them, and not after the instrument was signed."
We have omitted no material part of his testimony. He does not purport to state what was told him by Mr. McMinimee or in Mr. McMinimee's presence as to the terms of the oral contract. So far as his testimony reveals, there was no discussion of the oral contract at all but only of what was to go into the written instrument, "my best recollection is that I was told * * * to include that in the contract." Told by whom? Before there can be reformation a mutual mistake must be shown.
The only other testimony on the subject is that of plaintiff's sister-in-law (her first husband's sister), who said Mr. McMinimee told her (sometime after the marriage and before the written contract was executed):
"* * * that whatever was in the house in the shape of furniture was hers to do as she pleased and that the home was hers as long as she lived and then it was to revert to his children. * * * He told me it had all been arranged for that condition."
She also testified:
"At different times I would say to him I am glad she has such a comfortable home and for the future and he said I am too, and I intend it to be hers while she lives."
On cross-examination she added:
"I said to him at one time I hope you have arranged your affairs, both of you are not young any more and he said we have." *Page 1292
There is no evidence that connects any of this with the supposed terms of a previous oral contract — nothing inconsistent with what appears to have been supposed by all parties (including the attorney) to have been the legal situation under or in spite of the contract as revealed by the written instrument. Assuming that it would be admissible to prove the making of a valid postnuptial written contract, it had no probative value to establish the terms of the oral prenuptial contract.
Not much is shown of the situation of the parties at the time of the oral antenuptial agreement — surely, nothing tending to sustain plaintiff's contention. There is nothing as to their respective ages, health, or mode of living. The only clew to their relative financial condition indicates that her situation may have been slightly superior to his. Her first husband left a net estate in 1931 valued at $50,000 to $60,000. The exempt personal property set aside to her was appraised at $4,560. Some years later (1939) her son died and she was his sole heir to an interest in real estate estimated at $4,000, and personal property, the value of which is not shown.
Mr. McMinimee's estate was estimated at approximately $15,000 plus an interest in $3,900 of United States E bonds held jointly with grandchildren. It is true these figures may not accurately show the relative financial situation of the parties in November 1943, when they were married, but we have no further light on that subject. Perhaps the most that can be inferred is that they dealt on substantially even terms, though it appears plaintiff was the one later taking the initiative in getting the agreement reduced to writing. It is significant that in proceedings for fixing her widow's allowance in decedent's estate it was asserted (and not denied by her) that she owned "at least 154 acres of land * * * of the value of at least * * * $22,000.00 and * * * other property * * * of the value of at least $10,000.00 and that the income from her farm alone was at least $800.00 per year."
[2, 3] We think the evidence as a whole is insufficient to furnish the high degree of proof necessary to sustain the decree of reformation on the ground of mutual mistake. The remedy sought here is of a character to require even closer scrutiny *Page 1293
than in the usual reformation suits, both because of the evidentiary and noncontractual nature of the instrument sought to be reformed and also because of the time of its execution. Plaintiff's ultimate reliance is, and of necessity must be, upon the alleged oral antenuptial contract. Such agreements, under the statute of frauds, can only be proved by written evidence. Section 622.32, Iowa Code, 1946; Battin v. Merchants State Bank,202 Iowa 976, 208 N.W. 343; Frazer v. Andrews, 134 Iowa 621, 112 N.W. 92, 11 L.R.A., N.S., 593, 13 Ann. Cas. 556.
[4] The statute does not forbid oral contracts or render them invalid. But it renders oral evidence incompetent to prove them. See Rueber v. Negles, 147 Iowa 734, 739, 126 N.W. 966; Battin v. Merchants State Bank, supra, 202 Iowa 976, 979, 208 N.W. 343. The evidence must all be furnished by the writings. American Oak Leather Co. v. Porter Brothers Hackworth, 94 Iowa 117, 120, 62 N.W. 658; Frazer v. Andrews, supra, 134 Iowa 621, 628, 112 N.W. 92, 11 L.R.A., N.S., 593, 13 Ann. Cas. 556.
[5] Plaintiff can avail herself of the written instrument (executed after marriage) only to prove the oral antenuptial contract. Because of section 597.2, Iowa Code, 1946, which forbids such contracts between husband and wife, the writing can have no validity as a contract. Its only service is to supply necessary written evidence of the otherwise unprovable prior oral agreement.
[6] The attempt here, therefore, is to reform by oral testimony, not a written contract but an instrument that can only serve as a written memorandum or proof of an oral contract. We have held that an instrument of this kind must itself show that there was in fact a prior antenuptial contract and that oral evidence to supply an omission to state that fact in the writing is inadmissible. Battin v. Merchants State Bank, supra; Frazer v. Andrews, supra.
We have said:
"It is well settled, however, that in all such cases [where later writings are relied on to establish prior parol contracts] the court cannot look beyond the writing to ascertain the terms, *Page 1294
conditions, or provisions of the contract" (citing cases). Allan v. Bemis, 120 Iowa 172, 180, 94 N.W. 560, 562.
And in Vaughn v. Smith Co., 58 Iowa 553, 558, 12 N.W. 604, 606, we said:
"It must be remembered that the plaintiff is seeking to recover upon what he claims is a promise in writing to answer for the debt of another. Now he cannot aid or add to the promise by parol evidence. If he could, all the mischief intended to be guarded against by the statute of frauds would be accomplished."
It is true none of these cited cases was a suit for reformation. But their language is pertinent here where an otherwise unenforceable oral contract is sought to be proved and enforced by reforming, upon parol evidence, the writing which is offered to make it enforceable. To permit this would, of course, be to use oral testimony to establish the antenuptial oral contract. We said in Snell v. S.S. Kresge Co., 220 Iowa 837, 839, 263 N.W. 493, 495: "The very fundamental theory of the doctrine of reformation is that there must be a writing which is claimed to be the contract between the parties."
As we have said, no issue seems to be made here as to the power to reform an evidentiary instrument of this kind. We need not pass on that question but it should be noted that one court has, in a well-considered opinion, held such power does not exist. See Friedman Co. v. Newman, 255 N.Y. 340, 174 N.E. 703, 73 A.L.R. 95.
II. We have next to examine plaintiff's claim that despite the language of the written confirmation of the oral agreement she was not precluded from claiming the right to occupy the homestead for life and the ownership of its exempt contents. The trial court, citing Finn v. Grant, 224 Iowa 527, 278 N.W. 225, held she had no such right as the instrument made no reservation or exception of homestead and exemption rights from its operation.
[7] Defendants argue that as plaintiff has not appealed from this holding she may not here question it even in support of the trial court's decree. This contention is not sound. See *Page 1295
Humphrey v. City of Des Moines, 236 Iowa 800, 803, 20 N.W.2d 25; Wentland v. Stewart, 236 Iowa 258, 18 N.W.2d 305.
Our statutes provide several kinds of homestead rights in favor of the survivor when a husband or wife dies. In chapter 636, Code, 1946, in Title XXXII, on Probate, there is provision for setting off the distributive share in real estate so as to include the homestead. Section 636.7. This contemplates, of course, that the survivor takes the title in fee. It is not involved here.
[8] Section 561.12, in the Homestead chapter permits the survivor to "elect to retain the homestead for life in lieu of such [distributive] share in the real estate of the deceased." There is no mention of occupancy, and it would seem that under this statute the survivor takes a life estate. Finn v. Grant, supra, 224 Iowa 527, 534, 278 N.W. 225. Continued occupancy would be necessary to preserve the homestead exemption as against creditors of the survivor but not to retention of the life estate.
Section 561.11 creates a quite different right:
"Upon the death of either husband or wife, the survivor may continue to possess and occupy the whole homestead until it isotherwise disposed of according to law * * *." (Italics supplied.)
It is necessary to keep in mind the distinction between thelife estate that may, under section 561.12, be acquired in lieu of or in exchange for the survivor's distributive share in real estate, and the mere right "to possess and occupy," under the authority of section 561.11. Much of the conflict (some real and some apparent) in our decisions involving the effect of antenuptial contracts on homestead rights may be resolved by considering this distinction.
It is not entirely clear which section plaintiff claims under. She prays for a decree "establishing her right to occupy the homestead as long as she lives." (Italics supplied.)
The decree of reformation added to the written instrument similar language: "that nothing contained in this contract shall be construed as depriving the second party in the event *Page 1296
she survives the first party, from occupying the homestead duringher lifetime * * *." (Italics supplied.)
Neither the language of plaintiff's prayer nor of the trial court's decree is entirely consistent with either Code section. Neither describes a right "to possess and occupy" the homestead "until it is otherwise disposed of according to law" (provided for by section 561.11) or a life estate under section 561.12.
In Finn v. Grant, supra, 224 Iowa 527, 534, 278 N.W. 225, 229, the difference between these Code sections is inferred:
"Appellant Nels Quevli contends that notwithstanding the antenuptial agreement he had a right to continue to possess and occupy the whole homestead until it is otherwise disposed of by law, under the provisions of section 10145 of the Code of 1935 [now section 561.11, Code, 1946]. Under the antenuptial agreement, however, the appellant waived his right in the homestead property, and at Mrs. Quevli's death he had no dower interest or distributive share to be set off. * * *
"The possession given to a spouse under section 10146 of the Code [now section 561.12, Code, 1946] is a life estate in lieu of a distributive share, but as the spouse in this case had no distributive share, it naturally follows that he could not have the right to occupy the same for life.
"It may also be said that almost immediately after the death of his wife, Mr. Quevli leased the property in question under his assumed ownership thereof to others. Therefore, if he had any right to the possession of the property as a homestead, it was abandoned through its rental by him to others."
On page 532 of 224 Iowa, page 228 of 278 N.W., the opinion had already stated:
"An [antenuptial] agreement of this kind is valid and operates to extinguish the homestead right of either in the property of the other. Weis v. Bach, 146 Iowa 320, 125 N.W. 211; In re Devoe's Estate, 113 Iowa 4, 84 N.W. 923; Fisher v. Koontz,110 Iowa 498, 80 N.W. 551; Weismann v. Weismann, 150 Iowa 307, 130 N.W. 155; In re Estate of Thorman, 162 Iowa 316, 144 N.W. 5; In re Estate of Adams, 161 Iowa 88, *Page 1297
140 N.W. 872; Kroell v. Kroell, 219 Ill. 105, 76 N.E. 63, 4 Ann. Cas. 801; In re Estate of Shepherd, 220 Iowa 12, 261 N.W. 35."
The subsequent language, however (previously quoted), shows clearly that there was involved in the Finn v. Grant case only the life estate in lieu of distributive share, which we held could not be claimed since the distributive share had been waived by the contract and was not available for exchange. The "right to possess and occupy" had already been waived by abandonment. Of the Iowa cases cited, some clearly referred to the life estate to be obtained in lieu of distributive share. Weis v. Bach, 146 Iowa 320, 125 N.W. 211; In re Estate of Thorman, 162 Iowa 316, 144 N.W. 5; and In re Estate of Adams, 161 Iowa 88, 140 N.W. 872. The others had no special bearing on the homestead question with which the case was concerned.
Plaintiff's contention that the written agreement did not waive her right to the life use of the homestead is based on the language of certain decisions, commencing with Mahaffy v. Mahaffy, 63 Iowa 55, 63, 64, 18 N.W. 685, 689:
"The right of the wife to continue in possession and occupancy of the homestead, after the death of the husband, is not a right or interest in his estate which she takes by inheritance, but is entirely distinct from the interests which she takes by virtue of that right. It is a mere personal right to occupy and possess thepremises, but is unaccompanied by any title or property interesttherein. It does not accrue with the death of the husband, nor is it enlarged or otherwise affected by that event. She had the right to the same extent during his life, and the statute (section 2007 of the Code) simply continues it after his death."(Italics supplied.)
The cited Code section (2007) referred to the Code of 1873, and so far as pertinent here was identical with our present section561.11. What is now our section 561.12 was then section 2008.
What is said in the Mahaffy case, therefore, means that the right to possess and occupy until otherwise disposed of according *Page 1298
to law is a mere personal right "unaccompanied by any title or property interest"; and that an antenuptial contract by which the survivor agreed to "renounce and relinquish all claim, right, title and interest" in decedent's estate did not affect it.
In Fraizer v. Fraizer, 201 Iowa 1311, 1315, 207 N.W. 772, 774, the opinion was clearly discussing the right of occupancy under section 2985, Code, 1897, same as the present section 561.11. We said:
"Unless the antenuptial contract had the legal effect of depriving her of this statutory right, then she was not chargeable with rental for such occupation. In In re Estate of Johnson, 154 Iowa 118, we held that an antenuptial contract may not supplant the power of the court, under the statute, to award to the widow a year's support. See, also, In re Estate of Uker,154 Iowa 428.
"That the same rule should be applied to the statutory right of the widow to the temporary occupancy of the homestead is indicated in In re Estate of Adams, 161 Iowa 88. These statutory provisions are deemed to be in the interest of the family, and to involve a public policy."
[9] Our conclusion here is that the antenuptial contract as represented by the postnuptial written instrument did not preclude the survivor from claiming her right of occupancy under Code section 561.11. This right of occupancy is not properly described as being "for her lifetime." It is to endure only until the homestead "is otherwise disposed of according to law."
Abandonment by or the death of the survivor would, of course, terminate it. The section itself provides a method of termination and Code section 561.12 indicates other possibilities. The phrase "until it is otherwise disposed of according to law" is discussed in In re Estate of Gardner, 122 Okla. 26, 30, 250 P. 490, 492 et seq; Fore v. Fore, 2 N.D. 260, 50 N.W. 712. See, also, Butterfield v. Wicks, 44 Iowa 310, 312; Nicholas v. Purczell,21 Iowa 265, 89 Am. Dec. 572.
The language of the decree should be modified to secure to plaintiff only her right to possess and occupy the homestead *Page 1299
under Code section 561.11 in accordance with the views we have expressed.
III. There remains the question of plaintiff's claimed ownership of the contents of the home. She pleads (1) that such ownership was actually provided for in the contract; (2) that her husband orally gave and transferred the property to her after marriage; and (3) that the property was exempt to her.
What we have already said practically disposes of contentions (1) and (2) on account of lack of admissible proof. But section635.7, Code, 1946 (formerly section 11918, Code, 1939) provides that "all personal property which in his [the husband's] hands as the head of a family would be exempt from execution, after being inventoried and appraised, shall be set apart to her as her property, and be exempt in her hands as in the hands of the decedent."
Because of this statute the question of exempt personal property is quite different from that of life use of the homestead in lieu of distributive share. It is closely analogous to the right of the widow to an appropriate allowance for a year's support, under section 635.12, Code, 1946 (section 11923, Code, 1939); In re Estate of Johnson, 154 Iowa 118, 134 N.W. 553, 37 L.R.A., N.S., 875; In re Estate of Uker, 154 Iowa 428, 134 N.W. 1061; In re Estate of Peet, 79 Iowa 185, 44 N.W. 354; or to the right to occupy the homestead until otherwise disposed of by law. Mahaffy v. Mahaffy, supra; Fraizer v. Fraizer, supra.
In In re Estate of Peet, supra, at page 188 of 79 Iowa, page 355 of 44 N.W., it is said:
"It must be understood that contracts designed to divest the wife of the benefits of the statutes in her favor, after the death of her husband, and especially a statute providing for a necessary support, immediately following such death, must not be of doubtful interpretation, but specific and certain as to such intent. In general, the provisions of the statute in this respect embrace interests, not alone personal to the wife, but to the children, and in a sense to the public, and a law thus designed is to be guarded with caution. In this case there are *Page 1300
no children to be affected, but in the approval of contracts, by which its provisions may be set aside, the general purpose and scope of the law is to be kept in view."
[10] This language seems pertinent here. The statute is for the protection of widows and children as a matter of public policy. Rights so created should not be permitted to be waived in advance, at least in the absence of clear intention. It is so held as to exemption rights as against creditors. In re Will of Grilk, 210 Iowa 587, 589, 231 N.W. 327. We think it should be the rule here.
[11] The record is not entirely clear as to whether all the personal property in the home (exclusive of the mirror specifically mentioned) is exempt property. The decree should be modified so as to give plaintiff only what is exempt.
As modified in the two particulars pointed out the decision will be affirmed. — Modified and affirmed.
OLIVER, C.J., and BLISS, HALE, MANTZ, and MULRONEY, JJ., concur.
HAYS and GARFIELD, JJ., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431858/ | I am unable to agree with the majority opinion and therefore respectfully dissent.
Plaintiff-appellee is the surviving spouse of A.C. McMinimee, who died intestate. He is survived by children of a former marriage, who are defendants-appellants. Prior to the marriage of appellee and decedent they entered into an oral antenuptial agreement, which was reduced to writing after the marriage.
The agreement states that each has property and children by former marriages; that they desire that their marriage should not in any way change their then-existing legal rights, or the existing rights of their children in the real and personal property of each of them; and:
"Whereas * * * if the First Party [decedent] should survive the Second Party [plaintiff-appellee], the First Party should not as surviving husband make any claim to any part of the estate of which the Second Party might be seized and *Page 1301
possessed, and further agreed that in consideration of said marriage, he waived and relinquished all right in and to the property of which the Second Party might die seized * * * whether as surviving husband, heir at law or otherwise, and
"Whereas, it was further agreed * * * that if the Second Party should survive the First Party, the Second Party should not as surviving wife make any claim to any part of the estate of which the First Party might die seized or possessed, and the said Second Party in consideration of said marriage, expressly waived and relinquished all right in and to the property of which the First Party died seized * * *."
At the time of the marriage and at the time of the death of decedent he owned the property in question and had been and was occupying it as a homestead. Appellee, by a suit in equity, asks that the prenuptial contract be construed to give her the right to occupy the homestead property as long as she lives, and if not so construed, that the contract be reformed to express such right. The claim is made against the heirs of decedent, who are denying her such right under the contract.
The trial court held the contract denied her such right but reformed the same so as to allow it. This court, in Division I of the majority opinion, holds such reformation was error, and in this I concur. The opinion, in Division II, then construed the contract, as reduced to writing by the parties, to give her not the relief asked, which was to occupy the homestead as long as she lives, but the right to occupy the homestead until it is otherwise disposed of according to law. It is this holding that I am unable to agree with.
Whatever the right of the surviving spouse may be, the same is statutory. If the deceased spouse dies testate the survivor may accept the provisions in the will or reject the same and take dower (distributive share). Section 636.21. (All Code references are to the 1946 Code unless otherwise stated.) If decedent dies intestate the survivor is entitled to dower (distributive share) to the extent of one third of the real estate, generally speaking, section 636.5; which share may include the homestead, section 636.7. This dower may be set off at *Page 1302
any time after twenty days from the death of decedent and within ten years. Section 636.9.
Section 561.1 provides that the house used as a home by the owner may become the homestead and which, if there be no survivor, descends upon the death of the owner to his or her issue, according to the rules of descent, section 561.18. Section561.12 provides that the survivor may elect to retain the homestead for life in lieu of the distributive share. Section561.11 provides that the survivor may continue to possess andoccupy the whole homestead until it is otherwise disposed of according to law, but the setting off of the distributive share in the real estate of the deceased is such a disposal. Section636.27 provides that within six months after written notice to the survivor, given by any heir of a deceased intestate, the survivor may elect to take the distributive share or the right to occupy the homestead.
There is no question but that antenuptial contracts are recognized and given effect in this state. In the very recent case of In re Estate of Parish, 236 Iowa 822, 830, 20 N.W.2d 32, 36, we said: "Antenuptial contracts are looked upon with favor by the law and are to be liberally construed to carry out the intentions of the parties." (Italics added.) Thus in construing this contract a liberal construction should be given to its terms.
There is no dispute but that, under the terms of the contract, appellee has waived and relinquished her distributive share and has consequently lost any rights she may have had under sections636.5, 636.7 and 561.12. Section 636.27 does not give anything to the survivor but refers to the rights under section 561.12 and provides the heirs of the intestate with a means to force a termination of the rights granted under section 561.11. The majority opinion nullifies section 636.27 by holding that the right to a distributive share is waived but the rights under section 561.11 still exist in the survivor.
Appellee relies upon a line of cases starting with Mahaffy v. Mahaffy, 63 Iowa 55, 18 N.W. 685, and it is upon this case that the majority opinion rests. It says that the Mahaffy case announces the rule "that an antenuptial contract by which the survivor agreed to `renounce and relinquish all claim, right, *Page 1303
title and interest' in decedent's estate did not affect it" (right to occupy homestead under section 561.12). The opinion also quotes from the case to the effect that:
"The right of the wife to continue in possession and occupancy of the homestead * * * is not a right or interest in his estate which she takes by inheritance, but is entirely distinct from the interests which she takes by virtue of that right. It is a mere personal right to occupy and possess the premises, but is unaccompanied by any title or property interest therein. It does not accrue with the death of the husband, nor is it enlarged or otherwise affected by that event. She had the right to the same extent during his life, and the statute (section 2007 of the Code) simply continues it after his death." 63 Iowa, at page 63, 18 N.W., at page 689.
In my judgment the Mahaffy case simply holds that a relinquishment of "dower and inheritance" relinquishes merely that, nothing more. The court there clearly states that the sweeping clause by which the survivor agreed "to renounce and relinquish all claim, right, title and interest" therein, is limited by the prior specific renouncement of "dower and inheritance." In fact, at page 65 of 63 Iowa, page 690 of 18 N.W., it is said:
"There is nothing in the language of his covenant, nor in her agreement to accept the money in satisfaction of her right of dower or inheritance, which by any possible construction can be made to cover or include any other right or interests in theestate, except the one named in express terms by each of the parties. * * * They have identified the particular right or interest in the estate which was the subject of their agreement." (Italics added.)
The Mahaffy case clearly states that the right claimed is a "right or interest in the estate." I agree with the case when it says that the "right to occupy the homestead under section561.12" is not gained by dower or inheritance. It is a right gained by virtue of section 561.12, just as dower is granted by section 636.5. *Page 1304
The majority opinion further states that the same rule applies to release of homestead rights as applies to the release of a widow's allowance under section 635.12. In support thereof is cited the case of In re Estate of Uker, 154 Iowa 428, 134 N.W. 1061. However at page 434 of 154 Iowa, page 1063 of 134 N.W., is clearly pointed out the reason for the allowance rule. We say there, "We have * * * held * * * that such a contract [antenuptial] does not necessarily bar the allowance for support * * * The ground [therefor] is that public policy forbidsinterference with the discretion of the court in such a case." (Italics added.) Under sections 636.21, 636.5, 636.7, 561.1,561.18, 561.11, and 561.12 no discretion rests with the court but rights are granted to the survivor based on her exercise of discretion. There is no analogy between the two propositions.
There is another line of cases, not mentioned in the briefs or the majority opinion, which cast considerable light upon the intent and purpose of section 561.11. In the case of Wadle v. Boston Market Co., 195 Iowa 46, 48, 191 N.W. 528, 529, we said:
"`The right to continue and occupy has its limitations, and ceases when the property is otherwise disposed of according to law; and it is so disposed of when the survivor elects to take a distributive share in the entire property of the deceased spouse.' [Voris v. West, 180 Iowa 138, 142, 162 N.W. 836, 837.]The evident purpose of the legislature in enacting this statutewas to provide that the surviving spouse should have a right tocontinue the occupancy of the whole homestead * * * until eitherthe distributive share or the occupancy of the homestead for lifehad been determined upon by the survivor." (Italics added.)
And at page 50 of 195 Iowa, page 529 of 191 N.W.: "It frequently happens that the heirs * * * do not insist upon a settlement and division of an estate for some considerable time * * * and that during such period * * * the surviving spouse continues in possession of the homestead." In Crouse v. Crouse,219 Iowa 736, 742, 259 N.W. 443, 446, we said: "It [section *Page 1305 561.11] has been called a temporary right * * * and is said to expire after a reasonable time."
It is not claimed that appellee has not waived her right to dower or distributive share, nor that she has rights under section 561.12. As early as the Mahaffy case, we said (at least inferentially) that occupancy of the homestead was a right or interest in the estate. The contract in question clearly states, "* * * the Second Party should not as surviving wife make any claim to any part of the estate of which the First Party might die seized * * * and relinquished all right in and to the property * * *."
Under the precise words of the contract, the rights under section 561.11 are relinquished. Furthermore, as stated in the Wadle case, supra, the purpose of the statute is to give the surviving spouse a reasonable time to elect between dower and homestead for life. Under the contract in question she has elected. She elected when the oral agreement, made in consideration of the impending marriage, was entered into. Having released her rights, not by a specific limitation to dower orinheritance but by a general and all-inclusive statement of "any claim to any part of the estate," she released not only under sections 561.12 and 636.5, as conceded by the majority opinion, but also under section 561.11. By so holding, the homestead, under section 561.18, descends immediately to the appellants the same as though decedent had died before the marriage was performed. The intent of the contracting parties, as expressed in the contract, "said parties desired that their said marriage should not in any way change their then existing legal rights, orthe existing rights of their children and heirs in the real and personal property of each of them" is carried out. (Italics supplied.)
I would reverse the trial court and remand with directions to dismiss plaintiff-appellee's petition.
GARFIELD, J., joins in dissent. *Page 1306 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431859/ | DISSENT: Miller, C.J., and Sager and Bliss, JJ.
Horace V. Jeffrey filed an application in the District Court of Pottawattamie county, Iowa, asking that court to set aside its order appointing Louise Skinner Rainey, as guardian of the person and property of Louis Welborn Skinner, a minor. Mr. Jeffrey was a resident of Douglas county, Nebraska, and several weeks prior to the date of the order of the Pottawattamie county court, was appointed guardian of the minor by the county court of Douglas county, Nebraska. Mr. Jeffrey was designated in the will of Lloyd Skinner, the deceased father of the minor, as guardian for the minor. He was also executor under Skinner's will and was designated by said will as trustee of a trust covering the net assets of the estate, in which trust the children of said Lloyd Skinner, including the said minor, Louis Welborn Skinner, were named as the beneficiaries. He was also trustee of certain insurance funds under a trust agreement for the benefit of the minor and his brothers, the other children of Lloyd Skinner.
The grounds of the application to set aside the order of appointment in the District Court of Pottawattamie county were:
First, that the district court had no jurisdiction to appoint a guardian for the person of said minor since his domicile was not, at the time of the appointment, in said county or state;
Second, that the said court had no jurisdiction to appoint a guardian for the property of said minor, since the minor had no property interests within the jurisdiction of said court;
Third, that the appointment was not for the best interests of the minor.
Louise Skinner Rainey filed a motion to strike the application upon the following grounds: *Page 1018
1. That the applicant was an interloper and had no status as a party to the guardianship proceedings.
2. That the application showed that the minor was a resident of Pottawattamie County, Iowa, at the time of the appointment and that he had property located therein.
3. That no facts were shown in the application sufficient to authorize the court to remove the guardian.
4. That the application was premised upon a testamentary appointment of guardian, not recognized as effective under the laws of Iowa.
The hearing before the district court from which this appeal was taken, was limited to the legal question as to whether under the facts pleaded in the Jeffrey application and supplemental application, the court had jurisdiction to appoint a guardian for the person and for the property of the minor. The district court found that it did have jurisdiction to make the appointment, that at the time of the appointment the minor was a resident of Pottawattamie county, Iowa, and that there was property located in said county in which said minor had an interest. The court, therefore, denied and dismissed that portion of the Jeffrey application which objected to the jurisdiction of the court to appoint the guardian, and reserved the determination of the other issues presented by the pleading, for further hearing and determination.
Horace V. Jeffrey being dissatisfied with the decision of the lower court has appealed. It must be kept in mind that the only question, which confronts this court, in this appeal is whether the lower court had jurisdiction to appoint a guardian for the minor.
The pertinent facts alleged in the Jeffrey application are as follows:
Louis Welborn Skinner, is a child of appellee, Louise Skinner Rainey, and of her divorced husband, the late Lloyd Skinner. His parents were divorced on September 8, 1933, at which time the minor was three years of age. By the terms of the stipulation entered into between the parents at the time of the divorce and by the terms of the decree of divorce, the custody of the minor was given to the father until the minor should reach the age of twenty-one years, and the father, in said stipulation, *Page 1019
covenanted and agreed that he would assume and make proper provision for the custody, care, maintenance, discipline and education of the minor until he should reach the age of twenty-one. The child's father, pursuant to the stipulation and the divorce decree, took charge of the boy and assumed full charge and responsibility for his custody, care, maintenance, discipline and education. The child continued to live with his father at the village of Carter Lake, Pottawattamie county, Iowa, until the father's death which occurred on March 16, 1940. The father made special provision for the care of the child, setting up an insurance trust to provide for his care, maintenance and education and further, in his Last Will and Testament, all of Lloyd Skinner's net estate was left in trust to the appellant as trustee for the minor and his three brothers. The will further designated the appellant, Horace V. Jeffrey, as guardian for the minor and directed Mr. Jeffrey to assume and be given the custody, care, maintenance, discipline and education of said Louis Welborn Skinner until the minor should reach the age of twenty-one years.
The appellant on March 17, 1940, the day following the father's death, took custody of the minor child and brought him to appellant's home in Omaha, Nebraska. On the 18th day of March, 1940, the appellant was appointed guardian of the minor by the County court of Douglas County, Nebraska, and the appellant has had the care and custody of the minor at all times thereafter.
The will of Lloyd Skinner was admitted to probate in the district court of Pottawattamie county, Iowa, on March 25, 1940. The appellant qualified as trustee under the terms of the trust agreement relating to the insurance funds.
Following the divorce, the mother, the appellee herein, surrendered the custody of the three-year-old child to the father and in the same year removed to Texas, where she continuously thereafter maintained her residence. She remarried in 1936 and is now living in Texas with her husband, Mr. Rainey. She never sought to obtain the control and custody of the minor until after the death of Lloyd Skinner. Her application for her appointment as guardian was not filed until May 3, 1940, approximately seven weeks after the father's death. *Page 1020
[1, 2] It is argued that the lower court erred in holding that it had jurisdiction to appoint a guardian of the person of the minor, Louis Welborn Skinner. Under the divorce decree, the father, Lloyd Skinner was given the care, custody and control of his minor child. This was in 1933. The father lived at Carter Lake, Pottawattamie County, Iowa; his son, Louis, living with him. Up until the date of the death of the father, which occurred on March 16, 1940, the domicile of the minor was that of his father, in Carter Lake, Iowa.
Upon the death of his father, the surviving parent of this minor was his mother, Louise Skinner Rainey. Her domicile was in the state of Texas.
This court has recognized that the domicile of the surviving parent fixes the domicile of the child, in the absence of any showing of relinquishment and abandonment. In the case of In re Prehoda, Guardian, 194 Iowa 308, 310, 189 N.W. 719, 720, this court said:
"The showing was wholly insufficient to have justified a finding that appellee [the father] had legally bound himself to surrender his right to the custody of his minor child for more than a temporary purpose. This being true, the domicile of Dorothy continued to be the domicile of her surviving parent, and the district court of Johnson County was without jurisdiction to appoint a guardian of her person."
In the case of Modern Woodmen of America v. Hester,66 Kan. 129, 133, 71 P. 279, 280, the Kansas Court said:
"During his lifetime the domicile of the father established the domicile of his children. Had they resided apart from him, their domicile would not have been changed, and could not have been changed, from his own, except for faithlessness to the parental relation, under such circumstances as to indicate a total renunciation of his duty and authority. Upon the death of the father the domicile of the mother fixed that of the children. Not being sui juris, the children could not, in the first instance, adopt Douglas county as their place of habitation, and could not form or possess any individual intention of returning there when absent. Neither could they have any intention of remaining there permanently. After their father's *Page 1021
death, neither their grandparents nor Hester could do any of these things for them. Such authority, however, did vest in their mother. No actual transfer of the persons of the children was necessary to accomplish a change, and the legal domicile of the child afterwards withheld from the mother was as much in Missouri as was that of the two she removed there."
The same question was before the Court of Appeals of New York in the case of In re Thorne, 240 N.Y. 444, 448, 148 N.E. 630,631. The jurisdiction of the Surrogate's Court of Dutchess County, the county of the father's residence at the time of his death, to appoint a guardian was challenged by the mother on the grounds that her domicile was in New York County and that upon the death of the father the domicile of the child was by law changed to New York County, even though the child was actually in Colorado, as appears in the portion of the opinion in In re Thorne above cited. The court said:
"When the father dies, the dead hand does not hold the child at the father's domicile. The mother becomes the head of the family. She succeeds to his rights and duties. She may determine where the infant may live. His [the infant's] domicile automatically in legal contemplation attaches to hers. This right rests, not on the actual custody of the child, but on the right of the mother, the matria potestas. * * *
"The Surrogate's Court of Dutchess county had no jurisdiction to appoint a general guardian unless the infant was a resident of the county. Surrogate's Court Act, § 174. Residence and domicile here mean the same. The infant, generally speaking, has no legal residence of his own, whatever his place of abode may be. In this connection the extension of the mother's right of joint guardianship seems relevant as bearing on the practical result. * * *
"The judgment of divorce may be evidence to justify a finding that she is unfit, but it is not conclusive. It does not bar her right to apply for letters of guardianship. Her domicile fixes the domicile of the child, `the technically pre-eminent headquarters that every person is compelled to have in order that certain rights and duties that have been attached to it by the law may be determined.' Holmes, J., in Williamson v. *Page 1022
Osenton, supra, at page 625, 34 S. Ct. 443. Otherwise the child has no domicile for an infant cannot choose a residence. The child resides with his mother in the contemplation of the law, even though he be living elsewhere, until otherwise disposed of by competent authority, and that authority, so far as this case is concerned, is the Surrogate's Court of the county of the mother's domicile."
At the moment of Lloyd Skinner's death the domicile of this minor child attached immediately to the domicile of his surviving parent, his mother. No lapse of time and no act of the surviving parent is required to effect the change. The mother did not live in Iowa. She was a resident of the state of Texas.
Thus we find that the domicile of the minor, Louis Welborn Skinner, was in the state of Texas, and that the Pottawattamie district court had no jurisdiction to appoint a guardian of his person, and it erred in so doing.
[3] It is next argued that the lower court erred in holding that it had jurisdiction to appoint a guardian for the property of the minor in this case.
This record shows without any dispute that Lloyd Skinner died a resident and citizen of the state of Iowa. That his will has been admitted to probate in Pottawattamie county, Iowa. That the inventory shows both real and personal property in Iowa. That the will creates a trust and that Horace V. Jeffrey is the trustee. That this minor is entitled to one fourth of the income from the trust. That ten years after the decedent's death the trust shall terminate and the property shall be distributed to the beneficiaries, one of whom is this minor.
There can be no question but that the cestui que trust has a property interest in the trust. Legal title to the property may not be in the cestui que trust, but his interest is a property right.
The trustee could not pay to this minor what is the minor's share under this trust fund so long as he remains a minor. He could only pay it over to a guardian.
The appellant argues that there is no necessity for a guardian at this time, as the property is being handled by the trustee, citing the recent case of this court, Turner v. Ryan, 223 Iowa 191,197, 272 N.W. 60, 63, wherein we said: *Page 1023
"Insofar as the property was concerned, its management and distribution was fully and completely provided for by the terms of the will, and the appointment of the trustee, who was required to act under the orders of the court, was for all essential purposes and in legal effect identical with that of a guardianship of the property."
In the case at bar, we are deciding only one question, and that is whether the court had jurisdiction to appoint a guardian of this minor's property. Whether it is necessary at this time to appoint a guardian is not now before this court. This minor having an interest in property in Pottawattamie county, Iowa, the lower court had jurisdiction to appoint a guardian for the property of the minor. — Reversed in part; affirmed in part.
STIGER, OLIVER, GARFIELD, and WENNERSTRUM, JJ., concur.
HALE, J., concurs in the result.
MILLER, C.J., and SAGER and BLISS, JJ., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431860/ | I am unable to concur in that portion of the opinion of the majority which reverses the decision of the trial court and respectfully dissent. I think the court had jurisdiction to appoint a guardian of the minor's person as well as his property. I would affirm the decision in its entirety.
The proposition with which I do not agree is the following statement of the majority, "At the moment of Lloyd Skinner's death the domicile of this minor child attached immediately to the domicile of his surviving parent, his mother. No lapse of time and no act of the surviving parent is required to effect the change." I think that this statement is too broad and inflexible. It also seems to be inconsistent with some of the decisions heretofore rendered by this court.
In the case of Jenkins v. Clark, 71 Iowa 552, 555, 32 N.W. 504,505, this court states, "Now, the domicile of a child is to be determined by the domicile of the parent; and, when a domicile is once fixed, it remains until another is lawfully acquired. Schouler, Dom. Rel. § 230." This is a well-established principle of law. Under the record herein, there is no question but *Page 1024
that the domicile of Louis Welborn Skinner immediately prior to the death of his father was Pottawattamie County, Iowa. The question is whether or not, upon the death of the father, that domicile was immediately transferred to Texas, the domicile of his mother. The majority opinion so holds. I cannot agree with such holding.
A case which seems to be inconsistent with such a holding is that of Jensen v. Sorenson, 211 Iowa 354, 362, 233 N.W. 717, 721, wherein the facts are somewhat analogous in that the parents of the minor had been divorced, the custody had been granted to the mother, upon the death of the mother an aunt assumed custody, the father thereafter instituted habeas corpus proceedings to secure the custody of the child, was awarded such custody and on appeal the order was reversed, this court stating:
"The larger merits of the case relate to the conduct and attitude of the plaintiff at the time of the death of his wife, and the legal effect thereof upon his parental rights. It has been held in many jurisdictions that the custodial right of a divorced parent to whom custody has been denied by the decree is revived by the death of the other parent, to whom custody was awarded. We have never had occasion to pass upon the question in this state. For the purpose of this appeal, we shall assume such to be the law, without so deciding at present. * * *
"If it be assumed that the death of the mother revives the custodial rights of the father, notwithstanding the decree, yet such right is presumptive only. The right to custody, if asserted by such parent, imposes upon him the obligations attending such custody. It is perhaps correct to say that, if the parent has a right to such custody, he has a duty to assert it, and to assume all its obligations. In the case of a mere babe, such duty is not only an imperative one, but is an immediate one."
From the foregoing pronouncement, it clearly appears that, assuming that the majority opinion is correct in holding that upon the death of the father, Lloyd Skinner, the mother, appellee herein, became entitled to custody of the child, notwithstanding the decree of divorce and the agreement relating to the custody of such child, that right was presumptive only and did not *Page 1025
attach independent of action on the part of the surviving parent. It was necessary that appellee exercise that right immediately before she could claim the benefit of it. As I read the record, she has never undertaken to exercise such right.
In applying the rule regarding the domicile of an infant, it seems to me we should consider the reasons for the rule. In 17 American Jurisprudence 625, it is stated, "Since the father is the natural guardian, is entitled to the custody and services, and is responsible for the tutelage, discipline, and support of the child, the domicil of the father is in legal contemplation the domicil of his minor children."
This statement clearly demonstrates that the reason why a father's domicile ordinarily determines the domicile of his minor child is that he is entitled to the custody and services of the child and is responsible for its support. Looking to the reason for the rule, it seems to me that the mother could not change the domicile of the child to her domicile, the State of Texas, without first doing some act whereby she became entitled to the custody of the child and responsible for its support. Applying the rule announced by us in Jensen v. Sorenson, supra, hereinbefore quoted, to the record herein, the appellee has never qualified or become entitled to the custody of this child as surviving spouse. She has never' claimed such right and does not now claim it. She seeks only appointment as legal guardian.
The record shows that some seven weeks after the death of Lloyd Skinner appellee filed an application for appointment as guardian of Louis Welborn Skinner. She did not claim the right to his custody by operation of law, but sought it at the hands of the court and asserted that said minor child was then a resident of Pottawattamie County. Since it is undisputed that the child was not then in Pottawattamie County, the logical interpretation to be given to the use of the word "residence" in such application is that it was considered synonymous with the term "domicile". Accordingly, we have the surviving mother asserting at the very outset that the domicile of this child was in Pottawattamie County. This is directly opposed to any claim that by operation of law she was entitled to its custody and liable for its support so that its domicile was changed to *Page 1026
Texas. In the subsequent pleadings that were filed, the issue has revolved around the contentions on the part of appellee that the domicile of this child was in Pottawattamie County and the contentions of appellant that the domicile was in Nebraska. No one claimed in the trial court nor in this court, as I read the record, that the domicile was in Texas. Appellant suggests that it might have been in Texas but contends that it was in Nebraska. In appellee's brief and argument, her counsel specifically state that appellee waived any right she might have had to be appointed by the courts of Texas by asserting the jurisdiction of the courts of Iowa.
As heretofore pointed out, this child had a domicile in Iowa immediately prior to the death of Lloyd Skinner. That domicile was not lost until a new domicile was acquired. I am unwilling to subscribe to the doctrine that, upon the death of the father, the domicile of the child immediately shifted to Texas and that no lapse of time or act of the mother was required to effect that change. I think that the mother had to assert her right to the custody of the child and assume the responsibility for its support before the child could acquire a domicile in Texas. Since that had not occurred, its domicile was still in Iowa when appellee invoked the jurisdiction of the district court of Pottawattamie County for the appointment of a guardian of the person as well as the property of the minor child. Since the domicile was then in Iowa, the court had jurisdiction to appoint a guardian in both capacities. I would affirm the decision on both propositions.
BLISS and SAGER, JJ., join in this dissent. *Page 1027 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431861/ | Plaintiffs in their petition allege the corporate capacity of the defendant bank and the agency of the defendant Schluter, acting on behalf of said bank; that, on and prior to January 3, 1927, the defendant bank was the owner and holder of a certain sheriff's certificate, covering certain described Story County real estate; that, on January 3, 1927, the defendant bank transferred said certificate to plaintiffs, who paid in consideration therefor the sum of $3,256; that defendant Schluter, acting for the appellant bank in the negotiations prior to said contract of sale, stated and represented to plaintiffs that said certificate covered the property situated at 2906 Woodman Avenue, Ames, Iowa; that said property was improved by the erection of a dwelling house and garage, on which appellant bank had an insurance policy for $3,500; the essential allegations of fraud in equity; that, on May 1, 1927, at the expiration of the period of redemption from the sheriff's sale, plaintiffs surrendered the said sheriff's certificate to the sheriff of Story County, who issued to the plaintiff Garfield a sheriff's deed for the property covered by the sheriff's certificate; that, on the 14th day of September, 1927, plaintiffs for the first time learned that the property described in said sheriff's certificate was and is merely a vacant lot, and alleged the fact to be that the property situated at 2906 Woodman Avenue is improved property, and adjacent to the property described in the sheriff's certificate, and then learned for the first time that the property which the defendant *Page 611
Schluter represented to them was not in fact the property described in said sheriff's certificate; that, upon discovery of said facts, plaintiffs promptly caused to be served upon defendants a written notice of their intention to rescind said contract to purchase; that the representations inducing the purchase were false, or the result of mutual mistake and misunderstanding of the parties. The pleaded facts are fully established by the proofs. See Mohler v. Carder, 73 Iowa 582;Hunter v. French League Safety Cure Co., 96 Iowa 573.
The plaintiffs, so far as possible, attempted to place the appellant in statu quo, and brought into court the deed of the property, and tendered same to the appellant. Plaintiffs claim that they were entitled to the return of the consideration paid to the appellant, and to have a lien impressed on the property in the amount paid by plaintiffs. This claim has the sanction of the law, under the record facts.
Defendant first filed motion for change of trial to the county and residence of the appellant bank. This motion was overruled, and the defendant answered, in substance, by general denial.
This action is in equity, and consequently is triable de novo.
This means that the whole case can be examined and tried as if it had not been tried before. Stockwell v. David, 1 G. Greene (Iowa) 115. See, also, Pierce v. Wilson, 2 Iowa 20, 26; Seymour v. Shea,62 Iowa 708, 711; Grimes v. City of Burlington, 74 Iowa 123. It is quite obvious that the plaintiffs did not have an adequate and speedy remedy at law. They brought this suit in equity, asking that their vendee's lien be preserved, foreclosed, and enforced. See Wolfinger v. Thomas, 22 S.D. 57 (115 N.W. 100); Witte v.Hobolth, 224 Mich. 286 (195 N.W. 82); Larson v. Metcalf, 201 Iowa 1208
(45 A.L.R. 344); 39 Cyc. 2031 et seq.
We make the preceding statement by reason of the appellant's claim that, "although the action was filed as an equity action, it was in reality one at law." With this matter, however, we are not primarily concerned on this appeal. The principal contention is based on the overruling of appellant's motion for change of venue. At this point it may be stated that the petition was dismissed as to the defendant agent Schluter. The motion for change of place of trial on behalf of the appellant bank is predicated on the fact that the American Trust Savings Bank of Lowden, Iowa (appellant), was and had been a citizen *Page 612
and resident of Cedar County, Iowa, since the year 1913, and is and was a corporation organized under the laws of the state of Iowa as a banking corporation, having its legal residence and principal place of business and banking office in the town of Lowden, in Cedar County, Iowa.
Was this action in equity maintainable in Story County, Iowa, where the land was situated? We answer in the affirmative. Under the provisions of Section 11034, Code, 1927, "actions for the recovery of real property, or of an estate therein, or for the determination of such right or interest, * * * must be brought in the county in which the subject of the action or some part thereof is situated." The instant suit, as pointed out, is an action for the establishment and foreclosure of a vendee's lien, resulting from the inability of the defendant to perform the real contract between the parties. The plaintiffs were not, under the circumstances, compelled to resort to a court of law for the recovery of money damages. An action brought to enforce a lien on land which results from a rescission is and becomes local. 40 Cyc. 67. This court said, in John v. Orcutt, 9 Iowa 350:
"A bill in equity brought by the obligor in a title bond against the obligee, who is the purchaser, to compel him to perform his contract, or to procure the foreclosure and sale of his interest in the property, is in the nature of a local action, and is properly brought in the county where the land lies."
It was, therefore, held that the order of court awarding a change of venue to a different county from that where the land was situated, was erroneous.
The trial court correctly ruled that plaintiffs were entitled to enforce their action in the jurisdiction in which the land was situated. As bearing on the general proposition, see Epperly v.Ferguson, 118 Iowa 47, 48; Urmston v. Evans, 138 Ind. 285
(37 N.E. 792); Miles v. Martin, 103 Neb. 261 (171 N.W. 907); Bullittv. Eastern Kentucky Land Co., 99 Ky. 324 (36 S.W. 16). The decree entered by the trial court is — Affirmed.
MORLING, C.J., and EVANS, FAVILLE, ALBERT, and KINDIG, JJ., concur. *Page 613 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431863/ | The plaintiff-appellee, Mortemoth Company, alleges in its petition that it sold the defendant-appellant a quantity of "moth-proofing" crystals for a named price, and delivered the property designated, according to the contract. 1. SALES: Continuing the allegations in its petition, the warranty: appellee stated that the appellant, although contract for receiving the goods, refused and neglected to warranty pay the agreed price therefor. Appellant, in its satisfactory answer, for a defense, set forth, first, a to buyer: general denial, and second, an affirmative effect. defense, to the following effect: That the property in question was purchased from the appellee upon the conditions that the latter, before shipment, would furnish the appellant "a written guaranty in a form suitable to the [appellant] that the crystals would kill all moths and moth larvæ which might be present in upholstered furniture, and prevent such moths or larvæ from entering such furniture." Further, the appellant declared in its answer that the appellee did not furnish the guaranty, and therefore the goods, although shipped, were never in fact accepted.
By way of reply to that answer, the appellee pleaded: First, that the foregoing guaranty was in fact furnished the appellant; and second, that the appellant received and accepted the goods, and waived any different guaranty than the one actually furnished.
Upon those issues the trial proceeded until the appellee, as plaintiff, had rested its case. Whereupon the district court, as stated in the preamble to this opinion, directed a verdict against *Page 190
the appellant, as defendant, for the full amount of appellee's claim. A reversal is demanded by the appellant for the reason that the evidence discloses the agreement for the warranty aforesaid. This being true, appellant says, the trial court could not say, as a matter of law, that it rejected the guaranty offered by appellee in bad faith, or out of mere arbitrary caprice. That being the fact, appellant further claims, it is for the jury to say whether it, upon receiving the goods in question, waived the right to obtain the guaranty before paying the purchase price.
In reply thereto, and for the support of the district court's action, the appellee claims: First, that the guaranty furnished the appellant, when properly construed, was in full compliance with the contract; and second, if the foregoing is not true, nevertheless there can be a recovery because the appellant, by receiving the property in question, waived its right to delay payment therefor until after the receipt of the proper guaranty. Such, in a general way, is the controversy between the contesting parties.
I. There is little, if any, dispute concerning the fact that appellant was to receive from the appellee a written guaranty satisfactory to it. According to the evidence, appellant was to obtain that guaranty before the goods were shipped. About that there is no serious controversy. The Home Furniture Company is a corporation operating at Fort Dodge, and, on October 29, 1928, a salesman for the appellee company called at the appellant's place of business, and endeavored to sell Mortemoth crystals. J.K. Trauerman, the appellant's agent at Fort Dodge, had no previous experience with this particular product. He stated that the appellant would not be interested unless Mortemoth could be sold to appellant's customers for the purpose of "killing moths and moth larvæ" that were already in their furniture. Appellee's salesman replied that Mortemoth crystals would "kill moths and moth larvæ" which were "already in the furniture" at such customers' homes. Then appellee's salesman told Trauerman, appellant's agent, that the appellee company would, in writing, guarantee the moth-killing qualities of the crystals. Said guaranty, the salesman asserted, was to be such as would satisfy the appellant. Also, the salesman declared that the appellee would furnish appellant the written guaranty before the goods were shipped. Under those conditions, the appellant placed an *Page 191
order, and the salesman for appellee marked thereon the words, "want letter."
It was within appellant's right to contract for the guaranty, as well as the merchandise. Having thus contracted, the appellant was not obliged to accept the Mortemoth products without the written guaranty. Sections 9940, 9944, and 9970 of the 1927 Code;Hull v. Ray, 80 Cal. App. 284 (251 P. 810, 813). See CapitalCity Carriage Co. v. Moody Son, 135 Iowa 444; Atlas Torpedo Co.v. United States Torpedo Co. (Tex.Civ.App.), 15 S.W. (2d Ser.) 150, 152. In view of the circumstances, it is not enough for appellee to say that the crystals offered in fact would "kill moths and moth larvæ already" in furniture. To fulfill the contract, it was incumbent upon the appellee, not only to furnish the goods, but also to discharge the obligation of executing and delivering the proper warranty. For analogous cases, see RedheadBros. v. Wyoming Cattle Inv. Co., 126 Iowa 410 (local citation 419); Hull v. Ray, 80 Cal. App. 284 (251 P. 810), supra;Lamborn Co. v. Palmetto Grocery Co., 284 Fed. 427.
How is the sufficiency of the guaranty to be determined? An answer to that inquiry is important here. On the one hand, it is maintained by appellee that a legal satisfaction is enough and if the warranty in fact covers the quality of the goods concerned, the contract has been performed; while, on the other, appellant argues that the guaranty must be such as will satisfy it, when acting honestly and in good faith. This question under analogous, if not exact, facts has been before this court upon numerous occasions. Haney-Campbell Co. v. Preston Cream. Assn., 119 Iowa 188; Inman Mfg. Co. v. American Cereal Co., 124 Iowa 737; UnitedStates Tr. Co. v. Incorporated Town of Guthrie Center, 181 Iowa 992; Balcom v. Serenado Mfg. Co., 193 Iowa 668. Manifestly, a purchaser of goods is entitled to his bargain. H.D. Best Co. v.Federal Terra Cotta Co., 224 A.D. 618 (231 N.Y. Supp. 483). So, if such bargain includes a written guaranty, the vendee is entitled to the same. Here, the stipulation concerning the warranty was that it should satisfy the appellant. When interpreting the contract between the vendor and the vendee, it is necessary to give effect, if possible, to the entire language thereof. The term "satisfactory to the appellant" has its significance, which cannot be disregarded. If, then, the appellee's theory *Page 192
were to be adopted as the rule, the contract would be construed as if the term "satisfactory to the appellant" were entirely omitted. That omission, in effect, would deprive the appellant of its bargain under the sale agreement. Appellant is clearly entitled, under the contract here involved, to receive from appellee a written warranty which in its terms satisfies the former. Such warranty is not furnished by appellee if the appellant is not thus satisfied.
A warranty which may, in fact, cover the situation is not sufficient if appellant, when acting honestly and in good faith, is not satisfied therewith. Support for this doctrine is furnished in the above-cited cases. Haney-Campbell Co. v. PrestonCream. Assn. (119 Iowa 188), supra, was a case involving the sale of a churn, where the warranty was that it be satisfactory. During the discussion, we said, on page 194:
"* * * he [the purchaser] may refuse to keep and pay for it [the churn], providing only that he acts in good faith, and is honestly dissatisfied; and in such case the fact that others would regard the article purchased as good and satisfactory, or that it worked well in other hands, would be immaterial * * *."
Likewise, Inman Mfg. Co. v. American Cereal Co. (124 Iowa 737), supra, involved the purchase of machines which were to meet "the full satisfaction of the officers of the second party [the purchaser]." While discussing the significance of the word "satisfaction," this court said, on page 739:
"The plaintiff [the vendor] did not undertake to make and install machines which the defendant [the vendee] ought in reason to be satisfied with, and therefore ought to pay for, but he [the vendor] undertook to furnish machines which the defendant [vendee] would be satisfied with, and by this contract he is bound, provided only that the defendant[vendee] acted in good faith, and was honestly dissatisfied. This much, and no more, the law requires of the contemplated purchaser; and if his dissatisfaction is in good faith, it matters not whether it be reasonable or unreasonable, for the law will not make contracts for persons sui juris."
There was involved a sale of bonds in United States Tr. Co. *Page 193 v. Incorporated Town of Guthrie Center (181 Iowa 992), supra. In the discussion we stated:
"The point is as well stated by the Supreme Court of Nebraska in Thurman v. City, 90 N.W. 253, a bond bid case, as it is anywhere. It is there said that, where a party stipulates that his contract of purchase shall be subject to the opinion of his attorney as to the title to or legal status of the thing to be purchased, the plain purpose being to make his act dependent upon the personal opinion of his legal adviser, the sole requirement is that such legal adviser in fact pass upon the subject, and give his honest opinion; and the merits of an honest opinion, actually given, are not subject to review — that his decision is conclusive, provided he really passes upon the question, and reaches a conclusion honestly, whether his conclusion is right or wrong. The question is not whether the buyer `ought to be,' but whether, acting in good faith, he is, satisfied. * * * Good faith is the sole limitation."
Again, in Balcom v. Serenado Mfg. Co. (193 Iowa 668), supra, this court discussed a proposition involving the sale of goods which were to meet the purchaser's "full approval." On pages 671 and 672, we declared:
"Under the authorities, plaintiff [the purchaser] was not required to state the specific defects [in the goods]. He must act honestly in the matter, and his dissatisfaction must not be arbitrary or feigned. Some of the cases hold that, under such a contract as we have here, if the article is such as the buyer ought to be satisfied with, he is bound to accept it. The better view, however, is that, if there is no bad faith, and the buyer is honestly dissatisfied, his judgment is conclusive, irrespective of whether he had reasonable grounds for dissatisfaction or not."
See, also, Nickle v. Mann Clute, 211 Iowa —.
Obviously, under the rule established in this court, the question in the case at bar is not whether there was legal satisfaction and the written warranty in fact was sufficient to cover the situation, but rather, did the warranty offered meet the occasion to the satisfaction of appellant while it was acting honestly and in good faith? Hence, there remains for consideration the additional inquiry as to whether the district court, under the *Page 194
facts and circumstances here presented, could say, as a matter of law, that appellant, in refusing to accept the written warranty by appellee, was not in fact acting honestly and in good faith. At this place the record is clear that the district court could not legally reach such conclusion as a matter of law. After the order for the Mortemoth Products was taken by appellee's salesman, October 29, 1928, the appellant, on November 8th thereafter, wrote the appellee as follows:
"We have taken over a stock that has a quantity of Mortemoth on hand and we ask that you cancel this order, which we will reinstate when we reduce our stock."
As an answer to that letter, the appellee wrote appellant, November 10, 1928:
"* * * We are sorry we cannot comply with your request, since your order went forward yesterday, a day before we received your letter. Also your shipment was imprinted with your name and address and has been prepared several days. * * *"
Upon receiving that letter, the appellant again wrote appellee, December 5, 1928, to this effect:
"When your representative took our order for Mortemoth, it was given contingent upon a letter from you directly guaranteeing the product. This letter we told him we wanted before the shipment was made. To date the merchandise has been received, but not your letter of guarantee. Your representative made the notation on the bottom of the order, which you will find, with reference to this letter of guaranty and advised us that he would write you personally about it. Your invoice, though due, will not be paid until we receive a satisfactory letter of guaranty."
Pretending to comply with the above request, the appellee, on December 11th of that year, sent the following letter to appellant:
"We regret that your request for a letter of guarantee was overlooked in the first instance. In compliance with your letter of December 5th, we are pleased to send you this guarantee herewith.
"Mortemoth is warranted by us to be of A-1 character as a moth preventative and a reliable protection of furniture, carpets *Page 195
and textiles against attack by clothes moths or other fabric pests, providing it is used in accordance with the printed and published directions accompanying the product. The product is guaranteed by us to be absolutely 100% active and efficient, and to contain no inert ingredients whatever, and to give protection till the last grain is volatilized. * * * You will find, as time goes on, that this process of protecting furniture, becomes of great and stable value to you, as it has to most of the large stores throughout America. In closing we desire you to be assured that this product is guaranteed to be exactly as represented to you."
Not satisfied with the foregoing, appellant, on December 17th, wrote appellee:
"This is in reply to your letter of December 11th. Your salesman sold us the Mortemoth on the basis that it would not only prevent moths, but would kill moths and moth larvæ if these were present in the furniture before the Mortemoth. This is what we want you to guarantee.
Writing again, on January 7, 1929, appellee says:
"This is in reply to your letter of December 17th. The guaranty you request as to the killing power of the product is given to every one of our customers and is therefore given you. On each bottle you will find in red letters the statement and warranty that Mortemoth kills moths. You will find the product one of merit, deserving of your confidence. You will find it excellent protection for your upholstered furniture and will, we hope, continue to be used by you as long as you continue in business."
Refusing to accept the warranty offered, appellant, on January 23d thereafter, wrote appellee:
"This is in reply to your letter of January 7th, and inasmuch as you have shown by your letter that you were avoiding a definite answer to our letter of December 17th, we are returning to you the merchandise in question."
Following the writing of that letter, the appellant, about January 23d, reshipped to the appellee at Milwaukee, Wisconsin, the Mortemoth crystals in question. Appellee, however, was *Page 196
unwilling to let the matter rest there, and, on February 14th, wrote appellant to this effect:
"We cannot possibly see how our letter of January 7th can be construed as an avoidance of the questions asked by you or of the guaranty you requested. We have guaranteed this product to you to the fullest possible extent, and warrant it to you to be fully as represented. Since you have arbitrarily and without cause taken it upon yourself to return this shipment, we cannot do otherwise than to refuse it, and we hereby advise you and serve notice on you that this return shipment is not being accepted by us and will not be accepted by us. We have done everything compatible with good business in complying with your request. This merchandise was especially imprinted with your name and is therefore of no value to us. In the interests of good business we urge you to recall this shipment at once and consummate this transaction as per original agreement. In the event of your refusal to do so, we shall be forced to resort to legal action to protect our interests."
Appellant refused to reconsider and again receive the goods. Consequently, the present suit was instituted.
Does the foregoing correspondence indicate that appellant refused the guaranty dishonestly or in bad faith? Could not appellant well refuse the offered guaranty on the theory that it did not specifically at any place, without qualification, warrant that Mortemoth would "kill moths and moth larvæ" which were already in the furniture? No doubt the warranty declared that the Mortemoth crystals would protect furniture. That, however, was not enough; for the order was placed upon the express condition that the product would not only protect against moths and moth larvæ, but that it would kill the moths and the larvæ already in the furniture. Reference is made in appellee's letters to the labels, etc., on the bottles. Those labels, however, do not in express terms guarantee that the crystals will kill moths and larvæ already in the furniture. Much is said in the labels appearing on the bottles concerning what Mortemoth will do for garments, etc., in closets and cabinets. On another side of the bottle, there appears a label: "Mortemoth, Kills moths (trade mark), Stainless, Guaranteed, Mothproofing." The words "kills moths" obviously are a part of the trade-mark, and the word *Page 197
"guaranteed," appearing below, has reference to "mothproofing," which, under the circumstances, is something different from moth-killing where the insects are already in the furniture. Another label on the bottle contains this:
"Upholstered furniture. The contents of this bottle will protect one suite of three pieces. The crystals will harden slightly. This does not affect their efficiency whatsoever."
Here again is the word "protect," as distinguished from language that would convey the idea that the article would kill moths and moth larvæ already in the furniture. It is true that appellee's letter of December 11, 1928, ended with this sentence: "In closing, we desire you to be assured that this product is guaranteed to be exactly as represented to you." Nevertheless, the question remains: First, as to what the guaranty was; and second, as to who made the guaranty. Was the guaranty that the Mortemoth crystals would protect, as distinguished from kill? Did appellee, or the salesman, make the representation to which reference was made? Everything is in doubt.
Clearly, there was a basis for appellant's dissatisfaction. Under that state of the record, the district court, as a matter of law, could not rightfully say that the appellant acted dishonestly and in bad faith. Therefore, at least a jury question arose as to whether appellant was acting honestly and in good faith when it declared the guaranty unsatisfactory.
II. But appellee insists that, although the appellant had some option in reference to the guaranty, nevertheless it waived its right to receive the guaranty before title passed to the goods and payment became due. Here reference is made 2. SALES: by appellee to appellant's letter of December 5, warranty: 1928, wherein it is stated: "Your [appellee's] waiver: jury invoice, though due, will not be paid until we question. receive a satisfactory letter of guaranty." Adding that statement to the fact that the goods were shipped, and actually received by appellant and stored in its place of business, appellee concludes that the title to the product passed, and the purchase price became due. So, appellee insists, the district court had a right to direct a verdict in its favor.
Responding to appellee's contention, the appellant explains that the goods did come to Fort Dodge, and were delivered to *Page 198
its place of business. This was done, however, appellant says, before it knew the contents of the box. Furthermore, appellant suggests that it did not open the box or in any way use any of the contents. Considerable delay in reshipping the product to the appellee arose, appellant explains, in the attempt to obtain the guaranty, as disclosed by the foregoing correspondence. Section 9977 of the 1927 Code contains the following language:
"The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."
By way of analogy, we said, in Owens Co. v. Leland FarmersElev. Co., 192 Iowa 771, on pages 779 and 780:
"We cannot, as a matter of law, say that defendant [the purchaser] accepted the machine, or that there was an unreasonable delay in notifying the plaintiff at its office in Minneapolis that the machine was not satisfactory, when all of its defects and claimed unfitness were already well known to appellant, which was trying to adjust it to comply with the admitted warranties."
"As a general rule, title to personal property does not pass so long as anything remains to be done by the parties." Wesco Sup.Co. v. Incorporated Town of Allerton, 156 Iowa 695, on page 698.
Again, we said in Bishop v. Starrett, 201 Iowa 493, on page 495:
"The question whether title passed on delivery, with a mere right to rescind if they proved unsatisfactory, or did not pass until they were found satisfactory upon a trial, depended upon the intent of the parties, to be determined from their words and conduct, as shown by the testimony."
With the law thus established, it was erroneous for the district court to say, as a matter of law, that the appellant intended to accept the goods without a warranty. That question should have been submitted to the jury, under proper instructions, in *Page 199
order that such body could exercise its authority to determine the facts.
Then, because of the errors disclosed, the judgment of the district court should be, and hereby is, reversed. — Reversed.
MORLING, C.J., and EVANS, FAVILLE, and GRIMM, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431864/ | By agreement of the parties, the two actions designated in the caption were consolidated in the court below and are so presented to this court.
There is but one question involved, namely, whether or not, under the terms of a certain deed of conveyance, the grantees took title as tenants in common or as joint tenants with right of survivorship.
Richard M.J. Winey, paternal ancestor of the parties to both these actions, died intestate on or about January 29, 1922, leaving a large amount of real estate and personal property and leaving surviving him his widow, Jennie Winey, and eight children. It is undisputed that on or about the 26th day of March, 1923, said widow and children, all of whom were of legal age, undertook the mutual partition and division among themselves of all the property left by said Richard M.J. Winey, deceased. *Page 224
In effecting this said mutual division or partition, a deed was joined in by the widow and six of the children conveying to two of the other children, to wit, Isaac C. Winey and Alice Donahue, a certain 160 acres of real estate. This deed recites:
"This deed of conveyance witnesseth: — That Jennie Winey, widow of Richard M.J. Winey, deceased, and a single woman of DeWitt, Clinton County, Iowa, and Fitzhugh L. Winey, and Agnes Winey, his wife of Berthoud, Larimer County, Colo., and Della Dolan, and John Dolan, her husband, of Delmar, Clinton County, Iowa, and Vinnie Holcomb and George Holcomb, her husband, of Donahue, Scott County, Iowa, Lester A. Winey, and Olga Winey, his wife, of Clinton, Clinton County, Iowa, and Nettie Albright, and Andrew T. Albright, her husband of DeWitt, Clinton County, Iowa, Frederick E. Winey, and Luella Winey, his wife, of Charlotte, Clinton County, Iowa, for the purpose of partitioning the estate of Richard M.J. Winey, deceased, among the widow and heirs in consideration of $1.00 in hand paid to them hereby convey to Isaac C. Winey, of the town of DeWitt, Clinton County, Iowa, and Alice Donahue, of DesMoines, Polk County, Iowa, the Southwest quarter of Section eight (8) Township eighty-three (83) North, Range four (4) East of the 5th P.M. situated in Clinton County, Iowa. Said real estate being taken by said grantees jointly, and in consideration of the sum of $10,000 each on their distributive share of the real and personal property of Richard M.J. Winey, deceased, to have and to hold the above described real estate to the said grantees, their assigns, heirs, and devisees forever."
Isaac C. Winey, a bachelor, resided in Clinton county, Iowa, and Alice Donahue, a married woman with one son, the other grantee in said deed resided in Des Moines, Polk county, Iowa. Neither of the grantees lived on the farm. The deed was drawn by A.L. Pascal, a practicing lawyer since 1878. His practice consisted of probate matters and he was also an abstractor of titles and considered a good conveyancer and a good title lawyer. The deed bears date of March 26, 1923. Isaac C. Winey died intestate on or about the 11th day of January, 1937, leaving no widow, offspring, mother or father surviving him but left as his only heirs at law his sisters and brothers who are either plaintiffs or defendants in the partition suit.
In answer to the partition petition, Alice Donahue, one of *Page 225
the grantees in said deed, alleged that she was the absolute owner in fee simple of the land described in said deed. In all other respects she admitted the allegations in the partition suit. Alice Donahue also filed a separate action to quiet title to the quarter section of land described in said deed making her brothers and sisters defendants in said suit. Defendants in the quiet title suit answered denying that Alice Donahue was the owner in fee simple of said quarter section of said real estate and alleging that she and her deceased brother, Isaac C. Winey, held title to said premises under said deed as tenants in common and asking and praying that the petition in the equity suit to quiet title be dismissed. There was a decree for plaintiff in the partition suit and judgment dismissing the quiet title suit.
Alice Donahue perfected her appeal in each of said actions from said judgment and decree in both of said cases and from the orders, rulings, judgment entries and decrees of the said trial court and from each and all of the findings and rulings of said court adversely to the said Alice Donahue and which were made and entered of record in said actions.
[1] Two propositions are relied upon by appellant for reversal. Plaintiff, in the quiet title suit, filed a motion to strike certain parts of the defendants' answer and, although this motion was never ruled upon by the trial court, appellant contends that, since this is an equitable action triable de novo in this court, we should consider said motion and rule thereon. Appellant has not favored us with any legal authority which would justify this court in assuming original jurisdiction for the purpose of passing upon said motion to strike and we know of no such authority. We are quite sure that able counsel for appellant does not expect us to give this matter serious consideration. Even had the motion been overruled, a reversal would not be warranted. The complaint being that certain allegations in the answer were in the nature of conclusions and not statements of fact.
[2] The second error and the one most seriously urged by appellant relates to the language in the deed, it being the contention of appellant that the grantees held as joint tenants and not as tenants in common. The trial court took the opposite view and we are abidingly satisfied the trial court was right.
It will require but a brief examination of the authorities to *Page 226
support our conclusion. It is provided by the statute in this state that:
"Conveyances to two or more in their own right create a tenancy in common unless a contrary intent is expressed." Section 10054, 1935 Code of Iowa.
This has been the law since the Code of '51.
In an early case, Hoffman v. Stigers, 28 Iowa 302, Wright, J., in discussing this question made use of the following language:
"* * * in this state it is declared that conveyances to two or more in their own right create a tenancy in common, unless a contrary intent is expressed. Rev. § 2214. With us, therefore, when the estate is held by two or more, not as trustees, but in their own right, nothing being expressed to the contrary, the tenancy would be in common. And thus most plainly and authoritatively is the estate of joint tenancy disfavored by our law. * * * And as now we in most of the states condemn entailments, or perpetuities, so we do and should joint tenancies, or at least their common-law incident — the right of survivorship."
There has been no departure from the foregoing pronouncement and such is still the law in this state.
Counsel on both sides of this controversy are in agreement that there has been but one case decided by this court where this question was involved where the holding was in favor of a joint tenancy and this is the case of Wood v. Logue, 167 Iowa 436, 437,149 N.W. 613, 614, Ann. Cas. 1917B, 116. An examination of this case reveals the fact that the language in the deed is much more explicit in setting forth the intention to create a joint tenancy than in the deed in the instant case. We quote from the deed involved in the cited case as follows:
"* * * It is agreed between the grantor and the grantees named in the deed that they all have the right to occupy the property so long as they remain single. If the grantor or either one of the grantees get married, the ones that are married cannot occupy the property, without the consent of those that are not married, so long as the grantor and grantees remain single, they can occupy the property as a house free of rent. In case of the death of the grantor, the grantees are to inherit the undivided one-third interest of the grantor, and in case of one of *Page 227
the grantees dying first, the grantor and the surviving grantee are to inherit that portion of the property that is owned by the grantor and grantee that are deceased. It is understood between the grantor and grantees herein that the one dying last is to be the absolute owner of the property herein described, and he or she may dispose of the entire property by will or in any other way that he or she may desire."
In every other case where this question has been presented, our court has held against joint tenancies. In the case of Gruwell v. Gruwell, 185 Iowa 581, 171 N.W. 290, the deed contained the following language:
"`Above premises are to go and be held by either Sarah Gruwell or Ben Gruwell, which ever survives the other, and be held by said survivor undivided until the death of said survivor, when title to said land is to be vested in the legal heirs of above grantees as the law directs.'"
And it was held that this language did not create a joint tenancy. In the case of Fay v. Smiley, 201 Iowa 1290, 1293,207 N.W. 369, 370, the court had under consideration a deed containing the following language:
"`This indenture, made the 14th day of October in the year one thousand nine hundred and fifteen between James Fay, married, of the borough of Brooklyn, state and city of New York, county of Kings, party of the first part, and James Fay and Katherine Fay, of the same place, parties of the second part as tenants by the entirety and not as tenants in common.'"
It was held that when this language was considered in connection with other provisions in the deed that it did not create an estate in entirety or joint tenancy.
It is the contention of appellant that the use of the word "jointly" in the deed in question in the instant case taken with the evidence bearing on the question of intent was sufficient to create a joint tenancy. We find ourselves unable to agree with appellant. We are of the opinion that when the following provision, to wit, "to said grantees, their assigns, heirs, and devisees forever" is considered it completely negatives any intent on the part of the grantors to create in the grantees a joint tenancy. We have examined the testimony introduced by the appellant *Page 228
for the purpose of showing that this title was taken by the grantees under an agreement to hold the same as joint tenants with right of survivorship and we are firmly of the opinion that there is no competent proof of any such agreement. If we accept appellant's version and admit the evidence is competent, it goes no further, in our judgment, than to show that the grantees believed that, under the terms of the deed, the right of survivorship existed; but, with this concession, the proof falls far short of establishing that there was an agreement or understanding between the grantees separate and apart from the deed that they were to hold said property as joint tenants and not as tenants in common. Manifestly, their belief concerning the legal effect of the deed would not change the legal effect of the terms of the instruments. Our attention has been called, by the appellant, to the fact that an experienced lawyer and conveyancer drew the deed and that the word "jointly" is a technical word and, used by one acquainted with technical terms, must be given its technical meaning. In weighing this testimony, it is the unanimous opinion of this court that if an experienced conveyancer actually intended to create a joint tenancy with right of survivorship there would have been something in the deed expressly creating such an estate other than the mere use of the word "jointly". The rule is laid down in 33 C.J. 905, which is supported by cases from Massachusetts and Missouri, that the mere use of the word "jointly" is not sufficient to create a joint tenancy.
The contention of appellant in this case furnishes a forcible illustration justifying the policy adopted in the State of Iowa disfavoring joint tenancies with right of survivorship. Mrs. Donahue had a husband and a son. It is almost inconceivable that she would undertake to barter away the inheritance of the natural objects of her bounty, her husband and son, taking a gambler's chance that she would survive her brother. That she did not intend any such arrangement is borne out by the testimony of Mrs. Nettie Albright, another sister with whom Isaac C. Winey made his home for a number of years prior to his death, and who was present and heard a conversation between Mrs. Donahue and Isaac in relation to this matter and in which conversation Isaac said to Mrs. Donahue, "Well, Alice, I got a proposition to make to you." She said, "What is it ?" He says, "If you will let me have the farm you and I have got together *Page 229
as long as I live and take off what there is on it, then before I die I will see that it is fixed that you get it." "Well," she says, "I couldn't hardly do that because you don't know but what I might die first." Mrs. Albright's husband testified to the same effect. In weighing all this testimony, we cannot help but be impressed with the reasonableness of the statement just related and we are inclined to give it more credence than appellant is willing should be given to it. Most of the testimony of Attorney Williams was either incompetent or was the expression of a mere opinion or conclusion and the contention of appellant that his testimony tended to establish an oral agreement between Mrs. Donahue and her brother, Isaac C. Winey, is wholly untenable.
No such claim is found in plaintiff's action to quiet title or in her answer to appellees' petition for partition; neither is there a scintilla of evidence as to any agreement between the parties at the time this deed was made and delivered. There is an entire absence of any showing as to where, when, or under what circumstances or upon whose request the deed in litigation was drawn. The record does not reveal the ages of the grantees in this deed. It does recite: "* * * to the said grantees, their assigns, heirs, and devisees forever", thus, expressly negativing the right of survivorship in one of the grantees or his or her heirs. Appellant has cited cases from other jurisdictions all of which we have carefully considered.
The errors assigned are without substantial merit. An affirmance of the decree and judgment of the trial court necessarily follows. — Affirmed.
CHIEF JUSTICE and all JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431865/ | In December of 1932 the Metropolitan Life Insurance Company of the city of New York, a corporation, commenced an action in the district court of Humboldt county, Iowa, against Howard S. Van Alstine and others, including Ben Abben, receiver of the Gilmore Exchange Bank, Gilmore City, Iowa, for the foreclosure of a real estate mortgage against the following described real estate:
The southwest quarter of section 27, township 9, north of range 30, west of the 5th p.m., Humboldt county, Iowa.
Judgment in rem in the sum of $18,237.09, together with interest, costs, and decree of foreclosure, was entered on January 17, 1933. Thereafter special execution was issued and the real estate above described was sold at sheriff's sale on February *Page 765
25, 1933, to the Metropolitan Life Insurance Company for $18,660.81, the full amount of the judgment with interest, costs, and accrued costs.
On February 21, 1934, an application for extension of the redemption period to March 1, 1935, was filed by Ben Abben, receiver of the Gilmore Exchange Bank, and an order granting same was entered by consent on March 13, 1934.
On February 23, 1935, Ben Abben, as receiver of the Gilmore Exchange Bank, filed an application, asking for an extension of the period of redemption to March 1, 1937, under and by virtue of the provisions of House File No. 84, Acts of the 46th General Assembly of Iowa (chapter 110), and in said application he offered to do equity in regard to the rentals and consented that the court fix and determine same. Thereafter the Metropolitan Life Insurance Company filed a resistance to the application for extension of the redemption period, in which it asked that the application be dismissed or denied.
There was a trial to the court, which, on the 29th day of March, 1935, entered an order, extending the time for redemption from sheriff's sale to March 1, 1937, in compliance with the statute. The entire order is not set out in the record, but as the applicant offered to do equity and as the insurance company is not complaining that rentals were not fixed as provided, we assume that the court provided for the payment of the rentals to a receiver for the benefit of the insurance company during the period of redemption.
The insurance company, being dissatisfied, has appealed to this court.
I. The first proposition relied upon for a reversal is that the receiver of a private bank is not such an owner as would be entitled under the statute to be granted the relief asked, and is in the type or class to whom relief should be denied, in the sound judgment and discretion of an equity court.
Section 2 of chapter 110 of the laws of the 46th General Assembly provides:
"In any action, for the foreclosure of a real estate mortgage or a deed of trust, which has been commenced prior to March 1, 1935, in any of the courts, and in which a decree has been or may hereafter be entered, but the redemption period, as now provided, has not expired, upon application of the owner or *Page 766
owners of such real estate, the court shall, unless upon hearing upon said application good cause is shown to the contrary, order that no sheriff's deed shall be issued until March 1, 1937, and in the meantime said owner or owners may redeem such property, and are entitled to possession thereof."
[1] The question with which we are confronted here is whether or not the receiver of a private bank, which was a copartnership doing business as the "Gilmore Exchange Bank", which, prior to the commencement of this action, had had a receiver appointed for it by the district court, comes under the provisions of the statute as the "owner" or "owners" of such real estate and is entitled to an extension of the period of redemption.
This court has held that it was the intention of the legislature that only the owner or owners are entitled to the extension provided for.
Turning to Webster's New International Dictionary, we find the word "owner" defined as: "One who owns; a proprietor; one who has the legal or rightful title, whether the possessor or not." But we do not have to rely upon Mr. Webster for a definition of the word, for the Legislature saw fit to define who is an "owner". In section 11 of chapter 110 of the laws of the 46th General Assembly we find the definition:
"The words `owner or owners' as used in this act, shall include any person holding rights in real estate as joint tenant, tenant in common, life tenant, devisee or heir at law and/or any person holding the legal title to real estate. The application for extension by one or more owners, when made as provided in this act, shall inure to the benefit of all of the owners, if there be more than one."
No one questions that the receiver for the bank is the holder of the legal title to the real estate involved in this action. He therefore comes within the definition which the legislature set out in the act itself and is entitled to the extension.
[2] II. The second proposition relied upon is that the receiver is hopelessly involved financially and there is no prospect of refinancing or refunding the indebtedness within the moratorium period and therefor comes within the rule laid down by this court in the case of Federal Land Bank v. Wilmarth, 218 Iowa 339, at page 354, 252 N.W. 507, 514, 94 A.L.R. 1338: *Page 767
"The purpose of the statute is to afford the owner of the land an opportunity to refinance or pay up the indebtedness and save his farm within the moratorium period. But the appellant, as already indicated, will not be in a position to pay the obligation and redeem the farm within the period of the moratorium. He is hopelessly involved financially. * * * he has no property with which to make payment on the judgment aside from the mortgaged land. * * * Clearly the appellant has no prospect of refinancing or funding the indebtedness within the moratorium period."
The writer of this opinion did not agree with the majority in the Wilmarth case and set out in a dissenting opinion his views upon that proposition.
But under the record which the appellant has submitted to this court in the case at bar, it is not in a position to take advantage of the proposition it now urges. There is no evidence to show the financial condition of the receiver of this bank; not one single word as to whether or not he would be able or would not be able to refinance this indebtedness. The only evidence shown is that the insurance company bid in the property for the full amount of the judgment, plus interest and costs. It must therefore be assumed that the value of the property in the judgment of the appellant company was worth the amount of its judgment, plus interest and costs. Whether the receiver has funds to refinance it; whether he can sell his equity to some one that would refinance it; whether there has been such a change in the values of real estate in the community where this farm is located, to make it a valuable asset, we do not know. No evidence was offered on any of these propositions. The burden was on the appellant to show good cause why this extension should not be granted. It has failed to do so, and the lower court was right in granting the extension.
At the time of the trial of this cause it was stipulated and agreed by and between the parties that the decision in this cause shall be binding in the cases known as "Metropolitan Life Insurance Company of the City of New York v. L.R. Van Alstine et al.," No. 9512, and "Metropolitan Life Insurance Company of the City of New York v. Howard S. Van Alstine et al.," No. 9522.
It therefore follows that the judgment and decree of the *Page 768
lower court in the case at bar, to wit, "Metropolitan Life Insurance Company v. Howard S. Van Alstine et al.," No. 9508, is hereby affirmed; and in the case of "Metropolitan Life Insurance Company v. L.R. Van Alstine et al.," No. 9512, judgment and decree of the lower court is hereby affirmed; and in the case of "Metropolitan Life Insurance Company v. Howard S. Van Alstine et al.," No. 9522, judgment and decree of the lower court is hereby affirmed. — Affirmed.
DONEGAN, C.J., and KINTZINGER, HAMILTON, RICHARDS, and STIGER, JJ., concur.
ALBERT and ANDERSON, JJ., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431866/ | At the conclusion of the taking of testimony in the divorce suit against the present plaintiff, in which he had filed a cross-petition, the presiding judge indicated his opinion that the plaintiff in that suit (one of the 1. JUDGMENT: defendants in this suit) was entitled to vacation: divorce, and suggested that the parties discuss consent terms. The present plaintiff and his then wife decree. and their attorneys went into conference. This resulted in the drawing of a decree against the present plaintiff, which was entered under date of June 30, 1923. Not all of the provisions of the decree are before this court. Those attacked by this suit are that defendant (plaintiff here) shall pay $100 as attorney's fees for the plaintiff's attorney (defendant R.G. Smith), and that the defendant (plaintiff here) shall pay $100 as attorney's fees for his attorneys (defendants U.A. Screechfield and Harold Metcalf), in addition to the temporary fees allowed U.A. Screechfield theretofore, and that such allowance of attorney's fees be and remain a lien upon the property of the defendant in question. Judgment was rendered against the defendant (plaintiff here) for such attorney's fees. The petition in this case was filed November 28, 1923. Numerous reasons are put forward as the grounds of suit, which may be condensed into three: want of jurisdiction, fraud, and absence of legal authority for entering judgment in favor of strangers to the action and to the issues. *Page 986
The plaintiff testified that he was not present at the signing of the decree.
"All I heard is what the judge said, and my lawyers. * * * Mr. Screechfield * * * said the judge took it off their hands, and I said, `Can't you send it to a higher court?' and he said, `We can do nothing.' * * * I first learned that attorney's fees had been allowed in the decree, — well, I heard Judge Scott say it while the trial was going on. I heard him say my attorneys would be allowed attorney's fees. * * * I relied upon my attorneys to protect all my rights in the case. I think Mr. Hanley is the one that told me that it was not proper; that they had no right to allow the attorney fees. * * * I was there when the judge dismissed [decided?] it, and said what he did. * * * I was not in this room with Mrs. Coulter, Mr. Screechfield, Mr. Metcalf, and yourself [Mr. Smith] at the time the final decree was talked over."
He says that he paid his attorneys $25, but no more, "because I thought the court allowed you [Mr. Screechfield] enough. * * *"
"Q. It was perfectly all right for the court to allow us [Screechfield and Metcalf] our fee and charge it against your property? A. Well, no. I didn't suppose the court would do that. I intended to pay you that myself. I said now, since the court had allowed you that much, I wasn't going to pay more unless you got it out of the property. * * * I did not understand the provisions of the decree, not for a couple of days after it was all over with here, and I seen it in Screechfield's office, I think, the first I knew about it."
Judge Scott heard the divorce case. He remembered that there were various conferences; didn't remember whether the parties were present; said that there was a later conference, at which Mr. Hanley appeared. He remembered that allowances were made to the attorneys for both sides. He signed the decree on the agreement of the attorneys. He speaks of a hearing for modification, at which Mr. Hanley appeared; but the record does not show what that application was, except that he says that:
"Mr. Hanley and Mr. Coulter came up here and wanted her *Page 987
to take the property and she wouldn't take it. I insisted upon her taking it. * * *"
Mr. Metcalf, Mr. Screechfield, Mr. Smith, and Mrs. Coulter testified that Mr. Coulter was present at these conferences; that the present plaintiff wanted to turn over the property to his wife, but the equity was so small that she wouldn't take it; that the provisions of the decree were all talked over and all agreed to. Mr. Metcalf and Mr. Screechfield say that the present plaintiff declared that he was not going to pay them anything more, and they would have to take their fees out of the property. Two or three days after the decree was rendered, the present plaintiff went to their office and read the decree. They testified that he made no objection to its financial provisions.
The present plaintiff's attorneys had agreed to take the case for $100. Plaintiff, however, was put in jail for contempt in not paying alimony, and extra services were performed in getting him out. It appears, however, that, when they assigned the judgment to defendant Pederson, they did so with the understanding that $25 had been paid upon it.
Defendants pleaded, and it is apparently not disputed, that, on December 21, 1923, the plaintiff gave to E.F. Richman, his present attorney, a deed for the property, conditioned on the payment to the grantee for his services and expenses for services rendered or thereafter rendered. The trial court held that the evidence conclusively showed that the property interests involved were made the subject of agreement, and that the provisions of the decree were agreed upon by the parties; that defendant consented that the attorney's fees should be made a lien upon his real estate, and enforced as provided in the decree; that there was no evidence of any fraud; and that his attorneys represented the present plaintiff in his interest, and in a lawful and honorable manner. The record here amply sustains these findings.
The court rendering the judgment had jurisdiction of the subject-matter. The plaintiff was before it, and submitted himself to its jurisdiction. There was jurisdiction of both the subject-matter and the plaintiff; but, if not, it does not matter, *Page 988
for it was the agreement of the plaintiff (Duras v. Keller,176 Wis. 88 [186 N.W. 149]; Karnes v. Black, 185 Ky. 410
[215 S.W. 191]), and he is asking the active interference of a court of equity to set it aside, without any showing of fraud or mistake, and without any offer to pay the debt for which he agreed to give the lien.
We do not think it necessary to consider the differences of opinion among the courts respecting the validity of provisions in a consent judgment beyond the scope of the pleadings. See 34 Corpus Juris 129 et seq. Neither do we find it 2. JUDGMENT: necessary to discuss the question whether the vacation: plaintiff is pursuing the proper remedy. See failure to Section 4091 et seq., Code of 1897. The do equity. plaintiff is owing the attorney's fees in controversy. He agreed that they should be made a lien upon the property and paid from its proceeds. He was desirous of turning the property over to his former wife. It was in his interest that the fees of his attorney should be paid from it. He would naturally so regard it. He admits that he had paid no more than the $25 because of the court's allowance. The evidence shows beyond question that he did agree to the provisions of the decree. He is asking a court of equity to actively interfere in his behalf to annul an arrangement which he says, in effect, he had confirmed as the only means which he would recognize for his attorneys to get their pay. The vacating of the judgment would displace, in favor of a later attorney, the lien which the plaintiff deliberately agreed to, and of which the later mortgagee undoubtedly knew when he took his mortgage. A court of equity acts only in accordance with conscience and good faith. The plaintiff can ask equity only on condition that he does equity. Before equity will grant relief against a judgment, it must appear that it is against conscience to execute the judgment. 1 Pomeroy's Equity Jurisprudence (4th Ed.), Sections 385, 388, and cases in note; Burlington M.R.R. Co. v. Hall,37 Iowa 620; Commercial St. Bank v. Pierce, 176 Iowa 722;Schneider v. *Page 989 Lobingier, 82 Neb. 174 (117 N.W. 473); 34 Corpus Juris 432, 441, 490, 499; 21 Corpus Juris 701, 714, 715.
The judgment is — Affirmed.
De GRAFF, C.J., and EVANS and ALBERT, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431868/ | On June 22, 1932, defendant Monson obtained a justice-court judgment against plaintiffs. On June 22, 1942, it was transcripted to the district court. Plaintiffs (judgment defendants) bring this suit to enjoin its enforcement, claiming that it was barred by the ten-year statute of limitations, section 11007, subsection 6, Code, 1939, at the time it was transcripted. The trial court sustained a motion to dismiss, holding the statutory time had not run. Certificate granting right of appeal to this court having issued, this ruling is here for review.
The sole issue presented is tersely stated by the trial court:
"The question revolves about a matter of one day. Plaintiffs claim that June 21, 1942, was the last day of the validity of the judgment, while defendants say that the judgment was not barred until and including June 22, 1942, and having been transcripted on said date to the District Court it thereupon became a judgment of the District Court of Linn County, Iowa, and good for twenty years thereafter."
The applicable statute of limitations, section 11007, subsection 6, provides that actions "founded * * * on judgments of any courts except those provided for in the next subsection" (not pertinent here) may be brought within ten years "after their causes accrue."
It is not seriously disputed that if transcripted before being barred a justice-of-the-peace judgment becomes a district-court judgment and a new period of limitation starts from that date. Miller v. Rosebrook, 136 Iowa 158, 113 N.W. 771; Rand Co. v. Garner, 75 Iowa 311, 39 N.W. 515; Stover v. Elliott, 80 Iowa 329,45 N.W. 901. Nor, on the other hand, is it claimed that *Page 652
a judgment already barred would be revived by being so transcripted.
Appellants contend here that the ten-year period included June 22, 1932, and that June 21, 1942, was therefore the last day of the ten-year period. They rely largely on the language of certain of our own cases, e.g., Citizens Bk. v. Taylor, 201 Iowa 499,207 N.W. 570, in which we said that action on a demand note dated February 9, 1914, became barred on February 9, 1924. Similar language was used by us in In re Estate of Fuller, 228 Iowa 566,293 N.W. 55, and Horn v. Anderson, 234 Iowa 1068, 13 N.W.2d 693.
The trial court properly points out that in none of these cases was the language necessary to the decision, the exact day of expiration of the statutory period not being material. Appellants also cite 62 C.J. 965, 967, and several cases from other jurisdictions.
