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Court of Appeals
of the State of Georgia
ATLANTA,____________________
March 16, 2018
The Court of Appeals hereby passes the following order:
A18D0342. JEAN JOCELYN MERILIEN v. WENDY L. SHOOB, JUDGE et
al.
On May 1, 2017, the trial court entered an order denying prisoner Jean Jocelyn
Merilien’s request to proceed in forma pauperis in a proposed mandamus petition
against Judge Wendy L. Shoob. Merilien filed a motion for reconsideration, which
the trial court denied. On February 20, 2018, Merilien filed this application seeking
discretionary review of the trial court’s denial of his motion for reconsideration.
To be timely, a discretionary application must be filed within 30 days of entry
of the order to be appealed. OCGA § 5-6-35 (d); Hill v. State, 204 Ga. App. 582 (420
SE2d 393) (1992). This statutory deadline is jurisdictional, and we cannot accept an
application for appeal not made in compliance with OCGA § 5-6-34 (d). Boyle v.
State, 190 Ga. App. 734 (380 SE2d 57) (1989). Here, Merilien filed his application
nine months after entry of the order denying filing of the mandamus petition.
Although Merilien filed a motion for reconsideration, the denial of a motion for
reconsideration of an appealable order or judgment is not itself appealable and does
not extend the time for filing a notice of appeal or an application for appeal. See
Campbell v. State, 192 Ga. App. 316 (385 SE2d 14) (1989); Savage v. Newsome, 173
Ga. App. 271 (326 SE2d 5) (1985). Thus, this application is untimely as to the order
denying filing and invalid as to the order denying reconsideration. Accordingly, the
application is hereby DISMISSED.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____________________
03/16/2018
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.
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Opinion filed August 21, 2015
In The
Eleventh Court of Appeals
___________
Nos. 11-15-00180-CR, 11-15-00181-CR, & 11-15-00182-CR
___________
GARRY LON BROWNLEE, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 220th District Court
Comanche County, Texas
Trial Court Cause Nos. CCCR-07-03016, CCCR-07-03017,
& CCCR-07-03018
MEMORANDUM OPINION
In each cause, Garry Lon Brownlee has filed a pro se notice of appeal and a
motion for an out-of-time notice of appeal. We dismiss these appeals for want of
jurisdiction.
Brownlee seeks to appeal the findings of fact and conclusions of law that
were entered by the trial court with respect to Brownlee’s applications for writ of
habeas corpus, which were filed pursuant to Article 11.07 of the Code of Criminal
Procedure. See TEX. CODE CRIM. PROC. ANN. art. 11.07 (West 2015). We note
that the trial court entered the findings and conclusions on March 13, 2015, and
that the Court of Criminal Appeals denied Brownlee’s applications on May 13,
2015, without a written order. The substance of the relief sought by Appellant is
postconviction relief from a final felony conviction—relief for which the habeas
corpus procedure set out in Article 11.07 of the Code of Criminal Procedure
provides the exclusive remedy. See id. Article 11.07 vests complete jurisdiction
for such relief in the Texas Court of Criminal Appeals. Id. art. 11.07, §§ 3, 5;
Bd. of Pardons & Paroles ex rel. Keene v. Court of Appeals for Eighth Dist., 910
S.W.2d 481, 484 (Tex. Crim. App. 1995); Hoang v. State, 872 S.W.2d 694, 697
(Tex. Crim. App. 1993); Ater v. Eighth Court of Appeals, 802 S.W.2d 241, 243
(Tex. Crim. App. 1991). We have no jurisdiction to grant Brownlee’s motions or
entertain his appeals.
Accordingly, we deny each of Brownlee’s motions for an out-of-time notice
of appeal and dismiss these appeals for want of jurisdiction.
PER CURIAM
August 21, 2015
Do not publish. See TEX. R. APP. P. 47.2(b).
Panel consists of: Wright, C.J.,
Willson, J., and Bailey, J.
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Plaintiff is the owner of a tract of land,being a part of the west part of lot 6 in block 10 in Brewer Company's addition to the city of Des Moines, and the defendants are the owners of a tract of land lying immediately east of the plaintiff's lot. The lots extend north and south and the buildings thereon face the east-and-west street. A dispute arose about 1930 between the adjacent owners as to the boundary line between the two tracts. On appeal to this court in two actions, each entitled Minear v. Keith Furnace Company, the cases were decided December 16, 1931, and the opinion thereon is found in 213 Iowa 663, 239 N.W. 584. This court therein determined the boundary line in favor of the defendant, finding that the building of the defendant in that case (plaintiff in the present action) was a few inches to the west of the lot line. There was also a finding that the Keith Furnace Company's box screens and the windows, opening outwards, extended beyond the true line, and the company was directed to remove the same, which was done. By decree rendered in this court in conformity to the opinion it was found that the true line ran in a straight line and parallel with and three inches to the east of the main east wall of the Keith Furnace Company factory building, and it was so adjudged and the title quieted in such company, the plaintiff in the present action. The decree further ordered the modification of the windows and the removal of the box screens so as to prevent trespass upon the property of the plaintiff. In the present action the defendants concede that the true boundary line between the contending parties is *Page 991
three inches to the east of the main east wall of the furnace company's factory building.
The present action was commenced by the filing of a petition for injunction on August 17, 1938, the plaintiff alleging that the decree of this court had not been complied with; that a building had been erected by the defendants herein and attached to the east wall of the plaintiff's building by cutting holes in such east wall and inserting lag screws, and by flashing inserted into the mortar joints of plaintiff's building. The defendants by answer denied the injury complained of and claimed ownership as to part of the line. Other issues were involved about which there is no controversy here, and they are not considered in this opinion. Trial was had to the court and on December 2, 1938, a decree was filed finding "that said boundary line, as fixed by the Supreme Court of Iowa and as binding upon all the parties hereto, is one which runs from Dean Avenue on the North southward to the south line of said Lot 6, Block 10, of Brewer Co.'s Addition, now included in and forming a part of the City of Des Moines, Iowa, parallel with and three inches to the east of the main east wall of the Keith Furnace Company factory building. The Court further finds that that part of said building or buildings which now occupies any part of the real estate west of the line hereinbefore described should be, by the defendants, removed therefrom by the 15th day of April, 1939, so that the said buildings of the defendants will be on the or east of said line. The Court further finds that the term, `main east wall of the Keith Furnace Company factory building,' includes the footings thereof;" and the decree orders removal of the buildings. Appeal was taken to this court from this decree.
As stated by the defendants, the only issue on this appeal is the location of the division line — that is, whether the boundary line is three inches east of the brick part of the wall, or whether the boundary line is three inches east of the footings of the east wall. The building of the plaintiff extends from the street on the north to the south, but the north end of the building does not extend the entire width of the lot. The east wall *Page 992
of the building runs to the south 30 or 40 feet, then jogs east several feet, and runs thence south a distance of 150 feet or more, so that the plaintiff claims there are two east walls to the furnace company's building, and that it is the 150-foot wall that is known as the "main east wall," and that that is the wall which is designated in the opinion of the supreme court as "the main east wall." The defendants, however, insist that the main east wall refers only to the brick wall and does not include the footings.
The question then resolves itself simply into what constitutes the main east wall referred to in the opinion and the decree of this court conforming to such opinion. In the opinion of the district court wherein this action was tried, "three inches to the east of the main east wall" referred to the entire wall, including the footings, which would, under the evidence, bring the east line approximately nine inches to the east of the brick work in the wall.
We are inclined to think that the contention of the plaintiff is correct. No authority is given by the defendants in support of their claim, defendants' idea being that the words in the decree, "main east wall," were referable only to the brick part above ground, and to distinguish such wall from the lower part, or foundation and footings. The exact question has never been determined by this court. The law relating to party walls is not of great assistance, as the wall in question was not intended to be and was not a party wall, being erected entirely within the boundaries of plaintiff's property.
In Cornell v. Bickley, 85 Iowa 219, 221, 52 N.W. 192, 193, this court said:
"The word `wall' has reference to the part of the building on the line, and includes any permanent part of the structure or building."
In Molony v. Dixon, 65 Iowa 136, 140, 21 N.W. 488, 490, 54 Am. St. Rep. 1, an action to recover for the use of a party wall or wall in common, the question arose as to what was a part of the wall, and the court said: *Page 993
"There was evidence tending to show that there was an iron pilaster in front of, but which formed a part of, the plaintiff's wall; and that a `lintel' in the defendant's building rested on the pilaster. The lintel, as we understand, supported the wall over the stairway. The plaintiff introduced evidence showing the value of the pilaster, which the defendant moved to strike out, on the ground that the evidence was immaterial. The motion, as we think, was rightly overruled, because the pilaster was just as much a part of the wall as the brick and mortar."
So in the case of Monroe Lodge v. Albia State Bank, 112 Iowa 487, 490, 84 N.W. 682, 683, which was an action to recover one half the value of a wall in common. The defense was that the builder of the wall used unnecessarily expensive material, but the court held that it was not unusual or unnecessary, and said:
"* * * but surely every part of the footing and foundation wall covered by the dimensions of the defendant's building does contribute to its support, and is being used by the defendant for that purpose."
Wright v. Goldheim, 184 Iowa 1041, 169 N.W. 343, cited by defendants, was a damage action for negligence in the removal of a wall, and the general holding of the court in that case was that the part of the wall below the ground was as much a wall as that above the ground.
We think also that the evidence in this case indicates that the window sills or ledges in the wall, which, by the decree of the supreme court, were not required to be removed, protruded beyond the bricks of the wall to a distance so that their east edge was perpendicular with the east edge of the footings. Evidence was admitted showing that the plaintiff company pays taxes on the strip of ground three inches to the east of the footings. Since the footings supporting the wall extend to the east a distance of six inches beyond the brick work of the main or longer part of plaintiff's building, if they constitute a part of the main wall, this would locate the dividing line between *Page 994
the two properties at nine inches from the brick work or three inches to the east of the footings. It is so contended by the plaintiff. We think the contention of the plaintiff is supported not only by the evidence but also by the general definition and understanding of what constitutes a wall. We believe that when reference is made to a wall, as it was in the decree of this court, it cannot be limited only to that part of the wall which is composed of brick or which may be above ground. Webster's New International Dictionary defines "foundation" as: "The supporting part or member of a wall or structure, including the base course and footing courses;" and "footing" is defined therein as: "An enlargement at the lower end of a wall, pier, or column, to distribute the load." We think the generally accepted meaning of the word "wall" includes both the footing and the foundation. The case of Hamra v. Simpson, et al., 232 Mo. App. 158, 162, 108 S.W.2d 777, 779, in a decision filed August 2, 1937, in an action involving a party wall contract, states:
"Notwithstanding the theory of the plaintiff to the contrary, we believe the trial judge was cognizant of, and took into consideration, the fact that the wall necessarily has a foundation. A wall includes the foundation and the coping thereof, and in most cases, a party wall is such from the foundation to the top, or not at all."
We hold that the term "main wall" as used in the decree of this court in the former case means the entire wall, to include the footings thereof, and that the division line would, as stated, be at a distance of nine inches to the east of the brick work of the wall, extending through the tract parallel to the building.
Other questions raised by plaintiff on matters of procedure in this case, need not be considered here, as we determine from the facts that the decree of the district court should be affirmed. — Affirmed.
OLIVER, SAGER, MILLER, STIGER, MITCHELL, and RICHARDS, JJ., concur. *Page 995
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The defendant was indicted by the grand jury of Polk county charged with driving a motor vehicle while intoxicated. He was tried and convicted. Exceptions to instructions and motion for new trial were overruled, and from this action of the court and judgment on the verdict of guilty the defendant appeals. *Page 1213
The only question involved in this appeal is the effect of a communication by the court to the jury in response to a request after they had been considering the case for several hours. Following is the request:
"We, the jury in deliberation, would respectfully request information on one item of general procedure.
"Would it be within the power of the jury to render a verdict of `Guilty with recommendation for clemency,' and would this form of verdict have any weight in the subsequent sentence passed?"
The additional instruction given by the court is as follows:
"With reference to the question submitted to the court by the jury, which is signed by your foreman, will say that when you have agreed, you will sign the form of verdict agreed upon by your foreman and return the same into open court. Should you desire to make any recommendations, you may write the same on a separate sheet of paper and have the same signed by your foreman, or by any or all members of the jury and return the same together with your verdict and the instructions into open court."
The giving of this additional instruction is claimed by the defendant to have been error. He asserts that the instruction influenced and prejudiced the jury against him. We cannot see how this could be true. The jury had been given the usual instructions in such cases and informed that they were the judges of the facts in the case, and undoubtedly so understood; and examination of the additional instruction itself does not show that in any way the court indicated any opinion.
Defendant cites State v. Kernan, 154 Iowa 672, 135 N.W. 362, 40 L.R.A., N.S., 239, in support of his argument, but the instruction under consideration was not the same as in that case. In the cited case the jury were informed that the court would consider the recommendation made. In the instant case there was no such statement. The instruction given by the court in this case was almost word for word the same as that given in the case of State v. Cooper, 195 Iowa 258, 268, 191 N.W. 891, 895, and which was approved by this court. The language of the court in that case applies here: *Page 1214
"The court gave no indication as to whether or not the jury's recommendation, if they made any, would receive consideration. * * * The record in the case before us negatives the thought that the trial court said or did anything in connection with such recommendation that could be said to have influenced the jury in any way as to the verdict which should be returned."
We see no distinction that can be made between the case at bar and State v. Cooper, supra. Defendant urges that the latter was a murder case, and that in murder cases the jury determine degree or make recommendations but in ordinary cases they do not. In verdicts of murder in the first degree the jury, as part of the verdict, determine the punishment. There is no force in the argument that the rule should be more stringent in a case of this nature than in a murder trial. It is our holding that the additional instruction given in response to the request of the jury was proper and that defendant's rights were not prejudiced thereby. There is no reason for disturbing the rule announced in the Cooper case, which has been followed in trials in this state for many years.
Affidavits were filed as a part of the motion for new trial, in which affidavits several of the jurors stated that they were influenced by the additional instruction given in connection with the discussion in the jury room. Such affidavits cannot be considered by the court. See Eves v. Littig Const. Co., 202 Iowa 1338,1346, 212 N.W. 154, 157; Kirchner v. Dorsey Dorsey,226 Iowa 283, 297, 284 N.W. 171, 179; Gregory v. Kirkman Cons. Ind. Sch. Dist., 193 Iowa 579, 187 N.W. 553, and cases cited therein; Keller v. Dodds, 224 Iowa 935, 277 N.W. 467.
The questions involved in the exceptions to instructions and motion for new trial and entering of judgment, which are set out in separate divisions of defendant's brief and argument, are all based upon the alleged error in the giving of the instruction and are not argued except as they are argued in division 1 of defendant's brief and argument.
We find no error in the action of the court and the cause is affirmed. — Affirmed.
HAMILTON, C.J., and STIGER, SAGER, BLISS, OLIVER, and MILLER, JJ., concur. *Page 1215
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Albert Berg and the First: National Bank of Waukon each held a chattel mortgage upon some farm implements and live stock, executed to secure the indebtedness of one Oscar Anderson to the respective parties. The mortgagor had either abandoned, or was neglecting to properly care for, the property. For the better preservation of their security, the mortgagees, who were parties to an action then pending in the district court of Allamakee County for the foreclosure of the Berg mortgage, entered into a stipulation for the sale of the mortgaged property at public auction on November 21, 1924, agreeing that the proceeds of such sale be, by the terms thereof, turned over to the clerk of the district court, to be held by him until a controversy between them as to the priority of their respective mortgages could be finally adjudicated and determined in the pending action. W.H. Niehaus, president of the Citizens State Bank, was agreed upon as the clerk of the sale. The sale yielded something less than $1,200, $387.65 of which was paid in cash. Niehaus was informed of the stipulation, and directed to turn the proceeds of the sale over to the clerk. There was considerable delay in the payment of the outstanding accounts, and Niehaus placed the money received, as clerk of the sale, in the bank of which he was president, in a special account. On January 24, 1925, Berg's attorney went to the Citizens State Bank, to ascertain what amount had been collected, and to request Niehaus to deposit the amount on hand with the clerk. After the payment on that day of an account of $122 by the president of the First National Bank, the total amount in the Citizens State Bank was $1,181.32. Niehaus explained to the attorney that he could not turn the cash over to him, and, in lieu thereof, gave him a certificate of deposit, payable to the clerk of the district court, for the amount. This certificate was immediately delivered to the clerk, who gave the attorney a receipt therefor. The clerk was, however, unable to present the certificate for payment on the day it was received, which was Saturday, during banking hours. On Monday morning following, he took the certificate to the First National Bank, and asked credit in his account as clerk therefor. Both the president and the cashier *Page 956
of the bank informed him that his account would be credited therewith, subject, however, to the payment of the certificate. The clerk requested the bank to present the certificate to the Citizens State Bank at once for immediate payment. He was informed by the officers of the bank that, unless the drawer had checks drawn on the National Bank which it could surrender in payment, the best that could be done would be to accept a draft for the amount. The reason for this was a custom and agreement existing between the banks that, in making clearance, the debtor bank would make payment by draft on Chicago.
The representative of the First National Bank who presented the certificate for payment did not demand cash, but accepted a draft drawn on the Illinois Merchants Trust Company. Before the draft could be paid in regular course, the Citizens State Bank closed its doors, and its assets were taken over by the state superintendent of banking, as receiver. Thereafter, the mortgagees filed a joint claim in the receivership, setting up in detail the transactions above mentioned, and asking the court to direct the receiver to turn over the amount received by Niehaus from the sale of the mortgaged property to the clerk of the district court, to be held by him, as they had previously stipulated. The court so ordered, and the receiver appeals.
It is the claim of counsel for appellee, and for all of the purposes of this case it may be conceded, that the proceeds of the sale were held by the Citizens State Bank in trust for the parties ultimately found by the court to be entitled thereto. With this assumption, the sole question remaining for decision is: Was the relation of the beneficiaries of the trust fund changed or altered by the transactions detailed, from that ofcestui que trust and trustee, to that of debtor and creditor only?
The clerk of the district court and the officers of the First National Bank were alike suspicious of the financial soundness of the Citizens State Bank. The clerk, who had no other interest in the matter than as stakeholder for the parties, urged the immediate presentation of the certificate delivered by him to the bank, for payment in cash. During the same day, the president of the First National Bank inquired of the Illinois Merchants Trust Company, by telephone, as to whether the draft would be paid on presentation. He was informed that it would be paid *Page 957
in due course only, and that the Chicago bank would assume no other responsibility in the matter.
The principals in the several transactions were Berg and the First National Bank. The attorney for the former accepted the certificate and delivered it to the clerk, and the bank, when it was turned over to it for credit by the clerk, refused to demand payment thereof in cash, but, in obedience to a custom or agreement existing between the banks, accepted the draft referred to. The question here presented has recently been many times before this court, and it is unnecessary to discuss the same at length. Notwithstanding that the First National Bank had a right to demand payment of the certificate in cash, it refused to do so, and exchanged it for a draft on the Chicago bank. Thereafter, the relation between the parties was clearly that of creditor and debtor. The trust fund was surrendered, and, in the usual and ordinary course of business, passed into the general assets of the bank. It is not claimed that the officers of the First National Bank were not advised as to the nature of the account in the Citizens State Bank. Indeed, this appeared on the face of the certificate.
The rule and the reasons therefor are fully discussed in the following recent decisions of this court, and further discussion of the question is not necessary. Leach v. Mechanics Sav. Bank,202 Iowa 899; Leach v. Iowa State Sav. Bank, 202 Iowa 894; Leachv. Battle Creek Sav. Bank, 203 Iowa 507; Leach v. Citizens' StateBank, 203 Iowa 782; Valentine v. Andrew, 203 Iowa 463; DanburyState Bank v. Leach, 201 Iowa 321; Leach v. Iowa State Sav. Bank,202 Iowa 894. The cited cases are decisive of the question.
It follows that the order and judgment of the court below awarding preferential payment of the claims was erroneous. The cause will be remanded to the district court, with directions that the order be modified in harmony with this decision. —Reversed and remanded.
EVANS, C.J., and FAVILLE, KINDIG, and WAGNER, JJ., concur. *Page 958
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The plaintiff-appellant is a lessee of certain real estate in Waterloo, and has an option to purchase the 1. MUNICIPAL same. Desiring to erect thereon "an automobile CORPORA- filling station," the appellant made application TIONS: to the defendant-appellee D.B. Toenjes, then the police power Waterloo building inspector, for a license and granting the former the right of power storing regulations: inflammable liquids underground, inconnection inflammable with the conduct of such business. Whereupon, oils: the building inspector denied the application, regulations: because the city, through its council, would not permit approve it. required.
At the time in controversy, there was in full force and effect in Waterloo an ordinance regulating the storage of inflammable liquids. With this ordinance appellant claims he complied, and therefore he says the permit should be granted. His alleged "compliance," however, had to do with preliminary requirements *Page 409
relating to the consent of adjacent property owners. All preliminary demands under said ordinance are subject to the following fundamental provision therein:
"Provided * * * that the issuing of or refusal of a permit to install or locate such tanks [gasoline tanks] shall be within the sound discretion of the city council."
It is against this final declaration in the ordinance that appellant directs his attack. He says the ordinance is void.
Generally speaking, he predicates invalidity upon three grounds: First, that the ordinance in effect is confiscatory of his property, lacks uniformity in operation, and hence is unconstitutional; and second, that the ordinance is unreasonable, and so indefinite and uncertain as to permit arbitrariness and oppression in its operation; and, assuming, without conceding, the validity of the ordinance, appellant declares that the action of the building inspector and the city council was in fact arbitrary, oppressive, and captious.
Meeting those contentions, appellees maintain that the ordinance is constitutional, and the due exercise of police power. Moreover, they urge, the action of the officials under the ordinance was right, just, and fully sustained by the record.
I. Waterloo is a municipal corporation, and, as such, it possesses those powers which, first, were expressly conferred upon it by statute, and second, necessarily arise as an implication incidental to the express legislative grant. Brooksv. Incorporated Town of Brooklyn, 146 Iowa 136; Bear v. City ofCedar Rapids, 147 Iowa 341; Town of Akron v. McElligott, 166 Iowa 297.
II. Thus, having located the source of the municipal power, a consideration of the statute is important. Section 5714 of the 1927 Code provides:
"Municipal corporations shall have power to make and publish, from time to time, ordinances, not inconsistent with the laws of the state, for carrying into effect or discharging the powers and duties conferred by this title, and such as shall seem necessary and proper to provide for the safety, preserve the health, promote the prosperity, improve the morals, order, comfort, and convenience of such corporations and the inhabitants thereof, and to enforce obedience to such ordinances by fine not *Page 410
exceeding one hundred dollars, or by imprisonment not exceeding thirty days."
Contained within that legislation are elements generally known as police power. Such power had its source in the state, and by the foregoing statute was delegated to the municipality. City ofDes Moines v. Manhattan Oil Co., 193 Iowa 1096; 43 Corpus Juris 203, Section 200; 19 Ruling Case Law 800, Section 108. See Harrisv. City of Des Moines, 202 Iowa 53.
Armed with that power, the municipality may, under proper circumstances, regulate automobile filling stations and the explosive liquids kept for use in connection therewith. City ofClinton v. Donnelly, 203 Iowa 576; State ex rel. Lane v. Fleming,129 Wn. 646 (225 P. 647); Standard Oil Co. v. City ofMinneapolis, 163 Minn. 418 (204 N.W. 165); Crescent Oil Co. v.City of Minneapolis, 175 Minn. 276 (221 N.W. 6); City of Muskogeev. Morton, 128 Okla. 17 (261 P. 183); Harz v. Paxton, 97 Fla. 154
(120 So. 3); Whittemore v. Baxter Laundry Co., 181 Mich. 564
(148 N.W. 437); Storer v. Downey, 215 Mass. 273 (102 N.E. 321);Hyma v. Seeger, 233 Mich. 659 (207 N.W. 834); Hall v. Mayor andAldermen of Jersey City (N.J.), 142 A. 344; Martin v. City ofDanville, 148 Va. 247 (138 S.E. 629). See, also, City of WichitaFalls v. Continental Oil Co., (Tex.Civ.App.), 5 S.W. (2d Ser.) 561.
Not only is the city of Waterloo empowered to regulate that industry through the general grant contained in Section 5714, supra, but, in addition thereto, Section 5764 of the same Code specifically declares:
"They [cities and towns] shall have power to regulate the transportation and keeping of * * * inflammable oils, or other combustibles, and to provide or license magazines for storing the same, and prohibit their location or maintenance within a given distance of the corporate limits of such cities or towns."
Beyond doubt, therefore, the appellee city, unless prevented by constitutional restrictions, was enabled to regulate and control appellant's property so far as to prohibit, under special circumstances and conditions, the storing of inflammable oils and operating a filling station thereon. *Page 411
III. But appellant contends that such act on the part of the municipality amounts to a confiscation of his property, and hence violates alleged constitutional provisions. Elaborating, for the purpose of elucidation, appellant asserts that interference with the free and full use of the premises is equivalent to taking his property without just compensation. Speaking broadly upon this subject, we said, in Rehmann v. City of Des Moines, 200 Iowa 286:
"It is, of course, fundamental in the law of real property situated within the limits of cities and towns, that the owner thereof may erect any structure or building thereon, or use the same for any lawful purpose that he may see fit, subject only to such restrictions and regulations as the municipality may, in the exercise of the police power, by proper enactment reasonably impose. * * * The police power, which has never been quite adequately defined, and which, as suggested by the late Justice Weaver in City of Des Moines v. Manhattan Oil Co., 193 Iowa 1096, is perhaps happily undefinable, is, in matters of the character before us, bounded only by constitutional limitations. Theoretically at least, there can be no conflict between the exercise of purely police power and constitutional inhibitions, as the legitimate scope of the one ends where the other begins. So long, therefore, as municipal bodies confine their enactments providing for the regulation and control of the kind or nature of buildings that may be erected upon property privately owned, and the use to which the same shall be put, within the proper limits of such power, they do not violate the property rights of the individual. The limit imposed is that the requirements, whatever they may be, must be reasonable, and for the protection of property, the public morals, or the welfare of the inhabitants of such municipality."
During the discussion of this matter in City of Des Moines v.Manhattan Oil Co. (193 Iowa 1096), supra, on page 1104, this court declared:
"The power to designate the subject of police regulation rests in the state alone; and if a given statute is not clearly repugnant to some constitutional guaranty, the courts are without *Page 412
power to interfere. Such interference, if tolerated at all, must be on the theory that the subject of the regulation is not within the legislative jurisdiction, or, if the subject be one within such jurisdiction, it must appear to the court that, looking through mere forms, and at the substance of the matter, it can say that the statute, enacted professedly in the interest, of the public or general welfare, `has no substantial relation to that object, but is a clear, unmistakable infringement of rights secured by the fundamental law.' * * * The legislature, acting within these limits, is the sole judge as to all matters pertaining to the public policy, wisdom, and expediency of the police regulations which it prescribes * * *; and while the police power is familiarly exercised in regulations to promote the public health and morals, it extends as well to the promotion of `public convenience and general prosperity.'"
In conclusion, we stated in the Manhattan Oil Co. case, supra (on page 1116):
"With the wealth of precedent cited by the appellee as upholding the sacredness of constitutional guaranties of life, liberty, property, due process of law, and equal protection of the laws, we have no quarrel; but when the statute in question [one prohibiting oil stations in certain residential districts] is construed, as we do, as one of police regulation, it is entirely consistent with those guaranties. The statute being constitutional, the ordinance adopted pursuant thereto cannot be held invalid."
An ordinance prohibiting the operation of oil stations in certain locations within the municipality is reasonable. Furthermore, such an ordinance is within the police power, and has been sustained by the numerous authorities previously cited. A recent case upon this subject is Marquis v. City of Waterloo,210 Iowa. 439.
Being within the police power, then, such regulatory ordinance is constitutional, and appellant's objections in that regard are without merit.
IV. Assuming, without conceding, the constitutionality thereof, the appellant claims the ordinance in question is invalid because unreasonable, uncertain, and arbitrary. Basis for this *Page 413
2. MUNICIPAL assertion is found in the fact that the CORPORA- ordinance does not outline a plan or fix the TIONS: general requirements under which an applicant police power for a permit may meet the demands and thus and regula- obtain authority to build an oil station. This tions: point was determined against appellant's inflammable contention in our recent case of Marquis v. City
oils: of Waterloo, supra. Therein may be found the permits: following language upon this phase of the failure to controversy: specify rules.
"Other courts have held that a failure to prescribe rules and regulations to govern the city council in granting or refusing permits does not invalidate the ordinance."
Farther on in the same opinion we approve this language contained in In re Application of Larkin Co. v. Schwab, 242 N.Y. 330
(151 N.E. 637):
"The council, acting in its legislative capacity, enacted that the dispensing power should be vested in the same body that enacted the statute. * * * It makes a general rule, but maintains the right to create exceptions. It does not deny to any person the equal protection of the laws nor deprive him of liberty or property without due process of law. * * * It assumes that the council will exercise its discretion honestly, without unreasonable discrimination against particular persons or classes, and solely as the result of decision that special circumstances dictate exception to general rule."
After thus approving said declarations of the New York court, in conclusion we said in the Marquis case, supra:
"Our pronouncement in the Manhattan Oil Co. case and the foregoing authorities [the New York case and others to the same effect] are controlling, and decisive of this proposition."
Because of the extensive discussion in the Marquis case, we do not deem it necessary to pursue the subject any further at this time. Hence, the ordinance is not unreasonable or arbitrary in the manner named.
V. Continuing his attack on the action of the city council, the appellant insists that, even if the ordinance is valid, the act of the officials thereunder was arbitrary, captious, and *Page 414
unreasonable. Mandamus, therefore, the appellant urges, will require said officials to issue the desired permit.
It is important here to note that the council did act in the matter. They did not refuse to perform an official duty. Section 12440 of the 1927 Code declares, upon this subject:
"The action of mandamus is one brought to obtain an order commanding an inferior tribunal, board, corporation, or person to do or not to do an act, the performance or omission of which the law enjoins as a duty resulting from an office, trust, or station."
While Section 12441 of the same Code continues:
"Where discretion is left to the inferior tribunal or person, the mandamus can only compel it to act, but cannot control such discretion."
When acting upon this occasion, the council of Waterloo did have a legal discretion. Therefore, mandamus 3. MANDAMUS: will not lie. Conceding, without determining, subjects and that the city council could act so arbitrarily purposes of in the premises that appellant's remedy would be relief: by mandamus (see Harwood v. Quinby, 44 Iowa discretion: 385), yet this record does not present such a non- situation. availability of writ.
There is involved a peculiar street intersection. The traffic from five directions converges in front of appellant's property. Travel comes into this intersection on Fremont Street, from the north, on Maple Street, from the east, on 4. MUNICIPAL Walnut, from the northeast and southwest, and on CORPORA- Fifth Street, from the southeast. Across from TIONS: appellant's property is the largest church police auditorium in Waterloo. Running up Fifth Street, power and turning to the right on Walnut Street in front inflammable of said property, is a boulevard. That is the oils: route followed by fire trucks on their trips to regulation: the east side of the city. Opposite the nonarbitrary Methodist Church across Fremont Street is a action. school. Objection to the oil station was made by Grace Church and the city fire department. Many pedestrians walk to and fro on the sidewalk which vehicles would necessarily cross, going to and from appellant's property, were an oil station located thereon. On *Page 415
Sundays and at other times when services are held, many cars park near Grace Church. Traffic on that intersection is especially heavy. Wherefore, the intersection is congested. Also, it is indicated by the evidence that danger exists because of the inflammable and combustible nature of the contemplated liquids. So, then, as shown by the record, to store said liquids in large quantities at that place would create an unusual hazard. Other oil stations in different parts of the city are not located under the situations and conditions which are here presented.
Resultantly, the denial of the permit does not amount to an arbitrary or unreasonable action upon the part of the city officials. Their discretion, under the circumstances, cannot be interfered with by mandamus.
The judgment of the district court should be, and hereby is, affirmed. — Affirmed.
MORLING, C.J., and EVANS, FAVILLE, ALBERT, and GRIMM, JJ., concur.
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The plaintiff Mrs. M. Avis Lockie and the defendants Alanson Baker and Sarah Talbott are the only surviving children of Mary E. Baker, who died testate on the 21st day of 1. SPECIFIC August, 1926. The will was filed for probate in PERFORMANCE: the office of the clerk of the district court of contracts Iowa in and for Plymouth County, and October 4, enforcible: 1926, was the date fixed, upon due notice, for conditions hearing on the matter. No contest was made or precedent. objections filed in probate. The three children were named as beneficiaries in said will, but the estate of the testatrix was not divided equally among her said children. The plaintiff received the smallest share, and this fact is the provocation of the instant action, based on an alleged oral agreement between the plaintiff Mrs. Lockie and the other two beneficiaries named in the will.
It appears that, on the day following the mother's funeral, the son, Alanson Baker, produced the will, and it was read by him in the presence of all of the beneficiaries. There was little said at that time concerning the terms of the will, but the plaintiff Mrs. Lockie did express disappointment.
On the 3d day of October, 1926, at the home of plaintiff's sister, Mrs. Sarah Talbott, in Akron, Iowa, there was a meeting of the beneficiaries. This meeting was arranged by plaintiff. She testified:
"We [M. Avis Lockie and husband] went there with the intention of having a settlement of the differences in the will, so that we would not have to have a case in court and the will broken, and we talked that over. I told them, if there wasn't some settlement or agreement before the time of the probating of the will [the next day], that we would contest the will. I *Page 23
said I would contest the will if there wasn't some agreement made that was somewhere near fair."
It is quite apparent that the controversy from the beginning is predicated on the thought and belief of the plaintiff Mrs. Lockie that she was entitled to a larger share in the estate than was given to her under the provisions of the will of her mother. Undoubtedly she had intimated an intention to contest the will, and it is her claim that, to avoid the threatened contest, the defendants agreed to pay her $14,000. The defendants specifically denied, in answer, that they made or entered into the contract as alleged by plaintiff, or any contract of any kind or character by which they agreed to pay to the plaintiff the sums alleged in the plaintiff's petition. The defendants further pleaded that the alleged contract of settlement is and was without any consideration.
This case does not present what is commonly denominated a "family settlement." There was no family difficulty. Amicable relations existed between the parties, and the sole basis for any disappointment on the part of Mrs. Lockie was the share she was devised by her mother. She felt that the other beneficiaries should make contribution to her, in order that the estate of her mother should be more equally and equitably distributed than as provided in the will. As a matter of law, the daughter, Mrs. Lockie, was not entitled to any share in the estate. The mother had the legal right to make and execute the will as it was made.
There is no claim or evidence in the instant case that discloses any legal ground or basis for the contest of the will of Mrs. Baker. Plaintiff (Mrs. Lockie) in fact admits this proposition. In her judgment, the will was unjust, and she thought that, as the daughter of the testatrix, she had not been treated right. The record is as follows:
"Q. And you hadn't said anything then [prior to the meeting of the beneficiaries at the Talbott home] about contesting, had you? A. No, I hadn't said anything about it, but I thought it very unjust. Q. And what you thought or claimed about the will was that you thought you had not been treated equally with the other children? A. I thought it was unjust. *Page 24
I thought I wasn't treated right. Q. That is all that you claim; that is all that you claim now, isn't it? A. Yes."
There is no claim of fraud, undue influence, or lack of testamentary capacity. The quite universal rule is that, to sustain a compromise and settlement, it must appear that the claim or controversy settled, though perhaps not in fact valid in law, was presented and demanded in good faith, and upon reasonable grounds for inducing the belief that it was enforcible. Montgomery v. Grenier, 117 Minn. 416 (136 N.W. 9);Sullivan v. Collins, 18 Iowa 228.
There is one pertinent and controlling question in this case. Was the oral agreement, if made, as alleged by plaintiff, a valid, and therefore enforcible, agreement by specific performance? In an action for specific performance, the burden is on the plaintiff to establish the alleged contract, and the evidence must be clear, satisfactory, and convincing. Specific performance is not granted as a matter of right in every case.Wilken v. Voss, 120 Iowa 500; 4 Pomeroy's Equity Jurisprudence (4th Ed.) 3319, Section 1400. Contracts, to be specifically enforced, must be so certain and definite in their terms as to leave nothing to conjecture, or to be supplied by the court. The terms must be certain and complete in themselves. Marti v.Ludeking, 193 Iowa 500. A court of equity may properly refuse specific performance of an agreement of doubtful mutuality. The minds of the parties must fully meet on the terms of the contract sought to be specifically enforced. Briles v. Goodrich, 116 Iowa 517.
The plaintiff in the instant case declared upon an express oral contract, and the plaintiff alleges, inter alia, "that the oral agreement was therein entered into by and between M. Avis Lockie, Sarah Talbott, and Alanson Baker."
By virtue of the terms of this agreement, the plaintiff claims that Sarah Talbott was to pay $4,000, and Alanson Baker was to pay $10,000, in settlement of the proposed contest of Mary E. Baker's will. This allegation is specific and unambiguous. The prayer of the plaintiff is for a decree of specific performance of the contract on the part of the defendant appellees. A reading of the record makes it plain that there is no certainty in the evidence as to what actually transpired *Page 25
in the conversation between the parties when they met at the home of Mrs. Talbott on the eventful Sunday morning. There is no certainty as to what the actual agreement was, if one was made. There was no proof that Mrs. Talbott agreed or acquiesced to the terms of any contract. The most that can be said is that there was a disposition on the part of Mr. Baker and Mrs. Talbott's husband to contribute something to Mrs. Lockie, to make a more equitable distribution of Mrs. Baker's estate. It appears that Mrs. Talbott did not agree to any specific proposition. To illustrate this, we quote from the record:
"Q. You [Mrs. Lockie] didn't have any talk personally about the matter with Mrs. Talbott at all, did you? A. No, only as we talked as we were all together. Q. I say you didn't have any other talk, nor did Mr. Lockie, with Mrs. Talbott, did he? She never said that she would do anything herself? You never heard her, when in your presence, say to Mr. Lockie or anyone that she would pay you anything, or would do anything? A. Not as I know; only as her husband spoke for her, as I supposed. Q. No, you had talked with your brother, Mr. Baker, about this will, and that you regarded it unjust and unfair to you? He said, as I understand you, that he would do something for you personally, — isn't that true? A. Yes."
"Well, if it was to be a life estate which we were to get, — if it was to be tied up in that manner, — I wanted $15,000; but my husband thought that, if we could get $10,000 without any strings on it, it would be better, and we would take it and make more from it. Q. Mr. Baker, however, never did agree to that, did he? A. I couldn't say he wanted the life-estate agreement on it. Q. Well, do you claim that Mr. Talbott agreed to give you $4,000 in addition to the $10,000? A. He said: `We will give that much, to make it equal.' Q. Mrs. Lockie, to refresh your recollection, isn't this true, that, when you were going over these matters and talked it over, that Mr. Talbott said, `I haven't anything to say, — it is not my business,' — or words to that effect, but he said, `If I can do anything to fix it up, I will give $4,000 towards the $10,000?' A. He said that when my brother and sister were in the front room, talking it over; but after my sister and her husband went into the kitchen to talk it over, and came back, he didn't say it at all. Q. He *Page 26
never imparted that to anybody? A. Not after he went into the kitchen. After he went out in the kitchen, he came back, and said nothing more about it. I never agreed to accept $10,000 in full settlement. We first said we wouldn't take less than $15,000, and then they wanted to give $10,000 with strings on it, and the $4,000; and nothing more was said. Q. What is the least you said you would take, and not contest the will? A. I think it was $15,000, to start with. Q. But you are now asking $14,000? A. Well, the $10,000 had strings on it. The $12,000 was to be cash, without strings on it. Q. May I have a direct answer to that? I say you are now asking $14,000? A. Yes, considering we have strings on it. We have no agreement with Mrs. Talbott about the signing of the mortgage."
Mr. Lockie testified:
"Mr. Baker told me he was willing to give something out of his own property to my wife. He is the one who, in fact, opened up the subject. Q. So that, at that time, when he made the statement to you, there had never been any suggestion as to any contest of the will or anything of that kind, but it was a voluntary offer on his part? A. It was. Q. As a matter of fact, Mr. Lockie, Mrs. Talbott herself never at any time said, in your presence, she would pay any part of this fund, did she? A. She did not."
The foregoing constitutes a sufficient quotation to indicate the factual setting of this case, and to indicate that the pleaded contract is a joint contract on the part of the appellees, or it is nothing. Relief in equity must be consistent with the facts pleaded, and a court of equity does not undertake to make a contract for the parties or to supply any essentials thereof. True, Section 10975, Code of 1924, provides that, where two or more persons are bound by contract, either jointly only, or jointly and severally, or severally only, an action thereon may, at the plaintiff's option, be brought against any or all of them. The following section provides that any action against one or more of several persons jointly bound shall not be a bar to proceedings against the others.
These sections of the Code are in no sense controlling on the issues herein involved. They have to do with matters of practice *Page 27
and procedure, but do not create substantive contractual liability. Is the alleged agreement in the instant case joint, or is it several? Must the plaintiff recover, if at all, from both defendants? Clearly, there was a joint contract, if any there was made.
To determine whether or not the instant contract, as alleged, is severable, the obligation of the appellant must be examined, to see whether or not her obligation under the 2. CONTRACTS: contract was to deliver and furnish a separate construc- consideration to each of the other two parties. tion: joint It is obvious that the appellant was tendering contracts. to the appellees, under the alleged contract, but one consideration, — to wit, the refraining from contesting the will in question. The appellant claims that she was to receive the aggregate sum of $14,000 for refraining from contesting the will, and that a certain portion of this sum was to come from one party, and a certain portion from another.
Let us, for a moment, reverse the situation, and assume that the appellant is now attempting to contest the will, and that the appellees were attempting to prevent a contest, and pleaded the contract now sued upon, to prevent such a contest. It is clear that appellant could therein successfully contend that the agreement to refrain from a contest was based upon an agreement to receive $14,000, and that, if the obligation of one of the parties to pay a portion of this sum was void and unenforcible, or if the obligation never came into existence, then the proposed contract made by the appellant to refrain from a contest in consideration of the aggregate sum of $14,000 never ripened into a complete contract. Whether the instant contract is joint or several depends primarily upon the intention of the contracting parties, as revealed by the language of the agreement and the subject-matter to which it refers. Nabors v. Producers' Oil Co.,140 La. 985 (74 So. 527). The entirety of a contract depends upon the intention of the parties, and not upon the divisibility of the subject-matter. Bamberger Bros. v. Burrows, 145 Iowa 441. Corpus Juris states the rule thus:
"Where several persons execute an instrument, in parol or under seal, on the same consideration, at the same time, and for the same purpose, and which takes effect from a single delivery, it is a joint promise." 13 Corpus Juris 580, Section 579. *Page 28
It was a joint promise in this case, and so pleaded.
Without further comment, we reach the conclusion that the contract as declared upon has not been proven. The trial court properly dismissed the petition. The decree entered is —Affirmed.
STEVENS, C.J., and ALBERT, MORLING, and WAGNER, JJ., concur.
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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
A15-1248
Ann Majerus,
Appellant,
vs.
Harvey L. Huyser,
Respondent,
Barbara St. John,
Respondent,
Tony Montgomery Realty and Auction Company, et al.,
Respondents.
Filed May 31, 2016
Affirmed
Halbrooks, Judge
Goodhue County District Court
File No. 25-CV-14-2097
William L. French, French Law Office, Rochester, Minnesota (for appellant)
Cheyenne M. Wendt, O’Brien & Wolf, L.L.P., Rochester, Minnesota (for respondent
Harvey Huyser)
Einar E. Hanson, Strobel & Hanson, P.A., Hudson, Wisconsin (for respondent Barbara
St. John)
Hillary R. Stonelake-Curtis, Dunlap & Seeger, P.A., Rochester, Minnesota (for
respondents Tony Montgomery Realty and Auction Company, TMRA Company, and
Tony Montgomery)
Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and
Schellhas, Judge.
UNPUBLISHED OPINION
HALBROOKS, Judge
Appellant challenges the district court’s grant of summary judgment to
respondents, arguing that there are genuine issues of material fact. We affirm.
FACTS
In 2002, appellant Ann Majerus hired a realtor to sell 187.09 acres of land that
Majerus owned. Majerus received an offer to purchase her land for approximately
$1,000,000, but she rejected the offer because she thought that the property was worth
more.
By 2008, Majerus was in default on several mortgages secured by the property and
owed $407,141.66 to the bank. With the assistance of legal counsel, Majerus negotiated
an agreement with the bank to avoid foreclosure. She entered into an exclusive real
estate auction contract with respondent Tony Montgomery Realty & Auction Company
(TMRA) to sell her land at an auction. The contract obligated TMRA to “conduct said
auction in a professional manner.” The contract further provided that the “auctioneer
shall due [sic] their best to acquire as much money for the subject property as they are
capable.” The contract listed the minimum selling price as “money owed bank.”
Majerus alleges that she also hired respondent Tony Montgomery, who owns TMRA, to
be her “broker/real estate agent” and signed listing agreements with Montgomery and his
2
companies. Majerus claims that she asked Montgomery for copies of these agreements
but never received them.
Majerus attended the auction. According to Majerus, Montgomery began the
auction by stating that “the land is going to be sold today” and that “the sale is absolute.”
Absolute auctions are auctions that do not have a minimum selling price. Black’s Law
Dictionary 149 (9th ed. 2009) (defining “auction without reserve” as synonymous with
an “absolute action”). Majerus also alleges that Montgomery stated three times that there
were “no building sites on any of the parcels” and that respondent Barbara St. John, the
Holden Township town clerk who attended the auction, also stated that there were no
building sites on any of the parcels. Majerus claims that after Montgomery announced
that there were no building sites on any of the parcels, at least five potential bidders left
the auction. Montgomery made an audio recording of the auction. On the recording,
Montgomery can be heard saying several times that there are two building entitlements
on parcel two, which contains 124.65 of the property’s 187.09 acres.
Majerus contends that she twice “forcefully” told Montgomery to stop the auction
because she felt that Montgomery was not conducting the auction in a professional
manner. Majerus alleges that respondent Harvey L. Huyser “was talking very loudly,
disrupting the proceedings, and deliberately intimidating bidders not to bid.” Majerus
claims that Huyser made statements to the effect of “why are you bidding on that
dummie, it doesn’t have a building site” and “can’t you see I’m bidding on this.”
Majerus claims that Montgomery refused to stop the auction when she instructed him to
and that Montgomery stated, “[I]f you don’t go through with the auction today, the
3
banker will be out here tomorrow and you will never get a penny.” The audio recording
of the auction does not support Majerus’s allegations.
The realtor who represented Majerus in 2002 also attended the auction and
submitted an affidavit corroborating Majerus’s version of events at the auction. In the
realtor’s opinion, the auction was not conducted in a professional manner because
Montgomery did nothing to stop Huyser from disrupting the auction. The realtor also
opined that Montgomery breached his duties of loyalty and good faith as a real estate
broker by not advertising the property adequately; making the warranty deed available at
the auction (which drove down the price because it made the bidders believe that the sale
was forced); stating that the land would absolutely be sold that day; stating that there
were no building sites on any of the parcels (which drove down the price of the land);
failing to include in the auction flier that there were at least two existing building sites;
and dividing the property into only three parcels instead of six. According to the realtor,
land prices in the county where Majerus’s land was located had gone up “considerably”
between 2002 and 2008, and the land should have sold for more than $1,000,000 at the
auction.
Montgomery disputes Majerus’s claims about the auction. He maintains that the
auction was conducted in a professional manner. He notes that the audio recording
demonstrates that he described the property as “gorgeous” and that he told the bidders
that he would stay as long as they wanted. Montgomery asserts that he never stated the
auction was absolute and that Majerus specifically gave her permission to sell the
property at the end of the auction, as evidenced by the recording. He also asserts that the
4
advertising for the property was adequate. He advertised the property by distributing 200
auction bills, placing a sign describing the real estate and auction on each parcel,
advertising the auction in several regional newspapers and on two websites, and holding
open houses. St. John contends that she confirmed at the auction that two building sites
existed on parcel two and that she did not interfere with the sale.
Huyser was the highest bidder at the auction and ultimately purchased the land for
$497,986.81. After the mortgages and all expenses were paid, Majerus’s net proceeds
from the sale amounted to $9,734. Majerus claims that “[s]everal persons who wanted to
buy the property before the auction were directed to Montgomery. Each would have paid
far more than was brought at the auction. Montgomery would not consider the offers
they made to buy the property.”
In 2014, Majerus sued Montgomery and TMRA for breach of contract,
Montgomery for breach of duty of loyalty, and St. John and Huyser for tortious
interference with prospective economic advantage. The district court subsequently
granted summary judgment in favor of all respondents on all claims. This appeal follows.
DECISION
On appeal from summary judgment, we review de novo whether a genuine issue
of material fact exists and whether the district court erred in applying the law. STAR
Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). We view
the evidence in the light most favorable to the party against whom summary judgment
was granted. Id. Summary judgment is appropriate when “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
5
show that there is no genuine issue as to any material fact and that either party is entitled
to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “The party opposing
summary judgment may not establish genuine issues of material fact by relying upon
unverified and conclusory allegations, or postulated evidence that might be developed at
trial, or metaphysical doubt about the facts.” Dyrdal v. Golden Nuggets, Inc., 689
N.W.2d 779, 783 (Minn. 2004). To survive summary judgment, the nonmoving party
must produce concrete evidence and cannot rely on mere speculation. Bob Useldinger &
Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn. 1993). “[W]hen the nonmoving
party bears the burden of proof on an element essential to the nonmoving party’s case, the
nonmoving party must make a showing sufficient to establish that essential element.”
DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
I.
Majerus argues that the district court erred by granting summary judgment to
TMRA and Montgomery on her breach-of-contract claim. To maintain a breach-of-
contract claim, a plaintiff must prove the following elements: “(1) formation of a
contract, (2) performance by plaintiff of any conditions precedent to his right to demand
performance by the defendant, and (3) breach of the contract by defendant.” Lyon Fin.
Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 543 (Minn. 2014) (quotation
omitted). A breach-of-contract claim fails as a matter of law if the plaintiff cannot
establish that she has suffered damages as a result of the breach. Jensen v. Duluth Area
YMCA, 688 N.W.2d 574, 578-79 (Minn. App. 2004). A plaintiff cannot recover damages
that are “remote, conjectural, or speculative.” Id. at 579. “But damages need not be
6
proved with certainty; it is legally sufficient that a reasonable basis for approximating
loss is shown.” Id.
The district court concluded that “[t]he critical omission in this matter is that
[Majerus] failed to bring forth any evidence identifying a prospective individual who
would have bid on the property but for any of the [respondents’] actions.” Instead,
Majerus put forth only generalized evidence identifying her possible damages: her
statement in her affidavit that at least five bidders left the auction after Montgomery
announced that there were no building sites on any of the parcels; her opinion that Huyser
succeeded in getting others not to bid on the property; her opinion that Montgomery cost
her at least $1,000,000 by not promoting the building sites; her contention that several
people wanted to buy the property before the auction and would have paid more than
what the auction brought; and her realtor’s opinion that property values had increased
between the time of the $1,000,000 offer in 2002 and the auction.
Majerus has not identified a specific person who would have paid more at the
auction but for Montgomery’s alleged statements that there were no building sites on the
property. She similarly has not identified anyone who would have bid more if
Montgomery had not allowed Huyser to disrupt the auction as she claims. She also has
not identified the people who she claims approached Montgomery before the auction with
offers higher than what the auction brought, and she has not indicated what those people
actually offered. The district court concluded that even if Montgomery had stated that
there were no building sites on the property, no evidence other than speculation connects
that statement and the bidders’ departure from the auction. One would also have to
7
speculate that the bidders who left the auction after Montgomery’s alleged statements
would have bid more than Huyser. Furthermore, Majerus signed a contract with
Montgomery to sell her property at an auction with the minimum selling price being the
money that she owed to the bank. The contract was satisfied when Montgomery
auctioned off the property for an amount greater than what Majerus owed to the bank.
We agree with the district court that Majerus’s damages are speculative in nature.
Because Majerus has produced no concrete evidence of damages, her breach-of-contract
claim against TMRA and Montgomery fails as a matter of law. Summary judgment is
therefore appropriate on this claim.
II.
Majerus argues that the district court erred by granting summary judgment to
Montgomery on her claim that he breached his duty of loyalty. Majerus contends that
Montgomery owed her duties that went beyond the auction contract, based on additional
listing agreements.
The district court concluded that there was no evidence that Montgomery agreed
to assume broader duties than those articulated in the auction contract. The only
evidence that Majerus offered to show that Montgomery had assumed broader duties was
her statement in her self-serving affidavit that she had signed listing agreements with
Montgomery but never received copies of the agreements.
This claim is appropriate for summary judgment because, as the district court
noted, Majerus produced no concrete evidence of damages. In support of this claim,
Majerus offered the opinions of her former realtor that Montgomery’s actions breached
8
the duty of loyalty. The district court concluded that “there is no evidence of any specific
individual or individuals who were prospective buyers who were not considered, did not
attend, or did not bid at the auction but for any of the actions or omissions alleged to have
occurred.” We agree with the district court’s conclusion. Majerus put forth no evidence
of a buyer or bidder who would have paid more for the property if Montgomery had done
what she claims he should have done. Because Majerus offered no evidence of her
damages, Montgomery is entitled to summary judgment on this claim.
III.
Majerus argues that the district court erred by granting summary judgment to
St. John and Huyser on her claim of tortious interference with prospective economic
advantage. To recover on a claim of tortious interference with prospective economic
advantage, a plaintiff must prove the following elements:
1) The existence of a reasonable expectation of
economic advantage;
2) Defendant’s knowledge of that expectation of
economic advantage;
3) That defendant intentionally interfered with
plaintiff’s reasonable expectation of economic advantage, and
the intentional interference is either independently tortious or
in violation of a state or federal statute or regulation;
4) That in the absence of the wrongful act of
defendant, it is reasonably probable that plaintiff would have
realized his economic advantage or benefit; and
5) That plaintiff sustained damages.
Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 219
(Minn. 2014). To maintain this action, “a plaintiff must specifically identify a third party
with whom the plaintiff had a reasonable probability of a future economic relationship.”
9
Id. at 221. “[A] plaintiff’s projection of future business with unidentified customers,
without more, is insufficient as a matter of law.” Id. at 221-22. “The requirement to
identify specific third parties with whom the plaintiff claims prospective economic
relationships promotes the interest to be protected: a reasonable expectation of a future
economic advantage.” Id. at 221.
Majerus has not identified a specific third party who would have bid on the
property but for the alleged statements made by St. John and Huyser. She instead relies
on speculation that unidentified bidders were either intimidated into not bidding by
Huyser’s alleged behavior or discouraged from bidding by St. John’s alleged statements.
Majerus therefore cannot identify a specific third party with whom she had a reasonable
probability of a future economic relationship. Because she has not made a sufficient
showing on the claim, St. John and Huyser are entitled to summary judgment.
Affirmed.
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I. On or about February 20, 1923, E.H. Brawner entered into a contract in writing with the Independent School District of Wall Lake, Iowa, for the furnishing of materials and labor and the construction of a public school building in the city of Wall Lake, securing the performance of the terms of said contract by a bond signed by himself, as principal, and the United States Fidelity Guaranty Company, as surety, conditioned as required by Chapter 347, Acts of the Thirty-eighth General Assembly. The contractor defaulted, and the building was completed by the school district. The claims filed for material and labor exceeded in amount the contract price for the building, hence the several actions in equity against the principal and the surety on the bond.
The petition of the Garver Hardware Company was filed August 4, 1924, and that of E.C. Wickham, December 17, 1924; but the record does not disclose the date on which the petition was filed in the action commenced by William Francesconi. All of the claims involved were filed within four months after the date of the last item, except the claim of E.C. Wickham.
Two primary issues are involved, namely: Were the respective claims of the parties named duly itemized and verified, and were they filed in the office of the proper officer of the school district?
We will first dispose of the claim of the Garver Hardware 1. MECHANICS' Company. The claim of this appellee was not LIENS: verified, as required by Section 3102 of the public Code of 1897 and Chapter 347, Acts of the improve- Thirty-eighth General Assembly. This fact was ments: apparently overlooked until objection was made "verified" by counsel for the appellant surety company to statement as the admission of the claim in evidence. condition Thereupon, the claimant filed a duly itemized precedent. and verified claim in the office of the clerk of the district court. It *Page 310
is the claim of appellant surety company that the latter filing was not with the proper officer, nor within the time required by Section 3102 of the Code of 1897 and Chapter 347, Acts of the Thirty-eighth General Assembly, as amended.
Section 3102, Code of 1897, required claims to be filed "with the public officer through whom the payment is to be made * * * within thirty days after the performance of the last labor or the furnishing of the last of the material * * *."
Section 2 of Chapter 347, Acts of the Thirty-eighth General Assembly, as amended by Chapter 147, Acts of the Thirty-ninth General Assembly, provides for the filing of claims for labor or material furnished or performed upon a public building within four months after the date of the last item of labor or material.
Chapter 347, Acts of the Thirty-eighth General Assembly, was amended, revised, and codified by the fortieth extra general assembly (House File 254, Fortieth Extra General Assembly, Chapter 452, Code of 1924).
Section 10308, Code of 1924, provides for the filing of claims in such cases:
"1. At any time before the expiration of thirty days immediately following the completion and final acceptance of the improvement.
"2. At any time after said thirty-day period, if the public corporation has not paid the full contract price as herein authorized, and no action is pending to adjudicate rights in and to the unpaid portion of the contract price."
Section 10309 further provides for the filing of claims during the pendency of the action, as follows:
"The court may permit claims to be filed with it during the pendency of the action hereinafter authorized, if it be made to appear that such belated filing will not materially delay the action."
Appellant surety company contends that the rights of all claimants herein must be determined and adjudicated under the law as it appeared in the Code of 1897 and Chapter 347, Laws of the Thirty-eighth General Assembly, as amended by Chapters 28 and 147 of the Laws of the Thirty-ninth General Assembly, and that the provisions of Chapter 452 of the Code of 1924 have no application thereto. Section 2, Chapter 347, of *Page 311
the Acts of the Thirty-eighth General Assembly, as amended by Chapter 147, Acts of the Thirty-ninth General Assembly, is as follows:
"Such bond shall be executed in duplicate, one copy of which shall be filed in the office of the clerk of the district court of the county in which such public work is to be performed; and any person for whose benefit the bond is given, or his assigns, may bring an action on such bond for the recovery of such indebtedness; provided that no such action shall be brought on said bond after six months of the completion of any public improvement or building, and provided that a verified, itemized statement of the claim shall be filed with the city clerk, county auditor, or secretary of the school board, as the case may be, within four months after the last item of material is furnished or labor performed."
Prior to the enactment of Chapter 347 there was no provision in the statutes of this state requiring a public body letting the contract for the construction of a school or other public building, to require the contractor to give a bond to secure the performance of his contract. Section 3103 of the Code of 1897 provided that:
"Any party in interest may cause an adjudication of the amount, priority and mode and time of payment of such claim, by an equitable action in the district court of the proper county. In such action the court may assess a reasonable attorney's fee against the party failing, in favor of such corporation."
The provisions of this section are combined with the provisions of Section 2, Chapter 347, and, in the Code of 1924 are codified as Section 10313. The statute makes no specific provision as to the time within which an action under Section 3103 might be brought.
The sufficiency of the several statements and the time of their filing and of the proper place for such filing are before us for review. The original claim filed by the Garver Hardware Company was not verified by the oath of the claimant nor any other person, but the following certificate was attached thereto:
"We hereby certify that the above amount ($1,050) represents the balance due us for which payment has not been received."
By reference to Section 2 of Chapter 347, Laws of the *Page 312
Thirty-eighth General Assembly, as amended, it will be observed that by the provisions thereof any person for whose benefit a bond is given by the contractor for the erection of a public building, shall be liable directly to any person furnishing labor or material for such building, and that an action may be brought on such bond at any time within six months after the completion of the improvement or building, provided, however, that a verified, itemized statement of the claim has been filed with the secretary of the school board or other officer mentioned, within four months after the date the claimant furnishes his last item of labor or materials. Itemized and verified claims to be filed within four months were conditions precedent to be complied with, to entitle such claimant to recover in an action on the bond. The provisions of this enactment are mandatory. Independent Sch.Dist. v. Hall, 159 Iowa 607; McGillivray Bros. v. DistrictTownship, 96 Iowa 629.
Was the claim of the Garver Hardware Company verified? Clearly not. A verified claim is one supported by oath. Such is the universally accepted meaning of the term. It is true that the term used in Section 3102 of the Code of 1897 is "an itemized sworn statement," but this is immaterial. The two words "sworn" and "verified" in this connection are frequently used interchangeably. The claim of the Garver Hardware Company was, therefore, not verified, as required by the statute, and no right of action accrued in its favor by the filing thereof with the secretary of the school board.
Was the filing of a properly itemized and verified statement in the office of the clerk of the district court during the pendency 2. MECHANICS' of the trial sufficient? Clearly not. Chapter LIENS: 452 of the Code of 1924 did not go into effect statute until October of that year, which was several governing: months after the time within which claims of retroactive laborers or materialmen could be filed, had effect. expired.
Section 2, Chapter 347, was a part of the bond executed by appellant, as fully and completely as though the same had been 3. BONDS: written therein. Philip Carey Co. v. Maryland
statutory Cas. Co., 201 Iowa 1063, and cases cited. The bonds: ipso failure of claimant to verify its claim and to facto file the same within the time allowed by the law inclusion of then in force is fatal to its right of recovery. conditions. Section 2, *Page 313
Chapter 347, is not merely procedural in character, but compliance therewith is mandatory and essential to the right of the claimant to an action against the surety on its bond.Manchester v. Popkin, 237 Mass. 434 (130 N.E. 62); Kendall v.Fader, 199 Ill. 294 (65 N.E. 318).
There is nothing in the provisions of Chapter 452, Code of 1924, to indicate an intention on the part of the legislature that it is to be given retroactive effect. It must be held to apply to claims arising after it went into effect. The right of claimant fully matured under the provisions of Chapter 347, Laws of the Thirty-eighth General Assembly, as amended, and the filing of the claim during the pendency of the trial was not timely. This claim should have been rejected by the court.
II. The claim of E.C. Wickham was not filed within four months after the date of the last item thereon. What we have already said as to the time within which claims should be filed is applicable here. This claim should have been rejected.
III. We come now to the appeal of A.C. Norman. The ground upon which his claim was denied by the court was that it was not properly itemized; that it did not show the commencement and close of the account. In this we think the court 4. MECHANICS' is in error. The affidavit attached to the LIENS: claim, which was for labor performed by the public week, does state the dates between which the improve- labor was performed, and the itemized statement ments: itself, in our opinion, sufficiently shows this itemized fact. We think the statute, as to the form of statement: the statement, was sufficiently complied with. sufficiency. Empire St. Sur. Co. v. City of Des Moines,152 Iowa 531; Eggert Flater v. Snoke, 122 Iowa 582; Johnson v.Otto, 105 Iowa 605; Bangs v. Berg, 82 Iowa 350. This claim should have been allowed, unless it was not filed in the office of the proper party.
All of the claims in controversy were filed in the office of the secretary of the school board. Some contention is made by 5. MECHANICS' appellant that the claims should have been filed LIENS: with the public officer through whom payment is public to be made. Such was the requirement of Section improve- 3102; but Section 2, Chapter 347, Acts of the ments: place Thirty-Eighth General Assembly, subsequently of filing enacted, has particular reference to the filing claims. of claims under the provision *Page 314
relating to bonds. This section specifically provides that the claims shall be filed with the secretary of the school board. All claims were filed in the proper office.
IV. The court allowed the claim of one Thomas Bower in the sum of $257.85. The objection urged by appellant to this and other claims of similar nature is that they were not properly itemized. The Bower claim, which was duly verified, consists only of weekly time checks, all of which show the date and number of hours worked during each day of the week. There is no specific statement on the claim or in the verification as to the building upon which the labor was performed. The claim was properly indorsed by the foreman on the school building in question, and was filed with the secretary of the school board. No evidence except the claim was introduced on his behalf. The only objector to the allowance of this claim is the appellant surety company. The claim is very informal, but we think it substantially meets the requirements of the statute.
It follows that the judgment entered against the appellant surety company in favor of the Garver Hardware Company and E.C. Wickham must be, and is, reversed, and that the judgment entered disallowing the claim of appellant A.C. Norman against the fund in the hands of the school district must be, and is, reversed. In all other particulars, the judgment and decree of the court below is affirmed. — Affirmed in part; reversed in part.
All the justices concur.
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Clarence E. Hahn died testate on or about December 31, 1928, devising all of his property to his wife, and his will was admitted to probate January 14, 1929. His surviving widow, Katherine M. Hahn, quickly followed him, dying on January 2, 1929, also testate. The will of Clarence E. Hahn is dated August 21, 1928, and the will of Katherine January 2, 1929. Appellants are collateral heirs of the husband.
Two propositions are argued by appellants for reversal, one that Katherine Hahn, the surviving widow, never at any time elected *Page 638
to take under her husband's will by following either of the methods provided by statute, and the other that she never in fact in any other way or form at any time made such election.
It is provided by section 12006 of the Code of 1931 that "the survivor's share cannot be affected by any will of the spouse unless consent thereto is given as hereinafter provided."
It is provided in the succeeding section that, if the surviving spouse has not within sixty days from the day on which the will of a decedent has been admitted to probate elected to take thereunder, it shall be the duty of the executor to cause a notice to be served upon such surviving spouse advising her of the admission of the will to probate and requiring that such spouse, within six months after completed service, to elect whether she will take or refuse to take under the provisions of the will of such decedent. Such election, under this statute, may be made in open court or by writing filed in the clerk's office. The surviving spouse did not voluntarily in writing elect to take under the will, and it was impossible for her to appear in open court for that purpose. In fact, as already appears, the will of the husband was not admitted to probate for several days after her death.
The question as to whether an election may be made in any other form or method than that provided by statute has been discussed in many decisions of this court, and little need be said on this point. From time to time changes have been made in our statute. These are set out with considerable fullness in In re Estate of Culbertson, 204 Iowa 473, 215 N.W. 761. What has been previously said in our decisions sufficiently disposes of the first proposition relied upon for reversal.
The statutory method is not exclusive, and an election need not be made within six months, nor is it necessary that same be made in open court or of record by either of the methods designated by the statute. Phillips v. Phillips, 204 Iowa 78, 214 N.W. 548; Peckenschneider v. Schnede, 210 Iowa 656, 227 N.W. 335; Hahn v. Dunn, 211 Iowa 678, 234 N.W. 247. This case was disposed of on the former appeal on a motion to strike. The evidence was not before us.