We think the decision here must rest upon a construction of our own statutes, section 63, subsections 11 and 23, Code, 1939. Said subsection 11 defines the word "month" as a "calendar month" and the word "year" and the abbreviation "A.D." as equivalent to "year of our Lord." Appellants argue that the expression "year of our Lord" means a year beginning January 1st and ending the succeeding December 31st, citing 62 C.J. 965, section 11. By analogy they then argue that the first day of a given period must be counted and the corresponding later day excluded.
But we are not dealing here with a statute that involves a definition of the term "year A.D." We are confronted with a question of how to compute a given period of time — ten years. Subsection 23 of Code section 63, supra, gives us the formula for this purpose:
"Computing time. In computing time, the first day shall be excluded and the last included, unless the last falls on Sunday, in which case the time prescribed shall be extended so as to include the whole of the following Monday."
We can conceive of no reason why this last-quoted statute should not be applied in computing time under the statute of limitations. We have used its formula in computing the statutory *Page 653
year of redemption from execution sale of real estate: Teucher
English v. Hiatt, 23 Iowa 527, 92 Am. Dec. 440; in computing the time for taking appeal: Parkhill v. Town of Brighton, 61 Iowa 103,15 N.W. 853, and Ritchey v. Fisher, 85 Iowa 560,52 N.W. 505; and in computing the allowed time for filing bill of exceptions: Sheldon Bk. v. Royce, 84 Iowa 288, 50 N.W. 986. In Service System v. Johns, 206 Iowa 1164, 1168, 221 N.W. 777, we applied the rule without express reference to the statute, in holding that a motion to set aside default was filed in time. For other cases in which the rule has been followed, with or without express reference to the statute, see McLeland v. Marshall County, 199 Iowa 1232, 201 N.W. 401, 203 N.W. 1; Wilson v. Knight, 3 (G. Greene) Iowa 126; Des Moines Union Ry. Co. v. District Court, 170 Iowa 568, 153 N.W. 217; Bonney v. Cocke,61 Iowa 303, 16 N.W. 139.
The purpose of the statute is doubtless to avoid the necessity of dividing the day the cause of action accrues, without shortening the time allowed. In the case of entering judgment, the exact hour and minute are, of course, not recorded, and the period of time allowed under the statute of limitations must either be shortened by including all of the day the judgment is entered or lengthened by entirely excluding it. Said subsection 23 prescribes the latter alternative. Fractions of days are not to be taken into account.
It is to be mentioned that, even in the absence of statutory mandate, the decided modern trend of judicial decision is in the same direction as required by our statute. 34 Am. Jur., Limitation of Actions, section 252; 37 C.J., Limitation of Actions, section 478.
Appellants cite Welch v. Welch, 212 Iowa 1245, 238 N.W. 81, in support of their contention. That decision is not controlling here. It involved a landlord's attachment. The statute provided that the lien for rent should not continue more than six months after the expiration of the term of the lease. The lease expired with the month of February and we held that the term "six months" meant six calendar months (under subsection 11 of section 63, supra) and would include all of March and through to and including all of August. No part days were involved. *Page 654
Cases cited from other jurisdictions are not helpful here where we are guided by our own statutory provision. We hold the decision of the trial court was right. — Affirmed.
All JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431871/ | The very earnest argument made by defendants in support of petition for rehearing has had the consideration of the court in re-examination of applicable equitable principles and authorities.
That the policyholder is a creditor from the date of his policy, see In re Assignment of Rea, 82 Iowa 231, 238; Nichols v.Harsh, 202 Iowa 117; Gallagher v. Asphalt Co. of Am., 65 N.J. Eq. 258
(55 A. 259, 260); Herrick v. Wardwell, 58 Ohio St. 294
(50 N.E. 903, 906); Graeber v. Sides, 151 N.C. 596 (66 S.E. 600);Carr v. Davis, 64 W. Va. 522 (63 S.E. 326, 328); Brown v.Hitchcock, 36 Ohio St. 667, 678; 27 Corpus Juris 472, 473; Fryev. Chicago, R.I. P.R. Co., 157 Minn. 52 (195 N.W. 629).
That the corporation, at the time of the withdrawal of funds, did not measure up to the statutory requirement for solvency, see Code of 1897, Sections 1714, 1731; Chicago Life Ins. Co. v.Auditor of Public Accounts, 101 Ill. 82; and cases post.
That the relationship of defendants to the corporation and to the holders of policies then outstanding, and in contemplation of solicitation and procurement in the intended continued prosecution of the business, was, in essence, fiduciary, and that defendants' withdrawal of corporate funds and their appropriation thereof to the payment of the price of their stock was, in the eye of equity, fraudulent as to existing and prospective policyholders, see Oliver v. Brennan, 292 Fed. 197, 201; same *Page 223
case on appeal, 299 Fed. 106, 109; Couse v. Columbia Powder Mfg.Co. (N.J. Ch.), 33 A. 297, 299; 14a Corpus Juris 905;Consolidated Tank Line Co. v. Kansas City Varnish Co., 45 Fed. 7;Atlanta Walworth B. C. Assn. v. Smith, 141 Wis. 377
(123 N.W. 106, 108); Corey v. Wadsworth, 99 Ala. 68 (11 So. 350, 23 L.R.A. 618, 42 Am. St. 29); Johnson v. Canfield-Swigart Co., 292 Ill. 101
(126 N.E. 608); McIver v. Young Hdw. Co., 144 N.C. 478
(57 S.E. 169); 14a Corpus Juris 885, 896, 905; Bosworth v. Allen,168 N.Y. 157 (61 N.E. 163); Gilbert v. Finch, 173 N.Y. 455
(66 N.E. 133); 2 Cook on Corporations (6th Ed.) 2083, 2087, Section 682;Gantenbein v. Bowles, 103 Or. 277 (203 P. 614); 7 Ruling Case Law 760; Olney v. Conanicut Land Co., 16 R.I. 597 (18 A. 181, 27 Am. St. 767, 5 L.R.A. 361); In re Shotwell, 43 Minn. 389
(45 N.W. 842, 844); 3 Words Phrases 2947; Bradley v. Converse, 4 Clif. (U.S.) 375; Dickinson v. Stevenson, 142 Iowa 567, 570;Jackson v. Ludeling, 21 Wall. (U.S.) 616, 624. See quotation from this case in Dawson v. National Life Ins. Co., 176 Iowa 362, 385:
"`Managers and officers of a company where capital is contributed in shares are, in a very legitimate sense, trustees alike for its stockholders and its creditors, though they may not be trustees technically and in form. They accordingly have no right to seek their own profit at the expense of the company, its shareholders, or even its bondholders.'"
See, also, Hibernia Bank Tr. Co. v. Succession of Cancienne,140 La. 969 (74 So. 267, 269, L.R.A. 1917D 402; Barhydt Co. v.Perry, 57 Iowa 416, 419; Paulk v. Cooke, 39 Conn. 566; O'Neill v.Kilduff, 81 Conn. 116 (70 A. 640, 642); Savage v. Murphy,34 N.Y. 508 (90 Am. Dec. 733); Spuck v. Logan Uhl, 97 Md. 152
(54 A. 989, 99 Am. St. 427); Rudy v. Austin, 56 Ark. 73
(19 S.W. 111, 35 Am. St. 85); Lander v. Ziehr, 150 Mo. 403 (51 S.W. 742, 73 Am. St. 456); Crowley v. Brower, 201 Iowa 257; Brundage v.Cheneworth, 101 Iowa 256. For a very complete and persuasive discussion of fiduciary relationships, the reasons underlying the establishment of their existence, and their effect, see Dawson v.National Life Ins. Co., 176 Iowa 362.
Petition for rehearing overruled. *Page 224 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431875/ | Theodore E. Lindeken, the husband of the claimant, was a boilermaker who had been in the employ of the defendant *Page 646
company for about 12 years. At the time of his injury, he lacked a few months of being 62 years old. He was about 5 feet 6 inches tall and weighed approximately 165 pounds. He had never lost any time from his work because of physical disability. His work was rather strenuous and required the use of considerable physical effort. He was in apparent good health on the day of his injury and at all times prior thereto. About five months before that day, he had been physically examined by a doctor for life insurance and was accepted. About midafternoon of October 16, 1937, he was replacing some stay bolts in the firebox of a locomotive, when, because of being thrown off balance by the operation of the implement he was using, he fell and struck his left knee on the grates and received a comminuted fracture of the knee cap with some tearing of the quadriceps tendon fastening the muscles of the front upper leg to the knee cap. He was at once taken to St. Lukes Hospital in Cedar Rapids, where he was placed under the care of Dr. Ruml, the local surgeon of the railroad company. X-rays were taken, the knee was bandaged with a figure eight bandage, and a posterior splint was put on. No cast was ever placed on the leg. He was then placed on a fracture bed and a weight extension was applied to the foot. From day to day until the late afternoon of October 30th, nothing appeared out of the ordinary in his condition. His recovery appeared to be progressing normally. His blood pressure, temperature, respiration, and pulse appeared to be approximately normal for one of his age lying at rest. His pulse, however, varied from 50, 54, 60, 62, 64, 68, 72 to 80. Occasionally when the bandage was changed, he complained some of its being tight, but this discomfort would pass away. The bandage was changed at 10 a.m. of October 30th, and for a time he spoke of a "thumping" feeling in his leg, but he did not ask that it be changed, and this sensation apparently disappeared. When callers came and at meal time, he was raised to a semi-sitting position by the mechanical operation of the bed. At 4:57 o'clock in the afternoon of October 30th, while he was eating from a tray, he was observed by another patient in the room to drop his fork, his head fall forward, and to not respond when spoken to. Hospital attendants and doctors were called. His face became cyanotic and he gasped for breath. His pulse which was at 80 at 3 o'clock was *Page 647
100 at about 5 o'clock, although fairly regular. He complained repeatedly of severe pain about 10 or 12 inches below his chin. Heart stimulants were given and oxygen administered through a nasal catheter. At 5:40 o'clock his pulse was 128, and thereafter it was a flutter and impossible to count. He was conscious and talked and recognized members of his family until shortly before his death at 6:05 o'clock that afternoon. His body was taken to the mortuary and the embalming process was begun. The blood was forcibly withdrawn from the circulatory system through the veins by a suction pump, and the embalming fluid was forcibly injected into the circulatory system through the arteries. An autopsy having been requested by Dr. Ruml, and consented to by the family, the work of embalming was stopped and no embalming fluid was injected into the abdominal cavities. The next morning at 9 a.m., a necropsy of the organs of the chest and abdomen was performed by Dr. Mulsow, a competent pathologist. Dr. Ruml, two internes and a doctor friend of the family were present. No examination was made of the brain. The report of the autopsy, and Dr. Mulsow's testimony shows that no tumor masses or emboli (blood clots) were found in the larger vessels; the heart was large and weighed 410 grams, or about one-third heavier than for a man of his size; there was moderate fatty arteriosclerosis of the orifice of the left coronary artery, with a marked sclerosis of the descending branch of that artery. This branch was very tortuous and the thickening of the walls had reduced the opening or channel of the branch to about one fourth its normal caliber or size. There was moderate atherosclerosis of the aorta, and also some sclerosis in the right coronary artery of the heart and its branches, but much less than in the left descending branch on the left side. The organs of the abdomen showed rather negative conditions. The injured knee was examined, and while it was slightly swollen, no thrombosed vessels were found, nor any evidence of a previous thrombosed condition. The coronary arteries, both right and left, branch out of the aorta, and with their branches and capillaries nourish the muscles and tissues of the heart with the purified blood. The left coronary arterial system serves not only the left side of the heart, but also extends into the right side and the right coronary arterial system serves the right side of the heart, and also gives greater *Page 648
aid to the left coronary system than it receives from the latter. If either system becomes so damaged by sclerosis that it cannot properly serve the heart muscles on its side, nature extends the arterial system from the other side in order to supply with blood the parts that have been deprived of their supply. In fact, nature may clean out the clogged channels or open new channels in order to increase the blood supply to any part of the heart muscle receiving a deficient supply. Such process is referred to, in the record, as "collateral circulation." It is the testimony of Dr. Glomset, a witness for appellants, that an ordinary lead pencil is a very good average size for an adult coronary artery, and that sometimes the openings get as small as the lead in a lead pencil, and smaller.
[1] I. The legal questions involved in this case are neither many nor complicated. It is admitted by the appellants, whom we will refer to as the company, that the initial knee injury arose out of and in the course of the regular employment of the deceased with the company. It is, of course, conceded by the claimant that the sclerotic condition of the left coronary arterial system was not caused by the knee injury. That condition was a progressive one which had its inception, according to the testimony of different doctors, from two to 20 years before. It is conceded by both sides that the direct cause of death was the failure of the heart muscle to function because of a deficient supply of arterial blood. The vital issue in the case, and the one which the claimant must establish by a preponderance of the evidence, is whether the knee injury and its subsequent treatment so contributed to said cause by aggravating and accelerating the heart disability of the deceased as to hasten and bring about his death at a time earlier than it would have occurred without such injury and treatment. The deputy commissioner in a reopening hearing on the memorandum agreement, which the commissioner treated as an arbitration hearing, found that the claimant had sustained this burden. On a review hearing de novo, the commissioner affirmed the findings and decision of his deputy. On appeal, the district court affirmed the decision of the commissioner. The question for our determination is whether there is sufficient competent evidence of the facts found by the *Page 649
commissioner to support and warrant the making of his order and decision, and the affirmance thereof by the order and judgment of the district court.
It is the contention of the appellee not only that the knee injury was, as Dr. Ruml wrote to the chief surgeon of the railroad company, on December 2, 1937, a severe one which may have indirectly lowered Lindeken's resistance, but what is much more important, the removal of Lindeken from the activity of hard, vigorous work, and placing him in a condition of almost absolute rest and inactivity, with his left leg immobilized, decreased the action of his heart and caused a definite and decided retardation of the flow of his blood stream, and that because of the greatly reduced channel and the tortuous course of the descending branch of the left coronary artery, a condition was brought about in said artery which was conducive to the formation of a thrombus, or to the lodgment of an embolus therein. A thrombus, as appears from the testimony of different doctors, is a blood clot formed in a blood vessel while the patient is living. It forms in one spot and ordinarily remains there. An embolus is a blood clot, globule of fat, bubble of air, or some foreign substance which gets into the blood stream and flows along until it lodges at some point too small for its passage. The terms thrombus and thrombosis appear to be used interchangeably. The same is true of embolus and embolism. We find little, if any, dispute in the record that putting a person at complete rest in a bed will slow up the pulse rate and with it the rate of flow and force of the blood stream. Directly in point on this is the testimony of Dr. John Parke, for the claimant, on cross-examination:
"Q. It is your opinion * * * that if a man has never had an attack, but has arteries in the condition disclosed by the autopsy report, * * * that it is a very dangerous thing to put him to bed, and is liable to precipitate an attack? A. The answer is Yes, for this reason — Any man with marked narrowed coronary arteries has a diminished blood flow through those, and anything which lowers the amount of blood flowing through those arteries would tend to precipitate an attack. In other words, coronary arteries, narrowed as these were, 50 percent I wouldn't say would be too much to say, suppose that with bed rest his pulse rate went down four to six beats, eight or nine percent of the *Page 650
blood ordinarily flowing during active exercise is not flowing, that may be enough to precipitate an attack. That, I think is the whole point in the argument."
Dr. B.F. Wolverton, for the claimant, after testifying that the enlarged heart of the deceased indicated high blood pressure at some time, but that the only reading on the chart indicated a normal blood pressure, said:
"* * * with narrowed sclerotic arteries and a lower blood pressure, the rate of flow through the arteries is reduced, then the enforced inactivity of the leg, placed on a pillow and bandaged in such a way that the patient couldn't even move extensively in bed over a two weeks' period, would further cause the circulatory rate to slow down, and would definitely favor thrombosis, predispose to thrombosis."
In reply to the question, immediately following the above stated answer, "Was that the sequence of events which in your opinion caused his death?", he answered "Yes." He further testified "The volume of flow through the vessel depends upon the caliber of the vessel, and the pressure at which the blood is driven through it. * * * I would say the most common cause of death (in coronary sclerosis) is thrombosis of the artery. * * * It is felt that very often there is a projection of atheroma into the lumen (opening) of the vessel in such a way that, as the blood passes, an eddy is formed behind it, which slows the rate of flow of blood past that point; then there is opportunity for clotting of the blood in this little backwash, behind the projecting angle."
On further cross-examination, this witness made the point very definite:
"Q. In other words, the suggestion you made as to the thrombosis or embolism is merely an explanation, on your part, as to what might have happened in this man to have caused his death, isn't that true? A. That is what I think did happen."
Dr. Edward H. Files, for claimant, in answer to a hypothetical question based upon matters, applicable to Lindeken, with respect to his enforced rest, answered: "I would say that enforced bed rest brought on — made necessary by the injury would certainly favor vascular stasis, and would thereby predispose *Page 651
toward thrombosis in the vascular system." He further testified that the medical profession generally recognizes that enforced bed rest slows the rate of the heart, retards the volume flow of blood, and would affect the heart muscle which that volume flow nourishes. In answer to the inquiry whether in his opinion, the accident resulting in enforced bed rest probably hastened the death of Lindeken by reason thereof, he answered: "I believe that the accident and its attendant enforced bed rest would produce a retardation of the volume flow of blood in the body, and would predispose to a vascular accident, such as the manner of this man's last hour or two of life would, clinically, be typical of." By vascular stasis the doctor said he referred to a change in the volume flow of blood, that is, a slower and smaller rate and volume, which he said was certainly one factor which predisposes to coronary attack or occlusion.
Dr. R.K. Keech, a witness for claimant, in answer to an inquiry as to whether the accident and enforced rest would hasten the death of the person referred to in the hypothetical question, said: "My opinion is that the injury and going to bed of this patient incident to this injury, must be considered a contributory factor in his death, and would hasten his death." He further testified: "I would say that the accident and the putting of this man in bed, and the general slowing up of his circulation would predispose to the formation of a thrombosis, or stopping of the flow of blood through the heart."
Six or seven doctors testified for the appellants. While conceding that bed rest would slow up the blood flow, they maintained that such rest would not predispose to thrombosis, nor endanger the patient, nor hasten him to his death. On the contrary, they contended that when it became known that the person was afflicted with arteriosclerosis because of an angina or coronary attack, the standard practice of the profession required that the patient be put and kept in bed at complete rest. All of the doctors for the appellee agreed with this contention, that is, if the patient was already suffering from an acute coronary attack or onset, and was having difficulty breathing, and suffering pain in the heart or heart region, he should, of course, be put to bed, to try to ease the suffering and perhaps avoid a lesion of a heart vessel, even at the risk of the formation of a blood clot or thrombus *Page 652
by slowing up the blood stream. It was a choice of the lesser of two evils, since he was already suffering from an attack brought on by a thrombus or stoppage of some kind. By rest in bed, nature would be given an opportunity to repair the damage caused by the occlusion, by putting into effect the collateral circulation mentioned above. But all of the doctors, on both sides, quite fully agreed that they would not ordinarily put a person to bed simply because he had coronary artery sclerosis, if he was suffering from no attack. Their advice to him would be to take it very easy, to not overeat, or worry, or get excited, to cut out alcohols, smoking, and to get plenty of rest and sleep, but to be up and around. The record shows that over 50 percent of all persons over 50 years old have arteriosclerosis or hardening of the arteries. Keeping them all in bed indefinitely might not be practicable. If Mr. Lindeken, with a history of never having lost a day in 12 years of work, had gone to any of the doctor witnesses, on the morning of October 16, 1937, and the doctor had learned that he had marked sclerosis in the descending branch of the left coronary artery, it isn't likely, in the light of the testimony of any of them, that he would have been ordered to bed. He would have been told to ease up. Lindeken was forced to the hospital bed because of the knee injury, and not because he had coronary sclerosis.
The doctors for the appellants are much in doubt as to just what were the cause and the mechanics of the attack which brought about Mr. Lindeken's death. Dr. Ruml was at the autopsy. He said they found no clots in the heart arteries. On direct examination, his answer as to the cause of death was very general. He said: "My opinion was that death was produced by the condition of the heart." On cross-examination, he said: "My opinion is that there was a narrowing of the coronary artery, and a spasm of theartery, which interfered with the blood supply to the heart. The probabilities are, that, having had his supper put a little extra work on the heart and brought about that spasm. That would be my interpretation of what occurred at the attack." Here was a man, a boilermaker, who two weeks previous was engaged in the heavy labor of his trade, overcome while eating his meal in bed. The commissioner apparently doubted such interpretation. Arteriosclerosis is a slowly progressive *Page 653
ailment. A defense doctor said in this case it had progressed for five, ten, fifteen or twenty years. There was still a 25 percent opening in the artery after death, and yet Dr. Ruml opines that after two weeks in bed this artery spasmodically closed this 25 percent channel and brought about death. There is no tangible evidence in this record that there was ever such a spasm. The autopsy disclosed that the 25 percent opening was still there and there were no observable indicia that it had ever been closed by a spasm. Counsel for appellants argue strenuously that the opinions of appellee's experts are mere guesses, conjectures and surmises. We do not agree with these designations, but Dr. Ruml's opinion appears to be based wholly on conjecture.
Dr. Chauncey C. Maher, Chicago heart specialist and professor of medicine in the Northwestern University Medical School, testifying for appellants, does not subscribe to the artery spasm theory. He said: "As to what change took place in that artery when the collapse came, when the patient was eating his dinner, our belief is that there is not necessarily a change in the artery itself. There is the thought that there is a spasm of the arteries — that they change or narrow their caliber. But the more likely thing that happens, rather than an actual change or spasm in the arteries, is a change in the way the heart beats. That is the damaging thing, and the thing that causes death." The beat becomes irregular, unrhythmical, and "the circulation utterly awry," in his opinion. But he does not say what organic change or other happening precipitates this sudden awryness. The patient's chart shows that several minutes after the attack, his pulse was fast but "fairly regular." He agrees in part with appellee's doctors, in saying that long bed rest reduces the per time volume of the blood through the vessels, and that "the patient's heart in this case didn't pump the blood through at the usual speed and level." He further states "there has been some question in the minds of the heart men interested in this question, whether actual spasm occurs in the coronary vessels." And then rather irrefutably, he states "those vessels are hard like wood; they are stony, so that it is impossible for that particular place to cause a spasm. The vessels beyond that may have a spasm in them, beyond that *Page 654
site, depending upon the extent of their calcification, but the little ones down at the end don't usually have much change in them. * * * I think there may have been, in this case, a spasm of the artery, beyond the constricted area, described in the autopsy; beyond the narrowed area in the left descending branch." This is outside the record, and pure surmise. So far as the autopsy report shows, the left descending branch was narrowed throughout.
Dr. H.R. Hess, for appellants, testified: "It would be my judgment that the cause of the death of the person described was coronary heart disease." This answer does not help much. No one disputes that he died from heart disease. On cross-examination by the deputy commissioner, he became slightly more specific. He said: "I believe it was a spasm of the coronary vessel, but Ican't locate the vessel. I would think it was one of the branches of the larger coronaries. * * * I don't believe there could be a spasm of that part of a coronary artery which is badly sclerosed. It must have been some of the branches of that particular artery." The only branch with marked sclerosis was the "descending branch" referred to in the autopsy report. He guesses again with the remark that "it is very possible that this spasm extends to the heart muscles too. * * * That would be a fibrillation of the ventricle." On examination by the deputy, the doctor confesses that, "there is no definite way of provingwhether spasms occur, under the circumstances which I have been discussing. After death, of course, the portion of the artery subject to the spasm relaxes."
Dr. J. Stewart McQuiston, for the appellants, testified to a conceded fact that "the man died principally, and primarily, from coronary sclerosis." He thought that the spasm was "of the smaller vessels, which are quite small, and still able to dilateand contract." In other words, that the entire trouble lay, not with the sclerosed vessels but with the healthy, unimpaired capillaries. He also suggested ventricular fibrillation. On examination by the deputy, the doctor elucidates further: "I don't believe that we know just what causes the spasm, to which I attributed the death in this case. We do know that somethinghappened suddenly. These cases occur under all sorts of circumstances. They don't seem to follow any particular rule, andconsequently, *Page 655 we can't form any opinion. There must have been some reason that the patient became afflicted at the time, and in the manner, he did. I don't believe there would be anything in connection with the last two weeks of his life that would cause any marked increase, or marked change, in the condition of arteriosclerosis in the coronary vessels." With further frankness, he states: "Wehave no definite way of knowing that there was a spasm of theblood vessels of the heart. It is an assumption."
Dr. David E. Beardsley, a local surgeon at Cedar Rapids for the appellants, testified that his theory was that there was a spasm of the vessels beyond the obstruction "that threw the rhythm of his heart out of line and caused it to beat irregularly. Perhaps,
the part of the heart, where he had the spasm didn't beat at all. * * * The arteriosclerosis of the vessels, is the cause of the factor, that produces the spasm, but just what the mechanics ofit is, I don't know. * * * I don't think we know for certain why spasms do occur." Somewhat in line with the contention of the appellee, he stated: "I think it is true that if you have a man who has been engaged in exercise, in the routine activities of every day life, if he is put in bed, and forced to continue at long bed rest, the heart muscle would become flabby, and lose its tone. * * * We can't deny that taking a person away from hard manual labor, and placing him in a bed in a hospital, in strange surroundings, results in upsetting their nervous systems to some extent." Dr. Mulsow said: "Nervous changes may stop the heart beat, and result in death."
Dr. Bierring, for appellants, stated: "The cause of death was due to disease of the coronary arteries of the heart, with a sudden stoppage, causing the symptoms which have been stated, leading to death in about an hour's time." He made no attempt to explain what precipitated the sudden stoppage.
Dr. Glomset, for appellants, simply states that in his opinion death was due to heart failure, and further states that: "The exact mechanism involved in the coronary attack is not known. We have no way of knowing exactly what occurs."
The industrial commissioner and his deputy, on separate hearings, have each made written findings and decision, showing an intimate and understanding knowledge of the long and *Page 656
complicated record, and sound reasoning in support of their conclusions of law and fact. They express their inability to find in the record tangible evidence upon which to fasten findings with any reasonable certainty, in support of the contentions of the appellants. They find sufficient competent evidential support to sustain the claim and contentions of the appellee. In the Re-opening Opinion, Decision and Award, the deputy commissioner, in speaking of the intervening precipitating cause of death, states:
"To say that it might have been a spasm of the coronary artery does not satisfy us. That is not proven or accepted by the best heart men as satisfactory explanation for the death that occurred. * * * We believe that the ultimate death in this case was brought about by a thrombosis of the left coronary artery, not at the point of its origin or near the point of its origin, but at some little distance therefrom. Otherwise death must have occurred even sooner than it did. By that we mean the attack would not have continued so long until death occurred. This is the plain and reasonable inference only to be reached from the physical facts and the opinion evidence of the medical experts who testified in the case.
"With the development of a coronary thrombosis, that is, a clotting of the blood in the coronary artery, bearing in mind the fact that the lumen of the artery was diminished until it remained only about one-fourth of its normal diameter, a clotting of blood very small indeed was all that was necessary to occlude the blood vessel, and when that occurred the nourishment to the heart muscle was removed and it began to fail. The clotting of a drop or two or three of blood was probably all that was necessary to stop the free flow of blood through the artery and we can understand the admission of the pathologist, and the statements of other medical witnesses, that the embalming process could, and we believe probably did so disturb the contents of the artery that the presence of the thrombosis was overlooked."
There is support in the record for these findings. While Dr. Mulsow, who conducted the autopsy, testified that in his opinion any blood clotting sufficient to cause death would not have been removed by the embalming process, he conceded that there could have been an embolism there which he did not find. Dr. *Page 657
Parke testified that it was "perfectly possible" in the process of embalming to remove clots as well as fluid blood. Dr. Glomset, a defense witness, testified that "a blood clot in a coronary artery may be overlooked in a post mortem examination in an ordinary autopsy. I think many such clots are overlooked. * * * It is possible that only a couple or three drops of clotted blood in the blood stream would cause death if in the right place." Dr. Maher testified that the embalming fluid is corrosive and does not give as satisfactory procedure for the performing of an autopsy.
The industrial commissioner in his opinion and decision on review adopted the award and findings of fact and reasons in support thereof as stated in the deputy's decision. He also specifically found that the death of Mr. Lindeken was not brought about at the time it was because of the normal progress of the sclerosis of the left coronary artery and the descending branch thereof, but by the stoppage of the blood flow at some point therein by a blood clot formed or induced by the decreased speed and volume of the blood stream through the roughened and narrowed channel of the sclerosed vessel, and that this retardation of the blood stream was due to the enforced bed rest made necessary by the knee injury. He found that it was highly probable that any such blood clot was removed by the forcible withdrawal of the blood, and the forcible injection of the embalming fluid. In conclusion, he states: "Thus when all of the facts and circumstances are fairly considered, including the fair inferences that may be drawn from the proven facts, we are of the opinion, that the enforced bed rest, due to the injury with shock, though the latter not predominating, was a contributory factor that hastened and caused the death of claimant's husband sooner than it otherwise would have occurred. How much sooner we are unable to say, but since the thickening of the walls is one of slow process, it is reasonably probable life would have continued for at least a few years hence." The statement in the last sentence is fortified by the further fact that his life would likely have had such benefits as accrue from nature's collateral circulation asserted by several of the doctors. We think there is sufficient competent evidence to sustain the findings, order, and decree of the commissioner. This record presents a man in active and steady employment at hard *Page 658
labor up to October 16, 1937, on which day he received an injury requiring confinement in a hospital. Two weeks later, he suddenly dies from a heart attack. The autopsy discloses no discernible organic changes in the condition of the heart and its circulatory system from what it may be reasonably assumed it was on October 16th, previous. Neither on that date nor on any previous date had his heart given him any trouble, so far as shown by the record. With its organic condition the same, why did it fail him on October 30, 1937? The reasonable and probable answer is that some external factor intervened to impair the serviceable functioning of that organ by the precipitation of the painful and fatal heart attack. It is agreed that the pain of such an attack is caused by the hunger of the heart muscle or some part of it for nourishing blood. The suddenness of the attack and the severity of the pain indicates that the blood supply was almost completely and abruptly shut off. The record falls far short of establishing the arterial spasm theory. But it does, in our judgment, fairly and reasonably support the decision of the commissioner that the very probable cause of the stoppage was a clotting of the blood, because of the conditions herein stated. While there is no conflict in the evidence respecting many of the facts, there is a decided conflict in the evidence adduced by the doctors in their expert opinion testimony. It was the privilege and right of the commissioner to determine the weight, credibility and the ultimate probative value of this testimony. When such a conflict in the evidence exists, the courts cannot interfere with fact finding of the commissioner. We have held this so often that citation of authority in support thereof is needless. But see Fritz v. Rath Packing Co., 224 Iowa 1116, 1117, 278 N.W. 208; Rish v. Iowa Portland Cement Co., 186 Iowa 443, 453, 170 N.W. 532, 535; Schuler v. Cudahy Packing Co., 223 Iowa 1323, 1325, 275 N.W. 39, 40; Featherson v. Continental-Keller Co., 225 Iowa 119, 279 N.W. 432.
We have also repeatedly held that though the injury aggravates or accelerates a physical impairment with which the employee is afflicted, the injury is compensable if death resulted therefrom at a time earlier than it would have occurred had not the injury been suffered. Hanson v. Dickinson, 188 Iowa 728, 176 N.W. 823; Belcher v. Des Moines Electric Light Co., 208 Iowa 262, *Page 659
225 N.W. 404; Wax v. Des Moines Asphalt Paving Corp.,220 Iowa 864, 263 N.W. 333; Almquist v. Shenandoah Nurseries,218 Iowa 724, 254 N.W. 35, 94 A.L.R. 573; West v. Phillips, 227 Iowa 612, 288 N.W. 625.
This isn't a case where the testimony was that the claimed cause might or might not or possibly could have brought about the death, as was Guthrie v. Iowa Gas Electric Co., 200 Iowa 150, 204 N.W. 225, or Slack v. Percival Co., 198 Iowa 54, 199 N.W. 323, or Boswell v. Kearns Funeral Home, 227 Iowa 344, 288 N.W. 402. In this case, witnesses designate the alleged cause as theprobable cause, or that which did cause the death. The cause is removed from the realm of mere possibility, and is definitely placed in the field of reasonable likelihood and probability. Counsel for appellants assert that expert opinion testimony is of a low order. This statement is as condemnatory of their witnesses as it is of the appellee's. However this court has so stated in some of its decisions, one of them as late as 1929, State v. Maharras, 208 Iowa 127, 224 N.W. 537, wherein the court was influenced perhaps by the iniquity of the crime which the expert sought to excuse. While there is expert opinion testimony and there are expert witnesses deserving severe condemnation, the indictment made, like many generalities, is too broad, inaccurate and not to be followed blindly. All expert witnesses expressing opinions should not be regarded as charlatans. There are capable, experienced and reliable men in all special fields. The vital question with such testimony, as with all other testimony, is whether it is trustworthy, convincing, and supported by sound reasons. If it is, it should receive thoughtful, conscientious, and unprejudiced consideration.
[2] II. Appellants complain because the district court refused to set aside the decision and award of the commissioner, and to remand the case to the commissioner for proceedings before an arbitration committee. We find no error nor valid ground for complaint in this matter. Briefly stated, the procedure followed was this: The Memorandum of Agreement was executed by employee and employer on October 19, 1937, filed November 9th and approved by the commissioner November 19, 1937; the claimant, having no knowledge of this agreement, filed application for arbitration, July 11, 1938; on July 22, 1938, she withdrew the *Page 660
application and filed application to reopen the case; defendants resisted this and on September 12, 1938, filed application for arbitration, which was denied by the commissioner on the same day; no appeal was taken from this ruling; reopening hearing later came on before the deputy commissioner at which evidence was introduced by both sides; defendants' motion to dismiss proceedings and for arbitration was again denied; on August 3, 1939, the deputy commissioner filed his Reopening Opinion, Decision and Award in favor of claimant; no appeal was taken therefrom by defendants; on August 7, 1939, defendants filed petition for review, which was granted over resistance of claimant, on her special appearance, on August 10, 1939, in which decision the commissioner held that the reopening hearing before the deputy should be considered as and for an arbitration hearing; no appeal was taken from the decision by the defendants; defendants gave notice of, and introduced testimony, at the review hearing before the commissioner held August 18, 1939; on September 1, 1939, the commissioner made his decision and award, from which defendants appealed to the district court.
The defendants were given every reasonable opportunity to present their defense and took full advantage thereof. They received everything they asked for, except an arbitration hearing before three arbitrators. If it be conceded, arguendo, that the defendants were not estopped by their conduct to complain, it must be said they were in no way prejudiced. The finding of an arbitration committee, whether it be composed of one or three members, is not binding on the commissioner on review. Defendants had this review. If they were deprived of any right, it was of no substance.
The order and judgment appealed from is affirmed. — Affirmed.
RICHARDS, C.J., and MITCHELL, SAGER, HAMILTON, HALE, MILLER, OLIVER, and STIGER, JJ., concur. *Page 661 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432073/ | The remedy asked for is the equitable one of specific performance. The letter which, as a contract, is sought to be enforced by specific performance does not, on plaintiff's own evidence, correctly express the agreement and intent of the parties, which were that defendant "would agree to repurchase or take it [the security sold] back at any time if the same became in default;" not, "if this mortgage is ever foreclosed, * * * we will repurchase * * *" Neither the agreement as it was made nor the letter sued upon as the contract, when properly interpreted, as it seems to me, purports, or can be fairly said to be intended, to have authorized the extinguishment of the personal liability of the maker and assumptors of the obligation sold, or to bind defendant to purchase the real estate in lieu of the personal obligations of the mortgagors and assumptors after such obligations in the mortgage have been by the plaintiff voluntarily extinguished. The contract is one for breach of which the common-law remedies are well settled and adequate. If the contract sued upon were of such a nature that equity might grant specific performance of it, still plaintiff has not brought itself within the conditions on which equity will grant that remedy.
Defendant sold to plaintiff mortgages and other securities. The number of the transactions does not appear. Among them was a sale by defendant to plaintiff of the mortgage note and interest coupons in suit. This mortgage is upon real property in Minnesota. The petition is based upon a contract alleged to have been evidenced by a letter dated November 6, 1919, from defendant to plaintiff, as follows:
"Gentlemen: We have this day sold to your company a certain Farm Mortgage, signed and executed by Milo D. Morse and wife, Cecile Morse, dated October 1st, 1915, for $8000.00 — secured by 160 acres of land in Mower County, Minn., described as the Northeast Quarter of Section 10, Township 102, Range 14. Said note secured thereby drawing your Company 5 1/2 per cent interest.
"In consideration of the purchase of this mortgage by your company, the Central Trust Company agrees to collect all interest and remit to your Company, without charge and generally *Page 293
look after the loan the same as if our own. We further agree in the case this mortgage is ever foreclosed for non-payment that we will repurchase mortgage for its face value plus all interest and costs on same; said mortgage being recorded in Book 51, Page 60, of the records of Mower County, Minnesota."
Defendant attacks the validity of the agreement. I assume, for the purpose of this case, that this attack may not be sustained, and that the agreement is binding upon defendant. I therefore confine my discussion to a consideration of the question whether the plaintiff is entitled to the remedy of specific performance.
The makers of the note and mortgage made default in payment. Plaintiff thereupon presented the paper to defendant, with a demand for its repurchase. Defendant repudiated the agreement evidenced by its above-mentioned letter, and refused to recognize liability upon it. The plaintiff then foreclosed the mortgage according to the laws of Minnesota, by notice and sale. The foreclosure was not in court, and plaintiff got no personal judgment. At the sale, plaintiff purchased the mortgaged property for the full amount owed, including interest and costs. Meantime, the real property had been twice conveyed, the purchaser in each instance assuming payment of the mortgage. No action was taken to enforce the personal liability of the maker of the note or of the assumptors. At the expiration of the year allowed in Minnesota for redemption, the plaintiff became invested with the legal title to the mortgaged premises. The sale was had May 16, 1925. Petition in this suit was filed August 29, 1925. On October 29, 1926, and May 13, 1927, plaintiff paid taxes on the mortgaged premises for the years 1924, 1925, and 1926, for which, in addition to the amount of the principal and interest on the note and the costs of foreclosure, plaintiff seeks to recover. Plaintiff tenders to defendant the sheriff's certificate of sale under which the legal title to the mortgaged premises is now, as stipulated, vested in plaintiff, and abstract of title.
The property sold by defendant to plaintiff was incorporeal, personal property. It is described in the letter upon which the suit is founded as "a certain mortgage * * * dated October 1, 1915, for $8,000, secured by 160 acres of land in Mower County, Minnesota." The agreement further refers to it as the "said *Page 294
note secured thereby drawing your company 5 1/2 per cent interest." The agreement further designates the property sold (and the property to be repurchased) as follows:
"In consideration of the purchase of this mortgage by your company the Central Trust Company agrees to collect all interest * * * and generally look after the loan * * *"
The agreement to repurchase is this:
"We further agree in case this mortgage is ever foreclosed for non-payment that we will repurchase mortgage for its face value plus all interest and costs."
The property which by the decree the defendant is compelled to repurchase is the real property described in the mortgage. Plaintiff's position is that, under the terms of the agreement, it was required to proceed to foreclose the mortgage, and that, after it had purchased the mortgaged premises at foreclosure, the defendant was required to purchase them of plaintiff, at face value and interest on the mortgage note, with costs of foreclosure and taxes paid by plaintiff on the mortgaged premises after foreclosure. Otherwise stated, plaintiff contends that, though it purchased (incorporeal) personal property, defendant bound itself to purchase from it real property; that, though plaintiff purchased the personal obligation of the mortgagor, and acquired, incidentally to it, the personal obligations of subsequent purchasers of the mortgaged premises, defendant is bound to repurchase the mortgaged premises at the price placed upon them at the foreclosure sale by the plaintiff, stripped of the personal obligations of the mortgagors and subsequent grantees, which, as is conceded, have been discharged as a result of the foreclosure sale.
By the agreement sued upon, plaintiff was given the option to require defendant to repurchase. Plaintiff was not bound to resell. Defendant reserved no right to compel a resale. Defendant's agreement, therefore, in this particular was merely one giving plaintiff an option to resell to defendant. Wilson v.Holub, 202 Iowa 549; Engen v. Sheridan County State Bank,163 Minn. 1 (203 N.W. 434). Until plaintiff exercised its option, there was no contract of resale. The evidence is that plaintiff did, upon the mortgagor's default, and before foreclosure, *Page 295
exercise its option, and accordingly demanded of defendant that defendant repurchase the property. The property was then still personal in form. On the exercise of the option and making of the demand, the defendant (we may assume) was legally bound to perform its covenant to repurchase. The relationship between the parties then was that of seller and purchaser, under an executory contract by defendant to purchase the securities from plaintiff. The plaintiff's remedies for defendant's refusal to purchase were: (1) To store or retain the property for the defendant and sue defendant for the entire purchase price; (2) to sell the property, acting as agent of the defendant for this purpose, and recover the difference between the contract price and the price obtained on such resale; (3) to keep the property as plaintiff's own property, and recover the difference between the market price at the time and place of delivery and the contract price. Dustanv. McAndrew, 44 N.Y. 72, adopted by this court in Hamilton v.Finnegan, 117 Iowa 623. The law laid down in these cases was reaffirmed and applied to an agreement similar to that under consideration (between these same parties) in Hawkeye Sec. FireIns. Co. v. Central Tr. Co., 208 Iowa 573, decided since the rendition of the judgment here appealed from. Plaintiff's position, however, is that, under the terms of the agreement involved here, the defendant was bound to repurchase only after foreclosure, and that plaintiff was required to foreclose.
Particular attention has been called to the terms of the agreement. It variously refers to the subject of the sale as "a mortgage," as "said note," as "the loan." The property in fact consisted of a promissory note and farm mortgage securing it, and incidental documents and rights. The clause "we further agree in case this mortgage is ever foreclosed for non-payment that we will repurchase the mortgage" literally is an absurdity — a self-contradiction. "Foreclosure" of the mortgage would extinguish it. The mortgaged premises would be sold. The purchaser at foreclosure would acquire title. The lien of the mortgage would be at an end. The mortgage itself (and the note secured by it) would become defunct, — worthless paper. Clearly, the defendant did not agree to purchase a foreclosed and defunct mortgage (or note) for its face value and interest, nor does plaintiff claim that such was the agreement. Plaintiff's *Page 296
contention, in effect, is that the defendant agreed to purchase the farm on which the mortgage debt was formerly a lien, and which plaintiff has since acquired; and it is the purchase of the farm acquired by plaintiff at foreclosure, not the purchase of the mortgage (or note and mortgage), that plaintiff by this suit is seeking to compel the defendant to make. The agreement does not say that defendant will purchase of plaintiff the mortgaged premises or the farm in lieu of the note and mortgage which defendant sold to plaintiff, nor would such an agreement be reasonable. The mortgage is dated October 1, 1915. When it matured, is not shown. The agreement sued on is dated November 6, 1919. There is no limitation on the time within which defendant agrees to repurchase. On the contrary, the agreement is that, if the mortgage "is ever foreclosed for non-payment," defendant will repurchase. Literally, it might be allowed to run; it might be extended or renewed indefinitely. The improvements might be destroyed; the land might go to waste. Conditions might happen utterly destructive of its value, and, though the defendant never in terms agreed to purchase the farm, it might, according to plaintiff's theory, be compelled, on plaintiff's exercise of an option in the indefinite future, to purchase a piece of depreciated land for the amount of the principal of the note sold by defendant to plaintiff and an indefinite amount of interest and costs, and though the value of the paper as it was at the time the contract was made, had been utterly and voluntarily by plaintiff destroyed.
The phrase "ever foreclosed for non-payment," on which plaintiff relies, is contrary to the agreement to "repurchase mortgage * * * said mortgage being recorded in Book 51 * * *" It is not only unreasonable to suppose that the word intended to be used was "foreclosed," but the actual agreement, as testified to by plaintiff's vice president in his direct examination, in support of plaintiff's main case, is that defendant "would agree to repurchase or take it back at any time if the same became in default." He says the sewer bonds were bought "under a similar guaranty." Plaintiff is seeking, therefore, equitable enforcement of a contract in a sense which plaintiff's own evidence shows is absurd, and was different from defendant's verbal agreement. It may be inferred (though the evidence does not so show) that the letter on which the suit is based was dictated *Page 297
or written by defendant's official. Even so, on plaintiff's evidence it did not express the true agreement, and it had no right, as it claims to have done, to rely on what it knew to be the incorrect and unreasonable language used, and so specifically enforce it. 36 Cyc. 605, 608.
Specific performance, as plaintiff well argues, is awarded "because of the inadequacy of the remedy at law, and because equity can `do more perfect and complete justice'" than a court of law. Fisher v. First Tr. Sav. Bank, 206 Iowa 1105. See, also, Richmond v. Dubuque S.C.R. Co., 33 Iowa 422, 480; 4 Pomeroy's Equity Jurisprudence (4th Ed.) 1401. In ordinary cases founded on contracts of sale of personal property, the remedy at law for damages is adequate. McGraw Co. v. Zonta Tire RubberCo., 194 Iowa 685. Specific performance is not a matter of right, except in such cases as are brought within the conditions upon which equity (usually case of sale of real property) awards it.Lockie v. Baker, 206 Iowa 21; Wilson v. Holub, 202 Iowa 549;Shisler v. Catholic Cem. Assn., 207 Iowa 306. The contract, before equity will specifically enforce it, must be found to be unambiguous, clear, and certain, and its terms such that it cannot reasonably be misunderstood. Fenton v. Clifton, 204 Iowa 933; Donovan v. Murphy, 203 Iowa 214; Lockie v. Baker, 206 Iowa 21; Shisler v. Catholic Cem. Assn., 207 Iowa 306; In re Estate ofShinn, 207 Iowa 103; Schmidt v. Barr, 333 Ill. 494
(165 N.E. 131); Adcock v. Shaw, 167 Ga. 710 (146 S.E. 478). Neither the pleadings nor the evidence suggest any reason why the remedy at law was not adequate, complete, and speedy. In Fisher v. FirstTr. Sav. Bank, 206 Iowa 1105, decided since the trial below, this court applied these principles to a suit for specific performance of contract to repurchase note and mortgage denying that remedy. Here, the court is asked to compel the defendant, not to repurchase the note and mortgage, but to purchase the mortgaged property. It is asked to do so after the plaintiff has released the personal responsibility of the makers of the notes and the owners of the land who have assumed payment, and after plaintiff has destroyed the possibility of even negotiating with the debtors. It is asking the court to enforce a contract which its own evidence shows was different from the one actually made. Plaintiff, by transforming the property which was the subject *Page 298
of the contract into an entirely different property, elected to treat and keep it as its own. Plaintiff has thereby debarred itself from recovering the purchase price, and therefore from maintaining its suit for specific performance. Hawkeye Sec. FireIns. Co. v. Central Tr. Co., 208 Iowa 573. It seems to me that the judgment should be reversed.
De Graff and Wagner, JJ., join in this dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431878/ | The defendant, Marion Moss, occupied the premises of plaintiff, consisting of a quarter section of land in Sioux county, Iowa, for the year ending March 1, 1931, under a written lease, the stipulated rent being $10.00 per acre, which was fully paid. He continued to occupy the premises for the two succeeding years, and the controversy arises over the terms of the leases for these two years.
Under Count 1 of plaintiff's petition, it is alleged that there was an oral extension and renewal of the previous year's lease for one year from March 1, 1931, to March 1, 1932, with a reduction of the rent from $10.00 per acre to $9.00 per acre, and with a later oral agreement reducing the rent to $8.00 per acre. In this count the plaintiff admits payment of $500.00 on the rent. Defendant denies that such were the terms of the lease, and in his answer alleges that shortly prior to March 1, 1931, plaintiff and defendant entered into an oral agreement extending the old written lease for the former year, except as to the amount of rent to be due, and that plaintiff asked $9.00 per acre, and this amount was fixed with the understanding that defendant should go ahead and take the land and farm it, and that plaintiff would not expect any more rent than the place produced, that later the nominal rent was fixed at $8.00 with the same understanding that plaintiff would not exact more rent than the place would produce, and that the rental that was paid was all the rent that could be paid for said farm from the income as received for the season of 1931.
In Count 2 plaintiff alleged that on or about September 30, 1931, another oral lease was entered into between the parties for the same premises for the crop season of 1932 at an agreed rental of $8.00 per acre, which oral agreement was reduced to writing on June 14, 1932, and that said written lease was in lieu of said oral agreement. The substance of defendant's answer to Count 2 admits that the latter part of September, 1931, *Page 1344
an oral agreement was entered into and at that time the defendant told the plaintiff he could not take the farm for another year and pay $8.00 an acre, and that plaintiff then agreed and told defendant he did not know what rent he would ask for 1932, but that he wanted defendant to occupy the farm for that year, and that he should go ahead and do the fall plowing as he could have the farm for 1932, and that plaintiff further stated that he did not expect any more as rent than what the farm would reasonably produce, and that the nominal rent should be determined later after a conference between plaintiff and members of his family; that the defendant remained in possession of the farm and no other conversation relative to renting was had until June 14, 1932, when plaintiff came to the defendant's home on the premises and informed the defendant that the insurance company holding a mortgage on the property was insisting on an assignment by plaintiff of the lease and rents for the year 1932; that the company required a written lease for their records with an assignment of the same; that defendant refused to sign any written lease, and that plaintiff again stated to defendant that the lease would not make any difference in their understanding as to the matter of rents, that all he expected the defendant to do was to do the best he could, and that would remain their lease arrangements in case defendant would sign the written lease at $8.00 per acre; that this written lease was only for the benefit of the insurance company and did not in any way affect the lease arrangements between plaintiff and defendant as they had already been made, except the nominal rental would now be set at $8.00; and that with this oral agreement and understanding, and as a part of the same, plaintiff and defendant executed the written lease for the year 1932.
Defendant further alleged in his answer that there was no balance due and unpaid in any sum whatever for the reason that on or about the 13th of March, 1933, the plaintiff accepted from the defendant an order on one William Vander Striek for $65.00, which order was given by defendant and accepted by plaintiff as full settlement of all balance of back rent due from defendant to plaintiff, and he pleaded the same as a complete settlement and accord and satisfaction of both counts of plaintiff's petition.
[1] The court struck from the answer all allegations with *Page 1345
reference to the alleged oral contract for the year 1932, and all allegations with reference to accord and satisfaction of the rent due for the year 1932 under said written lease. We think the court was right in his ruling. It is the contention of the defendant that the giving of the written lease for 1932 which was entered into in June, 1932, long after the defendant had gone into possession of the premises under an oral arrangement, was a collateral agreement and did not take the place of the oral lease, and that the parol evidence rule has no application for the reason that it falls under one of the exceptions, and he cites the case In re Simplot's Estate, 215 Iowa 578, 581,246 N.W. 396, 398, wherein the court said:
"An oral contract contemporaneous with a written one which is purely collateral is provable by parol evidence, provided that such oral contract is complete in itself, and does not contradict or vary any of the terms of the written contract. The alleged oral collateral contract may not become a part of the written contract. Each must stand upon its own terms and upon its own consideration. This class of cases involves no waiver or suspension of the parol evidence rule."
The trouble in attempting to apply this well-recognized exception to the parol evidence rule to the situation presented in the case is the fact that the terms of the written lease do directly contradict the terms of what defendant contends was the oral agreement which had previously been entered into. The written lease coincides with what plaintiff contends was the previous oral understanding between the parties, by which the defendant undertook to pay $8.00 per acre for the rent, and no reference is made in the written lease to any terms of forbearance or to terms similar to those contended for by the defendant.
[2] The written lease, under the holdings of our court, which by its terms is in no manner a collateral agreement, is presumed to embody all the provisions and all of the terms of the previous oral agreement between the parties and oral testimony is not admissible to vary the terms thereof. "Where the parties have deliberately put their engagements into writing in such terms as import a legal obligation without any uncertainty as to the object or extent of their engagement, all previous negotiations and agreements with reference to the subject *Page 1346
matter, are presumed to have been merged in the written contract." 22 C.J., page 1098 to 1104; In re Simplot's Estate,215 Iowa 578, 246 N.W. 396.
[3] Under the written lease there was no dispute about the amount of the rent agreed to be paid, and under the evidence there was no dispute as to the amount of cash which had been paid. All allegations with reference to the previous oral agreement for a lesser amount were properly stricken by the court. Defendant's plea of accord and satisfaction cannot be sustained as against Count 2 for the rent due under the written lease for the year 1932, for the reason that under the written lease there was no dispute as to the amount due and no dispute as to the amount that had been paid upon the rent under the terms of the written lease. The plea of accord and satisfaction can only apply where there is a settlement of a disputed claim. Unless the defendant was entitled to introduce evidence of his alleged oral contract in contradiction of the written contract, there was no disputed amount in controversy. Before there could be any dispute as to the amount due, there would have to be proof of the alleged oral agreement, and no competent proof was possible under the parol evidence rule. There could be no good faith dispute as to the rent of 1932. There is no claim that there is any ambiguity in the terms of the written lease. The dispute only arises under the claimed oral agreement between the plaintiff and the defendant, which the court properly held could not be proven, and the exclusion of this testimony and the striking of the allegations of the petition in reference to such matters eliminated the dispute and hence the court was justified in striking the allegations in reference to accord and satisfaction as to the balance of the rent due for the year 1932. "Without an honest dispute an agreement to take a lessor amount in payment of a liquidated claim is without consideration and void." 1 C.J. page 554; Walston v. Calkins Company, 119 Iowa 150, 93 N.W. 49; Rauen v. Insurance Co., 129 Iowa 725, at page 740, 106 N.W. 198.
There is no claim by defendant that the $65.00 item of indebtedness which was owing to him by Vander Striek and which Vander Striek paid to plaintiff on a written order directed to Vander Striek, and which contained this statement: "And it is agreed and understood by and between Mr. Jacobsen and myself that this amount of $65.00 is accepted as balance in full *Page 1347
of back rent due Asmus Jacobsen, and charge the same to my account," fully paid the balance due under the terms of the written lease. The court permitted the plea of accord and satisfaction to stand as to Count 1, which was based solely upon an oral agreement. There was no error in striking the allegations of the answer with reference to plea of accord and satisfaction as applied to the second count of plaintiff's petition.
The ruling of the trial court was correct and is affirmed. — Affirmed.
DONEGAN, C.J., and PARSONS, ANDERSON, MITCHELL, STIGER, ALBERT, and KINTZINGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431880/ | The case was submitted on an agreed statement of facts, the substance of which is as follows:
On the 27th day of February, 1931, defendant Reuben A. Wagle was the owner in fee of lot 5, Maryland Acres of Urbandale. On that date he sold said property to Glenn L. and Elma Rain, husband and wife, under a real estate contract for the sum of $2,000, the purchase price being payable in monthly installments of $20. *Page 861
On October 27, 1932, Rain and wife assigned all their right, title, and interest in said land contract to the plaintiff, Burr C. Hatch. On February 28, 1931, Rain purchased from the defendant Commerce Insurance Company of Glenn Falls, N.Y., an Iowa Standard Dwelling Fire and Windstorm policy, No. c-11844, in the principal sum of $1,800, and on said 27th day of October, Rain assigned his interest in said policy to the plaintiff, Burr C. Hatch, which assignment was duly consented to by the insurance company. On November 21, 1932 — the policy being in full force — the dwelling on said property was completely destroyed by fire. The insurance company accepted proofs of loss furnished by Hatch and Wagle and settlement was made, the agreed amount being $1,641.30, which amount was paid by the insurance company into the hands of the clerk of the district court of Polk county, Iowa, the same to be held subject to the order of court as to distribution of the funds, and the case against the insurance company was dismissed. A copy of the land contract was admitted in evidence, and plaintiff states that the only part thereof necessary to a determination of this action is as follows:
"The purchaser agrees to keep the improvements thereon insured in the sum of $1,800.00 in a paid-up policy in an insurance company satisfactory to the first party, loss, if any, payable to the first party as his interest may appear."
The insurance policy, among others, contained the following provision:
"Loss, if any, to be adjusted only with the insured named herein and payable to the insured and Reuben A. Wagle * * * as their respective interests may appear. * * *"
As heretofore stated, the district court found the equities to be with the defendant and dismissed plaintiff's petition and authorized the clerk of the court to deliver the $1,641.30 to Wagle. The question for decision is whether or not the finding and order of the district court are in accordance with the law and the proper disposition of this fund.
Briefly stated, Wagle's contention is that this fund should be turned over to him to be credited on the purchase price of the property as shown by the land contract. Hatch contends that at the time the fire occurred, he had completely complied with all of the requirements of the contract, and no payments were due under the *Page 862
contract, and therefore it is inequitable to turn the fund over to Wagle, but insists that in equity the fund acquired from the insurance policy should be utilized to build another house on said lot.
Some fundamental rules may be of use in reaching a conclusion on this question.
Where the owner contracts to sell to another, but retains the legal title, or has a lien on the property until the purchase price is paid or the conditions of the sale are performed, he has an insurable interest in such property. Kempton v. State Insurance Co., 62 Iowa 83, 17 N.W. 194; 26 C.J. 31.
Under the above-stated circumstances, the vendee or purchaser in possession under such contract has also an insurable interest. Ayres v. Hartford Fire Ins. Co., 17 Iowa 176, 85 Am. Dec. 553; 26 C.J. 31.
In the absence of a contract to the contrary, neither the vendor nor the vendee has any interest in the policy of insurance taken out by the other. 26 C.J. 437, section 586.
In the case at bar, however, there is a contract between the vendor and the vendee in relation to this matter of insurance which we have heretofore set out, and the question now has the force and effect of that contract and the provisions of the policy.
The provision of the policy, as above set out, is that "the loss is payable to the insured (purchaser) and Wagle, the vendor, as their respective interests may appear."
Just what is the status of these parties under these conditions?
The law seems well settled in this state that in a land contract such as we have before us in this case, the vendor holds the legal title as security for the balance of the purchase price, and the vendee takes the equitable title. The relation between them, therefore, in equity is practically the same as that of mortgagor and mortgagee.
In the case of Gordon v. Ware Savings Bank, 115 Mass. 588, we had a similar situation to the one in the case at bar. The policy in that case, among other things, provided that the policy was "payable in case of loss to the Ware Savings Bank, mortgagee, as its interest shall appear". The court said:
"The insurance was for indemnity to the mortgagor as well as to the mortgagee. To the mortgagee it was for protection of the security, not for payment of the debt. * * * The money having been properly applied to the restoration of the impaired security, for the benefit alike of all parties interested, there are no equities *Page 863
in favor of this plaintiff which entitle him to appropriate that benefit exclusively to his own use. On the contrary, it would be inequitable even if such were his legal right by reason of the indorsement of the money, in the first instance, upon the note."
In the case before us, at the time this money became due on account of the fire loss, the vendee was not in default under any of the terms of his land contract, and there was no payment then due thereon. That being true, it would be wholly inequitable to allow the plaintiff to appropriate the $1,641.30 and apply the same on the purchase price because there was nothing due at that time. Under the holding in the Massachusetts case, supra, he would have no right to make such appropriation without the consent of his vendee. It would be equally true that the vendee would have no right to the possession of said money without the consent of the vendor. The money, therefore, is in the position that neither is entitled to the same without the consent of the other. If the money thus received were put into a new building on the aforesaid lot, then the vendor and the vendee would be in exactly the same position they were before the fire occurred. It would, therefore, seem to be equitable that the money in the hands of the clerk be used to erect a new dwelling on the lot in question, not to cost to exceed, of course, the amount of money on hand.
We conclude, therefore, that this should be done and the case remanded to the district court with directions to appoint a trustee to take the fund from the hands of the clerk and to make a necessary contract to rebuild the house, the same to cost not more than the amount of money in the hands of the clerk, less such expenses for services as the court may allow the trustee.
If the vendee be in default herein, as to any of his payments by reason of this litigation, he shall have sixty days from the date of the filing of this opinion to make such payments.
For the reasons above foregoing, the action of the district court is reversed and the case remanded with the above directions. — Reversed and remanded.
KINDIG, C.J., and EVANS, DONEGAN, CLAUSSEN, and STEVENS, JJ., concur.
SUPPLEMENTAL OPINION. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431882/ | William J. Reed died April 3, 1926, leaving surviving his widow Sarah, and four children, two of whom are the appellant and the appellee herein. All the property in dispute was derived by the widow through the will of her husband. Much of the record deals with his state and the controversy had therein. This testimony has no bearing on the decision of the case before us except as it discloses certain mental traits, the relation of the parties, and other features which point the direction in which the right probably lies.
In 1919 William J. Reed, with his wife, moved to Des Moines. They were joined in the household by the appellee and his wife a little later in the same year. The health and eyesight of the father failed in 1910, and he shortly thereafter became blind. Up to the time of his removal to Des Moines both sons had more or less to do with the management of his affairs, but after that time appellee seems to have had substantially sole charge thereof.
The amount of property, including the homestead ($4,800), received by the widow from her husband's estate, was estimated to be about $23,000.
Shortly after the death of the husband, on June 24, 1926, eight years before she died, the widow made a will in which she left appellant only $5. Two years later a codicil was added, in *Page 775
which appellant was bequeathed the same amount. At the time the codicil was drawn, a contract was executed between the widow and the appellee whereby, in consideration of long years of faithful and loving service and support rendered by the son, and his agreement to support his mother as long as she might live, she assigned to him all her property; and appellee agreed to support and care for his mother, furnishing her everything that "may be necessary or reasonably convenient or desirable to further her welfare and happiness." Appellee carried out his contract.
Appellant says that the will, codicil, and contract were caused to be executed by the fraud and trickery of his brother (appellee) in dealing with the aged, inexperienced, and mentally incompetent mother.
The mother died in 1934, at the extreme age of 91 or 92 years. The will and codicil were admitted to probate and, so far as this record shows, have never been challenged except in the cause before us.
Under these and other circumstances to be hereafter noticed appellant seeks to prove the instruments by which appellee acquired this property void; or at least that his title is so tainted with fraud and overreaching that the burden is upon the appellee to prove that there was sufficient consideration and no undue influence — this because of the confidential relations existing between the mother and the appellee son.
We have frequently expressed ourselves on this question. In McNeer v. Beck, 205 Iowa 196, 217 N.W. 825, we said [page 198 of205 Iowa, page 826 of 217 N.W.]:
"Mere blood relationship does not, of itself, create the legal trust or confidential relationship and change the requirement in the above regard. (Citing cases.)
"However, when there is a superiority of one over the other, a `confidential or trust relationship,' then it is incumbent upon the `beneficiary' under a `deed' to rebut the presumption that the transaction was fraudulent and voidable."
See, also, Curtis v. Armagast, 158 Iowa 507, 138 N.W. 873; Holler v. Roller, 201 Iowa 1077, 203 N.W. 41; Burger v. Krall,211 Iowa 1160, 235 N.W. 318; Pruitt v. Gause, 193 Iowa 1354,188 N.W. 798.
[1] These and other cases sustain, we think, appellant's claim *Page 776
that the burden of proof is upon appellee with reference to the contract. But this rule applies to the contract only. We have held that a different rule applies in matters testamentary. Pirkl v. Ellenberger, 179 Iowa 1122, 162 N.W. 791. In this case, after discussing the rule applicable to cases involving gifts or donations inter vivos, we said [page 1132 of 179 Iowa, page 795
of 162 N.W.]:
"In contemplation of death, however, the transaction wears a very different aspect. The property must be parted with when that event arrives. It is most natural to select for benefaction those who are nearest and dearest, whether related by blood, business, friendship or association. Men do not, in contemplation of death, ordinarily give their earthly possessions over to their enemies, nor to those in whom they repose no trust and confidence. Indeed, the closer the relationship, the greater the bond that binds, the more certain is the mind that the testator chose intelligently the objects of his bounty. That he chose one who is dear to him and excluded one who ought to be equally dear, does not cast upon the beneficiary the burden of showing that he did not procure the benefaction by the use of undue influence."
With these principles in mind we turn to the record to ascertain whether or not the ruling of the trial court was justified.
[2] Appellant's testimony as to the unsoundness of mind of his mother is confined very largely to himself and the members of his own family, and it is far from being convincing or satisfactory. Appellant himself had very little opportunity for observing his mother and forming an estimate of her mental capacity after the year 1926. In fact, he testified that he saw her but once after that, giving as his reason why he had not seen her more often that his brother threatened to shoot him if he did not stay away. He said his mother's mind was failing; when asked about her general financial condition she said she was living on her pension and did not see how they were going to get along. He related an incident of his lying on a davenport, with his face to the wall, when his mother came in. She asked who he was and one of her granddaughters tried to tell her, but she did not seem to understand. The mother walked over to him and put her hand on him, then turned away and said: "If that is Eel (Eli), he didn't speak to me." This incident is given a different and entirely harmless meaning by one or more witnesses present at the *Page 777
time. Appellant went on to say that his mother was totally lacking in business experience; that after the father lost his eyesight the mother thought he was a demon, insane, and she could hardly stand to be around him; that she came down to his house at three o'clock in the morning, wringing her hands like an insane person. This, he said, happened more times than one. Among other incidents he said he heard her praying that God would remove her husband, her son-in-law, and her daughter-in-law. This testimony loses something of its weight in the light of appellant's statement:
"I have heard that time and time again, not recently, but I can go back ten or twelve or fifteen years ago, I heard her do that. These matters occurred prior to 1926."
He testified that on another occasion (in 1922) the mother had said that her troubles began when the appellee told the father that she was entertaining men when he was not around. Another thing which finds place in appellant's testimony, and has some color of support in the testimony of one or more of his witnesses, is this: He says that his mother became, prior to 1926, a religious fanatic, and would bother the neighbors talking about religious matters. Her talk, he said, about religious principles, was "extravagant and extreme," but he does not go beyond his bare conclusion, nor does the record afford any basis from which the court could determine his qualification to pass on that subject.
The wife of appellant, speaking of the attitude of her mother-in-law, said:
"She was more anxious to tell me about the soul than anything else. She was more concerned about religion than she was really humanity here."
If the thought should have entered the mind of the trial court that the old lady may have had some excuse, if not justification, for her attitude toward spiritual matters, under the circumstances in which she was placed, it would not be the occasion of surprise to one who has examined this record.
Appellant was asked: "Basing your opinion upon the various acts and conduct and talk of your mother that you have described to the court prior to 1926, and your knowledge and your observation of her and her acts and conduct, will you state *Page 778
whether or not prior to and up to 1926 she was in your opinion a woman of sound or unsound mind?" Over objection which we regard sound he answered: "She was of unsound mind." On the one opportunity he had to see her in 1929, he said he noticed no improvement in her, that she seemed more childish and harder of hearing.
Utter, a brother-in-law of appellant, with considerable opportunity for observation, said he had occasion to observe Mrs. Reed's mental and physical condition back to 1925 or 1926. He said she was generally plainly dressed; rarely went to church, though she was very much interested in religion, her conversations on the occasions of her visits to his home generally being about the Scriptures; that she made contributions to the church of which witness's wife was a member. He noticed "different peculiar things." She was hard of hearing, and when he and his wife went there she did not seem to know who they were right at the time they came in. During the last four or five years before Mrs. Reed died this witness saw her about twenty-five times and he noticed a great change in her. She seemed to be getting weaker and seemed to be "awful bad." He noticed a change in her mental condition, she was altogether different, seemed older and more feeble and childish. He was asked his opinion, on this testimony, whether he thought she was "able even to manage her household affairs," to which he replied in the negative. Without having had any conversations with her about business or her business affairs, the witness expressed the opinion that she did not know anything about taking care of her business.
Appellant's wife had scarcely any greater opportunity of forming an opinion or describing Mrs. Reed than had her husband. Her testimony went to the effect that Mrs. Reed did not know her or her husband when she came, that she tried to tell her and "couldn't get it over;" that she was very childish, hard of hearing, and "couldn't talk to her with any satisfaction;" that she "went off on religion, went off about her brothers first and then off on religion;" was just like a child; sometimes she seemed to know and seemed to recognize, and "then it seemed to fade." Her opinion was asked with reference to Mrs. Reed's mental and physical condition prior to 1926. Her answer was that she had not been what the witness would call normal since she left What Cheer in 1919. Her observation was that her mind had changed since that time and got worse instead of better; *Page 779
that her physical condition, due to advancing age, was a little weaker all the time. She heard her once praying that her husband might die.
A son of appellant, twenty years old, had very little opportunity of seeing his grandmother, and his testimony is confined to the statement that she did not know him when they got back from Florida in 1929. The family had moved there in 1920.
This comprises, in substance, the testimony on which appellant relies on the issue of mental incapacity.
As against this is the testimony of Attorney Lehmann, who drew the codicil and contract. From his description (and it is supported by other witnesses far better qualified to testify than those who gave evidence in behalf of the appellant) the court was abundantly justified in accepting the appellee's contention. This is in part what this attorney said:
"She appeared entirely competent and normal. She was old, she was bright and alert and impressed me as being entirely competent. During this period, she told me that she had prior thereto made a will. She delivered to me a copy of the will. She told me when and where she had made the will. In these discussions with me she knew the contents of the will. She referred to her son, Eli Reed. She told me what disposition or what provision she had made for him in the will made some two years before. She showed me a copy of her earlier will. It contained a provision, I think, five dollars or ten dollars to Eli Reed, and she said that she wanted that continued."
He further said, after narrating fully his contacts and acquaintance with Mrs. Reed:
"I would say that she was perfectly competent to carry on and transact her own business and fully understood what she was doing, saving only as she was handicapped by old age, by the physical infirmity of being hard of hearing which would have made it quite difficult for her to transact normal business, but she knew what she was doing, she was bright and alert and keen."
In this connection he gave an extended description of her knowledge of what she was doing. Mrs. Reed discussed with him the matter of the will, her reasons for making the codicil and the contract; she gave very good reasons for cutting appellant off *Page 780
with $5 in telling of the difficulties and the troubles of which he had been the cause. While her statement in this respect was hearsay and was receivable only as indicating the mental condition of Mrs. Reed, there is competent testimony in the record which, if believed, would tend to show that the appellant had forfeited all claim to remembrance in his mother's will.
A granddaughter who had many opportunities of seeing Mrs. Reed said she was a very religious person and had been as long as the witness could remember; she never had noticed any tendency toward what might be called insanity; she was "very bright and chipper for her age, up to the last." In the last two years of her life she changed more than she had before, grew weaker, less weight, was very poor, and very stupid.
Dr. Johnston, a practicing physician, was acquainted with Mrs. Reed since 1920, saw her every few days or few weeks, lived within a block of where she lived, and observed nothing abnormal. He regarded her as a bright and intelligent talker, but a poor listener because of her deafness. She could discuss different subjects intelligently. He observed no indications of insanity at any time.
The wife of this doctor had frequent visits with Mrs. Reed. To this witness she was perfectly normal, discussed many things, principally flowers, growing peaches, and cooking. She heard her speak of the appellee and his brother Frank very often. She seemed to love them dearly. She never heard her say much about Eli (appellant).
A second granddaughter, with much opportunity to observe, said Mrs. Reed was always alert and active, but she grew childish as she grew older, naturally, and did many childish things; but at times was just as alert as, and knew more of current events than the witness. This was right to the last. In the last two years of Mrs. Reed's life the witness noticed a change in her; that she lost weight, and slept a lot. Again, at times, she would sit up in bed and talk for an hour, and seemed as bright as anyone. There were times when she seemed more weak than at others. This witness, as well as another, gave testimony to the effect that the appellant's attitude toward his mother was not what that of a son might be expected to be.
Another witness, a neighbor, said that up to within two or three years of her death Mrs. Reed was very keen and alert, had one of the most alert, keen minds of anyone he had ever known *Page 781
of that age or anywhere near it. She discussed business topics up to within a year or two of her death, had a complete and intelligent understanding of them, and could read without glasses.
The appellee's testimony supports his own claims, but we refrain from setting it out at length. He testified as to the matter of making the will and codicil and contract, and that they were made on the mother's own initiative. He testified to the conduct of his brother and his abuse of the mother.
On this record we would not be warranted in interfering with the judgment and decree of the trial court in holding that the appellant had not sustained the burden of proof on the issue of mental incompetence.
The evidence wholly fails to establish the appellant's contention of undue influence. The most that can be claimed is that the appellee had opportunity to exercise undue influence had he been so minded.
[3] One other contention of appellant needs to be noticed, and that is the will and codicil of Mrs. Reed are immaterial to the issue and not an obstacle to recovery by the appellant, this because, as he argues, appellee does not claim any of the property which he obtained from his mother under the will or codicil. With this contention we do not agree. The will and codicil have been probated and thereunder, until set aside by proper proceeding, appellant could have no interest in excess of $5. Appellee's answer was in effect a general denial, and while he did, in his answer, refer to the will and its having been probated, he put it on the ground just stated, that thereunder appellant had no interest entitling him to bring this action. Appellant brought this action and it was for him to establish his right to relief, keeping in mind the principles above adverted to; and this he failed to do.
Being satisfied that the decree of the trial court is abundantly sustained by the evidence, the decree is affirmed. — Affirmed.
ANDERSON, KINTZINGER, DONEGAN, MITCHELL, RICHARDS, STIGER, and MILLER, JJ., concur. *Page 782 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431884/ | I. The petition in this action, which was filed January 22, 1925, charges the appellant with keeping and maintaining a liquor nuisance in a building situated on Lots 5 and 6, Block 11, in the city of Des Moines. It was proven upon the trial 1. INTOXICATING that, on the evening of January 8, 1925, LIQUORS: appellant made a sale of a half pint of alcohol injunction: to one Ben Harvey, who purchased and paid for trial term the same with marked bills furnished by two permissive. police officers. The purchase of this liquor, which was followed immediately by a search of the premises by the two police officers, resulted in the seizure of a small quantity of alcohol and the discovery of one of the marked bills, lying on top of a pile in the cash register.
Notice of the commencement of the action was served January 30, 1925, returnable to the March term of the district court of Polk County. The answer of the defendant was filed May 1, 1925, and the cause tried and judgment entered in June following.
Section 2021 of the Code of 1924 makes actions to enjoin the maintenance of a liquor nuisance triable at the first term of court after due and timely service of notice of the commencement of the action. It is the theory of appellant that this statute is mandatory, and requires the action to be tried at such term. The only purpose and effect of the statute is to create an exception to the general rule in equity cases, which are triable at the second term, and to permit the trial thereof at the first regular term after the service of notice. The statute is permissive, and not mandatory. Jurisdiction to try the case at a later term was not lost upon the adjournment of the term to which the notice was returnable. The court had jurisdiction to try the case at any succeeding term. Highberger v. Thompson, 200 Iowa 580. *Page 152
Tuttle v. Pockert, 147 Iowa 41, does not sustain the position of appellant, and is in harmony with the foregoing construction of the statute.
II. In addition to a general denial of the allegations of the plaintiff's petition, the defendant pleaded the voluntary abatement of the nuisance prior to the commencement of the action and the trial thereof. Appellant testified that 2. INTOXICATING he vacated the premises and moved to Mankato, LIQUORS: Minnesota, on or about May 1st. It is contended injunction: by appellant that, as the nuisance had been voluntary voluntarily and in good faith abated at the time abatement: of the trial, decree should not have been effect. entered. It is true that we have, with some qualifications, recognized the rule that an injunction to abate a nuisance will not lie if it was, in fact and in good faith, abated prior to the commencement of the action. It has always been the rule in this state, however, that, in actions to enjoin, and for the abatement of a liquor nuisance, the court exercises a large discretion. It is the duty of the court to determine whether the nuisance has been voluntarily, permanently, and in good faith abated, and whether an injunction should issue. Stateex rel. Seeburger v. Tillotta, 202 Iowa 1217; State v. Seipes,202 Iowa 1199; State ex rel. Seeburger v. James, 202 Iowa 1137.
The right to an injunction at the suit of the State to restrain the maintenance of a liquor nuisance and to abate the same is statutory, and is one of the methods provided to prevent and punish violations of the prohibitory liquor laws. We are not disposed in this case to interfere with the finding of the trial court.
III. An effort is made by counsel to secure consideration by this court of a constitutional question. It is conceded that the question was not raised in the court below, but is presented for the first time upon appeal. The rule is well 3. APPEAL AND settled in this state that constitutional ERROR: questions will be considered upon appeal only review: when they have been properly raised and nonpresented presented in the lower court. The assessment, as constitu- a part of the judgment, of a mulct tax is tional mandatory, and this court is without authority questions. to modify such judgment. State ex rel. Seeburgerv. Riley, 202 Iowa 1213; State ex rel. Seeburger v. Jones,202 Iowa 640. *Page 153
The judgment and decree of the trial court is, accordingly, affirmed. — Affirmed.
EVANS, C.J., and FAVILLE, VERMILION, and KINDIG, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431885/ | Defendant contracted with the city of Des Moines to construct a sewer. The city had not acquired an intermediate section of the necessary right of way. When the construction work reached that place, the defendant was required to cease continuous construction and resume the work at the upper side of the non-acquired right of way. This he did, leaving a "blind lower end" to the upper section of the sewer. The upper portion of the sewer was in part located near the Raccoon River. The plaintiff's case is that the water of the river rose, overflowed, and entered the sewer, and, having no other egress, because of the lower "blind end," was forced out of the manholes, overflowing plaintiff's premises and causing the damage complained of. The assignment of negligence in the petition is that defendant failed to provide bulkheads to prevent the water from cutting through the banks of the river to the sewer, failed to cover the manholes with bolted-down lids, and failed to construct the sewer so as to sustain the pressure of the water of the river. No evidence on the subject of providing bulkheads to prevent the water from cutting through the banks, or on the subject of internal pressure of the water from the river in the sewer, was offered. The testimony offered by plaintiff was that the sewer was, as said by one witness, about 15 or 20 feet from the river bank. "In fact, the river at that time was up to it." He was speaking of flood conditions. Another of plaintiff's witnesses said that the ditch was about 85 or 90 feet from the river bank. Plaintiff's witnesses say that the flood water from the river entered the end of the sewer, which was open, and because of the absence of outlet was forced out of the manholes below the point of entrance. *Page 426
Because of the possibility of amendment to petition, and new trial, we follow counsel into a wider range of discussion than would be strictly necessary to dispose of the present appeal.
It was the duty of the city to provide right of way, and the defendant, in bidding for the work, was justified in assuming that the duty of the city in that regard would be observed. It would be destructive of the liberty of municipalities to make public improvements, and of economy in construction, if contractors were required, in making their bids, to anticipate failure on the part of the municipality to perform such duties and provide against such contingencies as have developed in this case.
Negligence has been defined to be either the non-performance or the inadequate performance of a legal duty. The existence of a duty to plaintiff, omission to perform it, or performance in an improper or inadequate manner, and injury to him resulting therefrom, are essential to the maintenance of an action for negligence. Green-Wheeler Shoe Co. v. Chicago, R.I. P.R. Co.,130 Iowa 123; Bowyer v. Western Union Tel. Co., 130 Iowa 324;Bowery v. Wabash R. Co., 185 Iowa 288; O'Neil v. Town of EastWindsor, 63 Conn. 150 (27 A. 237); 5 Words Phrases 4746; 3 Words Phrases (2d Ser.) 561; 29 Cyc. 415. The evidence here would not justify a finding that defendant was under duty to anticipate that continuous construction would for any reason be interrupted. Nothing is shown that required the defendant, in making his bid, to figure on providing bulkheads to protect the sewer from flood waters of the river, or to construct the sewer so as to sustain internal pressure therefrom, or to furnish construction for bolted-down lids for the manholes. It was the duty of the city to provide plans, and the defendant did not assume any responsibility for defects or insufficiency in the plans. The defendant would be liable ordinarily only for his negligence in the performance of the work contracted for, and not for the result of work performed according to the contract.Fitzgibbon v. Western Dredg. Co., 141 Iowa 328; Shaw v. Crocker,42 Cal. 435; Moraski v. Gillespie Co., 239 Mass. 44
(131 N.E. 441); Kaler v. Puget Sound Bridge Dredg. Co., 72 Wn. 497
(130 P. 894); Roland v. Jumper Creek Dr. Dist., 4 Fed. (2d Series) 719; 28 Cyc. 1086. The defendant's contract required him to "begin said work at such point as the superintendent of the department of streets and public improvements may direct, and *Page 427
shall conform to the directions of said superintendent as to order in which the several parts of said work shall be done, and the mode of performing the same." There is no evidence that the proper performance of the work would require bulkheads, to prevent the river from cutting through the banks into the sewer ditch, or that the river did cut through its banks into the sewer ditch. The plaintiff's claim is that the river was at flood at the time of the injuries complained of. The evidence in behalf of defendant is that there were no local rains of consequence at that time, and this evidence is not disputed. The plaintiff's evidence of the existence of flood conditions and the defendant's evidence of the absence of rains can only be reconciled by assuming that heavy rains had prevailed somewhere upstream. (In fact, defendant's evidence is that the river was not only not at flood, but was low at that time.)
The plaintiff's evidence tends to show that the upper end of the sewer was not closed, to prevent ingress of water; but there is no evidence that would warrant a finding that either the ordinary or standard method of construction of such sewers, or conditions existing and observable at the time the end was left open, would require the defendant, in the exercise of ordinary and reasonable care in performing his contract, to block the open end. The open end might apparently be safely above and distant from any watercourse. Plaintiff's case is based in evidence upon the claim that "there was a big flood, and the river was on a rampage." It is not based upon ordinary conditions, or upon the existence of dangers of which defendant knew, or which defendant, in the ordinary prosecution of the work and in the exercise of reasonable and ordinary care, should have anticipated. In other words, there is no evidence to charge the defendant with negligence in not anticipating that the river would rise, flood the sewer, and thereby cause damage to property, or that reasonable and ordinary care in performing his contract demanded that he should provide against such contingency.
The evidence does not sustain the verdict.
The judgment is — Reversed.
EVANS, C.J., and De GRAFF and ALBERT, JJ., concur. *Page 428 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3212305/ | THE THIRTEENTH COURT OF APPEALS
13-15-00081-CV
Juan Gabriel Espronceda
v.
Sylvia Sue Handy Espronceda
On appeal from the
County Court at Law No 2 of Hidalgo County, Texas
Trial Cause No. F-0300-13-2
JUDGMENT
THE THIRTEENTH COURT OF APPEALS, having considered this cause on
appeal, concludes the judgment of the trial court should be affirmed in part and reversed
and rendered in part. The Court orders the judgment of the trial court AFFIRMED IN
PART and REVERSED AND RENDERED IN PART. Costs of the appeal are adjudged
50% against appellant and 50% against appellee.
We further order this decision certified below for observance.
June 9, 2016 | 01-03-2023 | 06-11-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431910/ | The admitted facts are that Paul V. Reilly owned fifty shares of the capital stock of the J.W. Turner Improvement Company, Incorporated, and in 1906 became a director and the secretary thereof. The corporation was engaged in the business of general contracting for the construction of public works, such as sewers, paving, etc. It had a capital stock of $15,000, owned almost entirely by Reilly and J.W. Turner. On March 5, 1910, Reilly made application to the Penn Mutual Life Insurance Company for two policies upon his life for $5,000 each. The application was accepted by the company, and policies issued designating the J.W. Turner Improvement Company as beneficiary. At or about the same time, J.W. Turner made application to the same company for two policies, one for $10,000 and one for $5,000, upon which like policies were issued, also designating the corporation as beneficiary. The right to change the beneficiary was not reserved in the policy. The premiums on all of the policies were paid by the corporation for a time, and thereafter they were paid by borrowing the amount from the insurance company on the policy. Reilly resigned his office as secretary and treasurer, and also as a director, of the corporation, and organized a new and independent business of the same character as that in which the corporation was engaged. Reilly was not, at the time he resigned his office in the corporation, indebted to it in any way, except for the premiums advanced by it upon the policies. He retained his stock in the corporation until his death, which occurred November 6, 1923. The policies upon the lives of Reilly and Turner were obtained for the use and benefit of the *Page 557
corporation in pursuance of an agreement and understanding between them prior to making application therefor. Appellant claims the proceeds of the policy, less the amount due the corporation for premiums advanced, as administratrix of her husband's estate. The ground upon which her claim is predicated is that the policies were taken out on the life of her husband and made payable to the corporation as beneficiary for the sole purpose of securing the payment of any and all indebtedness of her husband thereto.
It is, as already stated, conceded by the corporation that the insured was indebted to it only for the premiums paid by it. The answer alleges that the policies were taken out by the corporation upon the life of Reilly, who was then secretary and treasurer and one of the directors thereof, for the use and benefit thereof; that it paid the premiums, as stated; and that it is, therefore, entitled to the proceeds thereof. The only testimony introduced upon the trial to show the purpose for which the policies were taken, was that of J.W. Turner. We quote the following brief excerpt therefrom:
"Prior to taking out this policy, Mr. Reilly, Mr. Brett, and myself had talked the matter of insurance over for months, and it was understood and decided among ourselves that we ought to cover the officers of the corporation by insurance, so that, as they were the principal assets of a construction company such as we were, and in the event of the death of either of us, we would have an income, or a — I don't know just the word I want to say. The corporation would get the benefit of that insurance, to help tide over the loss that we would be subject to by the death of said official. Second, that, at any time it should be necessary to borrow money on these policies, that we would have an asset that could be readily converted into some cash. In 1907, during the panic, we were badly pressed for money sufficient to carry on our business, and we had that in mind in discussing the matter of insurance, as one of the reasons for taking out the policies. Mr. Reilly was the principal advocate of the insurance scheme. One policy for $5,000 and one for $10,000 was taken out on my life, and two policies of $5,000 each were taken out on Reilly's life. It was always stated that the company would take care of all premiums, and *Page 558
were to be beneficiaries in the event of the death, or of the policies' maturing. The amount now due on the two policies is $6,710, after deducting the lien. The J.W. Turner Improvement Company borrowed money several times on these policies from the Penn Mutual. Mr. Reilly was informed of the fact of borrowing, and took part in them. We carried the insurance premium accounts together, and they were always grouped together. The policies bore the same date, and they were bunched together and paid together. Mr. Reilly was in charge of the books from 1910 to 1917. Mr. Reilly did not make any claim to the J.W. Turner Improvement Company, so far as we know, or any claim of interest in these policies, so far as I know. Mr. Reilly was a stockholder in the company from the time he went with it as an officer. He owned fifty shares. He owned fifty shares at the time of his death."
From this testimony it is clear that the policy was not taken out by Reilly and made payable to the corporation as security for indebtedness of his thereto. The arrangement was mutual between the parties, and it is manifest that the insurance was taken out for the general benefit and use of the corporation.
The proposition of appellant is briefly and succinctly stated by her counsel in argument as follows:
"Our position in this matter may be stated as follows: The insurance upon the life of Reilly for the benefit of the corporation is in the nature of insurance for the benefit of a creditor, and when the interest of the creditor ceases in the assured, the right to the proceeds of the policy ceases, but does not make the policy void. On the other hand, the proceeds belong to the estate of the deceased, and the beneficiary named, the creditors or the corporation, is trustee of the funds for the benefit of the decedent's estate."
We may, for the purposes of this case only, assume that, if the policy was taken out for the benefit of the corporation as a creditor only, its interest in the proceeds thereof terminated upon the payment thereof. It is conceded that the corporation had an insurable interest in the life of the insured, as an officer of the company, at the time application was made and the policy issued; and it is well settled that a creditor has an *Page 559
insurable interest in the life of his debtor. Of course, the insured had an insurable interest in his own life, and could himself take out a policy for the benefit of a creditor. It may also be assumed, for the purposes of our discussion only, that the corporation, at the time of the insured's death, did not have an insurable interest in his life, unless as creditor for premiums paid, and that, in the absence thereof, it could not take out a valid policy for its own use and benefit upon his life.
Principal reliance is placed by counsel for appellant uponCheeves v. Anders, 87 Tex. 287 [87 Tex. 287][87 Tex. 287]. Plaintiff in the above cited case was the assignee of a policy taken out upon the life of one Chilton, in favor of Cheeves Chilton, a corporation, as beneficiary. All premium on the policy was paid by the copartnership. The court held that to allow one who has no insurable interest to be the owner of a policy of insurance upon the life of a human being is contrary to the public policy of Texas, and that a policy taken out in favor of a partnership as beneficiary is valid as against the insurer, but that the partnership could profit thereby only to the extent of the insured's indebtedness thereto, and that the partnership would hold the excess merely as trustee for the benefit of those entitled by law to receive it.
It is held in most jurisdictions that the insured may take out a policy on his own life in favor of anyone as beneficiary, whether such beneficiary has an insurable interest in his life or not, "provided the transaction is bona-fide, without collusion, not intended to circumvent the law, and not speculative, nor a mere cover for the wager." 2 Joyce on The Law of Insurance, Section 894b; Davis v. Brown, 159 Ind. 644 (65 N.E. 908); Hawleyv. Aetna Life Ins. Co., 291 Ill. 28 (125 N.E. 707); United Sec.Life Ins. Tr. Co. v. Brown, 270 Pa. St. 270 (113 A. 446);Atkins v. Cotter, 145 Ark. 326 (224 S.W. 624); Haberfeld v.Mayer, 256 Pa. St. 151 (100 A. 587); Cohen v. Edinberg,225 Mass. 177 (114 N.E. 294); American Nat. Ins. Co. v. Moore,14 Ala. App. 413 (70 So. 190); Floyd v. Metropolitan Life Ins. Co.,
5 Boyce (Del.) 51 (90 A. 404); Langford v. National Life Acc.Ins. Co., 116 Ark. 527 (173 S.W. 414); Union Fraternal League v.Walton, 109 Ga. 1 (34 S.E. 317). The doctrine of these cases is not really before us, as *Page 560
both parties treat the policies as having been issued at the instance of, and, in one sense or another, for the benefit of, the corporation.