II. So far as direct proof on the point is concerned, there is nothing in the record to indicate that the surviving spouse in this case ever knew that an election or consent to take under the will was necessary. There is, however, abundant, competent evidence that she intended, by her will, to devise and bequeath all of the estate *Page 639
devised to her by her husband. The will executed by him gave her all of the property, real, personal, and mixed, of which he was possessed absolutely, subject only to his debts. The only debts owing by him at the time of his death were those for his last sickness. The remaining debts consisted entirely of his funeral expenses. This fact she well knew. Testatrix appears to have realized that death was rapidly approaching, and she stated to nurses, attendants in the hospital, and friends that it was her purpose and intention to dispose of all of the property of her husband's estate, and that in doing so she was acting in pursuance of a mutual understanding between them. There can be no doubt from the record that she believed that she was the owner and possessed of the property devised by her husband's will, which consisted of eighty acres of land and considerable personal property, and that she had a right to dispose thereof. The effect of her acts and conduct leads indubitably to the conclusion that she desired to carry out the prior mutual understanding and to dispose of all of the property covered by the will of her husband. This was her only reason for making a will at all. Otherwise, she had no property to dispose of. A scrivener, designated by her and called to the hospital at her request, prepared the document. Her mind was clear, and there is not a suggestion of any improper influence. What she did was voluntary on her part and with a complete understanding of the condition of his estate. Clarence E. Hahn died without issue, and an election by his surviving spouse to take under the will in any of the methods recognized by law would have operated to cut off his relatives. We think an election so to take was clearly proven. This is the logical inference from what she said and did.
No other propositions are discussed by counsel. The judgment and decree of the court below is accordingly affirmed. — Affirmed.
KINDIG, C.J., and ANDERSON, MITCHELL, and KINTZINGER, JJ., concur. *Page 640
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I. Two co-related questions are involved on this appeal: (1) Is Chapter 252-A2 (Section 5105-a40 et seq.), Code of 1927, in conflict with Article III, Section 30, of the Constitution of Iowa, in that it is a special law for the 1. MOTOR assessment and collection of taxes for road VEHICLES: purposes? (2) Is Chapter 252-A2, Code of 1927, taxation: violative of the provisions of the Fourteenth permissible Amendment to the Constitution of the United classifica- States, in that it denies to the complainants tion. the equal protection of the law? *Page 463
In the approach to the discussion of the questions heretofore indicated, it may be well to note first the provisions of the challenged statutes. Section 5105-a40 defines certain terms, and,inter alia, contains the following:
"1. The term `motor vehicle' shall mean any automobile, automobile truck, motor bus, or other self-propelled vehicle, not operated upon fixed rails or track, used for the public transportation of freight or passengers for compensation between fixed termini, or over a regular route, even though there may be occasional, periodic or irregular departures from such termini or route; except those busses owned by school corporations and used exclusively in conveying school children to and from schools.
"2. The term `motor carrier' shall mean any person operating any motor vehicle upon any highway in this state."
It is provided in Section 5105-a41:
"In addition to the regular license fees or taxes imposed upon motor vehicles there shall be assessed against and collected from every motor carrier the following tax for the maintenance and repair of the highways: For motor vehicles having pneumatic tires, one-fourth cent per ton-mile of travel. For motor vehicles having hard rubber or solid tires, one-half cent per ton-mile travel."
Section 5105-a42 provides:
"The ton-miles of freight travel shall be computed as follows: The maximum capacity of each motor vehicle, including trailers, shall be added to the weight of the vehicle; this sum shall be multiplied by the number of miles the vehicle is operated, and the amount thus obtained divided by two thousand."
Section 5105-a43 provides:
"The ton-miles of passenger travel shall be computed as follows: The maximum seating capacity of each passenger-carrying motor vehicle, including trailers, shall be estimated at one hundred fifty pounds per passenger seat; to this sum shall be added the weight of the vehicle, the total shall then be multiplied by the number of miles operated, and the amount thus obtained divided by two thousand." *Page 464
In subsequent sections it is provided that motor carriers shall keep daily records, upon forms prescribed by the commission, and make monthly reports on or before the 10th of the month following.
Section 5105-a48 prescribes that:
"On or before the last day of each month, the commission shall notify all motor carriers of the amount of the tax due from them for the preceding month, which shall be computed by multiplying the total number of ton-miles operated, by the appropriate rate of taxation as herein prescribed, and shall be paid to the commission on or before the 15th day of the following month."
It is further provided that, if the payment is not made upon the said date, a penalty shall be added, and that taxes and penalty shall be a first lien upon all the property of the motor carrier, and, in the event that the "payment is not made on or before 60 days from the date the tax is payable, the property of the carrier, or so much thereof as may be necessary, may be sold to satisfy the said taxes and penalty, interest, and costs of sale." It is made the duty of the board of railroad commissioners to collect all taxes and penalties provided in this chapter, and to remit to the treasurer of the state of Iowa all moneys so collected.
Section 5105-a54 defines the distribution of the proceeds as follows:
"1. For the administration and enforcement of the provisions of this chapter and the regulation of motor carriers one fifth, or so much thereof as may be necessary, shall be paid to the commission by warrant drawn from time to time by the auditor of state upon the treasurer of state. 2. The balance shall be allocated each month by the commission to the various counties in the proportion that the number of ton-miles of travel in the respective county bears to the total number of ton-miles of travel within the state."
It is the further duty of the commission to certify the amount due each county to the auditor of state, who shall draw warrants upon the treasurer of state, to be transmitted to the respective county treasurers. Such funds shall be used by each county board of supervisors for the maintenance and repairs of highways over which motor carriers operate. *Page 465
In connection with the foregoing provisions as contained in Chapter 252-A2, Code of 1927, there must be taken into consideration Chapter 252-A1, with the caption 2. STATUTES: "Regulation of Motor Vehicle Carriers." The construc- legislature (forty-first general assembly) tion: enacted these two chapters on the same date, as statutes in a part of the same system and comprehensive pari plan, and with the same class of carriers in materia. contemplation.
Chapter 252-A1, Code of 1927, defines the special and general powers of the railroad commission of this state. The chapter also makes it unlawful for any motor carrier "to operate or furnish public service within this state without first having obtained from the commission a certificate declaring that public convenience and necessity require such operation." Section 5105-a6.
It is the general rule, as to the construction of statutes adopted at the same session of the legislature when they relate to the same subject-matter, that they shall be construed together. The rule that statutes in pari materia shall be construed together applies with peculiar force to statutes passed at the same session of the legislature. It is presumed that such acts are imbued with the same spirit, and actuated with the same policy, and they are to be construed together, as if parts of the same act. 36 Cyc. 1151.
The two chapters in question constitute a plan promulgated by the state legislature at the same time, for the purpose of taxing and regulating motor carriers using the highways of this state, and only those motor carriers which qualify under the provisions of Chapter 5, Laws of the Forty-first General Assembly (Chapter 252-A1, Code of 1927), are required to pay the license fee or tax imposed under the provisions of Chapter 252-A2.
It may be observed that the act in question recognizes and expressly declares the creation and levy of a tax for the maintenance and upkeep of the public highways. See State v. Manhattan Oil Co., 199 Iowa 1213. The 3. CONSTITUTIO- legislative intent is primarily the creation of NAL LAW: a privilege tax for road use under the special act: classification as defined and limited by the what is not. statute. The authorities generally affirm that the power to tax, in a strict and proper sense, for the purpose of creating revenue, is not included within the police *Page 466
power of the state. City of Terre Haute v. Kersey, 159 Ind. 300
(64 N.E. 469). See, also, City of Ottumwa v. Zekind, 95 Iowa 622;City of Burlington v. Putnam Ins. Co., 31 Iowa 102; StarTransportation Co. v. City of Mason City, 195 Iowa 930; 17 Ruling Case Law 532; 26 Ruling Case Law 17; 37 Cyc. 711. True, part of the fund so levied and collected is devoted to the administration and enforcement of the provisions of the chapter and the regulation of motor carriers.
Sufficient to state that the statute under consideration is a conservation law, which provides for the assessment and collection of a fund for road purposes. It is based upon the physical employment of the highway, and contemplates the "wear and tear" of the highway and the repair and maintenance thereof. It may be conceded that there must be some other reason for the instant classification than the use of the vehicle, unless the use itself affords substantial grounds for a distinction.Waters-Pierce Oil Co. v. Hot Springs, 85 Ark. 509 (109 S.W. 293, 16 L.R.A. [N.S.] 1035). We do not feel, however, that the questions of constitutional law involved herein can be determined by an attempted distinction between the so-called police power of the state and the governmental power of the state to enact revenue measures. See State v. Caplan, 100 Vt. 140
(135 A. 705).
The Constitution of the United States is the supreme law, anything in the Constitutions or statutes of the states to the contrary notwithstanding, and a statute of a state, even when avowedly enacted in the exercise of its police powers, must yield to that law. As said in Connolly v. Union Sewer Pipe Co.,184 U.S. 540 (46 L. Ed. 679):
"No right granted or secured by the Constitution of the United States can be impaired or destroyed by a state enactment, whatever may be the source from which the power to pass such enactment may have been derived."
We may first inquire whether the act in question contravenes the provision of the Constitution of Iowa, to wit:
"The general assembly shall not pass local or special laws in the following cases: For the assessment and collection of taxes for state, county, or road purposes; * * * In all the cases above *Page 467
enumerated, * * * all laws shall be general, and of uniform operation throughout the state; * * *" Article III, Section 30.
Clearly, the statute may not be designated as "local." A public or general law is one that operates uniformly, as distinguished from a special or local act, which does not so operate, but relates to the particular locality or a part of a class. 36 Cyc. 987. Nor do we feel that the statute in question may be denominated "special," as distinguished from a general act. The criterion is well stated in Budd v. Hancock, 66 N.J. Law 133 (48 A. 1023), wherein it is said:
"A law is special, in a constitutional sense, when, by force of an inherent limitation, it arbitrarily separates some persons, places, or things from others, upon which, but for such limitation, it would operate. The test of a special law is the appropriateness of its provisions to the objects that it excludes. It is not, therefore, what a law includes that makes it special, but what it excludes. If nothing be excluded that should be contained, the law is general. Within this distinction between a special and a general law, the question in every case is whether any appropriate object is excluded to which the law, but for its limitations, would apply. If the only limitation contained in a law is a legitimate classification of its objects, it is a general law. Hence, if the object of a law have characteristics so distinct as reasonably to form, for the purpose legislated upon, a class by itself, the law is general, notwithstanding it operates upon a single object only; for a law is not general because it operates upon every person in the state, but because every person that can be brought within its predicament becomes subject to its operation."
See, also, Town of McGregor v. Baylies, 19 Iowa 43.
It is said in State ex rel. West v. City of Des Moines, 96 Iowa 521
:
"It is not necessary to an observance of this provision [Constitution] that the law should operate uniformly on all the people of the state, nor, when the legislation pertains to cities, is it important that it should operate uniformly on all cities throughout the state. But if the law is made to operate upon a particular condition as to persons or property, and is operative whenever *Page 468
and wherever the same conditions exist, affixing the same consequences, then it is a general law in its operation, even though it only operates on one of the conditions or classes specified."
On this phase of the case, therefore, we hold that the statute is not violative of the Constitution of Iowa.
II. Is the statute violative of the provisions of the Fourteenth Amendment to the Federal Constitution in that it denies the equal protection of the law? Is it unreasonable and discriminatory in character? The state is sovereign as to the supervision and regulation of its roads and highways. We do not mean that it has uncontrollable discretion, but the legislature may find definitions and make classification, and unless the judicial branch of the government finds a basis for the unconstitutionality of the act, the latter will not encroach upon the functions of the law-making power.
It is the prerogative of the legislature to classify property for the purpose of taxation. It has done so in the instant matter. It has placed motor vehicles engaged as common carriers in the transportation of passengers and freight over regular routes, on scheduled trips, and between fixed termini, in one class, and all other commercial and miscellaneous motor vehicles in another class. This results in a legislative finding that there was sufficient difference in the use made of the public highways to justify the difference in classification. Shall this court say that there was no basis of fact for the finding? If there is any reasonable ground for the classification, and the law operates equally upon all within the same class, there is no violation of the constitutional inhibition, either state or Federal, relating to class legislation, equal protection of the laws, the abridgment of privileges or immunities of citizens, or depriving persons of property or liberty without due process of law. It is presumed that the legislature acted reasonably in making the classification, and the burden is on the challenger to prove that the classification does not rest upon a reasonable basis, but is essentially arbitrary and palpably discriminating.
The state may reasonably regulate the manner and extent of the use of its public highways by common carriers, and the quantum of the privilege tax for the use of the highways does not necessarily have to be limited to the actual cost of such *Page 469
regulation, but may also, as in the instant case, include compensation for the use of the highway, and provision for anticipated repairs and improvements thereon. The statute in question is not class legislation because it applies only to common carriers of fixed routes. We may take judicial notice that commercial motor vehicle transportation and highway maintenance expense resulting therefrom are rapidly increasing, and that traffic on the main highways is becoming more and more congested. It is not an unreasonable classification for the legislature to make a distinction between those common carriers whose use of the highway is regular, and hence more frequent, and whose operation is attended with great danger to life and property and great damage to the highways, and those carriers whose use of the highways is only occasional and spasmodic. Such a distinction does not constitute an arbitrary discrimination, provided that the state of facts is sufficient to sustain the classification. See Liberty Highway Co. v. Michigan Public Util. Com., 294 Fed. 703, with cases cited.
The appellants herein do operate over regular routes or between fixed termini, whereas the other class of motor carriers, such as taxicabs, trucks hauling farm products to market, oil trucks, moving vans, ambulances, funeral cars, and miscellaneous carriers in general, use the highways "without any conscious or organized effort to create or assemble or concentrate traffic for hire upon particular localities or sections of the highway." Iowa MotorVehicle Assn. v. Board of Railroad Com., 202 Iowa 85. See, also,State ex rel. Northern Transp. Co. v. Railroad Com. (Wis.), 220 N.W. 390.
The appellants herein constitute a class of motor carriers which operate from terminal stations that are maintained and advertised as such by the carriers. The right of appellants to make the highways of this state their place of business or a part of their capital investment is distinct and different from the right of a citizen to travel thereon or to transport his property. Appellants operate from regularly established depots and stations in various towns along their route, on scheduled trips, year in and year out. They pick up and discharge passengers along the route, and by reason of their manner of operation, they are granted a franchise or certificate of public convenience and necessity by the board of railroad commissioners of Iowa. *Page 470
One of the appellants herein, the Red Ball Transportation Company, and in fact the only party offering evidence upon the trial, operated, in the year 1926, a total of 812,370 miles over routes between fixed termini for which it holds a certificate of convenience and necessity. This fact itself illustrates the enormous concentration of traffic by one carrier. We cannot escape the conclusion that, under the record, the appellants belong to and comprise a class entirely separate, distinct, and different from the other motor vehicles operating over the highways of this state. The legislature is presumed to have full information upon such matters, and in passing upon same, the courts cannot say that the legislature did not find sufficient difference in the use of the highways by motor vehicles to warrant the classification under complaint. See McReavy v. Holm,166 Minn. 22 (206 N.W. 942).
The courts will assume that the legislative arm of the government considered the interest of the whole people in enacting a statute providing for a classification, and it is also a well settled principle that a court will not declare a law unconstitutional, in whole or in part, unless it is clearly, plainly, and palpably of that character. McGuire v. Chicago, B. Q.R. Co., 131 Iowa 340; Baldwin v. State, 194 Ind. 303
(141 N.E. 343).
In passing, it may be said that all but five states in the union have statutes analogous to the one involved in the case at bar. We do not find that the Supreme Court of any state or of the United States has declared statutes of this character unconstitutional, although the instant or similar objections have been urged in the appellate courts. A few decisions may be cited:Holmes v. Railroad Com., 197 Cal. 627 (242 P. 486); Smallwoodv. Jeter, 42 Idaho 169 (244 P. 149); Reo Bus Lines Co. v.Southern Bus Line Co., 209 Ky. 40 (272 S.W. 18); Maine MotorCoaches v. Public Utilities Com., 125 Me. 63 (130 A. 866);Restivo v. Public Service Com., 149 Md. 30 (129 A. 884);Barrows v. Farnum's Stage Lines, 254 Mass. 240 (150 N.E. 206);Packard v. Banton, 264 U.S. 140 (68 L. Ed. 596); Raymond v. Holm,165 Minn. 215 (206 N.W. 166); State v. LeFebvre, 174 Minn. 248
(219 N.W. 167); Ex parte Anderson, 49 Nev. 208 (242 P. 587); Exparte Tindall, 102 Okla. 192 (229 P. 125); State ex rel. Evansv. Kozer, 116 Or. 581 (242 P. 621); In re James, 99 Vt. 265
(132 A. 40). *Page 471
We conclude, therefore, that the law in question is not discriminatory. Equal protection is not denied if all persons subject to the statute are treated alike under like circumstances. State v. McGuire, 183 Iowa 927. In the instant case, the law is based upon the actual manner of operation, and there can be no doubt that, where a state, at its own expense, furnishes special facilities for the use of those engaged in commerce, it may exact compensation therefor. It has the right to say, if it pleases, that no person or corporation shall use its public highways as a transportation line for hire. The right of a citizen to travel upon the highway and transport his property thereon in the ordinary course of living and business is radically different from that of one who makes a certain portion of the highway his place of business, and uses it for private gain in the transportation of freight or passengers, as under the terms of the statute in question.
From whatever angle the cause may be viewed, we discover no basis upon which to predicate the constitutional objections urged. The decree entered by the trial court is — Affirmed.
All the justices concur.
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Plaintiff is the owner of about 200 acres of real estate which adjoins the 240 acres owned by defendant on the north. County Highway G runs north and south along the east side of said lands. Plaintiff claims the boundary line between the two tracts is the south line of a certain ditch and a line fence. The petition states:
"That at a time more than thirty years prior to the commencement of this action, plaintiff's grantors erected a line fence along the south line of plaintiff's real estate above described, and at about said time, constructed a ditch running east and west, the south bank of said ditch and said line of fence constituting the south line of plaintiff's property above described. That said ditch has been maintained by plaintiff and his grantors ever since said ditch was constructed and for a period of more than thirty years, and the south line of said ditch forms the boundary line between plaintiff's property above described on the north, and defendant's property above described on the south. That plaintiff's grantors erected said fence and constructed said ditch with the intent to make the same the south boundary line of said above described property, and to claim, occupy, and use all of the ground and real estate lying north of said fence and the south line of said ditch as their own, and plaintiff and his said grantors have, in fact, claimed, occupied, used, and cultivated all of said ground lying north of said line so established, continuously, openly, notoriously, and adversely under claim of right for a period of more than thirty years, and that said line, as fixed by said fence and the south bank of said ditch, during all of said time constituted, *Page 492
and now constitutes the south boundary of the land occupied and claimed by plaintiff and his grantors, and by reason thereof plaintiff and his grantors have acquired title to all the lands and real estate lying north of said line above described."
The petition also alleged that plaintiff and defendant and their grantors have for a period of more than 30 years recognized said line as the boundary line between their respective tracts of real estate and that defendant and grantors at no time prior to October 30, 1939, ever made any claim that said line was not the true boundary line. The petition further stated:
"That on or about the 30th day of October, 1939, the defendant, without authority or permission from this plaintiff, unlawfully and illegally entered upon plaintiff's property above described and constructed a line of fence running east and west at a point about twenty-one feet north of the south line of plaintiff's property. That said acts of the defendant constitute a trespass upon plaintiff's land, and plaintiff is informed and believes that the defendant makes some claim to the real estate of plaintiff located south of the line of said fence extended."
The trial court found that the division line for many years and more than 10 years was marked by a line fence commencing at County Highway G on the east and extending in a westerly direction to Mosquito Creek and that the boundary line west of the creek to the west side of the land extended due west in line with the said fence and that said line, by reason of adverse possession and acquiescence is, as claimed by plaintiff, now the true boundary line between the premises.
The decree further states:
"That more than 25 years prior to the commencement of this action there was constructed a ditch along the north side of a portion of said fence commencing with County Highway `G' and extending westerly therefrom. That the original fence along the south side of said ditch is no longer in existence, but that the south bank of said ditch conforms to said original line of fence and has constituted the south boundary line of plaintiff's property above described for more than ten years prior *Page 493
to the commencement of this action, and has been acquiesced in by plaintiff and defendant and their grantors, and has been recognized by them as the division line between said properties during all of saint period. That the fence now on said premises and extending westerly from approximately the west end of said ditch to Mosquito Creek is substantially the same location as the original fence along said division line, and is and constitutes the division line between said premises, and that said line now marked by said fence has been acquiesced in by plaintiff and defendant and their grantors for more than ten years prior to the commencement of this action, and has been recognized by said parties and their grantors during all of said period * * *."
The court also found that plaintiff and his grantors had established title to the land to said boundary line by adverse possession and that defendant had wrongfully erected the fence 25 feet north of said true division line.
We are in full accord with the findings and adjudication of the trial court.
Harvey Lewis owned the land now owned by plaintiff from 1900 to 1918 and lived on and farmed the place during the period of his ownership. He testified that the original fence on his south line was directly in line with the east and west fence east of County Highway G which was the division line between the farm land east of plaintiff's and defendant's property. In 1908, he constructed a drainage ditch about 18 inches deep and 2 1/2 feet wide about 2 feet north of his south line fence. The ditch extended west from County Highway G about 100 rods. All during the time Mr. Lewis owned this land he farmed it right down to the ditch. No occupant of the land, now owned by the defendant, claimed the fence was not the true division line and all owners and occupants of the Anderson land farmed only to the fence or ditch. The fence now running west from the ditch to the creek is in the same place that the original fence was, on his south line, when he bought the premises in 1900. He testified the fence, built by defendant Anderson, is 24 feet north of the original division line fence; that this west fence is in the same place as where the fence was *Page 494
when he lived on the farm. He maintained the original fence all of the time he owned this farm and a portion of this fence is still there to the west.
Plaintiff purchased his farm in 1929. He testified the fence between the two farms was a real good fence in 1913; that it was about 2 feet south of the present ditch; that the fence, running west from the ditch, is in line with the south bank of the ditch; that in 1913 the ditch was about 2 feet north of the division fence; that the fence west of the ditch is in the same place as it was in 1913; that he intended to claim and did claim to this ditch and fence when he acquired the property in 1929; that he at all times claimed the fence and ditch constituted his south line; that during the 26 years he has known this land no person occupying the land of defendant has ever farmed across said line; that the owners and occupants of said land only farmed to the fence or ditch; that defendant never made any claim to any part of the property north of the line until he put his fence in his wheat field in 1939, which fence was 24 feet north of said line; that when defendant built his fence there were about 60 rods of division fence from the creek east to the ditch and in line with the south bank of the ditch. That part of the fence that was formerly along the south bank of the ditch has not been maintained during recent years by the several owners of plaintiff's land.
Owners of land in the neighborhood of the lands in controversy and tenants who had rented the lands now owned by plaintiff and defendant and who were familiar with said lands for many years testified that the occupants of plaintiff's land farmed south to the ditch and fence and the occupants of the defendant's land farmed north to the ditch and fence and that occupants of neither farm would cross this line in their farming operations but would turn at said line. Their testimony covered an uninterrupted period of over 30 years. They testified that the said line was "treated as the division line between the two farms by the respective owners and occupants."
Several witnesses for plaintiff testified that the fence, running west from the west end of the ditch, is in the same place as the original fence. *Page 495
Archie Campbell, a witness for plaintiff, has been the tenant on defendant's land for the past seven years and has been defendant's tenant for the past two years. He testified that during the seven years he has occupied the farm plaintiff had farmed and occupied the land south to the ditch and fence and that during said seven years he had only farmed north to the ditch and fence and had never crossed the ditch in his farming operations.
"Along that line west of the ditch there is a fence in there extending about 60 rods east from the creek. To my knowledge that fence has been in there ever since I farmed the ground. I didn't know anything about it until the last 7 years. The ditch has been there ever since I have been farming, I don't know how long before."
Another witness for defendant farmed defendant's land during the time Harvey Lewis owned plaintiff's land. He testified that "the fence between me and Harvey Lewis was there and was used as a dividing line. The fence went from the road clear to the creek and that was their dividing line between these two properties."
A landowner, testifying for defendant, farmed the land owned by plaintiff from 1920 to 1924. He testified:
"The fence I described ran from the county road on the east practically to Mosquito Creek. The ditch was about two feet north of the fence. That fence marked the boundary line between the two farms. The fence ran in a direct line east and west. We used this fence for a division line all the time I was there and it was so regarded by us when we farmed that land. The ditch extended along the east 40 acres. The fence extended on clear west to Mosquito Creek. That fence along there looked like practically the same fence all the way through. I judge it ran in a direct line east and west;" etc. Other witnesses who were familiar with these farms for many years testified the present fence is in the same location as the original fence.
The defendant, who purchased his farm in 1937, testified:
"I wouldn't say I thought they farmed across the fence. *Page 496
It looked like that fence separated the two farms and that it was used for that purpose. You could also see that ditch to the east separated these two farms. * * * I never farmed this place myself. I never made any claim that that fence and that ditch wasn't the dividing line between those farms until last fall. Not until I erected the fence in Mr. Sieck's wheat field. I didn't make any claim to Sieck; I just went into his wheat and dug post holes and set a fence without talking to him. * * * The wheat is about as close to the ditch as he could drill it in.
"I knew as a matter of fact, and know now, Archie Campbell, my tenant wasn't farming north of that line since I bought the farm. And I never occupied north of that low place [ditch] and the line marked by that fence and never had any occasion to make any claim to it until last fall.
"My fence is 22 or 23 feet north of the south edge of the wheat. I could see where they had farmed to but I didn't know that was the line. It showed where the people on my farm had been farming and where Sieck had been farming. I could see that.
"Q. And you acquiesced in that line yourself until last fall, didn't you?
"A. Well, I suppose I did.
"I could see the place that was treated as a line."
The evidence shows without substantial contradiction that the original fence and later the fence and south bank of the ditch were adopted and recognized by the owners of the adjoining lands as the boundary line for over 35 years. The respective owners and occupants made no claim to land beyond this division line. The mutual recognition of and acquiescence in this fence and ditch as the line for more than ten years establishes this line described by plaintiff as the true boundary line.
As stated in Mullahey v. Serra, 220 Iowa 1177, 1180,264 N.W. 63, 64:
"But defendants appellants contend that this line was not occupied by a fence when they purchased in 1930. Whether this be true or not is not of controlling importance. The line was so marked as to give ample notice that it was the line to *Page 497
which the adjoining owners occupied. There is evidence that one or more of the posts from the fence were still there."
The exhibits and other evidence show the ditch and fence constituted a visible and well-defined line marking the south boundary line of plaintiff's land and the north boundary line of defendant's land.
Appellant, after this suit was commenced, employed an engineer to locate the line fixed by government survey. Appellant claims he built his fence on the line established by the engineer which is 24 feet north of the boundary line established by plaintiff. There is serious doubt about the accuracy of this line. The engineer measured from two points. He testified:
"Then I had occasion to survey from the north. In surveying from the north I started from the northwest corner of 17, which would be the northeast corner of 18. I didn't find the corner, but I have every reason to believe that the highway right of way there is correct and on the section line. Then I measured from that point south 640 feet. I came out several feet south of the point that I established when I came up from the south. I believe it was ten feet south. So, measuring from the north I find one point and measuring from the south I find a different point."
But it is immaterial whether or not the engineer established the government survey line. The issue in this case is whether plaintiff has established a boundary line by acquiescence or adverse possession and we have found for plaintiff on this issue.
As stated in Kotze v. Sullivan, 210 Iowa 600, 604,231 N.W. 339, 340:
"Commencing with Miller v. Mills County, 111 Iowa 654, this court has continuously held that, where a line marking the boundary between adjoining owners is recognized as such for a period of ten years, and has been acquiesced therein for that period, such line becomes the true boundary, notwithstanding it is not the line fixed by government survey. The cases recognizing and applying this rule are too numerous in this state to require citation." *Page 498
In Brown v. Bergman, 204 Iowa 1006, 1011, 216 N.W. 731, 733, the court said:
"But, without prolonging the discussion, the case calls merely for the application of our repeated adjudications that the reciprocal recognition of and acquiescence in a fence as marking the boundary, through occupation and exercise of exclusive dominion thereto by the respective adjoining owners for a period of ten years, raise a conclusive presumption of an agreement upon the line so marked as the boundary." See Dake v. Ward, 168 Iowa 118,150 N.W. 50; Hughes v. Rhinehart, 190 Iowa 560,180 N.W. 643.
For cases on the question of acquiescence where tenants were in possession, see Brown v. Bergman, supra; Keller v. Harrison,139 Iowa 383, 116 N.W. 327.
In Brewer v. Claypool, 223 Iowa 1235, 1238, 275 N.W. 34, 35, we said:
"To establish title by adverse possession the claim of right must be as broad as the possession, that is, it was encumbent on the defendants to prove that they intended to claim to the fence whether the true line or not."
This record proves beyond question that plaintiff and his immediate and remote grantors intended to claim ownership to the fence and south bank of the ditch. For over 35 years they occupied the land south to this line and their occupation and exercise of dominion of the farm down to this line was continuous, open, visible and notorious for all of said time.
Appellant complains there is no evidence that a fence ever existed between the two farms from the west side of Mosquito Creek to the west side of plaintiff's farm. This contention is true. This area affects about one acre of appellant's farm. We approve the finding of the trial court on this question. The court said:
"The line extending west from said Mosquito Creek and in line with said fence to the west line of plaintiff's property has been acquiesced in by plaintiff and defendant and their grantors for more than ten years prior to the commencement of this *Page 499
action, and has been recognized by said parties and their grantors during all of said period."
On this record appellant cannot be permitted to disturb this boundary line which has been established for many years. The trial court was clearly right in finding that in building the fence he was a trespasser on plaintiff's land.
The court appointed a commissioner to survey and locate the division line established by the decree by metes and bounds. In a supplemental decree, the court approved the report of the commissioner and the boundary fixed therein by metes and bounds and quieted title in plaintiff to the land north of this line against all adverse claims of the appellant.
The said supplemental decree is affirmed. The case is affirmed. — Affirmed.
BLISS, C.J., and SAGER, GARFIELD, MILLER, HALE, OLIVER, and WENNERSTRUM, JJ., concur.
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ACCEPTED
03-15-00446-CV
7113707
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/25/2015 10:24:30 PM
JEFFREY D. KYLE
CLERK
NO. 03-15-00446-CV
IN THE FILED IN
3rd COURT OF APPEALS
COURT OF APPEALS FOR THE 9/25/2015 10:24:30 PM
AUSTIN, TEXAS
THIRD COURT OF APPEALS DISTRICTJEFFREY D. KYLE
Clerk
AUSTIN, TEXAS
______________
BAXTER OIL SERVICE, LTD.
APPELLANT
VERSUS
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
APPELLEE
______________
APPEAL FROM THE 345TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS
NO. D-1-GN-10-000772
BRIEF OF APPELLANT
PULMAN, CAPPUCCIO, PULLEN, BENSON & JONES, LLP
Elliott S. Cappuccio
Texas State Bar No. 24008419
Leslie Sara Hyman
Texas State Bar No. 00798274
Etan Z. Tepperman
Texas State Bar No. 24088514
2161 NW Military Highway, Suite 400
San Antonio, Texas 78213
(210) 222-9494 (Telephone)
(210) 892-1610 (Facsimile)
Attorneys for Appellant
APPELLANT REQUESTS ORAL ARGUMENT
NO. 03-15-00446-CV
IN THE
COURT OF APPEALS FOR THE
THIRD COURT OF APPEALS DISTRICT
AUSTIN, TEXAS
______________
BAXTER OIL SERVICE, LTD.
APPELLANT
VERSUS
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
APPELLEE
______________
IDENTITY OF PARTIES AND COUNSEL
Appellant: Appellate Counsel for Appellant:
Baxter Oil Service, Ltd. Elliott S. Cappuccio
Leslie Sara Hyman
Etan Z. Tepperman
Pulman, Cappuccio,
Pullen, Benson & Jones, LLP
2161 NW Military Highway, Suite 400
San Antonio, Texas 78213
–i–
Trial Counsel for Appellant:
Cynthia J. Bishop
C Bishop Law PC
P. O. Box 612994
Dallas, Texas 75261
Appellee: Counsel for Appellee:
Texas Commission on Environmental Thomas H. Edwards
Quality Craig J. Pritzlaff
Office of the Attorney General
P. O. Box 12548, Capital Station
Austin, Texas 78711
– ii –
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ............................................................................... i
TABLE OF CONTENTS ....................................................................................................... iii
INDEX OF AUTHORITIES ................................................................................................... iv
STATEMENT OF THE CASE ................................................................................................. 1
ORAL ARGUMENT STATEMENT ........................................................................................ 2
ISSUES PRESENTED ............................................................................................................ 2
STATEMENT OF FACTS ...................................................................................................... 3
SUMMARY OF THE ARGUMENT ....................................................................................... 8
ARGUMENT ....................................................................................................................... 9
I. Baxter Was Deprived of Due Process ......................................................................... 9
A. Baxter Is Entitled To Due Process .............................................................. 9
B. “Adequate” Notice is an Essential Element of Due Process ..................... 11
C. The Notice to Baxter Did Not Provide Baxter Sufficient Information ..... 15
1. The TCEQ Did Not Provide Any Notice of the
Right to Appeal the Order ................................................................. 15
2. Constructive Notice of Appellate Rights Is Inadequate
Given the Circumstances and Conditions of This Case ..................... 18
3. The TCEQ Did Not Provide Adequate Notice of the
of the Issues or Consequences .......................................................... 22
D. Because it Lacked Sufficient Information, the Order
Violated Due Process and Was Void ........................................................ 24
II. Because the Order is Void, it May be Collaterally Attacked
at Any Time and the Trial Court Erred in Granting
the TCEQ’s Plea to the Jurisdiction ................................................................. 27
CONCLUSION AND PRAYER ........................................................................................... 29
CERTIFICATE OF COMPLIANCE ...................................................................................... 31
CERTIFICATE OF SERVICE .............................................................................................. 31
– iii –
INDEX OF AUTHORITIES
Cases Page
Armstrong v. Manzo,
380 U.S. 545 (1965) ..............................................................................................10
Barrera-Montenegro v. United States,
74 F.3d 657 (5th Cir. 1996) ...................................................................................14
Baxter v. Colvin,
No. 14-CV-01306, 2014 WL 6985149 (N.D. Cal. Dec. 10, 2014) .......................13
Boddie v. Connecticut,
401 U.S. 371 (1971) ..........................................................................................9, 10
Bradf. v. Edelstein,
467 F. Supp. 1361 (S.D. Tex. 1979) ................................................................12, 18
Buckner Trucking, Inc. v. United States,
354 F. Supp. 1210 (S.D. Tex.1973) .......................................................................22
Butland v. Bowen,
673 F. Supp. 638 (D. Mass. 1987) ...........................................................................13
Chocolate Bayou Water Co. & Sand Supply v. Tex. Natural Res.
Conserv. Comm’n,
124 S.W.3d 844 (Tex. App.—Austin 2003, pet. denied) ......................................28
Chow v. Dole,
677 S.W.2d 220 (Tex. App.—Houston [1st Dist.] 1984, no writ).........................18
City of Celina v. Dynavest Joint Venture,
253 S.W.3d 399 (Tex. App.—Austin 2008, no pet.),
rev’d on other grounds, Rusk State Hospital v. Black,
392 S.W.3d 88 (Tex. 2012)....................................................................................28
City of Dallas v. VSC, LLC,
347 S.W.3d 231 (Tex. 2011) ......................................................................20, 21, 22
City of Waco v. Roddey,
613 S.W.2d 360 (Tex. App.—Waco 1981, no writ) ..............................................12
– iv –
INDEX OF AUTHORITIES (CONTINUED)
Cases (Continued) Page
City of West Covina v. Perkins,
525 U.S. 234 (1999) ..........................................................................19, 20, 21, 22
Cleveland Bd. of Educ. v. Loudermill,
470 U.S. 532 (1985) ..............................................................................................10
Consolidation Coal Co. v. Georgia Power Co.,
781 F.3d 129 (4th Cir. 2015) .................................................................................26
Dusenbery v. United States,
534 U.S. 161 (2002) ..............................................................................................20
FCC v. Pottsville Broadcasting Co.,
309 U.S. 134 (1940) ..............................................................................................13
Fuentes v. Shevin,
407 U.S. 67 (1972) ..................................................................................................9
Gonzalez v. Sullivan,
914 F.2d 1197 (9th Cir. 1990) .........................................................................13, 27
Hess & Clark, Division of Rhodia, Inc. v. Food and Drug Administration,
495 F.2d 975 (D.C. Cir. 1974) ...............................................................................13
Houston v. Fore,
412 S.W.2d 35 (Tex. 1967).............................................................................. 11, 29
In re Guardianship of B.A.G.,
794 S.W.2d 510 (Tex. App.—Corpus Christi 1990, no writ) ............................27, 28
In re E.R.,
385 S.W.3d 552 (Tex. 2012)............................................................................28, 29
In re Ruffalo,
390 U.S. 544 (1968) ..............................................................................................13
Joint Anti-Facist Comm. v. McGrath,
341 U.S. 123 (1951) .......................................................................................... 9, 11
–v–
INDEX OF AUTHORITIES (CONTINUED)
Cases (Continued) Page
Jones v. Flowers,
547 U.S. 220 (2006) ..............................................................................................20
L.B.L. Oil Co. v. Int’l Powers Serv., Inc.,
777 S.W.2d 390 (Tex. 1989)..................................................................................18
Langdale v. Villamil,
813 S.W.2d 187 (Tex. App.—Houston [14th Dist.] 1991, no writ) ......................12
Lesikar v. Rappeport,
33 S.W.3d 282 (Tex. App.—Texarkana 2000, no pet) ..........................................28
Logan v. Zimmerman Brush Co.,
455 U.S 422 (1982) .........................................................................................10, 14
Lopez v. Lopez,
757 S.W.2d 721 (Tex. 1988)..................................................................................18
Mathews v. Eldridge,
424 U.S. 319 (1976) ..................................................................................... Passim
Memphis Light, Gas, & Water Div. v. Craft,
436 U.S. 1 (1978) ..................................................................................................18
Misium v. Misium,
902 S.W.2d 195 (Tex. App.—Eastland 1995, no writ)..........................................18
Moss v. Malone,
880 S.W.2d 45 (Tex. App.—Tyler 1994, writ denied) ..........................................18
Mosser v. Plano Three Venture,
893 S.W.2d 8 (Tex. App.—Dallas 1994, no writ) ........................................... 11, 12
Mullane v. Central Hanover Bank Trust Co.,
339 U.S. 306 (1950) ..................................................................................... Passim
Navato v. Sletten,
560 F.2d 340 (8th Cir.1977) ..................................................................................13
– vi –
INDEX OF AUTHORITIES (CONTINUED)
Cases (Continued) Page
North Alabama Express, Inc. v. United States,
585 F.2d 783 (5th Cir.1978) ..................................................................................13
N.Y. Life Ins. Co. v. Brown,
84 F.3d 137 (5th Cir. 1996) .............................................................................27, 28
Peralta v. Heights Med. Ctr. Inc.,
485 U.S. 80 (1988) ................................................................................................14
Roman Catholic Diocese of Dallas v. County of Dallas Tax Collector,
228 S.W.3d 475 (Tex. App.—Dallas 2007, no pet.) ..............................................28
Rotello v. State,
492 S.W.2d 347 (Tex. Civ. App.—Houston [1st Dist.] 1973,
writ ref’d n.r.e., per curiam) ..................................................................................18
Security State Bank & Trust v. Bexar Cty.,
397 S.W.3d 715 (Tex. App.—San Antonio 2012, pet. denied) .......................27, 28
Stubbs v. Stubbs,
685 S.W.2d 643 (Tex. 1985)..................................................................................18
Tramco Enter., Inc. v. Indep. Am. Sav. Ass’n,18
739 S.W.2d 944 (Tex. App.—Fort Worth 1987, no writ) ......................................18
Valero South Texas Processing Co. v. Starr County Appraisal District,
954 S.W.2d 863 (Tex. App.—San Antonio 1997, no writ) ................................... 11
Villegas v. Carter,
711 S.W.2d 624 (Tex. 1986) ..................................................................................18
Vine St. LLC v. Borg Warner Corp.,
776 F.3d 312 (5th Cir. 2015) ...........................................................................25, 26
Walker v. City of Hutchison,
352 U.S. 112 (1956) .................................................................................. 11, 18, 22
– vii –
INDEX OF AUTHORITIES (CONTINUED)
Cases (Continued) Page
Williams v. Holley,
653 S.W.2d 639 (Tex. App.—Waco 1983, writ ref’d n.r.e.) .................................12
Wolff v. McDonnell,
418 U.S. 539 (1974) ..............................................................................................13
Constitutions
U.S. Const. amend. XIV ........................................................................................2, 9
Tex. Const. art. 1, § 19 ...............................................................................................9
Statutes
Tex. Health & Safety Code § 361.188 ....................................................................... 5
Tex. Health & Safety Code § 361.272 ....................................................................... 5
Tex. Health & Safety Code § 361.321 ...............................................................18, 26
Tex. Health & Safety Code § 361.322 ...............................................................18, 26
Secondary Sources
Webster’s New International
Dictionary of the English Language (2nd ed. 1935) ...............................................23
– viii –
STATEMENT OF THE CASE
Nature of the Case Appellee, the Texas Commission on Environmental
Quality (the “TCEQ”), sued Appellant, Baxter Oil
Service, Ltd. (“Baxter”), in order to enforce an
administrative order. CR 283–424. Baxter filed a
motion for summary judgment, attempting to negate
elements of the TCEQ’s claim. CR 1458–1581.
In addition to responding to Baxter’s motion for
summary judgment on the merits, the TCEQ filed a
plea to the jurisdiction claiming that Baxter
impermissibly sought a collateral attack of the
TCEQ’s administrative order. CR 1582–1703.
After further briefing by both parties, CR 1704–1934,
and a hearing, RR 1–56, the trial court granted the
TCEQ’s plea to the jurisdiction. CR 1592.
Trial Court The Honorable Amy Clark Meachum of 345th Judicial
District Court, Travis County, Texas.
Trial Court’s Disposition The trial court granted the TCEQ’s plea to the
jurisdiction and dismissed Baxter’s motion for
summary judgment. CR 1592.
–1–
ORAL ARGUMENT STATEMENT
Baxter Oil Service, Ltd. requests oral argument because this appeal turns on
whether the administrative order issued by the Texas Commission on
Environmental Quality is void, which itself turns on whether the order contains
sufficient information to comply with the demands of due process.
The determination of whether a notice of potential deprivation complies with due
process is a fact intensive one requiring balancing three factors. No bright line rule
exists. Oral argument would facilitate the Court’s understanding of the facts
presented below and how the balancing test applies to those facts.
ISSUES PRESENTED
Whether the trial court erred in granting the TCEQ’s plea to the jurisdiction
because (1) due process clause of the 14th Amendment to the United States
Constitution requires adequate notice and an opportunity to be heard before a
person is deprived of a property interest by the state, (2) an administrative order
that violates a person’s due process rights is void; and (3) an administrative order
that is void for failing to comport with due process can be collaterally attacked.
–2–
STATEMENT OF FACTS
Sam Baxter (“Sam”) is the owner of Baxter Oil Service, Ltd. (“Baxter”).
CR 1329, 1473. He founded the small family-operated business in the fall of 1983
and has managed all aspects of Baxter’s operations since that time. CR 1329,
1473. Baxter’s business for over 30 years has been transporting and brokering fuel
for customers who burn fuel for energy recovery, re-sell fuel, or sell blended fuel
products. CR 1329, 1473. The materials Baxter sells, brokers, or otherwise uses in
its business are not intended for disposal, but rather for re-use. CR 1329, 1473.
In the 1980s, Baxter sold petroleum products to the Voda Petroleum Company
(“Voda Petroleum”), amongst others. CR 1329, 1473. The products Baxter sold to
Voda Petroleum were intended for resale and did not require processing by Voda
Petroleum. CR 1323, 1329. Sam was never an owner or operator of
Voda Petroleum. CR 1373. To Sam’s recollection, Baxter never transferred
materials to Voda Petroleum. CR 1330, 1473. Rather, Voda Petroleum picked up
the products from Baxter. CR 1330, 1473. Baxter sold to Voda Petroleum
products such as No. 4 oil, naptha, transformer oil, on-spec used oil fuel,
natural gas condensate, and “‘light ends.’” CR 1329, 1473. Baxter had other
customers for these products. CR 1329, 1474. However, Baxter chose to sell to
Voda Petroleum because Baxter was able to charge it higher prices. CR 1330,
1473.
–3–
Voda Petroleum had complete control over the products it bought from Baxter.
CR 1330, 1475. Baxter had no role in making waste disposal decisions, or any
decisions for that matter, for Voda Petroleum. CR 1330, 1475. The only business
Baxter had with Voda Petroleum was selling fuel products for use or resale.
CR 1323–24, 1475. Waste disposal was never part of Baxter’s business with
Voda Petroleum. CR 1324, 1330, 1475. Sam had no knowledge of any disposal
occurring at Voda Petroleum’s facility. CR 1330, 1475.
Voda Petroleum’s facility (the “Voda Site”) sat on 6.12 acres of land in
Gregg County, Texas. CR 445. Appellee, the Texas Commission on
Environmental Quality (“TCEQ”), contends that the Voda Site was used as a
waste oil recycling facility from 1981 to 1991. Id. In 1995, the TCEQ conducted
an investigation to determine if Voda Petroleum’s operations caused environmental
contaminants to enter the groundwater or soil at the Voda Site. Id.
After conducting investigations into a site’s potential risk to public health and the
environment resulting from releases or potential releases of hazardous substances,
a site is given a Hazard Ranking System (“HRS”) score. Id. The HRS score
assigned to the Voda Site by the TCEQ was not severe enough to qualify the
Voda Site as federal “Superfund Site.” Id. The TCEQ referred the matter to the
United States Environmental Protection Agency (the “EPA”). Id.
–4–
The EPA investigated the Voda Site and on March 27, 1996, issued an action
memorandum. CR 446. That action memorandum stated that the Voda Site
contained hazardous substances, had received crude oil, and had large quantities of
oil that were subject to the United States Clean Water act and the United States Oil
Pollution Act. Id. As part of the EPA’s removal action, various sources of
contamination were removed from the Voda Site. Id. By late 1997, the EPA’s
remediation efforts were completed. Id. On-site soil and ground-water was tested
and the results showed that the EPA’s efforts had minimized threats of direct
human contact and inhalation. Id. The EPA sought to recover its removal costs
from various potentially responsible parties. Id. Although Baxter denied liability,
in 2000 it settled the EPA’s demand for cleanup costs for $10,000. CR 1324.
Three years after the EPA concluded its removal action, the TCEQ proposed
listing the Voda Site on the State Superfund Registry on November 17, 2000.
CR 447. The TCEQ never re-scored the Voda Site under the HRS following the
EPA’s removal action. Id. From 2001 to 2008, the TCEQ conducted remedial
investigations and a feasibility study at the Voda Site. CR 448.
After years of investigations, the TCEQ issued the Voda Site State Superfund
Order (“the Order”) pursuant to section 361.188 and 361.272 of the Texas Health
& Safety Code on February 12, 2010. CR 1733–1812. The Order, when counting
the accompanying exhibits, is 79 pages long. Id. Numerous obligations are
–5–
imposed on the “responsible parties,” such as: (1) reimbursing the TCEQ for its
past investigative costs, CR 1758; (2) designing and implementing a remedial
action, CR 1761–74; and (3) obtaining Post Construction Financial Assurance,
CR 1773–74. Nothing in the Order, including its exhibits, stated that Baxter was
liable for any amounts of money. CR 1733–1812. Nothing in the Order, including
its exhibits, stated that the Order was final and appealable. Id. Nothing in the
Order, including its exhibits, stated that Baxter or any of the other potentially
responsible parties had the right to appeal the Order. Id. And nothing in the Order,
including its exhibits, stated how much the Voda Site’s remediation efforts will
cost. Id.
The Order was accompanied by a short cover letter, simply stating to
“[p]ersons on the attached mailing list . . . [e]nclosed is a copy of an administrative
order issued by the Commission regarding the above referenced matter.
Should you have any questions, please contact . . . [the] Chief Clerk.” CR 1813.
That letter was sent to Baxter and hundreds of other potentially responsible parties
on February 19, 2010. CR 1813–31.
Young Chevrolet, Inc., a potential responsible party listed on the Order, initiated
the proceeding below on March 12, 2010, by filing suit against the TCEQ to appeal
the Order. CR 5–110. Other potentially responsible parties filed lawsuits against
the TCEQ, and on May 18, 2010, all of the cases involving the Voda Site were
–6–
consolidated in the trial court. CR 221–245. On August 8, 2011, the TECQ filed a
counterclaim against all the plaintiffs in the pending actions and in the same
pleading, instituted a third-party action against numerous potentially responsible
parties who did not appeal the Order. CR 283–424. Baxter was one of these
third-party defendants. CR 303. On March 12, 2012, Sam, on behalf of Baxter,
sent a letter to counsel for the TCEQ in response to the Order, enclosing an answer
setting forth Baxter’s defenses to liability under the Order. CR 1883–85.
On November 15, 2013, Baxter, through counsel, filed an answer in the proceeding
below. CR 578–81.
Baxter filed a motion for summary judgment on March 27, 2015, on the
grounds that Baxter negated two essential elements of the TCEQ’s third-party
lawsuit because Baxter did not send solid waste to the Voda Site and never
intended to dispose of solid waste at the Voda Site. CR 1458–1581. On April 17,
2015, the TCEQ filed a plea to the jurisdiction, requesting the district court to
dismiss Baxter’s summary judgment motion. CR 1582–1703. The TCEQ
contended that the Order was final and unappealable and could not be collaterally
attacked by Baxter. CR 1588–92. The district court granted the TCEQ’s plea to
the jurisdiction on June 29, 2015, dismissing Baxter’s motion for summary
judgment without consideration of the merits. CR 1952. This appeal followed.
CR 1953–55.
–7–
SUMMARY OF THE ARGUMENT
The trial court erred in granting the TCEQ’s plea to the jurisdicton. By the
Order entered in connection with the Voda Site, the TCEQ attempts to impose
monetary obligations on Baxter. Baxter is entitled to due process before it is
deprived by the TCEQ of such property. Due process requires both adequate
notice and an opportunity to be heard. The Order fails to comport with due process
because it does not provide adequate notice. Specifically, the Order not only fails
to inform Baxter of its appellate remedies, but affirmatively misrepresents the
finality of the Order. The Order also fails to inform Baxter of the possible scope of
its liability, thereby depriving Baxter of key information necessary to determining a
proper response.
Because the Order fails to comport with due process, it is void. And because
the Order is void, it may be collaterally attacked. Accordingly, the TCEQ’s plea to
the jurisdiction, which argued that Baxter could not collaterally attack the Order by
means of a summary judgment motion, was without merit.
–8–
ARGUMENT
I. Baxter Was Deprived of Due Process
A. Baxter Is Entitled To Due Process
The Fourteenth Amendment to the Constitution of the United States provides
that no person shall be deprived of property without due process of law. 1
In Fuentes v. Shevin, 407 U.S. 67 (1972), the United States Supreme Court
observed:
The constitutional right to be heard is a basic aspect of the duty of
government to follow a fair process of decisionmaking when it acts to
deprive a person of his possessions. The purpose of this requirement
is not only to ensure abstract fair play to the individual. Its purpose,
more particularly, is to protect his use and possession of property from
arbitrary encroachment – to minimize substantively unfair or mistaken
deprivations of property.
Id. at 80–81; see also Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (“The ‘right
to be heard before being condemned to suffer grievous loss of any kind, even
though it may not involve the stigma and hardships of a criminal conviction, is a
principle basic to our society.’”) (quoting Joint Anti-Facist Comm. v. McGrath,
341 U.S. 123, 168 (1951) (Frankfurter, J., concurring)).
Although the required procedures may vary according to the interests at stake in
particular contexts,2 “the fundamental requirement of due process is the
opportunity to be heard ‘at a meaningful time and in a meaningful manner.’”
1
Article 1, section 19 of the Texas Constitution states: “No citizen of this State shall be deprived
of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the
due course of the law of the land.”
2
Boddie v. Connecticut, 401 U.S. 371, 378 (1971).
–9–
Mathews, 424 U.S. at 333 (quoting Armstrong v. Manzo, 380 U.S. 545, 552
(1965)). The United States Supreme Court has specifically held that
“the Due Process Clauses protect civil litigants who seek recourse in the courts,
either as defendants hoping to protect their property or as plaintiffs attempting to
redress grievances.” Logan v. Zimmerman Brush Co., 455 U.S 422, 429 (1982).
Arguing by analogy to cases involving the right of access to courts,
Logan reaffirmed a long line of cases upholding the fundamental nature of the right
to be heard:
[A]t least where interests of basic importance are involved, “absent a
countervailing state interest of overriding significance, persons forced
to settle their claims of right and duty through the judicial process
must be given a meaningful opportunity to be heard.”
Logan, 455 U.S. at 430 n.5 (quoting Boddie, 401 U.S. at 377). The Supreme Court
has “described ‘the root requirement’ of the Due Process Clause as being ‘that an
individual be given an opportunity for a hearing before he is deprived of any
significant property interest.’” Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532,
542 (1985) (quoting Boddie, 401 U.S. 379).
Baxter, like all United States citizens, is entitled to due process. The Order and
the TCEQ’s third-party lawsuit against Baxter demonstrate that the TCEQ seeks to
deprive Baxter of property – a certain portion of the potentially millions of dollars
it will cost to remediate the Voda Site. CR 1448. The amount of money Baxter
– 10 –
may be liable for could be substantial. Therefore, before the TCEQ can deprive
Baxter of its property – in this case money – Baxter is entitled to due process.
B. “Adequate” Notice is an Essential Element of Due Process
In order to be afforded an opportunity to be heard, a party must have notice of
the opportunity. For this reason, the United States Supreme Court has repeatedly
recognized that the “essence of due process” requires that a person whose property
interests are in jeopardy receive both “‘notice of the case against him and an
opportunity to meet it.’” Mathews, 424 U.S. at 348 (quoting McGrath, 341 U.S. at
171–72 (Frankfurter, J., concurring)).
Texas courts are equally adamant that due process demands adequate notice.
“[N]otice must be reasonably calculated to inform parties of proceedings which
may directly and adversely affect their legally protected interests.” Houston v.
Fore, 412 S.W.2d 35, 39 (Tex. 1967) (citing Walker v. City of Hutchison,
352 U.S. 112 (1956)); see, e.g., Valero South Texas Processing Co. v. Starr County
Appraisal District, 954 S.W.2d 863 (Tex. App.—San Antonio 1997, no writ)
(“In other words, to meet the constitutional requirement of due process, the notice
must be reasonably calculated, under all the circumstances, to apprise interested
parties of the pendency of the action and afford them an opportunity to present
their objections.”); see also Mosser v. Plano Three Venture, 893 S.W.2d 8, 12–13
(Tex. App.—Dallas 1994, no writ) (holding that it is a “fundamental requirement of
– 11 –
due process” to provide sufficient notice that “apprise[s] interested parties of the
pendency of the action and afford them an opportunity to respond”); Langdale v.
Villamil, 813 S.W.2d 187 (Tex. App.—Houston [14th Dist.] 1991, no writ)
(“A fundamental element of due process is adequate and reasonable notice of
proceedings.”); Williams v. Holley, 653 S.W.2d 639, 640 (Tex. App.—Waco 1983,
writ ref’d n.r.e.) (“The right of a party to be heard in a contested case is
fundamental and failure to give adequate notice of the trial setting constitutes lack
of due process.”); City of Waco v. Roddey, 613 S.W.2d 360, 365 (Tex. App.—
Waco 1981, no writ) (“‘Procedural due process’ requires notice that is reasonably
calculated to inform parties of proceedings that may directly and adversely affect
their legally protected interests.”).
The Supreme Court has emphasized that “when notice is a person’s due . . .
[t]he means employed must be such as one desirous of actually informing the
absentee might reasonably adopt to accomplish it.” Mullane v. Central Hanover
Bank Trust Co., 339 U.S. 306, 315 (1950). In other words, notice is “adequate”
only when it “inform[s] the recipient of a procedure for resolving disputes and . . .
provide[s] a reasonable length of time to employ that procedure.” Bradford v.
Edelstein, 467 F. Supp. 1361, 1373 (S.D. Tex. 1979). Adequate notice should thus
“specify the nature of the facts and evidence” at issue in order to allow
“the affected party to prepare an informed response.” Hess & Clark, Division of
– 12 –
Rhodia, Inc. v. Food and Drug Administration, 495 F.2d 975, 983 (D.C. Cir. 1974);
see also Wolff v. McDonnell, 418 U.S. 539, 564 (1974) (“[p]art of the function of
notice is to give the charged party a chance to marshall the facts in his defense and
to clarify what the charges are, in fact”). In addition, a party must be notified in
advance of the precise issues to be raised at a hearing. In re Ruffalo, 390 U.S. 544,
550 (1968); Navato v. Sletten, 560 F.2d 340 (8th Cir. 1977); North Alabama
Express, Inc. v. United States, 585 F.2d 783, 786 (5th Cir. 1978) (citing FCC v.
Pottsville Broadcasting Co., 309 U.S. 134, 143 (1940)).
Notice cannot be adequate when it is misleading. Misleading notices thus
violate due process. Gonzalez v. Sullivan, 914 F.2d 1197, 1203 (9th Cir. 1990)
(holding that misleading notice violates due process because it “introduces a high
risk of error into the . . . decisionmaking process”); Baxter v. Colvin,
No. 14-CV-01306, 2014 WL 6985149, at *4 (N.D. Cal. Dec. 10, 2014) (citing to
Gonzalez, 914 F.2d at 1203, in holding that an “ambiguous and misleading” order
violates due process “because it did not clearly inform plaintiff how and whether
she could pursue her right to an oral hearing with the ALJ while also objecting to
his decision on its merits”); Butland v. Bowen, 673 F. Supp. 638, 641
(D. Mass. 1987) (“Notice that affirmatively misleads…clearly violates the
Constitutional guarantee of due process.”).
Because due process is required by the United States Constitution, a party’s due
– 13 –
process rights may be violated even when a state follows its own procedures.
Logan, 455 U.S. at 432 (“Each of our due process cases has recognized, either
explicitly or implicitly, that because ‘minimum [procedural] requirements [are] a
matter of federal law, they are not diminished by the fact that the State may have
specified its own procedures that it may deem adequate for determining the
preconditions to adverse official action.”); Peralta v. Heights Med. Ctr. Inc.,
485 U.S. 80, 86 (1988) (concluding that Texas bill-of-review requirements must
yield to constitutional demands of due process). “Although [a government agency]
is under no obligation to employ extraordinary means to notify an interested party,
when the government has in its possession information that would enable it to
provide adequate notice to an interested party,” it must do so.
Barrera-Montenegro v. United States, 74 F.3d 657, 660 (5th Cir. 1996)
(emphasis added). Assessing the adequacy of a particular form of notice requires
balancing the “interest of the State” against “the individual interest sought to be
protected by the Fourteenth Amendment.” Mullane, 339 U.S. at 314. Since 1976,
the test for determining whether notice is adequate to satisfy due process balances
three factors: (1) the private interest at stake; (2) the risk of an erroneous
deprivation along with the value of additional notice; and (3) the burden imposed
on the government by the additional notice. Mathews, 424 U.S. at 335.
– 14 –
C. The Notice to Baxter Did Not Provide Baxter Sufficient Information
Assuming for the sake of argument that the Order was the TCEQ’s attempt to
give notice to Baxter of the imminent deprivation of his property, the Order failed
to comport with due process in two ways. First, the Order did not provide Baxter
with notice of the right to appeal the Order and in fact was misleading on this point
thereby leaving Baxter with insufficient information with which to determine how
to fight the Order. Second, the Order did not provide Baxter with any information
about the extent of the property deprivation, thereby leaving Baxter with
insufficient information with which to determine whether to fight the Order.
1. The TCEQ Did Not Provide Any Notice of the Right to Appeal the
Order
The TQEC’s communications to the Voda Superfund Site Potential Responsible
Persons (“PRPs”) such as Baxter were not reasonably calculated to inform them of
an opportunity for a hearing. The TCEQ failed to provide any indication that the
Order could be appealed or the consequences of not appealing, namely that Baxter
could be liable for millions of dollars of response costs and other financial
obligations. This failure violated Baxter’s due process right to an adequate notice.
The cover letter to the Order (addressed to “Persons on the attached mailing
list”) consists of a two-sentence communication from the Chief Clerk of the
TCEQ. CR 1813. The first sentence merely indicates that a copy of the
administrative order is enclosed. Id. The second sentence states: “Should you
– 15 –
have any questions, please contact … the Chief Clerk.” Id. Nothing in the cover
letter indicates that Baxter or the other PRPs have the right to be heard to challenge
the Order.
Likewise, nothing in the 62–page Order itself even hints that a PRP has any
right to be heard in a challenge to the Order. CR 1733–94. Although the Order
contains references to various sections of the Texas Solid Waste Disposal Act, not
one of those references is to the section of that Act that explains how to challenge
the Order. Consequently, a PRP reading the entirety of the Order, its exhibits and
the cover letter would not acquire a single clue that a PRP has an opportunity to
appeal the Order.
To the contrary, the Order is misleading in that it creates the impression that no
right to appeal exists. A PRP reading the Order and getting to page 60
(and looking for some chance to object to the Order) might be encouraged by
§ XXXII, titled “Opportunity to Conference.” CR 1792. However, the final
sentence to section B of § XXXII makes clear that “The conference is not an
evidentiary hearing, does not constitute a proceeding to challenge this AO, and
does not give Agreeing Respondents or, if there are no Agreeing Respondents to
this AO, the Performing Parties the right to seek review of this AO.” Id.
(emphasis added). Although this would have been one logical place to provide
– 16 –
some notice to PRPs of the right to challenge the Order, no mention is made of a
PRP’s right to seek judicial review of the Order.
The express denial of any “right to seek review” of the Order expressed in
§ XXXII is reinforced by § XXXV titled “Sovereign Immunity.” CR 1793.
The first sentence of § XXXV states: “The Parties hereby agree that nothing in
this AO waives the State of Texas’ sovereign immunity relating to suit, liability,
and the payment of damages.” CR 1793. To a PRP not familiar with section
361.321 of the Solid Waste Disposal Act, § XXXV suggests that Texas’ sovereign
immunity precludes any opportunity to sue the State of Texas in order to challenge
the Order. Section XXXV would have been another logical place to provide some
notice to PRPs of a PRP’s right to seek review of the Order. But the lay reader of
this clause is understandably left with the impression that taking on the State of
Texas, shielded as it is by sovereign immunity, would be against the law.
It is undisputed that a party has a due process right to be notified of trial settings
or other procedural requirements. In such cases, a party’s rights to confront the
adverse party and to present evidence to a court are at stake – and adequate notice
– 17 –
is essential for a party to activate those rights.3 In other words, “the right to a
hearing is meaningless without notice.” Walker, 352 U.S. at 114.
The TCEQ’s failure to notify Baxter of the opportunity to be heard is directly
analogous. Receiving the Order, even by certified mail, is meaningless if nothing
in the Order, its exhibits, the cover letter or any other communication from the
TCEQ to the PRPs indicates that there is a right to appeal the Order.
See Memphis Light, Gas, & Water Div. v. Craft, 436 U.S. 1, 45 (1978) (holding that
notice to a utility’s customers was insufficient to satisfy due process because it was
not reasonably calculated to inform them of an opportunity for a hearing);
Bradford, 467 F. Supp. at 1373 (holding that for notice to be adequate, “it must
inform the recipient of a procedure for resolving disputes”).
2. Constructive Notice of Appellate Rights Is Inadequate Given the
Circumstances and Conditions of This Case
Baxter acknowledges that the procedure for challenging the Order is contained
in sections 361.321 and 361.322 of the Texas Health and Safety Code.
As described above, however, the Order is affirmatively misleading. It informs the
3
See L.B.L. Oil Co. v. Int’l Powers Serv., Inc., 777 S.W.2d 390, 391 (Tex. 1989) (notice of post-
answer default); Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988) (notice of trial setting);
Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986); Stubbs v. Stubbs, 685 S.W.2d 643, 645
(Tex. 1985) (required statement of facts not filed); Misium v. Misium, 902 S.W.2d 195
(Tex. App.—Eastland 1995, no writ); Moss v. Malone, 880 S.W.2d 45, 51 (Tex. App.—
Tyler 1994, writ denied); Tramco Enter., Inc. v. Indep. Am. Sav. Ass’n, 739 S.W.2d 944, 948
(Tex. App.—Fort Worth 1987, no writ) (required notice of trial setting); Chow v. Dole,
677 S.W.2d 220 (Tex. App.—Houston [1st Dist.] 1984, no writ) (required trial setting);
Rotello v. State, 492 S.W.2d 347, 349 (Tex. Civ. App.—Houston [1st Dist.] 1973, writ ref’d
n.r.e., per curiam).
– 18 –
reader that the TCEQ has sovereign immunity, discusses an “Opportunity to
Conference” that that does not constitute a challenge to the Order, and otherwise
implies that the Order is non-appealable. CR 1792–93. The Order’s misleading
nature violated Baxter’s due process rights.
While certain case law might seem to indicate that publically-available statutes
are sufficient to satisfy due process, the cases are distinguishable. For example, in
City of West Covina v. Perkins, 525 U.S. 234 (1999), the United States Supreme
Court stated that “in prior cases in which we have held that post-deprivation
state-law remedies were sufficient to satisfy the demands of due process and the
laws were public and available, we have not concluded that the State must provide
further information about those procedures.” Id. at 241. However, the holding in
West Covina was articulated in the context of the specific deprivation at issue in
that case, i.e., the deprivation of personal property 4 by the police for a criminal
investigation. Id. at 240 (“When the police seize property for a criminal
investigation, however, due process does not require them to provide the owner
with notice of state-law remedies.”). West Covina is distinguishable, however,
because in that case the plaintiff was provided with specific information about his
remedy: “One of the detectives told Perkins he needed to obtain a court order
4
In the West Covina case, “the police seized a number of items, including photos of Marsh
[the suspect in the homicide], an address book, a 12–gauge shotgun, a starter pistol, ammunition,
and $2,629 in cash.” In contrast, the owners of Baxter face the loss of their business (their only
source of income) and all of their property and savings.