The Texas and some other courts hold to the contrary. The question has not been squarely before this court, but the doctrine was stated in Belknap v. Johnston, 114 Iowa 265; and inMitchell v. Grand Lodge I.K. of H., 70 Iowa 360, we sustained recovery under the provisions of a policy in favor of a beneficiary who was not insured's wife, heir, or a member of his family. The rule in this state is that an assignee of a policy, although he has no insurable interest in the life of the insured, may, nevertheless, maintain an action thereon against the insurer, and recover the insurance. Farmers Traders Bank v.Johnson, 118 Iowa 282.
It thus appears that the doctrine of the Texas court, so far as the right of a beneficiary to assign the policy to one not having an insurable interest in the insured is concerned, is contrary to the rule in this state. It is the rule in most jurisdictions, including Iowa, that, if the beneficiary for whose benefit a policy has been issued, has an insurable interest in the insured when the policy is issued, it is immaterial whether such insurable interest exists at the time of his death or not.Schmidt v. Hauer, 139 Iowa 531; White v. Brotherhood of Am.Yeomen, 124 Iowa 293.
The question, however, involved upon this appeal is not whether the absence of an insurable interest of the beneficiary in the life of the insured at the time of his death could have been pleaded by the insurer as a defense to the policies, but what is the effect thereof upon the right of such beneficiary, under the facts of this case, to claim the insurance? That is, would such beneficiary, if it had received the proceeds of the policy, hold the same as trustee only for the estate of the insured, or for its own use and benefit absolutely? The question has not previously been before this court. We have held that a divorced wife, named as beneficiary in a life policy during the continuance of the marriage, is nevertheless entitled to claim the insurance. White v. Brotherhood of Am. Yeomen, supra; Schmidtv. Hauer, supra.
The Supreme Court of Tennessee, in Wurzburg v. New *Page 561 York Life Ins. Co., 140 Tenn. 59 (203 S.W. 332), held that the right of a corporation to claim the proceeds of a policy taken out on the life of its manager is not lost by the severance of his connection with the company.
There is a dearth of authority on the point before us, the Texas case being the only one sustaining the contention of appellant. Other cases and authorities cited by counsel for appellee to the contrary are Atkins v. Cotter, 145 Ark. 326
(224 S.W. 624); Mutual Aid Union v. White, 166 Ark. 467
(267 S.W. 137); 2 Joyce on The Law of Insurance, Section 902.
Appellee was the creditor of the insured at the time of his death only to the extent of the premiums advanced by it. It did not then have an insurable interest in his life, and could not have taken out a policy thereon for its own use and benefit. But, under the rule announced in our own cases cited supra, as well as those cited from other jurisdictions, we see no escape from the conclusion that the right of the designated beneficiary, for whose use and benefit the policy was taken out, to receive the proceeds thereof, is not defeated by the termination of its insurable interest in the life of the insured. This being true, the trust doctrine can have no application. It is clear from the testimony quoted above that the policies taken out upon the lives of Reilly and Turner were not for the purpose of securing any indebtedness which they might respectively owe to the corporation, but the mutual purpose of the parties was to benefit the corporation.
It is our conclusion that the designated beneficiary is entitled to claim the fund in controversy. This being true, the decree of the court below is — Affirmed.
De GRAFF, C.J., and FAVILLE and VERMILION, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431911/ | The indictment in this case charged the defendant with the crime of perjury, committed upon the trial of a case in the district court entitled State of Iowa v. DeLong. The indictment in that case charged the defendant with operating a motor vehicle while intoxicated. The basis of the charge of perjury is that the defendant, when called as a witness before the grand jury, testified that he saw the defendant get out of his car and go into a restaurant, where he remained for a few minutes, and that, when he returned, he could smell intoxicating liquor on his breath, and that he "staggered." As a witness upon the trial, he testified that, when he saw the defendant DeLong on the same occasion, he "stumbled." The change in the testimony from the use of the word "staggered" before the grand jury to "stumbled" upon the trial of the case constitutes the basis for this prosecution. Aside from two or three rulings of the court upon the admissibility of testimony offered by the State, which are too clearly correct to require discussion, the only proposition urged for review is the ruling of the court sustaining the motion of the defendant to direct the jury to return a verdict of acquittal. As some possible confusion has found its way into the decisions of this court as to the scope of the review permitted on appeals by the State, we deem it proper to go somewhat at length into this question.
Section 13994 of the Code of 1927 provides that either the defendant or the State may appeal.
Section 14012 limits somewhat the scope of the review when the appeal is by the State. This section is as follows:
"If the State appeals, the Supreme Court cannot reverse or modify the judgment so as to increase the punishment, but may affirm it, and shall point out any error in the proceedings or in *Page 373
the measure of punishment, and its decision shall be obligatory as law."
These sections are almost identical in language with the corresponding sections in the Revision of 1860, Section 4926; the Code of 1873, Section 4539; and the Code of 1897, Section 5463.
Commencing with State v. Kinney, 44 Iowa 444, appeals by the State presenting questions of law for the future guidance of courts have always been sustained. The court, in the cited case, referring to Section 4539 of the Code of 1873, said:
"Under this provision, the Supreme Court cannot interfere with the judgment of the district court on an appeal of this character. The effect of the decision in this court is nothing more than an authoritative exposition of the law to be followed by the inferior courts. This provision applies to all appeals by the State, whether they be from judgments rendered upon trials on the merits, or judgments upon demurrers and motions."
The rule thus stated has been followed and reaffirmed in many later cases. State v. Mackey, 82 Iowa 393; State v. Jackson,128 Iowa 543; State v. Gilbert, 138 Iowa 335; Town of Scranton v.Hensen, 151 Iowa 221; State v. Fairmont Cream. Co., 153 Iowa 702;State v. Johnson, 157 Iowa 248; State v. Meyer, 203 Iowa 694.
The same rule was recognized in each of the following cases, which will serve to illustrate the nature of the questions which may be reviewed by this court on appeals by the State. State v.Keeler, 28 Iowa 551; State v. Beckey, 79 Iowa 368; State v. Ford,161 Iowa 323; State v. Ward, 75 Iowa 637; State v. Fields,106 Iowa 406; State v. Alverson, 105 Iowa 152; State v. Sexsmith,202 Iowa 537.
There is considerable diversity in the statutes of the different states permitting the State to appeal; but, so far as the decisions have been brought to our attention, the rule quoted above is universally followed by the courts of this country.State v. Parker, 5 Ala. App. 231 (59 So. 741); State v. Moody,150 N.C. 847 (64 S.E. 431); State v. Murrey, 30 Wn. 383
(70 P. 971); State v. Kemp, 5 Wn. 212 (31 P. 711); State v.Hart, 88 N.J. Law 48 (95 A. 756); State v. Morris (Ala.), *Page 374
39 So. 589; Territory v. Norris, 12 Ariz. 176 (100 P. 459);State v. Clerkin, 58 Conn. 98 (19 A. 517); State v. Frisbee,8 Okla. Cr. 406 (127 P. 1091); People v. Damron, 212 N.Y. 256
(106 N.E. 67).
In State v. Miller, 81 Iowa 72, in which the State was the appellant, one of the rulings of the trial court complained of was the sustaining of a motion by the court for a directed verdict. This court declined to pass upon this question in that case, but indicated that, under some circumstances, it might do so.
We said in State v. Meyer, supra, that, on an appeal by the State, we will only discuss and dispose of those questions which are proper to be determined as precedents in future cases. However, as a majority of the court in that case desired to express an opinion as to the propriety of the court's ruling on the motion to direct a verdict, the cause was reversed. The rule announced above was adhered to in each of the following cases:State v. Mackey, 82 Iowa 393; State v. Kulough (Iowa),133 N.W. 706 (not officially reported); State v. Gilbert, 138 Iowa 335; and other cases cited supra.
The court in State v. Johnson, 200 Iowa 324, State v. Drain,205 Iowa 581, and State v. Woodruff, 208 Iowa 236, reviewed and passed upon the ruling of the court sustaining motions for directed verdicts. In each of these cases, questions of law properly reviewable by this court were presented, and the decision was general in character, and fully went into all of the propositions argued on behalf of the State. In none of these cases did the court pass upon the question as to the scope of the review permitted. So far as we are familiar with the decisions of the courts in other jurisdictions, the rule is universal that the court will not, on appeal by the State, review error alleged upon a ruling directing an acquittal. Commonwealth v. Brand, 166 Ky. 753
(179 S.W. 844); State v. Glenn Lbr. Co., 83 Kan. 399
(111 P. 484); State v. Savery, 126 N.C. 1083 (36 S.E. 22); People v.Tomsky, 20 Cal.App. 672 (130 P. 184); State v. Buechler,57 Ohio St. 95 (48 N.E. 507); State v. Morrison, 165 Ind. 461
(75 N.E. 968); State v. Miller, 82 Wn. 477 (144 P. 693); Peoplev. Knowles, 27 Cal.App. 498 (155 P. 137).
The acquittal of the defendant rendered him immune from further prosecution for the same offense. A decision by this court finding error in the ruling on a motion to direct a verdict, *Page 375
even if it be conceded that a question of law is thereby presented, would be a mere abstract declaration, of no possible value to the court in this or any future case.
It is well said by the Supreme Court of Arkansas in State v.Spear, 123 Ark. 449 (185 S.W. 788), that:
"It is clear that appeals in felony cases are not allowed by the State except in cases where it is important to have the court correct errors which prevent the `uniform administration of the criminal law.' Appeals are not allowed merely to demonstrate the fact that the trial court has erred. * * * The State has no right to ask for the decision of this court on a question which is purely abstract in its nature, and we are of the opinion that the statute does not contemplate an appeal in a case in which the only error alleged is that the court incorrectly decided that the evidence was not sufficient to warrant a submission of the issue to the jury."
The purpose of Section 14012 can hardly be misunderstood. It is to secure review by the higher court of erroneous rulings by the district court on questions of law which may be of use to the court and the profession in the administration of the criminal law. As is illustrated by many cases cited from this and other jurisdictions, questions of law which affect the State adversely, and go directly to the proper administration of the criminal law, may, of course, arise. When they do, and the question is one in which an appeal is permitted, the court must pass upon it, and announce the rule by which trial courts are in the future to be guided. Nothing could be more useless than appeals by the State from rulings directing verdicts of acquittal, unless a question of law, other than the mere sufficiency of the evidence to sustain a conviction, is involved. The ruling of the court below directing the jury to return a verdict of not guilty does not present a question of law which this court is required to review. The judgment must be affirmed. — Affirmed.
ALBERT, C.J., and FAVILLE, De GRAFF, MORLING, KINDIG, and GRIMM, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431914/ | This appeal is occasioned by reason of a habeas corpus proceeding brought by the appellant, William S. Bicknell, who at the time of the commencement of this action was held by Sioux City and Woodbury county, Iowa, authorities on an extradition warrant issued by the Governor of the State of Iowa. The appellant asserted that his restraint was illegal, and further contended that, although he was sought to be returned to the state of Minnesota on a criminal charge then *Page 465
pending in that state, he had never been in the state of Minnesota. The writ was quashed by the trial court and Bicknell has appealed.
It seems essential to set out certain of the proceedings. On March 11, 1942, appellant made application for a writ of habeas corpus, in which he alleged the facts as have heretofore been set forth. Upon the return of the writ, the appellees asked for a continuance until March 24, 1942, in order that they might obtain the presence of the authorities from Minnesota and to permit appellees to properly answer the petition presented. The continuance was agreed to by the appellant. On March 24th an answer was filed by appellees, wherein they stated that the appellant was being held substantially as alleged in his application, and further asserted that he was held by reason of an executive warrant of extradition issued by the Governor of the State of Iowa. A copy of this warrant was attached to the answer filed.
On the date last mentioned, when this cause was before the trial court for consideration, an argument developed between counsel for appellant and appellees as to which party had the burden of proof. The court held that it was incumbent upon the appellant to assume the burden of proof that he was not a fugitive from justice. Upon the announcement of the court's ruling, counsel for appellant moved the court to grant a further continuance until such time as he would be able to secure the records from the governor's office and further show that he was not a fugitive from justice. The court denied the appellant's application for an extended continuance but did set the matter down for hearing for the next day. Upon the reconvening of the court, the appellant moved to strike from the files the answer presented by the appellees. This motion was overruled. The appellant then made a motion to sustain the writ and release the applicant, it being asserted that there was no evidence in the record showing that the applicant had ever been in the state of Minnesota and that there was no evidence that he had ever been indicted in that state or that any charge had ever been filed against him there. The court quashed the writ and returned the appellant to the appellees for custody. *Page 466
It is contended by the appellant: (1) That the trial court erred in placing the burden of proof upon him to show that he was not a fugitive from justice; (2) that the court erred in refusing to grant the appellant's request for continuance in order to give him an opportunity to subpoena the governor's files; (3) that the court erred in refusing to sustain the appellant's motion to strike the appellees' answer from the files; (4) that the court erred in quashing the writ, for the reason that there was not any evidence in the record showing that the appellant was a fugitive from justice.
[1] I. We hold that the trial court did not err in placing the burden of proof upon the appellant in this case.
In the case of South Carolina v. Bailey, 289 U.S. 412, 417, 53 S. Ct. 667, 669, 77 L. Ed. 1292, involving the question as to the burden of proof in a habeas corpus proceeding growing out of the holding of an individual on a warrant of extradition, it is stated:
"Prima facie Bailey was in lawful custody and upon him rested the burden of overcoming this presumption by proof. McNichols v. Pease, 207 U.S. 100, 109."
In the case of People ex rel. McNichols v. Pease, 207 U.S. 100, 109, 28 S. Ct. 58, 61, 52 L. Ed. 121, 125, it is stated:
"One arrested and held as a fugitive from justice is entitled, of right, upon habeas corpus, to question the lawfulness of his arrest and imprisonment, showing by competent evidence, as a ground for his release, that he was not, within the meaning of the Constitution and laws of the United States, a fugitive from the justice of the demanding State, and thereby overcoming the presumption to the contrary arising from the face of an extradition warrant."
It is further said in this last-cited case at page 112 of 207 U.S., page 62 of 28 S. Ct.:
"When a person is held in custody as a fugitive from justice under an extradition warrant, in proper form, and showing upon its face all that is required by law to be shown as a prerequisite to its being issued, he should not be discharged from *Page 467
custody unless it is made clearly and satisfactorily to appear that he is not a fugitive from justice within the meaning of the Constitution and laws of the United States."
It appears to us that our court, in the case of Seely v. Beardsley, 194 Iowa 863, 866, 190 N.W. 498, 500, has passed upon the question as to who has the burden of proof in an action such as is presented before us on this appeal. In this last-cited case we said:
"It is upon the petitioner under such circumstances to prove that he is not in fact a fugitive from justice and the burden requires evidence which is practically conclusive. Ex parte Montgomery, 244 Fed. 967; Roberts v. Reilly, 116 U.S. 80 (29 L. Ed. 544).
"The presence of the accused in another state is sufficient, if unexplained and uncontradicted, to warrant his return to the demanding state upon formal and regular requisition and either upon a hearing before the governor, which is not a constitutional right, or upon a hearing on habeas corpus, if the record presents merely contradictory evidence on the subject of presence in or absence from that state, a warrant properly issues. Munsey v. Clough, 196 U.S. 364 (49 L. Ed. 515)."
In the case of Taylor v. Wise, 172 Iowa 1, 4, 126 N.W. 1126, 1127, in passing upon a question somewhat akin to the one now presented, we said:
"We cannot, in this proceeding, undertake to consider or decide the truth or falsity of the charge made against the appellant. The sufficiency of the requisition is, in the first instance, for the consideration of the governor of this state, and the determination that the accused is a fugitive from the demanding state is at least prima facie correct. People v. Pinkerton,77 N.Y. 245; In re Kingsbury, 106 Mass. 223; In re Davis,122 Mass. 324. To justify his discharge upon habeas corpus after the issuance of such warrant or order, there should be some fatal defect apparent on the face of the record. We find no such defect in this record, and the judgment of the district court remanding this appellant must be — Affirmed." *Page 468
Attention is also called to 25 Am. Jur. 247, section 150; Walker v. Johnston, 312 U.S. 275, 61 S. Ct. 574, 85 L. Ed. 830.
The record in this case shows that the appellant presented no evidence whatsoever in connection with his application for a writ of habeas corpus. It is contended by counsel for appellant that he was not in a position to present evidence by reason of the court's ruling on his motion for a continuance. Our comments as to this motion will be hereinafter noted. Upon the record presented, we hold that the appellant in no manner met the burden of proof that was placed upon him.
[2] II. The matter of continuance in any case is discretionary with the court. It is shown that some 13 days had elapsed between the time the appellant was first brought into court and the reconvening of the hearing on March 24th. The appellant knew, or should have known, what would be required of him to sustain his application for a writ of habeas corpus. We hold that there was no abuse of discretion on the part of the trial court in refusing to grant a continuance.
[3] III. The appellant's motion to strike the appellees' answer is without merit. This answer sets forth the fact that appellant was held by reason of extradition proceedings before the Governor of the State of Iowa upon the requisition of the Executive Department of the State of Minnesota. As is stated in Taylor v. Wise, supra:
"To justify his discharge upon habeas corpus after the issuance of such warrant or order, there should be some fatal defect apparent on the face of the record."
To sustain appellant's motion to strike would amount to a questioning of the sufficiency of extradition. This is a burden which is placed upon the appellant. The overruling of this motion was proper.
IV. It is contended by the appellant that there is no evidence in the record showing that the appellant is a fugitive from justice. This contention has been answered by our comments in division I of this opinion and does not necessitate any further amplification.
V. Appellees have submitted a motion to strike the court's *Page 469
ruling granting to the appellant the right to file an appeal bond, but we do not deem it necessary to pass upon this and other matters presented upon this appeal as they will undoubtedly receive attention in connection with further proceedings in this case.
Upon the whole record, we hold that the trial court was correct in its rulings and that it should be affirmed. — Affirmed.
All JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431916/ | We are grateful to counsel for the concise and systematic manner in which they have presented what would otherwise have been a very formidable record.
The Iowa State Savings Bank finally closed its doors on the evening of April 17, 1924. A receiver was appointed. Some 25 or 26 claims for preference, aggregating $41,870.86, were allowed, 9 of which are before us on this appeal.
I. The claims of the Massachusetts Bonding Insurance Company, 1. BANKS AND Hal Summers, and F.A. Martin are founded on BANKING: drafts and cashiers' checks purchased by insolvency: claimants. The instruments were presented for preference: payment after the bank closed, and payment draft and refused. These claims are ruled by Leach v.
check Mechanics Sav.
holders. *Page 499 Bank, 202 Iowa 899; Leach v. Iowa St. Sav. Bank (Iowa), 211 N.W. 515 (not officially reported); Andrew v. Chicago, M. St. P.R.Co. (Iowa), 211 N.W. 515 (not officially reported); Leach v.Exchange St. Bank, 203 Iowa 790; Leach v. Iowa St. Sav. Bank,202 Iowa 894; Leach v. Battle Creek Sav. Bank, 202 Iowa 871; Leach v.Battle Creek Sav. Bank, 203 Iowa 507; Leach v. Citizens' StateBank, 203 Iowa 782; Leach v. Citizens St. Bank, 202 Iowa 879;Leach v. Battle Creek Sav. Bank, 202 Iowa 875; Danbury St. Bankv. Leach, 201 Iowa 321; Leach v. Iowa St. Sav. Bank, 202 Iowa 95. Preference for these claims should have been denied, and the order allowing them must be reversed.
II. The Bankers Trust Company placed travelers' checks with the defendant bank for sale, with instructions to remit to claimant, immediately on sale, "the full face plus one fourth of one per cent New York exchange or any exchange upon a 2. BANKS AND central reserve city." The defendant bank sold a BANKING: number of the checks, and remitted by draft upon insolvency: its Chicago correspondent. The draft was not preference: presented until after the defendant bank had draft closed its doors. Payment was consequently remittance: refused. The defendant was authorized to make effect. remittance by Chicago draft; and under the authorities above cited, claim for preference should have been disallowed. Allowance thereof must, therefore, be reversed.
III. Claim of Mrs. O.C. Servis. The finding of the referee on this claim is as follows:
"The basis of this claim is for interest collected by the bank and belonging to this claimant. The claimant had purchased from the bank various real estate mortgages, and had permitted the bank to collect the interest thereon and hold 3. BANKS AND the same for the account of the claimant. These BANKING: transactions had occurred during a number of insolvency: years prior to the time of the closing of the preference: bank. Mrs. Servis or her agent, after the unauthorized collection of interest by the bank, would call draft or at the bank and receive the payment of the check interest, delivering coupons if the interest was remittance: represented by interest coupons. Collections so effect. made over the period in which these transactions occurred amounted to considerable sums. Various collections were charged in the real estate loan account and were paid with *Page 500
checks out drawn by the bank upon that account, and delivered to the claimant. In many instances cashier's checks were written, at the time or soon after the interest items were paid, and held at the bank until claimants called for them. The bank either had direct or implied authority from this claimant to make these particular collections of interest.
"Conclusions of Law. Under the recited facts and the record, it appears that no trust relation existed between this claimant and the bank, and that the claim is not entitled to preference. It is recommended that the claim be allowed as a general claim only."
The evidence is meager, but we are of the opinion that no such course of business between the bank and Mrs. Servis is shown as to raise any inference that she agreed to accept the bank's credit or liability, as evidenced by its cashier's checks, either as a substitute for the interest liability of the mortgagors or for the money paid by them for the interest. The bank was claimant's agent to make the collections. Its duty, in the absence of a sufficient showing to the contrary, was to collect the money and pay it over to claimant. We think the evidence is insufficient to show that she waived the bank's duty to pay over the money, or that she agreed that moneys collected for her might be mingled with the bank's assets and that she would accept the bank's credit for it. For these reasons and those later set out in connection with the claims of H.H. Dwight and others, the preference should be allowed, but prorated.
IV. State Bank of Omaha claim. On April 15, 1924, the State Bank of Omaha forwarded to the defendant bank for collection checks aggregating $5,015.59. The defendant was directed to collect the checks and remit the proceeds. The 4. BANKS AND checks were all drawn on other banks. They were BANKING: received by the defendant bank on April 16, insolvency: 1924, and presented through the local clearing preference: house. The balance of the clearings on that date dissipation was in favor of the defendant bank to the amount of trust of $2,600, for which amount a draft was issued funds. to the defendant bank. The defendant did not receive cash. It received only the $2,600 draft, and sent it to the National City Bank of Chicago for credit. Defendant thereupon remitted to the claimant its own *Page 501
draft on the National City Bank for the amount of the collection, $5,015.59.
On April 16, 1924, the Omaha bank forwarded to defendant for collection and remittance checks on other banks, aggregating $7,731.56. These were received on the 17th and presented through the clearing house. The balance on the clearings that day was against the defendant, so that it actually received nothing in the form of cash or draft for the checks. Defendant remitted to the Omaha bank its draft on the National City Bank for the amount of the checks, $7,731.56. The defendant's balance sheet for April 16, 1924, showed a credit balance in Chicago of $1,939.50, and for April 17, 1924, a debit balance or overdraft of $12,174.51. The books of the Chicago bank for that date showed a credit balance in favor of the defendant bank of $17,893.09, because drafts drawn by the defendant had not yet been presented. The defendant bank was owing the Chicago bank over $100,000 on bills payable. The Chicago bank applied the book credit of $17,893.09 on this indebtedness, and refused payment of the drafts issued to claimant and the other drafts in transit. The defendant bank had no authority to remit to the Omaha bank by the draft, and the receiver does not deny the relationship of principal and agent between the Omaha bank and defendant. The error assigned is in finding that the proceeds of the collections have come into the hands of the receiver, and that the receiver's assets were thereby augmented. Claimant relies on Messenger v. Carroll Tr. Sav. Bank, 193 Iowa 608. In that case claimant had forwarded to defendant bank for collection sight draft on defendant's customer. The customer had a credit balance on checking account of ample amount, and gave to defendant its check thereon for the amount of the sight draft. The bank had ample cash on hand. The amount of the sight draft was remitted to claimant in the form of Chicago exchange. This was held to be the equivalent of the payment of cash on the check and the payment of the cash on the sight draft. To apply the doctrine of that case to this, we would have to hold that what was done here was the equivalent of the presentation by defendant of the checks owned by claimant, to the banks on which they were drawn, the receipt of the money thereon by defendant, the placing of it in defendant's till, the increase thereby of defendant's cash assets, and *Page 502
remittance in Chicago exchange. The proven fact is, however, that claimant's particular property was specifically used in paying the defendant's debts to its depositors and to the National City Bank. The checks owned by claimant were not drawn on defendant.
The checks owned by the Omaha bank and remitted to the defendant for collection were used in the payment of checks held by other banks and drawn on the defendant bank, except as to $2,600. The $2,600 was received by the defendant in the form of a draft, and that specific draft was remitted to Chicago and was applied to the payment of the indebtedness of the defendant bank to the Chicago bank. The defendant got no cash for the checks received from the claimant. The only fund that it received was the $2,600, and that did not become a part of defendant's cash or of any fund that has come into the hands of the receiver. The claimant bank has no standing to claim a preference merely as a creditor. It makes no difference that its claim as a creditor is founded upon fraud, conversion, or breach of trust. The claimant has no standing other than as the owner of property which came into the possession of the defendant bank, and thence into the possession of its receiver. If the property of the Omaha bank did not find its way, either specifically or through substitution of other property, into the possession of the receiver, the claim to a preference cannot be sustained. To obtain a preference, the claimant "must show, by presumption of law or otherwise, that his fund has been preserved in the hands of the assignee, as an increase of the assets of the estate, from which it may be taken without impairment of the rights of general creditors." Bradleyv. Chesebrough, 111 Iowa 126. See, also, Farnsworth v. MuscatineProd. P.I. Co., 177 Iowa 21; Hanson v. Roush, 139 Iowa 58;First St. Bank v. Oelke, 149 Iowa 662; Stilson v. First St. Bank,152 Iowa 724; Hudspeth v. Union Tr. Sav. Bank, 197 Iowa 913.
Payment of debts is not, of itself, such an increase of assets. For instance, if the deposits amounted to $500,000, and the assets available for their payment to $250,000, the depositors would get 50 per cent. If $50,000 of the assets were used to pay checks or deposits to that amount in full, while the deposits would be reduced to $450,000, the assets available for their payment would be reduced to $200,000, and the remaining *Page 503
depositors would get only 44 per cent plus. If the $50,000 were taken to pay claims other than those of depositors, then the depositors, though, under the law, preferred creditors, would be postponed, to that extent, to other creditors, and get only 40 per cent. The evidence shows affirmatively that the plaintiff's property did not augment the assets in the possession of the bank, and did not come into the possession of the receiver. Idem;Leach v. State Sav. Bank of Logan, 202 Iowa 265; Jones v.Chesebrough, 105 Iowa 303; Board of Fire Water Com. v.Wilkinson, 119 Mich. 655 (78 N.W. 893); City of St. Paul v.Seymour, 71 Minn. 303 (74 N.W. 136); Slater v. Oriental Mills,18 R.I. 352 (27 A. 443); Bank Commissioners v. Security Tr. Co.,70 N.H. 536 (49 A. 113). The claim of the Omaha State Bank for a preference should have been disallowed, and the order sustaining it must be reversed. This conclusion makes it unnecessary to discuss claimant's appeal from the nonallowance of interest.
V. Claims of H.H. Dwight, Metropolitan Life Insurance Company, and Mechanics Metals National Bank. These may be considered together. Dwight's claim is similar to that of Mrs. Servis. The evidence fails to show any authority, express or 5. BANKS AND implied, to the bank to make remittance by BANKING: cashier's checks or drafts. The record is that insolvency: Dwight was not a depositor. His instructions to preference: the bank were to remit to him the interest as it nonchange in was collected. He was in Florida. The bank made trust funds. out its cashier's checks for Dwight's interest, but without authority from him, and filed them with his securities. He found the checks with his papers when he got them from the bank after the bank had closed.
The Metropolitan Life Insurance Company placed funds with 6. BANKS AND defendant to be paid out for specified first BANKING: mortgage loans then being negotiated, when liquidation: designated conditions were complied with. The equitable Metropolitan Life Insurance Company did not trust: carry a general deposit account with defendant. presumption: The money was placed to the credit of the real prorating estate department of the bank, to be paid out in intermingled accordance with the conditions named. It was trust funds. mingled with the other moneys of *Page 504
the bank. This money as a whole was drawn on in the ordinary course of the bank's business.
The Mechanics Metals National Bank sent to defendant notes for collection. Defendant made collections, and issued and retained in its files cashier's checks for the amount of the proceeds. In the Dwight case, we must hold that the collections were received as agent, and that defendant had no authority to substitute its obligation for the money which it held as agent. In the Metropolitan Life Insurance Company and Mechanics Metals National Bank cases, the agency or trust relationship is conceded. In all three cases, the question is whether there was an augmentation of the funds in the possession of the bank which came into the hands of the receiver, and if so, the extent of such augmentation. In each case, the funds are treated, in the record and arguments, as money received by the defendant bank. As the case is presented, we must treat such funds as having become a part of the cash balances in the possession of the bank. There is no evidence that they were transmuted into any other form of property, and we cannot presume that they were. We cannot presume, for instance, that they were remitted to the National City Bank, and there dissipated in the appropriation of the credit balance to the payment of defendant's drafts and bills payable. Defendant carried accounts with numerous correspondents, the balances in which fluctuated greatly, and we cannot presume that claimants' funds became a part of those balances. The only finding that can be made is that the funds, as stated, became a part of the cash balance on hand. The case is one of an acknowledged trust relationship. In such case, the burden of proof, or more correctly, the burden of going on with evidence from this point to follow the funds and show 7. APPEAL AND dissipation, is with the receiver. Hudspeth v.
ERROR: Union Tr. Sav. Bank, 197 Iowa 913; Murray v.
review: North Liberty Sav. Bank, 196 Iowa 729; Lusk Dev.
scope and Imp. Co. v. Giinther, 32 Wyo. 294 (232 Pac. extent: 518). The cash on hand when the bank closed is non-parties shown to have amounted to $12,136.94. The record to appeal. shows the allowance of a large number of preferences, the greater number of which are not before us for review. We can make no determination that will prejudice the rights of the holders of those claims. As to the three claims under consideration *Page 505
and the Servis claim, however, the preference should be allowed pro rata against the amount of cash that came into the hands of the receiver, without prejudice to the rights of claimants who have not been brought into this court by appeal. Hewitt v. Hayes,205 Mass. 356 (137 Am. St. 448, 91 N.E. 332, 334).
With this modification, the allowance of preferences to H.H. Dwight, Mechanics Metals National Bank, and Metropolitan Life Insurance Company is affirmed. The case is remanded for further proceedings not inconsistent with this opinion. — In partaffirmed; in part reversed and remanded.
EVANS, C.J., and De GRAFF and ALBERT, JJ., concur.
SUPPLEMENTAL OPINION. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431917/ | The Mechanics Metals National Bank, the Metropolitan Life Insurance Company, and the State Bank of Omaha have filed petitions for rehearing. The first two contend 8. BANKS AND that the preferences allowed to them should be BANKING: established against all of the assets coming liquidation: into the possession of the receiver, instead of equitable being limited to a pro-rata distribution of the trust: cash. They and the State Bank of Omaha argue presumption: that it will be presumed that the trust fund was prorating present in the mass of the bank's assets, under intermingled the "augmentation theory," and that the receiver trust funds. must overcome this presumption by clear and satisfactory proof that the bank had lost or dissipated the fund.
Petitioners are in error in their assertion that the augmentation theory in any such sense prevails in this state. InDavenport Plow Co. v. Lamp, 80 Iowa 722, preference was given for money used by the defunct company in its business and in the payment of its debts. In Independent Dist. v. King, 80 Iowa 497, 503, it was said that, money having been traced into the estate impressed with the character of a trust fund, the burden was upon the assignee "to show that it contributed nothing to the estate which he acquired by virtue of the assignment * * *." This holding is based on McLeod v. Evans, 66 Wis. 401, 409 (28 N.W. 173, 214). McLeod v. Evans was overruled in Nonotuck Silk Co. v.Flanders, 87 Wis. 237 *Page 506
(58 N.W. 383). In Bradley v. Chesebrough, 111 Iowa 126, the previous cases of Davenport Plow Co. v. Lamp and Independent Dist. v. King
were reviewed and limited, and the doctrine was laid down:
"That plaintiff was a trust creditor does not, of itself, entitle him to preference over general creditors. To obtain that right, he must show, by presumption of law or otherwise, that his fund has been preserved in the hands of the assignee, as an increase of the assets of the estate, from which it may be taken without impairment of the rights of general creditors."
This court has since steadily adhered to this doctrine. Cases post. Payment of debts is not an augmentation of assets. Leach v.State Sav. Bank, 202 Iowa 265 (quoted post); Birch v.International St. Bank (S.D.), 208 N.W. 167; In re Seven CornersBank, 58 Minn. 5 (59 N.W. 633); City of St. Paul v. Seymour,71 Minn. 303 (74 N.W. 136); Willoughby v. Weinberger, 15 Okla. 226
(79 P. 777); Empire St. Sur. Co. v. Carroll County, 114 C.C.A. 435 (194 Fed. 593). In First St. Bank v. Oelke, 149 Iowa 662, 667, it is said:
"It is the settled rule of our cases that a preference will not be allowed unless it be found that the fund has increased the present assets of the bank, and that it may be taken therefrom without impairment of the rights of creditors."
Confusion and misunderstanding have arisen probably because of the entanglement of the ultimate fact, which must be made to appear affirmatively, with the method by which that fact may be shown. The ultimate fact that must be shown is that the "fund has been preserved in the hands of the assignee, as an increase of the assets of the estate, from which it may be taken without impairment of the rights of general creditors." Cases above;Hudspeth v. Union Tr. Sav. Bank, 197 Iowa 913; City of NewHampton v. Leach, 201 Iowa 316; Murray v. North Liberty Sav.Bank, 196 Iowa 729; Whitcomb v. Carpenter, 134 Iowa 227; Seeleyv. Seeley-Howe-Le Van Co., 128 Iowa 294. So-called claims of preference of the character of those involved in this case may not be allowed merely as for a liability or debt of the insolvent's. A liability for trust property misappropriated or lost is not entitled to a preference. The right to preference consists in the right of property in assets in the possession of the receiver, but equitably belonging to *Page 507
claimant, and not belonging to the bank. The claimant is in the attitude of pursuing his own property. He may pursue it into different forms of property, if it is shown that it has been converted into such. But his right ultimately is to recover his own property, not to recover a debt or liability for his property. The principle is that the bank is not entitled to use property belonging to another to pay its debts, and its creditors are not entitled to resort to such property for satisfaction.Officer v. Officer, 120 Iowa 389, 393, 395; Farnsworth v.Muscatine Prod. P.I. Co., 177 Iowa 21.
"`The guiding principle is that a trustee cannot assert a title of his own to trust property. If he destroys a trust fund by dissipating it altogether, there remains nothing to be the subject of the trust. But, so long as the trust property can be traced and followed into other property into which it has been converted, that remains subject to the trust.'" In re Hallett'sEstate, 13 Ch. Div. 696, quoted in Nonotuck Silk Co. v. Flanders,87 Wis. 237 (58 N.W. 383, 385).
As said in Stilson v. First St. Bank, 152 Iowa 724, 730:
"Claimant's claim of preference does not present a controversy with the bank, but with the other creditors of the bank. The right of preference as against other creditors is not an equity. When such preference is awarded, it is awarded strictly as a right of property, and not as a mere right to equitable relief against other creditors."
It is said in Slater v. Oriental Mills, 18 R.I. 352
(27 A. 443):
"* * * the illustration may be used of a debtor mingling trust funds with his own in a chest or bag. Though the particular money cannot be identified, the amount is swelled just so much, and the amount added belongs to the cestui que trust. But in the latter case there is no swelling of the estate, for the money is spent and gone; or, as respondent's counsel pertinently suggests, `Knight Bruce's chest — Jessel's bag — is empty.' Shall we, therefore, order a like amount to be taken out of some other chest or bag, or out of the debtor's general estate? Suppose the general estate consists only of mills and machinery acquired long before the complainants' money was appropriated. Upon what principle could that property be taken to reimburse them? But the complainants say: `Our money has been misappropriated *Page 508
by the debtor without our consent and without our fault. Why should we not be reimbursed out of his estate?' Undoubtedly is it right that everyone should have his own; but, when a claimant's property cannot be found, this same principle prevents the taking of property which equitably belongs to creditors of the trustee, to make it up. The creditors have done no wrongful act, and should not be called upon, in any way, to atone for the misconduct of their debtor. It is an ordinary case of misfortune on the part of claimants, whose confidence in a trustee or agent has been abused."
By our statute the depositor is given a preference in the distribution of the proceeds of the property of the bank. The depositors are entitled to have the bank's property devoted first to the payment of depositors. They are not entitled to have property not belonging to the bank applied to such payment. Conversely, the owner of property which the bank has taken and misappropriated is not entitled to reimbursement out of property which belonged to the bank, and which the law gives to the depositors. The controversy is with the depositors. Stilson v.First St. Bank, 152 Iowa 724, 730 (quoted supra). It was said inFarnsworth v. Muscatine Prod. P.I. Co., 177 Iowa 21, 30:
"It follows, therefore, that the burden is on the one claiming preference to point out the fund into which his property has gone, show that it exists, passed into the hands of the receiver, either in its original form or as substituted in other property, and that, in taking out his property, he leaves the property of the insolvent concern intact for general creditors."
The ultimate fact of non-dissipation may be shown by actual proof, or prima facie by presumption.
Property in the possession of and ostensibly belonging to the bank is presumed to be its own. Such property may be shown, however, to be the property of claimant, and to have come into the possession of the bank under circumstances which did not give the bank title to it. When it is so shown to have come into the possession of the bank, without more, we allow to claimant the benefit of the presumption that the bank did not dispose of the property which it had no right to dispose of, and has not lost or dissipated it, but transmitted it, with the other assets in its possession into the possession of the receiver. This *Page 509
presumption has its limitations, which need not be now particularly referred to. First St. Bank v. Oelke, 149 Iowa 662;Stilson v. First St. Bank, 152 Iowa 724; Farnsworth v. MuscatineProd. P.I. Co., 177 Iowa 30; Jewel v. Clay, 107 Iowa 52;Bradley v. Chesebrough, 111 Iowa 126; Hanson v. Roush, 139 Iowa 58; Hudspeth v. Union Tr. Sav. Bank, 197 Iowa 913.
This presumption has been spoken of as "a presumption of law." It is not a presumption of law, but a rebuttable presumption of fact. Stilson v. First St. Bank, 152 Iowa 724, 727; Hudspeth v.Union Tr. Sav. Bank, 197 Iowa 913.
In the case before us, both on original submission and in the petitions for rehearing, the collections for the Mechanics
Metals National Bank and the Metropolitan Life Insurance Company are treated as having been made in the form in which the collecting bank would have authority to make them, — that is, in money. It is shown, therefore, that moneys belonging to claimants came into the possession of the bank, and were not paid over by the bank to claimants. From these facts, standing by themselves, a presumption would arise that the moneys of the claimants passed with the assets in the bank into the possession of the receiver. It is not presumed that the money was converted by the bank into bills receivable, or into a deposit account with another bank, or into any other form of property. If it appears that the claimant's money was intermingled with the bank's money, the trust attached to the commingled fund. When by withdrawals the commingled fund has been diminished below the amount of the trust fund, the trust fund is, to the extent of such diminution, dissipated. As said in the Slater case, 18 R.I. 352
(27 A. 443), supra, "The money is spent and gone." The trust for cash received by the bank may be established against the cash found in the possession of the bank when the receiver takes charge, but only to the extent of the lowest amount of cash held by the bank between the time of the receipt of the trust funds and the time of enforcing the trust. Board of Commissioners v. Strawn, 157 Fed. 49; Schuyler v. Littlefield, 232 U.S. 707. This rule has been often recognized in this court. In Whitcomb v. Carpenter,134 Iowa 227, 231, it was said, through Justice Weaver:
"The money was mingled with the funds of the bank, which were certainly increased by that amount, and the trust character *Page 510
of the sum so appropriated operates to create a lien for its amount upon the entire fund with which it was mingled; and when thereafter the fund is diminished by withdrawals therefrom by the trustee, he is presumed to have withdrawn his own moneys, and so long as the balance left on hand is equal to or greater than the trust fund, the right of the cestui que trust to have it applied to the payment of his claim remains unimpaired."
It was recognized in Leach v. Iowa St. Bank, 202 Iowa 887, 892, where it is said:
"So far as appears, upon this record, the fund to the credit of the Iowa State Bank in its correspondent bank was never depleted to a point below the proceeds of these bonds."
It was recognized in In re Insolvency of Farmers Merch. Sav.Bank, 202 Iowa 859, 863, where it is said:
"It follows that either the bonds in the possession of the receiver must be retained by him, because not specifically identified, and be used for the purpose of paying general creditors, or they must be prorated among the respective claimants. It would be manifestly inequitable and unjust to deprive the claimants thereof, and thereby swell the assets of the bank, which never acquired title thereto, to the advantage of creditors. We have no hesitation in holding that the bonds must be returned to the claimants, to be prorated among them, or sold by the receiver, and the proceeds thus used."
In Leach v. State Sav. Bank, 202 Iowa 265, 269, it is said:
"The argument for the applicant at this point is that the deposit of these funds to the credit of the bank necessarily enlarged its assets, and that, therefore, the amount coming later into the hands of the receiver must have been enlarged accordingly. The first part of this argument would be good, if the bank were solvent; the latter half of the argument is nonsequitur. The tracing of these funds shows that they operated to the advantage of particular creditors only. If the money had been in some manner invested in other assets, a different question would be presented. The money disappeared into a chasm of indebtedness. It reduced particular indebtedness accordingly, but it created no asset. So far as the debtor bank was concerned, it was a dissipation, and not an investment."
The general principle is well expressed in County of Grand *Page 511 Forks v. Baird, 54 N.D. 315, 320 (209 N.W. 782, 783), where it is said:
"The principle is that the trustee cannot assert a title of his own to trust property. In applying this principle to banks holding public funds in trust, and not in the capacity of debtors, the conversion by the bank of the cash assets, from time to time, into the various forms of investment, and their employment in the ordinary business of the bank, must be held to involve the cash to which it has title as owner, and not that which it holds in trust; for it is at all times precluded from asserting its ownership of the amount so held. From this it follows that the cestui may, at any given time, fasten the trust upon the cash assets available, to the extent of the minimum on hand between the origin of the trust relation and the times of its enforcement. This principle has never, in our opinion, been successfully controverted since Sir George Jessel, Master of the Rolls, gave utterance to his remarkably simple, yet compelling, illustration."
As said in Empire St. Sur. Co. v. Carroll County, 114 C.C.A. 435, 447 (194 Fed. 593, 605), quoted in Poisson v. Williams, 15 Fed. (2d Series) 582, 584:
"Proof that a trustee mingled trust funds with his own, and made payments out of the common fund, is a sufficient identification of the remainder of that fund coming to the hands of the receiver, not exceeding the smallest amount the fund contained subsequent to the commingling * * * [citing cases], as trust property; because the legal presumption is that he regarded the law, and neither paid out nor invested in other property the trust fund, but kept it sacred."
This rule is likewise subject to the qualification that the receptacle in which the trust money is kept, or the bank account in which it is deposited, may be the receptacle or bank account kept for the purposes of the trust; that the withdrawals may be shown to be withdrawals of trust funds, and the replacements therein for the purpose of replacing the trust moneys wrongfully withdrawn therefrom. See Leach v. Iowa St. Bank, 202 Iowa 887;Cable v. Iowa St. Sav. Bank, 197 Iowa 393, 401; Baker v. New YorkNat. Exch. Bank, 100 N.Y. 31 (2 N.E. 452); Cohnfield v.Tanenbaum, 176 N.Y. 126 *Page 512
(68 N.E. 141, 98 Am. St. 653); Garst v. Canfield, 44 R.I. 220
(116 A. 482).
Andrew v. Security Sav. Bank, 203 Iowa 546, is cited as holding contrary to our original opinion herein. In that case an express trust was created, and recognized as existing throughout. It was created by a promissory note, which went into the bills receivable, and was to be kept invested in mortgages. The burden of showing dissipation was held to be on the receiver. The court was divided in opinion on the fact question. The majority found themselves unable to hold that the facts were such as to show dissipation. If it had certainly appeared that all the trust fund had been transmuted into cash, a different question would have been presented.
The petitions are overruled. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/7247155/ | TIMOTHY S. HILLMAN, DISTRICT JUDGE
Background
Arthur Burnham ("Burnham") has filed a complaint against the Commonwealth of Massachusetts, Magistrate K. Candito, the Chief Probation Officer of the Dudley District Court and Jane Doe1 and Jane Doe 2, who are employees of the Dudley District Court, alleging claims under 42 U.S.C. §§ 1983, 1985 and 1986 for: (1) violation of his Eighth Amendment Right to be free from cruel and unusual punishment as well as deliberate indifference to his serious mental health needs; (2) violation of his right to due process under the Fourteen Amendment; (3) violation of the Equal Protection Clause; (4) conspiracy to impose disparate treatment; and (5) failure to prevent a conspiracy. Burnham has also alleged a claim against the defendants under *321the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq. and a state law claim for emotional distress.
This Order addresses Defendants Commonwealth Of Massachusetts, Magistrate K Candito, And Dudley District Court Chief Probation Officer's Motion To Dismiss (Docket No. 57) and Burnham's Motion To File A Fourth Amended Complaint (Docket No. 45). For the reasons set forth below, the defendants' motion to dismiss is granted and Burnham's motion to further amend him complaint is denied .
Discussion
Summary of Underlying Facts
Burnham's claims relate to an incident which occurred on March 3, 2012 at the time of his arrest by the Southbridge Police Department. More specifically, Burnham alleges that while in police custody, he had a medical emergency (a seizure) and soiled himself. He alleges that the police department had a video of the incident from its surveillance cameras and provided a copy to employees of the Dudley District Court. Burnham was brought to court at March 7, 2012, for a custody proceeding. He alleges that at the proceeding, employees of the courthouse looked at him and laughed. He further alleges that whenever he was brought to the Dudley District Court for the next year and a half, courthouse employees continued to laugh at him and mock his seizure. As a result, Burnham has been humiliated and attempted to commit suicide on a number of occasions. Upset about the courthouse employees' conduct, he acted out in court and as a result, lost custody of his children.
Motion To Dismiss
The defendants assert that Burnham's claims against them under Section 1983, 1985 and 1986 for violation of his civil rights and conspiracy to violate his civil rights, as well as all state law claims against them, must be dismissed because they are barred by the Eleventh Amendment. Defendants allege that the remaining ADA claim must be dismissed for failure to state a claim.
Standard of Review
On a Rule 12(b)(6) motion to dismiss, the Court "must assume the truth of all well-plead[ed] facts and give plaintiff the benefit of all reasonable inferences therefrom." Ruiz v. Bally Total Fitness Holding Corp. , 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino , 175 F.3d 75, 77 (1st Cir. 1999) ). To survive a motion to dismiss, the plaintiff must state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That is, "[f]actual allegations must be enough to raise a right to relief above the speculative level ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555, 127 S.Ct. 1955 (internal citations omitted). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Dismissal is appropriate if plaintiff's well-pleaded facts do not "possess enough heft to show that plaintiff is entitled to relief." Ruiz Rivera v. Pfizer Pharm., LLC , 521 F.3d 76, 84 (1st Cir. 2008) (internal quotations and original alterations omitted). "The relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the complaint." Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 13 (1st Cir. 2011).
Whether Plaintiff's Civil Rights Claims Are Barred By The Eleventh Amendment
Burnham has sued the individual defendants (including the Jane Doe defendants)
*322in their official capacities. "A lawsuit against a state official in his or her official capacity for money damages is, in substance, a suit against the state itself. [O]fficial-capacity suits generally represent only another way of pleading an action against an entity of which an officer is an agent. Suits against state officials in their official capacity therefore should be treated as suits against the State." McGuigan v. Conte , 629 F.Supp.2d 76, 82-83 (D. Mass. 2009) (internal citation omitted).
Bringing this action in federal court implicates the Commonwealth's sovereign immunity under the Eleventh Amendment. "Although the Eleventh Amendment does not expressly bar suits in federal court against a state by its own citizens, it has consistently been read to preclude such actions in the absence of a waiver of the state's immunity to suit. Thus, this court is without jurisdiction to grant relief directly against the Commonwealth or its agencies unless the Commonwealth has consented to the filing of this action." McGuigan , 629 F.Supp.2d at 83. The Eleventh Amendment to the Constitution states that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const. Amend. XI . "The Supreme Court 'has consistently held that an unconsenting State is immune [under the Eleventh Amendment] from suits brought in federal courts by her own citizens as well as by citizens of another State.' " Torres-Alamo v. Puerto Rico , 502 F.3d 20, 24 (1st Cir. 2007) (quoting Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) ). When enacting legislation, however, Congress has the authority "to abrogate the States' Eleventh Amendment immunity when it unequivocally intends to do so 'and acts pursuant to a valid grant of constitutional authority.' " Torres-Alamo , 502 F.3d at 24 (citation to quoted case omitted). Unless Congress has properly abrogated the Eleventh Amendment State immunity or the State has consented to being sued, a suit against State officials in their official capacity would be similarly barred. Will v. Mich. Dep't of State Police , 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989).
The law is clear that Section 1983 claims against the Commonwealth is barred on Eleventh Amendment immunity grounds. See Fantini v. Salem State College , 557 F.3d 22, 33 (1st Cir. 2009) (it is well settled that neither State nor its officials acting in their official capacity are subject to suit under Section 1983 ). The same is true for claims asserted against the Commonwealth under 42 U.S.C. §§ 1985 and 1986. See Anderson v. U.S. Dep't of Agric. , 604 Fed.Appx. 513, 517 (7th Cir. 2015) ; Santiago v. Keyes , 839 F.Supp.2d 421, 417-28 (D.Mass. 2012). Therefore, defendants' motion to dismiss Burnham's civil rights' claims against the Commonwealth and the individual defendants in their official capacities is granted.1
Burnham's State Law Claim
"[I]t is well established "that a claim that state officials violated state law in carrying out their official responsibilities is a claim against the State that is protected by the Eleventh Amendment."
*323Wilborn v. Walsh , 584 F.Supp.2d 384, 391 (D. Mass. 2008). Accordingly, the Eleventh Amendment also bars Burnham's state law tort claim for emotional distress.
Whether Burnham's ADA Claims should be Dismissed for Failure to State a Claim
Defendants assert that Burnham's ADA claim must be dismissed. Title II provides that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132 (Title II of the ADA). To state a claim under Title II of the ADA, a plaintiff must demonstrate: (1) he is a qualified individual with a disability; (2) he was either excluded from participation in or denied benefits of a public entity's services, programs or activities, or was otherwise discriminated against; and (3) such exclusion, denial of benefits, or discrimination was due to his disability. Buchanan v. Maine, 469 F.3d 158, 170-71 (1st Cir. 2006).
In order to establish that he is a qualified individual with a disability, Burnham must establish that he:
suffers from a physical or mental impairment that affects life activities that are 'major,' i.e. , 'of central importance to daily life.' Major life activities are basic activities of daily life that an average person in the general population can perform with little or no difficulty-'functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.' Finally, he must show that the impairment 'substantially limits' the identified major life activity. In assessing whether someone is disabled under the ADA, we must consider the impairment's effect on the particular individual. The limitation caused by the impairment must be permanent or long-term.
Ramos-Echevarria v. Pichis, Inc. , 659 F.3d 182, 187 (1st Cir. 2011) (internal citations and citation to quoted case omitted).
In this case, Burnham alleges that he suffered a seizure which resulted in him soiling himself, that the incident was captured on video surveillance tape and court employees who viewed the videotape thereafter laughed at him and humiliated him every time he came to court. He asserts that he suffers from unspecified mental health issues. He asserts that the courthouse employees' conduct caused him to suffer from post traumatic stress disorder, and suicidal ideation. He further asserts that it caused him to act inappropriately during court proceedings, which led to him losing custody of his children. Burnham provides details of the alleged conduct of court employees and its effect on him. However, as pointed out by the defendants, provides scant details of the nature of his mental illness and its effect on his major life activities. To the extent that he is alleging that his impairment includes suffering seizures-he does not specify whether the seizure was related to a medical condition. Thus, for the reasons stated by the defendants, he has failed to state claim under Title II of the ADA.
Whether The Amendment Should Be Allowed
Plaintiff seeks to amend his complaint for the Fourth time. Plaintiff's motion to amend adds additional factual allegations, primarily related to his ADA claim. Given that his factual and legal allegations relating to his ADA claims are intertwined with his civil rights claims, it is impossible for the Court to determine whether his proposed complaint would state a claim under the ADA. What is clear, however, is that the federal civil *324rights and state law claims asserted in his proposed amended complaint would be barred by the Eleventh Amendment, and therefore, as to those claims, allowing the amendment would be futile. For these reasons, the Court is denying Burnham's motion to file a Fourth Amended Complaint, without prejudice. Plaintiff shall have additional time to file a further amended complaint in which he may reassert only his ADA claim. Burnham is advised that his further amended complaint should address the deficiencies in his ADA claim noted by the defendants in their memorandum in support of their motion to dismiss. If Burnham fails to file his further amended complaint by April 26, 2018.
Conclusion
For the foregoing reasons,
1. Defendants Commonwealth Of Massachusetts, Magistrate K Candito, And Dudley District Court Chief Probation Officer's Motion To Dismiss (Docket No. 57) is granted ; and
2. Burnham's Motion To File A Fourth Amended Complaint (Docket No. 45), denied , without prejudice, as provided in this Order.2
Burnham seek monetary damages and injunctive relief in the form of an apology. While the Eleventh Amendment does not necessarily bar claims for injunctive relief, I do not find that the relief sought by Plaintiff is the type of relief which is cognizable in a civil rights claim, i.e., he is not seeking prospective injunctive relief seeking to end a continuing constitutional violation.
If Burnham fails to file his further amended complaint by April 26, 2018, this action will be dismissed, with prejudice. | 01-03-2023 | 07-25-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/3216945/ | IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
TYRONE WILLIAMS, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D15-5819
STATE OF FLORIDA,
Appellee.
_____________________________/
Opinion filed June 15, 2016.
An appeal from an order of the Circuit Court for Alachua County.
Mark W. Moseley, Judge.
Tyrone Williams, pro se, Appellant.
Pamela Jo Bondi, Attorney General, Tallahassee, for Appellee.
PER CURIAM.
AFFIRMED.
ROWE, KELSEY, and JAY, JJ., CONCUR. | 01-03-2023 | 06-24-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432071/ | Carl Scharpff, one of the defendants, purchased a mercantile business from the plaintiff, Alfred Price, in 1913, giving his note for $1,700 in part payment thereof. This note was reduced to judgment in October, 1933, for a balance of $932 then due thereon.
In 1919, after incurring said indebtedness by the husband, the defendant Minnie Scharpff, his wife, purchased two lots and paid $600 therefor out of her own funds, taking title thereto in her own name. Thereafter, in 1920 or 1921, she had a dwelling house constructed thereon, at a cost of about $9,000. When the building was completed, in 1921, $4,300 was paid thereon in cash, and $700 was taken out in trade by the contractor at her husband's store. This left a balance of $4,000 which was represented by a mortgage given on the homestead; $2,000 of this mortgage was paid off in 1926, $1,200 in 1931, leaving a balance of $800 which was paid from cash received on a paid-up insurance policy on the husband's life, payable to his wife.
The lower court found that the defendant. Carl Scharpff, *Page 127
contributed, toward the cost of the homestead, the $700 taken out in trade by the contractor in the husband's store in 1921, and the final payment of $800 received on the insurance policy. As such amounts exceeded the amount of plaintiff's judgment, a decree was entered establishing a lien against the homestead therefor.
No claim is made either in the pleadings or in the proof: (1) that the defendant, Carl Scharpff, was insolvent at the time the home was constructed; (2) that any fraud was perpetrated upon his creditors; (3) that any trust or equitable interest in said property resulted in favor of the husband; or (4) that there was any agreement or understanding that the husband was to have any interest in the homestead by reason of any payments claimed to have been made by him.
The only ground upon which plaintiff asks to subject the homestead to the payment of plaintiff's debt is that most of the money entering into the cost of the home belonged to and was contributed by the husband.
Appellants contend that such money belonged to the wife when the payments were made, and that such funds were acquired and accumulated by the saving of her personal earnings, and moneys given her by her husband as a regular daily allowance through a long period of years.
The defendants were frugal and thrifty people. The husband was in the employ of plaintiff for 14 years before he purchased the latter's store in 1913. That during all of that time he was also engaged in buying and selling chickens and eggs throughout the country. That all of the profits, made by him during these years, were given to and saved by the wife as her own separate property. The evidence also shows without dispute that for a period of 32 years of this married life, the wife kept and worked a garden in which she had hotbeds, from the products of which she personally saved over $100 a year; that she also owned some cows and chickens, from which she sold butter, cream, and eggs, the proceeds of which she saved. That about 1914 her husband sold a farm in Minnesota at a profit of $1,500 which he gave to his wife. At that time he was doing a profitable business and was perfectly solvent and well able so to do. The evidence also shows without dispute that during all these years she worked hard from early morning until late at night, and that during the 19 years her husband was operating *Page 128
the store, she also worked there. The evidence also shows without dispute that for many years after the husband purchased the store in question, he did a large and profitable business; that during all the time she worked in the store, her husband gave her an allowance of about $2 a day which she also saved.
[1] While there is some evidence of admissions made by the husband that he superintended the construction of the home, and that all moneys paid the contractor were his, this evidence was received solely for the purpose of showing admissions against the husband, and is not competent or binding against the wife.
The evidence, however, fairly tends to show that all such moneys, handled by the husband for the construction of the home, were received by him out of the savings accumulated by the wife, over a long period of years, and that all moneys so handled by him were for and on behalf of his wife.
The record clearly shows that during all of the time the wife was accumulating and saving this money, the husband was perfectly solvent and doing a large and prosperous business, and that the money was not given to or received by her with any fraudulent intent or purpose.
Although the family relationship between a grantor and grantee requires close scrutiny on the evidence of fraud, the relationship in itself does not establish fraud. Pike v. Coon,217 Iowa 1068, 252 N.W. 888; Erusha v. Wisnewski, 207 Iowa 1187, 224 N.W. 517. In Pike v. Coon, supra, loc. cit. 1071, we said:
"While the relationship may be closely scrutinized and although it may be considered as a circumstance tending to establish fraud, nevertheless, other evidence of the fraud must be introduced before such relationship in and of itself can be considered as establishing fraud."
It is also the well-settled rule of law in this state that the burden is upon the plaintiff to both plead and prove fraud, and that the party charged participated therein. Crenshaw v. Halvorson, 183 Iowa 148, 165 N.W. 360; LeSell v. Mendenhall,186 Iowa 980, 171 N.W. 152; Thompson v. Zuckmayer, 94 N.W. 476,
In this action, there was no evidence tending to show that the wife had any knowledge of the existence of the husband's indebtedness to the plaintiff, or that he was insolvent while she was saving this money. Under such circumstances fraud will *Page 129
not be presumed. Sheffield Milling Co. v. Heitzman, 192 Iowa 1288, 184 N.W. 631; Henderson v. Ball, 193 Iowa 812, 186 N.W. 668; Stephenson Peterson v. Svenson, 187 Iowa 802, 174 N.W. 570.
It is the well-settled rule of law in this state that a debtor has a right to transfer property or make gifts to his wife at a time when he is perfectly solvent and retains a sufficient amount to meet all of his debts. Erusha v. Wisnewski, 207 Iowa 1187, 224 N.W. 517; Lietz v. Grieme, 212 Iowa 1305, 236 N.W. 395; Bartlett v. Webber, 218 Iowa 632, 252 N.W. 892.
It is our conclusion, without considering the evidence in further detail, that the greater part, if not all the money, used in constructing the homestead was paid out of moneys belonging to the wife.
[2] Appellee contends that the $700 traded out in part payment of the home, and the $800 received upon the insurance policy, in which the wife was beneficiary, belonged to the husband. It is our conclusion that the only money, if any, that could have been contributed by the husband toward the construction of the homestead was the $1,500 made up by these two amounts. Even this is doubtful because the husband was perfectly solvent when the $700 was used, and when the premiums on the insurance policy were paid. Under such conditions he could make a valid gift thereof to his wife if he so desired.
The lower court, however, found that at least these two amounts were furnished by the husband toward the cost of the homestead. If this be conceded, could plaintiff subject the wife's homestead to the payment of his judgment to that extent?
It is the rule of law in this state that where a homestead is constructed upon lots owned by the wife, and the greater part of its cost is voluntarily paid by the husband without any intention of having or receiving an interest in the homestead, it is exempt from execution for debts incurred by the husband prior to its acquisition. Corning v. Fowler, 24 Iowa 584; Shields v. Keys,24 Iowa 298; Ebersole v. Moot, 112 Iowa 596, 84 N.W. 696; Shircliffe v. Casebeer, 122 Iowa 618, 98 N.W. 486.
In the case of Corning v. Fowler, 24 Iowa 584, the husband was insolvent when certain lots were purchased by him for his wife out of her funds, and that such insolvency existed when the homestead was being constructed. It was there held that although the husband furnished the greater part of the money *Page 130
used in its construction, the wife's homestead could not be subjected to the payment of the husband's debts to the extent of moneys voluntarily contributed by him toward its construction. In that case, this court said:
"The wife owns the land; the husband is in debt; she expends some of her own means in improvements; he a much larger amount;
she is guilty of no collusion, has no fraudulent purpose, but has knowledge of the improvements made by him, and makes noobjections to his thus expending his money. Under such circumstances can the creditors enforce a lien against the lands of the wife to the extent of the money thus invested by the husband? It seems to us not. If the case stood as a voluntary gift or conveyance of property by the husband to the wife, * * * made for the purpose of defrauding his creditors, equity could well follow such property into the hands of the donee or grantee. * * * But this rule can have no application where the husband makes with his own means improvements on the lands of the wife, without any contract that he acquired an interest thereby in the realty, or that she was to be liable or accountable to him for the value thereof. The expenditure was voluntary — not under any contract — and it would place at the disposal of an insolvent and spendthrift husband the entire real property of the wife, if his creditors could follow the means expended by him thus voluntarily thereon, and enforce their claims or liens to the extent of such expenditure. The wife cannot thus, without her consent, be made the trustee of the husband, holding her own lands in trust for the payment of liens in the creation of which she had no part. * * * To recognize the existence of such a lien from the fact that he, while in debt, has added to the value of her lands by expending his means thereon, would be going further than any case brought to our attention, and it seems to us would be most dangerous in practice, and in violation of the rights of the wife."
The facts in the instant case are much stronger in favor of the wife than those in the Corning case. It is not claimed or shown here that any moneys were contributed by the husband toward the cost of the homestead while he was insolvent, or with any intention to defraud his creditors. In fact, the contrary appears.
Appellee cites some cases supporting his contention that *Page 131
where a debtor expends money in improvements on his wife's real estate, with her consent, the husband has an interest in the homestead to the extent of his contributions, and that creditors can subject that interest to the payment of their claims. Croup Schafer v. Morton, 49 Iowa 16; 53 Iowa 599, 5 N.W. 1093; and Hamill Co. v. Henry, 69 Iowa 752, 28 N.W. 32.
These and similar cases are distinguishable from the case at bar, because in those cases, the greater part of the purchase money of the land was furnished by the husband, and he was insolvent when the money was advanced. In Croup Schafer v. Morton, 49 Iowa 16, loc. cit. 19, this court distinguishes that case from the Corning case in the following language:
"In Corning v. Fowler, * * * an insolvent husband had built a house upon his wife's land. The plaintiff was a judgment creditor of the husband, and brought the action to establish a lien upon the land. The petition was dismissed, and we think very properly.
The court says: `The wife cannot without her consent be made the trustee of her husband, holding her land in trust for the payment of liens in the creation of which she had no part.' It will be seen that the establishment of a lien as sought would have given the creditor a right in the property not co-ordinate with that of the wife, but in some sense paramount. * * * This could hardly have been allowed, even if the house had been built with the wife's consent."
The cases relied on by appellee are also distinguishable from this case, because the record therein shows that the husband furnished the money for the purchase of the real estate, and for the expenditures made thereon, and was insolvent when the money was advanced by him. In those cases the question of fraud was also clearly raised by the pleadings and by the proof. In the case at bar, the lots were purchased with the wife's money during a time when her husband was perfectly solvent, and no fraud is alleged or proven.
Under the ruling announced in Corning v. Fowler, supra, which has never been departed from in this state, plaintiff's claim cannot be established against a homestead belonging to the wife. We are not inclined to depart from the rule announced therein.
It is our conclusion that the facts in this case did not warrant a subjection of the wife's homestead to the payment of *Page 132
any part of plaintiff's judgment against her husband. The judgment of the lower court is therefore, hereby reversed, and the same is remanded for a decree in harmony herewith. — Reversed and remanded.
ANDERSON, C.J., and all Justices concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432072/ | I. This action is brought in equity, to compel the specific performance of an alleged written agreement to repurchase a certain note and mortgage negotiated by appellant *Page 286
1. SPECIFIC to appellee on November 6, 1919. The alleged PERFORMANCE: agreement, written upon the stationery of contracts appellant, and signed "Taylor Grimes, Vice enforcible: President-Loans," is as follows: contract to repurchase "We have this day sold to your company a note and certain farm mortgage, signed and executed by mortgage. Milo D. Morse and wife, Cecile Morse, dated October 1st, 1915, for $8,000.00 — secured by 160 acres of land in Mower County, Minn., described as the Northeast Quarter of Section 10, Township 102, Range 14. Said note secured thereby drawing your company 5 1/2% interest. In consideration of the purchase of this mortgage by your company, the Central Trust Company agrees to collect all interest and remit to your company, without charge and generally look after the loan the same as if our own. We further agree in the case this mortgage is ever foreclosed for nonpayment that we will repurchase mortgage for its face value plus all interest and costs on same; said mortgage being recorded in book 51, page 60, of the records of Mower County, Minnesota."
Default having been made in the payment of the note and interest, according to its terms appellee tendered the instrument back to appellant, and demanded performance of the alleged agreement to repurchase. Subsequently, appellee foreclosed the mortgage, and caused the land to be sold, and the title acquired in the name of the appellee. Thereupon, a deed, executed by appellee, was tendered to appellant, and a new demand made for the specific performance of the contract. The demand was refused, and this action followed.
The defenses interposed by appellant are: (a) That the vice president exceeded his authority in the execution of the written instrument; (b) that it is ultra vires; and (c) that the agreement was waived and abrogated by the subsequent conduct of the plaintiff, and cannot thereby be specifically enforced. To these propositions appellee set up ratification and estoppel.
The law applicable to transactions by agents in which their authority to conduct same, as well as the law relating to allegedultra vires contracts of corporations, is well settled in this and *Page 287
2. CORPORA- most jurisdictions. It is the contention of TIONS: appellee that the consideration for the purchase corporate of the note and mortgage was in part the powers and agreement on the part of appellant to repurchase liabilities: the same; that, when appellant was apprised of ultra vires the transaction, and performance demanded, the and lack of matter was referred to the executive committee authority: and board of directors of appellant corporation, ratifica- and that, with full knowledge of all of the tion. facts touching the transaction, they elected to retain the amount paid, and refused to carry out the contract; and that, by such refusal, the act of the vice president was fully ratified and confirmed.
If the right to make the alleged agreement to repurchase is not void because it is prohibited by law or is contrary to public policy, then the contention of appellee, if sustained by the evidence, that appellant, by the acts of its executive committee and board of directors, ratified and confirmed the contract, is sound. It has been many times held by this court that a corporation may ratify an ultra vires act so as to bind itself, when it has received and retains benefits on account thereof.Bobzin v. Gould Balance Valve Co., 140 Iowa 744; Iowa Drug Co. v.Souers, 139 Iowa 72; State ex rel. Carroll v. Corning Sav. Bank,139 Iowa 338; Bankers Mut. Cas. Co. v. First Nat. Bank, 131 Iowa 456; Vermont Farm Mach. Co. v. De Sota Co-op. Cream. Co.,145 Iowa 491; Garrison Can. Co. v. Stanley, 133 Iowa 57; Twiss v.Guaranty Life Assn., 87 Iowa 733; Traer v. Lucas Prospecting Co.,124 Iowa 107; Fidelity Ins. Co. v. German Sav. Bank, 127 Iowa 591; Field v. Eastern Bldg. Loan Assn., 117 Iowa 185; WisconsinLbr. Co. v. Greene Western Tel. Co., 127 Iowa 350. See, also, 3 Fletcher's Cyclopedia of Corporations, Sections 1543-1547.
The exceptions universally recognized to the foregoing rule are that, when the contract is prohibited by statute, or is against public policy, it cannot be ratified.
The scope of the business of appellant, as stated in its articles of incorporation, is as follows:
"To loan money, to buy, own, improve, rent, exchange, sell or otherwise deal in and handle real estate and personal property for pecuniary profit; to loan money on real estate and personal property; to buy, sell, hold and deal generally in notes, *Page 288
mortgages, bonds, securities and other evidences of indebtedness; * * *. It shall also have the power to issue and sell the debentures or bonds of the company and receive time deposits and issue drafts on its depositories. * * * It shall also have the further and additional powers which may at any time be granted by the legislature of the state of Iowa, or which may at any time be given by law to companies of like nature."
Section 9222, Code, 1927 (Section 1855, Code of 1897), provides that state and savings banks may contract indebtedness or liability for necessary expenses in managing and conducting their business, for deposits, and to pay depositors; provided that, in pursuance to the order of the board of directors previously adopted, other liabilities not exceeding in amount the capital stock of the corporation, may be incurred.
Section 9284, Code, 1927, authorizes trust companies and state and savings banks existing under the provisions of Chapter 416 of the Code, in addition to all other powers granted, when authorized by their articles of incorporation, "to issue drafts upon depositories, and to purchase, invest in, and sell promissory notes, bills of exchange, bonds, mortgages, and other securities."
We find nothing in the statute which prohibited the appellant corporation from entering into the contract in question. If, therefore, the execution thereof was previously authorized or subsequently ratified, with full knowledge by 3. CONTRACTS: appellant of the facts, then, under the requisites authorities cited, it is bound thereby, unless and the agreement was void because contrary to validity: public policy. It seems to us that the authority public conferred upon appellant by its articles of policy: incorporation, considered in the light of the agreement statute, effectively disposes of appellant's to contention that the agreement is void because repurchase contrary to public policy. The power to buy, note and sell, and deal generally in notes, mortgages, mortgage. bonds, securities, and other evidences of indebtedness, it seems to us, might be held to include the incidental power on the part of the corporation to guarantee the payment of negotiable instruments sold, as well as to make agreements to repurchase the same. It is unnecessary for us to pass on this question in this case.
In a discussion based upon Section 1850, Code, 1897, relating *Page 289
to savings banks, we said, in State ex rel. Carroll v. CorningSav. Bank, supra:
"* * * the design in enacting the section of the statute first quoted seems to have been to obviate any doubt as to the power of savings banks to engage in the general banking business, restricted only by such limitations as appear to have been thought essential to the preservation of the beneficial features of the early savings banks, and especially those calculated to shield savings placed in their keeping from exploitation and loss. Having authority to deal in commercial paper, they necessarily must assume the obligation incidental thereto, and among these are those of guaranty and indorsement in transferring the same."
Appellant cites two decisions of the Supreme Court of Minnesota to sustain the contention that the agreement is void because contrary to public policy. The decision of this court in Engen v.Sheridan County State Bank, 163 Minn. 1 (203 N.W. 434), was rested upon the finding there made that the agreement, which was similar to the one in controversy, created a mere option, and that, as the same was not accepted, no recovery could be had. The other case cited by counsel is Eberlein v. Stockyards Mtg. Tr.Co., 164 Minn. 323 (204 N.W. 961). The point decided in that case was that the officers of the trust company did not, solely because they had authority to buy securities for the company, possess implied authority to agree to repurchase a negotiable instrument on demand at its face value. The court there held that power to make a contract of repurchase was not necessarily incident thereto. The court further, in the course of its decision, said that implied authority to do the unusual and unnecessary things involved would not be upheld, in part, because of its inherent danger to the safety and stability of the corporation.
In a later case, not cited by appellant, the Minnesota Supreme Court, in Farmers Mech. Sav. Bank v. Crookston State Bank,169 Minn. 249 (210 N.W. 998), went further, and held that an agreement by the bank to repurchase a negotiable instrument in which the only interest of the bank was a small commission received on the transaction was void, because contrary to public policy. The court, however, held that its conclusion was not out of harmony with the recognized authority *Page 290
of a bank to guarantee the payment of a note, upon the negotiation thereof. The court said:
"In making such a guaranty a bank is within its corporate powers, however bad its policy may be in guaranteeing long-time mortgages."
It will be observed that none of the cited cases support appellant's contention, under the facts of this case, that the agreement in question is void because contrary to public policy. We are of the opinion that it should not be so treated.
II. We come now to what seems to us to be the decisive question in the case.
If it be granted that the vice president, as agent for the corporation, had neither express nor implied authority to bind it by the writing in evidence, did the corporation, its principal, with full knowledge of the facts, subsequently ratify the agreement, and by retaining the consideration paid by appellee in the transaction, estop itself from setting up either its claim ofultra vires or the want of authority on the part of its agent to enter into the agreement? It is suggested by counsel for appellant, in argument, that the transaction, so far as it involved the alleged agreement to repurchase, was concealed from the corporation for many years, and until a complete change in conditions had intervened, and that upon no principle of equity was appellant obligated to return the consideration and accept the tender of either the note and mortgage or the deed.
On this point it is further argued by counsel that the agreement is too ambiguous and uncertain in its terms to permit of enforced specific performance; that appellant was not bound to accept a deed to the mortgaged premises in lieu of the note and mortgage; that the consideration paid by appellee was not in cash, but in other securities, which appellant was no longer able to return. The appellee did tender the note and mortgage to appellant when demand was first made for the repurchase thereof, but this tender has not been kept good. The remedy does not require proof of the restoration of the status quo, as the relief sought is specific performance, and not rescission. It is immaterial that appellant is no longer able to return the cash or securities received for the note and mortgage, nor, indeed, would appellee be compelled to accept the same, if tendered. *Page 291
The agreement to repurchase on its face implied payment in cash. The language of the instrument is not as clear as it might easily have been made, but the agreement to repurchase is in case of foreclosure. If foreclosure of the mortgage was contemplated, appellant was bound to accept whatever was received as a result thereof. The foreclosure of the mortgage was by notice and sale, and no judgment was obtained against the makers of the note. The land was bid in for the amount of the claim, plus other items properly included therein. Full disclosure of the transaction and of the repurchase agreement was made to appellant at the time the tender was first made of the note and mortgage and the repurchase thereof demanded. The action of the executive committee and the board of trustees followed these disclosures. The action taken was in the light thereof. Under the authorities cited above, appellant could not retain the benefits and escape the obligation of the written contract upon the ground that its agent exceeded its authority, or that the contract was ultra vires. It was estopped to urge either as a defense to this action. It could not deny the authority of the agent and at the same time claim the benefits of the transaction. This is elementary in the law of principal and agent.
Other matters are discussed by counsel, but they are disposed of by what we have already said, and do not call for particular consideration. The conclusion reached necessarily involves the consideration of all matters urged by appellant.
III. The suggestion is made that a receiver has been appointed, 4. ABATEMENT who has taken charge of the business and assets AND REVIVAL: of appellant, and that for this reason this transfer of action will not lie. The receiver was appointed liability: some months after the action was commenced. It receiver- was not abated by the appointment thereof. ship: Weigen v. Council Bluffs Ins. Co., 104 Iowa 410. effect.
We reach the conclusion that the judgment and decree of the court below is right, and it is, therefore, — Affirmed.
ALBERT, C.J., and FAVILLE, KINDIG, and GRIMM, JJ., concur.
EVANS, J., took no part in the decision of this case. *Page 292
MORLING, De GRAFF, and WAGNER, JJ., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432075/ | The questions presented on this appeal arise in connection with two claims filed by Florence Graves against the estate of May Hill, deceased. May Hill died December 4, 1930, leaving a will in which W.N. Graves, the husband of Florence Graves, was named as executor. Upon the probate of the will W.N. Graves was appointed executor and on September 10, 1931, gave notice of his appointment. On September 6, 1932, the claims here involved were filed in the office of the clerk of the district court. One of these claims is for $1,050.30 for personal services alleged to have been performed by Florence Graves for the decedent, and the other claim, in the sum of $2,760.80, is for personal services alleged to have been performed by W.N. Graves for the decedent. This latter claim was assigned by W.N. Graves to Florence Graves and both claims were filed by her.
Nothing appears to have been done in connection with these claims until January 18, 1937, when W.N. Graves, executor, filed an application alleging that he had allowed and approved these claims and asking an order of court confirming such allowance *Page 529
and approval. An answer and objections to this application was filed by C.N. Wood and the other objectors named in the title hereof. C.N. Wood is the surviving spouse, and the other objectors are the children of May Wood, who was a beneficiary under the will of the decedent, May Hill. The claimant filed a reply to such answer and objections and, on hearing before Judge E.M. Miller, it was held that, under section 11968, W.N. Graves, the executor, had such interest in the claims that the approval of same by him should be set aside, and it was ordered that C.W. Kellogg be appointed temporary administrator to make investigation of these claims and report his findings to the court.
The temporary administrator filed a report, in which he stated that he had investigated the claims but was unable to state whether anything should be allowed thereon, that he could not recommend the approval of either of said claims, and that he, therefore, disapproved the same. The claimant, Florence Graves, filed objections to the report of the temporary administrator, in which she alleged that the order appointing such temporary administrator was without jurisdiction and void, and asked that the report be rejected and the appointment of the temporary administrator be vacated and set aside. Hearing was had on the report of the temporary administrator and the objections of claimant thereto, and an order was entered by Judge E.M. Miller overruling the claimant's objections. This order expressly provided, however, that such ruling was not an adjudication that the claims were disallowed, and stated that claimant "may, if she desires, have said claims heard as provided by section 11963 of the Code." This section provides that a claim filed, but not fully admitted by the executor or administrator, may be heard by the court or submitted to a jury.
Following this order, a hearing on said claims was held before Judge Brown on September 2, 1937. The abstract states that at this hearing it was stipulated in open court that law questions involved in paragraph 2 of the objectors' answer and objections filed January 25, 1937, would be tried first, and that the executor and claimant would have the right to file reply to such answer in conformity with proof that might be offered at the hearing. Testimony of W.N. Graves, executor, and of C.N. Wood, objector, was received at such hearing, and, on September 3, 1937, claimant filed a reply to objections to claim. We *Page 530
are unable to tell from the record set out in the abstract when the cause was argued and submitted. According to a statement contained in appellee's argument, it was argued and submitted on September 8, 1937, and the submission was "with leave granted to the parties to file additional pleadings in conformity with the evidence." In any event, both parties continued to file pleadings subsequent to that date. On September 9, 1937, the objectors, C.N. Wood et al., filed an amendment to answer and objections to allowance of claims. On September 13, 1937, claimant, Florence Graves, filed an answer and resistance to the amendment to answer and objections filed by C.N. Wood et al. And on September 13, 1937, the objectors, C.N. Wood et al., filed a reply to answer and resistance of the claimant, Florence Graves. On the same day, the trial court entered an order overruling the objections of C.N. Wood et al., and it is from this order that the objectors have appealed to this court.
Paragraph 2 of the answer and objections to the allowance of the claims, which it was stipulated should be tried first, is as follows:
"That said claims were not filed until the 6th day of September, 1932, and have never been legally allowed and approved by this court and no notice of hearing thereon was served on any party interested in said estate asking for the allowance of said claims within the time provided by law for filing and proving of claims against estates; that said claimants and each of them are now barred and estopped from having a hearing on said claims by the statute of limitations as made and provided by the Code of Iowa fixing time in which claims against estates may be filed and notice of hearing thereon served."
It is the contention of the appellants that the order entered by Judge Miller, on the hearing of the executor's application and the answer and objections of C.N. Wood et al., contained an adjudication that the executor had such an interest in the claims that, under section 11968, he could not serve in any manner connected therewith, and that, therefore, the approval and recommended allowance of said claims, and the waiver of the notice of hearing, alleged to have been made, were void and of no effect, and that the said claims were barred by section 11972, because of the failure to file such notice of hearing.
Such order of Judge Miller does state that, because of the *Page 531
interest of the executor in said claims, he should not serve in any manner in connection with the approval thereof, but, so far as we can find, there is nothing in such order that could be held to be an adjudication that the executor would not have authority to waive the notice of hearing on the claims, or that the claims were barred. In the very order referred to it is stated that the court was not in any way passing upon the legality or merits of the claims, or to any objection to their approval in the further consideration thereof by the court; and, in the order entered by Judge Miller on June 18, 1937, overruling the objections of the claimant to the report of the temporary administrator, he states that "this ruling shall not be an adjudication to the effect that the claims of Florence Graves are disallowed, but said Florence Graves may, if she desires, have said claims heard as provided in section 11963 of the Code."
Appellants contend, however, that, under the stipulation entered into, the only questions to be heard and determined at the hearing on September 2, 1937, were the law questions involved in paragraph 2 of the answer and objections to the allowance of the claims; that such law questions were, whether the executor had such an interest in the claims as invalidated any action of his in connection therewith, and, whether, for that reason, the alleged waiver of notice of hearing by him could relieve the claimant from the bar of the statute; and that this precluded the court from considering or determining the existence of peculiar circumstances entitling the claimant to equitable relief under section 11972. In the order entered by Judge Brown, however, he finds that said claims "were assigned for trial at this term under an agreement of counsel that the question as to whether said claims or either of them were barred was to be first and separately submitted to and decided by the court and that the matter now before the court for decision is under agreements limited to the sole question afore-mentioned."
It may be conceded that, if it was beyond the power of the executor to waive the service of notice of hearing under any circumstances, then it was not waived, even though he advised the claimant that he would waive it. As we understand the objectors' argument, however, they do not contend that an executor could never, under any circumstances, waive the service of the notice of hearing. Their contention is that, if the executor has such an interest in a claim, as is contemplated by section *Page 532
11968 of the Code, "he shall not serve in any manner connected therewith"; and that, because Judge Miller's order found that the executor "has such interest in said claims that in accordance with section 11968 of the Code of Iowa he should not serve in any manner connected with the approval of said claims," the executor could not, in this case, act in any manner in connection with said claims, even to the extent of waiving notice of hearing thereon. Much time is spent in argument and many cases cited by both parties, but neither of them has cited and we have been unable to find any decision of this court on the precise proposition thus presented. An examination of the decisions of other jurisdictions furnishes no decided support for either side of the question, because we have found no decision involving a statute with substantially the same provisions contained in ours, and even as to statutes having somewhat analogous provisions the pronouncements of the courts of different jurisdictions are in hopeless conflict.
In the view we take of this case, however, it is not necessary to decide this precise proposition. In our opinion the trial court was not restricted to a hearing and determination of the purely legal questions only, which are here insisted upon by the appellants. A consideration of the whole record, including the previous orders of Judge Miller, the stipulation entered into, the evidence received and the pleadings filed, leads us to the conclusion that the hearing before Judge Brown was for the purpose of first determining whether or not the claims here involved were barred, under the provisions of section 11972, because of the failure to serve notice of hearing on said claims within the time provided; that such hearing also involved the determination of whether, if said claims were barred because of the failure to file such notice of hearing, there were peculiar circumstances connected with the claims and the failure to serve notice of hearing thereon which would entitle the claimant to equitable relief from the bar of the statute; and that all of these matters were to be tried and determined at this hearing before Judge Brown, and only the proving of the claims was to be left for a later hearing, if the court found that the claims were not barred. We are further satisfied that the evidence presented at this hearing was such that the trial court could have found therefrom, that both claims were presented to the executor within six months after he gave notice of his appointment; and that the executor told the *Page 533
claimant that he had knowledge of the matters on which the claims were based, that the claims would be allowed, and that it would not be necessary to serve notice of hearing thereon. The claims themselves were filed in the office of the clerk of the district court before the expiration of the twelve months period allowed for filing same, and, even if the executor did not have the power to waive the notice of hearing, we think the trial court could properly find that the matters above referred to were sufficient to constitute peculiar circumstances entitling the claimant to equitable relief from the bar of the statute. While it may be conceded that there are many things connected with these claims which might well arouse suspicion, all such matters are properly for consideration in connection with the trial of these claims upon their merits.
Finding no error in the order of the trial court from which the appeal is here taken, said order is hereby affirmed. — Affirmed.
SAGER, C.J., and ANDERSON, KINTZINGER, RICHARDS, and HAMILTON, JJ., concur.
MILLER, J., takes no part. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431960/ | I. The evidence in this case is not in dispute. The correctness of the rulings of the court which it is claimed 1. INTOXICATING were erroneous, and upon which a reversal is LIQUORS: asked, is raised by objections to testimony and nuisance: exceptions to the court's instructions. instruc- Primarily, the basis of the appeal is an alleged tions. erroneous construction of the statute.
The prosecution is under Section 1924 of the Code of 1927, which makes it unlawful for any person to have possession of any intoxicating liquor, except as provided by Title VI of the *Page 817
Code, relating to intoxicating liquors. The contention of appellant is that the county attorney's information charged a nuisance, and that proof that the liquor was kept at a place with the intent to sell the same contrary to law is essential to conviction. The information charges only the unlawful possession of intoxicating liquors with the intent to own and possess the same. No attack was made upon the information whatever. The court in its instructions advised the jury that:
"The law of Iowa provides that no one shall, for himself or any person else, directly or indirectly, have possession of any intoxicating liquor, except as provided by law. The law also provides that whoever shall use any building or place for such purpose shall be guilty of a nuisance."
Section 1930 of the Code provides:
"Whoever shall erect, establish, continue, or use any building, erection, or place for any of the purposes herein prohibited, is guilty of a nuisance, * * *"
The liquor in question was taken under a search warrant from a farm occupied as a tenant by appellant's mother. Three bottles containing alcohol were seized, together with a number of empty bottles and cartons in boxes used to contain bottles. Appellant admitted to the officers that he was the owner of the liquor, and then proposed to plead guilty. The bottles were concealed in a row of trees along the highway. Whether they were thus placed or concealed for the purpose of sale or personal use is not shown. There was no building or erection on the premises near the place where the liquor was kept. The location selected by appellant for the preservation of the bottles was a place, within the meaning of the statute. Being in the unlawful possession of intoxicating liquor at a place, within the meaning of that term as used in the statute, he was guilty of a nuisance, as defined thereby. The instructions, therefore, were not erroneous. State v. Boever,203 Iowa 86; State v. Wareham, 205 Iowa 604.
II. The empty bottles taken from the premises were admitted in evidence, as was also the testimony of the officers as to the statements made by the defendant to them at the time of the *Page 818
2. INTOXICATING seizure. Timely objection was made to the LIQUORS: introduction of this testimony. It is true, as possession: claimed by appellant, that, at the time the evidence: statements were made, he was not under arrest. empty He knew that he presently would be, and he did, bottles, in fact, accompany the officers to town. The etc. admission was clearly admissible. The empty bottles tended to throw some light upon the situation. In any event, the evidence of the State is not disputed, and the court properly instructed the jury that proof of a sale or offer to sell intoxicating liquor was not necessary. Proof of the unlawful possession was sufficient. The evidence as to the empty bottles and cartons could not, even if erroneous, in the state of the record, well have been prejudicial. The interpretation placed by the court upon the statute is in harmony with what is said inState v. Boever, supra. The claim of misconduct by the county attorney in his opening statement to the jury is not made out by the record, and cannot avail the appellant.
The judgment is affirmed. — Affirmed.
All the justices concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431964/ | Appellee, the Farmers Mutual Hail Insurance Association of Iowa, is incorporated under the laws of this state, and has its principal place of business in the city of Des Moines. The policy in suit was issued June 28, 1920. The 1. INSURANCE: loss occurred July 5, 1922. The loss to mutual asso- appellant's crops was total, and appellee ciations: concedes that, if appellant is entitled to assessments: recover at all, it is for $2,000, the full face validity. of the policy. An assessment of $34.25 was levied upon the policy of appellant, to cover his pro-rata share of the losses occurring during the year 1920. Appellant, after due and proper notice, failed to pay the assessment. It is tacitly conceded that, if the assessment was legal, the policy was in suspension at the time of the loss, and no recovery can be had thereon.
Appellant asserts that the assessment was not levied according to law, the articles of incorporation, and the by-laws of the association, and that the same is invalid. The invalidity thereof is predicated upon the following matters: (a) That it was not made by the board of directors, as required by the articles of the association; (b) that it was not based upon an audit of the association accounts, and that, in making the assessment, the amount of insurance in force was not ascertained, or the assessment based thereon; (c) that the assessment was made in part by the secretary, and not by the board of directors, notwithstanding the fact that the power to make the assessment was not delegable; (d) that the levy was made without regard to the provision of the by-laws that one half of the amount to be assessed should be levied upon all insurance in force in the state; and (e) that the assessment was arbitrary, unreasonable, and far in excess of the necessities of the association. Other alleged irregularities will be noted as we proceed. *Page 1101
The burden was upon appellee to show that the assessment was valid and legal, and that same was made in substantial conformity to the rules and laws of the association. Van Scoy v. NationalFire Ins. Co., 191 Iowa 1318; Petite v. Atlas Ins. Co., 142 Iowa 265. The articles of incorporation conferred authority upon the board of directors to levy and collect assessments for the purpose of paying losses and expenses. This authority could not be delegated to the secretary, nor exercised by him alone.Farmers' Mill. Co. v. Mill Owners Mut. Fire Ins. Co., 127 Iowa 314. The by-laws of the association provided for the division of the state of Iowa into two districts, to be known as the northern and southern districts, for the purpose of making assessments to pay losses, etc., and also that one half of the amount of all losses should be levied on the whole insurance of the state.
The minutes of the meeting of the board of directors held on September 21, 1920, as kept by the secretary, were introduced in evidence, as were also the minutes of the annual meeting of the board of directors, and of the annual meeting of the policy-holders, held on September 21, 1921. The record of these meetings includes the audit of the assets and liabilities of the association for those years.