– 19 –
authorizing the property’s return.” Id. at 237. Here, Baxter was not provided with
any similar information about its rights or a potential remedy and instead was
misled about the availability of those remedies.
The West Covina decision, while citing Mullane, did not refer to Mullane’s
“notice reasonably calculated” standard or even attempt to apply it. Id. at 240.
The United States Supreme Court has subsequently endorsed Mullane’s
“notice reasonably calculated” standard. See, e.g., Dusenbery v. United States,
534 U.S. 161 (2002) (three years after the West Covina decision); Jones v. Flowers,
547 U.S. 220 (2006) (four years after the West Covina decision). It is fair to
conclude that the “notice reasonably calculated, under all the circumstances”
standard remains the relevant and appropriate method of analysis.
The Texas Supreme Court applied City of West Covina in another property
seizure case in City of Dallas v. VSC, LLC, 347 S.W.3d 231 (Tex. 2011). In VSC,
the city’s police department seized a number of vehicles from VSC, a licensed
vehicle storage facility. Id. at 234. Several days after the initial seizure, VSC sued
the city, asserting a lien for fees related to the vehicles’ storage and contending that
the city’s actions amounted to an unconstitutional taking. The Texas Supreme
Court observed that “[t]he facts in this case mirror those in West Covina. The
police legally seized VSC’s property, and VSC was aware of what property was
seized and by whom.” Id. at 239. Describing the key factor in West Covina, the
– 20 –
Texas Supreme Court observed that “[r]ather than seek a court order, Perkins sued
the officers and alleged that the remedies for the property’s return did not satisfy
due process.” Id. at 238–39. In other words, VSC, represented by counsel, took
immediate legal action but chose the wrong potential remedy. The Texas Supreme
Court concluded “that VSC’s actual notice of the vehicles’ seizures was
constitutionally sufficient and that it therefore had the burden of pursuing the
chapter 47 remedy” that the court held was proper. Id. at 238. Citing to the
Texas Code of Criminal Procedure, the court pointed out that “[e]ven if it failed to
participate in the chapter 47 proceedings, VSC might have had, in certain cases, a
second post-deprivation option available to it.”
Unlike VSC, Baxter has no such second option. In stark contrast to the facts in
West Covina and VSC, Baxter, unrepresented by counsel, was confronted with a
lengthy, misleading Order that offered no information connecting Baxter to the
Voda Site and strongly implied that the Order was final and could not be
challenged.
Due process is flexible and what constitutes adequate notice varies according to
the facts and circumstances of each case. Neither West Covina nor VSC hold that
statutory notice is always sufficient to satisfy due process. To the contrary, the
Texas Supreme Court acknowledged that the United States Supreme Court has
“recognized ‘the impossibility of setting up a rigid formula as to the kind of notice
– 21 –
that must be given.’” Id. at 238 (quoting Walker, 352 U.S. at 115). Instead, the
“notice required will vary with circumstances and conditions.” Id.
Adequate notice based on the facts and circumstances in West Covina and VSC
does not amount to adequate notice to Baxter. As discussed below, applying the
appropriate test, Baxter was entitled to notice of its appellate rights in the Order.
3. The TCEQ Did Not Provide Adequate Notice of the Issues or
Consequences
In addition to notice of the right to be heard, due process requires that
“the notice as published must reasonably apprise any interested person of the issues
involved in the proceeding.” Buckner Trucking, Inc. v. United States,
354 F. Supp. 1210, 1219 (S.D. Tex. 1973). The Order contains a maze of
cross-references that would confuse anyone but an experienced Superfund attorney
but it does not contain any information about the extent of possible remedial costs.
In addition to failing to give adequate notice of the right to be heard, therefore, the
Order failed to give Baxter adequate notice of the issues or consequences
to Baxter.
Except for the fact that Baxter was on the Order’s mailing list, nothing in the
TCEQ’s Order provides any information linking Baxter to the Voda Site.
The Order is confusing as to whether Baxter is even liable and, therefore, subject
to the Order’s financial obligations. Section II.A lists the entities
(including Baxter) that are referred to as “potentially responsible parties” or
– 22 –
“PRPs.” CR 1733–49. Then, without any supporting finding of fact or analysis,
all of the potentially responsible parties are suddenly and automatically
transformed into “responsible parties” by Conclusion of Law and Determination
III.A on page 25 of the Order. CR 1757. No explanation is given in the Order or
elsewhere as to how this transformation occurred. Although the Texas Solid Waste
Disposal Act does not define “potentially responsible parties,” the word “potential”
and its adverb form “potentially” have commonly accepted dictionary definitions
such as “existing in possibility, not in actuality . . . expressive of possibility; as a
potential use.” Webster’s New International Dictionary of the English Language
1932 (2nd ed. 1935). Consequently, a PRP such as Baxter might reasonably
conclude that because it has been designated a “potentially responsible party”
something more must be done (such as a fact-finding hearing) to transform him
from a possible responsible party into an actual responsible party.
Likewise, the Order fails to explain the possible scope of its consequences.
While it describes possible penalties for failing to comply, CR 1785–88, it does not
even hint at the possible financial exposure, let alone explain that Baxter could be
liable for millions of dollars in remedial obligations. Such notice did not provide
Baxter sufficient information of a potential deprivation of its property. A challenge
to the Order, assuming Baxter somehow knew that it was entitled to one, would be
enormously expensive to a small business. The only knowledge of the potential
– 23 –
size of the loss faced by Baxter was with the TCEQ. Given this fact, and the
confusing nature of the Order, the TCEQ had a legal and constitutional duty to
explicitly describe the implications to Baxter to allow Baxter to decide whether to
challenge the Order.
D. Because it Lacked Sufficient Information, the Order Violated Due
Process and Was Void
Assessing the adequacy of a particular form of notice requires balancing the
“interest of the State” against “the individual interest sought to be protected by the
Fourteenth Amendment.” Mullane, 339 U.S. at 314. Since 1976, the test for
determining whether notice is adequate to satisfy due process balances three
factors: (1) the private interest at stake; (2) the risk of an erroneous deprivation
along with the value of additional notice; and (3) the burden imposed on the
government by the additional notice. Mathews, 424 U.S. at 335.
Applying the three-part balancing test to the situation before the Court reflects
that the notice to Baxter was not adequate to satisfy due process. With respect to
the criterion of the private interest at stake, the Order itself provides the evidence.
Although the Order is silent on the potential scope of harm, PRPs that are subject
to the Order face apparently unlimited financial costs, burdens, and risks.
In addition to the multi-million dollar remediation project at the Voda Petroleum
Superfund Site, those subject to the Order must pay for a long-term,
post construction insurance, bond or its equivalent. CR 1773–74. In addition, if
– 24 –
permits are required to carry out the Order, the responsible parties must obtain
them and incur all consequent expenses. CR 1760.
For Baxter, a very small, family-owned business, the financial obligations and
requirements set forth in the Order could be devastating. All of its meager assets
would be quickly consumed if it were compelled by the TCEQ to make even a
small portion of the expenditures required by the Order.
The second factor consists of two components: the risk of an erroneous
deprivation along with the value of additional notice. Mathews, 424 U.S. at 335.
The risk of an erroneous deprivation is demonstrated by Baxter’s motion for
summary judgment – Baxter did not generate any solid waste. CR 1464–67.
Baxter sold only valuable and useful fuel products to Voda as it has to all of its
other customers since 1983. CR 1473. In fact, Baxter sold products to Voda
Petroleum over other customers because Voda Petroleum paid higher prices. Id.
Based on federal cases interpreting federal environmental protection statutes and
regulations that are similar to the Texas Solid Waste Disposal Act, Baxter should
not be liable in any way for the remediation costs at the Voda Site and therefore
was erroneously held liable in the Order. See Vine St. LLC v. Borg Warner Corp.,
776 F.3d 312, 317–19 (5th Cir. 2015); see also Consolidation Coal Co. v.
Georgia Power Co., 781 F.3d 129, 147–49 (4th Cir. 2015).
– 25 –
The value of additional notice, that is, the value of a notice that would have
informed Baxter and the other PRPs of their right to appeal the Order and more
clearly informed them of the implications, is virtually self-evident. In addition to
securing a right to appeal the Order, additional (i.e. adequate) notice leading to a
hearing or other presentation of the issues and evidence would serve to clarify the
liability issues at an earlier stage of the proceedings. This would avoid the
unnecessary expenditure of the Court’s resources – as well as the resources of the
parties, including the TCEQ.
The third factor – the burden on the government of additional notice –
also weighs in Baxter’s favor because the TCEQ’s burden would be miniscule.
Consider the burden that would be imposed on the TCEQ by adding the following
five simple sentences to the cover letter to the Order:
You have been found liable for response costs and other obligations as
set forth in the attached Order. Those costs could exceed $_____.
Pursuant to section 361.321 and/or 361.322 of the Texas Health and
Safety Code, you have the right to appeal this Order. Your appeal
must be filed with the TCEQ within 30 days of the date of this Order.
Failure to file an appeal will adversely affect your right to challenge
this Order.
These five sentences (or a similarly concise notice) would not even require a
second page for the TCEQ’s cover letter. The amount of additional ink required by
this notice would be negligible. Gonzalez, 914 F.2d at 1203 at 1203 (“Requiring
notices to accurately state how a claimant might appeal an initial decision does not
– 26 –
impose a significant financial or administrative burden on the Secretary.”). For all
practical purposes this additional notice would require no additional expense or
effort by the TCEQ.
Accordingly, the Mathews factors weigh in favor of Baxter. To comply with
due process, the Order should have contained at least a range of possible expense
and some kind of notice of a potentially responsible party’s appellate remedies.
Because it did not, the Order was void. See Security State Bank & Trust v.
Bexar Cty., 397 S.W.3d 715, 723 (Tex. App.—San Antonio 2012, pet. denied);
see also N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 143 (5th Cir. 1996) (holding that
a judgment is void if a court that rendered it “acted in a manner inconsistent with
due process”); In re Guardianship of B.A.G., 794 S.W.2d 510, 513 (Tex. App.—
Corpus Christi 1990, no writ) (holding that a guardianship order entered in
violation of due process is void).
II. Because the Order is Void, it May be Collaterally Attacked at Any Time
and the Trial Court Erred in Granting the TCEQ’s Plea to the
Jurisdiction
As Baxter demonstrated above, the Order is void because the lack of notice to
Baxter of appellate remedies and the scope of the financial consequences of the
Order violates Baxter’s due process rights. A void administrative agency’s order
can be collaterally attacked. City of Celina v. Dynavest Joint Venture
253 S.W.3d 399, 403 (Tex. App.—Austin 2008, no pet.) rev’d on other grounds,
– 27 –
Rusk State Hospital v. Black, 392 S.W.3d 88 (Tex. 2012). Void administrative
orders that violate a person’s due process rights should be subject to collateral
attacks, just like void judgments. See, e.g., In re E.R., 385 S.W.3d 552, 566
(Tex. 2012); Security State Bank and Trust, 397 S.W.3d at 723–24 (holding that a
judgment is void and subject to collateral attack where a person’s due process
rights were violated). 5
No set procedure or statute of limitations exists for a collateral attack.
In re E.R., 385 S.W.3d at 566; Roman Catholic Diocese of Dallas v. County of
Dallas Tax Collector, 228 S.W.3d 475, 480 (Tex. App.—Dallas 2007, no pet.).
A statutory time frame to act in a direct attack does not have any bearing on a
collateral attack involving a due process violation – a collateral attack is
permissible even if done well beyond a statutory deadline. In re E.R.,
385 S.W.3d at 566 (“Despite the Legislature’s intent to expedite termination
proceedings, it cannot do so at the expense of a parent’s constitutional right to
notice.”). In other words, there was no time-bar to Baxter’s collateral attack.
5
Baxter recognizes that some cases have described only two circumstances under which
administrative orders are void in a manner that subjects them to collateral attack – when an
agency exceeds its authority or when an order is procured by extrinsic fraud. See Chocolate
Bayou Water Co. & Sand Supply v. Tex. Natural Res. Conserv. Comm’n, 124 S.W.3d 844, 853
(Tex. App.—Austin 2003, pet. denied); Lesikar v. Rappeport, 33 S.W.3d 282, 613 (Tex. App.—
Texarkana 2000, no pet.). Those cases did not involve orders entered without adequate notice
and thus the courts had no opportunity to consider the implications of an order entered in
violation of due process. Orders that fail to comply with due process are void.
See Security State Bank & Trust, 397 S.W.3d at 723; see also N.Y. Life Ins. Co., 84 F.3d at 143;
In re Guardianship of B.A.G., 794 S.W.2d at 513. The types of void orders subject to collateral
attack should thus include constitutionally infirm orders.
– 28 –
The only basis for the TCEQ’s plea to the jurisdiction was its claim that
Baxter’s summary judgment motion was an improper collateral attack on the
Order. CR 1587–92. Because Baxter was entitled to collaterally attack the void
Order at any time, there was nothing depriving the trial court of jurisdiction to hear
Baxter’s summary judgment motion. The trial court therefore erred in granting the
TCEQ’s plea to the jurisdiction.
CONCLUSION AND PRAYER
“When notice is a person’s due, process which is a mere gesture is not due
process.” Mullane, U.S. at 657. In this case, although Baxter received the Order,
nothing in the Order, its cover letter, or its exhibits explained the scope of the
possible ramifications of the Order to Baxter and nothing in the Order, its cover
letter, or its exhibits even hinted that Baxter had a right to appeal the Order. To the
contrary, the Order suggested that it was final and not subject to challenge.
This “process” does not even rise to the level of a mere gesture. The TCEQ’s
“process’ was not reasonably calculated to inform parties of proceedings that may
directly and adversely affect their legally protected interests.”
Houston, 412 S.W.2d at 35. Obviously, the TCEQ was not “desirous of actually
informing” Baxter and the other PRPs of their right to protect their interests.
It would be fundamentally unfair and a clear violation of the United States
Constitution for Baxter to be deprived of its property in such a manner.
– 29 –
Because the Order was void, Baxter’s motion for summary judgment was a
permissible collateral attack. Therefore, this Court should reverse the decision of
the district court granting the TCEQ’s plea to the jurisdiction and remand so that
the district court can consider Baxter’s summary judgment motion.
WHEREFORE, Appellant Baxter Oil Service, Ltd. prays that the trial court’s order
granting Appellee’s plea to the jurisdiction be reversed and this case remanded for
further proceedings on Baxter’s summary judgment motion. Appellant prays for
such other relief to which it is entitled.
Respectfully submitted,
PULMAN, CAPPUCCIO,
PULLEN, BENSON & JONES, LP
2161 NW Military Highway, Suite 400
San Antonio, Texas 78213
www.pulmanlaw.com
(210) 222-9494 Telephone
(210) 892-1610 Facsimile
By: /s/ Leslie Sara Hyman
Elliott S. Cappuccio
Texas State Bar No. 24008419
ecappuccio@pulmanlaw.com
Leslie Sara Hyman
Texas State Bar No. 00798274
lhyman@pulmanlaw.com
Etan Z. Tepperman
Texas State Bar No. 24088514
etepperman@pulmanlaw.com
ATTORNEYS FOR APPELLANT
– 30 –
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)((3), I certify that,
excluding those parts allowed to be excluded, the above and foregoing Brief of
Appellant contains 7,096 words.
/s/ Leslie Sara Hyman
Leslie Sara Hyman
CERTIFICATE OF SERVICE
I certify that on the 25th day of September 2015, the foregoing Brief of
Appellant was served in accordance with the Texas Rules of Appellate Procedure
addressed as follows:
Via Email to thomas.edwards@texasattorneygeneral.gov:
Mr. Thomas H. Edwards
Via Email to craig.pritzlaff@texasattorneygeneral.gov:
Mr. Craig Pritzlaff
Office of the Attorney General
Environmental Protection Division
P. O. Box. 12548, Capitol Station
Austin, Texas 78711
/s/ Leslie Sara Hyman
Leslie Sara Hyman
– 31 –
NO. 03-15-00446-CV
IN THE
COURT OF APPEALS FOR THE
THIRD COURT OF APPEALS DISTRICT
AUSTIN, TEXAS
______________
BAXTER OIL SERVICE, LTD.
APPELLANT
VERSUS
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
APPELLEE
______________
APPEAL FROM THE 345TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS
NO. D-1-GN-10-000772
APPENDIX TO BRIEF OF APPELLANT
Tab Description
1 Order Granting the TCEQ’s Plea to
the Jurisdiction – CR 1952
2 Fourteenth Amendment to the United States
Constitution
3 February 12, 2010 Texas Commission on
Environmental Quality Administrative Order
– CR 1733-1812
{00050417}
Tab 1
Tab 1
DC BK15181 PG560
Filed in The District Court
of Travis County, Texas
JUN 2 9 2015 NS
At I \"~t.,~M.
CAUSE NO, D-I-GN-lO-000772 Velva L. Price, District Clerk
INRE: § IN THE DISTRICT COURT OF
§
VODA PETROLEUM STATE § TRA VIS COUNTY, TEXAS
§
SUPERFUND SITE UTIGA nON § 345 th JUDICIAL DISTRICT
ORDER GRANTING TCEQ'S PLEA TO THE JURISDICTION AS TO
BAXTER'S MOTION FOR SUMMARY JUDGMENT
On April 17, 2015, the Texas Commission on Environmental Quality (TCEQ),
Defendant, filed a Plea to the Jurisdiction seeking to dismiss the Motion for Summary
Judgment filed by Baxter Oil Service, Ltd. ("Baxter"). After considering the motion, the
pleadings, the documents on file and the arguments of counsel, the Court GRANTS the
TCEQ's plea.
It is therefore ORDERED that the Motion for Summary Judgment filed by Baxter is
dismissed. /? ~.Jh
SIGNED this ~'cia; of _ _-3I1~~_IL_e
___ 2015.
A~
DISTRICT JUDGE
1952
Tab 2
Tab 2
AMENDMENT XIV. CITIZENSHIP; PRIVILEGES AND..., USCA CONST Amend....
United States Code Annotated
Constitution of the United States
Annotated
Amendment XIV. Citizenship; Privileges and Immunities; Due Process; Equal Protection;
Apportionment of Representation; Disqualification of Officers; Public Debt; Enforcement
U.S.C.A. Const. Amend. XIV-Full Text
AMENDMENT XIV. CITIZENSHIP; PRIVILEGES AND IMMUNITIES; DUE PROCESS; EQUAL
PROTECTION; APPOINTMENT OF REPRESENTATION; DISQUALIFICATION OF OFFICERS; PUBLIC
DEBT; ENFORCEMENT
Currentness
Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the
United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges
or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due
process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Section 2. Representatives shall be apportioned among the several States according to their respective numbers, counting the
whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice
of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial
officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being
twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or
other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens
shall bear to the whole number of male citizens twenty-one years of age in such State.
Section 3. No person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any
office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of
Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer
of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same,
or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such
disability.
Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of
pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United
States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United
States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal
and void.
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.
{00050429} © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
AMENDMENT XIV. CITIZENSHIP; PRIVILEGES AND..., USCA CONST Amend....
U.S.C.A. Const. Amend. XIV-Full Text, USCA CONST Amend. XIV-Full Text
Current through P.L. 114-49 approved 8-7-2015
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
{00050429} © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Tab 3
Tab 3
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
DOCKET NUMBER 2009-1706-SPF
IN THE MATTER OF § BEFORE THE
THE SITE KNOWN AS § TEXAS COMMISSION ON
VODA PETROLEUM, INC. § ENVIRONMENTAL QUALITY
STATE SUPERFUND SITE §
AN ADMINISTRATIVE ORDER
I. Introduction
On FEbruary 10, 2010 , the Texas Commission on Environmental Quality
("Commission" or "TCEQ") considered the Executive Director's ("ED") allegations of the
existence of a release or threat of release of solid wastes and/or hazardous substances into
the environment on, at or from the VodaPetroleum, Inc. State Superfund Site ("Site") that
poses an imminent and substantial endangerment to the public health and safety or the
environment pursuant to the Solid Waste Disposal Act, TEX. HEALTH & SAFETY CODE,
Chapter 361 (the "Act"), and the ED's requested relief including issuance of a Commission
order to require persons responsible for such solid wastes or hazardous substances to perform
the Work, including conducting the Remedial Activities, as authorized by Sections 361.188
and 361.272 of the Act.
After proper notice, the TCEQ makes the following Findings of Fact and Conclusions of
Law:
II. Findings of Fact
A. For purposes of this Administrative Order (,"AO"), TCEQ has identifie4 the
following persons that are potentially responsible parties ('"PRPs") (at the solid .
waste and/or hazardous substances at the Site:
AAMCO Transmissions
AR Oil Co
A T P Results Inc
Exhibit A
1733
AT&T
Adena Exploration fuc
Allstate Transmissions
Amber Refining fuc
American Airlines fuc
American Auto
American Marazzi Tile fuc
American Norit Company fuc
American Spill Control fuc
Andrews Motor & Transmission
Anvil Shop
Aratex Services fuc
Archer Auto
Arco Oil and Gas Corporation
Ark-La-Tex Waste Oil Co fuc
Ashco Production fuc
Auto Precision Motors fuc
Autohaus
Aviation Properties fuc
Axelson fuc
Aycock Oil Corporation
B B Wells Waste Oil fuc
Page 2 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1734
BE&KInc
Basil Oil Field Service Inc
Baxter Oil Service
Bayou State Oil Corporation
Ben E Keith Company
Ben Griffin Tractor Company
Big Three Industrial Gas Inc
Billy D Cox Truck Leasing Inc
Bishops Auto
Blake Janet DBA D & D Radiator & Muffler
Borden Inc
Bright Truck Leasing Corporation
Brookhollow Exon Car Care
Brown & Root Inc
Brown Express Inc
Brunson Oil
Brushy Creek Saltwater Disposal Inc
Buck Resources Inc
Bule Diamond
Burland Enterprises Inc
CPL Industries
Cabot Corporation
Page 3 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1735
Can-Am Distributors and Warehouse me of Texas
Capacity of Texas Inc
Carraway Co
Carrier Air Conditioning
Cematco Inc
Central Power and Light Company
Central Texas Iron Works
Central Transfer & Storage Co
Champie Hill Mobil
Champion International Corporation
Channel Shipyard Company Inc
Chaparral Steel Company
Chief Oil & Chemical
Cities Service Company
Cities Service Pipe Line Company
City Motor Supply Inc
City of Dallas
City of Garland
City of Jefferson
City of Plano
City ofUniversity Park
Clarke Checks Inc
Page 4 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1736
Clements Oil Corporation
Cliffs Automotive
Coker Automotive Center Inc
Collin County
Complete Auto Transit Inc
Continental Can Company USA Inc
Continental Car Wash
Continental Trailways Inc
Converter Shop Inc
Coors Distributor
Custom-Bilt Cabinet and Supply Inc
Custom-Crete Inc
Daljet Inc
Dallas Area Rapid Transit
Dallas Dressed Beef Company Inc
Dallas Lift Trucks Inc
Dallas Power & Light Company
Damson Gas Processing Corp
Davison Petroleum Products
Davison, T M
Delmar Disposal Co
Deloach Texaco
Page 5 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1737
Delta Distributors Inc
Diamond Shamrock
Dillingham & Smith Mechanical and Sheet Metal Contractors Inc
Dixie Oil
Donco Saltwater Disposal System
Double A & Y Corp
Dowell Schlumberger Incorporated
Dunlap-Swain
Durham Transportation Inc
ECIncorporated
East Texas Gas
Eastern ECC Company
Fina
The Firestone Tire and Rubber Company
First Interstate Bank of Dallas
Fort Sill
Fox & Jacobs
Franks Oil Service
Fred Jordan Inc
Fred Taylor GMC Truck Sales Inc
Freilich Howard DBA Quick Stop Brake & Muffler
Fruin-Colnon Corporation
Page 6 - Voda Petrolewn, Inc., State Superfund Site
Exhibit A
1738
G B Boots Smith Corporation
Gelco Truck Leasing Division Gelco Corporation
General Electric Company
General Telephone Company ofthe Southwest
General Tire Inc
General Truck Leasing Inc
Georgia-Pacific Corporation
Gifford-Hill Cement Compariy of Texas
Goff Willie
Grantham Oil Service
Greyhound Lines Inc
Grubbs Enterprises Ltd
Gulf States Oil & Refining Co
Gulf Stream Oil
H & H Oil Services
H & P Trans
Halliburton Energy Services Inc
Harris Bros Co
Harry Vowell Tank Trucks Inc
Hartsell Oil
Haynes Resources Inc
Hearne Ave Exxon
Page 7 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1739
Herod Oil Inc
Hertz Penske Truck Leasing Inc
The Highland Pump Company Inc
Holloway Welding & Piping Co
Hunt Oil Company
Hydraulic Service and Supply Company
Industrial Lubricants Co
Industrial Solvents Gulf Division of Industrial Solvents Corporation
Ingersoll-Rand Company
Inland Container Corporation
International Electric Corporation
International Paper Company
J & E Die Casting Co Division of Cascade Die Casting Group Inc
James T Gentry Inc
Janks Texaco
Jeffco
J errys Waste Oil
John Crawford Firestone Inc
Johnson Controls Inc
Jones Environmental Inc
Joy Manufacturing Company
Jubilee Oil Service
Page 8 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1740
Juna Oil & Gas Co Inc
K & FOil & Gas Management mc
KRNN
Kayo Oil Company
Kellys Truck Tenninal Inc
Kennys Mobil
Kosar Frank DBA Rite Way Truck Rental
LA Transit
L D Baker Inc DBA Baker Gulf Service
L & J Recovery Ltd
LTV Energy Products Company
Lake Country Trucking mc
Lance Inc
Larry Gulledge Exxon
Las Colinas Service Center Inc
Lockheed Missiles & Space Company Inc
Lone Star Dodge Inc
Lone Star Logistics Inc
Long Mile Rubber Co
The Lubrizol Corporation
M Lipsitz & Co Inc
M & M Oil Salvage Inc
Page 9 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1741
MacMillan Bloedel Containers
Manvel Salt Water Disposal Company
Manville Sales Corporation
Marathon Battery Company
Martin-Decker
Mathews Trucking Company Inc
McAlister Construction Company
McBane Crude
McDonalds
Mega Lubricants Inc
Melton Truck Lines Inc
Metal Services Inc
Metro Aviation Inc
Metro Ford Truck Sales Inc
Millers Gulf
Minit Oil Change Inc
Mobil Oil Corporation
Modem Tire Service Inc
Mohawk Laboratories
Monsanto Company1
Moore James
I Only to the extent that Solutia Inc. is not excluded under applicable federal bankruptcy law.
Page 10 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1742
Morgan Oil
Morgan, Troy L Jr
Mr Transmission
Murphy Brothers Service Center Inc
National Oilwell Inc
National Scientific Balloon Facility
National Supply Co
Naval Air Station Dallas
Navarro Petroleum Corp
Nobles Transmission
North Highland Mobil
Northwest Oil
Norwel Equipment Company
Nucor Corporation
Occidental Chemical Corporation
Oilwell Division of United States Steel Corporation
Olympic Fastening Systems Inc
On the Spot Oil Change
Owens Mobil
Oxendine, Von K DBA Oxendine Transmission
Oxy Cities Service NGL Inc
P N B Corporation
Page 11 - Voda Petrolewn, Inc., State Superfund Site
Exhibit A
1743
Pantera Crude Inc
Paramount Packaging Corporation Texas
Parawax
Parrott Oil Corp
Pauls Oils Service
Pearl Brewing Company
Pelican Energy of LA Inc
Pen Roy Oil of Odessa Inc
Pengo Industries Inc
Pennwalt Corporation
Pepsi Cola
Performance Friction Products Formerly Cohec Automotive Products
Division of Coltec Industries Inc
Peterbilt Motors Company
Petro Chern Environmental Services Inc
Petroleum Distributors Inc
Petroleum Market Products
Petroleum Refiners Unlimited Inc
Petroleum Stripping Inc
Pipes Equipment Co Inc
Pitts
Pool Company
Post Office Vehicle Maintenance Facility
Page 12 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1744
Presbyterian Hospital of Dallas
Prestige Ford
Preston Management Company
Preston Oil Service
Production Operators Inc
R & C Petroleum Inc
R & K Auto Repair Inc
Ralph Wilson Plastics
Rayco Oil Company
Reed Tool Company
Reeves Oil Co Inc
Repetro Inc
Retail Graphics Printing Company
Rhodes Oil
Richards-Gebaur AFB
Roadway Express Inc
Robison Cecil
Rock Tenn Converting Company
Rockwall
Rollins Leasing Corp
Royle Container
Ruan Leasing Company
Page 13 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1745
Ryder Truck Rental Inc
SETI
SKI Oil Incorporated
The Sabine Mining Company
Safeway
Santos Radiator
Schepps Dairy Inc
Schlumberger Well Services Division of Schlumberger Technology
Corporation
Sears Roebuck and Co
Senco Marketing
Service Oil Co
Servion Inc
Shell Oil Company
Shippers Car Line Inc
Shore Company Inc
Shreveport Truck Center
Sitton Oil
Snappy Lube Inc
Snow Coil Inc
Sooner Refining Co Inc
South Coast Products Inc
Southeast Tex-Pack Express Inc
Page 14 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1746
Southern Gulf
Southern Plastics Inc
Southland Sales Corporation
Southwest Disposal
Southwestern Bell Telephone Company
Southwestern Electric Power Company
Southwestern Petroleum Corporation
Specialty Oil
Sprague Electric Company
Star Solvents Inc
Steel City Crane Rental Inc
Stemco Inc
Steve D Thompson Trucking Inc
The Stroh Brewery Company
Sullivan Transfer & Storage
Summit White GMC Trucks Inc
Sun Engine Sales Inc
T E C Well Service Inc
Tan A Co
Tannehill Oil Products
Taylor Rental Center
Texaco Chemical Company
Page 15 - Voda Petrolewn, Inc., State Superfund Site
Exhibit A
1747
Texas Gas Transmission Corporation
Texas hIdustrial Disposal hIc
Texas hIdustries Inc
Texas Mill Supply- Longview hIc
Texas State Technical hIstitute Airport
Texas Utilities Generating Company
Thompson Trans
Toneys Garage
Trailways hIc
Tricon
Trinity hIdustries hIc
Triple L Disposal
Tri-State Oil Tools hIc
Triton Aviation Services Inc
Truckstops of America
Tuneup Masters hIc of Texas
Twin City Transmission Service hIc
Union Oil 76 Truck Stop
United Gas Pipe Line Company
United Press hItemational
United States Army Corps of Engineers Mat Sinking Unit
Vanguard Sales
Page 16 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1748
Varo Inc
Vault Oil & Gas
Viking Freight Service Inc
Voda Petroleum Inc
Volvo White Truck Corporation
W F B Tank Bottom Reclaiming Corp
W W Waste Oil
Warren Petroleum Company
Westmoreland Joint Venture
Western Auto Supply Company
Westland Oil Company Inc
Willamette Industries Inc
W oodline Motor Freight
Woods Operating Co Inc
Wray Ford Inc
Yates SWD Corp
Young Chevrolet Inc
Zavala Energy Inc
and these parties
1. are the owners or operators of the Site;
2. owned or operated the Site at the time of processing, storage, or disposal of
any solid waste;
Page 17 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1749
>
3. by contract, agreement, or otherwise, arranged to process, store, or dispose
of, or arranged with a transporter for transport to process, store, or dispose of
solid waste owned or possessed by the PRPs or by any other person or entity
at the Site; or
4. accepted solid waste for transport to the Site as selected by the PRP.
B. Reserved.
C. The following PRPs entered into this AO as Agreeing Respondents but do not admit
liability regarding the Site except for the purpose of enforcing this AO.
There are no Agreeing Respondents.
D. When ranked, the Site had a State Superfund Hazard Ranking System ("HRS") score
of23.6.
E. The portion ofthe Site used for ranking on the State Registry of Superfund Sites is
described as follows:
All that certain lot, tract or parcel of land being situated in the David Ferguson
Survey, Gregg County, Texas and being a part of a 6.12 acre tract ofland conveyed
from Chaco, Inc. to Ultra Oil, Inc. in deed recorded in Vol. 1212, Page 252, Deed
Records, Gregg County, Texas and being more particularly described as follows:
BEGINNING at a 12" x 12" fence comer post on the north ROW of Duncan Road,
said point being the SE comer of a 50 acre tract conveyed from Charles McBride to
Chaco, Inc. in deed recorded in VoL 1206, Page 83, Deed Records, Gregg County,
Texas and also being the SE comer of the herein described tract;
THENCE along the SBL ofthe above mentioned 6.12 acre tract, also being the north
ROW of Duncan Road:
N 89 deg. 47' 06" W, a distance of 199.02 feet;
S 63 deg. 18' 26" W, a distance of57.72 feet;
S 89 deg. 55' 54" W, a distance of 120.65 feet to a liz" iron rod for this most
southerly SW comer, same being N 89 deg. 55' 54" E, 200.00 feet from the
SW comer of said 6.12 acre tract;
THENCE N 00 deg. 56' 53" W, a distance of200.00 feet to a liz" iron rod for comer;
Page 18 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1750
THENCE S 89 deg. 14' 07" W, a distance of 200.00 feet to a Yz" iron rod for this
most northerly SW comer, same being located on the east ROW ofCharise Drive and
the WBL of said 6.12 acre tract and being N 00 deg. 56' 53" W, 200.00 feet from the
SW comer of same:
THENCE N 00 deg. 56' 56" W, along the east ROW of said Charise Drive, a distance
of 271.25 feet to a 5/8" iron rod for this NW comer, same being the NW comer of
said 6.12 acre tract;
THENCEN 89 deg. 03'E, along the NBL of said 6.12 acre tract, a distance of578.45
feet to a 5/8" iron rod for this NE comer, same being the NE comer of said 6.12 acre
tract;
THENCE S 00 deg. 04' 55" E along the EBL of said 6.12 acre tract, a distance of
452.78 feet to the Place of BEGINNING ofthe herein described tract and containing
5.201 acres.