No attempt appears to have been made to delegate authority to the secretary to ascertain the amount necessary and to levy the assessment for the year 1920. It does appear, however, that an attempt was made at the board meeting on September 21, 1921, to authorize the secretary to fix the rate on business located outside of the state of Iowa as to him seemed fair.
The policy of appellant was in suspension prior to the 1921 meeting of the board of directors. Nothing is said in the minutes of either meeting as to the assessment of one half of the total losses against all insurance in force in the state. The secretary, however, testified that the by-laws requiring that this be done were complied with. The assessment levied in 1920 was 2 per cent in the northern division on all business in force July 1st; 1.8 per cent on all business written between July 2d and July 10th; and 1.5 per cent on all business written July 11th to August 6th; and on all business written after August 6th, 1.2
per cent. Franklin County, in which appellant resides, is included in the northern district.
The board of directors at its 1921 meeting levied an assessment *Page 1102
of 1.8 per cent on what is denominated "the eastern Iowa and the Iowa mutual business." The explanation made by the secretary of the variation in the rate of assessment in the two districts and as otherwise made was that the losses in one district were greater than in the other, and that to equalize the burden no assessment was levied on insurance written subsequent to July 1st, to cover losses occurring prior to that date. The same rule was followed as to the other assessments.
An audit was made of the accounts of the association, covering income, disbursements, assets, liabilities, and other matters for the years 1920 and 1921. Nothing is said in the report of the auditor for either of these years as to the amount of insurance in force. According to the testimony of the secretary of the association, this item was derived from the audit of the insurance department of the state of Iowa. The amount of insurance in force during the years 1920 and 1921 is not disclosed. No assessment could be made by the board of directors upon any other basis than the total amount of insurance in force, and, in the absence of a plea of fraud, we think it must be inferred from the testimony that this element must have been considered. It would be better if the records kept by the secretary of board and annual meetings more completely covered the details and gave full information as to all matters of importance considered thereat.
Section 1759-h of the Code Supplement, 1913, authorizes mutual assessment associations to make such assessments as are required to pay losses and necessary expenses incurred in the conduct of the business. The items of expense disclosed by the auditor's report were very large, when compared with the total disbursements for losses. The audit as to assets and liabilities appears to have been made, as required, and there is nothing to indicate that the expenses were less than indicated thereby. The amount collected in excess of the requirements of the association is apparently larger than it should have been. It is, of course, true that a perfectly accurate estimate cannot be made. We are not convinced, however, that the assessment was arbitrarily made, or that such irregularities are shown as to invalidate it. Appellant knew that he was in default in the payment of his assessment, and had requested the cancellation of his policy. Cancellation could be effected by him only by *Page 1103
payment of the assessment. This he declined or neglected to do.
The secretary was permitted, on the cross-examination of counsel for appellee, to testify, over the objections of appellant, to the manner in which the assessment was worked out, and to explain the facts upon which the rate 2. INSURANCE: of assessment was fixed in the different mutual asso- districts. It is urged by counsel for ciations: appellant that this testimony was validity of inadmissible, for the reason that it tended to assessments: impeach the records of the association. The oral evidence. testimony either covered matters not referred to in the record of the association or was explanatory in character only. The association is organized upon a mutual assessment basis, and the records kept by the officers thereof should be sufficiently complete to give all necessary information to its members. Although the record of the board meetings might well have been improved, we would not, in our judgment, be justified in holding the assessment invalid because of the irregularities shown. There was substantial compliance with the articles and by-laws of the association.
We conclude, therefore, that a verdict was properly directed for the defendant. — Affirmed.
EVANS, C.J., and VERMILION and ALBERT, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431966/ | Chariton Finance Company filed its petition *Page 465
at law in Lucas county alleging that the Farmers Mutual Hail Insurance Association had issued a policy of fire insurance covering a certain Chevrolet truck and that said truck had been destroyed by fire, and that there was attached to and made a part of the insurance policy a loss payable clause, providing for payment in case of loss to the Chariton Finance Company, and that it was entitled to recover the amount of $500, for which it prayed judgment. The insurance company appeared and filed a motion supported by affidavits for change of place of trial to Polk county, a resistance was filed, and the lower court entered an order sustaining the motion for a change of venue to the district court of Polk county. The finance company filed a petition in this court for a writ of certiorari to review the order entered, alleging that Judge Wennerstrum acted illegally and without jurisdiction. The writ was granted by one of the Justices of this court.
Many questions are argued. We find it necessary to discuss but one.
Code section 11053 provides for a change of place of trial where the defendant makes a proper motion.
It is followed by Code section 11054, which is as follows:
"Dismissal. If the sum so awarded and costs are not paid to the clerk by a time to be fixed by the court, or if the papers in such case are not filed by the plaintiff in the court to which the change is ordered ten days before the first day of the next term thereof, or, if ten days do not intervene between the making of said order and the first day of the next term of said court, ten days preceding the first day of the next succeeding term thereof, in either event, the action shall be dismissed."
Thus we find that the legislature has specifically provided for dismissal of cases, where a change of place of trial has been ordered, if the papers in the cases are not filed by the plaintiff in the court to which the change is ordered. With this in mind we turn to the record before us.
The order of change of place of trial was entered on the 27th day of March, 1937. The next term of court in Polk county following the date of the order sustaining the motion commenced on May 3, 1937. The petition for the writ of certiorari was not filed until June 5, 1937.
In the recent case of State ex rel. Havner v. Associated *Page 466
Packing Co., 216 Iowa 1053, 1059, 250 N.W. 130, 133, this court confronted with the same question as we are here said:
"The ruling of this court in the case of Hall v. Royce [56 Iowa 359,9 N.W. 295] was based upon the ground that the original papers in that case were not filed in the Butler county court ten days before the term of court following that in which the change of venue was granted in Floyd county. It may be true that only copies of the papers in that case were filed. It would have been immaterial, so far as the decision of that case was concerned, even if the original papers had been filed. The principle there announced was that, upon granting a change of venue from one court to another, it is necessary to file the papers in the court to which the change was transferred ten days before the beginning of the succeeding term of that court. Assuming that it might be sufficient to file certified copies of the papers, it is equally true that such papers, the certified copies, must be filed ten days before the following term of court in the county to which the case was transferred.
"So in this case, if it be conceded that the filing of certified copies of the original papers be sufficient, then it was necessary to file them in the district court of Dallas county ten days before the November term thereof. Such papers were not even filed ten days before the third succeeding term of the Dallas county court. They were therefore not filed within the time required by statute.
"The statute provides that in such event `the action shall bedismissed.' Under this statute, the district court of Polk county had no authority to transfer the case on March 8, 1932, because the order of transfer had already been made. If the action was not dismissed by operation of law, the only authority remaining in the district court of Polk county was to dismiss the action."
Clearly under the record in this case, it appears without dispute, that the petitioner failed to comply with the provisions of Code section 11054. That it did not file the papers in the court to which the change was ordered, to wit, Polk county, ten days before the next term of court. Nor did the petitioner file his petition for a writ of certiorari in this court until June 5, 1937, which was more than a month after the Polk county district court convened. The action pending in the trial court in *Page 467
the case at bar was dismissed by operation of law when the petitioner failed to file papers in Polk county ten days before the next term. It necessarily follows that the writ must be, and it is, annulled. — Annulled.
OLIVER, BLISS, HALE, MILLER, HAMILTON, and SAGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432076/ | No question is raised over the right of the plaintiff to foreclose for the loans of $20,000 and $16,000 respectively, made at the time the mortgages were given. The question is whether the following printed stipulation found in each mortgage should be eliminated, namely:
"It is expressly agreed that this mortgage shall stand as security for any other indebtedness the mortgagee may hold or acquire against the said mortgagor. * * *"
The mortgagee named in the mortgage is the Jones County *Page 470
Trust Savings Bank. At the time the mortgages were given, the bank held $15,000 of the notes of F.A. Ballou, on which Hosea was indorser (or surety), which he and Maria Ballou 1. MORTGAGES: have since renewed as principals. These renewal construction notes now amount to $18,000, and the notes and representing the new loans of $20,000 and operation: $16,000, with the mortgages, have been assigned dragnet to the plaintiff. The defendants contest the clause for right to a foreclosure for the $18,000, giving security: as reasons, in substance: (1) That, in making effect. the loans, the Jones County Trust Savings Bank acted as agent or trustee for the plaintiff, Turnis; that Turnis was the undisclosed principal in the contract for the loans; and that, as Turnis was the real mortgagee, the additional indebtedness clause in question, read in the light of that fact, cannot be construed to secure the $18,000 indebtedness to the Jones County Trust Savings Bank; (2) that the mortgagors signed the instruments to carry into effect a previous agreement, which did not provide that they should secure the additional indebtedness, and that they signed without knowledge of the inclusion of this clause, and are entitled to reformation by excising it; (3) that, if the $18,000 additional indebtedness is excluded, the security is of adequate value, and no receiver should have been appointed.
I. The negotiations resulting in the mortgages were entirely between the cashier of the Jones County Trust Savings Bank, Stimson, and the Ballous. There is nothing to indicate that the plaintiff, Turnis, was known by the mortgagors to have been personally concerned in the making of the loan until Stimson and Turnis gave their evidence on the trial of this case. Their evidence shows that the plaintiff, Turnis, was a director of the Jones County Trust Savings Bank; that the $18,000 liability of Hosea and Frank Ballou was objected to by the banking department; that Turnis had money with which he could make the new loans desired by Ballou, and Turnis agreed to furnish the money for the new loans if the mortgages were made to cover the $18,000 old debt to the bank. Plaintiff, Turnis, testifies that he constituted Stimson his agent to represent him in connection with the completion and making of the loans. The money used in making the new loans was Turnis's money. *Page 471
Turnis owned the two new notes from the beginning, but did not own the old ones, except as the renewals were afterwards assigned to him for the purpose of this suit.
Prior to April, 1919, Hosea Ballou had had no business with the Jones County Trust Savings Bank. Frank had been doing business with the bank, and was indebted to it. About that time, Hosea put his name on Frank's notes to the then amount of $15,000 (now $18,000). Afterward, Hosea wanted to procure a farm loan. Hosea says that the first thing that occurred about the making of the new loans was that Frank spoke to Cashier Stimson "about whether I could not make it there at the bank. Frank reported this to me, and that is what took us over there." They had an interview at that time, in which, Stimson says, he told Ballou that they would take the mortgage as protection for what Ballou already owed them and for the proposed $36,000, and Ballou assented to it. Hosea and Frank, who was also present, deny that anything was said on the subject. It is not claimed that any contract for the making of the loan was concluded at that interview. The negotiations from that time on were conducted entirely by correspondence. The letters to Ballou, so far as appears, were on the letterheads of the Jones County Trust Savings Bank, and were signed "F.E. Stimson, Cashier." One inquires, "Do you still wish us to make this loan at six per cent?" Another states:
"We are planning to furnish you the money you will need March first and will make it $36,000 if you wish. I am enclosing an application blank, which I wish you would fill in and sign."
Ballou called in Attorney S.S. Crittenden to fill out the blanks in the application. The application reads:
"I hereby apply to the Jones County Trust Savings Bank for a loan of $36,000 for the term of five years with interest at six per cent, payable semiannually, to be secured by a first mortgage upon" property described.
The rest of the application is taken up with the ordinary information required, relating to the worth of the security and of the applicant. The application contains no stipulations as to the terms or contents of the mortgages or notes to be given. Ballou mailed back the application to Stimson, who prepared *Page 472
the notes and mortgages in suit, making the notes payable to the Jones County Trust Savings Bank, and naming the bank as mortgagee, and stipulating for maintaining security, keeping up insurance and taxes, acceleration in case of default, etc. Stimson says that the notes and mortgages were "mailed to his attorney at Clarence, Mr. Crittenden. It must have been done by direction of Mr. Ballou, or I would not have sent them to him." Ballou says he received them through the mail. They are acknowledged before Stephen Crittenden.
It is obvious that no contract was consummated until the notes and mortgages were executed and accepted. The only mortgagee that Ballou knew was the bank. By the terms of the mortgages, they were to stand as security for any other indebtedness that the bank might hold or acquire against the mortgagor. Ballou did not understand that Turnis was the mortgagee, or that he was assuming any obligations to Turnis or giving Turnis security for any indebtedness, existing or future. The agreement was, on its face, and mutually understood as, an agreement with the bank and for the benefit of the bank. The claim in controversy was then owned by the bank. The new loans were, by arrangement between the bank and plaintiff, unknown to Ballou, the property of Turnis, and Turnis, to that extent, was the owner of the security. The bank was the owner of the mortgage, so far as it secured the old indebtedness. Whether the plaintiff's relation to the contract was that of an undisclosed principal, or whether 2. PARTIES: it was that of an equitable owner or beneficiary real party of a trust, the bank took the mortgages with a in interest: right to enforce them and to collect and agent for distribute the proceeds. Brown v. Sharkey, 93 undisclosed Iowa 157; Linnemann v. Kirchner, 189 Iowa 336; principal or Noe v. Christie, 51 N.Y. 270; National Bank v.
beneficiary. Grand Lodge, 98 U.S. 123; Jackson Sons v.Mott, 76 Iowa 263; Fear v. Jones, 6 Iowa 169; Simon v. Trummer,57 Or. 153 (110 P. 786); United States Tel. Co. v.Gildersleve, 29 Md. 232 (96 Am. Dec. 519); Huot v. Osler,44 R.I. 471 (118 A. 871); White Co. v. Jordan, 124 Va. 465
(98 S.E. 24); Namquit Worsted Co. v. Whitman, 136 C.C.A. 575 (221 Fed. 49).
This suit might have been brought in the name of the bank, and the decree would have covered the interests of the *Page 473
bank and of the plaintiff. Namquit Worsted Co. v. Whitman, 136 C.C.A. 575 (221 Fed. 49); Kelly Asphalt Block Co. v. BarberAsphalt Pav. Co., 211 N.Y. 68 (105 N.E. 88).
The plaintiff is suing here as assignee of the bank. He possesses the entire cause of action.
II. It is claimed that the clause in controversy was not 3. REFORMATION stipulated for in the application for the loan; OF that the later loan papers were prepared merely INSTRUMENTS: for the purpose of carrying out a previous instruments completed agreement; and that the mortgagors reformable: signed them in ignorance of the fact that they discrepancy contained the clause in question, and therefore between it is no part of the actual contract, and not mortgage and binding upon the defendants. application for loan. It is obvious that Merriam v. Leeper, 192 Iowa 587, cited by appellants, does not sustain their contention. The application does not profess to set out the terms of the mortgages to be given, nor does it refer to the notes. It does not profess to be a contract. The notes and mortgages afterwards prepared necessarily contained numerous provisions that are not in the application. The application was neither delivered nor accepted as a contract. On its face it was no more than a proposal. The answer to the application was the 4. REFORMATION notes and mortgages. No legal reason for signing OF the notes and mortgages without acquiring full INSTRUMENTS: acquaintance with their contents is given. It is instruments well settled that the defendants' failure to reformable: inform themselves of the contents of the negligence instruments, under the circumstances shown here, in signing. does not entitle them to a reformation, and that they are bound by the papers as written. First Nat. Bank v. TenNapel, 198 Iowa 816; Houchin v. Auracher, 194 Iowa 606; Martin v.Toll, 196 Iowa 388; Bowman v. Besley, 122 Iowa 42, and cases cited.
Defendant testifies that he did not read any of the fine print on the second page of the mortgages, did not know that either of them contained the clause in question, did not intend to mortgage his farms for any other indebtedness than the new loans; that nothing had ever been said to him by anyone on the subject of securing any other indebtedness. He does not claim any misrepresentations or give any reason for not reading *Page 474
the second page of the mortgage. The first page is in pica type, and contains the ordinary defeasance clause. The second page is in bourgeois type, and contains all the ordinary provisions with respect to diminishing the security, insurance, taxes, acceleration clause, attorneys' fees, cost of abstract of title, receivership, etc.
The contested paragraph is the first one on the second page, and in full reads as follows:
"It is expressly agreed that this mortgage shall stand as security for any other indebtedness the mortgagee may hold or acquire against the said mortgagor, mortgagors or either or any of them; and also for any future advances made to said mortgagor, mortgagors, or either or any of them."
The defendant received the mortgages through the mails and returned them through the mails. In a sense, the contested paragraph, assuming defendant's evidence to be true, was not relevant to the loan that he asked for, and that he supposed was granted. He knew, however, that he was owing the mortgagee at that time. He might desire future advances. He cannot claim, and does not claim, that this paragraph was surreptitiously inserted or concealed, for no one representing the mortgagee was present when it was placed before him and when he signed it. No representation was made as to what it did or did not contain. He was indifferent as to what was contained in the so-called small print or bourgeois type of four paragraphs. Printed forms of contracts, leases, insurance policies, mortgages, notes, collateral agreements, and bills of lading, contain many provisions that the party executing them would not think about if he did not read them. Similar clauses in agreements creating security are not unknown. The plaintiff says he told "Stimson on them conditions I would try to get the money, but I wouldn't otherwise — if it would also cover the $18,000." They do not testify that they would not have made the loan if defendant had refused to permit the incorporation of the contested stipulation.
The execution or acceptance of contracts containing unnecessary printed stipulations is not unusual. To grant the reformation of this contract might work a fraud on the bank. *Page 475
The bank doubtless relied upon the mortgage. The defendant received the plaintiff's money, and has not repaid it. That the defendant actually owes the $18,000, — though, as between him and his son, the son ought to pay it, — is undisputed. As a precedent, such reformation would be a dangerous one, and the breeder of unlimited litigation. The rationale of the rule estopping a party to a contract from saying that he did not read it, where no fraud, artifice, or ruse is practiced, is well stated by Judge Sanborn in an opinion concurred in by Justice Brewer and Judge Thayer in Chicago, St. P., M. O.R. Co. v.Belliwith, 28 C.C.A. 358 (83 Fed. 437, 439), as follows:
"A written contract is the highest evidence of the terms of an agreement between the parties to it, and it is the duty of every contracting party to learn and know its contents before he signs and delivers it. He owes this duty to the other party to the contract, because the latter may, and probably will, pay his money and shape his action in reliance upon the agreement. He owes it to the public, which, as a matter of public policy, treats the written contract as a conclusive answer to the question, what was the agreement? If one can read his contract, his failure to do so is such gross negligence that it will estop him from denying it unless he has been dissuaded from reading it by some trick or artifice practiced by the opposite party. * * * This is a just and salutary rule, because the other contracting party universally acts and changes his position on the faith of the contract; and it would be a gross fraud upon him to permit one who has received the benefits of the agreement in silence to escape from its burdens by proof that he did not know and did not inquire what these burdens were, when he assumed them. * * * A written instrument cannot be avoided for fraud or mistake unless the evidence of the fraud or mistake is clear, unequivocal, and convincing."
Cases may arise in which parties may have been surprised into signing agreements which contain provisions foreign to the subject-matter of their negotiations, and in which, on evidence of the employment of artifice or urgency in signing, or of an untrue implied representation, reformation might be required. We are basing this decision upon the particular facts *Page 476
of the case, and on those facts we think that a case for reformation has not been made.
III. The right to a receiver if the mortgage secures the $18,000 indebtedness is not contested.
The decree is — Affirmed.
FAVILLE, C.J., and EVANS and ALBERT, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432077/ | Arthur E. Hazeldine and Grace King were married in 1920 and in October 1930, their marriage was dissolved by a decree of divorce. Mary E. King is the mother of Grace King and of James Ernest King. After her divorce from Arthur E. Hazeldine, Grace King married a man named Hugh, and her name appears in the record as Grace King Hugh. Arthur E. Hazeldine remained single after the divorce and died on September 22, 1935, as the result of an automobile accident. After his death and before the institution of the action at bar, Dorothy Gwendolyn Hazeldine, then eight years of age, was found and adjudicated to be his illegitimate child and only heir at law. H.R. Lafferty was duly appointed and qualified as administrator of Hazeldine's estate and on March 14, 1936, the claim herein involved was filed against said estate. This claim is based upon moneys advanced to Hazeldine by Mary E. King, and was filed and is here prosecuted by James S. Coburn, assignee of Mary E. King. On August 4, 1936, the administrator filed a report of all claims filed against the estate. This report classified such claims, allowed some and disallowed others, and asked for an order approving the report and directing payment of certain claims allowed out of proceeds of life insurance in the hands of the administrator which, the report alleged, had been pledged to such payment. In this report the claim of Coburn, as assignee of Mary E. King, was allowed in full as a claim of the third class, without any preference to payment out of proceeds of life insurance. Upon the filing of the administrator's report the court fixed the time for hearing and directed that notice be given to all creditors.
At the time of his death and for some time prior thereto, Hazeldine carried five separate life insurance policies on his life, in the aggregate amount of approximately $72,000. The beneficiary named in each of said policies was either the estate of Hazeldine or the administrator thereof. Following the filing of the report of the administrator, and before hearing *Page 372
thereon, the claimant filed an amendment to his claim and objections to the report. The amendment alleged in substance that, prior to his death, Hazeldine promised Mary E. King that, if she would refrain from instituting any proceeding against him to enforce the payment of the money owed to her by him, he would arrange to make payment thereof and would make the life insurance policies carried by him and the proceeds thereof available to her as security for the repayment of the money owed to her, either by assignment of such policies or by designating her as beneficiary thereof; that, in reliance upon said promise, Mary E. King refrained from instituting proceedings to enforce payment; and that, by reason of the said agreement, the proceeds of said life insurance policies inured to and are the property of claimant. In addition to the prayer of the original claim, the amendment prayed the court to order the defendant administrator to complete and specifically perform said agreement of Hazeldine and pay the proceeds of said life insurance policies, in the sum of $72,000, or so much thereof as shall come into the hands of the administrator, to claimant, as assignee of Mary E. King. The objections were to that portion of the report which failed to recognize and recommend the establishment of the claim as a preference claim entitled to payment out of the proceeds of life insurance policies. The objections also refer to litigation as to certain of said life insurance pending in the United States Circuit Court of Appeals for the Eighth Circuit, and in the district court of Hennepin County, Minnesota, and state that, until such litigation is finally determined, it cannot be determined whether it will be necessary for claimant to establish his right to the proceeds of the insurance thus involved.
The administrator, Lafferty, filed an answer and a cross-petition against claimant, as assignee of Mary E. King. The answer admitted the filing of the claim and the pending litigation, but denied all other allegations of the amendment to the claim and of the objections to the administrator's report. The cross-petition alleged that the administrator had collected and held proceeds of certain life insurance policies, subject only to the rights of two named claimants, other than Coburn, to a part of the proceeds of two of said policies under a written assignment and a written agreement of Hazeldine; that one Dorothy Gwendolyn Hazeldine, a minor, had been *Page 373
adjudged and decreed to be the daughter of Hazeldine, deceased; that all of the proceeds of life insurance, except such part thereof as was pledged or assigned by Hazeldine in his lifetime, are exempt from the debts of Hazeldine, and are held by the administrator, in the nature of a trust fund for distribution to the heir or heirs. The prayer asked that the claim of Coburn for any lien upon or preference of claim upon the proceeds of life insurance be denied, and that such proceeds be declared exempt from debts of the decedent, and from claims against the estate. To this answer and cross-petition of the administrator the claimant, Coburn, filed a motion to strike, which, on hearing, was overruled.
The Davenport Bank Trust Company, as guardian of Dorothy Gwendolyn Hazeldine, filed a petition of intervention, alleging that its said ward was the only heir of Hazeldine, and, as such, was entitled to the proceeds of all policies of life insurance not assigned by Hazeldine in writing, in his lifetime; denied the allegations contained in the amendment to claim; and asked that the administrator's report of disallowance and classification of claims be approved, that claimant be found to have no lien upon or preference of claim with respect to the proceeds of policies of life insurance, and that the right of the intervenor to all such proceeds be established as superior to any right of the claimant. The claimant filed an answer to the cross-petition and the petition of intervention of the bank, denying the jurisdiction of the court to adjudicate as to the insurance policies involved in other litigation.
Upon motion of the claimant the cause was transferred to equity and was tried as an equitable action. The trial court entered a decree finding that the claimant, Coburn, as the assignee of Mary E. King, had no lien upon or right in any of the policies of life insurance upon the life of Hazeldine, deceased, and that the proceeds of all said life insurance policies in the hands of the administrator were exempt from the debts of Hazeldine, deceased, and were held or to be received and held by the administrator for Dorothy Gwendolyn Hazeldine, the daughter and heir at law of Arthur E. Hazeldine, deceased. The decree also overruled the objections and exceptions of the claimant to the administrator's report. From this decree of the trial court the claimant has appealed.
[1] I. No question is here involved as to the indebtedness *Page 374
owed by Hazeldine to Mary E. King, and the claim based upon such indebtedness was allowed by the administrator in the full amount of $75,879.57. The questions here involved go to the right of the claimant to subject the proceeds of insurance upon the life of Hazeldine to the payment of this claim. Of the five policies with which we are here concerned, by express provision thereof, one was payable to the estate and the remaining four were payable to the administrator. On the face of these policies, therefore, they were subject to the provisions of sections 8776 and 11919 of the Code of Iowa, 1935, as follows:
"8776. * * * A policy of insurance on the life of an individual, in the absence of an agreement or assignment to the contrary, shall inure to the separate use of the husband or wife and children of said individual, independently of his creditors. * * *"
"11919. * * * The avails of any life or accident insurance, or other sum of money made payable by any mutual aid or benevolent society upon the death or disability of a member thereof, are not subject to the debts of the deceased, except by special contract or arrangement, and shall be disposed of like other property left by the deceased."
It is conceded by the appellant that, unless there was "an agreement of assignment to the contrary," as provided in section 8776, or unless there was a "special contract or arrangement," as provided in section 11919, the proceeds of the five policies here involved would not be subject to the payment of Hazeldine's debts, but would inure to the benefit of his daughter and only heir, Dorothy Gwendolyn Hazeldine. It is conceded by the appellees that the proceeds of life insurance may be subjected to the debts of the insured by "an agreement or assignment," as provided in section 8776 or "by special contract or arrangement," as provided in section 11919; and that an oral contract of the insured, disposing of the proceeds of life insurance payable to the estate or to the administrator, and making such proceeds subject to a debt or debts of the insured, if clearlyestablished, is sufficient to comply with the requirements of the statutes. The claimant-appellant in this case does not base his right to recover on a written contract, and the appellees deny the sufficiency of the evidence to establish *Page 375
the oral contract upon which the right to a recovery is founded. The first and most important question confronting us is, therefore, does the evidence establish an agreement between Hazeldine and appellant's assignor, Mary E. King, such as constitutes "an agreement or assignment" or a "special contract or arrangement," referred to in the sections above quoted? The answer to this question necessitates a consideration of the evidence.
II. The oral contract relied on is claimed to have been entered into at Toledo, Ohio, in a conversation that Hazeldine had there with Mary E. King and her daughter, Grace King Hugh. The evidence offered in support of this contract consisted of the testimony of Mary E. King, Grace King Hugh and James E. King. The record does not state the date of this conversation, but a letter written to Mary E. King by Hazeldine on February 19, 1935, states that he expected to be in Toledo on Wednesday of the following week, which would be February 27, 1935. James E. King was not present at this conversation and his evidence is confined to a conversation which he testifies he had with Hazeldine in Boston on either February 7 or 14, 1935. No claim is made, either in pleadings or in argument, that any contract was made in this conversation between James E. King and Hazeldine and, at most, King's testimony amounts to no more than evidence tending to show that Hazeldine was willing to secure his indebtedness to Mary E. King and Grace King Hugh by his life insurance, and that the meeting later held at Toledo, at which the alleged oral agreement was made, was the result of James E. King's talk with Hazeldine, and was arranged by Hazeldine for the purpose of carrying out promises made by him to James E. King. After his conversation with James E. King, Hazeldine did not go directly to Toledo, and did not return immediately to Davenport. In his letter of February 19, he speaks of having returned to Davenport the day before, and says that he did not stop at Toledo on his way back because he had to be in Cleveland the next week and would spend a day in Toledo at that time.
The only evidence in regard to the actual making and the terms of this alleged oral agreement is found in the testimony of Mary E. King and Grace King Hugh, and all of this evidence was received over proper objections that the witnesses were incompetent, under section 11257 of the Code of Iowa, *Page 376
to testify to personal transactions or communications with Hazeldine, who was then deceased. Section 11257 is as follows:
"No party to any action or proceeding, nor any person interested in the event thereof, nor any person from, through, or under whom any such party or interested person derives any interest or title by assignment or otherwise, and no husband or wife of any said party or person, shall be examined as a witness in regard to any personal transaction or communication between such witness and a person at the commencement of such examination deceased, insane or lunatic, against the executor, administrator, heir at law, next of kin, assignee, legatee, devisee, or survivor of such deceased person, or the assignee or guardian of such insane person or lunatic."
[2] As Coburn's interest in the claim here involved was derived by assignment from Mary E. King, and, as Mary E. King's alleged oral agreement was made with Hazeldine and would constitute a personal transaction or communication between her and Hazeldine, under the express terms of the statute, she was clearly incompetent to testify in regard to it.
The only evidence, therefore, by which the claimant can establish the alleged oral agreement and subject the proceeds of the insurance policies to the payment of his claim, is that of Grace King Hugh. The appellees contend that this evidence also cannot be considered, because Grace King Hugh was likewise incompetent to testify to such oral contract. This contention is based upon the interest which appellees claim Grace King Hugh had and still has in the event of this action. Appellees argue that, under the evidence of both Mary E. King and Grace King Hugh, it is clear that the alleged oral agreement, if any, made by Hazeldine in regard to his insurance, was not made with Mary E. King alone, but that it was made with both Mary E. King and Grace King Hugh; that, if such agreement was made, as testified to by both Mary E. King and Grace King Hugh, any right or interest in the proceeds of his life insurance, that Hazeldine agreed to give or gave as security for his indebtedness, was expressly agreed to be given or was given to both Mary E. King and Grace King Hugh; that the claim of Coburn, as assignee of Mary E. King, if established as a lien upon the proceeds of the insurance, will exhaust the proceeds of all of the insurance in the hands of or hereafter coming into *Page 377
the hands of the administrator; and that, because of the interest of Grace King Hugh in all of the insurance policies or proceeds thereof, which Hazeldine subjected to the payment of his indebtedness to both Mary E. King and Grace King Hugh, the proceeds of said policies in the hands of said Mary E. King, or in the hands of her assignee, are held by said Mary E. King, or her assignee, for the benefit of Grace King Hugh to the extent, at least, of her proportionate interest therein.
We think it must be admitted that, as contended by appellees, if any agreement was made by Hazeldine in regard to the proceeds of the life insurance policies, it was made with both Mary E. King and her daughter, Grace King Hugh. Both Mary E. King and Grace King Hugh took part in the conversation with Hazeldine. The conversation was in regard to Hazeldine's indebtedness to both of them, and the oral agreement to which both testify was that both of them were or would be made beneficiaries in the policies, or that the policies and the proceeds thereof were or would be their security for the total indebtedness owed by Hazeldine to both of them. In addition to the claim here involved, Coburn filed a claim in the Hazeldine estate, as assignee of Grace K. Hugh, which was allowed by the administrator as a claim of the third class in the sum of $8,782.82. The record shows that, in the written assignment made to him by Grace K. Hugh, the provision in regard to the insurance policies and proceeds thereof covers all the policies and proceeds that are involved in this action, and in practically the identical language used in the assignment of Mary E. King. Neither of the claims against the estate was filed by Coburn in his own name alone as owner of the claim, but in both the title and in the body of both claims he is described as assignee, one of these claims being by James S. Coburn, assignee of Mary E. King, and the other by James S. Coburn, assignee of Grace K. Hugh. It is repeatedly asserted by appellees in argument and, so far as we have been able to find, nowhere denied, that Mary E. King and Grace K. Hugh, and not James S. Coburn, are the real beneficiaries of the claims filed by Coburn against the estate. If this be true, and if the appellant should prevail in this action, the entire proceeds of all the life insurance policies covered by the alleged oral agreement made by Hazeldine with Mary E. King *Page 378
and Grace King Hugh will be paid to the appellant, as assignee, for the benefit of his assignor, Mary E. King.
[3] True, no amendment was filed by Coburn to his claim as assignee of Grace K. Hugh, claiming any interest in or asking that the life insurance be subjected to the payment of that claim. In his reply argument appellant does not deny the appellee's statements that Mary E. King and Grace K. Hugh are beneficiaries respectively of the claims filed by him against the estate, under his assignments from them; but he contends that, because Grace K. Hugh or Coburn, as her assignee, did not file any amendment to the claim based on the assignment made by Grace K. Hugh to Coburn and did not claim any interest in the proceeds of the life insurance, in connection with that claim; because the time has now passed for amending such claim or asking any such interest in the proceeds of the life insurance; and because Grace K. Hugh has expressly disclaimed any interest in the event or outcome of this action, she cannot be held to be incompetent to testify to the oral agreement alleged to have been made by Hazeldine with her and her mother. We are unable to understand why the failure of Grace K. Hugh or her assignee, Coburn, to claim the right to participate in the insurance, as against the administrator and the intervenor, conclusively establishes her lack of interest in the event of this action. As a recovery by claimant in this action would give Mary E. King all the proceeds of all the insurance which, under the alleged oral contract, Hazeldine agreed should belong to both Mary E. King and Grace K. Hugh as beneficiaries or as security for his indebtedness to both of them, we see no reason why, as between themselves, Grace K. Hugh could not enforce the rights acquired by her to the proceeds of the insurance, under such contract, against the proceeds of the life insurance in the hands of Mary E. King. Nor are we convinced that the disclaimer of Grace K. Hugh establishes her lack of interest in the event of this action. The only evidence of such disclaimer referred to by appellant, and the only such evidence that we have been able to discover, consists of her answer to the question: "Mrs. Hugh, do you have any interest, either directly or indirectly, in the event or outcome of this suit?" to which she answered, "No." If, as we think the evidence indicates, under the assignments to Coburn, Mary E. King and Grace K. Hugh are the real beneficiaries of the claims *Page 379
filed by him against the Hazeldine estate, Grace K. Hugh, as well as Mary E. King, would have had a right to subject the proceeds of the life insurance to the payment of her claim when it was allowed. If she had such right when her claim was allowed, how and when did she cease to have it? Assuming that, as against the administrator and the intervening guardian of the minor child and heir, she cannot now enforce that right, because the time has passed when she could amend her claim, as Mary E. King did, and ask that her interest be established against the proceeds of the life insurance, how can this affect her right to such proceeds if the contract with Hazeldine is established and all of such proceeds are in the hands of Mary E. King by virtue of the very contract under which Grace K. Hugh acquired her right to share in such proceeds? No suggestion is made that Grace K. Hugh ever made any disposition of her right to participate in the proceeds of the insurance other than that contained in her assignment to Coburn, and if that assignment, as we think the evidence indicates, did not dispose of her beneficial interest in the indebtedness owed to her by Hazeldine and of her right to have the proceeds of the life insurance applied in payment of such indebtedness, then that right must still exist in her. In such a fact situation, Grace K. Hugh's disclaimer of any interest in the outcome of this action, conceding it to have been honestly made and to be true (so far as the enforcement of any right or interest in the proceeds of the insurance against the administrator or intervenor is concerned), cannot change the fact that, if the alleged oral contract was in fact made, Grace K. Hugh did have and still has a right to at least a part of the proceeds of Hazeldine's life insurance under that contract, and is incompetent to testify in regard to the transaction with Hazeldine out of which the contract arose. That neither a failure to prosecute nor a disclaimer of an interest will remove the incompetency of a witness, under the statute under consideration, is shown in the following cases: James v. Fairall, 168 Iowa 427,148 N.W. 1029; Linnemann v. Kirchner, 189 Iowa 336, 178 N.W. 899; Frye v. Gullion, 143 Iowa 719, 121 N.W. 563; Ivers v. Ivers,61 Iowa 721, 17 N.W. 149; Rawleigh Co. v. Moel, 215 Iowa 843,246 N.W. 782; McClanahan v. McClanahan, 129 Iowa 411; 105 N.W. 833. In McCalanahan v. McClanahan, 129 Iowa 411, at page 413,105 N.W., at page 834, it is said: *Page 380
"It is not necessary that the interest should be derived by transfer or assignment. It may be `otherwise,' and, as used, that word is one of broad significance. It means that, if the right asserted by a claimant depends for its existence and validity upon a transaction between the deceased and a third person, the evidence of such third person shall not be allowed to prove the transaction."
In this case, as in the McClanahan case, "the right asserted by claimant depends for its existence and validity upon a transaction between the deceased and a third person;" that third person was Grace K. Hugh, who took part in the very transaction upon which the claim of Mary E. King, claimant's assignor, is based; and we think it necessarily follows that "the evidence of such third person (Grace K. Hugh) shall not be allowed to prove the transaction."
[4] III. But, even if Grace King Hugh were not incompetent to testify to Hazeldine's conversation with her and Mrs. King, we think the evidence is still insufficient to establish the alleged oral agreement. The provisions of our statutes exempting the proceeds of life insurance from the debts of the insured are a part of the public policy of the state. Such provisions must be liberally construed in protecting the interests of those for whose benefit they were enacted, and, under the holdings of our cases, the "agreement or assignment" or "special contract or arrangement" making such proceeds subject to the claims of creditors must be shown by clear and satisfactory evidence. Larrabee v. Palmer, 101 Iowa 132, 70 N.W. 100; In re Estate of Donaldson, 126 Iowa 174, 101 N.W. 870; In re Will of Grilk,210 Iowa 587, 231 N.W. 327.
As already stated, the evidence of James E. King is confined to a conversation between him and Hazeldine in Boston on either February 7 or 14, 1935. Moreover, his evidence clearly shows that Hazeldine told him that Mrs. King and Mrs. Hugh were not named as beneficiaries in the policies; that he understood that, in order to make the proceeds of the policies available to them they should be named as beneficiaries in the policies and the policies delivered to them; and that he insisted that this should be done by Hazeldine without delay. Notwithstanding the importance attached by him to changing the policies and placing them in the possession of Mrs. King and *Page 381
Mrs. Hugh, and although it is claimed by the appellant that the oral contract alleged to have been made at Toledo was pursuant to the promises made by Hazeldine in this conversation, with James E. King, there is nothing in this evidence to show that James E. King ever informed Mrs. King or Mrs. Hugh of the alleged promises.
This conversation with James E. King was approximately two or perhaps three weeks prior to the conversation at Toledo, in which it is claimed the oral contract here relied upon was made, and Hazeldine's death did not occur until almost seven months after the date of the Toledo conversation. The record shows many letters and telegrams and telephone conversations between Hazeldine and Mrs. King and Mrs. Hugh prior to the date of the alleged oral contract, but no communication of any kind thereafter. These letters and telegrams and telephone conversations contain abundant evidence as to Hazeldine's indebtedness to Mrs. King and Mrs. Hugh, his failure to make payments according to promises made by him to them, and the persistence of their demands, but there is not a single word in any of them in regard to life insurance. The only place in which there is any evidence whatever in regard to life insurance is found in the testimony of James E. King as to his conversation with Hazeldine in Boston, and in the testimony of Mrs. King and Mrs. Hugh as to their conversation with him in Toledo.
Moreover, the testimony as to the conversation at Toledo contains no reference whatever to the conversation had between James E. King and Hazeldine. The testimony of Mrs. Hugh shows that, in the beginning of this conversation, her attitude was one of complete lack of faith in Hazeldine; that she berated him for his failure to keep his promises in the past and demanded something definite in regard to the future; that, when the subject of life insurance was mentioned, no reference whatever was made to naming her and her mother as the beneficiaries and delivering the policies to them; but that, notwithstanding her complete lack of faith in Hazeldine in the beginning of the conversation, when the subject of life insurance was discussed, she was content to accept his mere statement that she and her mother were beneficiaries in the policies, without further information or proof of any kind whatever. Her testimony further shows that the only statements made by *Page 382
Hazeldine in regard to the insurance were not, that he would make her and her mother the beneficiaries of the insurance in consideration of their refraining from taking measures to enforce payment, but, that he carried insurance policies and that they were the beneficiaries. In other words, no promise was made by Hazeldine as to something he would do in the future, but the statement made was as to a present fact or condition. No demand was made for the production of the policies, no further proof was offered by Hazeldine as to the truth of his statements, and none was requested by Mrs. Hugh; but, according to Mrs. Hugh's own testimony, she said: "Well, you haven't lived up to your agreements that you made with me through the years but since I feel I can definitely depend on your word, I will not push you to collect any large amounts but I will keep my attorney that I have engaged in Davenport to collect what alimony I can collect from you."
The evidence, moreover, leaves grave doubt as to the sufficiency of the consideration for Hazeldine's alleged promise. The consideration claimed is, that Mrs. King refrained from instituting any proceedings to enforce payment of the sums due her from Hazeldine. In view of her past experience with him, it seems incredible that Mrs. King was not aware of Hazeldine's precarious financial condition, or that she had decided on any specific action or proceeding to enforce payment by him of the money due her. The evidence of Mrs. Hugh as to this phase of the case is that, after Hazeldine had made the statements attributed to him in regard to the insurance, Mrs. King said: "Well, then, Arthur, we will again go along with you and I am sure that Grace will not push you and I won't push you either and we will just feel that you are keeping up these life insurance policies and we will take your word of honor to that effect." Further than this we find nothing in the way of any promise on the part of Mrs. King, and we think this insufficient to show that she actually had any definite intention of taking, or that she refrained from taking, any specific action.
It is our opinion that, considering all the evidence, its meagerness in regard to essential matters and the inconsistencies revealed therein, it is insufficient to establish the oral contract upon which the appellant relies, in that clear, satisfactory and convincing manner that such contracts must be established when claimed to have been made with a person since deceased. In re *Page 383
Estate of Donaldson, 126 Iowa 174, 101 N.W. 870; Herriman v. McKee, 49 Iowa 185; Groh v. Miller, 196 Iowa 1367, 195 N.W. 259; Helmers v. Brand, 203 Iowa 587, 213 N.W. 384; Houlette v. Johnson, 205 Iowa 687, 216 N.W. 679; Glissman v. McDonald,128 Neb. 693, 260 N.W. 182.
IV. One of the policies of insurance involved in this action, Aetna No. N997927, was for $10,000 and the designated beneficiary was the estate of Hazeldine. Prior to his death, Hazeldine, representing Red Jacket Manufacturing Company, had sold George A. Clark Son of Minneapolis, Minn., certain goods and merchandise, to be delivered in the future, under contracts which provided that part payment could be made by Clark Son in bonds of Red Jacket Manufacturing Company. As security for the performance of such contracts by the Red Jacket Company, Hazeldine had assigned and delivered this policy to Clark Son, and, at the time of his death, the contracts had not been fully performed and the policy was still in the hands of Clark Son. Within a month of his appointment the administrator of Hazeldine's estate obtained permission from the district court of Scott county, Iowa, the court having original and general jurisdiction of Hazeldine's estate, to enter into an agreement with Clark Son under which the proceeds of this policy would be collected by Clark Son, the administrator joining in a release to the insurance company, and deposited in a special account in a bank in Minneapolis as collateral security to the said contracts, in substitution for said policy. This arrangement was made by the administrator with Clark Son, the proceeds of the policy were collected and deposited in a special account in the bank in Minneapolis, and, prior to the trial of this action, the contracts between Red Jacket Manufacturing Company and Clark Son had been fully completed and Clark Son had released all claims to such proceeds.
In the meantime, James S. Coburn had applied to the probate court of Hennepin county, Minn., and obtained the appointment of a special administrator of Hazeldine's estate. He also asked that court to appoint a general administrator of Hazeldine's estate, alleging that he had a claim against the proceeds of said insurance policy on deposit in the bank in Minneapolis. The administrator, Lafferty, filed objection to the appointment of such general administrator. On hearing the probate court of Hennepin county, Minn., held that Coburn had *Page 384
already submitted himself to the jurisdiction of the Iowa court by filing his claim there, and refused to appoint a general administrator. From this decision Coburn appealed to the district court in and for Hennepin county, Minn., and that appeal was still pending at the time of the submission of the appeal in this case.
In his amendment to the claim filed in this action, the claimant sought to establish the oral contract alleged to have been made by Hazeldine with Mrs. King and Mrs. Hugh, and to have the proceeds of the insurance policies applied in payment of his claim, as assignee of Mary E. King. The administrator filed an answer and cross-petition to this amendment to the claim. The cross-petition alleged rights of the administrator to the proceeds of the said Aetna policy, subject only to the rights of Clark Son therein; that such proceeds are held by him, in trust, for Dorothy Gwendolyn Hazeldine, as the only child and heir of Hazeldine, free from all debts of the deceased; and asked that his rights therein be established by the court against any claims or rights of the claimant. Davenport Bank Trust Company, as guardian of Dorothy Gwendolyn Hazeldine, filed a petition of intervention, alleging the rights of its said ward to the proceeds of all the insurance policies, and asked that her rights therein be established as against all claims and rights of the claimant. In answer to this cross-petition and petition of intervention claimant alleged the payment of the proceeds of the policy to Clark Son, the deposit of same in the bank in Minneapolis, the action pending in the district court of Hennepin county, Minn., in which claimant is asking that the rights of the parties to such proceeds on deposit in said bank be determined in said Minnesota court, and asked that the part of the cross-petition and petition of intervention relating to said policy be dismissed for want of jurisdiction, and that the hearing in this action be confined to the rights of the claimant as to the proceeds of other policies. Upon the trial of this action, and before any evidence was introduced, claimant, in open court, asked to withdraw his amendment to claim, in so far as it concerned the said Aetna policy and the proceeds thereof. This was objected to by both the administrator and the intervenor, and no ruling was made by the trial court until final decree, in which the court held that it had jurisdiction as to said policy and the proceeds thereof. *Page 385
[5] Appellant contends that, as to the proceeds of this Aetna policy, the district court of Scott county, Iowa, had no jurisdiction, because claimant had withdrawn and dismissed that part of his claim with reference to said policy, and because the proceeds of said policy were never in the hands of the administrator and subject to the control of the probate court of Scott county, Iowa. In support of the first part of this contention appellant relies upon sections 11562 and 11564, Code of 1935, and on our holding in Davis v. Preston, 129 Iowa 670,106 N.W. 151. Section 11562 provides that:
"An action may be dismissed, and such dismissal shall be without prejudice to a future action;
"1. By the plaintiff, before the final submission of the case to the jury, or to the court when the trial is by the court. * * *"
Section 11564 provides that:
"In any case when a counterclaim has been filed, the defendant shall have the right of proceeding to trial thereon, although the plaintiff may have dismissed his action or failed to appear."
Davis v. Preston, 129 Iowa 670, 106 N.W. 151, held that, in an action to set aside the probate of a will, when the answer of the defendants not only denied the allegations of the petition but alleged affirmative matters and asked judgment establishing the will as against the plaintiffs, upon a dismissal of their cause of action by plaintiffs before submission, the trial court had no further jurisdiction and could not enter a judgment establishing the will as against the plaintiffs. The decision, however, was based upon the statutory provisions under which an order probating a will can be set aside by a separate action, and held that there is no provision of statute authorizing those who claim under a will to have the order of probate established and confirmed by a proceeding in which those who may possibly be entitled to bring an action to set it aside are made parties defendant. We find nothing in that decision that would be decisive of the question now under consideration.
The claimant's amendment to his claim alleged an oral agreement made by Hazeldine with Mrs. King and Mrs. Hugh in regard to all the policies and proceeds thereof, asked that *Page 386
such alleged oral agreement be established, and that his rights thereunder be adjudicated as against the estate and the administrator. Only one contract was involved. This contract covered all the insurance on Hazeldine's life. If established, claimant's right to the proceeds of the insurance, as against the estate and the administrator, would necessarily follow. A single cause of action based upon said alleged oral agreement was involved, and, under appellant's amendment to his claim, the jurisdiction of the trial court was invoked in its determination. The cross-petition and the petition of intervention not only denied the alleged oral contract, without which claimant would have no right to the proceeds of the insurance, but affirmatively alleged facts which, if established, would entitle the administrator to the proceeds of the policy of insurance involved, subject only to the rights of Clark Son and of the intervenor, as guardian of Dorothy Gwendolyn Hazeldine, and asked that these rights of the administrator and of the intervenor be established as against any claims or rights of the claimant. Under this state of the pleadings, if the claimant were allowed to dismiss as to a part of his claim and submit that part to the jurisdiction of another court in another action, this would amount to a splitting of a single cause of action. And, if there had been 48 separate policies of insurance and each of these policies had been pledged as collateral to a contract in each of the 48 different states, the claimant would have 48 separate actions and decisions in reference to this single contract. By stating the facts constituting their rights to the proceeds of the insurance and asking that these rights be established as against the rights claimed by the claimant, we think the administrator and the intervening guardian stated a cause of action which, if proved, entitled them to affirmative relief. That claimant's dismissal as to a part of his amendment to his claim did not deprive the court of its jurisdiction to adjudicate the rights claimed by the cross-petitioner and intervenor is, we think, sustained by our decisions in Worrell v. Wade's Heirs,17 Iowa 96; King v. Thorp, 21 Iowa 67; Sigler v. Hidy, 56 Iowa 504,9 N.W. 374; Foster Co v. Ellsworth, 71 Iowa 262, 32 N.W. 314; Hoyt v. McLagan, 87 Iowa 746, 55 N.W. 18; Lex v. Selway Steel Corp., 203 Iowa 792, 206 N.W. 586.
[6] Nor can we agree with appellant's contention that, because the proceeds of this policy were never in the hands *Page 387
of the administrator in Scott county, Iowa, the district court of Scott county had no jurisdiction with reference to such proceeds. Appellant's contention is based upon the assumption that the proceeds of this particular policy, being on deposit in the bank in Minneapolis, were beyond the jurisdiction of the Iowa court. In other words, that an action to determine rights as to such proceeds is an action in rem, and could only be prosecuted in a Minnesota court having jurisdiction of such proceeds. In this case, however, the right to such proceeds as between the claimant, on the one hand, and the administrator and intervenor, on the other hand, does not depend upon the location of the proceeds. Such rights depend upon the contract contained in the insurance policy and upon the alleged oral contract under which appellant claims an interest therein. The contract contained in the policy of insurance, by its express terms, made the proceeds payable to Hazeldine's estate. Conceding that, if the oral agreement upon which appellant relies were established, appellant, and not the estate of Hazeldine, would be entitled to such proceeds, this would be because Mary E. King, instead of the estate, would be the beneficiary in the policy. The policy became payable upon the death of Hazeldine, and the right to the proceeds, as between Mary E. King and the estate, became fixed at that time. If Hazeldine did not make the alleged oral agreement with Mary E. King, the proceeds of the policy were payable to the administrator. If Hazeldine did make the alleged agreement, the proceeds were payable to Mary E. King. Upon the death of Hazeldine, a relation of debtor and creditor came into existence, the insurance company being the debtor and either the estate of Hazeldine or Mary E. King being the creditor. The fact that the policy had been pledged as security to Clark Son, for the performance of the contracts with the Red Jacket Company, did not change the right to the proceeds as between the claimant and the administrator. Clark Son's rights were not absolute as to all the proceeds. The policy and, after substitution, the proceeds were security for the fulfillment of the Red Jacket Company's contracts, and, when these contracts were fully performed, Clark Son would have no further right or interest in such proceeds. In any event, any portion of the proceeds not required to compensate Clark Son for a failure of the Red Jacket Company to perform its *Page 388
contracts with them would still belong to the administrator or to the claimant.
This action is in equity, brought by the claimant in the district court of Scott county, Iowa, to determine and establish rights as between him and the administrator to proceeds of life insurance carried by Hazeldine upon his life. The administrator, by his cross-petition, and the guardian, by its petition of intervention, asked that their rights be determined and established as against the claimant. The rights asserted by the claimant to the proceeds of such policy were founded upon the oral contract alleged to have been made by Hazeldine with Mary E. King. Only one oral contract was alleged, and under this contract, if established, the claimant would be entitled to all the proceeds of insurance as against the administrator and intervenor, except such portion, if any, as had been pledged or assigned by Hazeldine prior to the making of such alleged oral agreement. As between the claimant and the administrator, therefore, the determination of the question as to whether such alleged oral contract actually had been made, determined the rights of the parties to this action as to the proceeds of all the policies.
[7] The fact that the decree rendered by the trial court in this action, in determining the rights of the parties to the proceeds of the policy on deposit in the bank in Minneapolis, indirectly affects the status of such proceeds does not make such decree one in rem instead of in personam. Primarily and fundamentally, courts of equity act only in personam, and it is only by statute that they acquired jurisdiction to act directlyin rem. 21 C.J., 194, 195; 1 Pomeroy's Equity Jurisprudence, 2d Ed., sec. 135. That the locus of a policy of insurance or of the proceeds thereof does not restrict the jurisdiction of a court of equity in determining the rights of the parties to such policy or proceeds is, we think, definitely held in Cross v. Armstrong, 44 Ohio State 613, 10 N.E. 160. See, also, Ward v. Bankers Life Co.,99 Neb. 812, 157 N.W. 1017; Leigh v. Green, 193 U.S. 79,24 S. Ct. 390, 48 L. Ed. 623; Densby v. Acacia Mutual Life Association,64 App. D.C. 319, 78 F.2d 203, 101 A.L.R. 863; Winnett Times Publishing Co. v. Berg, 82 Mont. 141, 265 P. 710; Austin v. Royal League, 316 Ill. 188, 147 N.E. 106.
It is our conclusion that the district court of Scott county, Iowa, had jurisdiction to determine the rights of the claimant *Page 389
and of the administrator and the intervenor, as to all of the insurance carried by Hazeldine upon his life, under the five policies involved in this action; that the determination of such rights included the determination of the rights of the parties to the proceeds of the Aetna policy in the special deposit in Minneapolis, as well as the proceeds of the other policies; and that the decree entered by the trial court establishing the rights of the administrator and the intervenor, as to the proceeds of that policy, was not beyond its jurisdiction.
We find no reason for disturbing the decree of the trial court in this case, and it is, accordingly, affirmed. — Affirmed.
STIGER, C.J., and all Justices concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3211032/ | This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1857
In the Matter of the Welfare of the Children of: D. O., Parent.
Filed May 23, 2016
Affirmed
Reyes, Judge
Hennepin County District Court
File No. 27JV15485
Mary F. Moriarty, Chief Hennepin County Public Defender, Peter W. Gorman, Assistant
Public Defender, Minneapolis, Minnesota (for appellant D.O.)
Michael O. Freeman, Hennepin County Attorney, Michelle A. Hatcher, Assistant County
Attorney, Minneapolis, Minnesota (for respondent)
DeAundres Wilson, Wilson Law Office, P.A., Minneapolis, Minnesota (for father)
Jeffrey P. Justman, Faegre Baker Daniels, Minneapolis, Minnesota (for guardian ad litem)
Considered and decided by Schellhas, Presiding Judge; Reyes, Judge; and Bratvold,
Judge.
UNPUBLISHED OPINION
REYES, Judge
Appellant-mother challenges the termination of her parental rights, arguing that
the district court abused its discretion by determining that the county made reasonable
efforts to rehabilitate her and reunite the family, that there is a statutory ground for
termination, and that the termination is in the children’s best interests. We affirm.
FACTS
D.O. is the mother of four children. Her two youngest children, D.W.P, born in
2002, and R.C.P., born in 2008, (the children) are the subjects of this action.1 Her two
older children are no longer in her custody. One child was transferred to the custody of
her father, and the other child is an adult. D.O. was sexually abused by her father from
ages 7 to 22 and was physically abused by her mother her “whole life.” She has been
diagnosed with post-traumatic stress disorder (PTSD) and antisocial personality disorder.
D.O. also has a history of chemical dependency. She has used marijuana daily since she
was eight-years-old.
In 2002, D.O., D.W.P., and D.O.’s two older children moved in with D.O.’s
mother and father. In 2008, D.W.P. told his school that his grandfather was sexually
abusing him and the two older children. Child protective services removed all three
children from D.O.’s custody. R.C.P., who was born shortly after the case was opened,
was also removed from D.O.’s custody directly from the hospital. After successful
completion of a case plan, D.O. was reunified with the children, and the case was closed
in 2009.
In 2012, the children went to live with their father, W.P. At trial, D.O. testified
that D.W.P. “wanted to go stay with his father for a period of time.” W.P. testified that
D.O. “said she just wanted a break” and “needed to get away.” Although D.O. lived in
1
The parental rights of D.W.P.’s and R.C.P.’s father were voluntarily terminated at trial
on August 18, 2015, and are not at issue on appeal.
2
the same area as the children, she saw the children only three times during the year and a
half that they lived with W.P.
In November 2013, child protective services received a report that W.P. had
physically abused R.C.P. by hitting him with a backscratcher. At this time, D.O. did not
have stable housing and was staying with a friend. The district court adjudicated the
children in need of protection or services and granted Hennepin County Human Services
and Public Health Department (the county) temporary legal custody of the children.
When the children were removed from W.P.’s home, they had mental- and
behavioral-health issues and were developmentally behind children of a similar age.
D.W.P. was three grades behind and R.C.P. was having tantrums in school. Both
children were diagnosed with PTSD and attention-deficit hyperactivity disorder. R.C.P.
was also diagnosed with adjustment disorder. The county removed the children from
their schools and placed them in daytime treatment programs where they received therapy
and education to address their special needs. They were also placed together in a non-
relative foster home.
The county developed a case plan for D.O. that identified family needs, including
housing, parenting skills, and counseling or therapy for mental and chemical-use issues.
Among other services, the county provided parenting education, chemical-dependency
services, and mental-health services to D.O. D.O. participated in three different
chemical-dependency treatment programs. However, one program gave her a poor
prognosis and another asked her to leave their aftercare program due to positive
3
urinanalysis tests (UAs) and lack of compliance. D.O. has recently started attending
individual therapy, but does not do so on a regular basis.
In March 2014, the children returned to D.O. for a trial home visit. In September,
during the visit, D.O. took the children and absconded to Arizona with the intention of
living there permanently. D.O. did not inform the county or any of the service providers
that she and the children were leaving. In Arizona, D.O. and the children were living
with one of D.O.’s friends, the children were not in school, and D.O. did not have a job.
The county eventually located the children and returned them to Minnesota where they
were placed into out-of-home placement. D.O. was criminally charged with and pleaded
guilty to felony deprivation of custodial rights.
In January 2015, the county filed a petition to terminate D.O.’s parental rights,
alleging that: (1) D.O. abandoned the children; (2) D.O. refused or neglected to comply
with the parental duties imposed by the parent and child relationship; (3) reasonable
efforts failed to correct the conditions leading to the out-of-home placement; and (4) the
children are neglected and in foster care. On August 18, 2015, a court trial was held.
W.P., D.O., a child-protection-services worker (CPS worker) from the county, and the
children’s guardian ad litem (GAL) testified.
D.O. testified that she “believes that a parent that smokes marijuana [can] care for
their child,” and when asked if she sees “any issues with [her] parenting when [she] is
using marijuana,” she said no. She testified that she dislikes therapists and, despite her
past experiences adversely affecting her life, she disagreed that therapy was “beneficial
4
for [her] as a parent.” She also testified that she is currently residing in an aftercare
treatment facility that will not allow the children to reside with her.
The CPS worker testified that D.O. has not made the progress necessary for her to
be reunified safely with the children, because she does not have safe and stable housing,
she was asked to leave one of her aftercare treatment programs, and she continues to have
positive UAs. She testified that, given the length of time the children have been out of
home and the number of services that have already been provided to D.O., she is not sure
what else the county could offer. She also testified that the “children deserve
permanency” and “the children needing a safe, stable, secure, home, is in the [county’s]
view the best interest for the children.”
The GAL, who has been working with the children since 2008, testified that this
case has gone on “an extreme length of time with as many options for service than any
other case that [she’s] ever been involved in.” She had hoped that reunification would be
possible, but believes it is not “practical” at this point. She testified that she does not
believe that D.O. currently has the capacity to parent, to meet the children’s needs, nor
will she be able to parent in the reasonably foreseeable future. She also testified that, in
her opinion, termination of parental rights is appropriate so the children can have a safe
and stable environment “where their needs are continually met.”
Following the trial, the district court terminated D.O.’s parental rights to the
children. The district court determined that the county made reasonable efforts to
rehabilitate D.O. and to reunite her with the children, three statutory grounds for
5
termination were met, and termination of D.O.’s parental rights is in the children’s best
interests. D.O. appeals.
DECISION
“[P]arental rights may be terminated only for grave and weighty reasons.” In re
Welfare of Child of W.L.P., 678 N.W.2d 703, 709 (Minn. App. 2004). Termination
requires clear and convincing evidence that (1) the county has made reasonable efforts to
rehabilitate the parent and reunite the family, (2) there is at least one statutory ground for
termination, and (3) termination is in the child’s best interests. In re Welfare of Children
of S.E.P., 744 N.W.2d 381, 385 (Minn. 2008). On appeal, we review a district court’s
“determination of whether a particular statutory basis for involuntarily terminating
parental rights is present for an abuse of discretion.” In re Welfare of Children of J.R.B.,
805 N.W.2d 895, 901 (Minn. App. 2011), review denied (Minn. Jan. 6, 2012). We
review the district court’s factual findings “to determine whether they address the
statutory criteria for termination and are not clearly erroneous, in light of the clear-and-
convincing standard of proof.” In re Welfare of Children of K.S.F., 823 N.W.2d 656, 665
(Minn. App. 2012) (citation omitted).
A finding is clearly erroneous if it is “manifestly contrary to the weight of the
evidence or not reasonably supported by the evidence as a whole.” In re Welfare of
Children of T.R., 750 N.W.2d 656, 660-61 (Minn. 2008) (quotation omitted). The
“district court’s individual fact findings will not be set aside unless our review of the
entire record leaves us with a definite and firm conviction that a mistake has been made.”
In re Welfare of D.T.J., 554 N.W.2d 104, 107 (Minn. App. 1996) (quotation omitted).
6
I. The district court did not err in determining that the county made reasonable
efforts to rehabilitate D.O. and to reunite the family.
D.O. argues that the district court erred in determining that the county made
reasonable efforts to rehabilitate her and reunite her with the children. We disagree.
In every proceeding to terminate parental rights, the district court must make
“specific findings” that the county made reasonable efforts to rehabilitate the parent and
to reunite the family. Minn. Stat. § 260C.301, subd. 8 (2014). “When determining
whether reasonable efforts have been made,” the district court must consider “whether
services to the child and family were: (1) relevant to the safety and protection of the
child; (2) adequate to meet the needs of the child and family; (3) culturally appropriate;
(4) available and accessible; (5) consistent and timely; and (6) realistic under the
circumstances.” Minn. Stat. § 260.012(h) (2014). “Reasonable efforts at rehabilitation
are services that go beyond mere matters of form so as to include real, genuine
assistance.” In re Welfare of Children of S.W., 727 N.W.2d 144, 150 (Minn. App. 2007)
(quotations omitted), review denied (Minn. Mar. 28, 2007).
The district court found that the county made reasonable efforts to rehabilitate
D.O. and reunite her with the children because they offered services that were “timely,
available, relevant, culturally appropriate” and “provided a meaningful opportunity to
address the issues relevant to the foster care placement.” These findings are supported by
the record. At the time of termination, the county had provided almost two years of
parenting education, chemical-dependency services, and mental-health services to D.O.
In addition, trial had been delayed to extend these services. D.O. had participated in
7
three different chemical-dependency treatment programs and received referrals to at least
three different therapists. She was also participating in parenting-skills classes. These
services were in addition to the parenting education and chemical-dependency services
the county had provided during D.O.’s previous involvements with the county.
Therefore, the district court did not clearly err in determining that the county had
provided reasonable efforts to rehabilitate D.O. and to reunite her with the children. See
Minn. Stat. § 260.012(h).
D.O. argues that the county’s services were not available or consistent because she
was unable to contact the initial CPS worker, who was replaced by another worker only
three months before trial, and the two workers never met to discuss the case. We are not
persuaded. Although it is concerning that D.O. had trouble contacting the initial worker,
she had many other service providers, put in place by the county, that were available to
her. D.O. testified that, after she was unable to contact the initial worker, she did not
attempt to contact the GAL or her attorney. In addition, the second worker testified that
when she took the case over she reviewed the previous notes and files, and consulted with
her supervisor regarding the history of the case. She also testified that she is trained to
take over a case without discussing it with the previous worker.
D.O. also argues that her aftercare treatment program was inadequate because the
programming was insufficient and because the children were not allowed to live with her
at the facility. Again, we are not persuaded. The record supports the district court’s view
that the problem is not the services being offered, but that D.O. does not think she has a
chemical-dependency problem and is not fully committed to the services being provided.
8
D.O. testified that she does not believe her marijuana use affects her ability to parent and
that the only reason she needs to stop using marijuana is because it is the only way she
will get the children back. In addition, D.O. is in her current aftercare treatment program
because she was asked to leave her previous aftercare treatment program due to positive
UAs and noncompliance. The record supports the district court’s finding that the county
made reasonable efforts.
II. The district court did not abuse its discretion in determining that at least one
of the statutory grounds for termination had been met.
D.O. argues that the district court abused its discretion in determining that at least
one of the statutory grounds for termination had been met. We disagree.
Minn. Stat. § 260C.301, subd. 1(b) (2014) sets forth nine statutory grounds for an
involuntary termination of parental rights. The district court determined that three of
those grounds were met here: (1) D.O. failed to comply with her duties under the parent
and child relationship under subdivision 1(b)(2); (2) reasonable efforts have failed to
correct the conditions leading to the children’s placement under subdivision 1(b)(5); and
(3) the children are neglected and in foster care under subdivision 1(b)(8). To affirm the
district court’s termination of parental rights, only one of these statutory grounds needs to
be supported by clear and convincing evidence. See In re Welfare of Children of R.W.,
678 N.W.2d 49, 55 (Minn. 2004).
A statutory basis for terminating parental rights exists under section 260C.301,
subdivision 1(b)(5), when “reasonable efforts, under the direction of the court, have
failed to correct the conditions leading to the child’s [out-of-home] placement.” It is
9
presumed that reasonable efforts have failed upon a showing that: (1) a child over age
eight has resided outside the parental home for a cumulative period of 12 months within
the preceding 22 months; (2) “the court has approved the out-of-home placement plan”;
(3) the conditions leading to a child’s out-of-home placement have not been corrected;
and (4) “reasonable efforts have been made by the social services agency to rehabilitate
the parent and reunite the family”. Minn. Stat. § 260C.301, subd. 1(b)(5). It is also
presumed that the conditions leading to out-of-home placement have not been corrected
upon a showing that a parent has “not substantially complied with the court’s orders and
a reasonable case plan.” Id., subd. 1(b)(5)(iii).
D.O. only challenges the last two elements of the presumption of subdivision
1(b)(5). Because we have already discussed the fourth element and concluded that the
record supports the district court’s finding that the county made reasonable efforts, we
only address the third element here.
The district court found that the conditions that led to the children’s out-of-home
placement had not been corrected. Specifically, the district court found that, while D.O.
had “made some efforts on case plan services,” she “failed to comply with her case plan”
and that the issues present when the case was first opened are still present nearly two
years later. These findings are supported by the record. Despite participating in three
chemical-dependency treatment programs, D.O. testified that she does not believe that
smoking marijuana affects her ability to parent or care for her children. She has failed at
least six UAs since she left her inpatient treatment program and used marijuana shortly
before the termination trial. D.O. also has not addressed her mental-health issues. She
10
does not attend individual therapy on a regular basis and she testified that she does not
believe that addressing her past with a therapist would be beneficial for her as a parent.
Further, D.O. has not demonstrated that she can care for the children’s needs. During the
trial home visit, D.O. removed the children from their daytime treatment programs and
absconded to Arizona with them. In Arizona, they did not have stable housing, and the
children were not attending school.
The CPS worker’s testimony indicates that D.O. complied with some aspects of
her case plan. For example, D.O. was “cooperative” in her parenting-skills classes,
attended “some” meetings with the staff at D.W.P’s daytime treatment program, and
attended weekly visits with the children. But complying with some aspects of the case
plan alone is not the same as substantially complying with the plan. See id. Therefore,
the district court did not clearly err in determining that D.O. failed to correct the
conditions that led to the children’s out-of-home placement. See id., subd. 1(b)(5).
D.O. further argues that the condition that led to the children’s out-of-home
placement was physical abuse by W.P. and, because W.P. is no longer in their lives, she
has successfully rebutted the presumption of subdivision 1(b)(5). We are not persuaded.
Although the children were initially taken from W.P.’s home due to the physical abuse,
there were other conditions that led to their out-of-home placement, including D.O.’s
chemical dependency, her lack of safe and stable housing, and her inability to care for the
children’s special needs. See In re Welfare of Child of D.L.D., 865 N.W.2d 315, 324
(Minn. App. 2015) (“That the factual bases for the condition at the time of the
adjudicatory hearing were not identical to the factual bases for the condition at the time
11
of removal does not undermine the juvenile court’s statutory finding that the overall
condition had not been corrected, even if one or both of the time-of-removal factual bases
had been corrected.”), review denied (Minn. July 21, 2015). At the time the children
were taken from W.P.’s home, D.O. was staying with a friend. Although D.O. expressed
an interest in having the children, the children were adjudicated as children in need of
protective services, and the county developed a case plan for her, which included
parenting education and chemical-dependency services. The district court did not abuse
its discretion by determining that the statutory ground for termination under subdivision
1(b)(5) exists. See id., subd. 1(b)(5).
Because we conclude that one ground for termination exists, we need not analyze
the other grounds found by the district court. See R.W., 678 N.W.2d at 55.
III. The district court did not abuse its discretion in determining that termination
was in the children’s best interests.
D.O. argues that the district court abused its discretion in determining that
termination was in the children’s best interests. We disagree.
After determining that one of the statutory grounds for termination of parental
rights has been met, “the best interests of the child must be the paramount consideration.”
Minn. Stat. § 260C.301, subd. 7 (2014). “In analyzing the best interests of the child, the
court must balance three factors: (1) the child’s interest in preserving the parent-child
relationship; (2) the parent’s interest in preserving the parent-child relationship; and
(3) any competing interest of the child.” In re Welfare of R.T.B., 492 N.W.2d 1, 4 (Minn.
App. 1992). The child’s competing interests include “a stable environment, health
12
considerations and the child’s preferences.” Id. “Where the interests of parent and child
conflict, the interests of the child are paramount.” Minn. Stat. § 260C.301, subd. 7
(2014). We review a “determination that termination is in a child’s best interest[s] for an
abuse of discretion.” J.R.B., 805 N.W.2d at 905.
The district court found that D.O. had an interest in preserving the parent-child
relationship, but that the children do not. The record supports these findings. Although
the GAL testified that D.W.P. once stated that he wanted to live with his mother, she also
testified that later he did not state a definite preference of where he wanted to live. In
addition, the GAL testified that D.W.P. talked more about being safe now than when the
case first opened.
The district court also found that the children’s “need for stability, security and
safety, as well as having their special needs met, overrides any interest in maintaining a
parent-child relationship.” The record supports this finding. Both the CPS worker and
the GAL, who worked extensively with the family for the past six years, testified that,
despite the time and number of services D.O. was provided, D.O. has not made the
progress necessary for reunification and that termination is in the best interests of the
children. The GAL also testified that D.O. cannot meet the children’s needs at this time
and that the children have benefitted from their stable out-of-home placement. Therefore,
the record supports the district court’s best-interests findings.
D.O argues that: (1) the district court relied too heavily on evidence of past
behavior instead of current evidence, which did not support termination; (2) the
children’s relationship with her, as demonstrated by her time with the children, did not
13
support a finding that termination was in the best interests of the children; and (3) there
were no competing interests between her desire to parent and the children’s interest in
maintaining the parent-child relationship. We are not persuaded. First, the district court
did not rely too heavily on evidence of past behavior. In its order, the district court made
extensive findings of fact regarding the children’s best interests and only briefly
mentioned D.O.’s past behaviors. Further, the district court’s use of D.O.’s past patterns
of behavior to determine future patterns of behavior was appropriate. See In re Welfare
of S.Z., 547 N.W.2d 886, 893-94 (Minn. 1996) (discussing parent’s history of mental
illness as it relates to the parent’s current and future ability to parent). Second, although
there is evidence in the record that D.O. had positive interactions with the children during
visitations and that D.O. loves the children, there is also evidence that D.O. cannot meet
the children’s needs. The GAL testified that the children need and have benefitted from
stability and that D.O. is not able to provide this to them. The district court did not abuse
its discretion by determining that the termination of D.O.’s parental rights is in the
children’s best interests.
Affirmed.
14 | 01-03-2023 | 06-09-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/4033725/ | IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
TREVOR BERNARD SMALLS, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D15-5927
STATE OF FLORIDA,
Appellee.
_____________________________/
Opinion filed September 14, 2016.
An appeal from an order of the Circuit Court for Walton County.
Kelvin C. Wells, Judge.
Nancy A. Daniels, Public Defender, and Steven L. Seliger, Assistant Public
Defender, Tallahassee, for Appellant; Trevor Bernard Smalls, pro se, Appellant.
Pamela Jo Bondi, Attorney General, Tallahassee, for Appellee.
PER CURIAM.
AFFIRMED.
RAY, KELSEY, and WINOKUR, JJ., CONCUR. | 01-03-2023 | 09-14-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432112/ | The facts in the case are stipulated. At the time of the transaction between Hannahs and the West Point State Bank, such bank was a going concern. Prior to these transactions, the West Point Bank had a correspondent known in the record as the "Burlington Bank." The Burlington Bank had become the creditor of the bank of West Point to the amount of $11,000 and was holding collateral therefor, to the amount of $33,000. Such was the relation between the two banks when the Burlington Bank went into the hands of a receiver. The necessity of meeting its obligation to the Burlington Bank, and of releasing its collateral, gave much concern to the officers of the West Point Bank, and they took preparatory steps in the direction of obtaining sufficient funds to meet exigencies. The cashier and president of the West Point Bank sought a loan from Hannahs and offered him collateral security therefor. Hannahs had become a depositor in the West Point Bank a few months preceding and was a depositor to the amount of more than $1,000 at the time of these negotiations. The cashier and president reported all their negotiations with Hannahs successively to the *Page 1018
board of directors at their meetings, and acted under the direction of such board in all their doings in the premises. Hannahs was advised by the cashier and president of the attitude of the board of directors before he paid any money upon the loan. He was advised by these officers and by the attorney for the bank that the procedure adopted was in all respects legal and in effect that the board of directors had complied with all formality that was legally required of them for the purpose of the loan. In reliance upon these assurances, he deposited $7,200 in the bank and received from the bank officials two real estate mortgages for $4,000 and $3,500, respectively. These were duly assigned by the bank officials. The assignment recited that it was made pursuant to the order of the board of directors. The stipulation of facts at this point contains the following:
"And said cashier, Kreikenbaum, reported said arrangement and agreement to the board of directors of said bank at meetings held by said board, and the board of directors agreed to, authorized and approved the arrangement and agreement thus made between said J.B. Hannahs and J.A. Kreikenbaum, cashier; that no record of any discussion of said arrangement and agreement appears on the records of said bank, and no record of any resolution or motion authorizing the carrying out of said agreement or the approval thereof appears in the records or minutes of said bank, but it is stipulated by the parties that the aforesaid discussion andauthorization and approval actually took place and was givenorally before meetings of said board."
The board of directors did not in fact make a record of their proceeding. In short, the board did authorize everything that was done by the president and cashier, and did fully approve the same, but neglected to make a record of such authority and approval. The question upon which the case turns is whether the failure of the board to enter its approval and authority upon the record was destructive of their negotiations with Hannahs. Section 9222-c2, chapter 415, of the Code of 1931, provides:
"The cashier or any other officer or employee shall have no power to pledge or hypothecate any notes, bonds or other obligations owned by said bank or trust company until such power and authority shall have been given, at least annually, to such cashier *Page 1019
or other officer or employee pursuant to a resolution by the board of directors, a written record of which proceedings shall first have been made; and a certified copy of said resolution signed by the president and cashier with the corporate seal annexed, shall be conclusive evidence of the grant of such power.
"All acts of pledging or hypothecation done by the cashier or other officer or employee of such bank or trust company without the authority from the board of directors shall be null and void, and any such cashier or other officer or employee violating the provisions of this section shall be guilty of embezzlement and shall on conviction thereof be imprisoned in the penitentiary not to exceed twenty years."
Section 9297, chapter 416 of the Code of 1931 provides as follows:
"Trust companies, state or savings banks, may contract indebtedness or liability for the following purposes: For necessary expenses in managing and transacting their business, for deposits, and to pay depositors, to maintain proper legal reserves and for other corporate purposes, and the directors of said trust company, state or savings bank shall have the right to pledge as security for said indebtedness or liability such assets of said bank or trust company as may be necessary."
The reliance of the appellant is upon section 9222-c2. The argument for the appellant rather subordinates section 9297 to section 9222-c2 and treats the latter section as a qualification of the former. We think there is no necessary inconsistency between the two sections. If there were, the legislative history would favor section 9297. This section was the product of 43 Gen. Assem. (c. 30, Section 20) and 44 Gen. Assem. (c. 205); whereas the other section was the product of 43 Gen. Assem. (c. 30, section 21). The last legislative touch rested therefore upon section 9297. We do not rest, however, upon this point. These sections are found in different Code chapters. Chapter 416 deals with banks, whose articles of incorporation authorize them to act as fiduciaries; whereas chapter 415 deals with banks, whose articles of incorporation do not authorize the exercise of fiduciary functions. It will be noted that section 9222-c2 of chapter 415 purports to restrict the power of a subordinateofficer to pledge or hypothecate any of the assets of the *Page 1020
corporation without authority from the directorate. A violation of this section by the subordinate officer subjects him to criminal prosecution. This section does not purport in any degree to restrict the powers of the corporation itself as represented by its directorate to pledge and hypothecate such assets. Turning to section 9297 of chapter 416 of the Code, express authority is conferred upon the directors of such corporation to pledge and to hypothecate, and this authority is conferred in broad and general terms without any restrictions whatever.
Since this case was heard and decided in the district court, we handed down an opinion in the case of Andrew v. Iowa State Bank of Osceola, 216 Iowa 1170, 250 N.W. 492. This case has received notice in the briefs of counsel. It is the contention of the appellee that the case is conclusive at all points upon the case at bar; whereas the appellant sees and points out distinctions to be observed.
The case is not necessarily identical with the case before us. But it is decisive upon one question that is quite pivotal herein. We did hold therein that, notwithstanding the failure of the board of directors to record its proceedings, this would not render such proceedings nugatory; and that such proceedings were provable in favor of third parties by evidence of the facts, nevertheless. In this case the authorization is proved by stipulation. The facts disclosed by the stipulation indicate that the negotiations carried on with Hannahs were done by the directorate itself through the president and cashier. In the cited case, we said:
"Section 9222-c2 does not prohibit the `directors' of the bank from pledging its assets. The language used clearly indicates that the Legislature never intended to prohibit the `directors' as a body, and managing board, from doing so, or it would have said so. Section 9297 specifically authorized the directors ofthe bank to pledge its assets, as security for such deposit; and section 9222-c3 fully authorizes banks to pledge their assets to secure such funds as may be authorized by the superintendent ofbanking. It is the settled rule of law that all statutes will be given such construction as to harmonize them with each other, and we believe that, by construing section 9222-c2 as not including the board of directors, as such, the statutes can be harmonized. The word `officer' in the statute is used in the singular, and is evidently not meant to include the board of directors, as such. * * * *Page 1021
"The evidence shows that the obligation and agreement of the Iowa State Bank to deposit sufficient bonds with the Central National Bank Trust Company of Des Moines, to secure the receivership funds deposited, was renewed on September 12, 1931, by direct action of the board of directors, at a meeting held in the bank at that time. It is true there is no evidence of the adoption of a formal written resolution to that effect, but the evidence clearly shows that the board of directors, at that time, again accepted the conditions of the court order, designating it as a depository, and at that meeting took action, requiring the cashier to deposit the necessary securities when required. The board of directors again accepted the obligations imposed by the second court order designating this bank as depository. The court order of September 12, 1931, imposed the same obligations as those contained in the first court order of December 15, 1930, and at the meeting of September 12, 1931, held in the bank, the board again authorized and directed the cashier to perform and carry out all of the obligations included in both orders. While there was no formal written resolution to that effect, the undisputed evidence shows that the board did take such action. * * *
"The statute does not require a written resolution to authorize the board of directors to pledge its assets, but authorizes such pledging without fixing the manner in which it shall be done. If a resolution is not necessarily required to be in writing, and if a yea and nay vote is not necessary to prove its adoption, a less formal action may be taken to adopt a measure not requiring either.
"The undisputed evidence of the cashier is that the board of directors at a meeting in the bank on September 12, 1931, accepted and agreed to the provisions of the court order of that date, and authorized and directed him to take all necessary steps to comply with the orders of court designating the bank as depository of the Simmons Co. receivership funds. Such action of the board of directors, at that meeting, specifically authorizing and directing him to make such assignments, was the equivalent of a resolution to that effect, as a resolution does not necessarily have to be in writing."
The general rule of evidence applicable in a case where no record has been made of the proceedings of a board of directors is stated in 22 C.J. 1011, section 1295, as follows: *Page 1022
"Unless it is expressly provided by statute, charter or articles of incorporation that the acts and proceedings of a private corporation can be proved only by its records, parol evidence is admissible to prove a fact or transaction which, although required to be recorded, has been omitted from the corporate records. One reason for this rule is that the omission of a corporation to make a record of its proceedings should not be allowed to prejudice the rights of an innocent third person who has in good faith relied upon an official assurance of its corporate acts."
We see little occasion to go into the details of other questions raised and discussed. Inasmuch as we must hold that the board of directors did authorize this transaction, and that the money was obtained from Hannahs by express representation, that it had so authorized the transaction, it leaves nothing in the way of applying to the case the ordinary principles of equity. The bank got the money and still has it, to the amount of $4,451. The appellee tenders a return of the collateral upon payment of the balance of the debt. The applicant has come into a court of equity. He is subject to the rule that he must offer equity. If he disaffirms, he must return. To hold otherwise would be to permit the corporation to retain, to its own advantage, the money obtained by its officers, even though it were so obtained by false representations, as appears herein.
We think the district court properly dismissed the application, and its order is accordingly affirmed.
CLAUSSEN, C.J., and KINDIG, ALBERT, and STEVENS, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432113/ | At the time of the injury in question, Ruth Denny was a girl about fifteen years of age. In August of 1907 she was living at Cedar Rapids in this state, but was contemplating a visit to St. Louis, Mo. She was acquainted with one E. W. Penny, who was then an employee of the defendant railway company. On learning of Miss Denny's proposed trip, he undertook to assist her by procuring a pass for her over defendant's line as far as Peoria, Ill., and return. This he accomplished by representing to the company that the person who was to use the transportation was his sister. The pass was made out to "Ruth Penny," instead of the girl's true name, Ruth Denny, and she was therein described as the sister of the employee. This pass was honored by defendant on the outgoing trip from Cedar Rapids to Peoria. Returning from St. Louis, the girl boarded defendant's train at Peoria for the completion of her journey home. She purchased no ticket, but relied upon the return coupon of said pass as the voucher or authority for such transportation. At Rock Island, through the mistake or negligence of an employee of the company in misplacing a switch, a freight train moving through the yards was brought into collision with the passenger train on which the young lady was riding, and in the crash thus occasioned she was severely injured. It is for the injuries so sustained the father seeks a recovery of damages in this action.
At the close of the testimony on part of the plaintiff, *Page 462
defendant moved for a directed verdict in its favor on grounds which may be stated as follows: (1) It is admitted that plaintiff's daughter was a trespasser who had obtained access to the train by fraud and deceit, and the relation of passenger and carrier did not arise between the parties. (2) That there is no evidence to show negligence or failure of duty on the part of the company with respect to the said Ruth Denny. Still other grounds are assigned; but we shall have no occasion to consider them. The motion was sustained, and from the judgment for the defendant upon the directed verdict this appeal has been prosecuted.
1. RAILROADS: passengers: trespassers: required care.
If we correctly interpret the position taken by appellant's counsel, they do not question the general rule that one who by fraud and false representations gains access to a railway car for the purpose of obtaining carriage or transportation without paying therefor is, in the legal acceptance of the term, a trespasser, and as such is not entitled to the same protection which a passenger may demand at the hands of a carrier. It is said, however, that one who, being supplied with a void or insufficient ticket, takes passage upon a car believing in good faith that he is entitled to ride, is at most a merely technical trespasser, and is entitled to a reasonable degree of care and protection by the carrier, and that in no event can such carrier knowingly, wantonly, or recklessly kill or injure one who is riding upon its train, and then be heard to excuse such wrong by saying that the injured person was a trespasser. Numerous cases are called to our attention and discussed by counsel on both sides. The subject is an interesting one, and cases can easily be imagined where an extreme application of the rule of liability on one hand or nonliability on the other would produce grossly unjust results. But, assuming for our present purposes the entire correctness of the main propositions *Page 463
of law advanced in support of the appeal, we think it very clear that the record fails to make a case against the defendant. Counsel say that Miss Denny "was not a trespasser in the ordinary sense of the term. She was riding on the train, riding in good faith but technically upon an illegal contract." The statement does not fairly reflect the testimony. The young lady was not a mere thoughtless child. She was not herself deceived as to the nature of the transaction. She knew that she had been falsely represented to the company as the sister of the employee Penny, and thereby the pass had been procured. To carry out the deception and secure the passage to Peoria and return, she assumed and used the name written upon the pass. When taken to the hospital after her injury, she gave the name on the pass as her own, and later when Penny came to the hospital to see her she introduced him to others as her brother. Of this incident she says: "I did it on account of having this pass that wasn't intended for me. I knew the pass wasn't intended for me, and that I didn't have any right to ride on it." She was not therefore one who boards a train in good faith and rides thereon in the honest belief that she may rightfully do so. We need not stop to consider to what extent, if at all, her conduct indicates moral obliquity. It is sufficient that she knew the pass had been procured by fraud and concedes that she used it in fraud. She was clearly and admittedly a conscious trespasser, and as such, even upon counsel's own statement of the law, plaintiff was entitled to go to the jury only upon the theory that the evidence would justify the jury in finding defendant guilty of "recklessness, wilfulness, wantonness, and gross negligence." Such a case is not made.
2 SAME: gross negligence: evidence.
The statement in appellant's brief that the evidence was such as to entitle him "to go to the jury as to whether or not the employee of the company did not wilfully and intentionally produce a collision there that night" *Page 464
finds its justification in the heat of debate rather than in the cold unimaginative record. The collision of the trains was not of unusual or remarkable character. It would perhaps not be an extreme statement to say that its happening was of itself evidence of negligence as to one occupying the relation of passenger; but there is an utter lack of circumstances to justify the conclusion that the act or omission which brought it about was wanton, wilful, or intentional. So long as men are human they will make mistakes and at times be guilty of carelessness. Few, however, are so base or so lacking in decent regard for human life as to wilfully or wantonly do or omit an act of duty by which death or disaster to others may reasonably be expected to follow, and, in the absence of other facts pointing to such conclusion, neither court nor jury should, from the mere fact that an injury has been negligently occasioned, assume to characterize the conduct of the negligent person as wilful or wanton. Accidents from misplaced switches have at times marked the history of railroading from its beginning. It is scarcely to be expected that the time will ever come when they will be wholly unknown. The responsibility justly attaching to a railway company for the unfortunate result of such mishaps is sufficiently heavy without imposing on it or its employees any presumption of intentional or wilful wrong, nor should such finding be indulged or allowed save upon evidence more tangible than mere conjecture. Without taking time to detail the stories told by the several witnesses, we have to say they disclose nothing whatever on which a finding that any employee who was in any manner responsible for this collision was actuated by malice or wilfulness or wantonness could be sustained by the court.
Counsel make frequent use of the phrase "gross negligence" in their discussion of this case. In this state, as is well known, the actionable character of negligence is *Page 465
not dependent upon its "degree," and the ancient differentiation into "gross," "ordinary," and "slight" has come to mean little more than a matter of comparative emphasis in the discussion of testimony. Nowhere in our own cases is any rule announced to the effect that "gross negligence" on the part of the carrier is sufficient ground for an action by a trespasser injured in course of transportation fraudulently procured. It has frequently been said that when the presence of the trespasser is known to the company or its employees, or when the circumstances are such that we may reasonably infer such knowledge, it owes him the duty not to run him down or otherwise wantonly or recklessly injure him; that this rule is open to some breadth of construction according to the circumstances calling for its application may be admitted. It may be conceded that the railway company through its conductor knew the girl was on the train. It did not know, nor is there evidence, that any of its employees knew of the peril to which she was exposed in time to avoid a collision or to remove her to a place of safety.
There was no tenable theory on which to submit the issues to a jury, and the court properly directed a verdict. — Affirmed.
*Page 408 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432114/ | [1] This is an appeal from an order of the district court of Dallas county vacating a judgment of dismissal and reinstating the case on the calendar. In January, 1930, plaintiff, a corporation, commenced its action against the defendant for an amount claimed due under a written contract. Defendant filed answer and the cause was at issue. On March 28, 1932, the court on its own motion entered the following order: "Case is dismissed under the rules, without prejudice, and judgment against the plaintiff for costs." On December 24, 1932, the plaintiff filed its petition to set aside the order and judgment and to reinstate the cause, and upon hearing the petition was granted. From the order setting aside the judgment and reinstating the cause, the defendant appeals.