The remainder, a contiguous 0.92 acre tract ofland, is described as follows:
All that certain lot, tract or parcel of land being situated in the David Ferguson
Survey, Gregg County, Texas and being a part of a 6.12 acre tract ofland conveyed
from Chaco, Inc., to Ultra Oil, Inc., in deed recorded in Vol. 1212, page 252, Deed
Records, Gregg County, Texas, and being more particularly described as follows:
BEGINNING at a 5/8" iron rod set in the EBL of Charise Drive; THENCE North
with the EBL ofCharise Drive 200 feet to a Yz" iron rod; THENCE North 89 deg. 14'
07" E, 200 feet to Yz" iron rod for comer, THENCE S 00 deg. 56' 53" E, a distance
of 200 feet to Yz" iron rod for comer: THENCE S 89 deg. 55' 54" W with the said
SBL of said 6.12 acre tract, 200 feet to the point of BEGINNING, containg [sic] 1
acre of land, more or less, together with all improvements situated thereon.
F. The Site consists of the area listed in Paragraph E above. In addition, the Site
includes any areas outside the area listed in Paragraph E above where as a result,
either directly or indirectly, of a release of solid waste or hazardous substances from
the area described in Paragraph E above, solid waste or hazardous substances have
been deposited, stored, disposed of, or placed or have otherwise come to be located.
G. The Site was proposed for listing on the State Registry of Superfund Sites in the
Texas Register on November 17,2000. 25 Tex. Reg. 11594-95 (Nov. 17,2000).
H. The Site historically has been used as a waste oil recycling facility.
Page 19 - Voda Petroleum, inc., State Superfund Site
Exhibit A
1751
I The Chemicals of Concern at the Site include those substances listed in Exhibit B.
The substances listed in Exhibit B have been processed, deposited, stored, disposed
of, or placed or have otherwise come to be located on the Site.
J. The substances listed in Exhibit B have been documented in surface and subsurface
soil and groundwater at the Site.
K. The substances listed in Exhibit Bare:
1. substances designated under Section 311(b)(2)(A) of the Federal Water
Pollution Control Act, as amended (33 United States Code ("U.S.C.") Section
1321);
2. elements, compounds, mixtures, solutions, or substances designated under
Section 102 ofthe Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA") (42 U.S.C. Section 9601 etseq., as amended);
3. hazardous wastes having the characteristics identified under or listed under
Section 3001 of the Federal Solid Waste Disposal Act, as amended (42
U.S.C. Section 6921), excluding wastes, the regulation of which has been
suspended by Act of Congress;
4. toxic pollutants listed under Section 307(a) ofthe Federal Water Pollution
Control Act (33 U.S.c. Section 1317);
5. hazardous air pollutants listed under Section 112 of the Federal Clean Air
Act, as amended (42 U.S.C. Section 7412); or
6. any imminently hazardous chemical substances or mixtures with respect to
which the administrator ofthe Environmental Protection Agency ("EPA") has
taken action under Section 7 ofthe Toxic Substances Control Act (15 U.S.C.
Section 2606).
L. The substances listed in Exhibit B include the following: garbage; rubbish; refuse;
sludge from a waste treatment plant, water supply treatment plant, or air pollution
control facility; or other discarded material, including solid, liquid, semisolid, or
contained gaseous material reSUlting from industrial, municipal, commercial, mining,
and agricultural operations and from community and institutional activities, or
hazardous substances, for the purposes of TEX. HEALTH & SAFETY CODE Sections
361.271 through 361.277 and 361.343 through 361.345.
M. The substances listed in Exhibit B are solid wastes or hazardous substances.
Page 20 - Voda Petrolewn, Inc., State Superfund Site
Exhibit A
1752
N. Solid wastes or hazardous substances at the Site listed in Exhibit B are, or potentially
are, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing into the environment.
O. Potential pathways for human exposure to the solid wastes or hazardous substances
listed in Exhibit B include incidental ingestion of, inhalation of or dermal exposure
to surface and/or subsurface soil, and ingestion of or dermal exposure to
groundwater.
P. Exposure to levels of dichloroethylene, cis-l ,2-; benzene; propylbenzene, n-; MTBE
(methyl tertiary-butyl ether); tetrachloroethylene; toluene; trichloroethane, 1,1,1-;
trichloroethylene; trimethylbenzene, 1,2,4-; trimethylbenzene, 1,3,5-; vinyl chloride;
xylene, m-; xylene, 0-; xylene, p-; dichloroethylene 1,1-; and dichloroethane, 1,2-
found at the Site poses an unacceptable carcinogenic risk or an unacceptable toxicity
risk.
Q. The solid wastes or hazardous substances at the Site are not capable of being
managed separately under the remedial action plan.
R. On November 6, 2000, the Commission provided written notice of the proposed
listing of the Site on the State Registry to each PRP identified as of that date at the
PRP's last known address.
S. On September 12, 2008, the Commission provided written notice of the public
meeting and of the opportunity to comment on the proposed Remedy as specified in
Sections 361.187(b) and (c) of the Act to each PRP identified as of that date at the
PRP's last known address.
T. On September 12, 2008, each PRP identified as of that date was provided an
opportunity to fully fund or perform the proposed Remedial Activities, as specified
in Sections 361.187(d) and 361. 133(c) of the Act.
U. No voluntary actions have been undertaken at the Site by any PRPs.
V. The Remedy Selection Document ("RSD") for the Site is attached to this AO as
Exhibit A.
W. The remedy adopted in Exhibit A is selected as the Remedy to be implemented in
accordance with this AO.
III. Conclusions of Law and Determinations
A. The PRPs listed in Section II (Findings of Fact) Paragraph A are responsible parties
("RPs") pursuant to Section 361.271 of the Act.
Page 21 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1753
B. Some ofthe substances referenced in Section II (Findings of Fact) Paragraph I, which
are found at the Site, are hazardous substances as defined in Section 361.003(11) of
the Act.
C. Some ofthe substances referenced in Section II (Findings ofF act) Paragraph I, which
are found at the Site, are solid wastes as defined in Section 361.003(34) ofthe Act.
D. Hazardous substances were deposited, stored, disposed of, or placed or otherwise
came to be located at the Site; and solid wastes were stored, processed, disposed of,
or discarded at the Site.
E. The Site is a facility as defined in Section 361.181(c) ofthe Act.
F. The Site is a solid waste facility as defined in Section 361.003(36) ofthe Act.
G. "Imminent and substantial endangerment" is defined by rule as follows: A danger is
imminent if, given the entire circumstances surrounding each case, exposure of
persons or the environment to hazardous substances is more likely than not to occur
in the absence of preventive action. A danger is substantial if, given the current state
of scientific knowledge, the harm to public health and safety or the environment
which would result from exposure could cause adverse environmental or health
effects. 30 TEX. ADMIN. CODE Section 335.342(9).
H. There has been a release (as defined in Section 361.003(28) ofthe Act) or threatened
release of hazardous substances or solid wastes into the environment at the Site that
poses an imminent and substantial endangerment (as defined in 30 TEX. ADMIN.
CODE Section 335.342(9» to the public health and safety or the environment; and
therefore, the Site will be listed on the State Registry of Superfund Sites as per
Section V (Order) Paragraph A.
1. The release or threatened release of hazardous substances or solid wastes into the
environment at or from the Site has not been proven to be divisible pursuant to
Section 361.276 ofthe Act.
J. The actions required by this AO are reasonable and necessary to protect the public
health and safety or the environment.
K. The Site is ineligible for listing on the National Priorities List ("NPL") because the
HRS score was below 28.5.
L. Funds from the Federal Government are unavailable for the Remedial Activities at
this Site because it is ineligible for the NPL.
Page 22 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1754
IV. Exhibits and Definitions
A. The following exhibits are incorporated by reference into this AO:
"Exhibit A" Remedy Selection Document
"Exhibit B" List of Solid Wastes and Hazardous Substances at the Site
"Exhibit C" Field Sampling Plan Contents Outline
B. The following terms have the meaning set out below:
"Agreeing Respondent" The PRPs listed in Section II (Findings of Fact)
Paragraph C that fund or perform the Work and have
agreed to the terms and conditions of this AD as
evidenced by signing a consent form.
"Chemicals of Concern" Any chemical that has the potential to adversely affect
ecological or human receptors due to its concentration,
distribution, and mode oftoxicity.
"Day" A calendar day.
"Defaulting Performing Any Performing Party that fails to comply with the
Party" terms or conditions ofthis AD.
"Demobilization" The dismantling and removal of all construction
equipment from the Site.
"Effective Date" The Day ten (10) Days after the issue date of this AO.
"Executive Director The Executive Director of the TCEQ or a designee.
(ED)"
"include" Use of the term include, in all its forms, in this AD is
intended to express an enlargement or illustrative
application specifying a particular thing already
included within the preceding general words. It is not
used as a term of limitation.
"Institutional Control" A legal instrument which indicates the limitations on or
the conditions governing use of the property which
ensures protection of human health and the
environment in accordance with 30 TEX. ADMIN. CODE
Chapter 350 and as required by the Remedy.
"Parties" Collectively, the Respondents and the Commission.
Page 23 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1755
"Performing Parties" Collectively, the Agreeing Respondents and persons
that did not enter into this AO but that fund or perform
the Work.
"Post Construction All Remedial Activities at the Site, subsequent to
Activities (PCA)" issuance of the Approval ofRA Completion, required
to complete the Remedial Activities in accordance with
this AO.
"Post Construction Cost An estimate of the cost to perform all of the PCA for as
Estimate" long as post construction activities are needed.
"Proj ect Manager" The individual designated by the ED to oversee
implementation of the Work and to coordinate
communications with the Agreeing Respondents or, if
there are no Agreeing Respondents to this AO, the
Performing Parties.
"Remedial Action (RA)" Those Remedial Activities, except for Post
Construction Activities, undertaken at the Site,
including on-site physical construction and any
required institutional controls, to implement the
Remedy. The areal extent of the RA is not limited to
the Site. It includes all suitable areas in proximity to
the Site necessary for implementation of the Remedial
Activities.
"Remedial Activities" The RD, RA, PCA, and any other actions required to
implement and maintain the Remedy pursuant to the
RSD and 30 TEX. ADMIN. CODE Chapter 335,
Subchapter K and 30 TEX. ADMIN. CODE Chapter 350.
"Remedial Activities The individual, company, or companies retained by the
Contractors" Agreeing Respondents, or if there are no Agreeing
Respondents to this AO, by the Performing Parties to
undertake any or all phases ofthe Remedial Activities.
Remedial Activities Contractors cannot assume the role
of any quality assurance official required by this AO.
"Remedial Design (RD)" Those Remedial Activities during which engineering
plans and technical specifications are developed for the
Remedy.
Page 24 - Voda Petroleum, inc., State Superfund Site
Exhibit A
1756
"Remediation Goals" Cleanup standards or other measures of achievement of
the goals of the Remedy, consistent with the Act, 30
TEX. ADMIN. CODE Chapter 335, Subchapter K and 30
TEX. ADMIN. CODE Chapter 350, determined by ED to
be necessary at the Site to achieve and to maintain the
Remedy.
"Remedy" The Remedy adopted for the Site in the Remedy
Selection Document to clean up or control exposure at
the Site in accordance with all applicable laws and
regulations and to be implemented in accordance with
this AO. The Remedy includes all applicable
requirements contained in the Act, 30 TEX. ADMIN.
CODE Chapter 335, Subchapter K and 30 TEX. ADMIN.
CODE Chapter 350.
"Remedy Selection The document that was developed for the Site, based
Document (RSD)" on Site specific information, that specifies the Remedy,
and that was adopted by the ED and TCEQ after the
opportunity for public review and comment.
"Responsible Parties" The PRPs listed in Section II (Findings of Fact)
Paragraph A.
"Respondents" , Collectively, the Agreeing Respondents, the RPs, and
the Performing Parties.
"Samples" Samples of environmental media taken pursuant to and
in accordance with this AO.
"Sections" Those major divisions ofthis AO designated by Roman
numerals.
"Site Coordinator" The individual designated by the Agreeing
Respondents, or if there are no Agreeing Respondents
to this AD, the Performing Parties to oversee the
Remedial Activities Contractors and the
implementation of the Remedial Activities and to
coordinate communications with the ED.
"Site Representative" A person designated by the Project Manager that is
authorized to oversee the Remedial Activities.
Page 25 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1757
"Substantial The point, as determined by the ED in his sole
Completion" discretion, at which the W ork (or a specified part
thereof) has been substantially completed in accordance
with any work plans or documents required to be
developed pursuant to this AD.
"Work" All activities to be undertaken or performed m
accordance with and as required by this AD.
V. Order
Therefore, the TCEQ orders:
A. The Site will be listed on the State Registry of Superfund Sites.
B. Reserved.
C. Respondents shall reimburse the Hazardous and Solid Waste Remediation Fee
Account for all of the ED's costs of the Remedial Investigation ("RI") and the
Feasibility Study ("FS"), including the oversight costs of these activities.
Respondents shall reimburse the Hazardous and Solid Waste Fee Account for all
uncompensated Pre-Remedial Investigation costs, including oversight costs ofthese
activities.
The RPs and any Defaulting Performing Parties shall reimburse the Hazardous and
Solid Waste Remediation Fee Account for all costs incurred by the ED in
implementing and in overseeing the Work and for any costs incurred by the ED for
activities other than the RI and FS to the extent that such costs have not been paid.
Reimbursement is to be made within forty-five (45) Days after the ED transmits a
Demand Letter stating the amount owed. Payment is to be paid by cashiers check or
money order. All payments and accompanying letters or documentation should
contain the following information: "Voda Petroleum, Inc. State Superfund Site,"
"Cost Recovery Funds for the Hazardous and Solid Waste Remediation Fee Account
(Fund 550) ofthe State of Texas," "PCA Code 50482," "Docket Number 2009-1706-
SPF," and "TCEQ Project Manager, Carol Boucher, P.G." All payments and
accompanying letters or documentation should be mailed to: Cashier's Office, MC-
214, TCEQ, Re: VodaPetroleum, Inc. State Superfund Site, P.O. Box 13088, Austin,
TX 78711-3088. All checks and money orders shall be payable to the "Texas
Commission on Environmental Quality," or "TCEQ." The requirement to make such
payments will survive the termination ofthis AD in accordance with Section XXXIII
(Termination of the Administrative Order).
Page 26· Voda Petroleum, Inc., State Superfund Site
Exhibit A
1758
D. This AO applies to and is binding upon Respondents, their agents, successors, and
assigns. Respondents are jointly and severally responsible for carrying out the Work.
Perfonnance of any or all of the Work by the Perfonning Parties or Agreeing
Respondents shall not excuse any other Respondent from such perfonnance. Upon
perfonnance by any Respondent of Remedial Activities, either alone or in
conjunction with other Perfonning Parties, such Respondent shall, from such
perfonnance forward, become a Perfonning Party. Such perfonnance by a
Respondent of some ofthe Remedial Activities does not excuse the Respondent from
perfonnance of those Remedial Activities that took place prior to the Respondent
becoming a Perfonning Party or any other preexisting requirement of this AO. No
change in the ownership or corporate status and no acquisition of a Respondent will
alter its respective responsibilities under this AO.
E. Respondents that own or lease real property at the Site shall provide a copy of this
AO to all of their lessees or sub lessees of the Site until such time as this AO is
tenninated in accordance with Section XXXIII (Termination of the Administrative
Order) and to any prospective owners or successors before all or substantially all
property rights, stock, or assets are transferred.
F. Respondents shall provide a copy of this AO to all cOl1tractors, subcontractors,
laboratories, and consultants retained by Respondents to perfonn any or all of the
Work within thirty (30) Days after the Effective Date or on the date such services are
retained, whichever date occurs later. Notwithstanding the terms of any contract,
Respondents remain responsible for compliance with this AO and for ensuring that
their contractors and agents comply with this AO.
G. Within forty-five (45) Days after the Effective Date each Respondent that owns real
property at the Site shall record a copy or copies ofthis AO, with all exhibits, in the
appropriate office where land ownership and transfer records are filed or recorded,
and shall ensure that the recording ofthis AO is properly indexed to each and every
property comprising any part or all of the Site so as to provide notice to third parties
of the issuance and terms of this AO with respect to those properties. Each
Respondent that owns real property comprising all or any part ofthe Site shall, within
sixty (60) Days after the Effective Date, send notice of such recording and indexing
to the ED. The obligations and restrictions of this AO run with the land and are
binding upon any and all persons who acquire any interest in any real property
comprising all or any part ofthe Site.
Not later than ninety (90) Days before any transfer of any property interest in any
property included within the Site and in accordance with Section XII (Notices and
Submittals) Respondents that own or lease such real property shall submit the
transfer documents to the ED.
Page 27 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1759
H. In accordance with Section 361.1855 ofthe Act and for the purpose of selecting the
Remedy, the ED has selected commercial/industrial as the appropriate land use for
the Site. Any change in use of any or all of the Site must comply with Section
361.190 ofthe Act.
1. A qualified Remedial Activities Contractor shall direct and supervise all aspects of
the Remedial Activities. Within ten (10) Days after the Effective Date each
Respondent that is not an Agreeing Respondent shall notify the ED of its intent to
perform the Work.
In addition to fulfilling the requirements of Section VIII (Project Manager/Site
Coordinator) Paragraph C, within ten (10) Days after the Effective Date, Agreeing
Respondents or, if there are no Agreeing Respondents, Performing Parties shall
notifY the ED in writing of the name, title, qualifications, relevant licenses, and
permits ofthe Site Coordinator and Remedial Activities Contractor proposed to be
used in carrying out the Remedial Activities. The Agreeing Respondents shall
demonstrate or, ifthere are no Agreeing Respondents, the Performing Parties shall
demonstrate that each proposed Remedial Activities Contractor has any licenses
necessary to do business in the State of Texas and permits necessary to perform any
or all ofthe Remedial Activities. If at any time the Agreeing Respondents or, ifthere
are no Agreeing Respondents, Performing Parties propose to use a different Remedial
Activities Contractor, the Agreeing Respondents or Performing Parties, as
appropriate, shall notifY the ED before the new Remedial Activities Contractor
performs any of the Remedial Activities. The Agreeing Respondents' Site
Coordinator shall be the Project Manager's and Site Representative's point of
contact for all Performing Parties. All Performing Parties must coordinate with and
cooperate with any Agreeing Respondents in the performance of any and all of the
Work.
J. The Remedy may be modified as specified in 30 TEX. ADMIN. CODE Section
335.349. Except as specified in the previous sentence and in Section xvrn
(Extension of Deadlines), the terms of this AO maybe amended upon approval by
the Commission after notice to all Respondents.
K. Respondents shall provide all the necessary information and assistance for TCEQ's
Community Relations personnel to implement the Community Relations Plan.
L. All ED-approved final submittals, documents, plans, and reports required to be
developed and approved by the ED pursuant to this AO will be incorporated in and
enforceable under this AO.
M. In complying with this AO, Respondents shall at all times comply with the
requirements of the Act and 30 TEX. ADMIN. CODE Chapter 335, Subchapter K and
30 TEX. ADMIN. CODE Chapter 350, as applicable.
Page 28 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1760
VI. Remedial Activities
A. The Respondents shall undertake the Remedial Activities in the following phases:
Remedial Design ("RD");
Remedial Action ("RA"); and
Post Construction Activity ("PCA").
The ED may, in his sole discretion, waive, in writing, a requirement to submit any
report, submittal, document or plan otherwise required to be submitted by this AO.
B. Remedial Design
1. Not later than ten (10) Days after the Effective Date, Respondents shall
submit a Design Concept Memorandum ("DCM") to the ED for review,
comment, and approval. Respondents must submit a DCM that includes:
a. Description of key performance and design criteria for the Remedy
necessary to meet the requirements of the Remedy Selection
Document;
b. Identification of all significant design options that may be considered
by the design professional to meet the required performance and
design criteria and the proposed option( s) to meet those criteria; and,
c. Identification ofpotential problems and umesolved issues which may
affect the timely completion of the RD, RA and PCA, and proposed
solutions to those problems.
2. Within thirty (30) Days after the ED approves the DCM, Respondents shall:
a. Obtain written landowner consent for any institutional control to be
placed on the land records for any or all ofthe Site as required by this
AO or by TCEQ rule and submit a copy ofthe consent to the ED; and
b. Submit a Preliminary RD to the ED for review, comment, and
approval.
3. The Respondents shall submit a Preliminary RD that meets the requirements
as set forth in this Section and consists of a 30% completion of all sections
ofthe following RD submittals:
Page 29 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1761
RA Schedule;
RA Field Sampling Plan ("RA FSP");
Remedial Action Construction Quality Assurance Project Plan ("RA C-
QAPP");
RA Plans and Specifications;
RA Health and Safety Plan ("RA HASP"); and
Post Construction Activity Plan ("PCA Plan").
4. The RA Schedule will describe the sequence, dependency on other activities,
and duration of each activity to be conducted during the RA including Project
Milestones (which will be subject to the provisions of Section XXI
(Stipulated Penalties), Paragraph D) and the specific mobilization date to
begin the RA.
5. The RA Sampling and Analysis Plan (RA SAP) and RA C-QAPP will
describe the means of assuring quality during the RA and will specify a
quality assurance official ("Respondent QA Official"), independent of the
RA Contractors, to conduct a quality assurance program during the RA.
a. The RA SAP will be comprised of the RA FSP and the "Texas
Commission on Environmental Quality Superfund Cleanup Section,
Remediation Division, Quality Assurance Project Plan for the
Superfund Program" (Program QAPP) which is most current as ofthe
Effective Date ofthis AO. The RA SAP will address sampling and
analysis relating to environmental parameters which may present
toxic risk to human health or the environment. Respondents and their
contractors and subcontractors, including analytical laboratories, shall
strictly adhere to all requirements of the approved RA SAP.
h. The Program QAPP text will not be altered. Alterations to the
Program QAPP necessitated byproject specific circumstances will be
effected by appropriate notation in Section 8.0 "Exceptions,
Additions and Changes to the Program QAPP" of the RA FSP.
c. The RA FSP will include:
i) All data required by the Program QAPP and the contents
outline attached as Exhibit C to this AO;
Page 30 - Voda Petroiewn, Inc., State Superfund Site
Exhibit A
1762
ii) Data Quality Objectives ("DQO's") which provide for the
collection and analysis of a sufficient quantity and quality of
data to demonstrate attainment ofthe Remediation Goals and
to demonstrate protection of off-site receptors from exposure
to Chemicals of Concern during the RA; DQO's will be
developed in accordance with EPA "Guidance for the Data
Quality Objectives Process, EPA QAlG-4"; and
iii) A perimeter air monitoring plan including the action levels
necessary to protect off-site receptors from exposure to the
Chemicals of Concern; the Chemicals of Concern to be
sampled; the kinds of sampling techniques to be used to
sample; the number, type, and location of monitors; the
calibration methods and schedule; and the sampling and
reporting frequency.
d. In regard to laboratories and laboratory analytical work, Respondents
shall:
i) Ensure that all contracts with laboratories utilized by
Respondents for analysis of Samples provide for access to
those laboratories by the ED's personnel and the ED's auth-
orized representatives to assure the accuracy of laboratory
results related to the Site.
ii) Ensure that each laboratory it may use is qualified to conduct
the proposed work. This includes use of methods and
analytical protocols for the Chemicals of Concern in the
media of interest within detection and quantitation limits
consistent with both QAlQC procedures and approved DQOs
for the site. The Respondent QA Official shall provide written
certification that it has reviewed the laboratory's Quality
Assurance Plan and capabilities and has determined that:
(a) The laboratory has a documented quality assurance
program in place that is generally consistent with
National Environmental Laboratory Accreditation
Conference (NELAC) standards;
(b) The laboratory has demonstrated and documented
proficiency with each sample preparation and
determinative combination to be used on the project;
Page 31 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1763
(c) The laboratory has documented standard operating
procedures for each of the methods required for the
proj ect; and,
(d) The laboratory has the capability of meeting the
analytical objectives for the project.
A table which presents the laboratory's method detection
limits and quantitation limits and the preliminary remediation
goal for each analyte of concern, and a table that presents the
laboratory's control limits for quality control parameters, i.e.,
surrogates, matrix spike/matrix spike duplicate samples, and
laboratory control samples must be submitted along with the
certification letter and must be submitted attached or inserted
into the RA FSP.
iii) Ensure that all laboratories used for analysis of Samples are
acceptable to the ED. A laboratory may be deemed
unacceptable for any ofthe following reasons:
(a) repeated or numerous deficiencies found in the
laboratory quality assurance program during the ED's
or EPA's laboratory inspections;
(b) repeated or numerous deficiencies III laboratory
performance;
(c) debarment by EP A; or
(d) failure to comply with any requirement or criteria of
the Program QAPP or this AO.
iv) Ensure that all data submitted to the agency is produced by
laboratories accredited by TCEQ according to 30 TEX.
ADMIN. CODE Chapter 25 (relating to Environmental Testing
Laboratory Accreditation and Certification) Subchapters A
andB.
6. The RA C-QAPP will describe the activities necessary to ensure that the
Remedy is constructed to meet or exceed all design criteria, plans,
specifications, and all applicable Remediation Goals. The RA C-QAPP will
address sampling and analysis relating to physical properties of constructed
engineered controls which must meet specified criteria to ensure the long-
term performance of those features (e.g. physical soil properties of soil
Page 32 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1764
backfill or constructed clay caps, physical properties of geotextiles and liner
materials, leak testing of piping systems and containment vessels, etc.). At a
minimum, the RA C-QAPP will include the following elements:
a. The responsibility and authority of organizations and key personnel
involved in designing and constructing the RA;
b. The qualifications ofthe Respondent QA Officiales) and supporting
inspection personnel;
c. The observations and tests that will be used to ensure that the
construction meets or exceeds all design criteria, plans and
specifications and all applicable Remediation Goals;
d. The sampling activities, sample size, methods for determining
locations, frequency of sampling, acceptance and rejection criteria,
and methods for ensuring that corrective measures are implemented;
and
e. Detailed reporting requirements.
7. The RA Plans and Specifications will establish the sequences, procedures and
requirements to be implemented at the Site including at a minimum:
a. Demolition activities including monitor well closure,
decontamination, environmental controls, and disposal.
b. Excavation activities including: establishment of limits of initial
excavation for surface and subsurface soils with provisions for field
controls; excavation materials handling including stockpiling;
excavation confmnation sampling; backfill procedures; air emissions
control; stormwater management; cross-contamination prevention;
and equipment and personnel decontamination procedures and
facilities.
c. Estimated quantities of material to be excavated and estimated
quantities of materials to be disposed of off-site.
d. Site restoration activities, including backfill materials, compaction,
and final cover.
e. Plans including at a minimum:
i) Site plan;
Page 33 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1765
ii) Demolition plan;
iii) Excavation plan, plan view;
iv) Excavation plan, sections;
v) Monitor well construction details;
vi) Final Site grading plan;
vii) Construction details; and
viii) All other plans and specifications necessary to describe
sequences, procedures, and requirements to conduct the
Remedial Activities in a manner protective of human health
and the environment.
8. The RA HASP will specify the procedures that are sufficient to protect on-
site personnel and the public from the physical, chemical and/or biological
hazards of the site. The HASP will address all requirements of 29 CFR
Chapter XVII - "Occupational Safety and Health Administration (OSHA),
Department of Labor," 40 C.F.R. § 35.6015(a)(21) "Health and Safety Plan,"
and all applicable safety regulations, ordinances and statutes pertaining to the
safety of on-site personnel and the public. The HASP and any revisions or
addenda will be reviewed and signed by a Board Certified Industrial
Hygienist.
The TCEQ relies on the Respondent in the preparation of an adequate HASP.
However, TCEQ reserves the right to review and provide comments on the
Respondent's HASP. If TCEQ provides comments, they constitute only
general safety guidelines which are not intended to cause the Respondent to
reduce the level of protection. Any language in the comments or in this AO
which appears to give the TCEQ the right to direct or control the
Respondent's means, methods and details of the Work shall be deemed to
mean that the Respondent will follow TCEQ's desires only as to the results
ofthe Work. The Respondent is solely responsible for preparing an adequate
HASP, for complying with the RD and the applicable safety laws and
regulations, for performing the Work in a safe manner and for protecting the
health and safety of on-site personnel and the public. The Respondent shall
address the TCEQ's comments and concerns and if necessary submit a
revised HASP. TCEQ notation of "approval," "acceptance," or similar
language in response to a HASP submittal for review shall not alter the
responsibilities of the parties as described in this Section. In the event that
TCEQ notes a HASP "approved" or "accepted" or uses similar language to
Page 34· Voda Petroleum, Inc., State Superfund Site
Exhibit A
1766
indicate that there are no further comments, such notation shall be deemed to
mean only:
We have reviewed your HASP under the AO provision reserving the right for
TCEQ to review and provide comments constituting general safety guidelines
(not intended to cause the Respondent to reduce the level ofprotection). The
reviewer(s) might not be Board Certified Industrial Hygienist or any other
type ofsafety professional. We have no comments (or further comments) at
this time on your HASP. We recognize this HASP as your final HASP. Ifyou
change this HASP you must submit a revision or addendum for review and
potential comment in accordance with this AD.
Do not rely on TCEQ review or comments (or lack thereof) on your HASP
for any purposes.
By telling you we have no comments (or further comments) we are not
assuming responsibility for your means, methods, details or sequences, nor
are we assuming any duty of protection to you, your employees, your
subcontractors or suppliers, or their employees, or to any third party. Any
language in the comments or in this AO which appears to give the TCEQ the
right to direct or control your means, methods and details of the Work shall
be deemed to mean that you will follow TCEQ's desires only as to the results
ofthe Work. You are solely responsible for preparing and implementing an
adequate HASP, for complying with the RD and the applicable safety
regulations, ordinances and statutes, for peiforming the Work in a safe
manner and for protecting the health and safety of on-site personnel and the
public.
9. The PCA Plan will describe all sequences, procedures and requirements for
implementing the PCA. The peA Plan will, at a minimum, include the
following:
a. A Post Construction Sampling and Analysis Plan ("PC SAP") and
Post Construction Quality Assurance Project Plan ("PC-QAPP")
meeting the criteria established herein for the RA SAP and RA C-
QAPP but addressing all sampling and analyses relating to PCA;
b. Post Construction Plans and Specifications necessary to assure that
the Remedial Activities attain and maintain the Remediation Goals;
c. A PCA Schedule describing the sequence, dependency on other
activities, and duration of each activity to be conducted during the
PCA including Project Milestones (which will be subject to Section
Page 35 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1767
XXI Stipulated Penalties Paragraph D), and the specific mobilization
date to begin the PCA;
d. A Post Construction Cost Estimate providing an estimate for a
qualified third party to perform all of the tasks necessary for post
construction for as long as PCA are needed, in accordance with the
PCA Schedule; and
e. A Post Construction Activities HASP ("PCA HASP") which meets
all ofthe requirements specified above for the RA HASP but which
is appropriate to protect on-site personnel and the public from any
physical, chemical andlor biological hazards ofthe site relating to the
Post Closure period and activities.
10. Within thirty (30) Days after the ED provides written comments to the Site
Coordinator on the Preliminary RD, Respondents shall submit a Pre-Final RD
to the ED forreview, comment, and approval. The Pre-Final RD will consist
of 95% RD submittals. Respondents shall address the ED's comments on
the Preliminary RD and submit a summary note which clearly and explicitly
indicates how each comment by the ED on the Preliminary RD has been
satisfactorily addressed and which will also identify all other revisions or
changes from the Preliminary RD.
11. Within twenty (20) Days after the ED provides the Site Coordinator with the
ED's written comments on the Pre-Final RD, Respondents shall submit the
Final RD, prepared and sealed by a Professiomil Engineer registered in the
State of Texas, to the ED. The Final RD will consist of 100% complete RD
submittals except the PCA Plan. A Professional Engineer shall include a
certification that the design was prepared to attain all Remediation Goals
upon implementation. Respondents shall address the ED's comments on the
Pre-Final RD and submit a summary note which clearly and explicitly
indicates how each of the ED's comments on the Pre-Final RD has been
satisfactorily addressed and which will also identify all other revisions or
changes from the Pre-Final RD.
12. The ED will notify the Site Coordinator of his approval or disapproval of the
Final RD including written comments. Within fifteen (15) Days after the ED
provides written comments to the Site Coordinator, Respondents shall
resubmit the Final RD, in both clean and redline, strikeout format, with a
summary note which clearly and explicitly indicates how each of the ED's
comments on the previous draft of the Final RD has been satisfactorily
addresse4 and which will also discuss all other revisions or changes from the
previous draft of the Final RD.
Page 36 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1768
13. The ED will notify the Site Coordinator of his approval or disapproval of
each resubmittal of the Final RD. Each resubmittal will be submitted as
specified in Paragraph 12 above. Disapproval of the first resubmittal, and
each subsequent resubmittal, is subj ect to assessment of stipulated penalties
in accordance with Section XXI (Stipulated Penalties).
14. Upon the ED's approval, the documents comprising the Final RD will be
incorporated as requirements into and will be enforceable under this AD.
C. Remedial Action
1. Respondents and Respondents' contractors and subcontractors shall not
mobilize to the Site until the Final RD is approved by the TCEQ. Under no
circumstance will mobilization occur prior to TCEQ approval of the RA
HASp. 2 The Respondents will be responsible for initiating, maintaining, and
supervising all safety precautions and programs required for the protection of
all persons who may be affected by the Work, the Work, and any property
which maybe affected by the Work.
2. As soon as practicable after the award of any contract to ship solid wastes
and/or hazardous substances from the Site and prior to any such actual
shipment, Respondents shall submit to the Project Manager a written
certification containing all relevant information regarding such shipments.
The certification will include:
a. The name and location ofthe facility to which the solid wastes and/or
hazardous substances are to be shipped;
b. The type and quantity ofthe solid wastes and/or hazardous substances
to be shipped;
c. The expected schedule for the shipment of the solid wastes and/or
hazardous substances; and
d. The method of transportation and the name, address, and phone
number ofthe transporter.
3. In addition, Respondents shall certify that:
a. No enforcement order is currently imposed on any selected receiving
facility or transporter by any regulating authorities;
2TCEQ 's "approval" or "acceptance" of the HASP will be given the meaning as explained in Section VI
(Remedial Activities) Paragraph B.8.
Page 37 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1769
b. The selected receiving facility and transporter are permitted to accept
the specific solid wastes and/or hazardous substances to be shipped
from the Site by all appropriate regulating authorities; and
c. After appropriate inquiry, they have no knowledge that either the
selected receiving facility or transporter is non-compliant with any
federal, state, or local requirement.
4. The ED may inspect the Remedial Activities and/or the Site at any time to
evaluate compliance with this AO.
5. At least ten (1O) Days prior to the expected date of achieving Substantial
Completion ofthe RA,the Site Coordinator shall conduct a pre-Substantial
Completion inspection and shall develop and submit to the ED a preliminary
punch list identifying any nonconformance with the requirements of the RA
Plans and Specifications.
6. At the same time that the Performing Parties submit the Substantial
Completion punch list, they shall schedule a Substantial Completion
inspection by the ED. The Site Coordinator shall accompany the ED during
the Substantial Completion inspection.
7. Within 10 Days after the ED's on-site inspection, the Respondents shall
submit to the ED in writing a revised punch list incorporating any
deficiencies identified by the ED during the Substantial Completion
inspection, indicating those deficiencies that are completely addressed and
providing a proposed schedule and list of activities necessary to complete the
RA. The ED will notify the Site Coordinator in writing of his approval or
disapproval of the revised punch list.
If the ED disapproves the revised punch list, the ED will provide written
comments to the Site Coordinator. Within ten (10) Days after the ED
provides written comments to the Site Coordinator on the revised punch list,
Respondents shall submit a final punch list, in both clean and redline,
strikeout format, with a summary note that clearly and explicitly indicates
how each of the ED's comments on the revised punch list has been
satisfactorily addressed. The ED will notify the Site Coordinator of his
approval or disapproval ofthe final punch list with comments. If disapproved
by the ED, within fifteen (IS) Days after the ED provides written comments,
Respondents shall resubmit the final punch list. The ED will notify the Site
Coordinator of his approval or disapproval of each resubmittal of the final
punch list. Disapproval of the first resubmittal and each subsequent
resubmittal is subj ect to assessment of stipulated penalties in accordance with
Section XXI (Stipulated Penalties).
Page 38 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1770
8. When Respondents believe that they have completed the RA, they shall
submit a certification to the ED that the RA is complete. Ifthe ED identifies
RA items to be corrected or completed, Respondents shall immediately
correct or complete these items.
9. Within forty five (45) Days after Respondents certify that the RA is complete,
Respondents shall submit to the ED a draft RA Report, containing the
following:
a. A certification from a Professional Engineer licensed in the State of
Texas that the RA has been completed in compliance with the Final
RD and this AO and that the RA is complete;
b. All data collected during the RA and documentation of compliance
with the terms of the RA Quality Assurance Project Plan and the RA
Construction Quality Assurance Plan;
c. Copies of waste manifests for all Class II, Class I, and hazardous
wastes and substances disposed of off-site;
d. As-built drawings showing:
i) Areas and depths of excavation, with verification sample
results by grid area;
ii) Final site plan with topographic contours;
e. Progress photographs;
f. Proposed areas for soil and groundwater that will require land use
restrictions and/or other deed notices, certifications, or restrictions;
and,
g. Proposed language for any institutional controls in accordance with
and as required by this AO and TCEQ rules.
10. The ED will notify the Site Coordinator of his approval or disapproval ofthe
draft RA Report. If the ED disapproves the draft RA Report, the ED will
provide written comments to the Site Coordinator.
11. Within fifteen (15) Days after the ED provides written comments to the Site
Coordinator on the draft RA Report, Respondents shall submit a final RA
Report, in both clean and redline, strikeout format, with a summary note
which clearly and explicitly indicates how each ofthe ED's comments on the
Page 39 - Voda Petro!ewn, Inc., State Superfund Site
Exhibit A
1771
draft RA Report has been satisfactorily addressed and which also discusses
all other revisions or changes from the draft RA Report.
12. The ED will notify the Site Coordinator of his approval or disapproval ofthe
final RA Report with comments.
13. If disapproved by the ED, within fifteen (15) Days after the ED provides
written comments, Respondents shall resubmit the RA Report as specified in
Paragraph 11 above. Each resubmittal will also be submitted in accordance
with Paragraph 11 above.
14. The ED will notify the Site Coordinator of his approval or disapproval of
each resubmittal of the final RA Report including written comments.
Disapproval of the first resubmittal and each subsequent resubmittal· is
subject to assessment of stipulated penalties in accordance with Section XXI
(Stipulated Penalties).
15. Within thirty (30) Days after approval of the final RA Report and after
obtaining the required written landowner consent in accordance with
Paragraph B.2 of this Section, Respondents shall:
a. record a copy or copies of any required institutional controls in
compliance with the requirements found in 30 TEX. ADMIN. CODE
Chapter 350.111 in the appropriate local or county office where land
ownership and transfer records are filed or recorded;
b. ensure that the recording ofthese documents is properly indexed and
recorded to each and every property at the Site in the appropriate
office where land ownership and transfer records are filed so as to
provide notice to third parties concerning those properties; and
c. send evidence of such recording, landowner consent, and indexing to
the ED.
16. After he approves the finalRA Report, receives evidence of the filing of any
institutional control from each property owner or other person as required by
Section V (Order) Paragraph G, and determines that the financial assurance
requirements of Paragraph E below have been satisfied, the ED will issue an
Approval ofRA Completion to the Agreeing Respondents, or ifthere are no
Agreeing Respondents to this AO, any Performing Parties.
Page 40 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1772
D. Post Construction Activity
1. Concurrent with the submittal ofthe preliminary punch list for the Substantial
Completion inspection, the Site Coordinator shall 1) submit a list of the
name, title, qualifications, relevant licenses and permits of the Remedial
Activities Contractors proposed to be used in carrying out any or all of the
PCA and 2) submit to the ED a Revised PCA Plan.
2. The ED will notify the Site Coordinator of his approval or disapproval of the
Revised PCA Plan including written comments to the Site Coordinator.
3. Within fifteen (15) Days after the ED provides written comments to the Site
Coordinator, Respondents shall submit the Final PCA Plan, in both clean and
redline, strikeout format, with a summary note which clearly and explicitly
indicates how each of the ED's comments on the Revised PCA Plan has been
satisfactorily addressed and which will also discuss all other revisions or
changes from the Revised PCA Plan.
4. The ED will notify the Site Coordinator of his approval or disapproval ofthe
submittal and each resubmittal ofthe Final PCA Plan. Each resubmittal will
be submitted as specified in Paragraph 3 above. Disapproval of the first
resubmittal and each subsequent resubmittal is subject to assessment of
stipulated penalties in accordance with Section XXI (StipUlated Penalties).
5. Upon the ED's approval ofthe final PCA Plan, Respondents shall begin the
PCA in accordance with the schedule included in the PCA Plan.
6. The Agreeing Respondent(s) shall submit a Five Year Review report to the
TCEQ for TCEQ' s approval no later than five (5) years after the ED approves
the Final Remedial Action for the Site. The Five Year Review report must
be conducted in accordance with the U.S. Environmental Protection Agency's
"Comprehensive Five-Year Review Guidance." The Agreeing Respondent(s)
shall submit Five Year Review reports for the Site to the TCEQ every five (5)
years unless and until the TCEQ approves cessation.
E. Post Construction Financial Assurance
1. Respondents shall provide financial assurance in the minimum amount ofthe
final Post Construction Cost Estimate and shall maintain such financial
assurance for the full duration ofthe PCA. Within ten (10) Days ofthe ED's
approval of the PCA Plan, Respondents shall submit a written proposal for
providing financial assurance to the ED for approval.
Page 41 - Yoda Petroleum, Inc., State Superfund Site
Exhibit A
1773
2. Subject to the ED's approval, financial assurance may be demonstrated by
one or a combination of the following mechanisms: letter of credit, surety
bond guaranteeing payment, surety bond guaranteeing performance, fully
funded trust, insurance, escrow account or other approved mechanism. Each
financial assurance document will be issued by an institution with the
authority to issue the document whose operations are regulated and examined
by a federal or state agency.
3. Within fifteen (15) Days after the ED provides written approval of
Respondents' proposed financial assurance mechanism to the Site
Coordinator, Respondents shall submit the necessary financial assurance
documents to the ED. The ED will notify the Site Coordinator of his
approval or disapproval ofthe financial assurance documents with comments.
If disapproved by the ED, within fifteen (15) Days after the ED provides
written comments to the Site Coordinator, Respondents shall resubmit the
financial assurance documents, in both clean and redline, strikeout fonnat,
with a summary note which clearly and explicitly indicates how each ofthe
ED's comments on the previous draft of the financial assurance documents
has been satisfactorily addressed and which will also discuss all other
revisions or changes from the previous draft of the financial assurance
documents.
4. The ED will notify the Site Coordinator of his approval or disapproval, with
comments, of each resubmittal ofthe financial assurance documents. Each
resubmittal will be submitted in accordance with Paragraph 3 above.
Disapproval of the first resubmittal and each subsequent resubmittal is
subj ect to assessment of stipulated penalties in accordance with Section XXI
(Stipulated Penalties).
VII. Failure to Attain Remediation Goals or Findings of Significant Difference
A. If at any point in the Remedial Activities the Performing Parties conclude that the
Remedial Activities as implemented in accordance with this AO will not attain the
Remediation Goals, or ifthe Performing Parties find that conditions at the Site differ
from those that form the basis of the RSD and significantly change the scope,
performance or costs of the Remedial Activities, then the Performing Parties shall
take the actions specified in this Section.
B. Within ten (10) Days after the Performing Parties initially determine that a failure to
attain Remediation Goals or that a significant difference in the scope, performance
or cost of the Remedial Activities as described in this Section exists, Performing
Parties shall notify the ED of that determination with a description of its basis.
Page 42· Voda Petroleum, Inc., State Superfund Site
Exhibit A
1774
C. Not later than sixty (60) Days after the initial assertion of a failure to attain
Remediation Goals or of a significant difference in the scope, performance or cost
of the Remedial Activities, the Performing Parties shall submit a Failure Evaluation
Report to the ED for his approval.
D. The Performing Parties shall submit a Failure Evaluation Report that meets the
requirements ofthis Section. The Failure Evaluation Report will include a discussion
of the following: the data related to the failure to attain Remediation Goals or to the
assertion of a significant difference, conclusions concerning all such data, and any
known cause of the failure to attain Remediation Goals or of the significant
difference, and a recommendation for any necessary additional studies. Data
presented in the Failure Evaluation Report will comply with the DQOs.
E. The ED will not consider the failure of a design element or remedial action that is not
required by this AO to be the basis for a failure to attain the Remediation Goals.
F. The ED will consider differences in the quantity or extent of contaminants as the
basis for a determination of a significant difference only when such differences are
so significant as to cause the Remedy not to be the lowest cost alternative that is
technologically feasible and reliable and that effectively mitigates and minimizes
damage to and provides adequate protection of the public health and safety or the
environment.
G. After receipt of the Failure Evaluation Report, the ED will notify the Site
Coordinator of his approval or disapproval of the report with comments. If the ED
determines that the basis of the Performing Parties' assertion of a failure to attain
Remediation Goals or of a significant difference is valid, no applicable stipulated
penalties will be imposed for missed deadlines subsequent to the Performing Parties'
notification made in accordance with Paragraph B above, except for failure to submit
documents pursuant to this Section. If the ED determines that the basis of a failure
to attain Remediation Goals or of an assertion of a significant difference is not valid,
the ED will direct that Remedial Activities continue and that the Performing Parties
pay any applicable stipulated penalties for any missed deadlines.
H. Unless the ED approves the Failure Evaluation Report and/or directs continuation of
Remedial Activities, within thirty (30) Days after the ED provides written comments
to the Site Coordinator, the Performing Parties shall resubmit the Failure Evaluation
Report, in both clean and redline, strikeout format, with a summary note which
clearly and explicitly indicates how each of the ED's comments on the previous draft
ofthe Failure Evaluation Report has been satisfactorily addressed and which will also
identify all other revisions or changes from the previous version of the Failure
Evaluation Report.
Page 43 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1775
1. The ED will notify the Site Coordinator of his approval or disapproval, with
comments, of each resubmittal of the Failure Evaluation Report. Each resubmittal
will be submitted in accordance with Paragraph H above. Disapproval of the first
resubmittal and each subsequent resubmittal is subject to assessment of stipulated
penalties in accordance with Section XXI (StipUlated Penalties).
J. Not later than ninety (90) Days after a determination by the ED that the Remedy will
not attain the Remediation Goals or a significant difference exists, the Respondents
shall submit to the ED for approval a written report evaluating alternatives to the
Remedial Activities and may submit a proposal for such alternative Remedial
Activities as may be necessary to achieve the Remediation Goals. Any proposed
alternatives must comply with the remedy selection criteria contained in 30 TEX.
ADMIN CODE Chapter 335, Subchapter K and 30 TEX. ADMIN. CODE Chapter 350.
The Remedy may be modified, as stated in Section V (Order) Paragraph J, only as
specified in 30 TEX. ADMIN. CODE Section 335.349.
K. In the event TCEQ determines that alternate or additional remedial actions are
necessary because of the Remedy's failure, TCEQ may terminate this AO.
VIII. Project Manager/Site Coordinator
A. Not later than the Effective Date, the ED will designate a Proj ect Manager to oversee
implementation ofthe Work and to coordinate communication between the ED and
the Agreeing Respondents or, ifthere are no Agreeing Respondents to this AO, the
Performing Parties.
B. Respondents shall direct all communications regarding the Remedial Activities,
whether written or oral, at a minimum, to the Project Manager or, if not available, the
alternate Proj ect Manager.
C. In addition to fulfilling the requirements of Section V (Order) Paragraph I, within ten
(10) Days after the Effective Date, the Agreeing Respondents or, if there are no
Agreeing Respondents to this AO, the Performing Parties shall submit a written
notice to the Project Manager containing the Site Coordinator's address, phone
number and/or pager number at which he/she may be contacted at any time in case
of emergency. The Site Coordinator shall notify the ED in writing at least seven (7)
Days prior to the start date of any field activities associated with the Remedial
Activities. All Performing Parties must coordinate with and cooperate with any
Agreeing Respondents in the performance of any and all of the Work.
D. The Project Manager has the authority to require that the Remedial Activities are
performed in accordance with all applicable statutes and regulations and with this AO
and to require a cessation of the performance of any part or all of the Remedial
Activities that:
Page 44 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1776
1. In the Proj ect Manager's opinion, may present or contribute to an imminent
and substantial endangerment to public health, welfare, or the environment
because of an actual or threatened release of solid wastes or hazardous
substances from the Site; or
2. In the Proj ect Manager's opinion, is not in conformance with any work plan
developed in accordance with this AO; or
3. In the Project Manager's opinion, is a violation of any work plan developed
in accordance with this AO, HASP, or RA Quality Assurance Project Plan.
E. Within 24 hours after the Project Manager issues an oral order to halt any or all ofthe
Remedial Activities, if time permits, the Project Manager will provide a brief
explanation ofthe basis for the order. As soon as possible, but in any event no more
than fourteen (14) Days after the initial order to halt any or all of the Remedial
Activities, the Project Manager will provide a written explanation ofthe basis for the
order to halt any or all of the Remedial Activities to the Site Coordinator. The
Remedial Activities may be resumed only after the basis for the order to halt any or
all of the Remedial Activities has been corrected and instructions to proceed have
been provided to the Agreeing Respondents or, ifthere are no Agreeing Respondents
to this AO, the Performing Parties by the Project Manager. All additional costs
associated with the cessation of any or all of the Remedial Activities will be borne
by Respondents.
F. During the RD and RA, the Project Manager and Site Coordinator shall hold
meetings at least once per month to review the progress and details ofthe Remedial
Activities and to review and resolve any discrepancies in data. At the ED's
discretion, these meetings may be held by telephone. At least seven (7) Days prior
to each meeting, the Performing Parties shall deliver an agenda for the meeting and
any documents to be discussed to the Project Manager.
G. The ED and the Agreeing Respondents or, ifthere are no Agreeing Respondents to
this AO, the Performing Parties may change their respective Project Manager,
Alternate Project Manager, or Site Coordinator by written notice to each other of the
name, address, and telephone number ofthe new Proj ect Manager, Alternate Proj ect
Manager, or Site Coordinator seven (7) Days prior to the change, or if seven (7) Days
notice is not feasible, as soon as possible.
H. The Proj ect Manager may assign other persons, including other TCEQ employees or
contractors, to serve as a Site Representative and may temporarily delegate her or his
responsibilities to such Site Representative. The Project Manager will notify the Site
Coordinator orally or in writing of such delegation.
Page 45 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1777
IX. Endangennent and Immediate Threat
A. In the event of any action or occurrence during the perfonnance of the Remedial
Activities which causes or threatens a release of a solid waste or hazardous substance
or which may present an immediate threat to public health or welfare or the
environment, Respondents shall immediately take all appropriate action to prevent,
abate, or minimize such release or threat and shall immediately notify the Project
Manager and Site Representative or, ifthe Project Manager cannot be contacted, the
alternate Proj ect Manager and Site Representative. Respondents shall also notify the
TCEQ Emergency Response Unit, 1-800-832-8224, Region 5, Tyler. Respondents
shall take such action in accordance with all applicable provisions ofthe HASP. If
Respondents fail to take appropriate response action as required by this Section and
the ED takes such action instead, Respondents shall reimburse the ED all costs ofthe
response action. Respondents shall make payments of such costs as specified in
Section V (Order) Paragraph C and not later than forty-five (45) Days after the ED
transmits a Demand Letter stating the amount owed.
B. Nothing in the preceding paragraph will be deemed to limit any authority of the State
of Texas to take, direct, or order all appropriate action to protect human health and
the environment or to prevent, abate, or minimize an actual or threatened release of
solid wastes or hazardous substances to the environment on, at, or from the Site.
X. Submittals Requiring the ED's Approval
A. Upon the ED's approval of a submittal, Respondents shall proceed to implement all
actions required by the submittal according to the schedule approved by the ED.
B. Approved submittals may be modified upon agreement by the ED and the Perfonning
Parties. The Performing Parties shall submit proposed modifications and obtain
approval in accordance with the process for submittals specified in this AD generally.
Upon approval of any modification, the modification is incorporated into the original
submittal for all purposes.
C. The ED's approval of submittals or modifications is administrative in nature and
allows the Agreeing Respondents or, if there are no Agreeing Respondents to this
AD, the Performing Parties to proceed to the next steps in the Remedial Activities.
The ED's approval does not imply any warranty of performance, does not imply that
the Remedy, when constructed, will meet the Remediation Goals, nor does it imply
that the Remedy will function properly and ultimately be accepted by the ED.
XI. Submittal of Documents, Sampling, and Analyses
A. Respondents shall provide to the ED all data, information, documents, or records
related to the Site which are generated or obtained by any Respondent within twenty
Page 46 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1778
(20) Days of any written request from the ED for such data, information, document,
or record. Respondents shall provide written notice to the ED immediately upon
generating or obtaining any such data, information, document or record.
B. Subject to the confidentiality provisions set forth in Paragraph C below, all data,
information, documents, and records developed pursuant to this AO or submitted by
Respondents to the ED pursuant to this AO will be available to the public.
C. Respondents may assert a claim of business confidentiality pursuant to the Texas
Public Information Act as to any process, method, technique, or any description
thereofthat the Respondents claim constitutes proprietary or trade secret information
developed by Respondents or developed by their contractors or subcontractors. If no
confidentiality claim accompanies the process, method, technique, or description
thereof when submitted to the ED, any such process, method, technique, or
description thereof may be made available to the public by the ED or the State of
Texas without further notice to Respondents. Respondents shall make business
confidentiality determinations in good faith.
D. The ED or his Site Representatives may take splits or duplicates of any samples
obtained by any Respondent at the Site at any time including during the
implementation of the Remedial Activities. The Respondents shall provide
assistance necessary for the ED to take split or duplicate samples.
E. Respondents shall provide the ED with a schedule ofroutine'sampling and notify the
ED at least seven (7) Days before any non-routine sampling is conducted at the Site,
except in the event of situations provided for by Section IX (Endangerment and
Immediate Threat). Respondents shall collect and analyze all Samples in accordance
with approved work plans developed pursuant to this AO and shall handle all
Samples in accordance with the approved RA Quality Assurance Project Plan.
F. Respondents shall submit all data, information, reports, schedules, and other
documents required by this AO in hard copy format (two hard copies of draft
submittals and three of final submittals) and in specific computer software format
(one electronic copy of each draft and final submittal) as determined by the Project
Manager.
XII. Notices and Submittals
Respondents shall make all notices and submittals required by this AO in writing and in
accordance with the contact information contained in this Section unless otherwise expressly
authorized. Receipt by the Site Coordinator of any notice or communication from the ED
relating to this AO will be deemed by the ED to be receipt by all Respondents. All
information required to be submitted pursuant to this AO, including data, documents,
records, reports, approvals, and other correspondence, will be submitted to the following
Page 47 . Voda Petroleum, Inc., State Superfund Site
Exhibit A
1779
Parties at the addressees listed below or to such other addressees as such Party hereafter may
designate in a written communication to all other Parties:
As to the Texas Commission on Environmental Quality:
For mail:
Texas Commission on Environmental Quality
Remediation Division
Mail Code 136
P.O. Box 13087
Austin, TX 78711-3087
Attention: Project ManagerNoda Petroleum, Inc. State Superfund Site
For overnight express mail or delivery service:
Project Manager
Mail Code 136
Voda Petroleum, Inc. State Superfund Site
TCEQ, Remediation Division
Building D, Floor 1, Room 277N
12100 Park 35 Circle
Austin, TX 78753
By facsimile:
Project Manager
Voda Petroleum, Inc. State Superfund Site
Superfund Cleanup Section
(512) 239-2450
XIII. Periodic Review
A. Respondents shall provide written progress reports on the Remedial Activities to the
ED, as specified below in Paragraphs Band C.
B. RDIRA Progress Reports
1. Respondents shall submit written monthly progress reports to the ED
beginning on the tenth Day ofthe month following the Effective Date. These
progress reports will describe the actions taken pursuant to this AO during the
previous month, including a general description of activities and progress
during the reporting period, activities projected to be commenced or
completed during the next reporting period, and any problems encountered
Page 48 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1780
or anticipated by Perfonning Parties in commencing or completing the
Remedial Activities. Progress reports will include all data received during
the reporting period and an up-to-date progress schedule. Progress reports
will identify any violations ofthis AO and calculate any applicable stipulated
penalty required under Section XXI (Stipulated Penalties). The requirement
to submit these monthly progress reports will be tenninated at the earlier of:
1) if no PCA Plan is required, when the AO is tenninated in accordance with
Section XXXIII (Tennination of the Administrative Order) or 2) if a PCA
Plan is required, upon the ED's approval of a Final PCA Plan in accordance
with Section VI (Remedial Activities) Paragraph D.
2. If an RD/RA progress report submitted by Perfonning Parties is deficient, the
ED will provide written notice to the Site Coordinator. The notice will
include comments and a description of the deficiencies.
3. Within ten (10) Days of the ED providing the Site Coordinator with a notice
of deficiency of an RDIRA progress report, Perfonning Parties shall make
such changes as the ED deems necessary and resubmit the progress report to
the ED.
C. Post Construction Progress Reports
1. Perfonning Parties shall submit written monthly post construction progress
reports to the ED beginning on the tenth Day of the month following the
initiation of the PCA as described in Section VI (Remedial Activities)
Paragraph D.l. These progress reports will describe the actions taken
pursuant to this AO, including a general description of activities and progress
during the reporting period, activities projected to be commenced or
completed during the next reporting period, and any problems encountered
or anticipated by Perfonning Parties in commencing or completing the
Remedial Activities. Post construction progress reports will include all data
received during the reporting period and an up-to-date progress schedule.
Post construction progress reports will identify any violations ofthis AO and
calculate any applicable stipulated penalty required under Section XXI
(Stipulated Penalties). The requirement to submit monthly post construction
progress reports will be tenninated when the conditions specified in Section
XN (Tennination of Post Construction Activities) have been met as
detennined by the ED in his sole discretion.
2. If a monthly post construction progress report submitted by Perfonning
Parties is deficient, the ED will provide written notice to the Site
Coordinator. This notice will include comments and a description of the
deficiencies.
Page 49 - Voda Petrolewn, Inc., State Superfund Site
Exhibit A
1781
3. Not later than ten (10) Days after the ED provides the Site Coordinator with
a notice of deficiency of a post construction progress report, Perfonning
Parties shall make such changes as the ED deems necessary and resubmit the
post construction progress report to the ED.
XIV. Tennination of Post Construction Activities
The ED will terminate the requirement to perfonn PCA if Respondents demonstrate that all
Remediation Goals have been met. The Respondents shall satisfactorily perfonn PCA for
the duration of time specified in the RSD, and the Remediation Goals will not be deemed
achieved before the time specified in the RSD.
XV. Records
A. Each Respondent shall preserve and retain, and shall instruct its accountants,
attorneys, employees, agents, contractors, and subcontractors and anyone else acting
on its behalf at the Site to preserve and retain, in the form of originals or copies, all
data, records, documents, and information of whatever kind, nature, or description
that relate in any way to the Site that are now or that corne to be in its possession or
control. The previous sentence is meant to include data, records, documents, or
information relating to each Respondent's potential liability or to any other person's
potential liability for the Site under Section 361.271 of the Act.
B. All data, records, documents, and information required to be preserved and retained
in accordance with Paragraph A above will be preserved and retained for a minimum
often (10) years after the ED's issuance ofthe Approval ofRA Completion. At the
end of this ten (10) years, each Respondent shall notify the ED at least ninety (90)
Days before any such data, records, documents, or information is destroyed. If the
ED requests, Respondents shall, at no cost to TCEQ, provide the ED originals or
copies of such data, records, documents, or information which are not protected by
a privilege as per Paragraph C below.
Until this AO is tenninated in accordance with Section XXXIll (Termination ofthe
Administrative Order), Respondents shall maintain an index of documents that
Respondents claim contain privileged information. The index will contain, for each
document, the date, author, addressee, and subject of the document. Respondents
shall submit a copy ofthe index to the ED within ten (10) Days after the ED submits
a written request.
C. Any Respondent refusing to provide copies of any data, information, records, or
documents based upon a claim of privilege shall identify the data, information,
record, or document and explain the basis for the claim. Notwithstanding the
immediately preceding sentence, any data, record, information, or document required
to be developed or submitted pursuant to this AO will be available to the public.
Page 50 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1782
D. At any time prior to the completion of the Work, the ED may contact the Site
Coordinator to determine the location and/or to obtain copies of any or all ofthe data,
records, documents, or information developed in accordance with this AO. The
Respondents shall provide copies of any such data, records, documents, and
information to the ED at no cost to TCEQ.
E. Upon request by the ED, Respondents shall submit to the ED all data, information,
records, and documents requested, including those relevant to the items specified in
Section 361.182(b) of the Act for possible inclusion in the administrative record in
accordance with 30 TEX. ADMIN. CODE Section 335.345.
XVI. Access
A. As of the Effective Date, any Respondent that owns, in whole or in part, the Site, an
off-site area that is to be used for access to the Site, property subject to or affected by
the Remedial Activities, or other property where documents generated in accordance
with this AO are or come to be located shall provide access to such property to the
ED; any federal, state or local authorities and their contractors approved by the ED;
and the Performing Parties and their authorized representatives and contractors.
Failure to provide such access may result in the imposition of statutory and/or
stipulated penalties. Respondents shall indemnify TCEQ, and TCEQ will not be
liable, for any loss or claim arising out of Respondents , activities at the Site, on off-
site areas to be used for access to the Site, on property subject to or affected by the
Remedial Activities, and on other property where documents generated in accordance
with this AO are or come to be located.
B. If a person other than a Respondent owns, in whole or in part, the Site, an off-site
area that is to be used for access to the Site, property subject to or affected by the
Remedial Activities, or other property where documents generated in accordance
with this AO are or come to be located, Respondents shall obtain, or use their best
efforts to obtain, Site access agreements from the then current owner( s) within ninety
(90) Days of the Effective Date. Respondents shall secure agreements to provide
access for the ED, federal, state or local authorities and their contractors as approved
by the ED, and the Performing Parties and their authorized representatives and
contractors. Respondents shall insure that such agreements specify that TCEQ is not
liable for any loss or claim arising out of any activities at the Site, on off-site areas
to be used for access to the Site, on property subject to or affected by the Remedial
Activities, or on other property where documents generated in accordance with this
AO are or come to be located. Respondents shall provide copies of such agreements
to the ED before the Performing Parties initiate field activities. Respondents' best
efforts shall include, if necessary, providing reasonable compensation to any property
owner not a Party. If access agreements are not obtained within the ninety (90) Days,
Respondents shall immediately notify the ED oftheir failure to obtain access. Ifthe
ED determines, in his sole discretion, that the Performing Parties have used best
Page 51 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1783
efforts to obtain such access, the ED will, pursuant to statutory authority, make
appropriate efforts to obtain such access upon reasonable terms to the Agreeing
Respondents or, ifthere are no Agreeing Respondents to this AO, to the Performing
Parties. Any revision to the deadlines specified in this AO necessitated by
Respondents' inability to obtain such access may be considered a reasonable ground
for extending any affected deadline pursuant to Section XVIII (Extension of
Deadlines).
C. Subject to the Agreeing Respondents' reasonable safety and internal security
requirements, the ED will have the authority to enter, freely move about, and exit the
Site, any off-site area that is to be used for access to the Site, property subject to or
affected by the Remedial Activities, or other property where documents generated in
accordance with this AO are located or come to be located, for the purposes of:
inspecting conditions at the Site, the Remedial Activities and all information,
documents, data, records, operating logs, and contracts related to the Site; reviewing
the Performing Parties' progress in performing the Remedial Activities; conducting
such tests as the ED deems necessary; using a camera, sound recording device, or
other documentary type equipment; verifying the data submitted to the ED by the
Performing Parties; and performing any Remedial Activities not being performed or
not being satisfactorily performed by the Performing Parties. Nothing herein will be
interpreted as limiting or affecting the ED's right of entry or inspection authority
under state or federal law . All persons with access to the Site shall comply with the
HASP.
XVll, Delay in Performance
Respondents shall notifY the ED of any delay or anticipated delay in achieving compliance
with any requirement ofthis AO. Such notification will be made by telephone to the Proj ect
Manager or, if not available, the alternate Project Manager, within forty-eight (48) hours after
Respondents first knew or should have known that an event might cause a delay. Within
seven (7) Days after notifying the ED by telephone, Respondents shall provide written
notification fully describing the cause of the delay, the anticipated duration of the delay, the
measures taken and to be taken by Respondents, their contractors, or consultants, to prevent
or minimize the delay, and the timetable by which these measures have been, are being, and
will be implemented. A revised timetable will be implemented upon its approval by the ED.
XVIll. Extension of Deadlines
Upon failure to comply with the terms and conditions of this AO, any Defaulting Performing
Parties shall cease to be Performing Parties and all such rights and privileges as accrue to the
Performing Parties pursuant to this AO will immediately terminate as to such Defaulting
Performing Parties. At that time all responsibilities and obligations that attach to RPs in
addition to those that attach to Performing Parties will attach to Defaulting Performing
Page 52 - Voda Petroleum, Inc., State Superftmd Site
Exhibit A
1784
Parties that are RPs, including the requirement to pay TCEQ costs in accordance with
Section V (Order) Paragraph C.
Notwithstanding anything to the contrary in this AO, the Agreeing Respondents or, ifthere
are no Agreeing Respondents to this AO, the Performing Parties shall bear no costs for any
fines, penalties, or increases in the ED's oversight ofthe Remedial Activities resulting from
Defaulting Performing Parties actions or inactions. Defaulting Performing Parties and the
RPs may be assessed the ED's full costs for oversight of the Work. If actions required by
this AO are delayed or are not timely completed because of acts or omissions of one or more
Defaulting Performing Parties, the Agreeing Respondents, or if there are no Agreeing
Respondents to this AO, the Performing Parties may request a time extension. Upon such
request, the ED will approve the time extension, disapprove it, or approve such alternative
time extension as the ED in his sole discretion deems appropriate. Thereafter, Respondents
shall adhere to all remaining deadlines in this AO and in any documents developed in
accordance with this AO and approved by the ED.