The first ground of error relied upon by appellant is that the court erred in sustaining the application to set aside the judgment, because such application was not filed within the time fixed by statute. Code 1931, section 12791. It is undisputed that the petition filed by the plaintiff to set aside the judgment and reinstate the case was not filed until two terms of court had elapsed after the entry of the judgment of dismissal. Appellant contends that, notwithstanding the designation of the plaintiff's pleading as a "Petition to Set Aside Order and Judgment of Court," this petition is nothing more than a motion; that the application was not on the ground of newly discovered evidence or on any ground which would excuse him from compliance with the statute; and that, under the statute, such motion must be made on or before the second day of the succeeding term. We think appellant is in error in assuming that the petition in this case is made to vacate a judgment or order because of irregularity in obtaining it. It is true that under section 12787 mistake or irregularity in obtaining a judgment is one ground upon which such judgment may be set aside, and it is further true that under section 12791 the application to vacate a judgment or order because of irregularity in obtaining it must be by motion, made on or before the second day of the succeeding term. Section 12787, however, contains a further provision that a judgment or *Page 614
final order may be vacated or modified and a new trial granted "for unavoidable casualty or misfortune preventing the party from prosecuting or defending;" and section 12792 provides that:
"The application based upon the other grounds (other than motion to vacate for mistake or irregularity) shall be by verified petition setting forth the judgment or order, the alleged facts or errors constituting a cause to vacate or modify it, and the matters constituting a defense to the action, if the party applying was a defendant."
We think the allegations contained in the petition to set aside order and judgment of court, which was filed by the plaintiff in this case, bring it within the provision having reference to setting aside a judgment for unavoidable casualty or misfortune preventing the party from prosecuting or defending, and that the petition was properly designated and was filed within the time required by statute. First National Bank v. Federal Reserve Bank,210 Iowa 521, 231 N.W. 453, 69 A.L.R. 1329, and cases cited.
It is also contended by appellant that the court erred in sustaining the application, because there was no showing of any legal excuse for appellee's failure to file his application within the time limited by law. As we have already found that the application was filed within the time provided by law, it is not necessary that any further consideration be given to this contention of the appellant.
[2] Appellant further contends that the court erred in sustaining the petition of appellee, because the statute makes no provision under which appellee is given the right to set aside a judgment in the manner sought in this case. Appellant argues that there is no showing of any reason excusing the delay of appellee in making his application. Appellee's petition to set aside the judgment not only stated facts which would bring it within the provisions for setting aside a judgment because of unavoidable casualty or misfortune, but, on the hearing, appellee presented evidence in support of such statements of the petition. There was a hearing by the trial court upon the petition, evidence was presented, and after such hearing the trial court sustained the petition and entered the order from which the appeal was taken herein. The trial court has a very large discretion in matters of this kind, and, where a new trial is granted, this court will not interfere with the *Page 615
ruling of the trial court except in cases of clear abuse of such discretion. Farmers Exchange Bank v. Trester, 145 Iowa 665, 124 N.W. 793; Clarke v. Smith, 195 Iowa 1299, 192 N.W. 136; New-love v. Stern, 196 Iowa 1111, 196 N.W. 51; Heater v. Bagan, 206 Iowa 1301, 221 N.W. 932. Moreover, under section 12794, the pleadings, issues, and form and manner of trial are governed by the same rules and conducted in the same manner and with the same right of appeal as in ordinary actions. There being evidence before the trial court from which it could find that there was unavoidable casualty or misfortune which prevented plaintiff from prosecuting his action, and the matter being tried by ordinary proceedings and not as an equitable action, we are bound by the findings made by the trial court, even if we were disposed to differ therefrom. Kelly v. Cummens, 143 Iowa 148, 121 N.W. 540, 20 Ann. Cas. 1283; Dobberstein v. Emmet County, 176 Iowa 96, 155 N.W. 815. We may say, however, that we think the facts presented to the trial court fully justify the action taken by it.
We find no error in the action of the trial court, and the order appealed from is therefore affirmed. — Affirmed.
CLAUSSEN, C.J., and EVANS, STEVENS, ALBERT, MITCHELL, and KINTZINGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432067/ | This action in equity was instituted June 6, 1935, on a $4,500 note of defendants, made in 1927, and due December 1, 1931, and a mortgage on 43 acres of farm land given to secure said note. The original mortgagees were one Siemsen and wife, from whom plaintiff alleged the note and mortgage were assigned and transferred to one Soltau and wife, and by said parties assigned and transferred to Dean P. Thomas, who thereafter assigned and transferred the same to plaintiff.
Defendants filed answer on November 15, 1937, and on March 20, 1939, amendment to answer. Thereafter plaintiff moved to strike various portions of said answer as amended, which motion was largely sustained by the court on October 24, 1939. Trial to the court, in November 1939, resulted in decree *Page 3
for judgment against defendants on the note and foreclosure of the mortgage. Defendants have appealed.
[1] I. Stricken by the court from the original answer were certain general allegations of lack of consideration and failure of consideration of the note and mortgage and of each assignment and transfer thereof. Without discussing these allegations in detail it may be said each of them is pleaded as a legal conclusion without any allegation of fact upon which the conclusion is based. Therefore, they were properly stricken. Benton v. Morningside College, 202 Iowa 15, 21, 209 N.W. 516, 519. In the same category is a stricken general allegation that the transfers from Siemsen to the Soltaus were obtained fraudulently. It may be noted that there is retained in the original answer a general denial, a denial that plaintiff owns the mortgage, a denial that Siemsen transferred it to the Soltaus and a charge that each of the transfers was part of a plan to defraud Siemsen of his ownership of said note and mortgage.
[2] In the amendment to answer defendants allege they executed the mortgage to the Siemsens to secure the unpaid balance of the purchase price of said real estate, that the validity of the Siemsen assignment is uncertain and that plaintiff is not the owner and holder of the note and mortgage in suit.
The afore-mentioned portions of the answer have no direct relation to the real controversy in this case and appear to be somewhat afield from it. In the trial defendants introduced no evidence attacking the validity of the Siemsen assignment and the record was undisputed that plaintiff was the owner and holder of the note and mortgage in question.
[3] II. The principal defense sought to be established by defendants is based upon the following circumstances: In March 1934, defendants had secured tentative approval from the Federal Land Bank of Omaha for a Federal Land Bank mortgage and a commissioner's loan, aggregating $4,200, conditioned that the proceeds of both loans pay in full all of their indebtedness and that defendants secure a legal right of way to the land. September 12, 1934, the Soltaus, who then owned the mortgage, executed a unilateral consent agreement reciting that they, having been advised the defendants had made application to the Federal Land Bank for a loan upon the premises, "do hereby *Page 4
consent and agree to receive and accept in full payment, accord and satisfaction for said mortgage and interest accrued thereon the sum of $3500.00, and further agree and consent to accept in lieu of cash the bonds issued by said Federal Land Bank of Omaha of the face amount of $3500.00", upon delivery of which the satisfaction of mortgage may be delivered. At that time the mortgage was past due and there was owing thereon the sum of $4,500 principal plus delinquent interest. On April 16, 1935, the Soltaus transferred and assigned the note and mortgage to Dean P. Thomas for a consideration of $3,500. Thomas, in turn, assigned and transferred said instruments to plaintiff on May 8, 1935, and the petition in foreclosure was filed June 6, 1935. The suit was continued until 1939, apparently under the moratorium acts.
In their amendment to answer, filed March 20, 1939, defendants set up the agreement of the Soltaus to accept $3,500 in settlement of the mortgage and note, alleging in substance that defendants had in good faith secured the allowance of a loan from the Federal Land Bank and had incurred expenses for procuring abstracts of title, and had attempted to secure the required right of way to said land; that delays were encountered and condemnation proceedings required to secure said right of way; that the owners of the right of way appealed the condemnation proceedings to district court and in said appeal and previous negotiations were represented by the legal firm of which Dean P. Thomas was a member, which firm also instituted this action for plaintiff; that defendants did finally secure and pay for the same and have proceeded with all expedition possible to secure said right of way and conform to the requisites preliminary to the consummation of said settlement and adjustment; that defendants have been willing at all times to proceed in the performance of the terms of said written agreement and have at no time refused such performance and that the Soltaus and the assignees of said mortgage and note are bound by the terms and conditions of said agreement; that the foreclosure action is in violation of their rights and equities under the agreement entered into in substitution of the mortgage whereby said note and mortgage are superseded and subordinated, *Page 5
and that plaintiff is barred and estopped from the prosecution of this action.
Plaintiff's motion to strike assailed the foregoing portion of the amendment to answer on the ground that the alleged contract shows upon its face it was merely an offer to accept settlement with which defendants failed to comply; that the amendment failed to allege facts constituting a defense to the action; failed to allege that any accord, alleged therein to have been offered or agreed upon, was in fact satisfied or performed; failed to allege facts sufficient to show any novation whereby the cause of action had been settled or discharged; alleged only unsuccessful efforts to effect a compromise and settlement and failed to allege settlement, satisfaction or discharge thereof.
The trial court sustained the motion to strike said portions of the amendment.
In considering this ruling, it should be noted that the only agreement relied upon in said amendment was the afore-mentioned written consent to accept $3,500. This was a unilateral contract executed by the Soltaus alone. The defendants did not join in executing this agreement, nor does the amendment allege that the defendants made any other agreement, written or oral, with the Soltaus by which defendants bound themselves to make said payment. Defendants do not allege they carried out and performed the contract in accordance with the written consent. The amendment, filed nearly 5 years after the date of the offer, states only that defendants have proceeded to secure the loan (which was a prerequisite to performance on their part), have never refused to perform the agreement and have been willing at all times to proceed in the performance thereof. However, the amendment does not state that the loan from the land bank was ever secured or that defendants were ready and able to perform. Nor does it tender performance.
The situation is quite different than that in First Trust Joint Stock Land Bank v. Hanlon, 223 Iowa 440, 273 N.W. 114. In that case the bonds and money were actually delivered to the mortgagee.
In the case at bar defendants contend the consent to accept $3,500 in satisfaction constituted a new obligation which superseded the original note and mortgage and that its *Page 6
effectiveness did not depend upon performance of the new contract. However, the amendment falls short of alleging a substituted contract or a novation if for no other reason than that defendants made no promise or agreement to make the payment which the Soltaus agreed to accept. Obviously, without an agreement on the part of defendants, there was no obligation on their part which could supersede or be substituted for their original contract. Furthermore, the written consent states that delivery of the mortgage satisfaction shall be made when $3,500 in bonds are available for delivery, thus definitely providing that the mortgage should remain in effect until such delivery.
If the written consent be regarded as an "accord", it is clear no "satisfaction" was alleged. It has been frequently held that a promise without execution or performance is not a satisfaction unless by express agreement it had this effect. Graham v. Crisman, 169 Iowa 91, 95, 146 N.W. 756, 757; Wheeler v. Woods,205 Iowa 1240, 1245, 219 N.W. 407, 409; Hughes v. National Equipment Corp., 216 Iowa 1000, 1009, 250 N.W. 154, 158; Galloway v. Hobson, 206 Iowa 507, 511, 220 N.W. 74, 76; Sawyer v. Hawthorne, 167 Iowa 410, 417, 149 N.W. 512, 515, 1 C.J.S. 543.
In an article in 24 Iowa Law Review, page 697, Judge Henry N. Graven states that the rule that an executory accord is not a defense grew out of a technical and outmoded rule of common law pleading, which later took on the appearance of a rule of substantive law. Criticizing the basis of many of the decisions which apply said rule, the article points out that in most of the Iowa cases which appear to be based upon it there is some defect in the agreement which by independent and substantive rules of law prevents it being a contract binding the creditor and that the same result could have been reached upon a better basis by founding the decisions upon the substantive law of contracts. Judge Graven suggests that the trend of judicial holdings is in the direction of basing decisions in such cases upon the substantive law of contracts rather than upon the technical rule.
However, it is unnecessary that we discuss the criticized rule or base this decision upon it. We are here considering an *Page 7
executory unilateral contract. The rule of substantive law governing this situation is correctly stated at page 705 of Judge Graven's article as follows:
"An `executory unilateral accord' is as a matter of fact nothing more than an offer to enter a contract; it is by its very nature no defense to the debtor. A `unilateral accord' could never be the basis for a separate action brought by the debtor for it is not a contract."
Therefore, the defense set up in the amendment to answer was without legal force or standing and was properly stricken by the trial court.
[4] That the same attorneys who instituted this suit also represented the owner of the land sought by defendants for right of way would not affect the rights of either of their clients. It is interesting to note there was no charge of conspiracy or fraud in this connection.
Under the record in this case plaintiff was entitled to judgment and foreclosure of the mortgage. Wherefore, the decree of the trial court is affirmed. — Affirmed.
CHIEF JUSTICE and all JUSTICES concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432068/ | Appellant presents one proposition for our consideration, which is thus stated in argument:
"The Court erred in sustaining the defendant's motion to withdraw from the consideration of the jury as a ground of actionable negligence paragraphs 17 and 17-A of the plaintiff's petition.
"Said grounds of actionable negligence so plead by the plaintiff being as follows:
"`(17) That the plaintiff's intestate, immediately before being struck by defendant's automobile had crossed over the paved portion of U.S. Highway No. 75 in a southwesterly direction and had reached a place of safety on the dirt shoulder lying immediately west thereof, and while in such place of safety the defendant, Kennedy, failed to continue his course on the paved slab as he approached the said John McCormick and drove out on the dirt shoulder and through the place of safety where the said John McCormick was walking.
"`(17-a) That under the circumstances stated in the foregoing ground No. 17, the defendants failed to give the said John McCormick any sufficient or timely warning of defendants' intention to change their course and to drive off the paved slab, and onto the shoulder and zone of safety where the said John McCormick was walking.'"
The question thus proposed calls for an examination of the record so far as it applies to this one feature of the case.
On the afternoon of June 11, 1935, McCormick was killed by an automobile driven by appellee Kennedy, a servant and employee of his corporate co-appellee. The deceased was a man 67 years old, weighing from 200 to 250 pounds, a farmhand, vigorous and alert for one of his years. The accident occurred within the limits of the town of Onawa, in Monona county. McCormick had been to this town with one Zortman and his wife. They had stopped at a filling station located on the west side of U.S. Highway No. 75, a main-traveled highway between Sioux City and Council Bluffs. Having purchased a quantity of gasoline, Zortman moved his car across the highway to make room at the gas pump for one Davis, whose car was parked along the north side of the filling station. Zortman brought his car to a stop on the east side of the highway, headed north, with his right wheels off the pavement. In that position he was about *Page 985
112 feet north of the north line of the station. Davis, instead of stopping to take gas, drove across the highway to the east and stopped a short distance north and ahead of the Zortman car. At about this time appellee Kennedy came down from the north at a speed variously estimated at 50 to 65 miles an hour, and as he was about in front of the oil station struck McCormick with such force as to throw him a distance of 60 to 65 feet — "like a bundle" in a cloud of dust, as one or more of the witnesses described it. McCormick died in a very short time without being able to make, or at least without having made, any statement to those who hurried to his assistance. To go back a little in the record: McCormick was riding in the back seat of the Zortman car. As this car drove away from the filling station, Walker, the attendant, called that they should get their change, 14 cents. To get this money deceased stepped out of the east side of the car, went around behind it, and started in a diagonal direction southwest across the pavement. When he had reached the point to which reference will hereafter be made, he was struck by the car driven by Kennedy, as already stated. There were no cars in or about the station or along the highway other than those already mentioned, and no diverting circumstances, except that appellees claim the movement of the Davis car across the pavement obstructed Kennedy's vision and he was thereby excused from failure to avoid the injury and death of McCormick. Appellees make much of the fact that, the highway being straight for a long distance north (the direction from which Kennedy came), McCormick would have seen the approaching car had he looked. This, if it proves anything, proves too much. If the vision was unobstructed for the deceased, it was likewise unobstructed for Kennedy had he been using his eyes to see what was ahead of him as he approached this filling station.
The record in the case is very long and no attempt will be made to examine it at length, nor do we find it necessary to do so. We are concerned only with the question as to whether the specification of error upon which appellant relies finds support or not. To this we direct our attention.
The witness Heinse, who worked about the filling station, had her attention attracted to what she thought was the sound of automobile brakes at the time the accident occurred. She did not see the actual collision, but turning saw "something coming *Page 986
through the air like a bundle. It must have been 15 or 20 feet that I saw it coming through the air. I saw it come to rest. After it stopped I saw that it was Mr. McCormick. I went over to where he was lying. He was lying on the right side of the pavement clear to the edge with one foot out on the shoulder. The right side of the pavement would be the west side, right as you go south." This witness, when asked about where there were any wheel marks to the west of the paving slab, answered that the wheel tracks were about 30 inches west of the slab and extended quite a way north, and that this mark on the shoulder was parallel with the burned mark she noticed on the pavement. On cross-examination this witness elaborated somewhat by saying that the marks 30 inches from the pavement were quite close to the north side of the station.
Walker, the appellant's only eyewitness to the actual collision, noticed McCormick as he left the Zortman car to come toward the filling station. At that time he saw a car at quite a distance north, and again as the deceased walked across the pavement. As he noticed the car the second time it was coming from the north along the edge of the pavement. He observed its movements practically continuously for a couple of hundred feet before it struck McCormick. He says that the brakes were applied intermittently for about 125 feet, and that after the accident he noticed marks on the pavement made by the tires. These marks were not on the pavement before the accident. No other vehicles had passed, so the inference was not only permissible but perhaps unavoidable that they were caused by the car appellee Kennedy was driving. This witness estimated the distance from the farthermost mark on the south to the farthermost mark to the north at 125 feet. At the same time the car that struck McCormick made a mark on the shoulder west of the slab a distance of about half the width of the tread of the tires. Other witnesses examined the marks to which this witness refers. Walker, when asked whether the automobile that killed McCormick sounded a horn, answered, "I think not."
After the accident the car turned almost its own length and stopped about the middle of the pavement, headed northeast. The front of the radiator was broken, as was the right lamp. The west side of the grillwork in the front of the radiator was caved in, all of which indicated that the right side of the car *Page 987
came in contact with the deceased. This, from the witness Walker, vividly describes the contact:
"After the car struck McCormick, I noticed the direction that his body took. It just went right straight down the edge of the paving, just as straight as a person could throw a ball. I know the distance that he went down that pavement before he stopped from the time the car hit him. It was between 60 and 65 feet."
Elaborating somewhat on his statement about the mark made by the right wheels of the car off the pavement, Walker said that he followed this mark back to the place where it left the pavement and found it to have been a distance of about 30 feet from where McCormick was struck. From the testimony of this witness, it appears that McCormick at the time he was killed was as much off the paving slab as he was on it. Walker said: "It looked very much from where I was he was just taking his last step off the pavement." This witness on cross-examination emphasized this testimony by saying that the deceased was on the very west edge of the pavement, with one foot on the pavement, as he was struck, indicating from his testimony generally that after the fleeting instant it would have taken to lift his right foot off the paving he would have been fully on the shoulder when Kennedy hit him.
The witness Patterson, who lived in one of the cabins located on the filling station ground, had his attention attracted by the "squeal" of brakes, and turning saw what "looked more or less like a bundle" going through the air. He followed it and continued to look at it until it came to rest. He continues: "I then went over to it. It was John McCormick." This witness, too, noticed the marks on the shoulder west and opposite those burned marks on the pavement at or near the point of collision. These marks at the farthermost distance from the paving slab were about 30 inches off on the shoulder. He traced the marks on the shoulder backward to the point where they joined the pavement, estimating the distance at about 90 feet. He says that where McCormick lay when he died, "he was lying face upward, his head to the north, and one leg was off the slab."
The wife of the last-named witness corroborated in vivid language the testimony of her husband, and when asked whether there was any dust or anything that interfered with her vision, *Page 988
answered: "Only when I saw the cloud of dust and thought that was a bundle I saw sliding down the road."
Mrs. Zortman, who looked when her attention was attracted by the setting of brakes, did not see the accident at the instant that it occurred, but saw McCormick in a movement that looked to her as if he were "making a jump", the inference being, of course, that he sought to escape the oncoming car.
Much other testimony descriptive of the circumstances and the surroundings would warrant the jury in finding that at the time McCormick was struck he was more off the pavement than on it. All of his body that remained on the pavement was his right heel, and at the time the right wheels of the car driven by Kennedy were a considerable distance off the shoulder. This, in connection with the fact, as the jury might have found, that there was nothing to indicate that Kennedy had any excuse for being where he was at the time he killed McCormick other than his explanation with reference to the Davis car, seems not only to justify but to require the submission of the grounds of negligence pleaded by appellant under designation 17 and 17-a already set out.
While not adopting literally and in all its terms as a rule of law in this state the following, it comprehends in brief so many of the considerations applicable to this and similar cases that we quote:
"The driver of an automobile is bound to anticipate the presence of pedestrians upon the streets of a city or upon rural highways, as well as to exercise reasonable care that he does not injure them after he is aware of their presence. O'Dowd v. Newnham, 13 Ga. App. 220, 80 S.E. 36. The court said: `The application of this principle is qualified by the rule to which we have just referred in the first division of this opinion. The pedestrian, like the driver of an automobile, in the exercise of ordinary care for his own safety and for the safety of others, is required to anticipate the presence of persons and vehicles upon the highway. But it cannot be said that the duty which is upon the pedestrian is as urgent as that devolving upon the driver of an automobile, for the foot passenger's action or inaction in the premises is far less important to the other users of the highway. The impact of the body of a pedestrian absorbed in his own meditations, upon a passer-by, might be measurably uncomfortable, *Page 989
but it would seldom be hazardous to either life or limb; whereas the impact of an automobile in motion while the driver is asleep might cause as certain death as if the injured person had been wilfully pursued and wantonly crushed. The pedestrian and the automobile have equal rights upon the highway, but their capacity for inflicting injury is vastly disproportioned. It follows, also, from this, that the driver of an automobile cannot be said to be using the highway within his rights, or to be in the exercise of due care, if he takes advantage of the force, weight, and power of his machine as a means of compelling pedestrians to yield to his machine superior rights upon the public highway, designed for the use of all members of the public upon equal terms. Instances are almost a matter of daily occurrence where apparently the drivers of automobiles operate their machines as if they have been granted a right of way over the public highways, and as if it is nothing more than the duty of the pedestrian to yield precedence to the automobile and to stop and wait until the automobile has passed before attempting to proceed in crossing a street or otherwise using the highway. If there is anything in the argument of priority, man was created before the automobile, and, to paraphrase a quotation from Holy Writ, man was not created for the automobile, but the automobile was created for man. Generally, the natural instinct of self-preservation will inspire in the pedestrian a due degree of caution for his own safety, when he is aware of the approach of an automobile, and this the law will require him to exercise. Sometimes the circumstances surrounding the approach of one of these vehicles of ponderous proportions inspire a terror which paralyzes the power of locomotion on the part of the traveler on foot, especially if he be a child of tender years. In such a case, the dangerous character of the instrumentality which the driver of an automobile is operating forbids the assertion that he has exercised even ordinary diligence, unless he has used every possible means to avoid injury to the pedestrian. On account of the ease with which injury can result from the slightest negligence or inattention in the operation of his machine, ordinary diligence requires that the driver of an automobile be constantly on the lookout, and that he have his machine in such condition as that it shall be under his perfect control. The pedestrian also is required to be on the lookout; but he has the right to assume that the drivers of all automobiles are on the lookout for *Page 990
him too, and if he is properly upon the public highway, which he is entitled to use equally with them, he has the right to assume that they are both willing and able to regard his rights. While, therefore, the law requires that a pedestrian and the driver of an automobile shall each anticipate the presence of the other upon the public highways, and that neither shall do any act likely to jeopardize the safety of the other, still, on account of the great disparity in their respective capacities to inflict injury, the exercise of ordinary diligence on the part of the pedestrian to look out for automobiles does not necessarily require as continuous caution as is requisite to enable an automobilist to fulfill the definition `ordinary diligence' as applied to one having in his charge a dangerous and death-dealing instrumentality.'" Note to Deputy v. Kimmell, 51 L.R.A. (N.S.) 989 at p. 990.
The reflections induced by this quotation, and other authorities which might be cited, may account for, and perhaps justify, the conclusion hereafter announced.
We have purposely refrained from discussing the testimony offered by appellees because we are not concerned with what the result might have been had the case been submitted to the jury with the specification of negligence for the omission of which appellant appealed. On the whole record we are satisfied that appellant's complaint is justified, and that because of the error complained of the case should be, and it is reversed. — Reversed.
STIGER, C.J., and HAMILTON, ANDERSON, KINTZINGER, DONEGAN, MITCHELL, and MILLER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431953/ | Plaintiff in this case brought an action in the district court of Warren County, Iowa, for forcible entry and detainer to recover possession of a farm. Defendant filed answers admitting the corporate character of plaintiff, denying each and every other allegation of the petition, and claiming he had a lease.
The case was tried to a jury, instructions were given, and the jury returned a verdict for the defendant. Judgment was finally entered upon the verdict, and plaintiff appealed to this court.
This case, it seems to us, must be decided upon the sufficiency of assignment of errors made by plaintiff in his argument. This court made a set of rules which applied to appeals made after November 15, 1931, and in these rules, in Rule 30, we find what the brief of appellant shall contain. The fifth matter therein is the errors relied upon for reversal, followed by a note which says:
"Note. What the rule contemplates and requires is a statement of errors relied upon for reversal.
"The rule contemplates that the statement of error shall be complete in itself and that each ruling of the court deemed by the appellant to be erroneous and reversible shall be set forth in clear, concise and definite language sufficiently full and specific, but without elaboration, to apprise the court of the ruling complained of and the particular or particulars in which and for what reason it is claimed to be erroneous."
Subsequently an amendment to and revision of the rules were made by the court, and therein Rule 30 was amended, and speaking of the appellant's brief, it says:
"Fifth. The appellant shall then state his first error relied upon for a reversal, and shall set out so much of the record as refers thereto, together with the ruling of the court thereon; and shall then point out specifically and in concise language, the complaint against the ruling of the court. This shall be *Page 716
followed by a brief of authorities in support of his contention, without quotation therefrom. Then shall follow his argument, in the usual form, supporting the errors thus claimed, in which, among other things, reference to and quotations from the authorities set out may be made or elaborated. This shall constitute the first division of his brief and argument."
We find in the record of this case, two assignments of error, one being:
"The court erred in overruling plaintiff's motion for a directed verdict." and second:
"The trial court erred in sustaining defendant's motion to reconsider its order entered on July 3, 1936."
There is no pointing out in concise language the complaint against the ruling of the court. That must be done. And then it is followed by a brief of authorities in support of the contention. In each of these assignments of error the appellant failed completely and utterly to observe the rule of the court as laid down in either the original Rule 30 or Rule 30 as amended.
As before stated, the first error assigned is in overruling the motion for a directed verdict. This motion was made at the close of all the evidence, and was based upon five grounds, no one of which is pointed out, so it is what might be called an "omnibus" assignment of error.
In an opinion by Judge Donegan, in Russell v. Peters,219 Iowa 708, at page 711, 259 N.W. 197, 198, the court said:
"`Our attention has been called to a number of cases in which we have held that statements of error relied upon for reversal were not sufficiently specific to comply with our rules, and have added that, notwithstanding this, "we have read the record and found no error". A reading of these cases, however, will show that they were always followed by an affirmance, and we have yet to have our attention called to any case where, after having held the statement of errors relied upon insufficient, we have reversed.'" Citing W.T. Rawleigh Medical Co. v. Bane,218 Iowa 154, 254 N.W. 18.
In this last case Judge Donegan wrote the opinion. The *Page 717
errors relied upon were upon similar assignments of error here. In this opinion Judge Donegan said at page 157:
"It will be observed that in the note which appears as a part of the fifth subdivision of Rule 30, it is stated that the rule contemplates that the statement of error shall be `sufficiently full and specific, but without elaboration, to apprise the court of the ruling complained of and the particular or particulars in which and for what reason it is claimed to be erroneous.'" On page 158 of the opinion the court quotes from Ryan Bros. v. Rate, 203 Iowa 1253, 213 N.W. 218, as follows:
"`Our rules require that, when errors are assigned or points are to be made in this court, they must specifically point out the matter complained of and the objections thereto. Omnibus errors will not be considered, but will be disregarded. Among the numerous cases so holding are Town of Waukon v. Strouse,74 Iowa 547, 38 N.W. 408; Guyer Hoshaw v. Minn. Thresher Mfg. Co., 97 Iowa 132, 66 N.W. 83; Holt v. Doty, 193 Iowa 582,187 N.W. 550; Reynolds v. Chehak, 199 Iowa 561, 202 N.W. 268. The thought is that, in assigning these points or errors, the assignment must not only state the points, but the reason or basis for the complaint.'"
In re Estate of Butterbrodt, 201 Iowa 871, 208 N.W. 297, in an opinion by Judge Albert, it was held that a general blanket assignment of error, to the effect that the court erred in overruling an eight-pointed motion for a new trial, will not be reviewed.
In Reynolds v. Chehak, 199 Iowa 561, 202 N.W. 268, Judge Arthur held that a specification of error on appeal is fatally indefinite when it simply asserts the naked proposition that the trial court "erred" in sustaining generally a numerous-pointed demurrer.
In Central Tr. Co. v. City of Des Moines, 204 Iowa 678,216 N.W. 41, Judge Morling held, an assignment of error which simply asserts that the court erred in overruling a 29-pointed motion is fatally lacking in definiteness. Likewise, statements or propositions of law, without any attempt to apply them to the ruling of the court.
In Hedrick Nat. Bank v. Hawthorne, 209 Iowa 1013,227 N.W. 403, Judge Wagner held that an assignment of error which broadly asserts that the trial court erred in sustaining a *Page 718
many-pointed motion presents no reviewable question to the appellate court.
The second assignment of error is simply that the trial court erred in sustaining defendant's motion to reconsider. It is not even pointed out in the assignment where the motion to reconsider is found in the abstract. This consists of four grounds, and hence the claimed assignment of error comes under the rule of "omnibus" assignment of error, and therefore cannot be sustained.
All these cases fully sustain the proposition of the defendant appellee in this case, that the assignments of error made in this case cannot be considered, and therefore, for the reasons pointed out, the judgment of the lower court is hereby affirmed. — Affirmed.
RICHARDS, C.J., and STIGER, HAMILTON, DONEGAN, ANDERSON, KINTZINGER, and SAGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431962/ | This case was originally determined in an opinion filed March 15, 1938, 278 N.W. 342. Petition for rehearing was granted and the matter is now before us for consideration.
The property involved is what is known as the Flynn building, located at the southeast corner of Locust and Seventh streets in the city of Des Moines. It is a tract 66 feet east and west on Locust street, and running back 132 feet on Seventh street to the east-and-west alley. On this tract is constructed a six-story building, the lower floor of which is occupied by stores and the other floors are used as shops and offices. Locust street is one of the principal business streets of the city, and Seventh is also a street in the principal retail district of the city of Des Moines. On the southwest corner of block 12, in which the Flynn building is located, and at the northeast intersection of Walnut and Seventh streets, is what is known as the "key" property, variously called the Kraft building and the Kresge building. This is supposed to be the heart of the retail business district of Des Moines.
The valuation placed upon the Flynn tract as of January 1, 1933, was $325,622. From this assessment the plaintiffs appealed to the district court and on trial the assessment was reduced to $319,022. From the decree of the district court the plaintiffs have appealed to this court. The board of review also appealed, but this appeal has been abandoned and need not be considered here.
Plaintiffs devote considerable of their argument to an expression used in the original opinion, claiming that it is contrary to the views of this court as expressed in previous decisions. The statement was there made that there can be no claim in this appeal that the property was assessed in excess of its actual *Page 1356
value, as the record discloses that the actual value exceeded the assessed valuation. We cannot interpret this statement in the opinion as do the plaintiffs, that it tends to establish any departure from our former holdings. It is a mere statement of fact and in no way lays down the rule that is suggested by the argument of counsel. It did not mean, nor do we think it can be held to mean, that if it appears from the record that the actual value of the property exceeded the assessed valuation this court will not inquire into what the facts are or consider the evidence as to whether such actual value as fixed by the assessor in the first instance was correct.
Under the provisions of section 7109 of the Code of 1931:
"All property subject to taxation shall be valued at its actual value * * *. In arriving at said actual value the assessor shall take into consideration its productive and earning capacity, if any, past, present, and prospective, its market value, if any, and all other matters that affect the actual value of the property; and the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate, or inequitable."
[1] In determining values it is the duty of the assessor to fix such values equitably in comparison with other like property. Under our laws property cannot be assessed at more than its actual value and cannot be assessed inequitably as compared to other property. It has consistently been held by this court, as in the case of Iowa Cent. R. Co. v. Board, 176 Iowa 131, 134,157 N.W. 731, 732, that:
"The paramount object which the law seeks to insure in distributing the burdens of taxation is equality; and, although the property of a taxpayer is assessed at less than its true value, nevertheless, if it is assessed higher proportionately than other property, he has a just cause of complaint. It is hardly necessary to cite authorities upon this proposition, but see Burnham v. Barber, 70 Iowa 87, 30 N.W. 20; Barz v. Board of Equalization, 133 Iowa 563, 111 N.W. 41; Reiniger v. Board of Review, 157 Iowa 193, 138 N.W. 399."
To the same effect, see Chapman Bros. v. Board of Review,209 Iowa 304, 228 N.W. 28.
[2] It is clear that the question at issue is a question of *Page 1357
fact. There cannot be much controversy about the legal aspects of the case. The law upon the various questions involved in such disputes as this has been frequently determined, but always there has been and always there will be difference of opinion as to values. Nearly every person called upon to appraise property, especially improved property, approaches the task with ideas based largely upon experience, occupation, and training. Honest minds will necessarily differ on values, and exact equality, though eminently desirable, is impossible of attainment. The presumption is that the valuation placed by the assessor upon any particular property is correct, and the burden of proof is upon the person challenging that estimate. It is so made by statute (section 7109, Code, 1931) and such has been the uniform holding of this court. Butler v. City of Des Moines, 219 Iowa 956,258 N.W. 755; Sioux City Bridge Co. v. Board of Review, 192 Iowa 1224,184 N.W. 733; Talbott v. City of Des Moines, 218 Iowa 1397,257 N.W. 393; In re Appeal of Blank, 214 Iowa 863, 243 N.W. 173. This does not mean, of course, that the opinion of the assessor is conclusive, but, when properly based and apparently not erroneous or excessive or out of proportion, it is to be held as the true value of the property. See Butler v. City of Des Moines, supra.
[3] It is obvious that in fixing values in a business district such as the one in question, the first duty of an assessor is to endeavor to arrive at the true value of the property. We realize that this is difficult. There are so many factors that must be taken into consideration that the fixing of a fair proportionate valuation is a serious problem; and it is also true that cases involving such valuations are among the most troublesome and vexatious that come into the courts. However, once having determined the actual value and the equitable valuation of the property proportionately with other properties of the district, the value for tax purposes is determined by the 60 per cent rule. In the case at bar the assessor worked under certain rules in a system, which system was supposed to give the approximate percentages affecting the value of the property in the district. As to the land values, after consultation with a number of persons supposed to be acquainted with the valuations throughout the business district, there was first fixed a key property at the corner of Sixth avenue and Walnut street; and afterwards the key property was fixed at the corner of Seventh and Walnut *Page 1358
streets — the Kresge property before referred to. Estimating this property and its valuation at 100 per cent, other properties were valued in proportion to their distance from this supposed business center, on a front-foot valuation. In devising the formula there were also taken into consideration the effects of other conditions, among them corner influence, the depth of the property, the influence of the alley, the ownership, whether in one person or divided among several, etc. The various influences and variations were combined into mathematical formulae and from them was derived the actual value of the real estate. The value of the building on a tract was determined to a great extent by the cubic content, the different values per cubic foot varying according to the type of construction. In determining the ground value of any tract its valuation was fixed at some certain percentage of the front-foot value of the key tract. Other matters taken into consideration were the trend of business in the neighborhood, the amount of pedestrian traffic, and the kinds of business in the vicinity. To the value of the land as fixed by these various formulae and percentages was added the value of the building estimated in the manner described, and the sum of these two values was supposed to be the actual value of the property. Elements other than those mentioned here were taken into consideration, but the general system of valuation was based upon these formulae, the object being to produce a fair proportionate valuation among the various properties within the same neighborhood.
The system referred to, if properly applied and if all elements necessary to be considered were so considered, would probably furnish a fair basis for comparison. It would not do, however, to follow blindly any method or any combination of methods without proper consideration of their limitations, and taking into the estimate factors not apparently considered by the assessor who made the valuation in question.
[4] The statute requires that production shall be considered. It is earnestly charged by the plaintiffs that this was not taken into consideration, and the assessor so testified in part of his examination, which testimony he later qualified. While the statute requires that the productive and earning capacity, past, present, and prospective, must be taken into consideration, yet this alone, of course, cannot be a true guide. Whether gross or not, such receipts are controlled by many factors. The condition *Page 1359
of the property, its proximity to other business, the nature of the surroundings, the availability of the property for special occupations, are elements that must be considered; and productive value, while an element, is only one of several factors necessary to be taken into consideration in determining value. And so with each of the factors entering into the equation. The front-foot valuation, while determined by proximity to the key property, is open to many variations — the condition and grade of the streets, the trend of business toward or from the assessed property, and so on. The combination of all factors that enter into valuation will, in many cases, approximate the true value. And in addition there must be the element of judgment which can properly estimate and determine the influence of each and all of these various factors, so that a rule of valuation placed upon mathematical formulae alone could never be an infallible guide. See In re Appeal of Blank, supra.
The defendant maintains that the system used by the assessor in Des Moines has had the sanction of the supreme court, and cites the case of Butler v. City of Des Moines, supra. We do not so read the case. This action was brought by the owner of the property just one block east of the Flynn block, with the same relative position as to other properties in the block as the Flynn building occupies in block 12, and, while the opinion refers to the system in use by the assessor, it neither expresses approval nor disapproval of any particular system, the case merely holding that the evidence in regard to valuation of that particular property was insufficient to overcome the presumption of correctness in the assessor's ratings.
[5] It appears that after the fixing by the assessor of the Kresge corner as the key corner upon which, in descending percentages, valuations of the surrounding real estate were made on a front-foot basis, the owner of the key property, whose Walnut street frontage was valued at $6,500 per foot, on appeal to the state board of assessment and review secured a reduction to $6,000 per front foot; and it is now urged that this carried with it a corresponding percentage reduction in the front-foot valuation of all the surrounding property. We are not prepared to say that this result necessarily follows. Upon a purely mathematical basis, and if the evidence showed that front-foot valuations were made solely on the valuation of the Walnut street front of the Kresge property, it might necessarily follow that *Page 1360
the other valuations should be reduced accordingly. But it is not clear from the evidence that such was the case, — that is, that, disregarding all other factors, the valuation of the Seventh street frontage of the Flynn block was so fixed solely on account of the proximity of the Kresge building and solely on a proportionate basis with the valuation of the Walnut street frontage of the key property. No doubt this was taken into consideration, but we do not discover from the evidence that this was the sole measure as to land values. We cannot say that the reduction of $500 per front foot on Walnut street by the state board of assessment and review necessarily calls for a corresponding percentage reduction in the frontage of the Flynn block on Seventh street. We must not overlook the fact that the reduction by the state board applied to the Walnut street frontage only, and that no change was made in the Seventh street valuation per front foot of the same property.
The Flynn building was constructed in 1885. Compared with other buildings in the business section of the city it is not modern. It is not equipped to furnish heat to its tenants, but heat is supplied from a neighboring building. It is not of fireproof construction. It was at the time of the assessment occupied by a drug business, at a lease very advantageous to the owners. The income has varied from year to year, but the reports of the trustees of the estate, which were introduced in evidence, do not indicate that the net income is very large for a property the actual value of which has been estimated by the assessor at a half million dollars. The net income has been affected at times by necessary repairs and other expenses. The net income varied. In some years it was greater, and in others less. Of course, the productive value alone cannot be taken as a basis for valuation of the property, but it must be considered in connection with other elements which go towards the fixing of valuations.
[6] In 1931 the assessment as of January 1 of that year was fixed at $365,052 for the land and $87,600 for the building, making a total of $452,652. On appeal to the district court this assessment was reduced, without specifying in the decree the amount of reduction on either land or building but a reduction on the whole to $362,122. On December 22, 1932, prior to the time of the assessment for the year 1933, the state board of assessment and review sent out a letter to all assessors in which *Page 1361
it stated that, for the purpose of equalizing real estate valuations in the state, they recommended a 20 per cent reduction on the values in 1931. Their reasons therefor were that there had been a general decrease in valuations in the state during the past two years of at least one fifth. They therefore recommended that in all communities which had been assessed and equalized two years before upon a general basis of assessment of 60 per cent of the actual value the new assessment should be 20 per cent less. The letter went on to say that if the assessments in 1931 were lower than the 60 per cent base, the assessor would not be justified in making such reduction. It appears, however, that this had been the base for valuations in Des Moines for some time. When it was indicated that the assessor in the taxing district contemplated making only an average reduction of 18 per cent, the city council also recommended that the valuations be reduced in compliance with the direction and request of the state board, as the state board, under the provisions of section 6943-c27 of the Code of 1931, has as one of its duties to exercise supervision over the administration of the tax list and to advise with taxing officials and aid in securing equitable and just enforcement of the tax list. The assessor undertook to and did reduce the valuations. His testimony shows that a general reduction was made of 27.7 per cent. However, the reduction on the Flynn property amounted to only 10.08 per cent for the assessment as of January 1, 1933. A comparison with other assessments and the reductions therefrom, together with the values made by the district court on other properties, indicate that the Flynn property did not receive the full benefit of the order of the state board, and the reductions made by the assessor following and in compliance with such order. While it is true that no two properties in the ordinary business district can be said to be exactly the same as to valuation, yet a comparison of the Flynn block with other similar properties similarly situated indicates that this, as well as other properties in the vicinity, should have been entitled to the full 20 per cent reduction recommended by the board and the city council, and acted upon in many cases by the assessor. We believe that from the 1933 taxable valuation the plaintiffs are entitled to a further reduction in order to give them the benefit of the 20 per cent reduction enjoyed by similar properties, and which seems to have been the reduction made in various properties in *Page 1362
the neighborhood by the district court on appeal. A general reduction for each individual property was not suggested by the state board, nor did all properties in the district receive such allowance by the assessor — some were given more and some less.
[7, 8] The valuation in 1931 on appeal was fixed as above stated at $362,122. This value, as fixed by the court, was acquiesced in by all parties and neither, appealed. It may be considered, and in view of all the evidence we do consider it, as fixing the fair assessable value in 1931. It is true that the assessment for each year is separate and based on a separate valuation. Nor can an adjudication for one year definitely fix the value for succeeding years. In re Assessment of Stock in Sioux City Stock Yards Co., 223 Iowa 1066, 274 N.W. 17. But there is no reason to believe, nor is there anything in the evidence to indicate, that this property, taking into consideration its productiveness, and all other matters that must be considered in fixing its value, was to any considerable degree different in value in 1931 and 1933 — but rather, the evidence indicates the contrary. Considering all the evidence, we think as fair a valuation as can be made would be to fix its value at $362,122, less the full 20 per cent reduction, instead of the reduction of 10.08 per cent allowed by the assessor.
[9] Plaintiffs urge that they are entitled to a further reduction under chapter 244, special acts of the Forty-fourth General Assembly. But that chapter does not apply to the situation here, but merely provides for a reduction in rates for the years 1931 and 1932.
In coming to the conclusion herein set out, we do not overlook the testimony of certain experts in whose opinion the property was of a much lower value than that fixed by the assessor. We do not find their testimony uncontradicted, and in view of all the testimony we do not feel that we should be guided solely by this opinion evidence. Nor have we failed to give due allowance to the work and study that have been given to the various assessments by the assessing officers; but we feel compelled, in view of all the evidence, to fix the value as of January 1, 1933, at $289,698.
We have not undertaken to review all the questions raised in the consideration of this very difficult problem. The *Page 1363
constitutional question raised, in view of our holding, we do not consider it necessary to discuss.
The former opinion in this case, appearing in 278 N.W., at page 342, is withdrawn, and the foregoing substituted therefor.
The decree of the district court is, therefore, reversed as to the valuation placed upon the property, and the cause is remanded for a decree in conformity with this opinion. — Reversed and remanded.
HAMILTON, SAGER, BLISS, and MILLER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3431968/ | I find myself unable to agree with the majority and therefore respectfully dissent.
The problem which confronts us is the construction of certain statutes which have not been passed upon before by this court and upon which there is not a great deal of authority in other jurisdictions.
The majority quote the case of State v. Noth, 173 Iowa 1, at page 3, 151 N.W. 822, 152 N.W. 639, but in my judgment that case is not in point and is of no help in solving the question before us for the court in that case said:
"Whether the mayor shall vote or not is entirely immaterial *Page 374
in determining the number requisite to election; and for this reason, the section of the special charter of the city saying, `The mayor shall have the casting vote and no other', is not pertinent, and whether he might properly have voted is not involved."
The material part of section 5717 of the 1935 Code reads as follows:
"No resolution or ordinance for any of the purposes hereinafter set forth, except as specifically provided by law, shall be adopted without a concurrence of a majority of the whole number of members elected to the council, by call of the yeas and nays which shall be recorded."
The material part of section 5639 of the 1935 Code is as follows:
"5. Presiding officer — vote. He shall be the presiding officer of the council with the right to vote only in case of a tie."
In the case at bar there was a tie — two voted for and two against. The mayor then voted to break the tie. The question is, Did he have a right to vote? The majority opinion holds that he did not.
It must be noted that there is no limitation placed upon the right of the mayor to vote in case of a tie. Nowhere in the statute is it provided that he may vote in certain cases and not in others. The provision is simply that "if there is a tie he has a right to vote."
In the case of State ex rel. O'Hern v. Loud, 92 Mont. 307,14 P.2d 432, a very similar question was before the Supreme Court of the State of Montana. In that case the question had to do with the confirmation of an appointment to the position of city attorney by the mayor, which seems to me to go just a little further than the case at bar. There was a tie. Did the mayor have a right to cast his vote to confirm the appointment that he himself had made? The court, 92 Mont. 307, 14 P.2d 432, at page 433, said:
"The relations of the mayor towards the body of the council, the board of aldermen are controlled by law. He has certain duties, rights, and powers granted to him of an executive nature, yet he presides over and is a constituent part of the whole *Page 375
council exercising its legislative powers, but withal he has no right to vote except where the body over which he presides, the board of aldermen, tie in a vote or proceeding. * * * A nomination to an office which requires confirmation by the members of the council, before becoming effective, necessarily demands a vote of the members constituting the city council who can vote. But, inasmuch as the mayor cannot vote unless there is a tie, the right to vote is necessarily restricted to the aldermen until that condition arises, when, by reason of a tie vote, the mayor may exercise his power, and confirm or reject."
And a little later in the same opinion, 92 Mont. 307,14 P.2d 432, at page 434, that court said:
"If the words `a majority of the whole number of the members elected is requisite to appoint or elect an officer' where unrestricted by any other provision, still there is found respectable authority to the effect that, when there is a tie, the mayor may cast the deciding vote. Carrollton v. Clark, 21 Ill. App.? 74; Village of Hazelcrest v. Lambert, 343 Ill. 105,174 N.E. 868; Mount City v. Shields, 220 Mo. App. 798, 278 S.W. 798,799; 7 R.C.L. Supp., p. 4733."
In Judge Dillon's work on Municipal Corporations, (5th Ed.) § 513, p. 834, that learned authority said at page 835:
"His functions are intended to be, and usually are, of an executive or administrative character, and whatever power he may at any time exercise in the legislative functions of a municipal government is never to be implied, but must find its authority in some positive statute. In this view, in the absence of a statute necessarily implying that he has the same standing in the council as any other member, and particularly when his powers are expressly stated to be to preside at meetings and to give a casting vote in case of a tie, he is only a member of the councilsub modo, and to the extent of the power specially committed to him * * *."
And at page 837 we read: "By providing that he shall have a casting vote, it is implied that he shall have no other vote. When a tie exists, the right of the mayor to give a casting vote is not affected by the fact that the question before the council involves the approval or disapproval of some action on his part *Page 376
as mayor. In case of a tie he may vote, although it be on a motion to confirm an appointment made by him. * * *"
The Legislature of Iowa gave to the mayor of the City of Winterset, and cities of that class, the right to vote in case there was a tie. He was a member of the city council for the purpose of presiding and casting a vote in case of a tie, even tho not a member for any other purpose. It is a rule of parliamentary procedure that the presiding officer — although he may not be a member of the body over which he is presiding — has a right in case of a tie to cast his vote. That rule applies even in the Senate of the United States, where the Vice President may vote in case of a tie. I appreciate that there are rules of procedure governing various bodies, including the Senate of the United States, and that we are here confronted with the construction of a statute, but, it seems to me that the procedure commonly used in parliamentary bodies, that a presiding officer has a right to cast his vote in case of a tie, points the way to what the Legislature meant when it enacted the statute before us. There should be some way to determine tie votes. A city council might, by a tie, have deadlocked some important matters. The mayor, the presiding officer, is in a position to cast his vote, and when the Legislature said as it did, that the mayor has a right to cast his vote in case of a tie, and there was no limitation placed upon it, I think that meant in case of any tie, and that the mayor of the City of Winterset had a right to vote.
I would affirm the decision of the lower court. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432078/ | The mortgage covered premises owned by defendants Byrne and M.F. First as tenants in common. It provided:
"It is further expressly agreed that this mortgage shall stand as security for any other indebtedness, direct or contingent, that the mortgagee may now hold or in the future during the life of this mortgage acquire against the said mortgagors, or either or any of them."
It was given June 13, 1940, specifically to secure mortgagors' joint note of even date for $2,400, and was subject to a first mortgage securing a joint debt of the same parties. Mortgagors were partners in business. Plaintiff mortgagee is defendant M.F. First's father and had on prior occasions loaned the partnership money which had been repaid. Other named defendants need not be identified or referred to.
The petition, filed May 10, 1946, asked personal judgment against both defendants upon their joint $2,400 note; personal judgment against defendant First upon his individual demand *Page 714
note of $5,667.32, dated May 8, 1946; and personal judgment against defendant Byrne upon his individual note of $1,192, dated July 15, 1940. It prayed that all be decreed a lien against the mortgaged premises and asked foreclosure of the mortgage as to all three amounts.
Defendant Byrne alone appeared and answered. He pleaded that the clause of the mortgage quoted above was intended only to secure the repayment of advances necessary for the protection of the security to the $2,400 loan and such future advances as the parties might agree to. He denied that the M.F. First note of May 8, 1946, was ever agreed to, and alleged that he had no knowledge of its execution or participation in its proceeds; that its execution was the result of a fraudulent scheme to wipe out his remaining interest in the property; that plaintiff's conduct in securing it was unfair and inequitable; and that plaintiff was not entitled to relief in equity.
Judgment and decree were rendered as prayed and defendant Byrne alone appeals. He complains only of that part of the decree making the judgment on defendant M.F. First's separate note of $5,667.32 a lien upon his (appellant's) interest in the mortgaged premises under the "dragnet" provision of the mortgage above quoted.
It appears from the evidence this note of defendant M.F. First to his father, given two days before commencement of suit, represented a debt contracted November 9, 1926. On that date plaintiff paid his son's share of the purchase price of the premises later covered by the mortgage in suit. The indebtedness had never been acknowledged in, or reduced to, writing until the execution of the note May 8, 1946, and no payments had ever been made on it. Defendant Byrne had no knowledge of it when the mortgage was given. Defendant First admitted on cross-examination that he signed the note knowing the foreclosure suit was to be brought and said that was the purpose of signing it. Plaintiff did not deny this.
The original petition did not reveal the origin of the indebtedness represented by this note. It was first pleaded by plaintiff in a "Reply to Answer and Amendment to Petition" filed two months after the answer was filed and three days *Page 715
before trial. Thereupon defendant Byrne filed "Amendment to Answer" in which he pleaded that action on said indebtedness had long since been barred by the statute of limitations and "that to permit, without the knowledge, consent or acquiescence of the defendant, F.C. Byrne, a revival of the alleged debt * * * and * * * to bring the same under the apparent terms of theacceleration [sic] clause of the mortgage * * * is unfair and inequitable and unconscionable and is conduct such as should not entitle plaintiff to relief in a court of equity."
[1] This amendment is not included in the printed record but question having arisen on oral argument as to such defense having been pleaded we have caused it to be certified under Rule 341, Iowa Rules of Civil Procedure. We shall, of course, consider it only so far as the printed briefs will justify such consideration.
I. What was the intention of the parties expressed by the above-quoted "dragnet" clause? The question is one of first impression as applied to a situation such as is presented here. No lamp of precedent lights our way.
The mortgagors owned the premises as tenants in common and the mortgage was specifically given to secure their joint note. The "dragnet" clause would, of course, be effective to make it secure other existing and future joint indebtedness of the mortgagors to the mortgagee. But its language is broader than that: "* * * shall stand as security for any other indebtedness * * * that the mortgagee may now hold or in the future * * * acquire against the said mortgagors, or either or any of them."
Does this mean the interest of each in the mortgaged premises was intended to be absolutely pledged to secure existing and future debts of the other as well as his own? Or should it be construed to mean each mortgagor pledges his own undivided interest to secure his own individual "other indebtedness" and in addition only such individual debts of the other (existing or future) as he may have knowledge of and consent to have included?
[2] A court of equity should be reluctant to adopt the first construction suggested above. "Dragnet" clauses are not *Page 716
highly regarded in equity. They should be "carefully scrutinized and strictly construed." First Bank Trust Co. v. Welch,219 Iowa 318, 321, 258 N.W. 96, 97. In Corn Belt Sav. Bk. v. Kriz,207 Iowa 11, 18, 219 N.W. 503, 506, it is said:
"The use of such a clause is not to be commended, and it naturally arouses suspicion as to the good faith of the mortgagee in the transaction. It might in many cases not require much evidence of concealment, haste, or artifice to overturn it. Such a clause, on the particular facts, was sustained in Turnis v. Ballou, 201 Iowa 468."
The same justice wrote both the opinion in Corn Belt Sav. Bk. v. Kriz, supra, and in the cited case of Turnis v. Ballou,201 Iowa 468, 205 N.W. 746. In each the "dragnet" clause was given effect. In the Turnis case the "other indebtedness" was that of the same mortgagor who owned the mortgaged property. In the Kriz case the clause was in a joint mortgage by husband and wife upon premises the husband had conveyed to the wife and the "other indebtedness" was the husband's alone. The wife sought to avoid the foreclosure as to the individual debts owed by the husband and to reform the mortgage upon the ground that she did not know the "dragnet" clause was in it and that her signature was obtained by fraud. The facts were in dispute and her contention was overruled. Neither case involved a question of construction or facts comparable to those confronting us here.
In Commercial State Bk. v. Ireland, 215 Iowa 241, 245 N.W. 224, defendant mortgagors in a foreclosure suit sought and obtainedreformation of the mortgage, eliminating the "dragnet" clause as not within the intent of the parties to the instrument. It was held that to uphold the clause under the circumstances there shown would amount to a legal fraud. The case is cited by both appellant and appellee but does not seem particularly helpful here except as indicating the readiness of equity to avoid the operation of the "dragnet" clause where to permit it to stand would produce a result not intended by the parties when it was executed. *Page 717
The case of Sullivan v. Murphy, 212 Iowa 159, 165, 232 N.W. 267, 269, is also cited by both sides. There is in it, strictly speaking, no "majority" opinion. The one written by Chief Justice Morling was concurred in by two justices. Two others joined in a special opinion reaching the same result, while four dissented outright.
The facts are not analogous or comparable to the facts here. The trial court denied plaintiff's claimed right, under a "dragnet" clause, to tack to the mortgage a note representing an indebtedness not owed by the equitable owner of the mortgaged homestead. Five judges affirmed the decision but not all by the same reasoning.
Chief Justice Morling's opinion is based on the broad principle that the proceeding, though not a suit for specific performance, was nevertheless governed by the equitable doctrine applicable to such suits, viz.:
"To stay the arm of a court of equity from enforcing a contract it is by no means necessary to prove that it is invalid; from time to time immemorial it has been the recognized duty of such courts to exercise a discretion; to refuse their aid in the enforcement of unconscionable, oppressive, or iniquitous contracts * * *." Quoting from Pope Mfg. Co. v. Gormully,144 U.S. 224, 236, 12 S. Ct. 632, 637, 36 L. Ed. 414, 419.
Numerous other authorities are cited and quoted.
The special concurring opinion by Justice Evans reached the same result by construction of the contract in the light of the circumstances and held it did not contemplate or cover the indebtedness sought to be included within the protection of the mortgage. The dissenting opinion, written by Justice Grimm, stood on the literal language of the contract and claimed the majority was overruling Turnis v. Ballou, supra, and Corn Belt Sav. Bk. v. Kriz, supra.
These various Iowa decisions are by no means conclusive of the question involved here, partly because of factual, and partly because of procedural, differences. We have here no direct evidence of the intent of the parties, whether there was *Page 718
any discussion of this particular part of the mortgage, or even whether either or all of them knew it was in the printed form. We are told by appellee's brief that the clause was in common use in Jones county for many years, referring us to Monticello State Bk. v. Schatz, 222 Iowa 335, 268 N.W. 602, and Turnis v. Ballou, supra. We are left to assume the mortgage form was used without discussion of the particular clause in question and with no special regard having been given to its consequences — certainly with no express common intent or purpose as to the debt in question.
No reason is suggested why this debt was not referred to in the mortgage if it was intended to be included. It would seem good faith required some mention of it. Appellee and his son both knew of it; appellant did not. It represented one half the purchase price of the premises and its inclusion would have made reasonably certain that appellant's interest in the premises would have to help pay it in case of foreclosure and would be thereby entirely wiped out. It had existed nearly fourteen years, resting in parol, and with no payment of principal or interest having been made. Even had appellant known of its existence we cannot reasonably assume it would have occurred to him that he was mortgaging his interest in the premises for its payment if no mention was made of it, or that he would have signed the mortgage knowing it was to be included.
And in all charity we cannot assume the mortgagee and his son had at that time any such secret intention. To so assume would impute to them a degree of duplicity not consistent with the apparently friendly relations of the parties. What has since occurred to account for the present attitude is not shown.
[3] In a joint mortgage given by cotenants each pledges his own individual interest. In a sense, separate liens are created upon the separate interests. If the interest of one is mortgaged to secure the individual debt of the other a relationship of suretyship is created. 36 Am. Jur., Mortgages, section 62; 50 C.J., Principal and Surety, section 35; Christner v. Brown,16 Iowa 130, 132; Cross v. Allen, 141 U.S. 528, 534, 12 S. Ct. 67, 35 L. Ed. 843. *Page 719
In Christner v. Brown, supra, a mortgage was given to secure a debt due the mortgagee, not from the mortgagor but from a third person. This court said: "That the liability of Porter, by reason of his mortgage, was that of a surety, we entertain no doubt." In the article on Principal and Surety in 50 C.J., section 1, it is said: "A suretyship may be designated * * * as `real' where certain specific property can be taken to enforce payment of another's debt * * *." And in section 35 of the same article it is said:
"A common instance of real suretyship, under which property mortgaged * * * is said to stand as surety, and the surety held liable as such only to the extent of the property mortgaged * * * arises where property is mortgaged, without personal liability, to secure the debt or obligation of another * * *."
To construe the language here as creating such a relationship to secure indebtedness the existence of which was unknown to the surety, and, of course, not intended by him to be secured, would be to countenance a situation inviting abuse and unfair dealing. It would give the indebted comortgagor and cotenant in effect a power of attorney to impose a lien upon the other's interest for his own benefit, to make the other a surety for the payment of his own debt. As a court of equity we cannot so construe it. Such a result should not be presumed or declared except upon a clear showing of intention.
Again referring to the article in 50 C.J. on Principal and Surety, section 111, we find:
"Where the names of two or more parties to an obligation appear, it will be presumed, unless a different relation is shown by the language of the writing, that all are principals; and in the absence of evidence to the contrary there generally is no presumption that any of such parties are sureties * * *."
Of course, the facts in the cases cited in support of the text are not in point here but we think the stated principle of law is applicable. Each mortgagor was a principal as to his own personal obligations. Whether he was to be held as a *Page 720
surety for the separate debt of the other depended on whether he consented to such relationship.
[4] We construe the "dragnet" clause to mean that each mortgagor pledged his undivided interest in the mortgaged premises to secure, in addition to the specifically named joint indebtedness: first, any other existing or future joint
indebtedness of the mortgagors to the mortgagee; second, any other existing or future individual debt of the mortgagor whose interest is sought to be foreclosed upon; and third, any existing or future debt of the other mortgagor which was known to the one whose interest is sought to be held and by him consented to or acquiesced in as being included in the lien upon his interest.
This construction is reasonable and in complete harmony with the language used, the conduct of the parties, and the circumstances as they existed at the time the mortgage was executed.
"The contract of suretyship imports entire good faith and confidence between the parties in regard to the whole transaction. Any concealment of material facts or any express or implied misrepresentation deceiving the surety * * * may invalidate the undertaking." 50 Am. Jur., Suretyship, section 17, section 163 et seq.
See, also, Benton County Sav. Bk. v. Boddicker, 105 Iowa 548, 75 N.W. 632, 45 L.R.A. 321, 67 Am. St. Rep. 310.
It is manifest the views we have announced must result in a reversal and remand of the case for modification of the decree to relieve appellant's share of proceeds of sale of the mortgaged premises from all liability on the individual judgment against his comortgagor. Clearly there was no intention when this mortgage was executed to make it a pledge of appellant's property to secure the old indebtedness sought now to be included; or if there was such intention it was nullified by appellee's conduct in concealing the fact of the existence of his son's indebtedness.
II. Our conclusion is strengthened by consideration of the fact that the debt was long barred by the statute of limitations when the mortgage was given. It is true appellant promptly *Page 721
pleaded the statute of limitations when the origin and nature of the indebtedness was revealed by appellee's "Reply to Answer and Amendment to Petition."
But the language of appellant's pleading and the method in which he argues it here do not suggest that the statute was pleaded as a defense which he could interpose. Rather, the fact that the debt was barred seems to be pleaded and argued on the ground that it was fraudulent to revive it in order to enforce it against his property. Appellant seems to concede his comortgagor's power to revive as against him. In this we think he concedes too much.
[5] It is true, of course, as a rule, that the right to interpose the statute as a defense is a personal privilege of the debtor which he may waive, or omit to avail himself of, if so inclined. But if appellant's property had been pledged to the payment of his comortgagor's debt and that debt had become barred we would entertain no doubt of his right to plead the statute in defense of his own property. Day v. Baldwin, 34 Iowa 380. See, also, Graves v. Seifried, 31 Utah 203, 87 P. 674, 676; 37 C.J., Limitation of Actions, sections 27, 33; 34 Am. Jur., Limitation of Actions, section 379.
He could not, of course, plead it on behalf of the principal debtor, nor could the latter waive it for him. In Day v. Baldwin, supra, the principal expressly waived the defense of the statute; the surety pleaded it. It was held the admission by the principal could not prejudice the surety's interests, the opinion saying:
"It is against his property that the action is brought, and that he may plead the statute of limitations in bar of the action in this respect, we have no doubt." 34 Iowa 380, 384.
However, we hold here appellant's interest was never pledged for the payment of the already outlawed debt. Consequently the statute of limitations has no application. But the fact that the debt was so long barred by the statute with no apparent intention of either creditor or debtor to treat it as an existing obligation strongly confirms our conclusion that there *Page 722
was no purpose of covering it under the "dragnet" clause of the mortgage.
III. The situation is different as to the individual judgment against Byrne. Defendant M.F. First testified he knew of the Byrne loan from his father and he impliedly consents that it be treated as a lien against his interest. He made no defense in the district court and has not appealed to this court.
But his liability therefor is only as surety (see authorities cited in Division I). The concession is of no benefit to appellant Byrne, whose interest in the premises seems sufficient to pay both his part in the joint judgment and the one against himself on his individual note. Nor, under the record, is it likely to result in loss to the surety. There is no probability that any part of the latter's interest will be available for distribution to him in any event.
The decree should be modified so as to marshal the net proceeds of sale after payment of the judgment on the joint $2,400 note, together with taxes, attorney's fees thereon, and costs, making appellant Byrne's share thereof subject only to the personal judgment against him on his individual note of $1,192, and defendant M.F. First's share subject to the judgment on his individual note of $5,667.32, plus the deficiency, if any, remaining unpaid on the individual personal judgment against appellant.
For that purpose the case is reversed and remanded. — Reversed and remanded.
OLIVER, C.J., and BLISS, HALE, GARFIELD, MANTZ, MULRONEY, and HAYS, JJ., concur. *Page 723 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432080/ | A preliminary question involved in this general controversy was previously considered and determined by this court. McPherson v.Commercial Bldg. Sec. Co., 206 Iowa 562. Many of the facts are recited in that opinion.
The Commercial Building Securities Company was organized under the laws of Iowa in January, 1920. Authority *Page 825
was thereby given the corporation to conduct a real estate and personal property investment business, with power to purchase, exchange, lease, or otherwise acquire real estate, plat, subdivide, and improve the same; and for that purpose this business concern was granted the power to borrow money, evidence the debt therefor by notes or bonds, and secure the same through mortgages, trust deeds, or otherwise. After being thus chartered, the company issued capital stock in the par value of $328,000, under a total authorization of $500,000. H.R. Howell and H.S. Taylor, defendants-appellees, were the promoters. They, together with two others, were also incorporators. Succeeding the incorporation and organization thereunder, the appellees Howell and Taylor were made directors, and became the president and secretary, respectively, of the corporation. Furthermore, said president and secretary were appointed and authorized to be the institution's general managers, and therefore they were to, and did, receive one half of the company's profits until February 1, 1922, when these men were appointed to that managerial position for three years, with compensation as follows: $11,000 for the first year; $12,000 for the second; and $13,000 for the third. In addition to that, the managers were to receive one half of the earnings above 16 per cent.
Thus Howell and Taylor continued in the management of the concern until it went into receivership, during the month of July, 1925. Soon after its organization, the corporation, in July, 1920, by its board of directors authorized the issuance of collateral trust bonds under a trust deed. Accordingly, eight series of such bonds, aggregating $500,000, were executed, and sold in the commercial world. Under the trust indenture, therefore, the Central State Bank was designated trustee. SeeMcPherson v. Commercial Bldg. Sec. Co., supra. Said eight series are not directly, but only incidentally, concerned in this litigation.
Subsequently, in September, 1921, the corporation authorized a series of bonds known as gold debentures, designated as "DA." Provision was made thereunder for a total bond issue of $100,000, bearing 6 per cent interest, but only $61,500 of these instruments were actually sold. Those are the bonds involved in the present suit. Elmer Loucks, defendant and appellee, and Frank S. Cummins were the trustees named in said *Page 826
trust indenture. Security for the bonds contemplated by that trust deed was to be "collateral owned by said company in the form of real estate or real estate securities or bonds and notes of various kinds, in an amount [the italics are ours] equal to or greater than the amount [the italics are ours] of outstanding bonds so issued."
Financial failure overtook the corporation, and, as before mentioned, a receiver was appointed for it in July, 1925. One year later, appellants, E. Allen Walker, Mable Pitt, and Mark L. Johnson, as a bondholders' committee, appointed by the gold debenture bondholders, intervened in the receivership proceedings aforesaid, commenced a foreclosure action, and impleaded the appellee Elmer Loucks, trustee, his cotrustee, and the receiver. As a result, judgment in the sum of $57,944.20 was duly entered, foreclosure decreed, and the collateral in the hands of the appellee, trustee, and his cotrustee, was disposed of at public sale for $8,496. From this sum there were deducted the expenses and costs of sale, thus leaving a balance of $6,021.80 to be credited on the judgment. This suit was brought by appellants, as such bondholders' committee, against appellees, Howell, Taylor, and Loucks, to recover the loss caused the gold debenture bondholders.
Four general propositions are urged by appellants: First, that the corporation, through the managers, Howell and Taylor, collected proceeds of the collateral security, which were not returned to the trustees for the satisfaction of the gold debenture bonds; second, that the trustees under the gold bond indenture permitted and allowed unlimited and unlawful substitutions of collateral securities; third, that the trustees permitted the corporation, through its managing officers, to "take down" said collateral and use it for the benefit of the "eight series — Collateral Trust Bonds" first above mentioned and certain officials who loaned the corporation money; and fourth, that the trustees substituted in lieu of the original in each instance less valuable securities. That replacement, it is alleged, was made by the trustees with the aid and connivance of the managing officers, Howell and Taylor.
I. At the outset, we are confronted with the duty of construing the trust deed for the gold debenture bonds. Does it *Page 827
permit the corporation to collect and retain the proceeds of the collateral placed with the trustees? Such is the problem.
Preliminary to a study of the terms embraced within that trust instrument, it is helpful to notice the general plan under which the company operated. It was buying lots and building houses thereon to sell on contract. Usually these 1. TRUSTS: purchase-money contracts were subject to a prior construc- mortgage, negotiated for the purpose of tion: right financing the betterments. In order to continue to collect in business actively, sales and collections were collateral. essential. Without them, there would be stagnation and business inactivity. So, with the aim of making possible the procurement of ready money, the scheme was launched whereby the corporation gave its said securities, in order to protect the gold debenture bonds. Turning now to the trust deed authorizing the same, there is to be found among its provisions the following:
"The company [the Commercial Building Securities Company] shall collect and receive the payment of principal and interest as they become due upon the various forms of collateral pledged with said trustees * * * The company shall be permitted to collect principal and interest upon the various collateral in the hands of the trustees, only so long as it shall have paid the principal and interest upon the bonds as they respectively mature. In the event that the company shall be in default for a period of sixty (60) days in its payments of principal and interest upon the said bonds, then the trustees may, as long as said default continues, collect, receive and hold the payments of principal and interest due from time to time upon the collateral in their hands."
What, then, did the language above quoted express, where the plain and unambiguous words are, "the company shall collect and receive the payment of principal and interest as they become due upon the various forms of collateral pledged * * * only so long as it [the corporation] shall have paid the principal and interest upon the bonds as they respectively mature?"
Obviously, the corporation desired to finance its operations in that way. There was extended in the language under consideration the power to collect the principal and interest on the collateral pledged, as and when the same came due. Demand *Page 828
is not made in that deed for the payment of such collections to the trustees. But one requirement is made as a prerequisite for the corporation's unlimited and continuous collection, and that is that it in turn shall pay the principal and interest on the bonds "as they respectively mature." Manifestly, under the mandates of the trust deed, the corporation may pay that principal and interest upon the bonds with any money in its possession: that is to say, it is not required that the identical interest or principal collected on the collateral, without change in form or substitution, be applied on the bonds. This must be true, for no provision is made in the trust deed that the collateral and the bonds shall mature at the same time.
Clearly, therefore, the corporation had a right to collect the collateral after it was placed with the trustees, and retain the proceeds thereof. Provision for this collection and retention is plainly and definitely made in the trust deed. Ambiguity or uncertainty nowhere appears in that document with regard to this. Hence, appellees are not liable for the corporation's acts in making those collections and retaining the money derived therefrom.
II. Having thus concluded, it is next to be decided whether the gold debenture bond trust deed permits substitutions for, or replacement of, the collateral so collected. The deed itself must furnish the solution. Taylor v. Oliver,137 Ark. 2. TRUSTS: 515 (208 S.W. 595); Mullen v. Eastern Tr.
construc- Bank. Co., 108 Me. 498 (81 A. 948); tion: Rhinelander v. Farmers' L. Tr. Co., 172 N.Y. collateral: 519 (65 N.E. 499); Colorado S.R. Co. v. Blair,
right to 214 N.Y. 497 (108 N.E. 840); Bremer v. Hadley,
withdraw and 196 Mass. 217 (81 N.E. 961); Mercantile Tr.
substitute. Dep. Co. v. Gottlieb-Bauernschmidt-Straus Brew.Co., 122 Md. 502 (90 A. 98); Goad v. Montgomery, 119 Cal. 552
(51 P. 681); Lamar L. C. Co. v. Belknap Sav. Bank,28 Colo. 344 (64 P. 210). See McCash v. Derby, 158 Iowa 371;Lingenfelter v. Iowa Tel. Co., 132 Iowa 211.
Specific substitutions or replacements are permitted by the trust deed, provided the trustees deem any collateral pledged not worth its face value. Application of that power, however, is not specifically made by the deed itself to the collateral collected in the manner and way aforesaid, although, by necessary *Page 829
implication, it must be so applied, in order to carry out said plan of collection. Forsooth, the power to replace or substitute is a necessary corollary of the right to collect. As previously stated, there is no provision in the trust deed that the collateral and the bonds shall mature at the same time. Necessarily, then, the corporation, under its power of collection, would have received considerable portions of the collateral funds through collection before the particular interest or principal was due on the bonds. During that space of time, the bondholders would be without collateral security to the extent of such collection, were the trustees not permitted to call for and receive replacement collateral for the collected or pro-tanto collected paper. A fundamental idea underlying the plan, as expressed by the trust deed, was that the corporation, through its officials, should at all times furnish adequate collateral to secure the bonds.
By necessary implication, then, if not through express language, the trust deed contemplated replacement of this collateral to the extent collections were made on that placed.
"`Undoubtedly, necessary implication is as much a part of an instrument as if that which is so implied was plainly expressed * * *.'" Rhinelander v. Farmers' L. Tr. Co., supra.
The trustees were required to know of the collections, and if a debtor, under the collateral, was in default for 60 days, the corporation, by the provisions of the deed, was compelled to make replacements. Likewise, if, for any reason, as before stated, the trustees believed the collateral pledged was not worth its face value, the corporation was also under obligation to supply the deficit by substitution. When, in any event, the corporation did not furnish such collateral, or failed to pay the interest and principal on the bonds, then the collection on its part must cease, and in 60 days thereafter, the trustees alone could receive the principal and interest from the debtors who were bound to pay the collateral. Yet this power of collection possessed by the trustees could apply only to the collateral held by them. If, then, there was to be full protection for the gold debenture bonds, it was necessary to replace or make substitutions for those pledged securities which the corporation had *Page 830
previously collected. Unquestionably the trust indenture contemplated full security, for such was its express provision.
Replacement of the collateral was proper, then, to supplement that satisfied or reduced by the authorized collections. For those replacements or substitutions, the appellees are not financially responsible to the appellants.
III. However, a different proposition is presented in relation to the withdrawal of collaterals from the gold debenture bond issue for the purpose of redepositing with and protecting the eight series collateral trust bonds above 3. TRUSTS: described. No such authority can be found, management: express or implied, in the deed for the gold unauthorized debenture bonds. Appellees, however, contend transfer of that such authorization appears in the collateral: trustees' certificate on the gold debenture conversion. bonds. So far as material, that certificate contains the following phraseology:
"We, the undersigned trustees, do hereby certify that * * * the Commercial Building Securities Company, of Des Moines, Iowa, has deposited and pledged with us, as trustees, real estate, or real estate securities, or bonds and notes of various kinds in an amount equal to or greater than the amount of outstanding bonds of Series `DA.' That we hold said securities in trust for the benefit of the lawful holder or holders of said bonds, with full power of substitution of securities of equal or greater value, and with power to collect or dispose of the same and to use the proceeds thereof to redeem such bonds in the event default shall be made in their payment, and that we hold said securities subject and according to the provisions and terms of a certain indenture of trust," etc.
Reference to the substitution and collection appearing in the trustees' certificate aforesaid unquestionably relates to the provisions of the trust deed itself. Nothing contained in the language of that certificate indicates in any way that the trustees were endeavoring to change or vary the terms of the trust deed. Identification, rather than change of the trust under that deed, was the purpose of the trustees when executing the certificate. Both substitution and collection are expressed or implied in the trust deed, as before indicated. Therefore, the trustees clearly sought to, and did, do nothing else but assume *Page 831
the burdens and duties imposed upon them by the trust instrument which created and controlled the gold debenture bonds. The transfer of collateral by the trustees from its rightful place in the pledged deposit, protecting the gold debenture bonds, to another corporate department, for the use of a different and independent bond issue, constituted an active and deliberate mismanagement. Authority for such withdrawal of collaterals does not exist. Execution of the trust neither contemplated nor permitted that action. Violation of duty, rather than fulfillment thereof, resulted from that manipulation. Thus the trustees, not rightfully, but wrongfully, exercised dominion and control over the collaterals so pledged, in denial of appellants' right thereto. Consequently, if, upon the new trial, the jury finds that the trustees thus wrongfully executed their trust, it will be warranted in saying that there was a breach thereof, and, accordingly, if the fact-finding body further determines that loss accrued to the appellants through such breach of trust, damages shall be fixed consistent therewith.
Theoretically, the replacement of collateral under the trust deed was to be made for securities rightfully and legally withdrawn, and not to facilitate wrongful substitution. Each bondholder is entitled to the fulfillment of the trust agreement, and need not accept something less or different. Thus the bondholder had a qualified ownership in the pledged property, and appellees could not destroy the same or, except as authorized by the deed, force an exchange thereof for something else. While it is true the corporation, if not in arrears, could collect the collateral when it became due, yet, until the hypothecated paper matured, and such collection thereof was in fact made, the security pledged remained as a protection for the bondholders, in case there was default in the payment of the principal or interest on the bonds. To that extent each item of the collateral was valuable to the appellees.
In view of this, these trustees could not follow the practice of accepting from the corporation collateral contracts with little equity, and retain them until, by partial payments, the remaining obligation thereon became a desirable security, and then transfer the same from the less favored gold debenture bond issue to the more popular collateral trust bond issue. Substantial evidence appears in the record supporting the breach of *Page 832
trust and appellees' loss because thereof. Necessarily, then, this issue should have been submitted to the jury.
IV. Also, the record discloses that the appellees, trustees, permitted the corporation and its officers to "take down" similar collateral from the gold debenture bond issue to protect loans made to the company by its officers and directors. That was done as the other, without and contrary to the authority afforded by the trust deed. For the reasons hereinbefore indicated, the trustees, if they so acted, thereby committed a breach of trust, and they are liable to the appellants if loss was occasioned thereby. It is for the jury to decide: First, whether the trustees did thus breach the trust; and, second, whether appellants suffered damages because thereof.
As previously indicated, the substituted collateral received by the gold debenture bondholders in lieu of that transferred, to secure the officers and directors' notes and the collateral trust bond issue, when finally converted into cash, amounted, in the aggregate, to $8,496, and, after subtracting costs and expenses, the net remainder was $6,021.80. Suggestion is made that the difference in values can be accounted for because there was a forced sale, and because the financial disturbance which took place during that time greatly reduced all values. The jury has the duty of deciding all questions relating to values. There is some evidence in the record indicating that part of said collateral actually was worth 100 cents on the dollar. Credit should be given the trustees for the amount received by the gold debenture bondholders from the receivership and foreclosure sale of the substituted collateral. Upon proper evidence, and under apt instructions, the jury will determine the appellants' loss.
V. On behalf of Howell and Taylor, it is argued that they, as the corporation's officers and directors, are not responsible to appellants for the loss aforesaid. Regarding what may be the law in reference to an officer's liability for nonfeasance, we are not now concerned, and make no pronouncement upon it. Appellees Howell and Taylor were the managers in control of the corporate activities. They, in that capacity, furnished the collateral to the trustees. Likewise, these managers arranged for, sanctioned, and generally controlled transfers and substitutions of collateral. That the corporation misappropriated and *Page 833
converted the securities there is no doubt. Leonard v. Sehman,206 Iowa 277; Danbury Tr. Sav. Bank v. Weber, 197 Iowa 263. See, also, Church v. Bloom, 111 Iowa 319. Under the record, said corporate officers actively participated in such conversion. This they did by willful and fraudulent mismanagement. Condonation is sought for them because the actual receipt of collaterals from, and delivery thereof to, the trustees were done by subordinate agents. Yet these subordinates, as well as the affairs and activities of the corporation, were managed and controlled by the appellees Howell and Taylor. Such control was a part of their management. Sweet v. Montpelier Sav. Bank Tr. Co., 73 Kan. 47
(84 P. 542).
Nor can excuse be found in the fact that these officers and managers were promoting the interests of the corporation. Officers of a corporation are guilty of conversion and fraudulent mismanagement even though the act constituting such was done for and on behalf of the corporation. 14a Corpus Juris 175, Section 1955; Hempfling v. Burr, 59 Mich. 294 (26 N.W. 496).
Within the language of the trust indenture, it is incumbent upon the corporation to furnish adequate collateral to the trustees in the premises. So if, upon the new trial, the jury finds that these officers did do the things aforesaid, then it may be concluded that there was a conversion, and damages shall be allowed as for a conversion. Furthermore, if only one of said officers so acted, and caused damages, then he alone is liable; but if both thus conducted themselves, and brought about a loss to appellants, then both are responsible. Manifestly, in this record there was evidence upon which the jury could say (if they so chose) that these officers were liable to appellants for said conversion. Hence, such issue should have been submitted to the fact-finding body, because said officials are responsible to appellants for such intended and injurious acts. 14a Corpus Juris 177, Section 1956; Hubbard v. Weare, 79 Iowa 678; Rumery v.Standard Seed Tester Co., 194 Iowa 325; Fish v. White, 188 Iowa 57; United States Fid. Guar. Co. v. Corning State Sav. Bank,154 Iowa 588; Hempfling v. Burr, supra; Browning v. Fidelity Tr.Co., 250 Fed. 321; Rauch v. Brunswig, 155 Mo. App. 367 (137 S.W. 67); McCollom v. Dollar (Tex. Civ. App.), 176 S.W. 876;Virginia-Carolina Chem. Co. v. Floyd, 158 N.C. 455 (74 S.E. 465);Sweet v. Montpelier Sav. *Page 834 Bank Tr. Co., 69 Kan. 641 (77 P. 538); Vujacich v. SouthernCom. Co., 21 Cal.App. 439 (132 P. 80); Dollar v. LockneySupply Co. (Tex. Civ. App.), 164 S.W. 1076.
VI. Again, it is asserted by the officers that they are absolved from any and all liability by a protective paragraph in the trust deed. So far as material, said provision is:
"It is understood and agreed that the company shall be liable for the payment of said bonds * * *, but the holder of any bond shall not have any claim based upon said bond, or upon this trust indenture against any incorporator, stockholder, officer or director, past, present or future, of the company, all such liability being by the acceptance of any bond or bonds as part of the consideration for the issuance thereof, expressly released."
Plainly, it was not intended by that stipulation to protect corporate officers in the commission of conversion or other willful wrongs. Business integrity and the 4. CONTRACTS: honest execution of trusts make impossible the validity: interpretation demanded by appellees. Browning
contracting v. Fidelity Tr. Co., supra. Therein a similar against thought is expressed in reference to a trustee's one's own absolution from liability. During the wrong. discussion, the court in the Browning case said:
"It [the trustee] insists that the provision [absolving trustees, etc., from liability] holds it immune from liability for all acts `whatsoever,' with the single exception of acts done in `bad faith' * * *. The plaintiff admits that, as a general proposition, parties creating a trust can, by their agreement, limit the liability which is imposed by one and accepted by the other * * *, but maintains, very properly, that the law, dictated by considerations of public policy, determines a point beyond which the parties cannot agree to relieve a trustee from liability for breach of a trust duty. For instance, a trustee cannot contract for immunity from liability for acts of gross negligence or for acts done in bad faith. Such contracts are invalid, because repugnant to law."
Similarly it may be said concerning managing officers of the corporation.
Resultantly, the protective provision in the trust deed *Page 835
aforesaid does not relieve appellees from responsibility for appellants' loss.
Wherefore, appellants are entitled to a new trial, and the judgment of the district court is hereby reversed. — Reversed.
All the justices concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432081/ | It is not disputed that the property in question is the homestead of the plaintiff. Defendants' contention is that the indebtedness represented by the judgment antedated plaintiff's title. The land was owned by plaintiff's father, but has been in the occupancy *Page 552
of plaintiff as his home for more than 25 years before the trial. The undisputed evidence is that, 25 years before the trial, which was in January, 1930, the father called his children together (his wife being present), saying as his purpose, "he was going to divide his land * * *. He said he was going to give a description of each place so that they would know what they drawed. He had a description of each piece of land and he had it written on a paper and had those papers on the table, turned upside down, each separate. He directed the children to draw, from the oldest down * * *. They each drew. I know John Lennert [plaintiff] drew the piece he now has. It was then unimproved. He built a house the fall before he was married, and in the spring I think that was a year after the drawing. * * * I believe it was stated at that time what farm land was to be paid rent on as long as he needed the money for his support and the support of Mrs. Lennert, and that was to be $1 per acre."
Plaintiff's sister testified:
"He said he wanted to give the older children a home, because they were renters, at that time. * * * He just said we younger children wouldn't draw because we were at home yet."
Another sister testified:
"He just said he was going to divide up his land and that he thought that would be the best way to divide it, by each of us drawing our own. * * * John, Kate, myself and Mollie drew. The two other children were smaller. We did not draw for the land father occupied at that time. * * * John took possession right after he was married. This drawing was just a short time before he was married. I think he broke out some ground before he was married."
Plaintiff testified:
"I was married 25 years ago. * * * I have lived on this land 25 years. * * * I broke 20 acres up before I moved on it. It was then pasture land. At that time there was no improvements on it, just a fence around it. I put on a house, barn and shed, hog house, hen house, machine shed, corncrib and waterworks. I put the house on before I was married. I occupied premises ever since I was married, except one year I moved to Woodbine, so my wife could take treatments. * * * Q. Now whom did you get to consent to move on *Page 553
these premises? (Objection.) A. My father. I paid all the taxes on the land. Q. Did you pay rent? (Objection.) A. Yes, sir, $1 per acre when he wanted it."
It is stipulated that plaintiff acquired title to the property "by virtue of the terms of his father's will." The will has been admitted to probate, but its terms are not set out in the record. A part of the indebtedness and the earliest represented by the judgment was contracted in 1915.
[1] Defendants argue, "Parol evidence is not competent to establish a contract creating an interest in the land." Defendants were not parties to the agreement between plaintiff and his father, nor do they claim under the father. Neither the statute of frauds nor the parol-evidence rule is available to the defendants, who are entire strangers to the parol agreement and to the title. Shedenhelm v. Cafferty, 174 Iowa 195.
[2] The testimony objected to was given by those who apparently are the father's successors in interest and without objection by them. Defendants are not within the class who may raise the objection of incompetency of a witness to testify to personal transactions with a deceased person. Harrow v. Brown, 76 Iowa 179.
[3] Defendants urge that "to entitle a person to claim homestead he must have a legal, certain and immediate interest and sufficient title to justify the occupancy as a homestead," — citing Rutledge v. Wright, 186 Iowa 777, Perry v. Adams, 179 Iowa 1215,1223.
Perry v. Adams, 179 Iowa 1215, 1217, was a similar case. The court said:
"That the property in controversy was the homestead of George W. Adams at the time these actions were commenced, is not disputed. The burden, therefore, rests upon the plaintiffs to show that the homestead was acquired, and the homestead rights attached, after the debts were contracted upon which the judgments were entered."
The homestead right was sustained.
In Rutledge v. Wright, quoted in American Savings Bank v. Willenbrock, 209 Iowa 250, 254, it is said:
"`It is not essential to the acquisition of a homestead, within the meaning of the statute, that the claimant have a perfect or complete legal title. It is essential that he have a sufficient title to justify *Page 554
his occupancy. Occupancy under such a title will justify a claim of homestead right, subject to the limitations of the statute.'"
It was further stated in the Rutledge case:
"`The logical corollary of this holding is that, to the extent of the area permitted by the statute, a homesteader with an imperfect and incomplete title may yet acquire the homestead right within the statutory limit, and may thereafter perfect or complete his title to the homestead area. Likewise, he may improve his homestead and add to its value. The date of the acquisition of the homestead is not thereby changed.'"
On the record before us there can be no doubt that the father intended to give the land in controversy to the plaintiff, with a reservation of the right to receive $1 per acre per year towards the support of himself and his wife, both of whom are now dead, the wife having predeceased plaintiff's father. There can be no doubt that the father so declared his intention to the plaintiff and to all his children, all of whom ever since have consistently recognized this purpose and intention. There can be no doubt that pursuant to such expressed purpose the father immediately delivered to plaintiff the subject of the gift; that pursuant thereto plaintiff moved upon the property, made valuable improvements upon it, and has occupied it as his home ever since, except the one year, as to which no contention is made. The father evidently retained the legal title until his death, as he retained the right to the $1 per acre which was called rent. The rent, however, was not the rent reserved by a landlord on a demise of premises for years. The gift has now been fully consummated, not only by delivery, performance of conditions, and making of valuable improvements, but by the transmission of the full legal title. We need not pursue the inquiry into the legal rights originally of the parties to the agreement, the plaintiff and his father. The understanding has been fully performed on their part. Plaintiff did have and exercise the right to the possession and to the enjoyment of the property as his home, on the understanding that the property had been given to him as his own. His incipient title has become consummate. His title has always been recognized by the parties in interest. His present title began when he took possession under the gift. He then made the land his home. His present title is a continuation and consummation of the interest *Page 555
which he had at the time when he first made his home upon the land. His homestead exemption has been continuous and unbroken, and dates from the time of his original occupancy as his home. In addition to the cases above cited, see Pelan v. DeBevard, 13 Iowa 53; Foster v. Rice, 126 Iowa 190; Lessell v. Goodman, 97 Iowa 681; Livasy v. State Bank, 185 Iowa 442; Wertz v. Merritt,74 Iowa 683. — Affirmed.
WAGNER, C.J., and EVANS, KINDIG, and GRIMM, JJ., concur.
SUPPLEMENTAL OPINION. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/4033727/ | IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
SUSAN SETSER, FORMER NOT FINAL UNTIL TIME EXPIRES TO
WIFE, FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
Appellant,
CASE NO. 1D16-853
v.
SCOTT SETSER, FORMER
HUSBAND,
Opinion Filed
Appellee. 09/13/16 KMS
_____________________________/
Opinion filed September 13, 2016.
An appeal from the Circuit Court for Duval County.
Elizabeth A. Senterfitt, Judge.
William S. Graessle and Jonathan W. Graessle of William S. Graessle, P.A.,
Jacksonville, for Appellant.
Jonathan J. Luca of Muench & Luca, PLLC, Jacksonville, for Appellee.
PER CURIAM.
AFFIRMED.
B.L. THOMAS, ROWE, and WINSOR, JJ., CONCUR. | 01-03-2023 | 09-14-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/4047794/ | THE STATE OF TEXAS
MANDATE
TO THE 123RD DISTRICT COURT OF PANOLA COUNTY, GREETINGS:
Before the Court of Appeals for the Sixth Court of Appeals District of Texas, on the 18th
day of March, A.D. 2015, the cause upon appeal to revise or reverse your Judgment was
determined; and therein our said Court made its order in these words:
Mark Hinton O'Neal, Appellant No. 06-14-00145-CR
v. Trial Court No. 2013-C0383
The State of Texas, Appellee
As stated in the Court’s opinion of this date, we find no error in the judgment of the court
below. We affirm the judgment of the trial court.
We note that the appellant, Mark Hinton O'Neal, has adequately indicated his inability to
pay costs of appeal. Therefore, we waive payment of costs.
WHEREFORE, WE COMMAND YOU to observe the order of our said Court in this
behalf, and in all things to have it duly recognized, obeyed, and executed.
WITNESS, the Hon. Josh R. Morriss, III, Chief Justice of our said Court of Appeals, with
the seal thereof annexed, at the City of Texarkana, this the 20th day of May, A.D. 2015.
DEBRA K. AUTREY, Clerk | 01-03-2023 | 09-29-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432094/ | The appellant owns a farm bordered on the *Page 1230
north by a highway, which is under the jurisdiction of the board of supervisors. The farm to the north of the highway is owned by Tennyson. The appellant seeks to enjoin the appellees from installing a culvert in a swale or draw running in a southerly direction through a portion of the Tennyson land and across the road to a large ditch 108 feet south of the highway. No complaint is made by the appellant as to the kind of culvert which the appellees contemplate installing. The uncontradicted evidence is that the water from about 3 acres of the Tennyson land naturally drains through the swale to the point of the proposed installation of the culvert. Appellant's contention is that, for more than 10 years, by a system of grading and drainage adopted by the highway authorities, the water from the 3-acre area has been prevented from crossing the highway at the place of the proposed installation of the culvert, and conducted westerly by means of a grader ditch along the north side of the highway, a distance of approximately 300 feet, where it enters a box culvert there constructed in another swale or draw across the highway, and is conducted from said box culvert in a southerly direction to the large ditch, 108 feet south of the highway, which latter ditch runs nearly parallel with said road. An area of approximately 20 acres is now being drained through said box culvert (not the one in controversy). The crest of the hill of the watershed on the Tennyson farm, which drains toward the place of installation of the proposed culvert, is 541 feet from the highway, and a little over 100 feet higher than the mouth of the proposed culvert, and there is a fall of 7 27/100 feet from the outlet of the proposed culvert to the large ditch on appellant's farm.
It will be observed that the place of installation of the proposed culvert is in the natural watercourse for the drainage of the higher ground in the highway and the 3 acres of the Tennyson farm lying to the north thereof. It has been the universal holding of this court that an easement exists for the drainage of the upper land, — the upper land being the dominant estate, and the lower land the servient estate, — and that the dominant owner may, by discharging the water upon his own land into a natural watercourse, drain surface water upon the land of the servient owner, but cannot gather larger quantities of water out of the ordinary and natural course of drainage and discharge *Page 1231
the same upon the servient estate, to its substantial damage, in largely increased quantities, or at a different place or in a different manner than it would usually and ordinarily have gone in the natural course of drainage. See Cresap v. Livingston,193 Iowa 488; Kaufman v. Lenker, 164 Iowa 689; Jontz v. Northup,157 Iowa 6; Hull v. Harker, 130 Iowa 190. Many other authorities could be cited upon this proposition. This rule is recognized by statute in this state. See Section 7736 of the Code of 1927.
It appears that, prior to 1914, very little, if any, grading had been done upon the highway in question. At that time, the highway was graded from beyond the place of the proposed installation of the culvert in controversy and the box culvert, 300 feet to the west. In the grading of the highway, a grader ditch about two feet deep was cut on the north side of the crown thereof, and in this way, the surface water coming from the Tennyson field to the place of installation of the proposed culvert was turned west, and conducted through the grader ditch along the north side of the highway to the box culvert. The bottom of the grader ditch at the proposed culvert is about 4 1/2 feet higher than the bottom of the box culvert. The Tennyson farm is in cultivation, and during heavy rains, the sediment coming from said farm filled the grader ditch. The highway became in poor condition, and many automobiles were stuck in the bog between the place of the installation of the proposed culvert and the aforesaid box culvert. The highway authorities have, at different times, cleaned out the grader ditch, only with the result that it again filled with dirt from the Tennyson field. They have now determined that the practical way to drain the road is by the installation of the additional proposed culvert.
The appellant, in an amendment to his petition, alleges:
"That the system of drainage hereinbefore referred to was established more than ten years prior to the filing of the original petition herein, and has been continued in force at all times, with the acquiescence and consent of the owners of all lands drained by said system or affected by said system, including Mr. Tennyson, his grantors, Wapello County, Iowa, and this plaintiff. That said system of drainage so established more than ten years ago has become a natural watercourse, which the defendants have no power to change to the damage of plaintiff." *Page 1232
This pleading presents the sole contention of the appellant. The appellant, in his brief and argument, relies solely on Meirv. Kroft (Iowa), 80 N.W. 521 (not officially reported), and he contends that, by the diversion of the water which ran across the highway, prior to 1914, to the grader ditch running along the highway, where it has since run, the grader ditch became the natural watercourse, and that, since more than ten years have elapsed since said diversion of the water, the highway authorities cannot now drain the water across the highway in the natural course of drainage as formerly existed. It will be observed from the Kroft case that the watercourse therein involved was not the ordinary surface drainage, as in the instant case, but was a small stream of water, the source of which was a spring. We have taken the pains to examine the abstract in said case, and find that in the petition it is alleged that an oral agreement was entered into among the respective owners of the real estate and the road supervisor for the change in location of the stream of water, and the evidence introduced in behalf of the plaintiff tends to establish the allegation. In the instant case, there is no contractual agreement or arrangement, as among the respective owners of the real estate and the highway authorities, and the diversion of the surface water was made only in the ordinary working of the highway. It is apparent that the Kroft
case is not analogous to the facts and circumstances, nor controlling in the determination, of the instant case.
In subsequent cases, we have consistently held that the statute of limitations cannot be urged or claimed against the public. Two of the cases are Brightman v. Hetzel, 183 Iowa 385, and Quinn v.Baage, 138 Iowa 426. In the Brightman case we declared:
"The rule that an artificial ditch may, under some circumstances, become a natural watercourse by the lapse of time, as between private individuals, does not apply when the rights of the public are involved; for neither the statute of limitations nor prescriptive right can be urged or claimed against the public."
We again quote from the Brightman case:
"As we have said before, the statute of limitations does not run against the exercise of governmental powers." *Page 1233
We there held that the improving, draining, and grading of public highways constitute the exercise of governmental power. Also, see Wilson v. Duncan, 74 Iowa 491; City of Waterloo v.Union Mill Co., 72 Iowa 437.
Since the claimed diversion of the water along the grader ditch in 1914, the appellant has in no way changed or improved his farm to the south of the opening of the proposed culvert, so as to constitute an estoppel against the right of the highway authorities to place a culvert in the natural watercourse. SeeQuinn v. Baage, supra; Bidwell v. McCuen, 183 Iowa 633. The situation of the appellant after the installation of the proposed culvert will be the same as it would have been if the drainage had never been diverted along the grader ditch.
It is undisputed that the location of the proposed culvert is in the course of drainage provided by nature, and under the facts of this case, the highway authorities are clearly acting within their rights.
For the foregoing reasons, the action of the trial court in dismissing appellant's petition is clearly right, and the same is hereby affirmed. — Affirmed.
ALBERT, C.J., and STEVENS, De GRAFF, and MORLING, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432095/ | Rebecca Street in Sioux City extends north and south, intersecting with Palmer Street, which extends east and west. The intersection of these streets is not paved. There *Page 1344
is a cement sidewalk on the west side of Rebecca Street, and a cement spur about four feet in length to the east. From the east end of this walk there is a wooden approach, about 6 feet 6 inches long, constructed of three 2x12" planks, resting upon the ground at the ends, and held in place by stakes driven in the ground. The planks were nailed to 4x4's at the top and bottom, with cleats across the top, to assist pedestrians in passing over same. The top cleat extended out from the edge of the planks, for the purpose of making a junction between the sidewalk and the plank. The approach, in some way, became separated, at the upper end, from the cement sidewalk, so as to leave a space or opening, the width of which, according to the testimony of the witnesses, varied from one to perhaps five inches. This was the condition of the walk on January 17, 1922, when appellee, while in the act of passing from the cement walk onto the approach, fell in such a manner as to receive a compound fracture of his left leg. He alleged in his petition that his fall and consequent injuries were caused by reason of the fact that his foot, or the heel of his shoe, became caught in the space between the approach and the cement walk.
The negligence charged was the failure of the city to maintain the walk in a reasonably safe condition for the use of pedestrians. The case was twice tried in the court below, both trials resulting in verdicts for appellee. For our prior decision, see Norman v. City of Sioux City, 197 Iowa 1310. No claim is made by appellant that the accident did not occur at the place charged, nor that the injuries complained of were not as shown by appellee's testimony.
Upon the former appeal, we reversed the trial court on two propositions: that is, that the defect complained of was not of such a character as to charge the city with negligence and that it was not shown that the defect, if any, was the proximate cause of the accident.
Appellant moved for a directed verdict, upon the ground that the prior decision of this court is the law of the case, and in all respects binding upon appellee and the court. The motion was overruled. This ruling presents the controlling and decisive question upon this appeal. The case was tried upon an amended and substituted petition, which appellee asserts materially *Page 1345
changed the issues from those formerly tendered. It is also urged by appellee that the evidence upon the last trial is substantially different from that offered upon the previous trial. A profile of the approach, showing appropriate and material measurements, and also a photograph thereof, clearly disclosing the opening between it and the cement sidewalk, were introduced upon both trials. The negligence charged in the original and in the amended and substituted petition is, for all practical purposes, identical. It is true that the latter pleading went into much greater detail in alleging the facts, but the vital part of the two pleadings — that is, the specific facts constituting negligence — is the same. The allegations of collateral facts which in no wise contributed to the result complained of, add nothing to the material allegations of the original petition. In other words, the negligence charged is the same in both pleadings, and necessarily the facts constituting the cause of action alleged could not, under the circumstances of the case, be materially varied. The elevation of the cement sidewalk on the west side of the street, the incline of the approach, the material composing it, the method of its construction, and the manner in which it was placed and used, were fully disclosed by the evidence upon the former trial. Appellee did not fall upon the approach, and no claim is made that the degree of the incline had anything to do with the accident. Appellee had proceeded north on the cement sidewalk to the intersection, and then turned east to Rebecca Street, when, as he claims, his heel or foot caught in the opening described, causing him to fall, in the manner and with the result already noted. Upon the former trial, he testified as follows:
"I walked on the cement sidewalk on the west side of Rebecca Street, going south. It was about 75 feet to where this wooden sidewalk was. I just walked slow down there, and when I come to this approach, I just got caught there, and fell over to the front and to the side. My heel got caught, — there must be a crack, — I don't know for sure, — just when I was crossing that wooden sidewalk. I think my heel got caught between the cement sidewalk and the wooden sidewalk. I fell right over to the left side of Palmer Street. I knew my leg was broken, and I couldn't get up." *Page 1346
Upon the last trial, he testified as follows:
"Q. And as you came to this wooden approach, just tell the jury what happened to you. A. Then I came to this wooden approach. I tried to go over, and I just got caught in the crack, and I couldn't move at all. I fell with my left heel. I was just fast with my heel, — couldn't move, — and I fell to the left side. My left foot was caught right on the left side from that approach in the crack; caught between the cement sidewalk and the wooden approach. My heel was caught. My leg was broken. I crawled home. The doctor was called, and I went to the hospital. * * * I testified at the former trial as follows: `As I walked along there, my foot got caught, — my heel got caught. Q. In what? A. Well, there must be a crack, — I don't know for sure, — there must be a crack. Q. Do you know whether your heel got caught between the cement sidewalk and the wooden sidewalk? A. Yes, I think for sure I got caught there.'"
It will be noted that the only change in his testimony upon the two trials is that he was somewhat more certain and positive as to the exact cause of the injury, upon the latter. The explanation offered for the change is that appellee is of German nativity, and speaks English badly, and that he made himself better understood upon the last than he did upon the former trial. It is evident that appellee was not misunderstood by the jury upon the former trial, as they returned a verdict in his favor for $3,500. Surely, appellee was in no better position to remember the circumstances of the accident, or to testify more explicitly as to what occurred, upon the latter than upon the former trial. The testimony of the other witnesses is in all material respects the same.
Sam Pickus, who was not a witness upon the previous trial, added little or nothing to the material facts of the case. He testified that:
"There was a crack or open gap between the south end of the cement sidewalk and the north end of the wooden approach, varying in size from an inch and a half to approximately two and a half inches in width, the small end being in the west side. On the east side, the gap was between two and a half and three inches, — no more. I only measured it with my eye." *Page 1347
Charles Hammer, upon the former trial, testified that the opening was two and a half inches, and upon the latter, that it was from two and a half to three inches.
Dr. Duckworth, upon the former trial, estimated the opening to be possibly one-half inch on one side and two and one-half inches on the other. He gave the same estimate upon the present trial, except to add that, at certain places, where the concrete was chipped off, it might be from three to three and one-half inches.
G.Y. Skeels gave no estimate upon the previous trial, but testified below that it was from an inch to two inches.
The testimony of H.M. Rickard, B.C. Hagan, George Norman, and Mrs. E.A.B. Norman was almost identical upon the two trials.
In our former opinion, we said:
"Was the condition which was thus described by the plaintiff and his witnesses such a defect in the sidewalk as to constitute a legitimate basis for a charge of negligence? Was it such a defect as the city was bound to discover and repair? The city is not an insurer of pedestrians. It is not bound to maintain perfection in its sidewalks. It is bound to exercise reasonable care to maintain its walks in reasonably safe condition. This is the measure of its duty. Through such duty be fully performed, yet accidents may and will happen to pedestrians, and there will always be a particular cause for every accident. It will not do to assume that every particular cause of an accident to a pedestrian is a defect or fault chargeable to the city. Here was a temporary approach, put in for the temporary convenience of pedestrians, to serve until such time as should be necessary to bring these streets to a permanent grade and to lay permanent sidewalks accordingly. For the city to be charged with negligence for the alleged defect here described, would be to say, in effect, that the city is liable for every imperfection in its sidewalks, if it result in accident. Taking a view of the evidence most favorable to the plaintiff, we are constrained to hold that the defect complained of was not such as to charge the city with negligence therefor. Moreover, the evidence in proof of proximate cause is quite deficient. It is predicated wholly upon the testimony of plaintiff which we have quoted above." *Page 1348
No change in the physical facts is shown, notwithstanding the slight variation in the testimony of some of the witnesses as to the width of the space or opening. Perhaps the depth was more definitely shown upon the last trial. This change, if any, in the physical facts is not material in any real sense. If the physical facts shown upon the previous trial were not sufficient to charge appellant with negligence, then surely proof of the same facts would not have that effect upon a retrial. The failure of appellee to prove that the defect in the walk was the proximate cause of the injury may have been fully met and overcome on the last trial. If, however, this were conceded, it could not change the result unless negligence was also proven. The method of construction and the use of the approach and its relation to the cement sidewalk could not be changed. The opening could not be made an inch wider or narrower. The condition of the weather and of the walk, as shown upon the former trial, was less favorable to appellee; but this circumstance does not bear upon the question of the city's lack of care in the maintenance of the approach. The former decision is the law of this case, unless such substantial change is shown by the physical facts as to make out the charge of negligence alleged in the petition. No such change is shown. The material facts are the same in both cases. Not only is the former decision the law of the case, but it will not be overruled in the same case. Barton v. Thompson, 56 Iowa 571; Adams County v. B. M.R.R. Co., 55 Iowa 94; Anthon St. Bankv. Bernard, 198 Iowa 1345; Boeck v. Modern Woodmen, 183 Iowa 211;Bryan Co. v. Scurlock, 190 Iowa 534.
The motion of appellant to direct a verdict should have been sustained, upon the grounds indicated. — Reversed.
De GRAFF, ALBERT, and MORLING, JJ., concur. *Page 1349 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432190/ | Joseph Breza, the appellant's intestate, and the plaintiff at the time suit was brought, made two subscriptions for stock of the appellee corporation, of the par value of $100 per share, for which he agreed to pay $200 per share. On September 2, 1919, he subscribed for 8 shares, and on October 15, 1919, for 15 shares. He fully paid for the shares first subscribed for. For the stock subscribed for on the second occasion, he executed two promissory notes, one for $750 and one for $2,250. We shall refer to the deceased Joseph Breza as the plaintiff. *Page 509
It was alleged in the petition that both subscriptions were procured by false and fraudulent representations of the same character, made by the agent of the appellee who took the subscriptions. The relief asked was the rescission of the contracts of purchase of the stock, the return of the notes given, and judgment against the appellee for the amount paid on the subscriptions. The decree below granted the relief prayed, to the extent of awarding to the plaintiff the return of the note for $2,250 only, and denied him further relief.
I. Since fraud in the procurement of the subscriptions was the only ground upon which a rescission was asked, the decree must, of necessity, have been based on a finding that the fraud was established, at least in the transaction in which the $2,250 note was given. The defendants have not appealed, so 1. JUDGMENT: that the question of fraud in that transaction relief: is not open for our consideration. The note for indivisible $750 was given in the same transaction, and in transaction. part payment for the same stock. We do not see any theory upon which, when the right to the return of one of the notes so given was established, the plaintiff was not entitled to the return of the other, also, or to judgment for the amount of it. The fact that the appellee had disposed of the note afforded no defense to the action to rescind. If plaintiff was entitled to rescind the second contract of purchase, as is conclusively established by the decree, he was entitled to a complete rescission, and to such a judgment as would place him in statuquo, or make him whole.
II. With respect to the first purchase of stock and the amount paid for it, the situation is only slightly less plain. The evidence on behalf of plaintiff tended to show that the same representations were made by the agent selling 2. JUDGMENT; the stock on both occasions; that, on the conclusive- second, he reaffirmed what he had said on the ness: first. unappealed judgment.
It is, of course, true that, where the representations in claimed reliance upon which two contracts were entered into at different times were different, or the facts from which a justifiable reliance on the representations must be found were different, one contract might be voidable for fraud, and the other not; and a finding of fraud, unappealed from, in one instance would *Page 510
not, in such case, be conclusive, as a matter of law, in the other. The conclusion that the representations relied upon as inducing the instant contracts, and as shown by the testimony, were the same, is one of fact, arrived at from an examination of the record. But that the representations so made were of matters of fact, as distinguished from mere expressions of opinion, and were such as the plaintiff, if in ignorance of their falsity, had a right to rely upon, and that they were knowingly false, and made with intent to deceive, are questions upon which the finding of the lower court is conclusive, and we, therefore, have no occasion to discuss them.
It very satisfactorily appears from the evidence that the representations claimed were made on the occasion of the first subscription; that they were made for the purpose of inducing the plaintiff to enter into that contract; and that 3. FRAUD: they were the effective, moving cause of his false doing so. The only discoverable difference in representa- the situation on the two occasions is in respect tions: to the plaintiff's reliance on the reliance. representations. At the time of the first purchase, plaintiff was given certain printed matter from which, it is said, he could have discovered, had he read it, that the representations upon which he claimed to have relied were not true. The plaintiff was of foreign birth, and testified that he could not read English, and that the pamphlet given him was not read to him. There was also testimony that, after the first purchase and before the second, he consulted a banker to whom the agent said he had sold stock; and it is claimed plaintiff relied, in making the second purchase, on what the banker told him. The plaintiff testified that, at the time of the second purchase, he was not entirely satisfied with the stock he had previously bought. These circumstances would all go to show less reliance, or less right to rely, on the representations made at the time of the second purchase than at the time of the first. If the plaintiff was entitled, under these circumstances, to rescind the second contract, it would seem plain that he was also entitled to rescind the first; that, if entitled to rescind because of the continued influence and reiteration of the original representations, he was entitled to rescind all of the acts and contracts induced by such representations. *Page 511
III. It is said by appellees that the evidence shows a waiver by plaintiff of any right to rescind. No such defense was pleaded. Schworm v. Fraternal Bankers Reserve
4. PLEADING: Soc., 168 Iowa 579; Dierksen v. Pahl,
matters 194 Iowa 713. Moreover, if the question of specially waiver were in the case, it would have been, pleadable: under the facts relied upon to establish it, a waiver. complete defense. Since plaintiff was allowed a measure of relief, the decree below is conclusive that there was no waiver.
The appellant was entitled to a decree for the return of the $750 note, or judgment for that amount, and to judgment for the amount paid on the first subscription. The judgment so modified is affirmed. — Modified and affirmed.
FAVILLE, C.J., and STEVENS and De GRAFF, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432099/ | Appellee subscribed for shares of stock in the Planters Terminal Elevator Company, a corporation then being organized in the city of Des Moines. He executed two notes, representing the stock subscription, one for $7,000 and one for $3,000. The note of $3,000 was sold and transferred to appellant, and the note in suit was given to appellant in renewal of the said note so purchased by it. Appellee pleaded fraud in the procurement of the original note, and all of the grounds of fraud were withdrawn by the court, in the instructions to the jury, except two: namely, an alleged false representation claimed to have been made to appellee to the effect that plans for the elevator which it was contemplated would be constructed by the Planters Terminal Elevator Company, at Des Moines, had already been drawn; and the further representation that no subscription for capital stock for less than $10,000 would be accepted by the terminal company.
In reply, appellant pleaded that appellee had compromised his cause of action for the alleged fraud of the Planters Terminal Elevator Company, and had secured from it a satisfaction of his claim for said fraud in full, and had discharged it from all liability because of said fraud; and appellant pleaded that, by reason of said fact and said discharge, appellee had ratified and confirmed the note in suit and the transaction out of which it grew, and had thereby barred and estopped himself from pleading said fraud as against appellant.
Appellant moved for a directed verdict, which motion was overruled, and the cause was submitted to the jury.
I. After the original note of $3,000 had been sold to appellant, and while the terminal company still held the note of $7,000, appellee rescinded his contract with the terminal company. This was on October 11, 1921. Said rescission was by written notice, in which appellee tendered a complete release of his subscription and demanded the return of his two notes, one for $3,000 and one for $7,000. On December 29, 1921, appellee and the terminal company entered into a stipulation of settlement, which embodied the following provision:
"In consideration of the premises each party hereto acknowledges as fully settled, satisfied and discharged any and all claims of either party against the other of whatsoever *Page 887
character, kind and description whether set out herein or not."
The stipulation referred to the note of $7,000 then held by the terminal company, which it was agreed should be returned to appellee, but no specific reference was made to the $3,000 note, in said stipulation. No action was instituted by appellee against the terminal company in connection with said matter.
It is urged by appellant that the settlement made by appellee with the terminal company barred appellee from interposing the defense of fraud against the note sued on by appellant. In other words, it is the contention of appellant that the record shows that appellee made full settlement for the wrong done in securing his subscription to the corporation stock and the giving of notes therefor, and that, having so settled his claim for the alleged fraud with the party who he claims perpetrated the fraud, he cannot now urge the same claim of fraud as against the note in the hands of appellant.
There can be no doubt of the general rule that, where a right of action for a tort is indivisible, one satisfaction extinguishes the entire demand. The injured party can enforce only one satisfaction for the same injury; and where, in a case of this kind, a suit is begun against the original wrongdoer for the injury growing out of the alleged fraud in the procurement of the stock subscription and the giving of notes therefor, and said claim is settled in its entirety between the original wrongdoer and the party claiming to have been injured, such settlement necessarily constitutes a full satisfaction for the injury, and the same fraud cannot be again urged after said satisfaction, against a third party who may be the owner and holder of one of the notes given in the original transaction. Iowa St. Bank v.Frankle, 197 Iowa 1177; Macedonia St. Bank v. Graham, 198 Iowa 12.
In this case, if appellee made a full and complete settlement with the terminal company for the injury which he claimed resulted from the fraud which he alleged induced him to enter into the subscription contract and to give his two notes, one of $7,000 and one of $3,000, therefor, then he has had full satisfaction with the original tort-feasor for the wrong done, and cannot have further satisfaction for said wrong in this or any other proceeding.
As before stated, no suit was brought at any time; but, by *Page 888
the terms of the stipulation of settlement, the note of $7,000 then held by the terminal company was returned to appellee, and there was a recital of full settlement and satisfaction of anyand all claims of either party against the other, of whatsoeverkind or character, whether set out in the stipulation or not.
It is quite evident from the record that appellee was making a claim against the terminal company for rescission of the contract and restoration for the full injury and wrong done him in the procurement of the stock subscription contract and the notes which he had given in pursuance thereof, and that he made a settlement with the terminal company of any and all claims which he had with said company, growing out of said transaction. Having done this, he is in no position to now claim a further satisfaction for the injury done him, by interposing the same defense of fraud to the note sued upon by appellant. He had his right of action against the terminal company for the claimed fraud. He proceeded, not by suit for damages, but by rescission and a demand for restoration of the status quo; and he settled "any and all claims of either party against the other of whatsoever character, kind and description whether set out in the stipulation or not." This constituted, and was intended by the parties to constitute, a full and complete settlement between appellee and the terminal company, of all claims of whatsoever character, whether specified or not, growing out of the transaction between them. This fully satisfied all claims by appellee against the terminal company for the identical fraud pleaded by appellee as a defense to appellant's note. "Any and all" claims by appellee growing out of the transaction have been settled between the appellee and the wrongdoer. Appellee can enforce only one satisfaction for the same injury. Iowa St. Bankv. Frankle, supra, and cases cited.
The trial court should have sustained appellant's motion for a directed verdict, upon the ground that, under the record, the defense of fraud was not available to appellee, in view of the settlement and compromise he had made with the terminal company.
In view of our holding on this question, it is unnecessary that we consider other errors argued by appellant. *Page 889
For the error pointed out, the judgment of the district court must be, and it is, — Reversed.
ARTHUR, C.J., and EVANS and PRESTON, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432100/ | 1. Contracts: RESTRAINT OF TRADE: CONSIDERATION: VALIDITY. The grocerymen of a town entered into an agreement with the plaintiffs not to buy any butter nor to take any in trade, except for the use of their families; providing that such agreement should not prevent any merchant from buying butter to retail from any regular butter buyer who bought all the butter he handled in the town for cash. The contract recited as occasion for its execution that the grocerymen found the business of purchasing butter of the farmers, and handling the same, very burdensome, and they believed the same could be better handled as an exclusive business. The plaintiffs in said agreement undertook to open rooms conveniently located for buying butter, to keep a man in attendance thereat, to accept all butter offered, and to pay as high a price therefor in cash, as the merchants or butter buyers in the town of N., in the same county, were at the time paying. The contract was to continue for two years unless sooner dissolved, and it might be terminated at any time whenever the majority of the grocerymen were dissatisfied with the agreement or with the manner in which it was carried out. This action having been brought to enjoin one of the grocerymen from engaging in the business of buying and selling butter in said town, held, that said contract was without consideration, and was, therefore, invalid. *Page 157
2. ___: ___. Such contract is also invalid as being in restraint of trade, and, therefore, against public policy.
It appears from the petition that in the month of March, 1890, the plaintiffs entered into a written agreement with the defendants and other parties. The following is a copy of said agreement:
"We, the undersigned grocerymen of Storm Lake, finding the business of purchasing butter of farmers and handling the same very burdensome, and of material loss to us, and believing the same could be handled as advantageously by persons who would make butter buying and handling an exclusive business, and whereas the firm of D. E. Chapin, through their agent, assure us of their ability to handle butter to the best advantage, and that they will engage in the business extensively in our town, we make a solemn engagement and pledge ourselves to each other and to the said firm of D. E. Chapin that we will buy no -more butter or take no more in trade, except for our family use, and all butter so bought shall be delivered by the seller to the buyer's place of residence. This, however, *Page 158
shall not prevent any merchant from buying butter to retail from any regular butter buyer who buys all the butter he handles in this town for cash. It is further provided that the said firm of D. E. Chapin, in whose favor we abandon the business, shall open rooms conveniently located for buying butter; that they shall keep a man in attendance during all business days and hours in the year from as early in the morning and until as late in the evening as the season of the year and state of the weather might seem to require. They shall accept all the butter offered, and shall pay for the same as high price in cash, or by giving check against a suitable deposit in some bank in this town, as merchants or butter buyers in the town of Newell, this county, are at the time paying in cash for a similar grade of butter, except in extreme cases, where they may be paying materially more than the markets will warrant. It is also provided that the said D. E. Chapin shall not direct their checks or persons taking the same to any particular store for payment. That shall not buy in connection with any dry-goods or grocery store. Whenever a majority of the merchants signing this article of agreement are convinced that the engagements herein entered into are not being complied with, or whenever they are dissatisfied with this arrangement or the manner in which it is being carried out, any merchant whose name is hereto appended may appoint a meeting by notifying each grocery firm in town of the time and place for the purpose of considering who may be guilty of a breach of faith in carrying out these engagements, or whether it is advisable to continue the same; and if, at such meeting, a majority of the subscribers hereto shall certify in writing that they think it advisable for the interest of the town to withdraw from this engagement, this contract shall become null and void. This engagement shall take effect and be in force from and after such time as when *Page 159
it shall have been subscribed to by each grocery house in this town, and when the firm of D. E. Chapin shall designate, provided they are then prepared to handle the butter, and shall continue two (2) years unless sooner dissolved, as herein provided. We also agree not to pay a higher price for eggs than shall be fixed by the said firm of D. E. Chapin, provided said firm shall fix as high price as eggs are at the time worth to ship.
W. C. Kinne Co.,
"Fred Scholler,
"Brown Bros.,
"J. O. Douglas,
"W. A. Jones,
"Geo. E. Ford Bro.,
"W. Lownsberry,
"Libby Rae,
"D. E. Chapin."
1. Contracts: restraint of trade: consideration: validity.
It is averred in the petition that the plaintiffs, in pursuance of said written contract, came and located at Storm Lake and engaged in the business of buying butter at that place, and were at the commencement of the suit still so engaged, and have made arrangements to continue the business for the said period of two years, and that they have thus far fully complied with said written agreement, but that the defendants, in violation thereof, have opened a butter store in said town, and have engaged in the business of buying butter generally, and have thereby interfered with the plaintiffs' business, and alienated their trade to the extent of five thousand pounds of butter, upon which the plaintiffs would have realized a profit of three cents a pound, making in all one hundred and fifty dollars damages suffered by the plaintiffs. Judgment is demanded for said sum, and an injunction is prayed, restraining the defendants from continuing in said business. *Page 160
Among the several grounds of objection to the granting of an injunction we regard two of them as material. They are as follows: "First, that the agreement in writing is void for want of consideration, as there is no money value inuring to the benefit of the defendants herein; and, second, that said contract by its terms is for the purpose of creating a monopoly in purchasing and selling butter at Storm Lake, and is, therefore, in restraint of trade, to the detriment of the producers and consumers of butter at that place and in that vicinity." The history of the law upon the question of contracts in restraint of trade is an interesting subject of investigation. The books abound in cases upon the subject. Anciently all contracts were void which in any degree tended to the restraint of trade, even in a particular locality, and for a limited time. This ancient rule has been so far modified that, although agreements in general restraint of trade are invalid, because they deprive the public of the services of the citizen in the occupation or calling in which he is most useful to the community, and expose the people to the evils of monopoly, and prevent competition in trade, yet an agreement in partial restraint of trade will be upheld where the restriction does not go beyond some particular locality, is founded upon a sufficient consideration, and is limited as to time, place and person. It is accordingly everywhere now held that when one engaged in any business or occupation sells out his stock in trade and good-will he may make a valid contract with the purchaser binding himself not to engage in the same business in the same place for a time named, and he may be enjoined and restrained from violating his contract. This is about as far as contracts in restraint of trade have been upheld by the courts in this country or in England. The general principles above announced will be found in all text-books upon contracts, and find support in many adjudged cases. *Page 161
We have not thought it necessary to set out or cite the cases. They will be found collected in 3 American English Encyclopedia of Law, page 882, and the same, volume 10, page 943; 2 Parsons on Contracts, page 747.
Applying these rules to the contract under consideration we are to inquire first whether there is a sufficient consideration for the promise of the defendants and the other parties who executed the instrument not to engage in dealing in butter at Storm Lake. It is very plain that there was no money paid to them as a consideration. The plaintiffs did not purchase any stock of butter which the defendants had on hand. They paid nothing for an established plant or place of doing business, nor for the good-will of any business. So far as appears they went into the town of Storm Lake and proposed to go into the butter business if the other persons then engaged in that business would agree to quit that line of trade for two years. In all the search we have made for authority upon this branch of the controversy we have found no warrant in any precedent for holding that this is a sufficient consideration. There are cases which hold, and the law is well settled, that, where a party proposes to expend money in erecting a manufactory or other plant which may be a public benefit, subscriptions in aid of the enterprise are valid obligations. But such contracts are widely different in principle from the agreement under consideration. Suppose the plaintiffs had made a proposition to the dry-goods merchants of Storm Lake that if they would all quit the business for two years, without any consideration being paid to them for so doing, the plaintiffs would establish a dry-goods store at that place, and the proposition had been accepted; it would be a marvelous decision if any court would hold that there was any consideration for such a contract.
2. ___: ___.
II. But it appears to us that the decision of the district court is manifestly right upon the question that *Page 162
the agreement is against public policy. it plainly tends to monopolize the butter trade at Storm Lake, and destroy competition in that business. it is not necessary that the enforcement of the agreement would actually create a monopoly in order to render it invalid, and surely where all the dealers in a commodity in a certain locality agred to quit the business, and the plaintiffs are installed as the only dealers in that line, the tendency is, for a time at least, to destroy competition, and leave the plaintiffs as the only dealers in that species of property in that locality. Such contracts cannot be enforced.
Affirmed.
*Page 435 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432084/ | For convenience, plaintiffs will be spoken of in the singular, and the defendants, unless otherwise indicated, *Page 713
as the bank. We find it unnecessary to deal at length with the proceedings which resulted in the consolidation of the First National with other banks, and this feature will have only incidental attention as we proceed.
The diligence and learning of counsel for the parties have invited us to examine a substantial portion of the field of equity jurisprudence; and while we have patiently inspected that part of the legal terrain pointed out to us, we find it unnecessary to set down here our observations as to most of the matters suggested. There is not, nor could there well be, much difference between the parties as to the rules of law applicable to cases of this kind. The difficulty has been in adjusting such principles to the facts before us. The proper outcome of this cause depends so much on fact propositions that we purposely refrain from discussing the many citations to which our attention is directed.
The defendant Bonnifield was the president, and Ackley, cashier of the First National Bank during the time the transactions involved herein occurred. Briefly stated, appellant contends that he dealt only with reference to what will be designated the "Haw" stock, and alleges that he had a right to rely upon the representations made to him as to the ownership of the stock he was to acquire; that no contract resulted when he, thinking he was dealing with A, finds that he has actually made a bargain with B; that the value of the stock was misrepresented; that the condition of the First National Bank (whose stock was the subject of the bargaining) was not as he was led to believe and that the stock was not worth what he was told it was. As incidental to, or perhaps implicit in these contentions, are appellants' arguments that the fact that Ackley, the cashier who negotiated the deal, acted in good faith, would not permit escape of the defendants; that when plaintiff borrowed the money to pay for this stock and the money so borrowed was deposited in the name of Bonnifield, whose stock was actually transferred to plaintiff, a trust was established for the owners of the Haw stock; that the bank was bound by the knowledge of Bonnifield and Ackley, its officers, and thereby became chargeable with the alleged fraud. To each and all of these propositions appellant cites authorities. These have been examined but, as said above, will not be analyzed here. It is apparent that, as abstract propositions of law, most, of appellant's legal *Page 714
contentions would be admitted. The trouble is that an examination of the record and the many exhibits certified to this court does not support the deduction of fact which plaintiff would draw therefrom. Among the many cases cited by appellant there is one (Bates v. First Trust Savings Bank, 222 Iowa 407, 269 N.W. 437) which tends to support the claims made by the plaintiff, that a bargain with A, when a contract was supposed to be with B, results in no contract at all. But the facts in that case are so different from those before us that the language of that case is not controlling.
In the case before us the plaintiff, if the record does not belie him, is a keen business man of large experience. Not only have his transactions been large, but on the whole (this transaction being one of the exceptions) successful. He was for a long time a customer of the bank and borrowed frequently, his transactions running in figures of five thousand dollars to twenty thousand dollars and "probably more". He had been in the gas and electric business at Trenton, Missouri, for ten years; in the gas business at Morris, Illinois, for three or four years; and in the same business for three or four more years at Marshall, Michigan. At Ottumwa, where this controversy arose, he bought into an ice business, with such result that at the time of the trial he was operating four plants of that kind. He had dealt in a variety of corporation stocks, among them some of the character of that of John Morrell Company and Cities Service, displaying on the whole an unusual degree of familiarity with this type of business transactions. He had dealt for a considerable time with the bank of which Ackley was cashier and a close friendship developed between them. The stock of the bank had consistently paid dividends and to all appearances was, at the time plaintiff bought the stock, a good investment.
There is some uncertainty in the record as to just how the negotiations looking to a transfer of stock were opened up but that is not important. Ackley says that the plaintiff wanted to buy stock generally, not particularly the Haw holdings; appellant makes a qualified denial. Plaintiff says that he was dealing only with reference to the Haw stock, and because Bonnifield sold him a part of his own holdings, that he (the plaintiff) was cheated. Plaintiff's contentions appear to us not supported by the record; or at least, at the time he acquired this stock, that he did not regard his purchase in the light he would have *Page 715
us view it now. He accepted dividends on the stock, and the note which he now seeks to annul was a renewal of the note originally given. True, appellant says that he did not know at the time that he was not acquiring the Haw stock, but he signed receipts on the stock book which distinctly said that he was getting a part of the defendant Bonnifield's holdings. Plaintiff does not in terms deny this, but says that if Bonnifield's name was on the stock stubs he didn't see it. He seems to have been satisfied with the transaction until the effects of the merger of the First National with a number of other banks began to be manifest. And here seems to be the crux of the whole matter.
Ackley, the cashier, thus gave his reason for consenting to consolidation:
"I would say there was nothing in the condition of the First National at that time from which I could determine that the condition of the First National standing alone required any consolidation for the protection of its stockholders and depositors. The consolidation was the result of conditions in other banks and general financial conditions, rather than the condition of the First National."
As explaining the failure to detect the extent of the state official's personal interest in the transaction, the cashier says:
"It probably would have raised a question if I had seen this consolidated statement before the merger agreement was entered into, and my suspicions might have been aroused by the showing that the First National had deposits of a little less than $850,000.00, and Mr. Andrew's bank had deposits of a million and a half."
And further he has this to say:
"L.A. Andrew was urging upon all the banks the importance of very prompt action to avoid any difficulties which might arise because of some of the weaker banks. He said to me that his bank and its assets were all right and in good condition, and that an examiner would go over the assets of all the banks and would make one large sound bank with good assets. That was the reason I did not then insist on checking up in detail the assets of the various banks. It was because of that urging of Mr. Andrew that we made this consolidation so hurriedly, and *Page 716
on his promise to have his chief examiner make a careful segregation of assets.
"In doing that we knew that shareholders of the First National were sacrificing somewhat of their values in the interest of the other banks and in the interest of the community and the banking situation in general. The First National was the best bank that went into the consolidation, and its shareholders did not receive any more per share in the new bank than the shareholders in all the other banks. I believe the First National could have taken care of itself without a consolidation, and would have been better off without the consolidation."
It should be said here that plaintiff, although consulted with reference to proposed consolidation, did not consent thereto. This took place in October 1931, but he made no complaint until October 1932. On the whole record, we are satisfied that the plaintiff with his experience in business matters was not defrauded. He made a bargain which in the light of subsequent events proved improvident, but we detect no element of fraud on the part of defendants.
Bonnifield had nothing to do with the making of the bargain beyond transferring a part of the stock held by him to the plaintiff. Ackley, the cashier, withheld no information asked for, nor dissuaded plaintiff in any way from making any investigation that he cared to make. He told the plaintiff how to read a bank statement and so far as we are able to discern from the record, made no attempt to mislead at any time. That Bonnifield used the money for the sale of his stock to the payment of his debts connotes nothing sinister. The claim that because the money was deposited in his name impressed it with a trust for the owners of the Haw stock does not appear to merit analysis or discussion; neither does the claim that the plaintiff was misled as to the value of the stock. The evidence justifies the conclusion that at the time he bought this stock, it was regarded as worth what he paid for it, and there is evidence (some of it perhaps incompetent) tending to show that others were bargaining for or holding stock of the same kind at the same or higher prices.
A consideration of the record satisfies us that the plaintiff understandingly made a bargain which in the turn of events proved to be a poor one. He was not ignorant or inexperienced *Page 717
nor unfamiliar with the hazards of business. He says he had bought stock before and lost, and this seems to be another occasion on which he was unable to forecast the future. In any event, we find no evidence to warrant the belief that he was blindly led into buying stock that he had no thought of buying, nor that he signed a record he didn't see. Neither does it appear likely that in the business conditions then prevailing he was not aware of the difficulties which beset the banking business. On the whole, we are satisfied that the trial court reached the correct conclusion. The foregoing makes it unnecessary that we advert to the contentions of appellees, nor consider other questions proposed in argument.
The decree of the trial court being right should be, and it is, affirmed. — Affirmed.
HAMILTON, MILLER, OLIVER, BLISS, HALE, and STIGER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432085/ | I. Briefly stated, this litigation grew out of the following facts: On July 28, 1927, W.C. Taylor executed a promissory note for $4,000, payable January 28, 1928, to C.E. Taylor, and at the same time, and as a part of the same transaction, to secure the payment thereof, W.C. Taylor and wife, Ruth L., executed a chattel mortgage, covering 30 cows, 18 sows, 110 spring pigs, 11 yearling heifers, 9 spring calves, one roan team, and one bay team. This mortgage was recorded in Wayne County, Iowa, August 23, 1927, and purported to be acknowledged before one McKibbon, as notary public in and for Lucas County, Iowa. It is conceded by all parties that McKibbon was not a legal notary public in and for Lucas County at the time this acknowledgment was taken, and that he had no legal authority whatever to take such acknowledgment.
On August 23, 1927, C.E. Taylor indorsed this note, and made a written assignment of this chattel mortgage to the plaintiff in this action. This assignment was duly recorded in Wayne *Page 1155
County on April 28, 1928. On November 30, 1928, W.C. Taylor and wife executed a chattel mortgage on certain of this property to W.P. Taylor, and on December 31, 1928, the same parties executed a chattel mortgage on part of the same property to one John Morgan.
On January 18, 1928, W.C. Taylor had a large stock sale, and sold part of the stock covered by this chattel mortgage. We have no identification in the record of the chattels sold, but it is claimed that the proceeds thereof amounted to something over $4,000, and that the same was turned over to C.E. Taylor, president of the First National Bank of Derby. This sale was conducted with the knowledge and consent of the plaintiff, and all it has to do with this controversy is the claim made that, when the proceeds of this sale were turned over to C.E. Taylor, he was the agent of the plaintiff, and therefore the mortgage is paid.
According to the evidence, on December 27, 1927, W.C. Taylor wrote a letter to the plaintiff as follows:
"I was talking with Carl [C.E.] Taylor the other day about the note you have against me. He said it was due January 1st, and I thought it was January 15th, so if it is due January 1st, would like to have the privilege of extending them to the middle of January as I intended to have my sale then, as my cows will mostly be fresh then or have springers and I think will help lots in the sale of them. If this will be all right, either tell Carl or write me."
In response to this letter, the plaintiff wrote Carl Taylor, and told him it would be all right with the plaintiff to have the sale at the time suggested, if it would be all right with him (C.E. Taylor). Pursuant thereto, a sale was held by W.C. Taylor January 18, 1928. C.E. Taylor clerked the sale and collected the proceeds, amounting to about $4,000.
The cashier of plaintiff bank testifies that he knew this property was being sold on which they had this chattel mortgage, and that Carl Taylor got a part of the proceeds of said sale. Speaking of Carl's clerking the sale, the cashier testified: "I didn't know he was the fellow that clerked that sale, and I didn't want to know it." By way of explanation, it may be said that Carl (C.E.) Taylor was president of the First National Bank of Derby, and, of course, the proceeds of this sale were in that bank *Page 1156
when it closed. Carl Taylor had been one of the customers of plaintiff bank, and a close and intimate friend of said cashier's, and on two occasions, the plaintiff bank had loaned money to Carl Taylor. The cashier further says that the plaintiff bank and the First National Bank of Derby had dealings, from time to time, and the relations between them were very close. Plaintiff bank wrote C.E. Taylor, urging the collection of the proceeds of this sale, and Taylor replied, in substance, that the balance would be collected in a few days, and W.C. Taylor would then pay the plaintiff. This cashier further testifies, when questioned as to whether he relied upon Carl Taylor in the collection and renewal of the notes:
"I think he renewed all the notes. Q. You relied on his doing it? A. Yes. Q. You left it to him to collect everything that was collected, didn't you? A. I think we did."
We cannot set out all of the testimony in relation to this matter, without unduly extending the opinion; but we have read the same with care, and fail to find sufficient evidence in the record to warrant our holding that C.E. Taylor was the agent of the plaintiff to receive the proceeds of this sale. We should have stated heretofore that this mortgage and note were turned over by C.E. Taylor to the plaintiff as collateral security for a debt owed by him to the plaintiff, but even finding this to be so does not aid the defendants in their claim that this note and mortgage were paid.
The chattel mortgage heretofore referred to, made to John 1. CHATTEL Morgan, December 1, 1928, was for a past MORTGAGES: consideration, to wit, land, rent, and feed sold construction by Morgan to W.C. Taylor; and while this and evidence is not satisfactory, no such chattel operation: mortgage in favor of Morgan was introduced in lien and evidence. It is Morgan's claim that he and W.C. priority: Taylor agreed that the amount due was between subsequent $1,000 and $1,100, and in payment of the same, mortgages Taylor turned over to Morgan 19 head of cattle, securing without knowledge or notice, either actual or pre-existing constructive, on the part of Morgan of the indebted- existence of the plaintiff's mortgage. ness.
As to the Mitchells and W.P. Taylor, each claims that he is an absolute owner in good faith of any personal property *Page 1157
which they secured from the defendant W.C. Taylor, by purchase or otherwise, and that their rights are prior and superior to those of the plaintiff, and that the property they obtained was for a valuable consideration, and in good faith, and without notice or knowledge of the mortgage sued on herein. W.P. Taylor specially pleads that he took a chattel mortgage from W.C. Taylor on November 9, 1928, covering all cattle and a number of hogs and horses at that time owned by W.C. Taylor, and that a part of this personal property was covered by plaintiff's mortgage; but that he (W.P. Taylor) took his mortgage without notice or knowledge of the mortgage sued on herein, and alleges that his chattel mortgage is superior to that of the plaintiff.
The evidence shows that Ruth L. Taylor was discharged in bankruptcy, and that W.C. Taylor was adjudged a bankrupt January 14, 1930. By dictation into the record, plaintiff withdrew any claim for a personal judgment against W.C. and Ruth L. Taylor, but alleges, as against the Mitchells, Morgan, and W.P. Taylor, that they claim to have purchased certain of the property described in plaintiff's mortgage; that they were not good-faith purchasers thereof; and that its mortgage is superior to their respective rights. The claims of each of these parties in response thereto has been above set out.
This record seems to be in a hopeless tangle as to identification of property. There is no evidence pointing out any specific property in the hands of any one of the defendants which plaintiff claims is covered by its mortgage. We have the original description in plaintiff's mortgage, but the record shows that plaintiff consented to the public sale heretofore referred to, at which a part of this property was sold. There is nothing whatever in the record to point out the particular items of chattel property that were sold at this public sale, and none of the defendants testify, except Morgan. W.P. Taylor admits, however, that, when he took his chattel mortgage, it covered part of the chattels described in plaintiff's mortgage; but which particular chattels or what articles were in both mortgages we are at a loss to know. There is nothing in the record to show, aside from the admissions of W.P. Taylor above referred to, that any of the property described in plaintiff's petition is now in the hands of any one of the defendants. True, all of the defendants admit that they have certain personal property received from W.C. *Page 1158
Taylor, but in each instance it was received in payment of a past-existing indebtedness.
The chattel mortgage, among other things, contains this provision:
"It is my intention hereby to mortgage all of the property of the respective kinds above described, which I now own or may acquire, together with all increase thereof or additions thereto until the consideration herein named and all other indebtedness to said mortgagee is fully paid. * * * And I further sell and transfer to said mortgagee all grain, feed and hay owned by me on the premises above mentioned, including that which is to be grown on said premises until the indebtedness herein named and all other indebtedness held by the said mortgagee is fully paid."
No attack is made on the validity of this provision of the mortgage, the Mitchells and Morgan admitting that they each received personal property from W.C. Taylor after the plaintiff's mortgage was executed and delivered, of the respective kinds described in plaintiff's mortgage. This admission on the part of the Mitchells, however, does not describe any property in their hands received from W.C. Taylor, and W.P. Taylor stands upon the description in his mortgage.
An unacknowledged or unrecorded mortgage is good as between the parties thereto. Morse v. Beale, 68 Iowa 463, 467; Lake v. Gray,30 Iowa 415; Aultman Taylor Mach. Co. v. Kennedy, 114 Iowa 444;Live Stock Nat. Bank v. Julius, 187 Iowa 748. Under Section 10015, Code, 1927, an unrecorded chattel mortgage is good as against all persons excepting existing creditors or subsequent purchasers without notice. The fact that this chattel mortgage of the plaintiff's in this case was acknowledged before a notary who had no authority to take such acknowledgment, and later recorded, did not give constructive notice to any person. The recording, therefore, of this improperly acknowledged instrument leaves it in the same shape as though it had not been recorded; and if the defendants herein are "subsequent purchasers" without notice, under the aforesaid section of the statute, plaintiff's chattel mortgage would not be effective against them. We have the question, therefore, of *Page 1159
whether or not these defendants were "subsequent purchasers," within the meaning of the aforesaid Section 10015.
The Mitchells and W.P. Taylor do not testify in the case. Morgan testified that he knew nothing as to the existence of the chattel mortgage at the time the cattle were turned over to him, but the record shows that he and the Mitchells took the property from W.C. Taylor in satisfaction of a pre-existing indebtedness. It also shows that the chattel mortgage given to W.P. Taylor was for a pre-existing indebtedness.
Is one who takes property in satisfaction of a pre-existing indebtedness a "subsequent purchaser," under the aforesaid section of the statute? We have settled this question that he is not a subsequent purchaser in the following cases: Phelps v.Fockler, 61 Iowa 340; Cambria Sav. Bank v. La Nier, 135 Iowa 280;Martin v. Fritz, 194 Iowa 740; Smith v. Moore, 112 Iowa 60. Where one claims to be an existing creditor or a subsequent purchaser without notice, he has the burden of alleging and proving such facts as show that he was such creditor or purchaser. Loranz Co. v. Smith, 204 Iowa 35; Diemer v. Guernsey Johnson, 112 Iowa 393; Zacharia v. M.C. Cohen Co., 140 Iowa 682; Martin v. Fritz,194 Iowa 740.
Under these rules it follows that neither of these defendants is entitled to any protection as against the plaintiff's foreclosure.
II. The original decree in this case was signed, filed, and entered of record January 24, 1930, and on the same day, special execution was issued thereon, and on that day, under such execution, the sheriff levied on certain 2. JUDGMENT: specific property and advertised the same for amendment, sale. On February 17, 1930, without notice or correction, knowledge or consent of any of the defendants or and review their attorneys, the trial judge signed and in same filed what is designated as a "supplemental court: decree," in which he recited that the court's notice as attention was called to the fact that the condition language of the decree entered in January, 1930, precedent. did not correctly set forth the language of the mortgage declared upon, "and it is hereby ordered that said decree heretofore entered shall stand as the same now appears, excepting only that it is further found, adjudged, and decreed that plaintiff's said mortgage covered all of the property of the respective kinds described in said mortgage which W.C. Taylor and Ruth L. Taylor, or *Page 1160
W.C. Taylor or Ruth L. Taylor, owned on the 28th day of July, 1927, or might acquire, together with all increase thereof or additions thereto."
Complaint is lodged against this supplemental decree on the ground that the court had no jurisdiction to enter the same at the time it was entered.
Sections 10798 and 10799, Code, 1927, provide for the making of the record of the court proceedings and the signing of the same by the judge. Section 10800 provides for the signing of the record as to entries made in vacation. Section 10801 reads as follows:
"The record aforesaid is under the control of the court, and may be amended, or any entry therein expunged, at any time during the term at which it is made, or before it is signed by the judge."
The question raised in this case upon which the appellant depends is that, while this power is given under the last-named section, it cannot be exercised without notice to the opposite party. We have numerous decisions in this state in which various loose language has been used in relation to this question. As a general rule, such supplemental decree which changes or varies the original decree in any material particular cannot be entered without notice to the other party. 34 Corpus Juris 246, Section 472. While we may not have announced this rule in direct language, it is the necessary and logical deduction from our pronouncements in the following cases: Kwentsky v. Sirovy,142 Iowa 385; Perry v. Kaspar, 113 Iowa 268; Chicago, I. D.R. Co.v. Estes, 71 Iowa 604; Hawkeye Ins. Co. v. Duffie, 67 Iowa 175;McGlaughlin v. O'Rourke, 12 Iowa 459.
It follows, therefore, that the trend of our decisions has been along the line of the general rule above set out, and we are not disposed to vary therefrom. As heretofore said, the uncertainty in identification of this property leaves us in some doubt as to whether the supplemental decree brought other and different property into the range of leviable property under the original decree. The very fact, however, that plaintiff asked for this supplemental decree would indicate that the change desired by the supplement was material; and, under the peculiar facts of this case, we are disposed to view it as a material change, and *Page 1161
therefore hold, under the general rule, that the court had no right to enter this supplemental decree without notice to the opposing parties. The ruling of the district court will be modified accordingly, and in all other respects shall stand. —Modified and affirmed.
MORLING, C.J., and STEVENS, De GRAFF, and WAGNER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432086/ | On November 12, 1925, Martha L. Junkin, executrix of the estate of Frank W. Junkin, deceased, entered into a written contract with Fred W. McClain, under the terms of which she sold a certain business building located in the city of Fairfield, Iowa. The contract provided that McClain was to deed to the seller certain land located in Canada, and in *Page 1086
addition he was to pay the sum of $30,000, $500 per year on December 1st of each year, beginning with 1926, for five years, and $1,000 a year on December 1st of each year thereafter until said principal sum was reduced to $15,000, when the balance became due. It further provided that McClain was to pay interest and all taxes levied against the property before they became delinquent, and that he was to carry insurance, payable to the seller in case of loss, in an amount of not less than $11,000; and that "all of which payments and charges therefor shall be a first lien upon the rents accruing upon said premises conveyed by said executor, a deed for which shall be executed at once by said executrix to said McClain and placed in escrow in the Farmers State Bank of Fairfield, Iowa, to be delivered to said McClain upon the full payment of the above consideration." Possession was to be given on December 1, 1925.
Pursuant to the terms of the contract, McClain conveyed the Canada land to the seller and the executrix delivered possession of the business block to him. McClain made payments thereon in accordance with the provisions of the contract up until the time that the taxes became due for the year 1930. He failed to pay the taxes for 1930 and 1931, and both were delinquent before this action was commenced, and in addition he was in arrears in the payment of the installment due September 1, 1932.
On the 19th day of April, 1930, McClain, desiring to make certain repairs upon the building in question, borrowed from George C. Woods the sum of $3,000, and executed to the said Woods what is termed a "collateral" note, signed by McClain and his wife. This instrument provided that there was deposited with the said Woods, as collateral security for the amount owing him by McClain, certain leases, one known as the "Gibbons" lease, one known as the "Great Atlantic Pacific Tea Company" lease. McClain also assigned as collateral the contract for the purchase of the said property from the estate. The Gibbons lease was dated October 14, 1929, and was for five years. The Atlantic Pacific lease was for one year, with provision for renewal at the end of each year for a period of eight years provided the lessee desired to renew. The rental was on the basis of $160 per month on the Atlantic Pacific lease and $125 per month on the Gibbons lease. The leases were delivered to Woods.
On December 2, 1931, McClain desired to borrow additional *Page 1087
money to finish improvements on the store building and borrowed $1,000 from George C. Woods, assigning as additional security what was known as the "Archibald" lease, also a lease covering part of the property McClain had purchased under the contract.
The collateral agreement also provided that McClain was to assign all leases that he thereafter made on the said described property, to Woods, until the amount due Woods was paid. On December 12, 1931, McClain entered into a lease for another year with the Atlantic Pacific Company covering the same property, the former lease having about terminated, and transferred the lease to Woods, to be held as collateral to his note.
On September 17, 1932, McClain sold and conveyed by quitclaim deed, to Gladys L. McClain, for a good and valuable consideration, the premises in question, "subject to the present encumbrances against the property, which the grantee does not assume." On March 19, 1933, Gladys L. McClain executed a new lease with the Atlantic Pacific Company for one year from and after April 30, 1933. This lease, pursuant to the provisions of the collateral note of McClain to Woods, was assigned to Woods and delivered to him. On March 16, 1934, Gladys L. McClain, pursuant to the option right of the Atlantic Pacific Company, executed with said concern another written lease for one year.
Woods appointed, as his agent to collect the rents, McClain, and from the collection of these rents the $1,000 note was paid in full, together with interest, and there was the sum of $310.37 applied upon the $3,000 note. However, there was a balance due Woods on said note of $3,796.70, with interest from September 29, 1934.
It appears in the record that Woods did not receive all of the rents which were assigned to him; that he at different times permitted McClain to retain part of the rentals which McClain said it was necessary to do in order to make repairs upon the building. Woods also at one time executed a written waiver on the rents from the Atlantic Pacific lease for a period of months, in favor of Susannah Hisel, to whom McClain owed certain indebtedness.
This action was commenced on the 24th day of October, 1932, in equity, to foreclose the written contract for the sale of the real estate, to enforce the provisions thereof, asking that *Page 1088
the payment of taxes and other provisions of the contract be declared a first lien on the accruing rents. There were joined as defendants in the action, in addition to the McClains, George C. Woods, and the Atlantic Pacific Tea Company, Archibald and the other tenants in the building. The petition alleged that McClain was insolvent and that the property was of less value than the unpaid portion of the purchase price, and asked for the appointment of a receiver to take charge of the said property and to collect the rents during the period of foreclosure. On the 14th day of September, 1934, an amendment was filed by the plaintiff, joining Gladys L. McClain as one of the defendants, and notice was given to her as by law provided. In her separate answer Gladys L. McClain claimed that she was entitled to the rentals, subject to the assignment to Woods, up until the time of the commencement of the action against her, to wit, September 14, 1934.
The court found the equities to be with the plaintiff, and that by agreement of the parties one Harry McWhirter had collected part of the rents, and other rents accruing since the commencement of the action had been paid to the clerk of the district court. The lower court found that under and by virtue of the provisions of the contract sued upon, payments of principal, interest, insurance, taxes, and charges therefor, were a first lien upon the rents accruing upon said premises, which said lien the plaintiff was entitled to have specifically enforced as to all rents accruing upon said premises from and after October 24, 1932, the date of the filing of the petition and also the date of the service of the notice on all defendants except Gladys L. McClain, who held only a quit-claim deed to the premises in question, made by Fred W. McClain and wife. The court ordered and adjudged that the rent funds in the hands of McWhirter and in the hands of the clerk of the district court be paid to the plaintiff for application upon the indebtedness of Fred W. McClain, as provided by the contract in question; and that the plaintiff have a decree of specific performance against McClain, and that unless the amount due under the contract was paid within thirty days, together with interest and all unpaid taxes, special execution issue for the sale of the interest of said McClain in said premises; and that the rights of the defendants and each of them, except the right of redemption, be and the same stand foreclosed and barred forever. *Page 1089
From this decree Gladys L. McClain and George C. Woods have appealed.
I. The first question that confronts us in this case is the construction of the real estate contract which was entered into between these parties. It must be kept in mind that no question is raised as to the right of executrix to enter into this contract.
[1] This real estate contract is what is called in the reports and text-books generally "Contract of Sale and Purchase," or a "Bond for Deed," because it is a contract for sale of real estate with the legal title of record retained by the seller, pending payment of the purchase price, and upon completion of payment of such purchase price the instrument transferring the legal title to be delivered to purchaser.
The statutes of Iowa provide for and recognize the vendor and the purchaser in contracts for sale of real estate or in bonds for deeds, where a conveyance is to be made upon the payment of purchase money, are in the respective positions of mortgagee and mortgagor in any action brought for enforcement or foreclosure under such contract.
Code, section 12382, is as follows: "12382. Foreclosure of title bond. In cases where the vendor of real estate has given a bond or other writing to convey the same on payment of the purchase money, and such money or any part thereof remains unpaid after the day fixed for payment, whether time is or is not of the essence of the contract, the vendor may file his petition asking the court to require the purchaser to perform his contract, or to foreclose and sell his interest in the property."
Code, section 12383, is as follows: "12383. Vendee deemed mortgagor. The vendee shall in such cases, for the purpose of the foreclosure, be treated as a mortgagor of the property purchased, and his rights may be foreclosed in a similar manner."
By the very literal terms of the provisions of the last-quoted section, the vendee in such cases is treated as a mortgagor of the property purchased, and the vendor as a mortgagee with right to foreclose in manner similar to that of the ordinary mortgage.
In a very recent case, Wood v. Schwartz, 212 Iowa 462, at page 470, 236 N.W. 491, 494, this court said:
"It is well settled by our previous cases that, under a contract such as the one between Schwartz [vendor] and Middaugh *Page 1090
[purchaser], Middaugh held the equitable title, and Schwartz retained the legal title, to the real estate as security for the payment of the purchase price. Middaugh held an equitable title in real estate which would descend to his heirs, but Schwartz, at the time of his death, had only personal property, which would pass to his personal representatives. * * * In In re Estate of Miller, 142 Iowa 563, at page 566, 119 N.W. 977, 978, we said:
"`It has been held repeatedly by this court that when a landowner enters into a contract of sale whereby the purchaser agrees to buy, and the owner to sell, and whereby the vendor retains the legal title until the purchase money or some part thereof be paid, the ownership of the real estate, as such, passes to the purchaser, and that from such time forth the vendor holds the legal title as security for a debt and as trustee for the purchaser. The interest acquired by the vendee is "land," and the right and interest conferred by the contract upon the vendor is "personal property." In case of the death of the vendee, his interest in the land would descend to his heirs. In case of the death of the vendor, his interest would pass as personal estate to his administrator. A judgment against the vendee would become a lien on the land, inferior, of course, to the rights of the vendor. A judgment against the vendor would not become a lien upon the land, nor could an execution thereunder be made by levy and sale of the land.'"
Thus there can be no doubt that in the case at bar, from and after the date of the real estate contract, to wit, November 12, 1925, the purchaser, McClain, held equitable title to the premises, and the vendor, Martha Junkin, executrix, retained the legal title to the real estate as security for the payment of the remainder of the purchase price. The purchaser's equitable estate in the premises was such that in the event of his death it would descend to his heirs, while the vendor held only personal property, which, in the event of her death, would pass to her successor administrator. The ownership of the real estate, as such, was in the purchaser and not in the vendor. The vendor held the legal title simply as security for the remaining debt, the balance of the purchase price, and as trustee for the purchaser or his assigns or successors. The interest or right acquired by the vendee or purchaser was "land," and the interest *Page 1091
or right retained or conferred by the contract upon the vendor was "personal property." In such cases the security held by the vendor must be understood to be such as is given by the statute to the vendor of real estate when part or all of the purchase money remains unpaid. And under such statute the vendee is treated as the "mortgagor" of the property and his rights may be foreclosed in the same manner. The parties are to be treated for all purposes of this suit as "mortgagee" and "mortgagor," respectively. In this action to foreclose the contract the vendee is always treated as the mortgagor of the property purchased, and his rights and interests foreclosed in a similar manner. It is the intention and design of the statute to place the vendor and vendee of real estate in the same position, so far as related to the remedy, as the mortgagor and mortgagee in express mortgages.
Thus we find that in the case at bar these parties are in the same position as if the executrix had deeded the land to McClain and he had given back a mortgage to secure the unpaid balance.
[2] The instrument in question, wherein the purchaser is the mortgagor and the vendor the mortgagee, as the usual mortgage does, provides for a lien upon the rents until all the payments and charges are met. How is this provision to be construed, and what is the remedy for enforcement?
It is the contention of the appellant, and we believe correctly, that the remedy for the enforcement of such a provision is exactly the same, whether the instrument in which it is found is an express legal mortgage or an equitable mortgage.
II. Receiverships in mortgage or lien foreclosures were not formerly much invoked, but in the last few years — due no doubt to the economic condition that confronted the country — this court has frequently had the question before it.
In the case of First National Bank v. Security Trust Savings Bank, 191 Iowa 842, 844, 181 N.W. 402, 403, the mortgage granted, bargained, sold, and conveyed the premises by description, together with the rents, income, and profits thereof, to secure the debt, and this court said: "It is the law in this state, in harmony with the general holding, that the right of the holder of a mortgage upon real estate, pledging the rents and income as security to the defendant [mortgagee] for the same, does not arise until action has been commenced to enforce collection of the debt." *Page 1092
Again, in Cooper v. Marsh, 201 Iowa 1262, at page 1266,207 N.W. 403, 405, we said:
"Even if the mortgage provided in general terms for a pledging of the rents and profits of the mortgaged premises, it is the uniform holding that the mortgagee acquires no lien by virtue of his mortgage upon said rents and profits until foreclosure proceedings are commenced and the appointment of a receiver is sought. * * * The general rule is that, although the rents and profits are pledged in a mortgage, the mortgagor has the right to dispose of the same without being liable to account to the mortgagee therefor prior to the institution of an action wherein foreclosure and the appointment of a receiver are asked."
In John Hancock Mutual Life Insurance Company v. Linnan,205 Iowa 176, 178, 218 N.W. 46, 47, the mortgage recited:
"And the party of the first part hereby pledges the rents, issues, and profits of said real property for the payment of said principal sum, interest, attorneys' fees, and costs," etc. Mortgagee contended the instrument created a specific lien upon the rents, issues, and profits of the mortgaged premises; that the mortgage assigned the rents, issues, and profits to mortgagee as security for the loan. The opinion says at page 180:
"This court has repeatedly held that a mortgagee has no lien upon the rents, issues, and profits under a clause merely pledging the same as security for the debt without making the same a present lien thereon, until an action to foreclose the mortgage is commenced and the appointment of a receiver requested. * * *
"The right of the mortgagor to freely sell and dispose of crops grown upon the mortgaged premises or to assign the rent therefor at any time prior to the commencement of an action to foreclose the mortgage and for the appointment of a receiver has been repeatedly sustained by this court."
And at pages 181, 182:
"Manifestly, the mortgagee could have no purpose in asserting a lien upon rents, issues, and profits so long as there was no default in the terms of the mortgage. The intention of the mortgagee to claim a lien thereon only in case the mortgagor *Page 1093
defaulted in the performance of certain designated terms of the contract is not only manifest, but dearly implied thereby. This being true, no present lien upon the rents, issues, and profits was created by the mortgage. * * *
"We think it entirely proper to say that the parties intended the land to constitute the primary security for the mortgage debt. The provision giving a lien upon the rents, issues, and profits was secondary and intended to meet a possible future contingency. The several clauses of the mortgage must, of course, be construed together. The distinction between primary and secondary security in the sense we have used the term is of significance both as to the nature and character of the lien intended and also the remedy to be pursued in giving effect thereto."
In the recent case of Andrew v. Home Savings Bank, 215 Iowa 401,405, 246 N.W. 48, 49, this court said:
"At the time the lease was made, the mortgagee in the real estate mortgage had no lien on or an existing, as distinguished from a prospective, right to the rents, issues, and profits from the real estate. As has been said before many times, the clause in the real estate mortgage under consideration pledging the rents, issues, and profits does not create a lien thereon prior to the foreclosure proceedings, wherein a receiver is asked to collect such rents and profits. * * *
"She, as such mortgagee at the time when the superintendent of banking made the lease, had no title to or lien upon the rents, issues, and profits named in the real estate mortgage. * * * Such right of the mortgagee to the rents, issues, and profits did not arise until the commencement of the foreclosure proceedings wherein a receiver under the real estate mortgage was asked."
And at page 406:
"When the superintendent of banking made the lease in question and collected the rent in advance, he was exercising his legal right to thus rent the real estate. * * * At the time when the superintendent of banking entered into the lease, the aforesaid prospective right of the real estate mortgagee to the rents, issues, and profits had not been made a present lien, right, or interest through the foreclosure of the mortgage, and an *Page 1094
application for a receiver thereunder. Hence, the superintendent of banking at the time the lease was executed had an absolute right, under the circumstances, to dispose of the rents, issues, and profits as he saw fit. When so acting, the superintendent of banking may have been prompted by one motive or another. The motive which prompted the banking superintendent to exercise his legal right is quite immaterial under the circumstances. He had the right to make the lease."
Thus we find it is the well-settled rule in this state that the mortgagee does not have a lien on the rents and profits pledged under the mortgage until the foreclosure action was commenced.
In the case at bar, as we have pointed out, the contract for the sale of this real estate is governed by the same rules of law as if it was a mortgage. And the appellee, the seller, had no lien upon the rents pledged under the contract of sale until she commenced this action. Prior to the commencement of this action, McClain, the purchaser, had a right to sell, assign, or transfer, as long as it was a bona fide sale or transfer, the leases covering the property in question. McClain made the lease with the Atlantic Pacific Tea Company prior to the commencement of this lawsuit. That lease was transferred to Woods as security for the indebtedness that McClain owed to Woods. The indebtedness is not in controversy. That McClain did borrow the money from Woods to repair the building is not disputed; that it was a good-faith transaction is conceded. Before the commencement of this action by the appellee, the lease to the Atlantic Pacific Company was assigned by McClain to Woods. That lease expired the 1st day of May, 1931. On December 12, 1931, McClain entered into another lease with the Atlantic Pacific Company for a period of one year, which would make the lease expire on May 1, 1932. This lease was assigned and transferred to Woods. Before the expiration of that lease McClain entered into another lease with the Atlantic Pacific Company, which was to run from May 1, 1932, to May 1, 1933, and this lease was assigned to Woods and transferred to him. This assignment and transfer was made prior to the commencement of this action. In addition to this, McClain had rented a certain part of the property to one Archibald, under a written lease, and this lease was also assigned to Woods. There was also assigned to Woods a certain lease known as the Gibbons *Page 1095
lease. At the time this action was commenced in October of 1932, Woods was in possession of the Atlantic Pacific lease which had been assigned to him and which lease ran to May 1, 1933. And he was also in possession of the Archibald lease, which had been assigned to him and which had under its terms some time to run. The Gibbons lease had been canceled some time before. It is the contention of the appellee that these leases were assigned to Woods as a chattel mortgage, not as a sale or transfer. She argues that due to the fact that Woods permitted certain of the rentals, to which he was entitled, to be used by McClain, and part of them to be turned over to another creditor of McClain under a written agreement, in reality all that Woods had was a chattel mortgage rather than the real ownership of the leases. With this we cannot agree. The leases were assigned to Woods under a written agreement; they were assigned as security to pay an indebtedness which McClain owed to Woods. No question is raised as to the validity of these assignments; that they were good-faith transactions is conceded. Woods therefore was the owner of the lease known as the Atlantic Pacific lease and of the Archibald lease. Those assignments were made long before this action was commenced, and Woods was entitled to receive the money under the lease known as the Atlantic Pacific lease up until the expiration of the lease, which was May 1, 1933, and he was entitled to receive the money collected under the Archibald lease which was assigned to him, until the end of that lease or until the end of the period of redemption, whichever was first. The lower court erred in holding that Woods was not entitled to any of the rentals under the Atlantic Pacific lease and the Archibald lease, after the commencement of this action, to wit, October 24, 1932, and the judgment and decree will be modified to the extent herein pointed out.
[3] III. It is the claim of the appellant Gladys L. McClain that she is entitled, subject to the rights of George C. Woods, to rent from certain portions of the premises involved, until the 11th day of September, 1934, when she was made a party to this action and notice of said action was served upon her.
The record shows that when the original action was commenced in October of 1932, Gladys L. McClain was not made a party to the action. Some time prior to the commencement of the original action Fred W. McClain and his wife, for a valuable *Page 1096
consideration, made, executed, and delivered a quitclaim deed covering the property described in the original contract, to Gladys L. McClain. The quitclaim deed provided that grantee did not assume the indebtedness still owing.
In the case of Steele Son v. Sioux Valley Bank, 79 Iowa 339, at page 347, 44 N.W. 564, 567, 7 L.R.A. 524, 18 Am. St. Rep. 370, this court said: "It is apparent that no more is contemplated by such a conveyance than to convey the interest of the grantor, whatever it may be. It should be noticed that in this form of deed the grantor does not covenant or say that he has the title, or any interest. In this respect it is in marked contrast with the ordinary deed of conveyance, which expresses exactly what the title owner can and should express, and what the purchaser desires. It in no sense purports to convey a title, not even by inference. If it was there by legal inference, then the grantor would be liable, for its failure; and such is not the effect of a quitclaim deed. It is practically said in Gest v. Packwood, supra [ (C.C.) 34 F. 368], that the deed is itself a notice of a want of or a defect in the title. These deeds are generally taken upon a venture. The idea is: `I may get something, or I may not.' This court, in the cases cited, has many times said that the holder of the quitclaim deed takes it with notice of prior equities."
And in the case of Duntz v. Ames Cemetery Association, 192 Iowa 1341, at page 1345, 186 N.W. 443, 445, this court said:
"The defendant city is not in a position to claim that, in the absence of an express undertaking, the assignee of a written contract is not held to have assumed the obligations of the assignor. True the Duntz contract was not formally assigned to the city, but it did accept a quitclaim deed to the land covered by the contract. The grantee under a quitclaim is conclusively presumed to have knowledge of all prior equities, and takes subject thereto. Steele Son v. Sioux Valley Bank, 79 Iowa 339,44 N.W. 564, 7 L.R.A. 524, 18 Am. St. Rep. 370."
And in the case of Howell v. Howell, 211 Iowa 70, at page 75,232 N.W. 816, 818, this court said:
"The deed in the instant case was a quitclaim, and it therefore contained no covenants. The grantee is not entitled to be considered a bona fide purchaser, and does not acquire priority *Page 1097
over equities or unrecorded conveyances which are valid against his grantor."
The appellant Gladys L. McClain in this case took a quitclaim deed. Under the cases cited she took "with notice of prior equities." At the time that she accepted the deed, which was shortly before the foreclosure action was commenced, her grantor was in default in the payment of installments due and had failed to live up to the terms of the contract in that he had failed to make the payment of taxes as they became due. In fact, there were at that time two years' taxes unpaid, upon which penalties were accruing. And he had failed to keep the fire insurance in force, as provided. In addition to this, at the time that this action was originally commenced, there were joined as defendants the tenants in the building, and notice was served upon them. Thus, with the knowledge of these facts that she had, Gladys L. McClain is not now in a position to say that she is entitled to the rents up until September of 1934, when this action was commenced as against her. These rentals, it was shown, were necessary to pay back taxes, and a court of equity would not permit the turning over of these rentals to a person who held a quitclaim deed and who had knowledge of the default under the terms of the contract.
It was conceded in the case at bar that McClain was insolvent, and that the value of the property was not sufficient to pay the amount due upon the contract. The court was right in the appointment of a receiver to take charge of said property.
Other questions are raised, all of which have been given careful consideration. The decree of the lower court will be modified, in that George C. Woods is entitled to the rentals received from what is known as the Atlantic Pacific lease up until May 1, 1933, and from the Archibald lease in the amount provided in the said lease to the end of said lease or to the end of the period of redemption, whichever is first.
The costs of this appeal will be evenly divided between the appellants and appellee.
With this modification, judgment and decree of the lower court is hereby affirmed. — Modified and affirmed.
DONEGAN, C.J., and ANDERSON, PARSONS, KINTZINGER, and RICHARDS, JJ., concur. *Page 1098 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432088/ | Claimant, W.A. Griffith, married a daughter of Frank Portlock, a retired farmer who died on February 19, 1939. His will, admitted to probate on March 27, 1939, devises a quarter section farm and a dwelling house in the town of New *Page 494
London equally to his two children, Mrs. Griffith and Kineta Portlock "except that Mrs. Elizabeth Griffith shall first be remunerated for the expense of repairs put on the property in the north part of town while she lived there which shall not exceed Five Hundred ($500.00) Dollars." The will also provides for a lien against the share of the daughter Mrs. Griffith to the amount of $2,700, which it is admitted the testator had paid to take up two notes given by the claimant to banks, which the testator had signed as surety.
Claimant is a civil engineer. He and his wife occupied the above-mentioned house in New London from the summer of 1921 to May 1924, when they moved to Mt. Pleasant. During that time claimant modernized and improved the property. The expenditures made in so doing are the basis for his claim, filed on September 26, 1939. The basement was further excavated and enlarged, a furnace was put in, a bathroom added and other plumbing was installed, floors were sanded, and inside walls were papered, and the house was painted both inside and out. The garage was enlarged to accommodate two cars and a concrete drive was built. These were the principal improvements.
In the original claim the total expense on the property is given as $2,749.24. The claim was amended several times. By amendment of July 22, 1940, the items of expense on the house total $2,838.27. According to the amendment of March 13, 1941, the expense items total $3,074.83. All of the work was done and expenditures made not later than 1924, except that it is claimed some window glass was replaced in 1925 following a hailstorm, and settlement for the carpenter work of one Waller, done in 1924, was not made until June 20, 1931, after Waller's death.
After claimant vacated the property in May 1924, Portlock rented it to various tenants, receiving as rent down to the time of his death in 1939, according to claimant, $3,075. Claimant contends the owner would have received $1,068 as rent for that period if the improvements had not been made. He therefore included in his claim not only the expenditures alleged to have been made by him but also the difference between $3,075 and $1,068 in rentals, or $2,007. The total of the two large debit items in the claim as finally amended is thus somewhat more than *Page 495
$5,000. The claimant admits the estate is entitled to the following credits: $192 for 32 months' rent of the property while occupied by the Griffiths from September 1921 to May 1924; $300 rent of two rooms and vault in garage for 120 months at $2.50; $87 rent of storage room and vault from May 1934 to February 1939 at $1.50 per month. Claimant also admits that testator paid his notes of $2,700 on which testator was surety. The total credits are thus $3,279, leaving a balance of about $1,800 which claimant seeks to recover.
An amendment to the claim alleges that the expenditures were made under an oral contract. Later, a second count was added which apparently sought recovery on quantum meruit. Defenses to the claim are a general denial, the statute of limitations, payment, that the improvements were for the benefit of claimant's family, and estoppel and waiver by reliance on the provision of the will directing remuneration to the amount of $500. An offset was also pleaded, one item of which is $500, paid by testator on May 20, 1922, for an automobile for claimant.
The lien sought to be foreclosed in the equity suit commenced by the executrix on April 17, 1940, against Mrs. Griffith and claimant is that created by the above-mentioned provision of the will. Mrs. Griffith and claimant pleaded his claim as an offset to the petition in equity. Following consolidation and trial of the probate claim and suit in equity, the claim was disallowed but the lien was established and foreclosed. The Griffiths have appealed.
[1] We will refer briefly to the evidence for appellants. Claimant and his wife were incompetent under section 11257, Code, 1939, to testify to the expenditures for improvements made by claimant for decedent or to any fact which tends to establish an express or implied contract between claimant and decedent. Ballinger v. Connable, 100 Iowa 121, 129, 130, 69 N.W. 438; In re Estate of Kahl, 210 Iowa 903, 911, 912, 232 N.W. 133, and cases cited.
[2] Mrs. Griffith, however, was not incompetent to testify that she overheard a conversation between her husband and father, in which she took no part, wherein her father told claimant to go ahead and install the furnace. In re Estate of Allis, *Page 496 221 Iowa 918, 922, 267 N.W. 683; Diesing v. Spencer, 221 Iowa 1143,1145, 266 N.W. 567, and cases cited.
[3] Aside from the testimony of appellants themselves, the bulk of the evidence consists of somewhat uncertain and indefinite statements of different laborers and material men regarding labor and material furnished by them on the property at the request of claimant, who paid them. A number of the workmen had died prior to the trial. Several witnesses said they saw Portlock on the premises watching the work at various times. One witness who said he had had considerable experience in improving properties testified it would cost from $1,500 to $2,000 to make the improvements in question. Another witness who had charge of excavating for the basement, putting in the sewer and disposal plant and doing the masonry, testified the work he did was reasonably worth $1,000, also that the house alone was worth $1,550 more after it was improved than before. There is also testimony that Portlock told a prospective purchaser, probably in 1924, 1925, or 1933, "Will has considerable invested in it, I don't think I would better price it at this time." Appellants also showed the rentals paid by tenants who occupied the place after the Griffiths moved out. Appellants argue that the above-quoted provision from the will regarding remuneration up to $500 is a recognition of the indebtedness for which claim is made. Appellants say in argument "* * * the evidence as to just what the understanding was * * * as to paying for the improvements is admittedly somewhat scanty."
Several facts are inconsistent with the existence of the claim or afford substantial evidence of payment. Portlock was apparently well able to pay any amount he might be owing claimant. His estate was valued in excess of $50,000. He owned two quarter-section farms and a house in New London where he lived, aside from the property which was improved. All were unencumbered. Appellants, in effect, concede that no demand for payment was ever made upon Portlock. The executrix testified that after Portlock died and his will was probated she asked claimant when his $2,700 indebtedness to the estate would be paid. "Mr. Griffith said that just as quick as he could sell his farm down in Lee county that he would pay me." She further *Page 497
testified that Mrs. Griffith directed that her half of the rent from the property in question be kept and applied on what the Griffiths owed the executrix; that "Mrs. Griffith said she would pay her husband's indebtedness just as soon as she could get the money"; also that no demand was made upon her before the claim was filed. None of this testimony is denied. As bearing on the above, see Baker v. Davis, 212 Iowa 1249, 1252, 235 N.W. 749, and cases cited.
It is not denied that in 1930 or 1931 Portlock signed as surety for claimant a note for $1,500 to a New London bank and a note for $1,080 to a Mt. Pleasant bank. The notes were renewed by both signers over a period of two or three years. It is admitted that Portlock took up these notes by paying $2,700 sometime before he made his will on January 2, 1934. It further appears that claimant furnished Portlock, or perhaps the bank, drainage warrants for $1,347 to secure decedent against loss on the note given the Mt. Pleasant bank. These warrants were in Portlock's possession when he died. On April 14, 1939, the executrix turned them over for collection to appellants, who signed a written receipt therefor in which they agreed that the proceeds of the warrants "shall be applied on the indebtedness for which they were pledged as collateral unless said notes have been paid in full into the estate of Frank Portlock." If decedent owed claimant the amount claimed by him it is somewhat strange that he would borrow from the banks with Portlock signing as surety and furnish the warrants to secure him. As having some bearing, though not directly in point, see Allen v. Bryson, 67 Iowa 591,597, 25 N.W. 820, 56 Am. Rep. 358; In re Estate of Kahl, 210 Iowa 903,906, 232 N.W. 133.
It also appears that on May 20, 1922, Portlock advanced $500 to enable claimant to buy an automobile. The inference is justified that this was a loan which claimant had requested from his father-in-law.
Claimant kept no book account of the amounts expended by him but says he kept some of the bills. A considerable part of his account was prepared from the daybooks of a lumber company.
The basis for the trial court's decision does not appear. We think a finding would be justified that the claim was not proven *Page 498
by a preponderance of the evidence. We also think the claim is barred by the statute of limitations.
[4] Claimant contends his is a continuous, open, current account that accrued on the date of the last item (section 11011, Code, 1939) and is not barred until five years from that date. Section 11007 (5). A "continuous, open, current account" is one "which is not interrupted or broken, not closed by settlement or otherwise, and is a running, connected series of transactions." Tucker v. Quimby, 37 Iowa 17, 19; Porter v. Chicago, Iowa
Dakota Ry. Co., 99 Iowa 351, 355, 68 N.W. 724; Miller v. Boyce,219 Iowa 534, 537, 258 N.W. 764. See, also, 34 Am. Jur. 79, section 96; annotation, 1 A.L.R. 1060. It may be conceded that the items for improvements made from 1921 to 1924 constitute such an account. As stated, however, the last of these items is dated in 1924 except for a repair item incurred probably in August 1925, and a payment in 1931 for work done in 1924.
It is obvious that claimant is not entitled to include in his account rentals collected by Portlock on his own property after the Griffiths vacated it. He has no claim to such rentals or any part thereof on any theory known to us. If the claim, filed in September 1939, is not barred, it must be because there is properly included therein one or both of the credits of $300, for use of two rooms and vault in the garage at $2.50 per month from May 1924 to May 1934, and $87, for storage and vault in the garage at $1.50 per month after May 1934. Claimant testified these amounts were the fair rental value of that part of the property. We think neither of these items can be coupled with the items of expenditures to make a continuous, open, current account.
It may be conceded that claimant had possession of part of the garage after he moved to Mt. Pleasant in 1924, presumably to store some belongings. We find no testimony thereof except from claimant himself over objection to his competency under section 11257. There is no evidence that decedent ever made or intended to make any charge for any such use or that he had any knowledge or notice of any credit extended him by claimant therefor. Both items were apparently voluntarily credited by claimant after Portlock's death. While we have recognized that the last item in *Page 499
an account may be either on the debit or credit side (Ritter v. Schultz, 211 Iowa 106, 107, 232 N.W. 830, and cases cited), the bar of the statute cannot be avoided by the inclusion of such voluntary credits, without knowledge or consent, express or implied, of the other party. Leland v. Johnson, 227 Iowa 520,525, 288 N.W. 595; 37 C.J. 875, section 239, note 75; 34 Am. Jur. 266, section 339.
Appellants have not argued that the provision of the will referred to at the outset constitutes a signed admission in writing that the debt is unpaid, sufficient to revive the cause of action under section 11018, Code, 1939. We therefore do not consider the question.
It may be thought that the claim of Mr. Griffith, even though barred, is a legal offset to the equity suit of the executrix. Such contention is also not argued and we do not consider it.
We understand appellee concedes that Mrs. Griffith is to be remunerated to the amount of $500, as provided by paragraph 4 of her father's will, and that the decree is not a denial of her right thereto.
The decree is — Affirmed.
WENNERSTRUM, C.J., and MITCHELL, STIGER, BLISS, OLIVER, and MILLER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432091/ | This is a suit in equity to vacate a judgment recovered in an action at law and to enjoin the enforcement thereof. The petition contains four divisions. Each division incorporates all allegations of the petition which precede it so *Page 484
that each is cumulative. The petition asserts the following allegations:
(1) Plaintiff is an Indiana corporation, defendant Fritz is a resident of Polk county, Iowa, the other defendants are the clerk of the district court and the sheriff of Polk county. On April 11, 1936, Fritz procured a judgment against the plaintiff company in the district court of Polk county, copy of which judgment is attached, as Exhibit A. No notice was served on the company and it did not appear. Copy of the original notice with return of service is attached, as Exhibit B. The purported service was invalid and defective, was not served upon an officer or agent of the company, and the person that was served was merely designated as one who claimed to be its agent. Fritz was guilty of fraud and perjury in asserting that one Herbert Stahlhut, upon whom service was had, was a general agent of the company when Fritz knew he was merely a traveling solicitor whose only authority was to solicit and receive orders at his own expense, and forward same to the company for approval or disapproval. A supporting affidavit as to such facts is attached, as Exhibit C. Plaintiff is a foreign corporation with no office or agency in Iowa, no official residing in Iowa, and is not authorized to do business in Iowa. The action was not connected with and did not grow out of any office or agency of the company in Iowa. Plaintiff has never owed Fritz anything.
(2) Fritz practiced fraud and perjury by asserting that he was an agent of the company under an oral contract, such assertion being false, and practiced fraud and perjury by asserting that he received products of the company, sold them for it, and remitted therefor to it, said assertions being false.
(3) On December 21, 1937, Fritz commenced an action at law in the Dearborn circuit court in Indiana on the judgment against the company. The cause proceeded to trial, and, upon a verdict of a jury, judgment was rendered for the company and against Fritz. Copy of the transcript of proceedings in the Indiana court is attached as Exhibit D. The decision of *Page 485
the Indiana court is an adjudication of the questions involved herein, and, by reason thereof, Fritz is estopped to assert the validity of the judgment the company seeks to vacate.
(4) Fritz caused an execution to issue on the Polk county judgment, has garnished a creditor of the company, and seeks to condemn funds owed to it to pay said judgment. The company will suffer irreparable injury and has no adequate remedy at law.
The prayer of the petition was that the judgment be vacated, defendants be enjoined from enforcing the same, particularly by said garnishment, and for general equitable relief and costs.
Defendant Fritz filed answer admitting the identity of defendants and the recovery of judgment on April 11, 1936. The other allegations of the petition were denied. The answer further asserted that on June 8, 1936, the company filed in the district court of Polk county what was termed a "special appearance and petition to vacate" the judgment of April 11, 1936. Copy of the special appearance and petition to vacate is set out as Exhibit A. On November 16, 1937, after a full and complete argument on said special appearance and petition to vacate, the same was overruled. All of the matters asserted in divisions I and II of the petition were fully submitted and adjudicated against the company, and it is estopped from obtaining the relief here sought. Also, it is estopped and foreclosed from maintaining this suit by the limitations fixed in section 12793 of the Code, 1935. The prayer of the answer was that the petition be dismissed, and for costs.
At the trial, the record, pertaining to the recovery of judgment in the action at law and the proceedings on the special appearance and petition to vacate such judgment, was introduced in evidence. It appears that Fritz, to support the allegations of his petition, testified to the following facts: He is a resident of Des Moines, Iowa; a salesman selling jobbing supplies, such as corrugated boxes, folding cartons, etc.; sold merchandise for Martin Brothers Box Company for a period of six to eight *Page 486
months. Herb Stahlhut was a salesman for the company, his territory including Iowa and parts of Nebraska, Illinois, and Missouri. Fritz was employed by Stahlhut to work for the company. Stahlhut stated he had authority to hire Fritz and an oral contract of employment was made. Fritz did business with the company on that basis. In sending in orders, some of the orders were sent by Fritz to Stahlhut. Others were sent direct to the company. Fritz's commission was to be 4 percent of the sales, except on what was called pool cars. The commissions earned by Fritz were not paid. Fritz testified to the various sales made by him. There was also identified and introduced in evidence correspondence had with the company, advising them of the claim and pendency of the action. It was Fritz's understanding that the company would pay the commissions. His total commissions amounted to approximately $385. After suit was commenced, the company was advised of the suit, and a copy of the petition was sent to it.
The judgment of April 11, 1936, was entered on default. The original notice was served upon Herbert Stahlhut, as an agent of the company. If such service conferred jurisdiction, the company was in default when the judgment was entered.
The special appearance and petition to vacate, filed on June 8, 1936, asserted that Martin Brothers Box Company was not and never had been a resident of Polk county, Iowa, had not had an office in Iowa and no officer of the company had been a resident of Iowa; the return of service of the original notice did not constitute service on the company, shows on its face that such service was illegal and gave the court no jurisdiction; Herbert Stahlhut, upon whom the notice was served, was not an officer of the company, and his employment was as a salesman contacting trade in a restricted territory. His compensation was on a basis of a drawing account applied against commissions earned. He was without authority during his employment to bind the company in any way except as to solicitation of contracts for material to be furnished purchasers. He had no authority to employ any sales agents or to parcel out any *Page 487
of his territory and could in no way bind the company for such employment or splitting of territory. If Fritz had any claim against any person, it was not against the company. This special appearance and petition to vacate was verified by counsel and supported by affidavit of Fred J. Martin, president of the company.
The order entered November 16, 1937, recited that the cause came on for hearing on special appearance and motion to vacate judgment and the court being fully advised in the premises, the motion was overruled with exception to defendant.
The transcript of proceedings in the Dearborn circuit court in the state of Indiana was introduced and showed that the petition was filed December 21, 1937, asserted the judgment of April 11, 1936, and prayed for judgment thereon. The answer contained a general denial and also asserted substantially the same facts which were asserted in the special appearance and petition to vacate heretofore reviewed. At the trial it was shown that such special appearance and petition to vacate had been filed and overruled. The plaintiff Fritz objected to submitting the cause to a jury. The objections were overruled. A jury was impaneled, evidence introduced, motion for directed verdict in favor of Fritz overruled, the jury was instructed, returned a verdict for the defendant company, and judgment was entered accordingly on June 15, 1938. Motion for new trial was asserted and overruled.
The record shows no appeal from the ruling of the district court of Polk county on the special appearance and petition to vacate, and no appeal from the judgment of the Dearborn circuit court. The court found that the equities are with defendant Fritz. The petition herein was dismissed, injunction denied, and judgment entered for costs. Plaintiff, Martin Brothers Box Company, appeals.
Whereas appellant asserts that the original notice, served upon Stahlhut as its agent, was insufficient to confer jurisdiction and appellee contends to the contrary, it is not necessary for us to decide that question. Each party relies upon a plea of *Page 488
estoppel by former adjudication. One or the other of such pleas must be sustained. Accordingly, the merits of the proposition need not be decided.
[1] Appellee relies upon the decision on the special appearance and petition to vacate the judgment of April 11, 1936, as an adjudication that the court had jurisdiction to enter such judgment and asserts that the appellant, having failed to appeal from such adverse decision, is bound thereby and cannot now litigate the questions there adjudicated. The trial court sustained such contention. We hold that its decision must be affirmed.
The special appearance and petition to vacate is in the nature of a combination of pleadings. It seeks to comply with the provisions of section 11088 of the Code, relating to special appearance. It also seeks to meet the requirements of chapter 552 of the Code, relating to procedure to vacate or modify judgments. In addition thereto, it asserts all of the necessary facts to warrant equitable relief from a void judgment. Sloan v. Jepson,217 Iowa 1082, 1084, 252 N.W. 535; Blain v. Dean, 160 Iowa 708, 717, 142 N.W. 418; Cummings v. Landes, 140 Iowa 80, 117 N.W. 22.
Ordinarily, a special appearance to challenge the jurisdiction of the court is interposed before the entry of judgment and to forestall the same. This is the first cause to be presented to this court wherein a special appearance was filed after judgment and to set the same aside. We doubt that such procedure is feasible or proper. Also, we have heretofore recognized that section 12787 of chapter 552 of the Code, 1935 (section 4091 of the Code, 1897) does not appear to apply to proceedings to vacate a judgment entered without jurisdiction. Cummings v. Landes,140 Iowa 80, 87, 117 N.W. 22. However, as above stated, the petition to vacate judgment herein asserts all necessary facts to secure such relief in equity.
No resistance was filed by Fritz. He did not challenge the forum which appellant selected. The petition was entertained. The ruling thereon recites that it came on for hearing. This recital is not challenged by appellant. It must be presumed *Page 489
that a hearing was had. Allen v. First Natl. Bank, 191 Iowa 492, 494, 180 N.W. 675, and cases cited. The record does not show what evidence was considered by the court at the hearing. However, the same judge conducted the hearing that heard the testimony when the judgment was entered. The most reasonable surmise would seem to be that the court considered the testimony of Fritz, which was given when the judgment was entered, with the affidavit of Martin, president of the company, and found the facts to be that the company's activities in Iowa and relationship with Stahlhut were such that service of process on Stahlhut conferred jurisdiction upon the company. The company did not appeal from such ruling. What our view might be had an appeal been taken is not material now. We are of the opinion and hold that the ruling on the petition to vacate became final when no appeal was taken, constitutes an adjudication upon all questions presented by the petition to vacate and bars the company from maintaining the present suit.
The general principles of the doctrine of res adjudicata are concisely stated in the case of Bowen v. Bowen, 219 Iowa 550, 552, 258 N.W. 882, 884, as follows:
"It is the well-established policy of the law to have an end to litigation, and, where parties have litigated a question to final determination in a court of competent jurisdiction, it is not open to either of them or their privies to thereafter institute another action for the purpose of having this same question determined. This is the basis of the doctrine of res adjudicata. Town of Kenwood Park v. Leonard, 177 Iowa 337, 158 N.W. 655; Smith v. Cretors, 181 Iowa 189, 164 N.W. 338. The principle applies, not only to the questions actually determined, but also, to all questions which should properly have been determined. Secor v. Siver, 165 Iowa 673, 146 N.W. 845; Hodge v. Shaw,85 Iowa 137, 52 N.W. 8, 39 Am. St. Rep. 290; Beh v. Bay, 127 Iowa [246] 247, 103 N.W. 119, 109 Am. St. Rep. 385."
To the same effect, see Wheatley v. Fairfield, 221 Iowa 66, 75, 264 N.W. 906; Smith v. Russell, 223 Iowa 123, 128, 272 N.W. 121; Bagley v. Bates, 223 Iowa 836, 841, 273 N.W. 924. *Page 490
In the case of Bagley v. Bates, supra, we held that, where a motion to strike an amendment to petition was sustained and no appeal was taken from such ruling, the contentions asserted in the amendment to petition could not be made the basis of a subsequent action between the same parties, stating, at page 844 of 223 Iowa, at page 928 of 273 N.W., as follows:
"The ultimate question to be determined in both actions is whether or not the deeds should be set aside, and this question might and could have been determined in the former action. It may be that the lower court sustained defendant's objection to the filing of the amendment to plaintiff's petition in the former action because it was filed too late, it being filed after the submission of that case. Thul v. Weiland, 213 Iowa 713, 239 N.W. 515. It may also be that such action of the lower court in the former case was prejudicial, but in either event these matters are not before us now for review, as the ruling of the lower court in striking out the amendment was never appealed from. The court's action was, therefore, a final adjudication and cannot be reviewed in the present action."
In the early case of White v. Watts, 18 Iowa 74, 78, we likewise held that the rulings on two motions to set aside a default constituted adjudications, which were binding in a subsequent action between the same parties, stating as follows:
"Then what effect shall be given to the orders of the court, overruling these motions? The object of the motion made in February, 1862, was to set aside plaintiff's default. The second was for a like purpose, * * *. So far as relates to the decree and plaintiff's default, we are of the opinion that he is concluded by the rulings of the court on said motions, and that he cannot be now heard to gainsay the correctness of such adjudications."
In the case of Scott v. Scott, 174 Iowa 740, 747, 156 N.W. 834, 837, the defendant in a divorce proceedings sought to set aside a decree against him on the ground that the court did not have jurisdiction. The record showed that the defendant filed a *Page 491
special appearance challenging the jurisdiction. The special appearance was overruled. Defendant did not plead to the merits nor did he appeal from the ruling on the special appearance. Decree was entered against him. This court held that he could not thereafter assert that the decree was void for want of jurisdiction because of the adjudication to the contrary, which was binding upon him, stating as follows:
"We are not to be understood as approving or disapproving this ruling. All now held is that the defendant, having procured an adjudication on the issue as to whether the court had jurisdiction to entertain the suit, is not in a situation to ignore the same and treat or have treated the decree as a nullity. Possibly on appeal it might have been reversed. But defendant did not avail himself of that remedy. Having invoked the power of the court to pass on the issue of whether it had jurisdiction to hear, depending on the facts as the court might find them, and decide, its decision thereon was quite as conclusive and no more subject to collateral attack than had the ruling been on the merits of the case. The court erred in treating the decree of divorce as void, * * *."
Applying the foregoing pronouncements to the record herein, we are of the opinion and hold that the ruling on the petition to vacate the judgment herein is an adjudication which is binding upon appellant. Appellant was then before the court. It was asking that the court determine whether or not the service upon Stahlhut conferred jurisdiction over appellant. The question was decided adversely to appellant. No appeal was taken from such decision. The decision became final. Appellant cannot again litigate the same questions that were or might have been determined upon its petition to vacate the judgment. The trial court so held. Its decision is correct.
[2] This brings us to the question of the effect of the Indiana judgment. Appellant asserts that it is an adjudication that the Iowa judgment is invalid and that, under section 1, Article IV of the Constitution of the United States, the Iowa *Page 492
courts must give full faith and credit to the Indiana judgment and to such adjudication. We have held repeatedly that constitutional questions cannot be raised for the first time in this court. Andrew v. Farmers Merchants State Bank, 215 Iowa 1150, 1157, 247 N.W. 797; Talarico v. City of Davenport, 215 Iowa 186, 190, 244 N.W. 750; State v. West, 197 Iowa 789, 790, 198 N.W. 103. We have also held that, to present a constitutional question, specific reference must be made to the clause of the constitution relied upon and the reasons must be asserted for the application of such clause. Peverill v. Board of Supervisors,201 Iowa 1050, 1056, 205 N.W. 543. The constitutional question here asserted was not so raised below. But if it were to be entertained here, the contentions are without merit.
[3] The full faith and credit clause requires the courts of one state to give to the judgment of a court of another the same effect that is accorded such judgment in the latter state. Bowen v. Bowen, 219 Iowa 550, 552, 258 N.W. 882; In re Guardianship of Baxter, 191 Iowa 407, 182 N.W. 217; Secor v. Siver, 165 Iowa 673, 146 N.W. 845. Under such clause, since the Iowa judgment has been adjudicated to be valid in Iowa, the Indiana court should have enforced such judgment. It refused to do so. We know of no decision which would support the proposition that, if a judgment has been adjudicated to be valid and enforcible by a court in Iowa, but enforcement of such judgment is thereafter refused by a court in Indiana, the Iowa court must then follow the example of the Indiana court and also refuse to enforce such judgment. We are unwilling to so construe the full faith and credit clause.
The estoppel asserted by appellees applies herein. That asserted by appellant does not. The decree is affirmed. — Affirmed.
HAMILTON, C.J., and MITCHELL, STIGER, HALE, OLIVER, and BLISS, JJ., concur. *Page 493 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/7247156/ | Landya McCafferty, United States District Judge *328Getinge AB, one of the three defendants in this multi-district litigation, moves pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss all claims against it for lack of personal jurisdiction. See doc. no. 80. Plaintiffs object to the motion to dismiss and also move for discovery on the issue of personal jurisdiction. See doc. no. 95. Getinge AB objects to discovery.
Background
Plaintiffs bring claims in individual cases for injuries they allege were caused by hernia repair products made from C-Qur mesh. They further allege that the C-Qur mesh products were developed, manufactured, marketed, and sold by the defendants, Getinge AB, Atrium Medical Corporation ("Atrium"), and Maquet Cardiovascular US Sales, LLC ("Maquet"). Atrium and Maquet are wholly-owned subsidiaries of Getinge AB. The cases have been consolidated in this court for pretrial proceedings as multi-district litigation.
Getinge AB moves to dismiss all claims against it for lack of personal jurisdiction. Plaintiffs object, arguing that they have satisfied their burden of showing that the court has personal jurisdiction over Getinge AB. Plaintiffs also move for leave to conduct discovery limited to Getinge AB's personal jurisdiction in the event that the court is not inclined to deny the motion to dismiss.
Discussion
In the Master Long Form Complaint, plaintiffs allege that Getinge AB is a Swedish corporation with its principal place of business in Sweden. They allege that Atrium is incorporated under the laws of Delaware with its principal place of business in New Hampshire, and Maquet is incorporated under the laws of Delaware with its principal place of business in New Jersey.
With regard to defendants' personal jurisdiction, plaintiffs allege:
24. Defendants have and continue to conduct substantial business in the State of New Hampshire and in this District, distribute Hernia Mesh Products in this District, receive substantial compensation and profits from sales of Hernia Mesh Products in this District, and made material omissions and misrepresentations and breaches of warranties in this District, so as to subject them to in personam jurisdiction in this District.
25. Defendants conducted business in the State of New Hampshire through sales representatives conducting business in the State of New Hampshire, and because Defendants were engaged in testing, developing, manufacturing, labeling, marketing, distributing, promoting and/or selling, either directly or indirectly, and/or through third parties or related entities, Hernia Mesh Products in New Hampshire.
26. Consistent with the Due Process Clause of the Fifth and Fourteenth Amendments, this Court has in personam jurisdiction over Defendants, because Defendants are present in the State of New Hampshire, such that requiring an appearance does not offend traditional notices of fair and substantial justice.
Doc. no. 53.
Plaintiffs do not allege that Getinge AB itself has any physical presence in New Hampshire or anywhere in the United States. They allege, however, that this court has personal jurisdiction over Getinge AB for the following reasons:
• Getinge AB was directly responsible for the design, development, manufacture and sale of the C-Qur devices.
*329See doc. no. 53 at ¶¶ 9, 10, 15, 16, 18.
• Getinge AB assumed Atrium's liabilities, and is therefore liable as Atrium's successor. See id. at ¶ 8.
• Getinge AB is liable for Atrium's and Maquet's actions because they are Getinge AB's agents and/or alter egos. See id. at ¶¶ 11-14.
Getinge AB moves to dismiss, contending that the court lacks personal jurisdiction over it because it is a Swedish corporation without jurisdictional contacts with any state in the United States. It further contends it did not assume Atrium's liabilities and that plaintiffs cannot show that the activities of Atrium and Maquet can be imputed to Getinge AB.
Plaintiffs object, arguing first that Getinge AB has waived a personal jurisdiction defense or should be judicially estopped from asserting the defense. Plaintiffs also argue that personal jurisdiction exists because, as they alleged in their complaint, Getinge AB is responsible for the C-Qur products sold after it acquired Atrium and because the activities of Atrium and Maquet can be attributed to Getinge AB under theories of assumption of liability, agency, and alter ego. Alternatively, plaintiffs move for leave to conduct discovery on the jurisdictional issues.
I. Waiver
A defendant waives the defense of a lack of personal jurisdiction by failing to raise it in a timely motion or failing to include it in a responsive pleading. Fed. R. Civ. P. 12(h)(1). A defendant may also waive the defense through conduct that is inconsistent with the defense. Vazquez-Robles v. CommoLoCo, Inc., 757 F.3d 1, 3 (1st Cir. 2014). Conduct that may constitute waiver of the personal jurisdiction defense, in addition to a failure to raise the defense in a timely manner, includes "participation in, or encouragement of, the district court proceedings." Precision Etchings & Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21, 25 (1st Cir. 1992) ; Gen. Contracting & Trading Co., LLC v. Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991) ; see also Lechoslaw v. Bank of Am., N.A., 618 F.3d 49, 55 (1st Cir. 2010).
Plaintiffs contend that Getinge AB has waived the defense of lack of personal jurisdiction by participating in the multi-district litigation and complying with various court orders without reserving the defense. Getinge AB argues that its involvement in routine case management matters did not waive its right to assert a lack of personal jurisdiction defense. Getinge AB also represents that it reserved the right in its response to plaintiffs' motion for transfer and consolidation and then asserted the defense in its answer and moved to dismiss in a timely manner.
A defendant does not waive a personal jurisdiction defense by participating in the initial proceedings for multi-district litigation as long as that defendant raises the defense in a timely motion to dismiss. In re: Mobile Telecomms. Techs., LLC, 243 F.Supp.3d 545, 551-52 (D.N.J. 2017). In this case, Getinge AB raised the lack of personal jurisdiction as an affirmative defense in its answer filed on June 6, 2017. See doc. no. 77 at 18. On the same day, Getinge AB filed its motion to dismiss for lack of personal jurisdiction. See doc. no. 80. Its participation in the preliminary multi-district litigation proceedings does not operate as a waiver of the defense. In short, plaintiffs have not shown that Getinge AB waived the defense of a lack of personal jurisdiction.
II. Judicial Estoppel
Plaintiffs also argue that Getinge AB is barred by judicial estoppel from raising the defense. In support, plaintiffs assert that Getinge AB's participation in a *330related product liability action in New Hampshire state court and in a product liability action in California state court, without asserting a lack of personal jurisdiction defense in either case, bars the defense here.1 Plaintiffs also rely on Getinge AB's suit in Delaware state court against the founder and primary shareholder of Atrium, Steve Herweck.2
The doctrine of judicial estoppel "typically applies when, among other things, 'a party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.' " Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 170, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010) (quoting New Hampshire, 532 U.S. at 750, 121 S.Ct. 1808 ). "The doctrine should be employed when a litigant is playing fast and loose with the courts, and when intentional self-contradiction is being used as a means of obtaining unfair advantage." John Hancock Life Ins. Co. v. Abbott Labs., 863 F.3d 23, 34 (1st Cir. 2017) (internal quotations marks and citation omitted). The party to be estopped must take positions that are mutually exclusive, must have persuaded a court to adopt or rely on the earlier position, and "must stand to derive an unfair advantage if the new position is accepted by the court." RFF Family P'ship, LP v. Ross, 814 F.3d 520, 528 (1st Cir. 2016) (internal quotation marks and citation omitted).
Judicial estoppel does not apply here. Although Getinge AB participated as a defendant in two cases without raising the defense, Getinge AB has not affirmatively taken a contrary position to the one it asserts here; that is, Getinge AB has not persuaded the courts in those two cases to find that personal jurisdiction existed there. Further, plaintiffs have not shown that Getinge AB is attempting to gain an unfair advantage by asserting the defense here.
In sum, plaintiffs have not shown that Getinge AB is barred from raising the defense of personal jurisdiction based on a theory of judicial estoppel.
III. Jurisdiction Analysis
"Personal jurisdiction implicates the power of a court over a defendant. In a federal court, both its source and its outer limits are defined exclusively by the Constitution." Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 143 (1st Cir. 1995). A "federal court exercising diversity jurisdiction is the functional equivalent of a state court sitting in the forum state."
*331Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 8 (1st Cir. 2009) (internal quotation marks and citation omitted). Thus, ordinarily, a federal court sitting in diversity must "find sufficient contacts between the defendant and the forum to satisfy both that state's long-arm statute and the Fourteenth Amendment's Due Process clause." Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995).
In multi-district litigation cases, however, the inquiry is often more complicated. In multi-district litigation based on diversity jurisdiction, ordinarily personal jurisdiction in the transferee court is based on the jurisdiction of the transferor court. See Oliver v. Ethicon, Inc., No. 2:12-cv-06950, 2017 WL 3193652, at *2 (S.D. W. Va. July 27, 2017) (citing cases); In re:Zofran (Ondansetron) Prods. Liab. Litig., MDL No. 1:15-md-2657-FDS, 2016 WL 2349105, at *3 (D. Mass. May 4, 2016). The transferee court then separately applies the state law pertaining to personal jurisdiction applicable in each of the transferor courts. In re U.S. Foodservice Inc. Pricing Litig., No. 3:07 MD 1894(CFD), 2009 WL 5064468, at *8 (D. Conn. Dec. 15, 2009). The transferee court, however, conducts "this analysis according to the law not of the transferor circuit," but rather according to the law of the circuit in which it sits. In re LIBOR-Based Fin. Instruments Antitrust Litig., No. 11 MDL 2262 NRB, 2015 WL 6243526, at *22 (S.D.N.Y. Oct. 20, 2015) ; Torres v. Johnson & Johnson, No. 2:14-cv-29741, 2015 WL 4888749, at *3 (S.D. W. Va. Aug. 17, 2015) ; In re Chinese Manufactured Drywall Prods. Liab. Litig., 894 F.Supp.2d 819, 836-37 (2012) (citing cases).
In this case, Getinge AB does not rely on or cite the law of a particular state to show a lack of personal jurisdiction. Instead, Getinge AB asserts that personal jurisdiction does not comport with the due process clause of the Fourteenth Amendment because it lacks contacts with any state or the United States generally. Plaintiffs review the standards provided under the transferor states' law but do not appear to rely on any specific provisions of state law. Thus, although any particular state's law may allow greater protection to non-residents than is mandated by the Due Process Clause of the Fourteenth Amendment, the court limits itself to a due process analysis in this order.
A. Personal Jurisdiction Framework
To satisfy due process, "the nonresident generally must have 'certain minimum contacts ... such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.' " Walden v. Fiore, 571 U.S. 277, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ) (additional internal quotation marks omitted). Personal jurisdiction may be general, which is based on continuous and systematic activity in the forum making the defendant "at home" there, or specific, which occurs when the claims arise out of or relate to the defendants' contacts with the forum. Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 754-60, 187 L.Ed.2d 624 (2014) ; Lechoslaw, 618 F.3d at 54. Plaintiffs assert that specific jurisdiction, rather than general jurisdiction, exists over Getinge AB.
In response to a personal jurisdiction challenge, the plaintiff bears the burden of showing that jurisdiction exists. Astro-Med, 591 F.3d at 8. There are "a trio of standards, each corresponding to a level of analysis, that might usefully be employed when a trial court comes to grips with a motion to dismiss for want of personal jurisdiction." Foster-Miller, 46 F.3d at 145.
*332The first approach requires a plaintiff to make a prima facie showing that personal jurisdiction exists. AngioDynamics, Inc. v. Biolitec AG, 780 F.3d 429, 434 (1st Cir. 2015). A prima facie showing requires the plaintiff to establish facts to support personal jurisdiction through evidence or properly supported proffers, which the court accepts as true without factfinding.3 Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016). The defendant's properly supported facts are also considered but only to the extent they are not contradicted by the plaintiff's showing. Id.
The prima facie method "is a useful means of screening out cases in which personal jurisdiction is obviously lacking, and those in which the jurisdictional challenge is patently bogus." Foster-Miller, 46 F.3d at 145. On the other hand, however, "in closer, harder-to-call cases, particularly those that feature conflicting versions of the facts," the prima facie method "offers little assistance." Id. In such cases, the court may turn to alternative standards that require the court to take evidence and engage in fact-finding through a hearing. Id.; accord Astro-Med, Inc., 591 F.3d at 8 ; see also Vysedskiy v. Onshift, Inc., No. 16-12161-MLW, 2017 WL 4391725, at *1 (D. Mass. Sept. 29, 2017).
On the other end of the spectrum, a court may "embark on a factfinding mission in the traditional way, taking evidence and measuring the plaintiff's jurisdictional showing against a preponderance-of-the-evidence standard." Foster-Miller, 46 F.3d at 145. A court may invoke this standard when it
determines that in the circumstances of a particular case it is unfair to force an out-of-state defendant to incur the expense and burden of a trial on the merits in the local forum without first requiring more of the plaintiff than a prima facie showing of facts essential to in personam jurisdiction. A court may so determine, for example, when the proffered evidence is conflicting and the record is rife with contradictions, or when a plaintiff's affidavits are "patently incredible."
Id. at 145-46 (quoting Boit, 967 F.2d at 676 ). The "preponderance standard necessitates a full-blown evidentiary hearing at which the court will adjudicate the jurisdictional issue definitively before the case reaches trial." Id. at 146. This "method must be used discreetly," however, as, among other things, "the court's factual determinations ordinarily will have preclusive effect." Id.
In between the two extremes is an "intermediate standard," under which
a district court, even though allowing an evidentiary hearing and weighing evidence to make findings ... may merely find whether the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction. This showing constitutes an assurance that the circumstances justify imposing on a foreign defendant the burdens of trial in a strange forum, but leaves to the time of trial a binding resolution of the factual disputes common to both the jurisdictional issue and the merits of the claim.
*333Id. (internal quotation marks and citations omitted). This method is often referred to as the "likelihood standard," and is useful when jurisdictional proof is intertwined with the merits of a claim. Id.; see Hilsinger Co. v. FBW Invs., 109 F.Supp.3d 409, 418 (D. Mass. 2015) (likelihood standard appropriate when finding of personal jurisdiction turned on the question of whether a defendant manufactured and sold certain products, resolution of which "may also overlap with the merits of the case"). "Prior to using the 'likelihood' standard, it is important 'to ensure that parties are given satisfactory notice, reasonable access to discovery, and a meaningful opportunity to present evidence.' " Hilsinger, 109 F.Supp.3d at 418 (quoting Foster-Miller, 46 F.3d at 148-49 ).
The court next analyzes the disputes concerning personal jurisdiction in this case to determine which standard is appropriate.
B. Specific Jurisdiction
Plaintiffs in this case assert that the court can exert specific personal jurisdiction over Getinge AB based on its own actions with respect to the products at issue in this litigation, based on its assumption of Atrium's liabilities, and based on the activities of Atrium and Maquet as its agents and/or alter egos. Specific jurisdiction requires proof of three elements:
(1) [that] the claim[s] directly arise[ ] out of, or relate[ ] to, the defendant's forum state activities; (2) [that] the defendant's in-state contacts represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendants involuntary presence before the state's courts foreseeable; and (3) [that] the exercise of jurisdiction is reasonable.
Baskin-Robbins, 825 F.3d at 35 (internal quotation marks omitted). Getinge AB contends that it has not engaged in any jurisdictional activities in any state and that the activities of Atrium and Maquet cannot be attributed to it.
1. Summary of Issues and Evidence
a. Getinge AB's Activities
Plaintiffs provide evidence that since 2011, when Getinge AB acquired Atrium, the Getinge name has been used to market and advertise the C-Qur products at issue in this litigation. Specifically, plaintiffs point to a Getinge advertisement in General Surgery News promoting the C-Qur family of products and directing customers to the Getinge website (www.Getingegroup.com). Plaintiffs also note that the website identifies C-Qur products as part of Getinge's hernia mesh products, and that it refers to the items as "our" products. Finally, plaintiffs submit a June 2016 letter from Getinge to customers regarding a competitor's hernia mesh product, which discusses "Maquet Medical Systems USA/Getinge Group (formerly Atrium Medical Corporation)" and refers to "our" C-Qur products. The letter lists an address for Getinge Group as 45 Barbour Pond Drive, Wayne, NJ 07470.
Getinge AB does not dispute that the products at issue in this litigation are marketed and sold under the Getinge name. It argues, however, that the name "Getinge" is used as a "master brand," tradename, and trademark for marketing, and that this use is separate from the corporate identity of Getinge AB, a defendant in this case. It also distinguishes the "Getinge Group," an entity with a New Jersey address, from Getinge AB, though it does not precisely explain the relationship between the entities.
*334b. Atrium and Maquet's Conduct
Plaintiffs also contend that the activities of Atrium and Maquet can be attributed to Getinge AB. Atrium and Maquet do not challenge the court's personal jurisdiction over them. Atrium has its principal place of business in Hudson, New Hampshire, and as such is "at home" in New Hampshire. Maquet has its principal place of business in New Jersey, making it "at home" there. In addition, Atrium and Maquet do not dispute that they are engaged in business in the United States and do not dispute that they have sufficient minimum contacts with all of the states implicated in this case to support personal jurisdiction. Therefore, their conduct could support the exercise of personal jurisdiction over Getinge AB if either or both are operating as agents or alter egos of Getinge AB. See, e.g., Medici v. Lifespan Corp., 239 F.Supp.3d 355, 371-72 (D. Mass. 2017) ("Courts have permitted the exercise of jurisdiction over a corporation that is the alter ego or successor of a corporation which is subject to the jurisdiction of the court."); see also Sawtelle, 70 F.3d at 1389 n.4 ("contacts of corporation's agent can subject the corporation to personal jurisdiction" (internal citation omitted)). In addition, if Getinge AB assumed Atrium's liabilities, then Atrium's conduct could subject Getinge AB to personal jurisdiction here. See, e.g., Perry Drug Stores v. CSK Auto Corp., 93 Fed.Appx. 677, 681 (6th Cir. 2003). (A "court may impute the jurisdiction of a corporate predecessor to its successor where the successor expressly assumed the liability of the predecessor corporation.").
Ordinarily, a parent corporation is legally independent from its subsidiaries for purposes of personal jurisdiction. United Elec., Radio and Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1091 (1st Cir. 1992). The presumption of corporate separateness may be refuted, however, by sufficient evidence that the parent controls the subsidiary. Id.; Medici, 239 F.Supp.3d at 371-72. When the issue arises of corporate separation between a parent and subsidiary, courts generally "make an actual inquiry into the nature of the interrelationship before abandoning the jurisdictional quest." Donatelli v. Nat'l Hockey League, 893 F.2d 459, 465 (1st Cir. 1990).
In support of their assertion that Getinge AB assumed Atrium's liabilities, plaintiffs point to Getinge AB's 2011 Year End Report to its shareholders that stated the purchase of Atrium included its liabilities and Getinge AB's subsequent purchase of Atrium's liability insurance that is applicable to the claims in this case. Getinge AB contends that plaintiffs' theory does not apply since it acquired Atrium in a "reverse triangular merger," and otherwise argues that plaintiffs' proffered evidence does not show that Getinge AB assumed Atrium's liabilities.
Plaintiffs also argue that, in the alternative, Atrium and Maquet are Getinge AB's agents or alter egos. Plaintiffs cite evidence that Getinge AB, Atrium, and Maquet represent that they are a single entity, including statements and press releases from Atrium's website and Getinge AB's annual report. Plaintiffs also refer to Getinge AB's June 2016 letter that accepts ownership of the C-Qur products and directs customers with questions to contact a Maquet/Getinge AB representative, rather than an Atrium representative. Finally, plaintiffs point to the Maquet website which directs customers to contact "Vascular Systems (formerly Atrium Medical)" and which provides a VSpurchaseorders@Getinge.com email address. Getinge AB contends that plaintiffs are misreading the cited evidence and that, at best, the evidence shows "an intent to unify under a common 'Getinge' brand and logo." Doc.
*335no. 113 at 13. It maintains that Atrium and Maquet are separate corporate entities from Getinge AB.4
2. Appropriate Standard
Plaintiffs have shown that complex relationships exist among Getinge AB and its subsidiaries. Plaintiffs point to evidence that Getinge AB assumed Atrium's liabilities and that Atrium is no longer operating as a separate entity. Getinge AB disputes the inferences plaintiffs urge from the evidence and other circumstances and denies that it assumed Atrium's liabilities or that Atrium and Maquet operate as its agents or alter egos.
The jurisdictional issues raised here at this pre-discovery phase present difficult questions that are dominated by disputed facts. For example, the Getinge AB website and other advertising raise a question about Getinge AB's activities in advertising and marketing C-Qur mesh products in the United States. In addition, even if Atrium and/or Maquet are liable for plaintiffs' claims in this litigation, Getinge AB's liability depends on whether it is directly responsible for manufacturing and marketing C-Qur mesh products in the United States or whether it is responsible through assumption of Atrium's liabilities, agency, or alter ego status. Therefore, these questions raise issues both as to Getinge AB's personal jurisdiction and its liability on the merits of the claims in this litigation.
In light of these factors, the prima facie standard is inappropriate. Foster-Miller, 46 F.3d at 145 (courts should not use the prima facie standard in "closer" cases "that feature conflicting versions of the facts"). In addition, in light of how closely related the issues of personal jurisdiction are to questions surrounding Getinge AB's liability, the court will not employ the preponderance standard. Hilsinger, 109 F.Supp.3d at 417 (courts should avoid the preponderance standard when it could raise "potential issues regarding issue preclusion and law of the case"). The likelihood standard is the middle ground between the extremes, the prima facie and preponderance standards. For the reasons explained above, the court finds that the likelihood standard is most appropriate here.
C. Jurisdictional Discovery
In addition to objecting to Getinge AB's motion to dismiss, plaintiffs have moved for leave to conduct jurisdictional discovery to develop additional proof to support the existence of personal jurisdiction over Getinge AB. A "diligent plaintiff who sues an out-of-state corporation and who makes out a colorable case for the existence of in personam jurisdiction may well be entitled to a modicum of jurisdictional discovery if the corporation interposes a jurisdictional defense." Negron-Torres v. Verizon Commc'ns, 478 F.3d 19, 27 (1st Cir. 2007) (internal quotation marks and citation omitted). In addition, as mentioned, a court employing the likelihood standard must ensure that the parties have a meaningful opportunity to present evidence and reasonable access to discovery.
Here, plaintiffs have made out a colorable case for the existence of jurisdiction and sought jurisdictional discovery immediately *336in response to a jurisdictional challenge. See, e.g., Orion Seafood Int'l, Inc. v. Supreme Grp. B.V., No. 11-cv-562-SM, 2012 WL 3776919, at *3 (D.N.H. Aug. 29, 2012) (finding that plaintiffs were entitled to jurisdictional discovery to determine whether one defendant exercised control over another). Therefore, because there are legitimate questions as to Getinge AB's role in the actions underlying this lawsuit and the relationship between the three defendants, and in light of the court employing the likelihood standard, the court finds that plaintiffs are entitled to jurisdictional discovery.
Plaintiffs propose jurisdictional discovery in the form of 106 requests for production of documents, video depositions of a Rule 30(b)(6) designee of Getinge AB, a video deposition of a Rule 30(b)(6) designee of Maquet, a video deposition of Reinhard Mayer, the Chief Financial Officer of Getinge AB, and a video deposition of Steve Herweck. In response, Getinge AB contends that any discovery must be "limited to exploring whether Atrium and [Maquet] are mere instrumentalities of Getinge AB." Plaintiffs and Getinge AB cite cases from a variety of jurisdictions to support or oppose theories of a parent's separation from or lack of separation from its subsidiaries. Both plaintiffs and Getinge AB, however, focus largely on the factors set forth in Bennett v. GAF Corp., No. CIV 93-432-M, 1994 WL 279752 (D.N.H. June 2, 1994), for determining whether a parent's control over a subsidiary warrants piercing the corporate veil. See id. at *2.
Getinge AB characterizes plaintiffs' proposed discovery as overbroad and harassing. In particular, Getinge AB objects to plaintiffs' requests for production that reference "any and all" of Getinge AB's subsidiaries and affiliates when only Atrium and Maquet are at issue here. Getinge AB also objects to the requests for copies of all employee health insurance plans for Getinge AB, Atrium, and Maquet on the ground that those plans do not relate to the Bennett factors. In addition, Getinge AB asserts that the requests must be limited to the date of the complaint. Getinge AB also asserts that plaintiffs' discovery requests implicate European Union and Swedish privacy laws and requests "further briefing on the regulations, restrictions, and consequences imposed by" those laws. Doc. no. 109 at 16.
Plaintiffs assert that the issues of assumption of liabilities, agency, and alter ego are fact-intensive, requiring reasonably broad discovery. With respect to time, plaintiffs contend that because the cases are continuing to be filed in this litigation, their inquiry cannot be limited to the date of the master complaint. Plaintiffs explain that they directed discovery broadly to all of Getinge AB's affiliates and subsidiaries because they anticipate that Getinge AB will dispute which entity acquired Atrium. They also contend that health insurance plan information pertains to whether Getinge AB is intermingling accounts and records with Atrium and Maquet and other alter ego factors. They dismiss the privacy laws raised by Getinge AB as a red herring.
Plaintiffs' proposed discovery is broader than necessary to address the jurisdictional issues that have arisen here. For example, plaintiffs have not shown that discovery of documents, communications, and other matters related to any and all subsidiaries and affiliates of Getinge AB is within the scope of the jurisdictional issues raised here. Nor have plaintiffs shown that production of all health insurance plans is necessary to determine which entity paid for health insurance. For that reason, plaintiffs shall not serve the proposed discovery attached to their motion for leave to conduct discovery.
*337Plaintiffs are granted leave to conduct limited discovery that is focused on the issues necessary to decide whether the court may exercise personal jurisdiction over Getinge AB. Plaintiffs shall revise and narrow their discovery for that purpose.
Any objection to plaintiffs' revised discovery shall be addressed and resolved by counsel. If counsel are unable to resolve discovery disputes, despite their best efforts to do so, specific objections may be raised in a timely manner in an appropriate motion.5 As always, sanctions for failure to make disclosures or to cooperate in discovery under Federal Rule of Civil Procedure 37 are applicable here, and fees may be awarded to the prevailing party who files or opposes a motion to compel under Rule 37(a)(5).
D. Procedure
As discussed, the issue of personal jurisdiction over Getinge AB will be addressed, if necessary, based on the likelihood standard. Under the likelihood standard, the court holds an evidentiary hearing and weighs the evidence to make findings as to "whether the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction." Boit, 967 F.2d at 677. The court's findings made under this standard do not have preclusive effect. Foster-Miller, 46 F.3d at 145-46.
Getinge AB is granted leave to file a second motion to dismiss for lack of personal jurisdiction based on the likelihood standard, if discovery supports such a motion.6 Plaintiffs shall respond to a motion to dismiss within the time allowed under the Federal Rules of Civil Procedure and the Local Rules of this district. When motion practice on the issue is complete, the court will schedule a hearing.7
Conclusion
For the foregoing reasons, Getinge AB's motion to dismiss for lack of personal jurisdiction (document no. 80) is denied without prejudice. Getinge AB's motion to strike plaintiffs' supplemental objection (doc. no. 299) is denied as moot.
Plaintiffs' motion for discovery on personal jurisdiction (document no. 95) is granted to conduct discovery that is revised and limited to focus on the issues necessary to decide whether the court may exercise personal jurisdiction over Getinge AB under the likelihood standard.
The deadline for completion of jurisdictional discovery is February 14, 2018. Interrogatories and requests for production or admissions must be served with adequate time for responses before that date.
*338Getinge AB is granted leave to file a second motion to dismiss for lack of personal jurisdiction on or before March 2, 2018. Failure to file a motion to dismiss for lack of personal jurisdiction by that deadline, absent good cause, shall result in waiver of the defense.
SO ORDERED.
Plaintiffs' argument as to Getinge AB's failure to challenge personal jurisdiction in other cases appear to focus only on judicial estoppel. To the extent plaintiffs intended to argue that Getinge AB's failure to challenge personal jurisdiction in other cases operates as a waiver of the defense, that argument is without merit. As Getinge AB points out, consent to jurisdiction in one case does not constitute waiver of a jurisdictional defense in another case. Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 937 F.2d 44, 50 n.5 (2d Cir. 1991) ; accord Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., No. 16-665, 2017 WL 3129147, at *10 n.10 (E.D. Pa. July 24, 2017) ; Brainware, Inc. v. Scan-Optics, Ltd., No. 3:11cv755-REP-DJN, 2012 WL 1999549, at *4 n.3 (E.D. Va. May 9, 2012).
Plaintiffs provide no analysis of the elements of judicial estoppel in their objection and cite no case in which a defendant's actions in other cases barred the defense of personal jurisdiction based on judicial estoppel. In their surreply, however, plaintiffs provide a slightly more developed theory of judicial estoppel, relying on New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001).
Plaintiffs appear to argue that they can rely on unsupported allegations alone to make a prima facie case. They are mistaken. See A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016) ; Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992) ("The prima facie showing of personal jurisdiction must be based on evidence of specific facts set forth in the record. The plaintiff must go beyond the pleadings and make affirmative proof." (internal quotation marks and citations omitted)).
Plaintiffs also refer to a decision in a related case in New Hampshire state court, Hayward v. Atrium Med. Corp., 212-2015-CV-00087 (N.H. Super. Ct. July 11, 2012), where the court granted the plaintiffs' request to amend their complaint to add claims to hold Getinge AB liable on a theory of "piercing the corporate veil and assumption of liabilities." Plaintiffs offer no support for the theory that the superior court's order allowing them to amend their complaint to allege a claim for piercing the corporate veil can be used as evidence that personal jurisdiction exists in this case.
This includes any challenge to plaintiffs' revised discovery requests based on Getinge AB's privacy and international law concerns.
As mentioned, for purposes of the discovery issues, plaintiffs and Getinge AB focus on the factors laid out in Bennett. That case, however, sets forth factors relevant to determining whether to pierce the corporate veil under New Hampshire law. The court notes that to the extent Getinge AB files a second motion to dismiss for lack of personal jurisdiction, the parties will be required to present a choice of law analysis to show what law will govern with regard to evaluating the relationship between Getinge AB, Atrium, and Maquet.
On November 9, 2017, plaintiffs filed a supplemental objection to Getinge AB's motion to dismiss for lack of personal jurisdiction. See doc. no. 283. On November 13, 2017, Getinge AB moved to strike the supplemental objection as "untimely and procedurally barred." Doc. no. 299 at ¶ 6. The court reviewed plaintiffs' supplemental objection and the additional facts and arguments set forth in that filing do not change the court's analysis as set forth in this order. Therefore, Getinge AB's motion to strike (doc. no. 299) is denied as moot. | 01-03-2023 | 07-25-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/3211097/ | This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0853
State of Minnesota,
Respondent,
vs.
Joshua Scott Leithe,
Appellant.
Filed May 2, 2016
Affirmed
Ross, Judge
Hennepin County District Court
File No. 27-CR-13-14102
Lori Swanson, Attorney General, St. Paul, Minnesota; and
Michael O. Freeman, Hennepin County Attorney, J. Michael Richardson, Assistant County
Attorney, Minneapolis, Minnesota (for respondent)
Cathryn Middlebrook, Chief Appellate Public Defender, Frank R. Gallo, Assistant Public
Defender, St. Paul, Minnesota (for appellant)
Considered and decided by Reyes, Presiding Judge; Ross, Judge; and Klaphake,
Judge.
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
ROSS, Judge
Appellant Joshua Leithe pleaded guilty to and was convicted of third-degree assault
for his involvement in a fight at a Minneapolis bar that left Z.M. injured. Leithe petitioned
to withdraw his guilty plea before his sentencing. The district court denied Leithe’s
petition, and we affirm that decision as falling within the district court’s discretion.
FACTS
Joshua Leithe was involved in a fracas outside a Minneapolis bar in April 2013,
resulting in the state charging him with two offenses: second-degree assault and second-
degree assault for the benefit of a gang. Represented by counsel, Leithe entered into a plea
agreement and pleaded guilty in October 2014.
Leithe admitted to the following facts when he submitted his guilty plea. According
to Leithe, Leithe was sitting in his car outside a bar when Z.M. approached and tapped on
the window with what Leithe believed was a pocket knife. The two men argued. Z.M.’s
friend pulled Z.M. away from Leithe while Z.M. yelled profanities and swung his knife at
Leithe. At some point, Leithe’s friend left the bar and, seeing the turmoil, charged after
Z.M. Leithe says he warned his friend and then struck Z.M., intending only to disarm him
and to protect his friend. Then Leithe fled.
Leithe informed the district court that he was pleading guilty to third-degree assault
to avoid the risk of being found guilty and receiving a lengthier prison sentence for second-
degree assault. He said that he understood what he was doing and that he was not under the
2
influence of any substance that might affect his plea decision. The district court accepted
Leithe’s guilty plea.
Two weeks later, however, Leithe was represented by a different attorney and
moved to withdraw his plea. The district court denied Leithe’s motion and sentenced him
to 26 months in prison. This appeal follows.
DECISION
Leithe argues on appeal that he received constitutionally deficient assistance of
counsel before he entered his guilty plea. He also maintains that the district court abused
its discretion by denying his motion to withdraw his guilty plea. Neither argument
convinces us to reverse.
I
We first address Leithe’s argument that he received constitutionally deficient legal
counsel before he entered his guilty plea. The Sixth Amendment affords criminal
defendants the right to the effective assistance of counsel. Strickland v. Washington, 466
U.S. 668, 685–86, 104 S. Ct. 2052, 2063 (1984). We will reject a claim of ineffective
assistance unless the claimant establishes, among other things, that his attorney’s
performance was objectively unreasonable. Id. at 687–88, 104 S. Ct. at 2064. We follow
“a strong presumption” that the attorney’s conduct was within “the wide range of
reasonable professional assistance.” Id. at 689, 104 S. Ct. at 2065. Leithe does not make
the threshold showing of objective unreasonableness.
Leithe first argues that his attorney improperly advised him of the duty to retreat in
relation to the law of defense of another. Defense of another parallels self-defense. See
3
State v. Granroth, 294 Minn. 491, 492 n.2, 200 N.W.2d 397, 399 n.2 (1972). One element
of self-defense is the lack of the reasonable possibility to retreat to avoid the danger. State
v. Basting, 572 N.W.2d 281, 285 (Minn. 1997). Leithe fails to identify any instruction his
attorney should have provided him either as to his or as to his friend’s duty to retreat before
Leithe attacked. The district court therefore correctly concluded that Leithe failed to
establish that his attorney’s advice was objectively unreasonable.
Leithe charges that his attorney failed to investigate his case before the plea. But the
charge is belied by the fact that Leithe goes on to challenge the manner in which the
attorney conducted the investigation. To the extent that Leithe challenges the quality of the
investigation, the challenge leads us into the broad range of the discretion afforded to trial
counsel. Opsahl v. State, 677 N.W.2d 414, 421 (Minn. 2004) (noting that the “extent of
counsel’s investigation is considered a part of trial strategy,” which this court generally
does not review). Leithe’s related contention that his attorney should have interviewed a
potential witness in the presence of the investigator falls into this same category. The Sixth
Amendment is not concerned with an attorney’s conduct that might, with the benefit of
hindsight, appear less than perfect. It is troubled instead only by objectively unreasonable
and therefore constitutionally deficient representation. The investigation here survives that
test.
Leithe maintains that his attorney had no trial strategy whatsoever. But avoiding
trial can be (and often is) a reasonable strategy. See Brown v. State, 292 Minn. 174, 177–
78, 193 N.W.2d 613, 615–16 (1972) (discussing plea bargain as best possible trial
strategy). Leithe raises other concerns, none of which convinces us of any constitutional
4
infirmity. We have carefully examined all his allegations and the controlling caselaw, and
we are satisfied that Leithe has not presented a persuasive case for ineffective assistance of
counsel under Strickland.
II
We turn to Leithe’s argument that the district court abused its discretion by denying
his motion to withdraw his guilty plea. A defendant has no absolute right to withdraw a
guilty plea, and whether to allow withdrawal falls within the district court’s discretion.
State v. Raleigh, 778 N.W.2d 90, 93, 97 (Minn. 2010). The district court may allow a
defendant to withdraw a plea before sentencing if doing so is fair and just, weighing the
defendant’s reasons and any competing prejudice to the state’s case. Minn. R. Crim. P.
15.05, subd. 2.
Leithe contends that the district court should have permitted him to withdraw his
plea for two reasons (in addition to his attorney’s alleged ineffective assistance, which we
have already addressed). He first argues that the district court erred by failing to inquire as
to whether he was satisfied with his attorney’s representation and whether he was coerced
into taking the plea. He next argues that the district court erred when it evaluated the
voluntariness of his plea in light of the emotional pressure he faced.
We reject Leithe’s contention that the district court erred by failing to inquire into
Leithe’s satisfaction with his attorney or whether he felt coerced into pleading guilty. It is
true that the district court judge must “ensure” that the defendant is satisfied with his
counsel and that he was not threatened or otherwise improperly persuaded to plead guilty.
Minn. R. Crim. P. 15.01, subd. 1(4). But Leithe provided the necessary assurance by
5
signing the plea petition, in which he avowed that he was “satisfied that [his] attorney ha[d]
represented [his] interests and ha[d] fully advised [him].” See Williams v. State, 760
N.W.2d 8, 14–15 (Minn. App. 2009) (concluding that the district court did not err by
“summarily rejecting” the defendant’s claim that her plea was involuntary in the face of
her acknowledgements in her plea petition), review denied (Minn. Apr. 21, 2009).
We also reject Leithe’s contention that the district court was bound to allow him to
withdraw his plea because he was emotional when he pleaded guilty, affecting the
voluntariness of his plea. The requirement that a plea be voluntary “ensures a defendant is
not pleading guilty due to improper pressure or coercion.” Raleigh, 778 N.W.2d at 96.
Emotion, even open displays of emotion, might reasonably accompany a defendant’s
admission of guilt. Whatever one might infer from Leithe’s emotion at the plea hearing,
Leithe confirmed by signing the plea worksheet that he was pleading guilty “freely and
voluntarily.” Our review of the plea-hearing transcript corroborates this by his repeatedly
stating that he wanted to plead guilty to avoid the risk associated with trial. This reasoning
demonstrates voluntariness, not involuntariness. See State v. Ecker, 524 N.W.2d 712, 719
(Minn. 1994). It is true, as Leithe maintains, that the district court addressed Leithe’s
allegations individually. But this does not mean that the court failed to adequately consider
the plea circumstances in their totality.
We are satisfied that the district court did not abuse its discretion when it denied
Leithe’s plea-withdrawal request, having reasonably determined that Leithe did not
provide fair and just reasons to withdraw his plea.
Affirmed.
6 | 01-03-2023 | 06-09-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3211067/ | This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1314
Thomas Ardell Gentry, petitioner,
Appellant,
vs.
State of Minnesota,
Respondent.
Filed May 9, 2016
Affirmed
Schellhas, Judge
St. Louis County District Court
File No. 69DU-CR-13-545
Thomas Ardell Gentry, Red Wing, Minnesota (pro se appellant)
Lori Swanson, Attorney General, St. Paul, Minnesota; and
Mark S. Rubin, St. Louis County Attorney, Gary W. Bjorklund, Assistant County Attorney,
Duluth, Minnesota (for respondent)
Considered and decided by Johnson, Presiding Judge; Worke, Judge; and Schellhas,
Judge.
UNPUBLISHED OPINION
SCHELLHAS, Judge
Appellant challenges the denial of his postconviction petition in which he asserted
claims of prosecutorial misconduct and ineffective assistance of trial counsel. We affirm.
FACTS
Appellant Thomas Ardell Gentry was present in J.H.’s apartment when law
enforcement executed a warrant to search the apartment and discovered numerous
packages of cocaine. Respondent State of Minnesota charged Gentry with second-degree
controlled-substance crime (sale), and a jury found Gentry guilty. Gentry challenged his
conviction on direct appeal on the grounds of insufficient evidence and prosecutorial
misconduct. He argued in part that the prosecutor committed plain error that affected his
substantial rights by stating during closing argument: “[J.H.] is not the type of person who
is going to be selling thousands and thousands of dollars of crack cocaine from his
apartment. It’s consistent with someone who is allowing other people to do it to support
his [drug] habit.” We determined that this statement was an improper comment on
character and was error. See State v. Gentry, No. A14-0262, 2015 WL 1013561, at *5–6
(Minn. App. Mar. 9, 2015), review denied (Minn. May 19, 2015). But we concluded that
the prosecutor’s statement was not plain error because the statement was brief and defense
counsel and the prosecutor later informed the jury that character was not in question. Id. at
*6. We also concluded that the error did not affect Gentry’s substantial rights because the
evidence against him was sufficient, the prosecutor’s statement was brief in the context of
the entire trial, and defense counsel reminded the jury during closing argument that
Gentry’s character was not on trial. Id. We addressed Gentry’s remaining appellate
arguments and affirmed his conviction. Id. at *2–4, 7.
Gentry then filed a petition for postconviction relief, again challenging the
prosecutor’s statement about character and arguing that trial counsel provided ineffective
2
assistance by failing to object to the statement. The district court determined that Gentry’s
postconviction claims were procedurally barred and denied his petition without a hearing.
This appeal follows.
DECISION
A summary denial of a petition for postconviction relief is reviewed for an abuse of
discretion. Carridine v. State, 867 N.W.2d 488, 492 (Minn. 2015). “A postconviction court
abuses its discretion when its decision is based on an erroneous application of the law or is
against logic and the facts in the record.” Nunn v. State, 868 N.W.2d 230, 232 (Minn.
2015).
“A petition for postconviction relief after a direct appeal has been completed may
not be based on grounds that could have been raised on direct appeal of the conviction or
sentence.” Minn. Stat. § 590.01, subd. 1 (2014); see also Colbert v. State, 870 N.W.2d 616,
626 (Minn. 2015) (stating that under Knaffla rule, “once a direct appeal has been taken, all
claims raised in the direct appeal and all claims that were known or should have been
known but were not raised in the direct appeal are procedurally barred” (emphasis
omitted)). Gentry argues again in this appeal that the prosecutor’s statement about character
was plain error that affected his substantial rights. This argument was raised, addressed,
and rejected on direct appeal, Gentry, 2015 WL 1013561, at *5–7, and is procedurally
barred.
Gentry also contends that defense counsel provided ineffective assistance by failing
to object to the prosecutor’s statement about character. “If a claim of ineffective assistance
of trial counsel can be determined on the basis of the trial record, the claim must be brought
3
on direct appeal or it is Knaffla-barred.” Nissalke v. State, 861 N.W.2d 88, 93 (Minn. 2015).
“If, however, such a claim requires examination of evidence outside the trial record or
additional fact-finding by the postconviction court, such a claim is not Knaffla-barred
because the claim is not based solely on the briefs and trial court transcript.” Id. Gentry’s
ineffective-assistance-of-counsel claim involves only facts within the trial record, and the
claim is therefore procedurally barred. Even if the claim were not barred, “[g]enerally, [an
appellate court] will not review an ineffective-assistance-of-counsel claim that is based on
trial strategy,” State v. Vang, 847 N.W.2d 248, 267 (Minn. 2014), and “[d]ecisions about
objections at trial are matters of trial strategy,” Leake v. State, 737 N.W.2d 531, 542 (Minn.
2007). We noted on direct appeal that defense counsel chose to address the statement about
character at the start of his closing argument rather than to object immediately. See Gentry,
2015 WL 1013561, at *5 (“Instead of objecting, Gentry’s defense counsel opened his
closing argument by stating . . . .”).
We conclude that the district court did not abuse its discretion by summarily denying
Gentry’s postconviction petition.
Affirmed.
4 | 01-03-2023 | 06-09-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432101/ | The plaintiff is an Iowa corporation, engaged in the business of generating, transmitting, distributing, and selling electricity for light, heat, and power purposes. It filed a petition with the board of railroad commissioners for a franchise to construct a 6,600-volt transmission line on a highway in Greene County. The petition, as required by law, was accompanied by certain specifications as to material, manner, and method of construction, which provided, among other things, for a 6-foot and 7-inch cross arm on the poles, for the purpose of carrying wires conducting electrical energy. There is no question as to the regularity of this proceeding, which resulted in the granting of the prayer of the petition of the defendant and the issuing of a franchise accordingly, which, so far as material, reads as follows:
"This franchise is issued and permission and authority thereunder are hereby granted unto the above-named Iowa Railway Light Corporation to erect, maintain and operate a 6,600-volt line for the transmission, distribution, use and sale of electric current outside cities and towns, and for such purpose to erect, use and maintain poles, wires, guy wires, towers, cables, conduits and other fixtures and appliances necessary for conducting electric current for light, heat and power over, along and across any * * * highways, along a road particularly described as follows:" (Here follow a description of the highway along which this line was to be built, and also a designation on *Page 546
which side of the highway the line was to be constructed, the length of the line being approximately 5 1/2 miles.)
The franchise further provides that it is subject to the provisions, conditions, and requirements of Chapter 383, Code, 1924, and to all of the provisions, rules, and regulations of the board of railroad commissioners as now exist or may be hereafter ordered or required, and the board of railroad commissioners is to retain jurisdiction and may at any time make such further orders and regulations as may be necessary, and as said board may authorize by law.
The county engineer designated the location of the poles of this line at a point one foot from the line which marks the boundary between the highway and the adjoining property. The plaintiff was constructing, or starting to construct, its line by placing poles at a point four feet from the line between the highway and the adjoining property.
Some elementary principles in relation to this matter are well settled. Primarily, the right to establish, regulate, and control highways rests in the state. It is equally true that the state has the right to delegate such powers to boards, commissions, public or municipal corporations. Originally, these rights were all delegated to the boards of supervisors of the respective counties of the state, but later, the power of the boards of supervisors respecting the construction and maintenance of primary roads was vested in the state highway commission. Chapter 101, Section 8, Acts of the Forty-second General Assembly.
No one would dispute the proposition that the primary purpose of establishing and maintaining highways is for the benefit of the general traveling public; but whether the highways are those established by direct act of the legislature, as they were in the early history of the state, or by bodies or commissions or corporations authorized so to do by the state, it (the state) yet has a reserve right over the whole subject, by which it may enlarge, reduce, or take away any powers thus conferred. The legislature of this state has seen fit, in the exercise of this right, to grant to telegraph and telephone companies the right to construct their lines upon the highways within the state, and this power has been enlarged to include electric transmission lines. With the wisdom of this legislation (allowing highly charged *Page 547
electric lines to be constructed upon the highway) we have no concern, as that rests within the sound discretion of the legislature. The legislature later created a board of railroad commissioners, and conferred upon it the power of determining whether or not high-tension transmission lines should be placed upon any of the highways of the state. The board is given a discretion to determine this question, and their determination is final, unless appealed from. See Section 7874, Code, 1924, where the board of railroad commissioners is given "general supervision of * * * all lines for the transmission, sale, and distribution of electrical current for light, heat, or power, except in cities and towns."
Under Section 8309, Code, 1924, all such companies are prohibited from erecting, maintaining, or operating any of these lines without first procuring a franchise.
As provided by Chapter 383, Code, 1924, they acquire this franchise by the filing of a petition, in conformity with Sections 8310 and 8311. Upon the filing of this petition, the railroad commissioners are required to fix a date, and to publish notice to the citizens of each county through which the proposed line or lines will extend.
Section 8313 provides that "any person, company, city, town, or corporation whose rights or interests may be affected, shall have the right to file written objections to the proposed improvement or to the granting of such franchise," and that, after being fully advised in the matter, the board of railroad commissioners "may grant such franchise in whole or in part upon such terms, conditions, and restrictions, and with such modifications as to location and route as may seem to it just and proper."
It is obvious, therefore, from this enactment that the board of railroad commissioners has the power to grant the franchise, specifying the terms, conditions, and restrictions thereof, and designating the location and route of these lines, as they may deem just and proper. Any person is given the right to appear before the board on such hearing, and file written objections to the proposed improvement or the granting of such franchise. No objections appear to have been made in the instant case, and we turn to the requirements of the statute as to what was legally included in the franchise.
Section 8310 says, among other things, that they may petition *Page 548
for "a franchise, to erect, maintain, and operate a line or lines for the transmission, distribution, use and sale of electric current outside cities and towns and for such purpose to erect, use and maintain poles, wires, guy wires, towers, cables, conduits, and other fixtures and appliances necessary for conducting electric current for light, heat, or power over, along, and across any public * * * highways." It is quite apparent, therefore, from this section that the franchise covers more than simply the line of poles, because it so specifies in terms. It follows necessarily, therefore, that the board of railroad commissioners had the power to grant this franchise for the erection of this transmission line, and upon the terms, conditions, restrictions, and limitations therein set out. It also had power to designate the route and location of this line which it did.
It is provided in Section 8313 that the board of railroad commissioners may examine the proposed route, or cause an engineer selected by it to do so, and it may grant such franchise, in whole or in part, upon such terms, conditions, and restrictions, and with such modifications as to the location and route as may seem to it just and proper; and such franchise, according to Section 8314, shall be subject to such rules, not inconsistent with the statute, as the board of railroad commissioners may establish from time to time.
By Section 8318 the board is required to keep a record showing all franchises granted, and to whom issued, with a general statement of the location, route, and termini of the line or lines covered thereby.
It is to be noticed that this chapter of the Code (383) is headed "Electric Transmission Lines," and from a study of all of the sections it is apparent that they all purport to deal with electric transmission lines.
Chapter 174, Acts of the Thirty-fifth General Assembly (Sections 2120-n to 2120-t, inclusive, Code Supplement, 1913), was approved April 11, 1913, and published April 16, 1913. Many of the electric lines in the state were built and operated before 1909, when the board of supervisors was given power to locate these lines.
A state highway commission was created by Chapter 122, Acts of the Thirty-fifth General Assembly, and Section 18 thereof (Section 1527-s17, Code Supplement, 1913), provides, among *Page 549
other things, that the "county and township boards, charged with the duty of improving public highways, shall have power to remove all obstructions in the highways under their jurisdiction, but fences and poles used for telephone, telegraph or other transmission purposes, shall not be removed until notice * * * to the owner," etc. It further provides that "any new lines, or parts of lines hereinafter constructed, shall be located by the engineer." This act was approved April 3, 1913, and published April 9, 1913.
As between these two acts, it is apparent that both were passed by the same general assembly, but the act conferring the powers upon the railroad commissioners was the later expression.
By Chapter 410, Acts of the Thirty-seventh General Assembly, the former act, Section 1527-s17, Code Supplement, 1913, with reference to location by the engineer, was amended, by adding thereto a provision that written application should be filed with the county auditor, describing the highways upon which such lines, or parts of lines, were to be constructed, etc.
It might be noted, in passing, that this section of the statute (now appearing as Section 4838, Code, 1924), is related to Sections 4834, 4835, 4836, and 4837, all of which deal with and refer to transmission lines.
The real contention in this case is whether or not the county engineer had the right to disregard all the rights acquired by this electric company under its franchise from the board of railroad commissioners, and to locate the poles of this transmission line so that a part of the construction will overhang adjoining land; or can the two statutes be so construed as to reach a harmonious result? If not so, which shall govern?
Much testimony was introduced on both sides relative to the wisdom and expediency of the location of this electric line at the point designated by the county engineer; but, as we view the question, this is wholly immaterial. Many of the matters now made the basis of justification for putting this line within one foot from the fence are matters which, if material, should have been raised by objection when the matter was on for hearing before the board of railroad commissioners, and are not available to defendants in this proceeding.
One of the inducements which led the legislature to grant *Page 550
the right to construct these public utilities on the highways was undoubtedly the fact that it saved them the expense of condemning and paying for a right of way for their lines, and by so doing, made the purchase price of electric current less to the public than it would be, were the companies compelled to expend vast sums in acquiring a right of way for their improvements.
A careful reading of all of the statutes touching upon this proposition shows that the subject dealt with is electric transmission lines. It goes without saying that the term "transmission lines" consists of more than poles, and the very wording of the statute above quoted shows that the legislature contemplated, in the use of this term, not only the poles, but the wires, guy wires, towers, cables, conduits, and other fixtures and appliances necessary for conducting electric current. As a part thereof, these poles carry cross arms over 6 feet in length, which, of course, would extend over 3 feet on either side of the center of the pole which supports them. The specifications filed with the railroad commissioners show this manner of construction, and the same were approved by them, and authorization for such construction was included in the franchise. The legislature empowered the railroad commissioners to authorize the construction of these electric transmission lines on the highway, and we can reach no other conclusion than that, when the railroad commissioners granted the franchise, the plaintiff thereby derived authority from the legislature to place all of its lines within the boundary of the highway. It would be no authority whatever for them to so construct their line that part of the same overhung the adjoining property. We think this is perfectly clear under the statute with reference to the power of the railroad commissioners, and they were acting wholly within their jurisdiction when they so authorized the construction of this electric transmission line on this highway. We are re-enforced in this conclusion by the exact wording of the statute (Section 8309, Code, 1924), which uses the words "over or across any public highway or grounds outside of cities and towns."
Section 8310 provides for the asking of a franchise for constructing these lines "over, along, and across" any public highway. Section 8311 requires "a general description of the public * * * highways * * * over, across, or along which any proposed line will pass." Section 8312 provides for a notice which *Page 551
shall give "a general description of the lands and highways to be traversed by the proposed line or lines." Section 8313 provides for the duty of the board and for the issuance of a franchise granting in whole or in part "upon such terms, conditions, and restrictions, and with such modifications as to location and route as may seem to it just and proper." Section 8316 prohibits this franchise from giving exclusive right to any person, etc., "to conduct electrical energy, or to place electric wires, along or over or across any public highway or public place or ground." Under Section 8318, the railroad commissioners are required to keep a record, and, among other things, a general statement of the location, route, and termini of the transmission line or lines covered by the franchise.
It is obvious from the statutes, therefore, that the legislature has dealt with this question of electric transmission lines as an entity, treating the poles, cross arms, wires, guy wires, etc., as constituting the "line;" and secondly, it intended, and in fact says, that the board of railroad commissioners may authorize the construction of a line upon a highway. To our minds this means but one thing: that is, the whole of the line, together with the necessary structure and attachments, is to be placed within the confines of the highway.
It is urged that a certain method of construction, which the defendant claims is impracticable, could be made, by which the whole of the line would be within the confines of the highway. This question is wholly beside the issue, because the railroad commissioners authorized the method of construction which is being carried out by the company, and we are not concerned with some possible construction other and different from that which is authorized by them. This question might have been raised before the railway commission, but is immaterial here.
It is insisted, however, that, because of Section 4838 of the Code, the county engineer, notwithstanding the order and franchise granted by the railroad commissioners, has the power to locate this line at such a place on the highway as he sees fit; and in the instant case, he located the pole line at a point one foot from the boundary of the adjoining property. A corporation, like a human being, cannot be expected "to obey two masters," especially where there seems to be a conflict between their rights and powers. It would appear from Section 4838 that, when new *Page 552
lines are constructed, the county engineer has the right to locate the same on the highway. Apparently, therefore, there is a conflict between the power of the county engineer and that of the railroad commissioners. As shown in the record, the railroad commissioners went no further, however, than to indicate on which side of the highway the line was to be constructed; and we believe that both sections of the statute may be given force and effect by saying that the railroad commissioners did locate the line on a certain highway. Subject to this location, the county engineer has the right to designate where it shall be placed on the highway, limited, however, to so placing the line that all of it, including the superstructure, shall be within the boundary line of the highway. Any other construction of these two sections of the statute would put it wholly within the power of the county engineer to make nugatory the orders of the railroad commissioners.
We turn now to the facts in the case. The conceded facts are that, if this transmission line, as located by the railroad commissioners, is constructed in accordance with the orders made by the county engineer, not all of the electric transmission line will be within the boundaries of the highway, but a part of it will overhang adjoining property. We think it is the right and duty of the electric company to so construct its line on the highway that its structure and superstructure shall all be within the boundary of the highway. In the instant case, the boundary of the highway is 33 feet from the center line thereof. Under this situation, and to the end that the whole of the transmission line may be within the boundary of the highway, the center of the poles carrying the superstructure cannot be closer than one half the length of the authorized cross arms to the boundary line of the highway. It may be, as suggested by counsel, that these poles and lines on the highways are a nuisance, and produce inconvenience to those in charge of the highways; but that is not a matter for our consideration. The legislature has authorized them to be there, and whatever it authorizes cannot be considered a nuisance.
The testimony shows that the county engineer was advised that this line was to be constructed along the highway in controversy. He stated that he designated the line not closer to the center line of the highway than one foot from the right-of-way *Page 553
line. There seems to have been no dispute whatever as to the location of this line on the highway, except a disagreement as to whether it was to be one foot from the fence line or four feet therefrom. This is the real and the only question of contention in this respect between the parties.
Finally, it may be said that one of the duties of the railroad commissioners in considering the application for this franchise was to determine whether or not transmission lines would interfere with the public use of the highway. This was a prerequisite to the allowance of the franchise, and was a determination that, at the time, the condition and use of such highway were such that the erection of this transmission line would in no way obstruct the public use thereof.
As we have just suggested, one of the questions decided by the board of railroad commissioners was that the construction of this line would not interfere with the public use of the highway, and this determination was made September 16, 1927. The record as a whole is barren of any evidence whatever to show that there was any change in the condition or any increased demand on the part of the defendant or of the public for the use of this highway between the time the franchise was granted by the railroad commissioners and the time of the trial of this case. The decision of the railroad commissioners, therefore, is controlling on this question.
The fact, if it be a fact, that, in the onward march of commerce, conditions may arise in the future under which a larger use of the highways demands the further removal of these poles, or their entire removal from the highways, under existing statutory power or under future legislation under the reserve power of the state, is a question with which we are not now concerned. It will be time enough to cross the bridge when we get to it.
To the end that this opinion may not be misunderstood, we will say that the power of the county engineer to fix the location of the line on the highway is limited as above specified; but, aside from this limitation, he has complete control of the location of the line upon the highway. Local conditions arise which require him to use his judgment as to placing a line, because of culverts, cattle crossings, private ways, drainage, and other conditions which exist on the highways which would require a change in the location of the line to meet such existing *Page 554
conditions. These powers, of course, the county engineer has, and is authorized to exercise. Local conditions may be such that the lines should be in closer proximity to the highway than above specified. In other words, the question of where the line shall be on a given side of a highway is wholly within the control of the county engineer, except that he must so place it that not only the poles, but all of the wires, guys, superstructure, etc., shall be within the confines of the highway.
As a final word, it will be noted by common observation that, in many instances, both in cities and in the rural districts, large conduits are being buried in the ground for the purpose of carrying wires of telegraph, telephone, or electric lines. If the rule were as claimed by the defendant in this case, then it would be within the power of the local engineer to require that one half or more of such conduits should be constructed on the land adjacent to the highway; and if he had power to order such construction, it would logically follow that, if he allowed one inch of said conduit to be upon the highway and the remainder upon the adjoining land, it would be a full compliance with the law. This would be true even though the conduits were placed, as they are, wholly under ground, so that there could be no possible interference with the use of the surface of the highway by the public for travel or otherwise. As herein expressed, we cannot agree with any such narrow construction of the statute.
The district court erred in entering a decree contrary to the construction of the statute placed upon it by this opinion. It should have awarded the relief prayed by the plaintiff. —Reversed.
FAVILLE, De GRAFF, KINDIG, and GRIMM, JJ., concur.
STEVENS, EVANS, MORLING, and WAGNER, JJ., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432102/ | The error of the majority in this case appears to me fundamental. The opinion is predicated upon premises which contravene what would seem to be the clear purpose and intent of the legislature. The primary and first right to the use of the highways is in the public. This right is not subordinate to the claim or privilege for permissive use by any person or entity. As was said in substance by Mr. Justice *Page 555
Wagner, in Central States Elec. Co. v. Pocahontas County (Iowa),223 N.W. 236 (opinion withdrawn), the highways are established and maintained for the benefit of the public, from side to side and from end to end. Lacy v. City of Oskaloosa, 143 Iowa 704;Quinn v. Baage, 138 Iowa 426; Perry v. Castner, 124 Iowa 386.
The opinion of the majority, in terms, recognizes the principle, but, in practical effect, subordinates it to the mere permissive right of a franchise holder. The assumed extent and scope of the franchise granted appellant to erect its transmission line in the public highway are so emphasized as to make them the controlling factor in the case. Permissive rights or privileges granted to utility companies in the use of public highways are always to be construed most strongly in favor of the public. In Application of Russell, 163 Cal. 668 (126 P. 875). The opinion of the majority proceeds on the opposite theory.
It is quite inconceivable that the legislature, in the enactment of the statutes applicable to this case, intended to in any way subordinate the public welfare to the benefit of individuals or corporations desiring to operate electric transmission lines upon the public highway. Every provision of the statute touching the subject-matter of this discussion clearly and unmistakably sustains the right of the public. The authority conferred upon the railroad commission to grant to owners of electric transmission lines a privilege or franchise to erect their poles and other equipment upon the public highway is not exclusive. The same power, and by the same section of the statute, Section 8309, Code, 1927, is conferred upon boards of supervisors. The power conferred upon these respective bodies is identical, and is to be exercised in the same way. Section 8309 opens with a prohibition against the right of persons or companies to erect transmission lines on the public highway, again emphasizing the superior right of the public. The very purpose for which Chapter 383 was enacted was to provide all necessary safeguards for the protection of the public highways. It was the obvious legislative purpose and intent that nothing should be permitted thereon that would interfere with the free unobstructed use thereof. The form of the franchise to be granted, whether by the railroad commission or board of supervisors, is to be prepared by the commerce counsel. The commerce counsel *Page 556
is a public officer charged with the duty of interpreting the statutes so as to give effect to the legislative intent. There is neither word nor clause in any provision of the Code which gives authority to the railroad commission to designate the location of transmission lines at a particular place upon the highway, nor is there any conflict in the statutes at this point. This duty, under Section 4838 of the Code, is to be performed by the county engineer, if there be one; otherwise, by the board of supervisors of each respective county. Under the language of this statute, — "New lines, or parts of lines hereafter constructed, shall be located by the county engineer upon written application filed with the county auditor and shall thereafter be removable according to the provisions of this chapter. If there be no county engineer, the board of supervisors shall designate said location," — the power here conferred is absolute. It is the only power conferred upon any body or person to designate the location of the line. If statutes are to be construed most favorably to the public, then full scope and extent must be given to the authority conferred by the legislature upon the engineers and boards of supervisors. The county engineer does not exercise his power in contravention of any authority conferred upon the railroad commission, but solely in the exercise of a right specifically conferred by Section 4838 of the Code, and in compliance with the duty thereby imposed upon him. The grant of a franchise by the railroad commission carries with it no right or power upon the part of anyone to interfere with the exercise by the county engineer or the board of supervisors of their statutory powers and duties. The duty and authority of the railroad commission and those of the county engineer are separate and distinct, and both originate in legislative enactments. The power conferred upon the county engineer, or, in his absence, upon boards of supervisors, to designate the location of the line, is in strict harmony and keeping with other duties imposed upon county and township officers.
Section 4840, Code, 1927, is as follows:
"It shall be the duty of all officers responsible for the care of public highways, outside cities and towns, to remove from the traveled portion of the highways within their several jurisdictions, all open ditches, water breaks, and like obstructions, and *Page 557
to employ labor for this purpose in the same manner as for the repair of highways."
This statute imposes the duty upon officers responsible for the care of the public highways of maintaining the same free of obstructions. It confers an absolute duty upon certain officers, and imposes no limitations upon them in the performance thereof. As a further indication of the legislative purpose and intent to maintain authority in boards of supervisors and township trustees to maintain the public highways free of obstruction, the specific duty is imposed upon them by Section 4834 to "cause all obstructions in highways under their jurisdiction to be removed." The sole limitation emphasized is that poles used for telephone, telegraph, or other transmission purposes shall not be removed until notice in writing of not less than 30 days has been given to the owner or company operating such lines. In case of fences, the notice must be in writing, of not less than 60 days. It is also provided by Section 4837 of the Code that all fences and poles shall, within the time named, be removed to such line on the highway as the county engineer may designate; or, if there be no county engineer, then the board of supervisors shall fix the location. If the obstruction is not removed within the time fixed in the notice, the public authorities are authorized to move them forthwith. New lines constructed under a franchise granted by the railroad commission are, by specific provision of Section 4838, made subject to the same rules and authority of the public officers to remove such lines to a different location, designated by the county engineer or the board of supervisors. The state has not undertaken to subordinate the use of its public highways to certain permissive uses which the railroad commission and board of supervisors are authorized to grant to individuals or corporations. The only part of electric transmission lines in any way entering the public highway are the poles and guy wires. The state has not undertaken either to grant or procure an absolute franchise for telephone, telegraph, or electric companies to erect and maintain transmission lines throughout the state. It has given the permissive use of the public highways upon certain conditions, so far as such use may not interfere with the higher right of the public. If the franchise is inadequate to meet all of the requirements of the *Page 558
franchise holder, when exercised in accordance with the law, then it is up to the company to make such further arrangement as may be required. Suppose application were made to a board of supervisors for a franchise, would not the statute, which imposes certain duties upon such officers to keep the highways free from obstructions, be binding upon such board, as it would be under any other circumstances? The same board that might be called upon to grant a franchise might also be charged with the additional statutory duty to locate the line. In the performance of such duty, it might find itself in some embarrassment to know which statute to observe. The authority of the railroad commission in granting a franchise for the purpose under consideration is limited by other statutes, in the light of which it must be construed. It is not plenary, and guarantees only the right of the applicant to use such portion of the public highway as is not demanded or necessary for the use of the public. Just what portion is necessary and what will constitute an obstruction in the road are to be determined by the officers designated by the statute to perform that duty. The railroad commission does not, in exercising the authority conferred, determine just how the line shall be constructed. Section 8311 requires certain things to be stated in the petition, for the information and advice of the commission. The matters referred to aid the commission in determining whether or not it will grant the franchise petitioned for, but, when it is granted, do not determine the exact method of construction. When we give effect to the several applicable statutes, the conclusion of the majority cannot, in my opinion, be upheld.
I am authorized to say that Justices EVANS, MORLING, and WAGNER concur in this dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432104/ | The administrator de bonis non of the estate of William Schmitz filed, in the probate proceedings, an application for the construction of decedent's will. The trial court, upon presentation of this matter, found against the contentions of the Society of the Divine Word, which was a beneficiary named in the will and had filed a resistance to the administrator's application to have the will construed in keeping with *Page 1179
his interpretation. The Society of the Divine Word has appealed.
The will which was construed is hereinafter set out:
"Westphalia March 24th 1920 Testament an Will!
"I William Schmitz a Widow residing in the County of Shelby State of Iowa being of sound and desposing mind and memory to mak publish and Declare this Instrument is my Will and testament.
"Claus I It is my Will that my funeral expens and all my Depts to be paid first and four hundert Dollers, 400, for holy Masses.
"Claus II I William Schmitz promes fife tausent Dollers, 5000, to the Society of the Divine Word of Techny Illinois for a Boy Stuten with the agreement if there evere be a Boy in Family one in the Parish of Westphalia the shall be taken first and the fife tausent Doller shall be paid after my Death as following my Son Dr. Will. Schmitz shall pay three tausent Doller and the Chiltern by name John, Tony, Henry, Joseph, Marie Schmitz Hargarten hav to pay the two tausent Dollers my Dauther Anna Langenfeld is free thereof.
"Claus III My Dauther Anna Schmitz Langenfeld ows me a note of two tausent Dollers, 2000, after my Death she shall hay the note back againg withouth paing for the same.
"I paid my Dauther Mari in Milwaukee six tausent Dollers, 6000, wathever Chile got and I say further that Mari and Will shall hav the one hundert and sixty akers Farm wath they call the George Schechinger Farm for One hunderd Doller per aker. Than the rest wathever is in my name so as money, nots and cretis shall be Devidet equaly to all the chiltern.
"Claus IV I nominate and apoinding as joint atministrator my two sons John and Tony J. Schmitz withouth given Bonds."
The trial court found and held: (1) That clause 2 of the will created a bequest in favor of the appellant in the sum of $5,000, but that said bequest was not directly or expressly charged against any specific property owned by the testator; (2) that said legacy was a charge solely against the residuary legacies of William Schmitz, John Schmitz, Tony Schmitz, Joseph Schmitz, Henry Schmitz, and Marie Schmitz Hargarten, in the *Page 1180
respective sums stated in clause 2 of the will; (3) that the testator intended that said bequest should be paid solely from the residuary legacies of the above-named children and that he did not intend to create any personal obligation against the children or any of them above and beyond such sum or sums as they might receive from their residuary legacies; (4) that under the terms of said clause 2 the residuary legacy of William Schmitz is subject to the charge of $3,000, and the residuary legacies of John Schmitz, Tony Schmitz, Joseph Schmitz, Henry Schmitz, and Marie Schmitz Hargarten are subject to a charge of $400 each; (5) that the testator intended to cancel and forgive the note of his daughter, Anna Schmitz Langenfeld, held by the decedent at the time of his death; (6) that from the evidence presented the court found that whenever a son was married the testator sold real estate to him at the price of $100 per acre and at the same time credited the son with a gift of $6,000 to apply thereon; (7) that all of testator's sons were married at the time of the execution of decedent's will and had received a credit against the real estate conveyed to them of $6,000, except William Schmitz; (8) that it was the intention of the testator to provide for his son William Schmitz in his will in the same manner as he had provided for all of the other sons prior to the execution of the will; (9) that it was the intention of the testator to make a special devise of the real estate referred to in clause 3 of the will to William Schmitz and Marie Schmitz Hargarten, share and share alike; (10) that from the evidence before the court it is found that the testator intended to charge the specific devise of the real estate referred to in clause 3 of the will with the sum of $100 per acre, less a credit to William Schmitz's proportionate share of the charge in the sum of $6,000, and that under the terms of the will William Schmitz and Marie Schmitz Hargarten take the real estate charged with the net sum of $10,000, and that it was the intention of the testator that such sum should be paid by William Schmitz and Marie Schmitz Hargarten into the hands of the executor; (11) that the testator intended to bequeath all the residue of his estate to all of his children named in the will, share and share alike.
It is the contention of the appellant that the decision and decree of the trial court was wrong in holding: (1) That the *Page 1181
bequest under clause 2 of the will was not chargeable against the specific devise to William Schmitz and Marie Hargarten; and in holding that the bequest to appellant was payable solely out of the residue; and in further holding that the devisees who accepted benefits under the will were not personally obligated to pay the bequest of appellant; (2) that the court was wrong in allowing a credit of $6,000 on the amount due from William Schmitz by reason of clause 3, because the will is clear, unambiguous, and makes no provision for the reduction of the charge on the land devised, and for the further reason that the evidence upon which this construction is founded was illegally considered, and the evidence does not sustain the conclusion of the court, in any event.
It will be observed that there has been no appeal on the part of any of the interested parties from the holding of the court that clause 2 of the will created a bequest in favor of the appellant. However, as previously stated, the appellant contends that the trial court was in error in holding that, under clause 2 of the will, the specific devise to William Schmitz and Marie Hargarten, was not chargeable with the bequest made to appellant and that the same was payable only out of the residue of the estate. The further contention of the appellant, it will be noted, is that the court was wrong in allowing a credit of $6,000 on the amount due from William Schmitz under the provisions of clause 3 of the will, because it is claimed the will is clear and unambiguous, and it makes no provision for the reduction of the charge on the land devised.
[1] In giving consideration to questions such as are before us it is well to have certain guides. These may be found in the case of Boehm v. Rohlfs, 224 Iowa 226, 232, 276 N.W. 105, 109, where this court made the following statement:
"In construing a will, the first consideration is to ascertain, if possible, the intention of the testator, and to give effect to such intention if lawful and not against public policy. This must be ascertained from the provisions of the will itself where the language is plain and unambiguous. Guilford v. Gardner, 180 Iowa 1210,162 N.W. 261; Chapman v. Newell, 146 Iowa 415,125 N.W. 324; Gilmore v. Jenkins, 129 Iowa 686, 106 N.W. 193, 6 Ann. Cas. 1008; Blackett v. Ziegler, 153 Iowa 344, *Page 1182 133 N.W. 901, 37 L.R.A. (N.S.) 291, Ann. Cas. 1913E, 115. Testator's intent, clearly and definitely ascertained, must govern in the absence of legal impediments. In re Etzel's Estate, 211 Iowa 700,234 N.W. 210. Ordinarily, the testator's intent must be determined by the language of the will. Fulton v. Fulton,179 Iowa 948, 162 N.W. 253, L.R.A. 1918E, 1080. The plain effect of the language as used in a will is not to be varied by external proof of what effect was really intended. But where the language is more or less obscure, or the meaning is hidden and there exists what is known in the law as a latent ambiguity, parol evidence may be resorted to for the purpose of making intelligible in the will that which cannot without its aid be understood or resolving a doubtful interpretation. Moran v. Moran, 104 Iowa 216, 73 N.W. 617, 39 L.R.A. 204, 65 Am. St. Rep. 443. We have many times said that a will must be read in all its parts and in the light of the admitted circumstances under which it was made, in order to determine its meaning. Warden v. Overman, 155 Iowa 1, 135 N.W. 649. The court should, as far as possible, put himself in the position of the testator, and take into consideration the circumstances surrounding him when the will was executed. Ironside v. Ironside, 150 Iowa 628,130 N.W. 414."
With the statements hereinbefore made as our guide, we shall give consideration to the questions before us.
I. Should the bequest as noted in clause 2 be held to be a charge against the particular devise mentioned in clause 3 of the will?
In the case of Manchester v. Loomis, 197 Iowa 1049, 1072,195 N.W. 958, 198 N.W. 102, this court said:
"It is a familiar and well established rule that a specific devise of real estate takes precedence over a bequest of money, if the estate is insufficient in amount to carry out in full the terms and provisions of the will."
In 69 C.J. 1168, section 2486, we find the following statements that are applicable to the present inquiry:
"Real Estate; Intention of Testator — (a) In General. The testator may, of course, charge the payment of legacies on the real estate, in case the personal property is insufficient for their *Page 1183
payment, or he may make the real estate on which the legacy is charged the primary or sole fund for its payment, as where legacies are charged on land and the personal estate is bequeathed or disposed of. The matter of such a charge, however,is always a question of the testator's intention, as manifestedby the will, and, inasmuch as the personal estate is usuallyregarded as the primary fund for the payment of legacies, as ageneral rule the real estate is not charged with the payment oflegacies, unless an intention, on the part of the testator, tocreate such a charge, is either expressly declared or can befairly and satisfactorily inferred from the terms or provisionsof the will, as construed in accordance with the general rules ofconstruction, in connection with, in case of ambiguity, thesurrounding circumstances. [Italics supplied.] It is not necessary that the legacy be formally made a charge eo nomine on the real estate, but, if created by implication, the intention soto charge must clearly appear or be clearly and satisfactorilydeducible from the language and dispositions of the will;
[italics supplied] or, as otherwise expressed, the intention so to charge is sufficient if it appears by fair or necessary implication, or by any words that reasonably indicate such an intention. Such an intention will not be inferred from the mere fact of giving the legacies."
Also in 69 C.J. 1184, section 2506, the following statement is made:
"Direction To Pay Legacies. A simple direction in the introductory part of a will for the payment of legacies is insufficient to charge them on real estate specifically devised, unless such a direction is accompanied by something in the context from which it may be inferred that the legacies are to be paid first or that the devise is to be enjoyed after payment of the legacies."
Applying the foregoing authorities to the will before us, we cannot find that it was the testator's intention to make the bequest to the appellant Society a charge upon the specifically devised real estate. Consequently we hold, as did the trial court, that the bequest to the appellant Society was payable only out of the residuary portion of the estate.
[2] II. It is our judgment and holding that the trial court was in error in allowing the $6,000 credit in ascertaining the *Page 1184
amount due from William Schmitz in connection with the devise to Marie Hargarten and him. As stated in Boehm v. Rohlfs, supra, it is only "where the language is more or less obscure, or the meaning is hidden and there exists what is known in the law as a latent ambiguity, [that] parol evidence may be resorted to for the purpose of making intelligible in the will that which cannot without its aid be understood or resolving a doubtful interpretation." It was only from the parol evidence introduced in the hearing before the court that it was shown that the other children had received $6,000 from their father and that it was the custom of the father to make such a gift to each of his children. It was further shown by parol evidence that William Schmitz had not received such a gift. There is nothing in the will to indicate that William Schmitz, one of the children, had not received his share. We hold that the particular portion of the will, on which this $6,000 deduction was grafted by the trial court, is not ambiguous and unintelligible and does not justify or necessitate the introduction of parol evidence to ascertain its meaning. For that reason, we have concluded that the trial court was in error in that portion of its construction which allowed this credit.
In all other respects we hold that the conclusions reached by the trial court were correct. However, by reason of the comments heretofore made, this cause must be remanded for the entry of an order in conformity with our pronouncements here made. We have given consideration to appellee's motion to dismiss but have concluded that the same should be overruled. For the reasons heretofore set forth we affirm in part, reverse in part and remand. — Affirmed in part; reversed in part and remanded.
BLISS, C.J., and STIGER, MITCHELL, MILLER, OLIVER, and HALE, JJ., concur. *Page 1185 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432105/ | It appears from the record that an action of replevin was brought in the district court of Union County by one Early against both plaintiffs herein, and that such action was pending at the time of the events herein complained of; that a writ of replevin was duly sued out in said cause, and was placed in the hands of defendant-sheriff for service, and was duly served by him; that the defendant Weaver was a drayman, who had been employed by plaintiff Early in such suit to receive *Page 722
the piano from the sheriff and to convey the same from the home of the plaintiffs herein to the town of Creston; that said Weaver did receive the piano, and did transport the same to the town of Creston, and did put the same in storage in such town. This replevin suit was prosecuted and judgment was entered therein in favor of plaintiff Early, and against the defendants therein, who are the plaintiffs herein. It was adjudged in such suit that Early was entitled to the possession of the property thus replevined. It is contended by the appellants here that the action of the sheriff in taking such piano was a mere trespass, because the writ of replevin in his hands was void and of no effect. The brief is not clear as to the ground upon which the nullity of the writ is predicated. The writ bore date December 15, 1921, and was executed the same day. It is pointed out that the return of such writ was due on or before January 23, 1922, and that such writ was not in fact returned on said date, but on a date long subsequent thereto. This appears to be the ground upon which appellants predicate their claim of nullity. No defect is pointed out in the form of the writ or in the circumstances of its issue. It was in no manner challenged at the trial of the replevin suit. Such trial was had after January 23, 1922, and before the writ was formally returned to the court. Whatever penalty the sheriff may have subjected himself to by reason of such default in the time of the return, we fail to see how such a default is available to the plaintiffs herein as a basis for their cause of action. Their cause of action accrued, if at all, on December 15, 1921. The writ was regular on its face and valid at that time, and the sheriff was under duty to execute it. The theory that the failure of the sheriff subsequently to file the return of his writ within the statutory date became effective to wholly destroy the validity of the writ ab initio is without merit. The return of the writ had in fact been made and filed long prior to the beginning of this suit, and the validity of such return was never assailed or questioned in the suit in which the writ issued.
As to the currency alleged to have been concealed in the piano, it is not claimed that either defendant had any knowledge thereof. On the contrary, plaintiff O.B. Gibson, who had joined with his coplaintiff in concealing the currency only a few *Page 723
hours before the writ was served, was present at the taking of the piano, and gave some assistance to the removal thereof, but withheld all information concerning the concealed currency. The plaintiffs were allowed immediate opportunity to make search for the currency after they had made known the alleged concealment thereof. It is undisputed that the piano was put in storage, and that it had not been opened nor its covering disturbed at the time the search for the currency was made. No claim is made in the brief of appellants of any ground of liability of the defendants for such alleged currency, except upon the ground of the nullity of the writ of replevin. It follows that this branch of the appellants' claim falls with their claim for the piano.
The order of the trial court directing a verdict and entering judgment against the plaintiffs is accordingly affirmed. —Affirmed.
FAVILLE, C.J., and ALBERT and MORLING, JJ., concur. | 01-03-2023 | 07-05-2016 |
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https://www.courtlistener.com/api/rest/v3/opinions/3432149/ | This appeal is from an order overruling a motion in a partition action by John A. Beggs, appellant herein, a nonresident defendant, served with original notice by publication only, to set aside a previous order by the court, approving the referee's report of distribution. It is conceded that appellant did not appear in the partition action personally or by attorney. The decree fixing and establishing the shares of the parties and appointing a referee to make sale of the land involved was entered December 19, 1919. A sale of the land was had, and the report of the referee of such sale approved, and distribution ordered. The date of this decree is not shown in the record, but the parties agree that it antedated the filing of the motion in question by more than two years.
On October 31, 1925, the order in question, approving the referee's report of distribution, was entered. Within two years thereafter, appellant filed a motion to set aside the order approving the referee's report of distribution and to grant appellant a retrial thereof. The motion was based upon Section 11595 of the Code of 1924, which is as follows:
"When a judgment has been rendered against a defendant or defendants, served by publication only, and who do not appear, such defendants, or any one or more of them, or any person legally representing him or them, may, at any time within two years after the rendition of the judgment, appear in court and move to have the action retried, and, security for the costs *Page 795
being given, they shall be permitted to make defense; and thereupon the action shall be retried as to such defendants as if there had been no judgment."
The motion was overruled by the court, upon the objection of the parties in interest that same was not filed within two years after the final decree and judgment was entered. The question here presented is: What constitutes the judgment in a partition action? The following sections are pertinent:
"Sec. 12325. After all the shares and interests of the parties have been settled in any of the methods aforesaid, decree shall be rendered establishing the rights of the parties, confirming the shares and interests of the owners of the lands, and directing partition to be made accordingly."
"Sec. 12334. Upon the report of the referees being approved, a decree shall be rendered confirming the partition and apportioning the costs as herein provided, entering judgment therefor."
The two years' period within which a motion may be filed commenced to run from the date of the judgment, and not from the time of entering a default. Walker v. Cameron, 78 Iowa 315.
The final decree in a partition action is entered after the report of sale by the referee and the approval thereof by the court. At the time of the entry of this decree, judgment shall be rendered for costs. These are the plain provisions of Section 12334. The entry of final judgment is preceded by default, or a trial upon the merits.
The contemplation and purpose of Section 11595 was to protect the rights of nonresident defendants served only by publication, and to permit them, within two years, to secure a retrial of the merits of the action. The appellant finds no fault with the decree fixing and establishing the shares of the parties, or with the final decree, approving the report of the referee, ordering distribution, and entering judgment for costs. The granting of a motion by a nonresident defendant served by publication only, when filed within two years after judgment, does not operate to set the same aside, but only to grant the movant a trial for the purpose of determining whether or not he has a defense to the action. Stanbrough v. Cook, 86 Iowa 740; Clark v. Ellsworth,84 Iowa 525. *Page 796
As will be observed, the attack in this case is upon the order of the court approving the referee's report of distribution. The hearing on this report in no respect involves the merits of the action. It involved nothing more than the performance of the order of the court entered as a part of the final decree and judgment in the action. The default was on the part of the referee. If the allegations of the motion are true, a fraud was practiced by him upon the court, and also upon appellant. The effect of an order sustaining the motion in question would extend no further than to remove an obstacle in the way of appellant to an action on the bond of the referee. The order approving the report of distribution is not the judgment referred to in Section 11595. Appellant relies upon Huston v. Huston, 29 Iowa 347. In that case, the attack by motion was upon an order for the sale of real estate, entered in probate. It was held that the proceeding came within the provisions of Section 3160 of the Revision, which corresponds with Section 11595, Code of 1924. It was necessary, as pointed out in the opinion of the court in In re Estate ofFeldner, 167 Iowa 150, that notice be given. It does not appear in the Huston case whether movant was a resident or a nonresident, but it is shown that a notice of the proceeding was served upon him by publication. It is held in the Feldner case that Section 11595 is not applicable to proceedings in probate. The notice referred to in Section 11595 is the original notice of the commencement of the action, and the judgment contemplated is the one entered upon a trial of the merits of such action. This is as true in a partition action as in any other, notwithstanding the provision for the entry of an interlocutory and final decree therein. Obviously, the motion was not filed within two years after judgment was entered, and it was, for this reason, properly overruled. — Affirmed.
ALBERT, C.J., and De GRAFF, MORLING, and WAGNER, JJ., concur. *Page 797 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432152/ | The county attorney of Madison county, Iowa, filed an information, charging W.R. McLuen and Samuel Morrison with the crime of larceny from a building in the nighttime.
Morrison filed a demurrer, in which he alleged that the information accused him of a crime which is not known to the statutes of the state of Iowa, and that it does not substantially conform to the requirements of the Code. The demurrer was overruled, and the defendant then entered a plea of not guilty. *Page 5
There was evidence offered and the case submitted to the jury, which returned a verdict of guilty, and the court entered judgment, sentencing the defendant to the reformatory at Anamosa for a period of not more than ten years, from which judgment he has appealed to this court.
[1] I. It is the contention of the appellant that the court erred in overruling the demurrer, in that there is no such crime known to the statutes of Iowa as "larceny from a building in the nighttime"; that the statute provides, "If any person in the nighttime commit larceny in any dwelling house, store, or any public or private building, or in any boat, vessel, or water craft," etc. (Code 1935, section 13008); and that the phrase is "in a building" and not "from a building". To support such contention he cites two or three cases, foreign to Iowa, but we find that this question has been determined by this court, and, regardless of what other courts say, we will follow our own decisions.
In State v. Carter, 144 Iowa 280, 121 N.W. 694, 695, the proposition was advanced that there was no such crime as "larceny from a building" as distinguished from simple larceny. Considering in turn the crime of simple larceny, larceny from a building in the daytime, and larceny from a building in the nighttime, this court said: (pages 283, 284)
"If the three sections of the statute were to be construed as to be defining three different crimes, there would be much strength in the position taken by counsel, but such we think is not the force and effect of the language employed. The crime defined in each instance is larceny. Under the criminal law of this state we have no degrees of larceny by names or number, but the same effect is obtained by varying the severity of the punishment accordingly as certain specifically described circumstances do or do not accompany the commission of the offense." And finally concluded, at page 285: "In our judgment the indictment is not open to the objection urged. The charge as stated is in our judgment a sufficient accusation of larceny in the daytime."
In State v. Lawson, 196 Iowa 740, at pages 742, 743,195 N.W. 366, 368, the following instruction was approved:
"In determining whether or not the defendants are guilty *Page 6
of the crime as charged in the indictment, it will be proper for you to take into consideration the place from which the property in question was taken, if the property was so taken; the time when the property was taken whether in the daytime or at night," etc.
The court's opinion follows, page 743: "In fact, the court required the jury to find beyond a reasonable doubt that the crime of larceny was committed from a building, — the certain garage mentioned in the indictment, — in the nighttime. We find no error at this point."
[2] And so in the case at bar the crime charged was "larceny from a building in the nighttime." The charge as stated is, in our judgment, a sufficient accusation of larceny in the nighttime, and the lower court was right in overruling the demurrer.
[3] II. The only evidence contained in this record that appellant was guilty of the crime charged was that furnished by one Carl Cooley, who was an accomplice, and it is the contention of the appellant that there was not sufficient corroboration of his testimony to submit the case to the jury. Cooley testified that on the evening of January 15, 1935, he was in the town of Stuart and he had talked with a friend of his by the name of Bill McLuen about stealing the alfalfa seed which was located on the farm of John De Vault; that he was acquainted with Morrison and saw him that night; that at about 10:30 or 11 McLuen in his own car drove to what is known as the "Peterson oil station"; that he (Cooley) drove down to this same station, parked his car, and went over to the McLuen auto, in which Morrison was sitting. Cooley testified that he asked McLuen why Sam was along, and that he replied: "Oh, that's all right." As far as this record is concerned there is no evidence to show that Samuel Morrison knew they were going out into the country to steal the seed, until they arrived at the place where the theft was committed. Cooley had been working at this farm, had a key to the building, opened the door, and the seed was carried out and placed in McLuen's car. They then started for Panora, but there was trouble with the automobile and it was necessary to get Cooley's car to transport the seed. The seed was then transferred to the Cooley car, and they proceeded to Panora, where they arrived the next morning. *Page 7
The evidence which the State relies upon to corroborate the story of the accomplice Cooley consisted of a certain heel print which was found upon the floor of the room from which the seed was stolen. This was compared with the heel on the shoe that Morrison was wearing, and there is some evidence that the imprint might have been made by the shoe that Morrison had on at the time he was arrested. However, if this was the only corroborating evidence, we would doubt very much if it was sufficient to take the case to the jury. The evidence shows that the shoes Morrison was wearing were ordinary shoes, of which there are hundreds of thousands made. There is no evidence to show whether or not this impression was on the floor prior to the time the seed was stolen. But we do not have to rely upon this testimony alone. There is the evidence of the deputy sheriff of Guthrie county in regard to admissions which he said Morrison made to him, which is sufficient corroboration to submit the case to the jury.
[4] III. The last question urged by the appellant is that there is no evidence that the value of the property stolen exceeded the sum of $20.
It is a peculiar record that confronts us here. Morrison is a young man who lived in the town of Stuart. There came to the witness stand, to testify in his behalf, the leading men of that town — the editor of the paper, business men, the chief law-enforcing officer of the town, the city marshal. All of them, whose acquaintanceship with Morrison covered a period of from fifteen to twenty years, testified that his general reputation as to moral character was good.
The undisputed record shows that Morrison had nothing to do with the planning of this crime; that he received nothing out of it. He was just unfortunate, in that he knew McLuen and Cooley and happened to meet them on that evening.
The property stolen consisted of alfalfa seed. What grade it was does not appear. It was in sacks. Whether it could be used as seed is not shown. No evidence was offered as to its value, by the pound, bushel, or hundred pounds. The seed itself was not offered in evidence. The burden of proving the value of the property rested upon the State. It failed to prove that the value of the seed exceeded the sum of $20. There was no evidence upon which the jury could have found that the value exceeded that amount. *Page 8
There was evidence to sustain the finding of the jury that the appellant was guilty of the crime charged, except that the value of the property did not exceed the sum of $20. And the only punishment provided for under the statute under which this appellant was informed against, "where the value does not exceed $20," is that he be fined not exceeding $300 and imprisoned in the county jail not exceeding one year.
For the reasons indicated, judgment below is reversed, and the cause remanded to the district court, with instructions to re-sentence the appellant consistent with the provisions of section 13008, as set out in this opinion.
Reversed and remanded, with instructions.
DONEGAN, C.J., and ANDERSON, KINTZINGER, RICHARDS, and HAMILTON, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432156/ | In 1935 the W.B. Ewer Construction Company erected an office building for the Maytag Company in the city of Newton, Iowa. This building stood on the north side of an east and west street. It is faced with stone. The building was erected and the roof put on by September, 1935. There were three foremen on the job, all employees of the construction company. Paul H. Hatfield was foreman of the stone and brick work. The street upon which the building faced was 54 feet wide, from the office building on the north side of the street to the Maytag factory on the south side of the street. The condition *Page 8
of the street, as it existed on April 9, 1936, is shown by various photographs, Exhibits A, B, and C. In the process of erecting the building and placing the stone on the front thereof, which was the south side of the building, a derrick was mounted on the roof of the new building, with three ropes running from the top of the pole in different directions, to hold it in place and to steady it while stone was being lifted into place. Along the street, on the north side of the factory building, ran a railway switch track for car loadings, and at the end of the track was a bumper to which one of these guy ropes was sometimes fastened. This railroad ran along the factory building and was enclosed by a woven wire fence, which also enclosed the bumper. This track and fence took up a part of the street between the office building and the factory, so that the width of that portion of the street left open to the public was about 33 feet, from the north side of the fence to the office building.
The derrick mounted on the roof of the office building consisted of a pole mounted on a framework, with three ropes from the top of the pole, running in different directions to hold and steady the pole. Two of these ropes were fastened in the back of the building, and the third rope was stretched across the street and fastened to the fence, or to the bumper at times, and sometimes it did not stretch across the street, but was fastened down in front of the building near the mixer. The derrick was movable back and forth, and was approximately twelve feet high, the pole being a 6x6. Besides the poles and ropes there was a winch with a cable with which the stone was hoisted. The framework of the derrick is composed of a piece of timber four feet long and six inches wide with rollers on it, and on top of this is placed the pole, straight up. On top of the pole was a ring for the ropes to be tied to, two guy ropes being fastened back on the building, and one in front. The winch is a crank with two handles, one on each side, operated by two men generally. The rope that was sometimes stretched across the street is called a tag line, and its use was to keep the derrick from falling backward; the other two ropes to keep it from falling forward. When drawing up stone the pole will give at least a little, and that would cause the tag line to slacken or sag.
On the afternoon of September 3, 1935, in the construction of the office building, it became necessary, or advisable, to raise from the street quite a large stone to be put in place in the front *Page 9
wall. Hatfield had charge of this part of the work, directing just how it should be done, and under his direction the tag line was fastened to the bumper at the end of the switch track, thus crossing the street diagonally from the north side to the south side. Assisting Hatfield was a man by the name of Harthorn, and one Boley. Boley was winding up the winch, to raise the stone, Hatfield and Harthorn were holding down the other two ropes, which were anchored to steel beams which came up above the roof, each rope tied in a hook in the end of the beam, and tied so as the knot would not slip. The ropes ordinarily would be tightened up good so the derrick would be straight; it was customary to so fasten them tightly. But this day Hatfield and Harthorn were holding down the ropes. Harthorn said in his testimony, "I had never known of it being done by a man sitting down on the rope, and holding it down as it was done that day", and added that Hatfield said, "This is our last stone and we will hold it down instead of tightening it up." Near Hatfield was an elevator shaft, west and a little north of where he was working. He was near the elevator shaft so he could call to the men on the lower floor to tell them what to do in setting the stone. Boley was drawing up the stone.
The photographs, Exhibits A, B and C did not show the condition of the street as it existed September 3, 1935. Exhibit I is a photograph showing the condition of the street on September 3, 1935.
The street was open to travel, at least trucks were passing through there quite frequently to the factory building on the south side of the street, probably loading and unloading. On September 3, 1935, a truck of the defendant, of the trailer type, came along the street and struck the guy rope stretched across the street, and the ropes which Hatfield and Harthorn were holding down on top of the building were suddenly jerked from under the men, throwing Harthorn about six feet away, and throwing Hatfield into the elevator shaft, where he fell to his death.
The plaintiff in this case is the widow of Hatfield and the administratrix of his estate, and she brings this suit to recover damages occasioned by his death. In her petition she sets up that the plaintiff, Nettie M. Hatfield, was the administratrix of the estate of Paul H. Hatfield, deceased, and alleged the employment of Hatfield by the W.B. Ewer Construction Company in building the two-story office building for the Maytag factory *Page 10
at Newton, Iowa, and that the deceased was a foreman of the construction company, working on the roof of said building, assisting in placing the stone, which at that time was being lowered by the derrick mounted on the roof of the building, and that one of the ropes by which the derrick was held in place, extended from the top of the derrick, some ten feet above the building, in a southeasterly direction across the pavement, to the south side thereof, where the same had been made fast several feet above the ground. That Ferd Brunk, a driver for the defendant, operating a truck for it, in a careless and negligent manner, ran into the rope causing the derrick to be disturbed in such way that it hurled her husband to the ground and killed him. The petition alleged six grounds of negligence, as follows:
1. That said defendant was negligent in failing to keep a lookout for said tie rope.
2. That said defendant was negligent in attempting to drive said truck under said tie rope, and too close to the lower end thereof to permit clearing the same.
3. That said defendant was negligent in failing to avoid contact between said truck and said tie rope.
4. That said defendant was negligent in driving said truck into and against said tie rope.
5. That said defendant was negligent in failing to stop said truck immediately upon the same coming in contact with or striking said tie rope.
6. That said defendant was negligent in continuing to drive said truck ahead after striking said tie rope and until said derrick had been pulled down and plaintiff's intestate had been thrown from the top of said two-story building and hurled to the ground.
To this petition an amendment to conform to the proof was filed by plaintiff, alleging a seventh ground, to wit:
"That the defendant was negligent in failing to stop said truck within the assured clear distance ahead."
The answer of the defendant admits that plaintiff's decedent was on September 3, 1935, killed by a fall from the roof of the building; denying each and every other allegation of plaintiff's petition; specifically denied it was guilty of any negligence which was the proximate cause of the death of decedent.
Such were the facts, and the pleadings of the case. At the *Page 11
close of plaintiff's evidence the defendant made a motion for a directed verdict, setting forth:
1. The failure to show that the defendant was guilty of negligence as alleged.
2. That the defendant had a right, in the absence of actual knowledge, to assume freedom from aerial obstruction.
3. That there was no evidence that the driver had any knowledge of the rope which caught on the top of the truck was across the street in a position not to clear the trailer, and the right to assume there was no rope there with which his truck would come in contact.
4. That the driver had the right to assume that the rope was in a position to clear the truck, and hence the collision with the rope did not constitute negligence.
5. That in placing the rope across the street as it was placed, under the supervision of plaintiff's intestate as foreman, constituted a nuisance under sections 12395 and 12396 of the code, and rendered the plaintiff's intestate guilty of contributory negligence as a matter of law.
6. That defendant's driver was not guilty of any negligence.
7. That there was a failure to prove plaintiff's intestate was free from negligence.
8. The evidence affirmatively shows that plaintiff's intestate was guilty of contributory negligence as a matter of law.
9. That the plaintiff's intestate was one of the foremen of the construction company, and the rope in question was placed where it was under his supervision, and by reason thereof he was guilty of contributory negligence.
10. That upon the whole record in this case, plaintiff is not entitled to recover.
11. That if a verdict were returned in favor of the plaintiff the court would be compelled to set the same aside as a matter of law.
This motion was sustained by the court, and a verdict in favor of the defendant. Judgment was duly entered on the verdict, and appeal is taken to this court by reason thereof.
It is evident that any strain put on the tag line as it crossed the street, would tend to pull the derrick forward, and thus render more taut the two steadying ropes, which were attached to the top of the pole, and might very well throw anyone down who attempted to hold down the ropes. So in this case, Hatfield *Page 12
being so close to the elevator shaft was pushed into it and met his death.
We are met with the following propositions:
1. Was the defendant in this case guilty of negligence such as resulted in the death of Hatfield?
2. Was the deceased, under the circumstances, guilty of any such negligence as contributed in any degree whatever to his injury or death?
3. This case involves what were the rights of the defendant truck company on the street.
4. By what right was the street obstructed by stretching the guy rope across it?
The answer to these questions will determine, of course, this case.
In considering the question as to whether or not the defendant can be held on the ground of negligence, it is necessary, of course, to take into account all of the surrounding facts as to the condition of the street, as to the derrick and the wire across the street at the time. And it is also necessary to take into account the traffic on the street at the time, the character of the vehicle or automobile which it is claimed that the defendant's employee was using negligently at the time of the accident.
The derrick in this case was held in place by three guy ropes, one running across the street where it was fastened, and the two fastened back on the top of the building. These ropes coming together would form a sort of triangle that braced and held the upright on the derrick in position, which, of course, was sitting back on the roof of the building. When the derrick was put in use it was used to take up a stone on the street and bring it up where it could be used in the construction of the stone work on the face of the building. That was what was being done at the time of the accident.
It is evident, viewed in this way, that the weight of the stone, which was quite heavy, would naturally pull the upright of the derrick over toward the street, and hence, would cause a slack in the tag line, lowering it so a vehicle going up the street might pass under this rope, if the derrick were not in operation, but if it were in operation, the danger from collision with the rope, or tag line, would be greater by reason of it being lowered. So it is evident that the more solidly the two other guy ropes *Page 13
were fastened, and the tighter they were, the less would be the slack in the tag line across the street.
The evidence shows that the customary way, prior to lifting this stone, was to tighten up, make more secure, the two ropes from the derrick and fastened to the top of the building, and that was the usual method of doing it. The plaintiff's decedent, however, in charge of the work, made the remark that it was the last stone for the day and they would try to hold down the ropes by sitting on them and holding them, instead of fastening them. So it is also evident that anything that touched the tag line and added to the weight of pulling the derrick toward the street, would make the strain on the ropes attached to the top of the building that much greater, and hence that much more difficult to hold down. So when there was a collision of the truck with the tag rope, the strain on the other ropes became so great as to throw off the men holding them, and as plaintiff's decedent was near the open elevator shaft, there was more liability of his being thrown into the shaft, and this is the way the accident happened.
A glance at Exhibit 1 in appellee's denial of the abstract shows the condition of the street at the time of the accident. One looking at this picture would have great trouble imagining how an automobile could get through at all. The street is all cluttered up. But the record shows that during the day different trucks came in there, this truck came in there. There had been no collision with this tag line before, but it is claimed this truck in going out struck the tag line. It must have been the top of the truck. There is no showing whatever of the height of the truck, nothing except that it was of the trailer type.
It must also be evident, when one stops to think, that the driver of the vehicle in the highway, constructed as trucks and automobiles are constructed, is not chargeable in the same degree with discovering aerial objects as in discovering objects in the street. That whatever may have been the rights of the contractor erecting the building, or even the owner of the building, to obstruct, litter up, the street in front of his premises, this right did not to the same extent obtain as to aerial objects.
The record also is entirely void of any testimony, or any showing as to anything that was done to call the attention of the driver on the street to be constantly looking up instead of looking where he was going on the street, to discover dangerous *Page 14
instrumentalities up in the air, which would be out of his line of vision as he picked his way through the street, crowded as this street was with so many obstacles to easy travel.
[1] With these considerations in mind, therefore, we are of the opinion, taking all of the circumstances that existed at the time of the accident into account, that there is no showing here whatever of any negligence on the part of the driver of the truck, and upon this ground alone the motion to direct a verdict should have been sustained.
We think that the following authorities support the views we have here expressed:
Weaver v. Dawson County Mut. Tel. Co., 82 Neb. 696,118 N.W. 650, 651. 22 L.R.A. (N.S.) 1189, is a case in which plaintiff sued a telephone company for injuries suffered from coming in contact with wires across a road. He had been hauling hay over the road in question. The hayrack had a pole bolted on it, which reached ten feet from the ground. This piece struck the telephone wire and broke the upright, and the plaintiff was severely injured. The court says:
"The defendant contends that it was the duty of the plaintiff, when approaching the place where the telephone line crossed the road, to have looked and examined the wires before attempting to drive under, and that his failure to do so constituted contributory negligence."
There was a verdict and judgment for plaintiff, and on appeal the supreme court held against this contention, saying:
"Driving along a road under a telephone or telegraph wire, properly constructed, is not attended by any danger. It is unlike crossing a railroad where a train is liable to pass at any time, and the rule which would require a person about to cross a railroad, to stop and look before so doing, has no application to a person driving along either a public or private road which is crossed by telephone or telegraph wires.
"The plaintiff did not observe that the wire was down, or that it was likely to strike his hayrack. Within a few days previous to this accident he had hauled a number of loads of hay over the same road, and he had experienced no interference or trouble with the defendant's wires. He was under no obligation to anticipate any danger or to stop and look and examine defendant's *Page 15
wires. The evidence was wholly insufficient to justify a finding of contributory negligence, much less requiring such a finding."
Jacks v. Reeves, 78 Ark. 426, 95 S.W. 781, holds that an instruction, in an action for injuries received by a traveler on a highway in coming in contact with a telephone wire dragging over the highway, due to a broken pole, that plaintiff, in order to recover, must prove that the accident occurred through the negligence of the owner of the telephone line, was misleading, because not qualified by a charge that the evidence of the accident and injury following therefrom, when the occurrence was not out of the usual course, was prima facie evidence of the negligence, and shifted the burden to defendant to prove that the injury was not caused by any want of care on his part.
Further, the court held that a traveler driving along the highway is not required to look up to see if a telephone wire is in reach of the top of his vehicle in order to be free from contributory negligence precluding a recovery for injuries received in consequence of the vehicle coming in contact with a wire dragging over the highway in consequence of a broken pole.
If in such a case the traveler is not required to look up, to see if the wire is in reach of the top of his vehicle, in order to be free from contributory negligence, it certainly could not be held that there was any duty on him to be looking up.
In McWhorter v. Draughn et al., 134 Miss. 247, 98 So. 597, it was held that a traveler upon a highway is only charged with the duty of using reasonable care to prevent running into other vehicles which are using the road in a reasonable and customary manner, and hence was not bound to discover a chain stretched across the road.
In Wheeler v. City of Fort Dodge, 131 Iowa 566, 108 N.W. 1057,1058, 9 L.R.A. (N.S.) 146, in an opinion by Judge Weaver, in a case where there was an obstruction of a wire in the street running from the court house across the street, it was argued that this was not in a sense a nuisance. The court said on page 570:
"The fact that the wire in most of its course passed through the air above the heads of the people using the walks and carriageway below does not remove its character as an obstruction of the street. The public right goes to the full width of the *Page 16
street and extends indefinitely upward and downward so far at least as to prohibit encroachment upon said limits by any person by any means by which the enjoyment of said public right is or may be in any manner hindered or obstructed or made inconvenient or dangerous."
It is also said in 29 C.J. 697, sec. 461:
"A traveler has a right to rely upon the presumption that the highway is in a reasonably safe condition for travel and free from obstructions and he need not keep his eyes constantly fixed on the road or path, or look far ahead for defects which should not exist."
To this statement of the rule we might say that a traveler on a highway that is already cluttered up so he has to pick his way through it, having enough to do to avoid the obstructions which are in plain view, cannot be held to keep one eye on the ground and the other eye open for aerial obstructions, especially when he knows he is on a highway that is constantly used for the purposes the highway in question was used.
The record shows that quite a number of trucks used this street; that it was the road they used for the trucks to go into the loading yard where they loaded freight, and that material for the building came in by truck on that street. That other White Line trucks came in there at various times. It also shows that after the accident this rope was still fastened to the derrick, and also to the bumper; but the derrick was hanging over the top of the building, at least about twelve feet. A witness describing this said that after the accident the truck was standing on the south side, headed east, and as to whether there was anything unusual about the truck, he said there was the rope still hanging over the truck body, just behind the cab, and it was still fastened to the derrick and the bumper at that time. So if the truck moved very little after it hit the guy rope, if it did hit it, stopping within that short distance, it was going slowly, as the rope was not broken. The stone fell just east of the small door of the building, shown in the photograph Exhibit D, which shows the front of the building under construction, more than seven months after the accident, when the street had been completely cleared of all debris existing at the time of the accident.
The following is laid down as the law, in 5 Blashfield's *Page 17
Cyclopedia of Automobile Law Practice (Permanent Ed.), page 457, sec. 3320:
"An automobile driver is not required to anticipate unusual obstructions on the public highway, but he is not privileged to assume that it was not negligently obstructed in the face of formidable physical obstructions which are plainly visible. He cannot ignore highway conditions commonly prevalent and with which he is familiar, nor can he assume that a roadway in process of construction or repair would be clear at night, merely because it was clear in the morning when he drove over it. He is not bound, however, to discover such obstructions as a chain stretched across the road."
The succeeding section lays down the proposition that, when a traveler knows that a highway is dangerous or when he knows of a condition that constitutes a warning of unusual peril, he is bound to exercise ordinary care to avoid any danger which he has reason to apprehend.
In driving over this street near the Maytag plant, at the time of the accident, the driver of the truck would be held to avoid any dangers which are open to his observation in going on the street, such as an obstruction on the surface of the street. He could not be held to be observing both the street and the air at the same time.
The rope in this case which was struck was not torn down or broken. The driver was not bound to anticipate that just at the time he came along there this rope would sag and catch on his truck, or that because of this the other two ropes, which had not been fastened securely, would cause a possible sagging. In other words, he was not bound to know that they were not tied to something so solid that they would resist the tendencies of the pole to bend over and thus lower the tag line and catch on the truck.
In Wegner v. Kelley, 182 Iowa 259, 267, 165 N.W. 449, 452, the court held with reference to a telephone wire, that only at places of ingress and egress along public highways need telephone wires be placed and kept at such a height as to afford the property owner unobstructed access to his lands for all ordinary use. At places not of ingress or egress to adjoining lands, the owner of the line may place and keep his wire where he pleases, provided: (1) he does not incommode the public in the use of *Page 18
the highway; (2) he exercises reasonable care at all times, in view of the many and varied circumstances which may be manifest or reasonably apparent to him while installing and maintaining his lines. In this opinion Judge Ladd said:
"The wire must be high enough for the usual and ordinary travel on the highway — not for any and all travel * * *; and this the traveler may assume without keeping a lookout for wire obstructions over the traveled way. * * * If the line is seen, of course, ordinary care must be observed to avoid injury therefrom. * * *
"In other words, in traveling the road, or entryway, he may assume, in the absence of knowledge to the contrary, that the wire is beyond the reach of all ordinary vehicles of travel; for otherwise the line would not have been so constructed as not to incommode the public; and this is to be taken into consideration in determining whether he has been without fault."
This is discussed on the question of the negligence of the plaintiff in a case. The rule laid down is clear. A person claiming damages by reason of an accident is held to show that he is not guilty of contributory negligence. In an ordinary case where the defendant is sued, as in this case, the burden is upon the plaintiff to show that the defendant actually was negligent. So if an aerial obstruction, such as is present in this case, existed, the burden of proof is upon the plaintiff who brings a suit to show by a preponderance of the evidence that the party charged with negligence in an instance such as this, negligently committed an act which resulted in the injury.
Following the rule laid down in the opinion of the Wegner case, that the person on the highway may assume, in the absence of knowledge to the contrary, that the wire or obstruction is beyond the reach of ordinary vehicles, the truck of defendant in this case was an ordinary vehicle. Trucks were constantly going in and passing out while delivering or removing material for the great manufacturing establishment which stood opposite the office building. So the street was ordinarily used for that purpose, and the drivers of the various trucks going to and from were not charged with the notice that a rope stretched across the street was of such height that it would catch on trucks passing. Hence, if the doctrine of this case is to be followed there was no negligence shown here on the part of the truck driver, and hence, *Page 19
upon that ground alone the motion should have been sustained.
The general rule was laid down in Kendall v. City of Des Moines, 183 Iowa 866, 167 N.W. 684. This case, of course, applied to surface obstructions. But the rule laid down is that the operator of an automobile is not necessarily guilty of negligenceper se for failing to have the automobile under such control that he can stop it within a distance he can plainly see obstructions ahead of him.
This was held in a case where the operator of a car, on a misty night, drove into an open excavation on a public road. Had it been in the daytime, when there was no obscurity of the danger to be apprehended, which was on the surface, the driver would be bound to take notice of it.
The appellant in its brief and argument cites the following Iowa cases as authority in opposition to the position of appellee, to wit: Abraham v. Sioux City, 218 Iowa 1068,250 N.W. 461; Ege v. Born, 212 Iowa 1138, 236 N.W. 75; Holderman, Admx., v. Witmer, 166 Iowa 406, 147 N.W. 926; Winter v. Davis, 217 Iowa 424, at page 436, 251 N.W. 770; Swan v. Dailey-Luce Auto Co. et al., 221 Iowa 842, 265 N.W. 143; Lukin v. Marvel, 219 Iowa 773,259 N.W. 782; Sec. 5029, Code of Iowa; Kisling v. Thierman,214 Iowa 911, 243 N.W. 552; Wosoba v. Kenyon, 215 Iowa 226,243 N.W. 569; Lorimer v. Hutchinson Ice Cream Co., 216 Iowa 384,249 N.W. 220; Kadlec v. Johnson Const. Co., 217 Iowa 299, 252 N.W. 103; Ellis v. Bruce, 217 Iowa 258, 252 N.W. 101; Townsend v. Armstrong, 220 Iowa 396, 260 N.W. 17.
As to each of the foregoing cases cited by the appellee, we have examined the same carefully and find nothing in any of these cases which in any way touches the particular facts in this case. The length of this opinion is such that it does not justify the burdening of it with an analysis of these cases showing their nonapplicability to the questions involved here.
2. Was the plaintiff's intestate, under the circumstances, guilty of any such negligence as contributed in any degree whatever to his injury and death?
[2] The deceased was a foreman of the company, having charge of the stone work and the means by which it was placed in position. So he had full control over the derrick, over the placing of the guy ropes, the tag line. It is evident that the tighter the ropes were fastened to the building, the greater would be the resistance of the upright part of the derrick to bend *Page 20
while the stone was being lifted, consequently causing a slack in the tag line. Ordinarily the two ropes on the back should be secured quite tightly, because it would prevent sagging in the tag line.
By the express directions of the foreman himself, the ordinary manner in which the work was usually done was not observed at the time of the accident. He didn't tighten the two guy ropes on top of the building, but concluded they would hold them down as it was the last stone to be put in (perhaps) that day. He was the employee of the construction company and entrusted by the construction company with the duties of looking after this matter; he knew that the street was open for traffic, at least to the extent of permitting trucks to go in and unload at the great plant across the street. There were a number of trucks constantly going and coming. Knowing this, Hatfield must have known that anything that would permit the tag line to slacken so as to be disturbed by these trucks, was dangerous. Yet he did it.
In Lane, Admr. v. Cent. Iowa Ry. Co., 69 Iowa 443, 446,29 N.W. 419, 421, it was held that where the conductor in charge of a railway train knew every circumstance which tended to render the operation of his train hazardous, and if, in his judgment, it was not being operated in the safest possible manner, he had full authority to direct that such changes be made in the manner of its operation as would render it safe. It was held that:
"The conductor is the superior agent on the train, the other employees being subject to his direction and control. The engineer is bound to obey his directions as to the speed at which the train shall be run, unless he has express directions on the subject from the train dispatcher, who is the superior of the conductor. On the occasion in question the engineer had not been directed, as to the speed at which he should run, either by the train dispatcher or conductor."
Further on the court said: "Every circumstance which tended to render the operation of the train hazardous was known to the deceased [that is, the conductor]. If the transfer of the engine from the rear to the front end of the train was practicable, and would have lessened the danger attending its operation, he knew those facts, and had authority to direct that the change be made. If the rate of speed at which the train was being run *Page 21
was hazardous, considering the liability to collision with cattle and the condition of the track, he knew that fact also, and had the authority to direct that it be run at a lower rate of speed. His position made him the judge of whether the train was being operated in the safest manner practicable; and if, in his judgment, it was not being so operated, he was empowered to direct that such changes be made in the manner of its operation as would render it safe. By permitting it to be operated in the manner in which it was being operated at the time of the accident, he, in effect, determined that that was the proper mode of operating it, and he was in precisely the same position he would have occupied had lie expressly directed that it be operated in that particular manner. The case is clearly within the principle laid down in Dewey v. Chicago N.W. Ry. Co.,31 Iowa 373."
In the Dewey case it was held that as the deceased was the conductor and superior officer of the train, and directed the line of conduct which resulted in his death, it would estop his administrator from recovering against the company on the ground of negligence on the part of its employees.
We believe these rules to be sound, and that the court would have been right in sustaining the motion, even alone, on the ground of contributory negligence of the deceased, barring his recovery.
3. What were the rights of the defendant truck company on the street?
The street was kept open for travel, at least for trucks coming in to the factory. True, the streets were obstructed on the surface by piles of brick, sand, and the mixer, etc., as the photograph Exhibit 1 shows, and a trucker driving through there had to carefully pick his way to avoid the surface obstructions. But granting that it was proper to cross the street with the tag line, it must be done in the view of existing circumstances. The tag line should have been so placed across the street that there was practically no possibility of it coming in contact with any of the trucks that had to go through there, unless they were of extraordinary height, at least, and there is no showing as to that here. So the deceased, in the position of foreman, occupied a position as representative of his company, and was held in the exercise of ordinary care to see that every means possible were taken to prevent such an occurrence as is claimed to have taken *Page 22
place here. And under the rule laid down in this court, in Banning v. C.R.I. P. Ry. Co., 89 Iowa 74, 81, 56 N.W. 277, 279, the court says: "The rule is that, if the injured party contributed in any way, or in any degree directly to the injury, there can be no recovery."
And this court reversed the lower court in that case for giving an instruction that,
"* * * in order to defeat recovery, [he] must have materially or substantially contributed to produce the injury; that is, the negligence of the deceased must have contributed `in an important degree' to the injury in order to prevent a recovery. Such is not the law in this state."
So under the rules laid down in these cases, and in many other cases we might cite, because it has become "horn book" rule in this state, we hold there could be no recovery on account of the contributory negligence of the deceased. The truck was rightfully on the street, because it must be presumed that when the construction company took the contract to make the building, knowing all the circumstances and knowing the need and necessity for trucks to go through this street to keep the factory running, by delivering to or taking away freight, it must carry on its affairs so as not to interfere with such operations.
4. By what right was the street obstructed by stretching the guy rope across it?
The Maytag Company made a contract with the construction company to erect the office building. Conceding that this gave to the construction company all the rights that the Maytag Company, the owner of both sides of the street, had, without deciding it, it took no greater rights than the Maytag Company had, and hence it was bound to observe the rights of the truckers driving in and out the street the same as the Maytags would have, and hence the agent of the construction company, the plaintiff's intestate in this case, had no greater rights than the company had, and he was the company, so far as seeing that these operations involved in this action, were carried on with meticulous care, to avoid any such catastrophe as took place here.
So we are of the opinion that the court properly sustained the motion to direct a verdict. And if that motion was good on any one ground, the sustaining of the motion was proper. We see no applicability, whatever, in this case, of the proposition *Page 23
raised by the appellee under the "assured clear distance ahead" rule, which rule is in reference to speed.
Therefore, the decision below is hereby affirmed. — Affirmed.
DONEGAN, ANDERSON, SAGER, STIGER, and HAMILTON, JJ., concur.
RICHARDS, C.J., and KINTZINGER, J., dissent. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432157/ | I. Mary L. Brunsdon, appellant herein, and William M. Brunsdon were, at the time of the transactions involved *Page 1101
in this controversy, husband and wife. T.B. Brunsdon is the brother of appellant's husband. Appellant 1. HOMESTEAD: and her husband, on April 13, 1914, obtained a conveyance: contract for a deed to Lot 5, and on February nonjoinder 23, 1918, a contract for a deed to Lot 6, all in of wife: Block 3, Broadmoor, an official plat in the city ratification of Des Moines. Harry H. Polk Company was named and as grantor in each of said contracts, which ran estoppel. to appellant and her husband jointly. On or about March 20, 1920, appellant assigned her interest in the contracts to her husband, who, on April 9th following, assigned the same to his brother, T.B. Brunsdon, one of the appellees herein. The consideration agreed to be paid for the lots was paid in monthly installments; and on May 11, 1920, T.B. Brunsdon paid the balance, of $154.98, due thereon, and received a warranty deed to himself to the property. On January 1, 1921, T.B. and William M. Brunsdon entered into a written contract for the reconveyance of the premises to the latter, upon the payment of $7,950, in the manner and upon the terms specified in the contract. There was an old residence on Lot 5 at the time the contract for a deed was entered into. Appellant and her husband moved upon the property and resided in the old residence until May 8, 1918, when it was totally destroyed by fire. A garage having in the meantime been erected upon Lot 6, the family moved into it, where they lived until Thanksgiving, 1920, when they moved into a new house erected thereon by T.B. Brunsdon, which forms the subject-matter of this controversy. On February 1, 1920, T.B. Brunsdon executed a mortgage upon the described premises to James K. Turner, one of the appellees herein, to secure the payment of a loan of $2,000. William M. Brunsdon built the foundation for the new residence at his own expense. T.B. Brunsdon furnished all of the material and labor and constructed the house, in pursuance of an oral contract between himself and William M. Brunsdon, by the terms of which title was to be taken by the former, and a new contract for a deed was executed by him to William M. after the improvement was completed. As already stated, a written contract was subsequently executed, in pursuance of this oral agreement. Appellees filed separate answers to appellant's petition, the appellee Brunsdon pleading *Page 1102
as defenses ratification and estoppel, and Turner setting up the mortgage executed to him by T.B. Brunsdon. As affirmative relief, both prayed that their respective claims be established as liens upon the property. No mechanics' liens were filed, either for labor or material furnished, against the property.
The court entered judgment in rem against the property in favor of T.B. Brunsdon for $4,367, the balance due him, and established the same as a lien upon the property, decreed a foreclosure thereof, and ordered special execution to issue if not redeemed by appellant within 90 days, barring all right of redemption after that date. The court also confirmed and established the lien of the mortgage, making the same senior to the other lien. Subject to the above, the court found that appellant was the owner of the property in fee simple, and quieted title in her. No appeal was taken from this portion of the decree. The decree quieting title in appellant was no doubt based upon a prior decree entered September 1, 1922, in an action brought by appellant for a divorce, by the provisions of which she was given all the right, title, and interest of her husband in the property in question.
We will first dispose of the issues tendered by the answer and cross-petition of the appellee T.B. Brunsdon. Although appellant and her husband were in possession of the property under a contract for a deed, only, it nevertheless constituted their homestead. Stinson v. Richardson, 44 Iowa 373; Johnson CountySav. Bank v. Carroll, 109 Iowa 564. The statute exempting the homestead from judicial sale is as follows:
"Sec. 2972 [Code of 1897]. The homestead of every family, whether owned by the husband or wife, is exempt from judicial sale, where there is no special declaration of statute to the contrary."
See, also, Section 10150, Code of 1924.
Because of certain additions therein to Section 2976, Code of 1897, we will set out Section 10155, Code of 1924, which specifies and classifies the debts for which the homestead is liable.
"Sec. 10155. The homestead may be sold to satisfy debts of each of the following classes:
"1. Those contracted prior to its acquisition, but then only *Page 1103
to satisfy a deficiency remaining after exhausting the other property of the debtor, liable to execution.
"2. Those created by written contract by persons having the power to convey, expressly stipulating that it shall be liable, but then only for a deficiency remaining after exhausting all other property pledged by the same contract for the payment of the debt.
"3. Those incurred for work done or material furnishedexclusively for the improvement of the homestead.
"4. If there is no survivor or issue, for the payment of any debts to which it might at that time be subjected if it had never been held as a homestead."
The portion italicized above first appears in Chapter 237, Acts of the Fortieth General Assembly.
One of the contentions of appellee, which we will later discuss, is that the property in question is liable for the purchase price thereof. Construing Section 2976 of the Code of 1897, we have repeatedly held that the homestead is not exempt from execution on a judgment for purchase money. Christy v. Dyer,14 Iowa 438; Hyatt v. Spearman, 20 Iowa 510; Campbell v.Maginnis, 70 Iowa 589; Clifton Land Co. v. Davenport, 130 Iowa 94. Unless the claim of appellee may be classified as purchase money, or the pleas of ratification and estoppel or of an equitable lien may be sustained, the property in question is exempt from execution on any judgment entered in favor of appellee against either appellant or her husband.
Before proceeding to a final discussion of the facts or the authorities relied upon by appellee to sustain his pleas of ratification and estoppel, attention should be directed to certain statutory provisions relating to conveyances of the homestead.
"Sec. 2974, Code of 1897 (Sec. 10147, Code of 1924). No conveyance or incumbrance of or contract to convey or incumber the homestead, if the owner is married, is valid, unless the husband and wife join in the execution of the same joint instrument, whether the homestead is exclusively the subject of the contract or not; but such contracts may be enforced as to real estate other than the homestead at the option of the purchaser or incumbrancer."
The only thing assigned by appellant was her joint interest *Page 1104
in the contract to her husband. This manifestly did not in any way affect or alter the status of the property as a homestead. The exemption thereof from execution is for the benefit of the family, and not for the husband or wife alone. Green v. Farrar Wheeler, 53 Iowa 426; Harsh v. Griffin, 72 Iowa 608. The homestead can only be conveyed by a joint instrument, signed by both the husband and the wife. This is the plain provision of the statute, which has frequently been construed and applied in the decisions of this court. Belden v. Younger, 76 Iowa 567; Barnettv. Mendenhall, 42 Iowa 296; Clay v. Richardson, 59 Iowa 483;Donner v. Redenbaugh, 61 Iowa 269; Clark v. Evarts, 46 Iowa 248;Alvis v. Alvis, 123 Iowa 546; Keeline v. Clark, 132 Iowa 360. Although we have held that the joint assignment of a title bond by the husband and the wife is sufficient to convey the homestead(Rubelman v. Rummel, 72 Iowa 40), nevertheless, under the doctrine of the above mentioned cases, the assignment of the contracts by William M. Brunsdon to appellee was wholly void. This has been specifically held with reference to similar transactions. Belden v. Younger, supra. Further, we have held that a conveyance of the homestead by the husband under a power of attorney from the wife is void (Keeline v. Clark, supra); and that a conveyance by the husband is not validated by the act of the wife in subsequently executing a separate instrument of conveyance thereto (Alvis v. Alvis, supra); and that the oral consent of the wife to the execution of a written contract signed by the husband alone does not meet the requirements of the statute (Donner v. Redenbaugh, supra).
But it is also well settled that a void instrument by which the husband has attempted to convey the homestead may be ratified by the wife, and she may thereby be estopped from setting up the statute which requires, for a conveyance of the homestead, the execution of a joint instrument. Spafford v. Warren, 47 Iowa 47;Sawyer v. Perry, 62 Iowa 238; Seiffert Wiese Lbr. Co. v.Hartwell, 94 Iowa 576; Drake v. Painter, 77 Iowa 731; Epperly v.Ferguson, 118 Iowa 47; Pagel v. Tietje, 193 Iowa 467; Shaffer v.Miller, 195 Iowa 891; Townsend v. Woodworth, 185 Iowa 99.
Having thus briefly summarized the previous decisions of this court bearing upon the issues involved, we will now proceed *Page 1105
to a somewhat lengthy recital of the record.
Appellant and her husband lived unhappily together, there being many quarrels between them, and numerous actions for divorce. There was also great animosity between appellant and appellee T.B. Brunsdon. The latter furnished the cement for the foundation of the house, at a cost of $75. Appellant had a check in her possession, payable to herself, for that amount, which she indorsed, and which her husband turned over to T.B. Brunsdon in payment for the cement. Appellant claims that the check was taken from her possession without her knowledge and consent, and that, before it was presented to the bank, she stopped payment thereof. This resulted in an open breach between her and T.B. Brunsdon. Sometime in November, 1919, appellant being ill, she entered the Methodist hospital in Des Moines, where she remained until about the middle of February, 1920, when she went to a local hotel for a time. She testified that at this time she was entirely out of money, and that, after she went to the hotel, her husband requested her to assign her interest in the lots to him, and that she declined to do so; that finally he left the hotel and went to reside with his mother and T.B. Brunsdon, leaving appellant without money for the support of herself and her ten-year-old son. A few days later, appellant went to the home of her mother-in-law, for the purpose, as she testified, of inducing her husband to return to the hotel; but while she was there, an altercation ensued between herself and T.B. Brunsdon, who forcibly ejected her from the house. Appellant's husband returned with her to the hotel, where they stayed that night. Appellant testified that they quarreled all night, and that her husband cursed and swore at her, and threatened several times to leave if she did not assign the contracts to T.B. Brunsdon. This, she testified, she steadfastly refused to do, but finally consented to assign the same to her husband. The assignments were executed about a week later.
Appellant is corroborated by the testimony of a witness that she and her husband made two visits to the office of Polk
Company before the assignments were executed, although this is denied by William M. Brunsdon. The morning after the events just narrated, appellant called the office of Polk Company *Page 1106
over the telephone and talked with a woman employee, the witness above referred to. Both testified that appellant told her that she was in a tight place and that she was going to have to assign the contracts, but that she did not want to do so. Later in the day, when she and her husband went to the office, the employee referred to refused, on account of the telephone conversation with appellant, to make out the assignments, giving as an excuse that no officer of the company was present. Appellant's testimony as to what occurred at the hotel is corroborated by that of her son, and to some extent by the testimony of a female employee, who was sleeping in a near-by room.
Appellant further testified that she knew nothing of the assignment of the contracts by her husband; that she never consented thereto, and at all times refused to join therein; and that the first she knew of the written contract between her husband and T.B. Brunsdon was about the time the house was completed, when she discovered a copy of it in his traveling bag. Her claim that she then went to the office of Polk Company to ascertain whether her husband had assigned the contracts to appellee is corroborated by the employee of that office above referred to. Appellant and appellee T.B. Brunsdon would not deal with each other. On this point the evidence is conclusive. Concerning the arrangement between William M. Brunsdon and T.B. Brunsdon, the latter testified as follows:
"I told him I would not go ahead and do any building there unless I had the deed in my own name; that, if the woman would stop payment on this check and claim it was a forgery, what would she do if I went ahead further? I don't think there was any more talk at that time. I didn't do any more work there or order any more material for a while. Nothing further was said about building a house until the following spring, of 1920; then he brought me a contract like Exhibit 3 and asked me if I would sign that, and I told him I would not. I told him there was only one way I would go ahead, and that was that he would deed the place to me, and then, when it was completed, I would give him a deed back for it, after we had made a contract. My brother and his wife were living together at that time. I didn't know a thing about her assigning a contract to me. It was never discussed before me. She didn't say anything about assigning *Page 1107
it to me in March, 1920, when she came to my mother's house. We did talk about building the house, though. Plaintiff was there then, but didn't take any part in the conversation. This was in March, 1920. She didn't offer any objection to the plan I talked of. A month after that, my brother came to the house and said she had signed the contract over to him and he would assign them to me, which he did, at Harry Polk's office. * * * I had nothing whatever to do with the plaintiff during that time. She never made any suggestions to me about the building. With regard to the incident she says I came there one Sunday afternoon along in September, 1920, I heard her testimony as to what I told her, — that I built the house and that it was my place, — and that is about what I said. I am positive the floors were laid and a good deal of painting done after that. Mr. Brunsdon and his family occupied the house almost as soon as it was completed, — about Thanksgiving Day, 1920. * * * I told him I would still go ahead if the contract was signed over to me. I was talking with my brother about building the house, at the time Mrs. Brunsdon came to my mother's house in March, 1920, and we continued to talk about it. Just went on with the conversation. It is quite possible that Mrs. Brunsdon did not hear all of the things that I and my brother said that night. I and my brother and my two sisters and my mother were in the room when Mrs. Brunsdon was there. Mrs. Brunsdon didn't take any part in the talk about the house. She and I got into some kind of dispute later, and I threw her out of the house; but that was not in connection with building the house. When she came to the door, I told her she could come in if she would behave herself. She didn't say she would behave herself, but she came in under those conditions. If Mrs. Brunsdon ever learned anything from me about the contract for building the house, she heard it that evening. This was the only time she had any opportunity to learn from me what the contract was. I felt more or less hostile to her still at that time. I did not start building the house again in 1920 until after these contracts were assigned to me by Bill. With regard to whether I had an impression that Mrs. Brunsdon would be very much averse to making an assignment to me after I threw her out of the house, I don't know. I didn't have any impression, one way or the other. I realized *Page 1108
that she seemed not to like me, and I would not naturally think that her affection would be increased by my throwing her out in the street. I never talked with Bill anything about how he got the assignment from his wife. * * * From sometime in April, 1920, until I had this conversation with Mrs. Brunsdon in the latter part of September, where I told her I owned the house and that she could get off of the place, I never spoke to Mrs. Brunsdon on the place there, and she never spoke to me, that I know of. I was there very frequently. All day, sometimes. She never came in the house nor around the house to look over the house while I was working on it. Never made any suggestions to me about how I should fix the house or where she thought anything should go, or whether a thing was put in right. She never looked over the plans of the house, so far as I know. * * * I did not have any further conversation with Mrs. Brunsdon after this time in September, before they moved into the house. That is the one and only conversation I had with her during the entire time, and that was to the effect that I owned the house, and she could get out."
The testimony of appellant is contradicted in some particulars by William M. Brunsdon, but the preponderance of the testimony as to the matters stated above is in her favor. The only other testimony having a material bearing upon the issues of ratification and estoppel is, in substance, as follows: At the time the oral agreement was entered into between appellant's husband and appellee for the erection of the house, appellant had an action for divorce pending in the district court of Polk County, in which an attachment had been levied upon the property. It was necessary that the attachment appearing on the abstract obtained at the time the mortgage to Turner was executed, be released. The action for divorce was dismissed, and the attachment released by appellant, at the request of her husband. The latter testified that he explained to appellant why this was necessary, but this was denied by her.
Appellant further testified that she first learned of the contemplated mortgage early in the third week of January, 1921, together with the name of the lawyer to whom the abstract had been referred for examination. She immediately went to the attorney and advised him of what she had heard, and that the *Page 1109
premises were occupied by her as a homestead. This testimony is not disputed. Isabel Cowan, the employee of Polk Company above referred to, testified that she at some time was informed that the purpose of the assignment of the contracts by appellant to her husband was to enable him to make a deal with appellee T.B. Brunsdon to build a house on the lots. She was uncertain from whom she obtained the information, but if from appellant, it was probably after the building had been completed. Similar testimony was given by one Lorenz, an officer of Polk Company. The witness was, however, unable to state that he obtained the information as to the purpose of the assignment from appellant.
Do the above facts present a correct basis upon which to rest a finding of ratification and estoppel? Whatever else may be found, it is certain that appellee at no time or in any particular relied upon anything that was said or done by appellant in furnishing labor or material for the improvement. The conditions upon which he consented to furnish the necessary material and build the house were dictated absolutely by him. Appellant was entirely ignored, and during all of the time she was held at arm's length. The only communication between appellant and appellee was on the two occasions when they quarreled; and she made no suggestion to the latter at any time during the building of the house. She did suggest to her husband that a porch be built on the south side of the house, and he procured that to be done. Appellant throughout her testimony denied that she in any way consented to the assignment of the contracts by her husband to appellee or to the arrangement that was made with him to build the house. In these claims she is corroborated by the testimony of other witnesses and by the inferences to be drawn from the record stated above. She did not want appellee on the premises, and apparently did not hesitate to so declare, both to him and to her husband. It is probable that appellee and William M. Brunsdon believed that the latter had legal authority to bind appellant by the assignment of the contracts. No such authority existed. Appellant also testified that her husband again suggested, while they were in the office of Polk Company, that the assignment be made directly to Tom, and that she refused to do it, and started to leave the office, *Page 1110
declaring that she would not do so. It is true that William testified that appellant knew of the oral contract between himself and appellee, and that he explained to her the reason of his request for the release of the attachment. This she denied, and we think her claim finds corroboration in the relationship of the parties. The testimony of the employees of Polk Company is of little force, and perhaps goes as far to sustain the testimony of appellant as that of her husband. Of course, appellant, who resided on the premises, knew that appellee was building the house; but he at all times refused to in any way recognize or deal with her. The only thing appellant did that could possibly constitute a ratification was to move into the house, when completed, with her husband. That this is insufficient requires no demonstration.
One other fact should be mentioned. William M. Brunsdon testified that appellant employed an attorney to prepare a contract to be signed by appellee for the reconveyance of the property to her and himself after the building was completed. A contract in which the names of the parties are written, but in which the other blank spaces are not filled out, and which is claimed to be the one in question, was offered in evidence. Appellant denied that she procured such a contract to be executed or at any time talked with her husband about the matter.
We shall refer but briefly to the authorities cited and relied upon by appellee to sustain the plea of ratification and estoppel. None of them goes so far as to sustain such a plea upon the facts stated. In Spafford v. Warren, supra, Sawyer v. Perry,
supra, Epperly v. Ferguson, supra, and Luttschwager v. Fank,151 Iowa 55, it was disclosed that the husband and wife signed joint instruments irregular in form, or on different dates, and otherwise imperfect. In each of these cases, the court recognized the necessity that the husband and wife join in the same instrument. Seiffert Wiese Lbr. Co. v. Hartwell, supra, andPagel v. Tietje, supra, simply reaffirm the general doctrine of equitable estoppel, as applied to cases of this character. In all of the other cases, the plea of estoppel was based upon transactions in pursuance of which both the husband and the wife voluntarily abandoned the premises as a homestead. Appellee's plea of ratification and estoppel cannot be sustained. *Page 1111
II. As already stated, the homestead is not exempt from execution on a judgment for the purchase price. It is contended by appellee that the cost of the house must be treated as a part of the purchase price; but the purchase price in 2. HOMESTEAD: this case was the price fixed in the contracts liability between Polk Company and appellant and her for debts: husband, and not such price augmented by the "purchase cost of the house. The assignment of the "price contracts by William M. Brunsdon to appellee defined. being void, appellant was in no wise bound thereby. These assignments could neither operate in favor of appellee as a ratification nor against appellant as an estoppel. The cost of the house was in no sense a part of the purchase price of the contract assigned by appellant to her husband. Of course, it was a part of the consideration of the written contract between William M. Brunsdon and appellee, but this transaction had no effect upon the homestead right of appellant, and existed wholly independent and apart therefrom.
The further contention is urged by appellee that, where a party in good faith takes title to a homestead under a void conveyance and makes judicious improvements thereon which are not inconsistent with the circumstances of the 3. HOMESTEAD: parties owning the homestead, the homestead is improve- liable therefor. Stinson v. Richardson, supra, ments: and Parsons v. Moses, 16 Iowa 440, are relied equitable upon at this point. In the former of the above elien. case, the purcahser in good faith placed certain improvements upon the premises and collected a larger amount as rents. He was allowed to offset the cost of the improvements against the rent. In the other case, the court held that, in an action under the Occupying Claimants Law, to recover the value of permanent improvements upon real estate, the same might be offset against the rents and profits which had accrued during the period. The distinction between these cases and the application sought to be made thereof to the case at bar is obvious. We find nothing in the record upon which to base an equitable lien in favor of Brunsdon upon the property. Section 2975, Code of 1897, makes the homestead subject to a mechanics' lien for work, labor, or material done or furnished exclusively for the improvement; but no mechanics' lien was filed. On this branch of the case we reach the conclusion that *Page 1112
the only portion of appellee's claim that can, upon any theory, be recognized as purchase money is $154.98 which he paid to Polk Company. Whether, under the circumstances, this constituted a mere voluntary payment, we have no occasion to determine. No such claim is asserted. Appellee should have judgment for this amount, with interest at 6 per cent from the date of payment. In all other respects, the finding and decree of the court below with reference to appellee's claim must be vacated and set aside. This includes the portion of the decree relating to the equity of redemption.
III. We come now to consider the mortgage executed by T.B. Brunsdon to Turner, and the lien which the court confirmed and established against the homestead in his favor. Appellee Turner was furnished an abstract of title to the 4. MORTGAGES: property before the mortgage was executed. The validity: abstract was referred to an attorney for rights of examination, who, in addition to other party in requirements, advised appellee to investigate as possession. to who was in possession of the property. This he failed to do. Had he done so, he could readily have learned the truth. Appellant was in possession thereof all of the time, and asserting her homestead right therein. A purchaser of real property is charged with notice of the interest or claims of a party in possession thereof. Koon v. Tramel, 71 Iowa 132; In reEstate of Gill, 79 Iowa 296; Truth Lodge v. Barton, 119 Iowa 230;Leebrick v. Stahle, 68 Iowa 515; Lowther Oil Co. v. Miller-SibleyOil Co., 53 W. Va. 501 (44 S.E. 433). In the latter case, the court, referring to the character of the notice imparted by the possession of real property, said:
"The earth has been described as that universal manuscript open to the eyes of all. When a man proposes to buy or deal with realty, his first duty is to read this public manuscript, — that is, to look and see who is there upon it, and what are his rights."
The term "purchaser" includes "mortgagee." In re Estate ofGill, supra.
Appellee Turner could not, therefore, be an innocent holder of the mortgage. Appellant's possession of the property was with notice to him of appellant's right therein. Certain exceptions are recognized to this general rule, but the facts in this *Page 1113
case do not bring it within any of them. Koon v. Tramel, supra;May v. Sturdivant, 75 Iowa 116; Elliot v. Lane, 82 Iowa 484;Crooks v. Jenkins, 124 Iowa 317. Whatever interest T.B. Brunsdon may have acquired in the property by reason of his oral contract with William M. Brunsdon and the conveyance to him of the legal title by Polk Company, he could not execute a valid mortgage thereon, as against the homestead right of appellant. It is clear that the mortgage did not become a lien upon the property. The conclusion arrived at in this case may result in the doing of a grave injustice to appellees, but a court of equity cannot so expand its proper jurisdiction as to completely override statutes or ignore established doctrines.
It follows from what we have already said that the judgment against the property in favor of appellee T.B. Brunsdon must be so modified as to reduce the judgment to $154.98, with lawful interest from the date thereof. Judgment will be entered in the court for the amount due. The mortgage lien decreed in favor of appellee Turner must be canceled, set aside, and held for naught. It is so ordered. — Modified and affirmed as to the claim of T.B. Brunsdon; reversed as to the mortgage of the appellee Turner.
ARTHUR, C.J., and EVANS and VERMILION, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432161/ | These two cases are submitted under one record. The testimony was made applicable to both machines.
These machines were seized under search warrant, and one G.I. Titus appeared claiming ownership of said machines and that they were not gambling devices. The machines were the ordinary type of slot machine. By dropping a nickel in the slot, the machine was started in operation and delivered a package of mints, and also slips on which were printed different sayings, and also, by mechanism of a disc in the machine, the fortune of the player was told. In the instant cases, the officer dropped a nickel in the slot of one machine and got nothing in return for it, and it was claimed the machine was out of order. From the other machine, he got a slip on which was printed the words: "You will marry a Greek dishwasher." The officer turned the slip over to the proprietor of the store where the machine was found and was given in return therefor four Harvester cigars. These were in addition to the mints that he had received from the machine when he dropped the nickel in it.
Great ingenuity has been utilized by the inventors of these machines to so construct them that they will not be gambling devices in the eyes of the law. Almost every state in the Union has passed upon these various devices and they have been universally condemned.
[1] Titus insists that he knew nothing about the manner in which these machines were used, and that he did not know that any of the managers or proprietors of places where his machines were placed were giving merchandise for these slips of paper that came from the machines. This contention is wholly beside the issue. He says he furnished the machines and the mints to the various proprietors and the profits were divided with the merchants "fifty-fifty". Whether he knew that the machines were not being used for a legitimate purpose is of no significance. This proceedings is against the machines themselves, and their use; and what he, as the owner of such machines, knew as to the method in which they were being used *Page 3
by the different proprietors of the different places where he had placed them had nothing to do with the case.
[2] Whether or not these machines are per se gambling devices is not very material in the consideration of these cases. The question is, Were these machines used for gambling purposes? The evidence shows that the machines, as used, not only vended mints, but, in return for certain slips above referred to, the player not only received the package of mints which presumably was of the value of 5 cents, but also, by reason of the exchange of the certain slip thrown out or furnished by the machine, received four Harvester cigars in one instance, and in the other he got nothing in return for the nickel dropped into the machine.
Many things or articles may be innocent in themselves, but may fall under the condemnation of the law by reason of the manner of their use. For instance, a deck of cards, in itself, may be wholly innocent, yet it may be used in a certain way so that it is subject to condemnation under the law; and it is on this theory that the court undoubtedly acted in the condemnation of these machines, to wit, that as a matter of fact they were being used in such a way as that it was a violation of the law. While this record is very scanty, we feel that the court had before it (which we do not have) the machines as exhibits in the cases. Further than this, the court had the witnesses on the stand and could observe their conduct and demeanor. Without the two machines, which were exhibits, before us, we cannot say that the court erred in its judgment wherein it condemned the machines. — Affirmed.
KINTZINGER, C.J., and MITCHELL, POWERS, ANDERSON, DONEGAN, RICHARDS, and HAMILTON, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432162/ | The Iowa Railway Light Company of Cedar Rapids owns and operates an electric light and power plant in the city of Cedar Rapids. For many years prior to 1913, a wooden dam had been maintained across the Cedar River at that place. Prior to the above date, the city had acquired a 59/64th interest in the dam and the dam site, which included all of the rights and appurtenances of every kind belonging therewith. On or about the above date, the Iowa Railway Light Company had acquired the remaining 5/64th interest therein. The dam served the city in the maintenance of its water supply, but was inadequate for the purposes desired by it and appellant. Hence, on or about May 27, 1913, a written contract, which covers 17 pages of the abstract, was entered into between the appellee and appellant for the erection by the former of a new dam at the location of the old one, at a cost not exceeding $125,000. When completed, the dam would serve both the city and the Railway Light Company. The statement of the contract as to the nature and character of the dam to be constructed is as brief and clear as it can well be made, hence we quote it:
"1. To employ Ira G. Hedrick of Kansas City, Missouri, to draft and prepare plans and specifications for a concrete and steel dam to be built across the Cedar River at or near the location of the present dam, together with a lock for transferring boats from the lower to the upper levels and the necessary concrete headraces, bulkheads and mechanical head gates for the delivery of such water as the said city may be entitled to, to the power plant and wheels hereinafter provided for and for an adequate tailrace for conducting the water from the power house *Page 1327
without undue loss of head; and for the delivery to the owners of the remaining 5/64 of said dam and site in proper conduits or raceways such water as each may be entitled to; said dam to be of modern construction, of substantially the same height as the present timber dam, to wit: 86.0 datum and to be equipped with steel flashboards, wickets, or other suitable devices for bringing the total head to ten feet in ordinary stages of the water. The foundation of said dam shall be carried down into solid rock a sufficient depth to insure against seepage and absolute safety against scour, ice or floods. All movable portions of the dam to be operated by machinery with power house on one side of the Cedar River and the boat locks upon the other side thereof and the entire construction of the same to cost not to exceed the sum of $125,000. The plans so drafted shall be approved by the city council of said city if satisfactory, if not, with such changes as said council may require and shall then become a part of this contract by this reference and the dam as referred to herein shall be held to mean the said dam, machinery and other construction which the city hereby obligates itself to install so provided for in said plans and specifications as finally approved.
"2. To build, said dam, locks and all the raceways, bulkheads, head gates and other appurtenances thereunto belonging at its own cost and expense according to the said plans and specifications and to provide for supplying without undue loss of head all that portion of the water belonging to said city under its undivided interest in said dam and water rights to the party of the second part, through the raceways under the terms and conditions, and at, and for the prices, and for the term of years hereinafter mentioned."
The services of the engineer named were secured by appellant, plans and specifications were made, and were approved by the city council, and the dam constructed, substantially at least, in accordance therewith. It was finally completed, and accepted by the city, and turned over to the appellant, in accordance with the terms and provisions of the contract of April 10, 1916. In the meantime, appellant had so constructed the new hydroelectric light plant contemplated at the time the contract was signed, as to make the power available to it for the operation of its plant. The dam was equipped with steel gates or flashboards, as required by the contract, which were provided with mechanical *Page 1328
devices for automatically raising and lowering the same by the action of the water, and also raising and lowering the same by hand.
In May, 1918, the Ellis Park Stone Company commenced an action against appellant for damages which it alleged were caused by the raising of the water in the river at the dam above the original elevation of 86 feet above city datum, which was the elevation for which appellee had a prescriptive right. Four other similar actions were commenced. Later, the city was made a party defendant in each of these actions. The city and the Railway
Light Company each filed answer and cross-petitions, alleging a cause of action against the other, and asking that, in the event that the plaintiffs, or any of them, should obtain a verdict in their favor, judgment therefor be entered against the other. A settlement as to the amount of damages suffered was, apparently, had of each of the five actions commenced against the parties, but no judgment was entered against either therefor. It was stipulated, however, upon the trial that, upon the final adjudication of the issues between appellant and appellee, judgment for the sums claimed, which aggregated something over $8,000, should be entered against the party found liable therefor. This stipulation eliminated all of the parties except the city and the Railway Light Company, and the issues joined between them on their respective cross-petitions present the only question before this court for decision.
A jury was waived, and the cause tried to the court. It was stipulated by the parties that the damages complained of were caused by the maintenance of the crest of the water at an elevation above the city datum, and not by the permanent structure.
The following provisions of the contract are material, and constitute the principal subject of contention:
"Article 1. (Par. 5.) To grant to party of the second part the full control of all of the head gates to said raceways and all the machinery provided, for the movable portions of said dam, subject to the right upon the part of the city to so regulate the flow of water through said head gates as to prevent damage from overflow of lands which have not heretofore been subject to overflow by the maintenance of the dam at its present height or interference with the city's water supply *Page 1329
through its intake mains, but said intake mains shall at all times be located at points suitable therefor and as near the bottom of the river as is practicable.
"Article II. (Par. 5.) To assume and take over full control of the operation of all the movable portions of said dam during the life of this contract at its own cost and expense and to protect and hold the city harmless from any damages of any kind, nature, and description arising from the operation thereof."
It will thus be observed that each of the parties assumed or reserved certain control over definite portions of the dam. The contract obligated appellant to pay 10 per cent of the total net cost of the dam annually in equal semiannual payments for the use of its water power. It was evidently deemed necessary that the operation of the flashboards and of the dam generally should be confided to it. The reservation of the city set out above in Paragraph 5, Article 1, of the contract, of the right to so regulate the flow of water through the head gates as to prevent damage from overflow to lands not previously subject thereto, has nothing to do with the flashboards, or the crest of the water at the dam. The head gates and their use are explained by William G. Fargo, a civil engineer called by appellant, as follows:
"Q. Now, Mr. Fargo, what are the head gates, — what does that term cover? A. Head gates may mean the gates at the entrance to the headrace, — the Taintor gates, — or they may be the gates near the power house or plant itself, as they were in this case. The purpose of these gates is to hold the water off the wheels. I desire to modify my answer. There are two places for head gates, and one of the two places for head gates is near the entrance to the canal. The head gates in the dam proper were down by the hydraulic electric plant.
"Q. Are there head gates in the dam itself? A. Not ordinarily spoken of as head gates in the dam, unless they lead to some use of the water.
"Q. I take it the hydroelectric plant and the dam is an equipment taken together, in this particular instance they were part of the gates in the dam proper? A. Yes, one set of the gates were in the dam. They were operated by manual operation. I mean by that, hand power applied by winches and pulleys. *Page 1330
The purpose of the gate in the dam was to admit water to the power house. That was partly the purpose of these gates, — to regulate the amount of the water admitted to the hydroelectric plant. There was an automatic operation finally installed, and I believe these gates were operated in this way. The gates in the dam proper would surely control the amount of water permitted to go through the raceway down to the hydroelectric plant."
The reason for the reservation in favor of the city was to enable it to control the head gates and the right to operate the same in such a way as to, when necessary, maintain the full discharge capacity of the dam. Appellee reserved no control over the flashboards, but, on the contrary, appellant assumed full control of the operation thereof and agreed in specific terms to protect and hold the city harmless from all damages of every kind, nature, and description that might result from the operation thereof.
It is clear that the quoted portions of the contract refer to wholly distinct matters. The city had a prescriptive right to maintain a water level in the river at an elevation of 86 feet above city datum only. It is not easy, when full scope and effect are given to the various stipulations of the parties and the findings of the court on questions of fact, to determine exactly what remains of the controversy. Some contention is made by appellant that the mechanism provided for the automatic operation of the flashboards was defective, that the counter-weights were too heavy, and that the gates were not operated by the action of the water in the manner intended. Evidence was introduced, tending to show that, when appellant accepted the dam, on April 12, 1916, the gates were down, and that they were raised by appellant, perhaps by means of the mechanism provided for raising them by manual power. All that was involved or is suggested by any controversy on this point was necessarily determined by the court as questions of fact. That the gates were down in April, 1917, is disclosed by a decree entered in Wenig against appellant and the city of Cedar Rapids, which enjoins them from maintaining the elevation of the flashboards above 86 feet. This decree, on application of appellant, was modified on September 27, 1917. The decree, as modified, permitted appellant to raise the flashboards, upon condition *Page 1331
that it executed a bond in the penal sum of $10,000 to indemnify Wenig against any damages he might suffer on account thereof. The petition in this action was filed May 23, 1918. It seems to us, therefore, that this appeal presents only a question of the construction of the contract between the parties.
We have quoted the material paragraphs thereof. The assumption of full control over the operation of all movable portions of the dam during the life of the contract and of the obligation to hold the city harmless from any damages of any kind, nature, or description arising from the operation thereof is very sweeping, and leaves little room for construction. The word "operation" cannot be limited to the mere physical raising and lowering of the gates. What the parties evidently contemplated was that appellant was to protect appellee against every form of liability to property owners resulting from the maintenance of the water crest in the river above the elevation of 86 feet. This, it seems to us, is the plain, obvious meaning of the contract. This being true, we find nothing in the record upon which a reversal can be predicated.
Many questions are discussed by counsel, but, when analyzed, they present only questions of fact and of the interpretation of the contract. On the questions of fact, this court is precluded by the finding of the trial court. We think the contract should be construed as indicated. For the reasons stated, the judgment of the court below is — Affirmed.
EVANS, FAVILLE, KINDIG, and WAGNER, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432163/ | We find it unnecessary in the decision of the questions before us to set out at any great length the facts upon which the parties rely. The record presents the kind of evidence commonly produced in cases of this kind, with the contradictions which are usually found in will contests. It is sufficient for our purpose to say that we have carefully gone over the record and have reached the conclusion that the action of the trial court was right.
It would extend this opinion to an unwarranted length to take up all the complaints made by the contestant, particularly with reference to the alleged errors upon which the motion for a new trial is based. This document takes up nearly thirty-four pages of the printed abstract, but, as we read the record, contestant's claims and criticisms may be summed up under a few general heads.
[1] Much stress is laid upon the rulings of the trial court in excluding testimony offered by the contestant. It may be conceded that some of the rulings in this regard were not correct, but we find that wherever testimony was excluded, the excluded matter found its way into the record so that no error resulted. A few examples of the testimony of the ruling out of which contestant complains are noticed. The court excluded testimony to the effect that: "His physical condition wasn't good. * * * He was not in good health. * * * They (the conversations) would drift onto other matters, but when talking of Germany he would talk as if I should know all about it." This latter phrase was stricken out because a statement of opinion and conclusion. Again, this appears: "Well, he would talk, you know, without any sense to it, changing the subject." This was stricken on the same grounds. There was testimony that: "He spoke of the fact to me that he did not feel a bit good;" further, that he acted "like a sick man," and that "he appeared to be very feeble." This likewise was ruled out. Instances might be multiplied along the same general line, but, as indicated, we find it unnecessary to do so. The facts sought to be elicited by the stricken testimony we think were covered by the testimony of other or the same witnesses, and we find no error, while not approving the rulings made. If some of the stricken testimony was not exactly and in detail supplied by the witnesses, *Page 608
there is nevertheless no error because, even if the excluded testimony had been admitted, the record still presents a jury question. Because of that fact we are not disposed to set aside the findings of the trial court. See In re Estate of Cooper,200 Iowa 1180, 206 N.W. 95, wherein Albert, J., used language which is appropriate to the case before us (page 1184 of200 Iowa, page 97 of 206 N.W.):
"There is nothing in the record to show that the testator was so lacking in mental capacity as to be unable to intelligently remember and identify the property he possessed and the natural objects of his bounty, and to intelligently dispose of the same. This is the ultimate measure of mental capacity that the law requires of a testator. Will contests must turn largely upon the facts incident to each case, and it is difficult to lay down a rule in such matters."
[2] Contestant, as another proposition, argues that the fact that testator was under guardianship at the time he made the will made a prima facie case in her favor which was not overcome by proponents' testimony. With this we cannot agree. The record does in fact establish the guardianship, but it does not appear that the court, in appointing the guardian, passed upon the question of mental incompetence. A careful reading of the record shows that the court was warranted in concluding (if it did so) that this guardianship was established because of excessive drinking on the part of the testator, and that he was placed under guardianship because of his weakness in that regard. There was no testimony offered when the appointment was made, but apparently the court was given a statement of the general situation by the attorney for the children. This was made in the presence of testator's attorney, who made no objection or resistance to the application.
We held in Cahill v. Cahill, 155 Iowa 340, 136 N.W. 214, that where the appointment is not based upon any specific grounds, and might have been made upon one of several grounds, parol testimony is receivable to explain the appointment, though not to contradict it.
See, also, Brogan v. Lynch, 204 Iowa 260, 214 N.W. 514.
It was the unqualified testimony of the attorney who drew the will, and of his stenographer who was present, wrote, and witnessed the will, that at the time of the making thereof the *Page 609
testator was of sound mind and understood the nature of his act. Contestant herself seems not to have seriously considered the guardianship as establishing testator's mental incompetency. She presented for probate a will drawn by him in 1934. The petition for the appointment, in which contestant joined, was filed in March 1933, and appointment of a temporary guardian thereunder was made in November of the same year. The 1934 will bequeathed his property share and share alike. The will executed in 1936 revoked the earlier will and made no provision for contestant. Another evidence of contestant's view of her father's (testator) mental condition and the purpose of asking a guardian, is this: While the sworn petition alleges that testator was "incompetent to transact business," etc., she took a deed from her father. This was dated November 23, 1933, just two days before the temporary guardian was appointed. Through and by it she acquired the home in Clinton and, so far as the record discloses, has it yet. The property so deeded, though not of great value, nevertheless represented a larger value apparently than the legatees under the present will will receive. In addition to this, the record would seem to indicate that contestant had borrowed from testator a considerable sum of money, $500 of which remained unpaid at the time of the father's death. The total estate is very small — $1,659.84, which when reduced by the estate expenses will result in an amount of less than $1,000 to be divided among the four proponents.
There is a controversy among the parties as to whether the deed to the contestant was intended to pay her for services, or not, but this conflict need not be solved. The fact of the matter is that this contestant was allowed $20 a month for support after the guardianship, for a certain period of time, and this was later reduced to $16 a month.
But contestant says that, taking it all in all, the testimony was not sufficient to overcome the presumption resulting from the guardianship. We have repeatedly held that one under guardianship is not necessarily incompetent to make a will.
What we said in Linkmeyer v. Brandt, 107 Iowa 750, 77 N.W. 493, is strictly applicable to the situation before us. Given, J., speaking for the court, said (page 751 of 107 Iowa, page 494 of 77, N.W.): *Page 610
"Appellant cites authorities to the effect that unsoundness of mind must be presumed from the appointment of the guardian, and that it continues throughout the guardianship. In re Fenton's Will, 97 Iowa [192] 193, 66 N.W. 99. Let this be conceded, still we think these presumptions are fully overcome by the evidence as to the condition and acts of the deceased at the time he burned the will."
To the same effect is Waters v. Waters, 201 Iowa 586,207 N.W. 598, wherein there is an extensive review of cases on this subject.
In the well-considered case of Cookman v. Bateman, 210 Iowa 503,231 N.W. 301, Albert, J., summed the whole situation up, as it applies to the case before us, in this language (page 504 of210 Iowa, page 302 of 231 N.W.):
"We take up first the question of mental incapacity. The law governing this question has been so long established in this state that we need make but slight reference to the authorities. It is well settled in this state that physical weakness or infirmity, if proven, is not in itself sufficient to avoid the probate of a will, and mere mental weakness, not due to mental disease, until it has reached that stage which deprives the testator of capacity for intelligent action, does not constitute mental unsoundness such as to incapacitate him from making a will. (Citing cases.)
"As to mental incapacity, the rule has been well settled in this state that one who has a full and intelligent knowledge of the act in which he is engaged, a full knowledge of the property he possesses, and an intelligent perception and understanding of the disposition which he desires to make of it, of the persons whom he desires to be the recipients of his bounty, and of the natural objects of his bounty, even though he has not sufficient mental capacity to make a contract or to attend to ordinary business matters, has sufficient capacity, in the eyes of the law, to make a will." (Citing cases.)
See In re Estate of Shields, 198 Iowa 868, 200 N.W. 219, where we said (page 691 of 198 Iowa, page 221 of 200 N.W.):
"Time and again this court has declared that mere old age or some deterioration in physical or mental powers, or peevishness, childishness, and eccentricities, are not alone sufficient to *Page 611
carry to a jury the question of mental unsoundness on the part of a testator. The final question in such a situation as is presented to us is whether or not there is sufficient evidence offered in behalf of the contestant to take to the jury the question of whether or not the testator was so lacking in mental capacity at the time of the execution of the will as to be unable to intelligently know the property which he possessed and the natural objects of his bounty and to intelligently exercise judgment and discretion in the disposition of the same."
See, also, Walters v. Heaton, 223 Iowa 405, 271 N.W. 310.
Contestant says that the testator clearly did not know what he was doing at and before the time of making the will, because, among other things, he made statements which in effect accused the contestant of stealing his money. This finds support in the fact that the old man did complain that he was not getting as much money out of the allowance made for him by the court as he understood it would be, but this is readily explained by the fact that the moneys were handled under the direction of the court and the ward was not advised that the allowance had been cut down from the original amount. Seemingly he was not taken into anyone's confidence, and he not unnaturally felt that some of his money was being withheld. But, without proceeding much further into the record, it appears that when this last will was made, the testator went to the office of Attorney Peterson and told him what he wanted and how he wanted to dispose of his property. At the time he was talking with his attorney about how he wantedthis will, he remembered that he had already made one. He inquired in effect whether he must produce the earlier will before a new one could be executed. He spoke of having given a deed to the contestant, which he supposed was to pay her for taking care of him. Notwithstanding (he told the attorney) she was getting $20 per month of his meagre estate for the same service. In the course of the conversation he said he first intended to cut one of his sons off because he had received more than his share. On reflection he said that since this son did not have anything anyway, he might as well have his share. His failure to include the contestant is not only not unreasonable but natural, in the light of the circumstances disclosed in this record. That the old man did drink excessively at times cannot be disputed, but there *Page 612
is no evidence that he was under the influence of liquor at the time he made his will. On the contrary, it is established that he was not under such influence, and the attorney who drew the will, and his assistant who typed it, had no hesitation in saying that the testator was at that time of sound mind. Other witnesses testified to the same thing, and while contestant's evidence shows many eccentricities and peculiarities, and one or more, on a somewhat slender foundation, said he was of unsound mind, a consideration of it fails to impress us that the testator was not competent to make a will.
We have examined all the cases cited by the parties, and others, and we find nothing therein which calls for a reversal of the judgment of the trial court.
As a general complaint contestant argues that the repeated adverse rulings made by the trial court to the testimony offered by her were erroneous, and had the effect of breaking into the continuity of the record as she intended to make and would have made it had the court not ruled out so much of the testimony. It may be conceded that the record is full of breaks induced by objections, rulings of the court, and statements of counsel. Confusion was further introduced by the uncertainties of the statements of some of the witnesses, made so perhaps by their lack of understanding of the English language. Be that as it may, as we have already indicated, a reading of the whole record and the inclusion of such testimony as might have been received had the court made no rulings to which objection could be made, the question of the competency of this testator was clearly a fact question which would have been for the jury had one not been waived, and was for the court as the case was tried.
Other objections and propositions urged by contestant have been carefully considered, and call for no specific attention.
It follows that the ruling of the trial court should be, and it is, affirmed. — Affirmed.
MITCHELL, STIGER, MILLER, RICHARDS, KINTZINGER, and HAMILTON, JJ., concur. *Page 613 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/3432164/ | The petition of intervention alleges that the First Savings Bank of Sutherland, Iowa, was incorporated under the laws of the state of Iowa, and for many years had engaged in the general banking business in the town of Sutherland; that there were on deposit in said bank funds of the said incorporated town to the amount of $6,328; that said funds were on hand at the time of the closing of the bank, and are now in the hands of the receiver of said bank; that they constitute a trust fund in the hands of the receiver, to which the town of Sutherland is entitled to make claim as a special deposit and a preferred claim against said estate in the hands of said receiver; that the assets of the bank in the hands of said receiver were increased $6,328 by said deposit; that said bank closed its doors on the 25th of April, 1923; and that on that date a receiver was appointed by the court, on account of the insolvency of the bank. The petitioner asks that its claim for said amount be allowed as a preferred claim, and that it be given priority over other creditors.
To this petition a demurrer was filed, for the reason that the facts stated do not entitle the intervener to the relief demanded. The court overruled this demurrer; the receiver took exception to the ruling and stood thereon; and judgment was entered, establishing the claim of the town as a preferred claim.
The record shows that an order was made on the 25th of April, 1923, appointing W.J. Murray, who was then the superintendent of banking, receiver for the defunct bank. Later, on the 9th of May, Murray having resigned as superintendent of *Page 283
banks, and Robert L. Leach having been appointed as his successor, the court, by order then made, confirmed the appointment of Robert L. Leach as receiver of said Sutherland State Bank. Ordinarily, this would be of no importance; but it is urged as important here by reason of the matters to which reference is hereinafter made. We do not deem the same of any materiality whatever; because the court, by its action on the 25th of April, 1923, took jurisdiction of the subject-matter, to wit, the appointment of a receiver for said bank on the grounds of insolvency, and exercised its power under the statute by appointing a receiver therefor. The fact that this receiver may have resigned, and another been appointed, to our minds has no bearing whatever on the questions involved herein. The arguments of counsel in the lower court and here are devoted primarily to a discussion of whether or not the law governing this receivership and the question of preference of claims are controlled by our decision in the case of In re Receivership ofMarathon Sav. Bank, 198 Iowa 692, or by the case of Leach v.Exchange State Bank, 200 Iowa 185. The writer of this opinion, as expressed in his special concurrence with Judge Arthur in theExchange State Bank case, is of the notion that the Marathon Sav.Bank case should have been overruled; but, as the majority of the court is of a different notion, it is controlling. Under the ruling laid down in the Marathon case, and the facts conceded by the demurrer herein, there can be no doubt that the town's claim is a preferred one. The receiver, however, seeks to avoid this by reason of a certain enactment by the legislature, designated as Chapter 189, Acts of the Fortieth General Assembly. It was by reason of the enactment of this statute that the Exchange StateBank case was decided as it was. It therefore becomes very material to determine whether or not this statute was in operation at the time the court assumed jurisdiction of this matter and appointed the receiver.
The aforesaid act of the fortieth general assembly was passed and approved on March 20, 1923. As then passed, it did not contain a publication clause. By Chapter 389 of the acts of the same general assembly, approved April 11, 1923, the aforesaid Chapter 189, being Senate File 563, was deemed of immediate importance, and made to be in force and effect after its publication, etc. By what is now Chapter 190 of the Acts of the *Page 284
Fortieth General Assembly, which was approved on April 19, 1923, the aforesaid Senate File 563 was amended by adding a section thereto providing that the act was deemed of immediate importance, and would become effective on and after its passage and publication in the Des Moines Capital and Des Moines Register, etc. This last act was deemed of immediate importance, and provided that it was to take effect on and after its passage and its publication in the above newspapers. It was approved on April 19, 1923, and was published in the Des Moines Capital and Des Moines Register on April 24, 1923. The original act, Senate File 563, now Chapter 189, Acts of the Fortieth General Assembly, was published in the Des Moines Capital on the 2d day of May, 1923, and in the Des Moines Register on the 3d day of May, 1923. According to the terms of the acts and the amendments thereto this act was only in force from and after the 3d day of May, 1923. It follows, therefore, that the act on which the ExchangeState Bank decision was based was not in force and effect at the time this receivership was commenced, and that this act and theExchange State Bank case, supra, have no effect whatever upon the rights of these parties. The rights of the respective parties must be determined under the law as it existed prior to this enactment, and prior to the rendition of the opinion in theExchange State Bank case. To simplify, this receivership was established by the court on the 25th of April, 1923; the enactment in question did not go into operation until the 3d of May, 1923; and hence the rights of the parties are to be determined under the rule laid down in the Marathon case. This being the law, the facts pleaded by the intervener were sufficient, under the rule in the Marathon case, to entitle it to have its claim established as a preferred claim. The ruling of the district court in overruling the demurrer was therefore correct.
Some other matters are discussed, but we do not deem them of importance, and no further attention is given to them. —Affirmed.
De GRAFF, C.J., and EVANS, VERMILION, and MORLING, JJ., concur. | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/4302292/ | Order entered August 8, 2018
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-00297-CV
JACKIE MENYWEATHER, Appellant
V.
JOAN ANTHONY, Appellee
On Appeal from the County Court at Law No. 2
Kaufman County, Texas
Trial Court Cause No. 18C-001-2
ORDER
Appellee’s brief is signed by Sharon Gary as power of attorney for appellee. A power of
attorney authorizes an individual to transact business for another; it does not authorize a person
to act as a licensed attorney, representing individuals in proceedings in court. See Harkins v.
Murphy & Bolanz, 112 S.W. 136, 138 (Tex. Civ. App.—Dallas 1908, writ dism’d); BLACK’S
LAW DICTIONARY 1013 (9th ed.). In Texas, an individual may represent another in state court
only if licensed as an attorney in Texas or authorized under rules promulgated by the Texas
Supreme Court. See TEX. GOV’T CODE ANN. § 81.012 (West 2013); Paselk v. Rabun, 293
S.W.3d 600, 606 (Tex. App.—Texarkana 2009, pet. denied) (“layperson does not have right to
represent others”). Gary is neither licensed in Texas nor authorized under court rules.
Accordingly, we STRIKE appellee’s brief. Appellee may file any brief pro se or through
counsel no later than September 17, 2018.
/s/ DAVID EVANS
JUSTICE | 01-03-2023 | 08-09-2018 |
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