The Agreeing Respondents may seek and the ED may grant an extension of any deadline
contained in this AO or in any document submitted pursuant to this AO. Agreeing
Respondents shall submit the request for a deadline extension no later than seven (7) Days
prior to the deadline date and shall substantiate good cause for extension of the deadline.
The determination of what constitutes good cause and the length of any deadline extension
will be at the ED's sole discretion.
XIX. Reserved
XX. Compliance with Applicable Laws
A. Respondents shall perform all actions pursuant to this AO in accordance with the
requirements of all applicable or relevant and appropriate federal, state, and local
laws, including the Texas Solid Waste Disposal Act as codified in the Texas Health
and Safety Code and the Texas Oil and Hazardous Substance Spill Prevention and
Control Act as codified in the Texas Water Code. This AO is not, and shall not be
construed to be, a permit issued pursuant to any federal or state statute or regulation.
B. All materials removed from the Site shall be disposed of or treated at a facility which
is in compliance with all applicable or relevant and appropriate federal, state, and
local laws and shall be disposed of or treated in accordance with all such
requirements.
XXI. Stipulated Penalties
A. Subject to the provisions of Sections XXII (Force Majeure) and XXllI (Resolution
of Disagreements), noncompliance with this AD shall result in the imposition of
stipulated penalties as set forth below.
Page 53 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1785
B. Penalties Related to Timeliness of Submittals Required by this AO
For failure to:
1. meet the deadlines set forth in Sections V (Order) and VI (Remedial
Activities);
2. submit timely reports as set forth herein;
3. submit data in a timely fashion or provide timely notice of sampling as
required by Section XI (Submittal of Documents, Sampling, and Analyses);
or
4. resubmit a document within the timeframes specified herein;
Agreeing Respondents shall pay stipulated penalties in the following amounts
for each Day and part thereof during which any delay listed in Subparagraphs
B.l through B.4 above continues:
Period ofDelay Amount/Day
1st through 14th Day $500.00
15th through 45th Day $2,000.00
46th Day and beyond $3,000.00
C. Penalties Related to Competency of Submittals
This Paragraph applies to submittals of any document required by Sections VI
(Remedial Activities), VII (Failure to Attain Remediation Goals or Findings of
Significant Difference), and XIII (Periodic Review) which fail to be responsive and
acceptable. Agreeing Respondents shall pay a stipulated penalty of$5,000 for each
week and part thereof that an acceptable and responsive document is not submitted.
This penalty may be assessed in addition to any penalties assessed under Paragraph
B ofthis Section.
D. Penalties Related to Project Milestones
For failure to:
1. achieve any RA Proj ect Milestones in accordance with the schedule approved
under Section VI (Remedial Activities) Paragraph B; or
Page 54 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1786
2. achieve any PCA Project Milestones in accordance with the schedule
approved under Section VI (Remedial Activities) Paragraph B.
Agreeing Respondents shall pay stipulated penalties in the following amounts for
each Day and part thereof during which any delay listed in Subparagraphs D.1
through D.2 above continues:
Period ofDelay Amount/Day
1st through 14th Day $1,000.00
15th through 45th Day $3,000.00
46th Day and beyond $10,000.00
E. For disobeying an order to halt any or all ofthe Remedial Activities under Section
vm (Project Manager/Site Coordinator), Agreeing Respondents shall pay stipulated
penalties of $10,000 per Day.
F. For failure to use best efforts to obtain Site access in accordance with Section XVI
(Access), Agreeing Respondents shall pay a stipulated penalty of $1 ,000 per Day.
G. For denying access provided for in Section XVI (Access), Agreeing Respondents
shall pay stipulated penalties of $10,000 per Day.
H. Any Agreeing Respondent who fails to provide records within ten (10) Days after
receipt of a written request from the ED or within such other period as specified
herein shall pay a stipulated penalty of $1 0,000 per Day.
1. With the exception ofthe stipulated penalties referenced in Paragraphs E, G and H
above which attach to individual Agreeing Respondents, all stipulated penalties
assessed in accordance with this Section are joint and several, not individual,
obligations.
J. Agreeing Respondents shall pay stipulated penalties assessed under this Section as
specified in Paragraph K below within sixty (60) Days after ED transmits a demand
letter stating that stipulated penalties have accrued or after resolution of a
disagreement as specified in Section XXIII (Resolution of Disagreements),
whichever comes later. Stipulated penalties will accrue from the date of
noncompliance until the noncompliance is corrected, provided however, that if any
Respondent prevails in resolution of disagreements as specified in Section xxm
(Resolution of Disagreements), it shall have no liability to pay stipulated penalties
with regard to those matters submitted for resolution of disagreements in accordance
with Section xxm (Resolution of Disagreements) in which it prevails.
Page 55 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1787
K. Agreeing Respondents shall pay stipulated penalties to "General Revenue Fund of
the State of Texas" and shall mail payments to:
Chief Fiscal Officer (MC 180)
Texas Commission on Environmental Quality
"Re: Voda Petroleum, Inc. State Superfund Site Administrative Order, Docket
Number 2009-1706-SPF"
P.O. Box 13088
Austin, Texas 78711-3088
L. The requirement to pay stipulated penalties that have been incurred prior to the
tennination of this AD in accordance with Section XXXIII (Termination of the
Administrative Order) will survive tennination of this AO.
M. A single act or omission may be the basis for more than one type of stipulated
penalty. A single act or omission may also be subject to more than one (1) Day of
stipulated penalties. In cases where more than one stipulated penalty applies to a
single act or omission, the ED may choose which stipulated penalties to assess.
N. The ED has the sole discretion to reduce or waive stipulated penalties and to do so
as to specific Agreeing Respondents or groups of Agreeing Respondents.
O. Stipulated penalties against Agreeing Respondents will be in lieu of administrative
and civil penalties for the same violation but will not prevent TCEQ from seeking
enforcement of the ordering provisions by injunctive relief. Respondents that are not
Agreeing Respondents are subject to administrative and civil penalties.
XXII. Force Maj eure
A. If a delay in perfonnance is caused (in whole or in part) by events beyond the
reasonable control ofthe Agreeing Respondents, that failure will not be construed as
a violation of this AD. The burden of establishing that an event is beyond their
reasonable control lies with the Agreeing Respondents. The Agreeing Respondents
shall notify the ED in writing within seven (7) Days ofthe start ofthe Force Majeure
event and within seven (7) Days of the end of the Force Majeure event. Agreeing
Respondents shall submit the notification as specified in this Section. Failure to so
notify the ED will constitute a waiver of the claim of Force Majeure.
Such notice will describe in detail the cause ofthe delay; the anticipated duration of
the delay; the measures taken and to be taken by the Agreeing Respondents, their
contractors or consultants, to prevent or minimize the delay; and the timetable by
which these measures have been, are being, and will be implemented. Measures to
prevent or minimize the delay will be implemented upon the ED's written approval
ofthe timetable. The Agreeing Respondents shall also submit, for the ED's approval,
Page 56 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1788
a proposed schedule for subsequent Remedial Activities whose deadlines have been
affected by the Force Majeure event. Neither the ED's approval ofthe timetable of
measures to be taken to prevent or minimize delays or of the revised schedule of
Remedial Activities will be construed as excusing the delay or as a waiver of
TCEQ's rights to enforce this AO.
B. Force Majeure events will not include increased costs or expenses of any part or all
ofthe Work or the financial inability of any Agreeing Respondent to perform any part
or all of the Work.
C. Ifthe ED and the Agreeing Respondents cannot agree that the cause for the delay was
a Force Majeure event or cannot agree upon the schedule for subsequent Remedial
Activities, then the disagreement will be resolved according to Section XXIII
(Resolution of Dis agreements). The Agreeing Respondynts shall have the burden of
demonstrating that Force Majeure is warranted.
XXIII. Resolution of Disagreements
A. The Agreeing Respondents and the ED shall attempt to resolve on an informal basis
any issues arising under Sections V (Order) through XXXIll (Termination of the
Administrative Order) on which there is disagreement. The Agreeing Respondents
shall commence informal negotiations by notifying the Project Manager in writing
that there is a disagreement and that this Section is being invoked. Except as
provided below in Paragraph D, informal negotiations will not extend beyond thirty
(30) Days from the date the Project Manager receives such notification, unless the
Agreeing Respondents and the ED agree otherwise in writing.
B. The Agreeing Respondents shall notify the Proj ect Manager within thirty (30) Days
after the Day the Agreeing Respondents knew or should have known of the events
giving rise to the disagreement. Should the Agreeing Respondents fail to give such
notice, the ED's decision on any disagreement will be binding.
C. Notification ofthe Project Manager in accordance with Paragraph A above will not
by itself postpone the deadlines established in accordance with this AO or stay the
accrual of any applicable stipulated penalties for the matter at issue. However, the
obligation to pay any applicable stipulated penalties to the TCEQ will be stayed
pending resolution of the disagreement in accordance with this Section.
D. If the ED makes a determination to perform a portion or all of the Remedial
Activities, the Agreeing Respondents shall have five (5) Days after notification to the
Site Coordinator to commence informal negotiations by notifying the Project
Manager in accordance with Paragraph A above. Informal negotiations will not
extend beyond fifteen (15) Days from the date the ED receives notification, unless
the Agreeing Respondents and the ED agree otherwise in writing.
Page 57 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1789
E. The procedure for any resolution of disagreements subsequent to informal
negotiations will be found in Sections 361.321 and/or 361.322 of the Act.
F. Unless otherwise specifically set forth herein, the fact that resolution of
disagreements is not specifically set forth in individual Sections is not intended to
and will not bar the Agreeing Respondents from invoking this Section as to any
disagreement arising under Sections V (Order) through XXXIII (Termination ofthe
Administrative Order), including any disagreement concerning the ED's exercise of
discretion under the terms ofthis AO.
XXIV. Indemnification
Respondents agree to indemnify and hold harmless TCEQ and its officers, employees,
agents, principals and assigns from and against all fines, penalties, claims, damages, losses,
demands, judgments, settlements, costs of suit, and attorneys fees that arise out of or result
from:
1. Respondents' performance of an inherently dangerous activity or handling of
a solid waste or hazardous substance at or from the Site;
2. Respondents' negligent, reckless, or intentional acts or omissions or such acts
or omissions of any of its agents or employees; and
3. the negligent, reckless, or intentional acts or omissions of any of
Respondents' contractors or suppliers or their agents or employees.
XXV. Liability
The State of Texas, by issuing this AO, assumes no liability for any injuries or damages to
persons or property resulting from acts or omissions of Respondents, or their directors,
officers, employees, agents, representatives, successors, assigns, contractors, or consultants
in carrying out any of the Work. Neither TCEQ nor the State of Texas will be deemed a
party to any contract entered into by any Respondent or its directors, officers, employees,
agents, successors, assigns, contractors, or consultants to perform any or all of the Work or
any other activity at the Site.
XXVI. Severability
The provisions of this AO are intended to be severable and are deemed severable. Should
any provision ofthis AO be rendered unenforceable by a court of competent jurisdiction or
other appropriate authority the remaining provisions will remain valid and enforceable.
Page 58 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1790
XXVII. TCEQ' s General Reservation of Rights and Retention of Claims
Except as specified herein, nothing in this AO will constitute or be construed as a covenant
not to sue by TCEQ or the State of Texas or a release from any claim, cause of action, or
demand in law or equity against any person, firm, partnership, or corporation. Except as
specified herein, the ED reserves and this AO is without prejudice to all rights against
Respondents with respect to all matters including:
1. Claims based on Respondents' failure to fulfill the requirements of this AO;
2. Liability arising from the past, present, or future disposal, release, or threat
of release of solid wastes or hazardous substances outside of or not related to
the Site;
3. Liability for future disposal of solid wastes or hazardous substances at the
Site, other than as provided in the RSD or in any work plan required to be
developed in accordance with this AO;
4. Liability for violations of federal or state law which occur during or after
implementation ofthe Remedial Activities;
5. Claims based on criminal liability; and
6. Claims for natural resource damages as defined by CERCLA (42 U.S.C.
Sections 9601 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. Sections
2701 et seq.), the Oil Spill Prevention and Response Act (Texas Natural
Resources Code Chapter 40), and the Federal Water Pollution Control Act
(33 U.s.C. Sections 1251 et seq.).
xxvrn. Section Headings
Section headings are included for convenience of reference only and will be disregarded in
the construction and interpretation of any ofthe provisions of this AO.
XXIX. Continuing Authority
TCEQ specifically retains authority over Respondents for the duration of this AO for the
purposes of issuing such further orders or directions as may be necessary or appropriate to
construe, implement, modify, enforce, terminate, or reinstate the terms of this AO or for any
further relief as the interest of the State of Texas may require.
XXX. Enforcement
Page 59 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1791
Except as provided in Section XXI (Stipulated Penalties) Paragraph 0, nothing herein will
preclude TCEQ from taking any additional enforcement actions against Respondents at any
time including issuing such additional orders as TCEQ may deem necessary or from
requiring Respondents to perform additional activities in the future and to completely
perform all of the Work.
This AO in no way obligates the State of Texas to assist Respondents in defending
contribution actions brought by other persons or entities.
XXXI. Computation of Time
A. Deadlines falling on a weekend or a State of Texas holiday will be extended until the
next business day.
B. The terms "submit" and "provide" as used herein will refer to the date on which
information, data, a document, or a record is to be received by the appropriate Party.
Submittals received on the deadline date will be deemed timely.
XXXll. Opportunity to Conference
A. The Agreeing Respondents or, ifthere are no Agreeing Respondents to this AO, the
Performing Parties may, within twenty (20) Days after the Effective Date, request a
conference with the Project Manager. The request must be submitted in writing to
the Project Manager. Any such conference will occur at the TCEQ's main campus
in Austin.
B. The purpose and scope of the conference will be limited to issues involving the
implementation of the Remedial Activities. The conference is not an evidentiary
hearing, does not constitute a proceeding to challenge this AO, and does not give
Agreeing Respondents or, if there are no Agreeing Respondents to this AO, the
Performing Parties the right to seek review of this AO.
xxxrn. Termination ofthe Administrative Order
A. The ED may terminate this AO when he determines that alternative or additional
work is required at the Site because the Remediation Goals will not be attained by
implementation of the Remedial Activities, unless Agreeing Respondents and the
ED agree on such alternative or additional work, agree to modify the Remedial
Action to include such additional or alternative work in accordance with Section V
(Order) Paragraph J, and agree to modify this AO in accordance with Section V
(Order) Paragraph J.
B. Except as provided in this Section, when the ED determines that the Work has been
completed in accordance with this AO, the ED will provide written notice to
Page 60 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1792
Agreeing Respondents that Agreeing Respondents have fully satisfied the
requirements ofthis AO. Such notice will be issued within one hundred and eighty
(180) Days after the ED determines that the Work has been completed in accordance
with this AO. This notice will not, however, terminate Respondents' obligations to
comply with those provisions specified herein that are intended to survive this AO,
including requirements regarding record preservation and Sections XV (Records),
XXI (Stipulated Penalties), XXV (Liability), XXIX (Continuing Authority), and
XXX (Enforcement).
XXXN. Rules of Construction
The masculine, feminine, and neuter gender will each include the other and the singular and
plural number will each include the other.
This AO may be executed in two or more counterparts each of which will be deemed an
original but all of which together will constitute one and the same document.
xxxv. Sovereign Immunity
The Parties hereby agree that nothing in this AO waives the State of Texas' sovereign
immunity relating to suit, liability, and the payment of damages. The Parties further agree
that all claims, suits, or obligations arising under or relating to this AO are subject to and
limited to the availability offunds appropriated by the Texas Legislature for that respective
claim, suit or obligation.
Page 61 - Voda Petroleum, Inc., State Superfund Site
Exhibit A
1793
The Chief Clerk shall send a copy of this Administrative Order to all Parties.
Issue date: FEB 12 2010
TEXAS COMMISSION ON
ENVlRONMENTAL QUALITY
Bry w, Ph.D., Chainnan
For the Commission
Page 62 . Voda Petroleum, Inc., State Superfund Site
Exhibit A
1794
VODA PETROLEUM, INC.
STATE SUPERFUND SITE
ADMINISTRATIVE ORDER
EXHIBIT A
REMEDY SELECTION DOCUMENT
Exhibit A
1795
REMEDY SELECTION DOCUMENT
TCEQ
VODA PETROLEUM, INC.
STATE SUPERFUND SITE
CLARKSVILLE CITY, GREGG COUNTY,
TEXAS
SEPTEMBER 2009
PREPARED BY: CAROL BOUCHER, P.G., PROJECT MANAGER
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
REMEDIATION DIVISION
Exhibit A
1796
TABLE OF CONTENTS
I. INTRODUCTION .............. ............................................................................................... 1
II. PURPOSE ..... ..................................................................................................................... 1
III. LEGAL AUTHORITY ..................................................................................................... 1
IV. SITE HISTORY .................................................................. ;............................................. 2
V. SUMMARY OF REPORTS ............................................................................................. 3
VI. ACTION LEVELS ............................................................................................................ 4
VII. THE SELECTED REMEDIAL ACTION ...................................................................... 5
VIII. GLOSSARy ....................................................................................................................... 6
Exhi~it A 1797
VODA PETROLEUM, INC. STATE SUPERFUND SITE
CLARKSVILLE CITY, GREGG COUNTY, TEXAS
REMEDY SELECTION DOCUMENT
I. INTRODUCTION
Voda Petroleum, Inc., (aka Ultra Oil) (Voda Site) occupies 6.12 acres at 211 Duncan Road,
approximately 1.25 miles west of the intersection of FM 2275 (George Richey Road) and FM
3272 (North White Oak Road), 2.6 miles north-northeast of Clarksville City in Gregg County.
The Voda Site was operated as a waste oil recycling facility from about 1981 until it was
abandoned in November 1991.
The Texas Commission on Environmental Quality (TCEQ) is an agency in the State of Texas
that implements many of the state laws relating to the conservation of natural resources and the
protection of public health and safety and the environment. The TCEQ addresses certain sites
that may constitute an imminent and substantial endangerment to public health and safety or the
environment through the state Superfund program.
II. PURPOSE
This Remedy Selection Document (RSD) presents the Remedial Action (also known as "the
remedy") for the Voda Site, which is designed to address the contamination and provide
protection of public health and safety and the environment.
Words appearing in italics in this document are defined in Section VIII, "Glossary," of this RSD.
III. LEGAL AUTHORITY
The investigation of the nature and extent of contamination at the Voda Site and the selection of
the Remedial Action is in accordance with the Solid Waste Disposal Act, Tex. Health & Safety
Code §§ 361.001-966 (West 2008); Subchapter K: Hazardous Substance Facilities Assessment
and Remediation (Subchapter K) rules found in 30 Tex. Admin. Code (TAC) §§ 335.341-351
(2009); and the Texas Risk Reduction Program (TRRP) rules found in 30 TAC §§ 350.1-135
(2009).
While the Subchapter K rules are specific to the Superfund process, the TRRP rules are a
comprehensive program for addressing environmental contamination and apply to many different
types of corrective action administered by the TCEQ. The TRRP rules establish procedures for
determining the concentration of contaminants to which a person or other environmental receptor
can be exposed without unacceptable risk of harm. These acceptable concentration levels are
called Protective Concentration Levels (PCLs).
A three-tiered approach may be used under the TRRP rules to calculate the PCLs for a site. The
tiers represent increasing levels of evaluation where site-specific information is factored into the
process. For example, Tier 1 uses conservative, generic models that do not account for site-
specific factors, Tier 2 allows for the use of site-specific information but must use PCL equations
1
Exhibit A
1798
provided by the TCEQ, and Tier 3 allows for more detailed and complex evaluations so that
PCLs are appropriate for specific site conditions. The PCLs for the Voda Site were developed
under Tier 1.
Critical to the analysis under all three of the tiers is the land use classification for the site. Under
the TRRP rules, the land can be classified as either residential or commercial/industrial.
Remediation to residential standards assumes that the site may be occupied by children and
therefore is applicable not only to strictly residential land but also to playgrounds, schools,
daycare centers and similar land uses. Remediation to commercial/industrial standards assumes
that the site will not be regularly occupied by children and is protective of persons who may
occupy the site as workers. Sites remediated to commercial/industrial standards cannot be used
for residential-type activities unless further controls are implemented to make the site safe for
that use. The TCEQ determined that a commercial/industrial use was appropriate for the Voda
Site.
The TRRP rules allow risks posed by the presence of contamination above a PCL to be managed
by any combination of the following: 1) removal or decontamination of contaminated media; 2)
physical controls, such as landfills and caps, which limit exposure to the contaminated media; or
3) institutional controls, such as deed restrictions on the future use of the property, which are
also intended to limit exposure to the contaminated media. These remedies under the TRRP
rules are divided into two main categories: Remedy Standard A and Remedy Standard B. To
meet Remedy Standard A requirements, the contaminated media must be removed and/or
decontaminated such that physical controls and, in most cases, institutional controls are not
necessary to protect human and ecological receptors from unprotective levels of contamination
based on the designated land use. To meet the requirements of Remedy Standard B, however,
physical controls and institutional controls may be relied on to limit exposure to unprotective
levels of contamination. These standards are described in detail in 30 TAC § 350.32 and §
350.33. The proposed remedy at the Voda Site meets the criteria established for Remedy
Standard A.
IV. SITE HISTORY
The Voda Site was operated as a waste oil recycling facility from about 1981 until it was
abandoned in November 1991. The Voda Site is located in a rural residential neighborhood with
occupied residences directly on the east and west sides of the facility. A review of the facility
waste management activity records revealed that Voda Petroleum, Inc., had received, stored and
processed waste gasolines; oily wastes; used oil mixed with methyl ethyl ketone, varsol,
trichloroethane, toluene, and hexane; crude oil; greases; and waxes. In 1996, the EPA conducted
an emergency removal of 462 fifty-five-gallon drums of grease or oily wastes, 14 fifty-five-
gallon drums of corrosive wastes, 16 above-ground tanks, and associated contaminated soil. The
site was then backfilled to approximate the undisturbed topography to facilitate site drainage.
The EPA response action removed the immediate threat to human health and the environment
but was not intended to be and did not constitute a final remediation solution. Post removal
analysis of soil and groundwater samples indicated that soil and groundwater continued to be
contaminated above appropriate cleanup levels.
2
Exhibit A
1799
V. SUMMARY OF REPORTS
A. HAZARD RANKING SYSTEM REPORT
The Hazard Ranking System (HRS) is a numerically-based screening system that uses
information from initial, limited investigations to assess whether a site qualifies for the
state or federal Superfund program. Sites scoring 28.5 or greater may qualify for the
federal Superfund program, while sites scoring 5 or greater may qualify for the state
Superfund program. The HRS scoring for the Voda Site was prepared by the TCEQ in
August 1995 and is presented in the report titled "Hazard Ranking System (HRS)
Documentation Record, Voda Petroleum Site, Gregg County, Texas." The Voda Site
earned a score of23.63. The TCEQ proposed t6 list the Voda Site on the State Registry
of Superfund Sites and published notice of its intent in the Texas Register on November
17,2000. 25 Tex. Reg. 11594-95 (Nov. 17,2000).
B. REMEDIAL INVESTIGATION REPORT
The Remedial Investigation (RI) includes field work, laboratory analysis and
interpretation of collected data for the purpose of determining the nature and extent of
contamination associated with the Voda Site. The Phase I RI Report, dated August 2002,
included a summary of the RI activities conducted at the site in May 2002. Based on the
Phase I results, a second phase was conducted in April 2004, focusing on the area known
as the "East Tank Farm." The Phase II RI Technical Memorandum (TM), dated July
2004, concluded that the investigation of the extent of soil contamination above cleanup
standards was complete; however, additional groundwater monitor wells were needed to
complete the groundwater investigation. Additional groundwater monitor wells were
installed from April 2005 through May 2007. The final round of monitor well
installations was found to fully define the extent of the groundwater contamination.
The following summarizes the findings of the RI:
Groundwater - The Queen City Aquifer beneath the Voda Site is impacted by various
volatile organic constituents (VOCs) exceeding the PCLs applicable to a Class 1
groundwater resource.
Onsite Soil - Soil containing contaminants above cleanup standards at the Voda Site is
generally limited to the East Tank Farm area, encompassing an area of approximately 60
feet by 120 feet and 12 feet deep. Contaminants exceeding cleanup standards include
VOCs and Total Petroleum Hydrocarbons (TPH).
Offsite Soil/Sediment - No offsite soil or sediment contamination was detected.
Ecological Risks - The Tier 1 Exclusion Criteria Checklist determined that conditions at
the Voda Site precluded the need for a formal ecological risk assessment (ERA) because
Exhi~it A 1800
the site meets the conditions for "de minimis land area," meaning there are insignificant
ecological exposure pathways at the site.
C. FEASIBILITY STUDY PHASE REPORT
The Feasibility Study CFS) for the Voda Site, dated January 2008, presented an evaluation
of the potential remedial alternatives to address the chemicals of concern CCOCs) in
onsite soil and onsite and offsite groundwater found exceeding the applicable PCLs.
D. REMEDY SELECTION PHASE REPORTS AND MEETING
The Proposed Remedial Action Document (PRAD), dated June 2008, presented a brief
discussion of remedial actions evaluated and the specific remedy proposed by the TCEQ
to address the contaminants exceeding the PCLs at the Voda Site.
On October 23, 2008, a public meeting was held at the Broadway Elementary School
Cafeteria in Gladewater, Texas, for the purpose of presenting the PRAD and soliciting
public comment about the proposed remedy. Upon consideration of the comments
received during the public comment period, the TCEQ selected the remedy described in
this RSD.
E. PLUME MANAGEMENT ZONE (PMZ) DEMONSTRATION TECHNICAL
MEMORANDUM (TM)
In May 2009, TCEQ technical staff reevaluated information that could be read to support
the finding of two possible classifications for the groundwater at the Voda Site. As a
result, pursuant to 30 TAC § 350.33(f)(4), the TCEQ conducted a PMZ demonstration in
accordance with TCEQ publication RG-366/TRRP-29, Soil and Groundwater Response
Objectives in July 2009. The PMZ demonstration, detailed in the PMZ Demonstration
TM dated August 3, 2009, showed that the COC concentrations will exceed cleanup
levels at the nearest point of exposure, an intermittent creek located on the offsite
affected property. Therefore, it was confirmed that a PMZ would not meet the remedial
action goals and would not be an appropriate remedy for the groundwater at the V oda
Site, and the currently selected remedial action continues to best fit the statutory criteria
for remedial selection.
VI. ACTION LEVELS
Remedial Action Objectives are the stated goal of the remedy that must be achieved to make the
site protective of human health and the environment. Action levels are the maximum numeric
concentrations of the COCs which must not exceed the Tier 1 PCLs for the appropriate land use
and groundwater resource classification. For the onsite and offsite groundwater, the Tier 1 PCLs
are those developed for Class 1 groundwater resources established in TRRP. For the onsite soil,
the Tier 1 PCLs are those developed for Commercial/Industrial Soil with a greater than 0.5 acre
source area for groundwater protection, with the exception of TPH which was developed based
4
Exhibit A
1801
on site-specific exposure criteria. Those objectives and action levels are presented in the
following table for the specific COCs found at the Voda Site:
ACTION
GROUNDWATER
LEVEL REMEDIAL ACTION OBJECTIVES
CONTAMINANT NAME
(Critical PCL)
Benzene 5 !J.g/L Reduce COCs concentrations to levels below
Dichloroethylene, 1,1- 7 !J.g/L the action level (TRRP Tier 1 peL for
Dichloroethane, 1,2- 5 !J.g/L groundwater ingestion: TRRP Tier 1 GWGWrng).
Vinyl chloride 2 !J.g/L
SOIL CONTAMINANT ACTION
NAME LEVEL REMEDIAL ACTION OBJECTIVES
(Critical PCL)
Benzene 0.013 mg/kg Reduce COCs concentrations to levels below
Dichloroethylene, cis-1 ,2- 0.12 mg/kg the action level (TRRP Tier 1
Ethylbenzene 3.8 mg/kg Commercial/Industrial Land Use PCL for
surface and subsurface soil to groundwater:
Propylbenzene, n- 67 mg/kg
TRRP Tier 1 C/I GWSoillng).
MTBE 0.93 mg/kg
Tetrachloroethylene 0.025 mg/kg
Toluene 4.1 mg/kg
Trichloroethane, 1,1,1- 0.81 mg/kg
Trichloroethylene 0.017 mg/kg
Trimethylbenzene, 1,2,4- 72 mg/kg
Trimethylbenzene, 1,3,5- 79 mg/kg
Vinyl chloride 0.011 mg/kg
Xylene, m 53 mg/kg
Xylene, 0 35 mg/kg
Xylene, p 75 mg/kg
VII. THE SELECTED REMEDIAL ACTION
In accordance with 30 TAC § 335.348(1) and the requirements of section 361.193 of the Solid
Waste Disposal Act, the TCEQ selects the Remedial Action for a site by determining which
remedial alternative is "the lowest cost alternative which is technologically feasible and reliable,
effectively mitigates and minimizes damage to the environment, and provides adequate
protection of the public health and safety and the environment." 30 TAC § 335.348(1). The
TCEQ has selected excavation with offsite disposal for the onsite soil, and the installation of
reactive biobarrier wells with institutional controls for the onsite and offsite shallow
groundwater.
5
Exhibit A
1802
Also in accordance with TRRP, the Performing Parties (or the TCEQ if no parties agree to fund
or perform the remedial action) shall record an institutional control in the real property records
of Gregg County. The institutional control shall be placed on each property which overlies
groundwater contaminated above the PCLs and shall describe the specific area of the
groundwater plume on each affected property. The institutional control shall remain in place
until such time as the TCEQ has determined that the Remedial Action Objectives have been
permanently achieved. If the Remedial Action is implemented by the TCEQ, the TCEQ will
request that the owner of each affected property voluntarily agree to record a restrictive covenant
to serve as the institutional control. If the property owner does not agree to the restrictive
covenant, the TCEQ shall record a deed notice to serve as the institutional control. If the
Remedial Action is implemented by Performing Parties, the Performing Parties shall be
responsible for securing the institutional control in the form of a restrictive covenant from the
owner of the affected property. All of the elements of the Remedial Action described above shall
be in accordance with detailed requirements established in TRRP.
Monitor wells installed at the Voda Site shall be sampled for the COCs identified in Section VI,
Action Levels, and the hydraulic gradient shall be measured quarterly during the first two years
and semi-annually for the following two years of the Remedial Action. Monitoring results shall
be evaluated no less frequently than annually to verify that the plume has been reduced in both
areal extent and concentration of COCs. Once the TCEQ determines that the Action Levels have
been permanently achieved, the TCEQ will discontinue sampling andlor monitoring activities.
VIII. GLOSSARY
Feasibility Study (PS) - A description, screening, and analysis of the potential Remedial Action
alternatives for a site.
Hazard Ranking System (RRS) - The scoring system used by the TCEQ to evaluate a site for the
state or federal Superfund program. The scoring system was developed by the United States
Environmental Protection Agency as described in 40 Code of Federal Regulations Part 300,
Appendix A.
Institutional Control - A legal instrument placed in the property records in the form of a deed
notice, restrictive covenant, or other form established in the TRRP rules which indicates the
limitations on or conditions governing the use of the property which ensures protection of human
health and the environment.
Performing Parties - Collectively, 1) any parties who agreed to fund or conduct the remedial
action by entering into an agreed order with the TCEQ and 2) parties that did not enter into an
agreed order with the TCEQ but that fund or perform the selected Remedial Action.
Plume Management Zone (PMZ) - The area of the groundwater protective concentration level
exceedance (PCLE) zone, plus any additional area allowed in accordance with 30 TAC §
350.33(f).
1803
Potentially Responsible Parties (PRPs) - Persons or entities that the TCEQ considers potentially
responsible for the contamination of the site pursuant to section 361.271 of the Texas Health and
Safety Code.
Proposed Remedial Action Document (PRAD) - The document which describes the TCEQ's
proposed Remedial Action.
Protective Concentration Level (PCL) - The concentration of a chemical of concern which can
remain within the source medium and not result in levels which exceed the applicable human
health risk-based exposure limit or ecological protective concentration level at the point of
exposure for that exposure pathway.
Remedial Action - An action, including remedial design and post-closure care, consistent with a
remedy taken instead of or in addition to a removal action in the event of a release or threatened
release of hazardous substances into the environment to prevent or minimize the release of a
hazardous substance so that the hazardous substance does not cause an imminent and substantial
endangerment to present or future public health and safety or the environment.
Remedial Investigation (RI) - An investigative study which may include removals, and/or a
feasibility study, in addition to the development of protective concentration levels, designed to
adequately determine the nature and extent of release or threatened release of hazardous
substances and, as appropriate, its impact on airs, soils, groundwater and surface water, both
within and beyond the boundaries of the site.
Solid Waste Disposal Act - Ch. 361 of the Tex. Health & Safety Code. The purpose of the Solid
Waste Disposal Act is to safeguard the health, welfare, and physical property of the people and to
protect the environment by controlling the management of solid waste, including any hazardous
waste that is generated. Subchapter F of Chapter 361 relates to the state Superfund process. The
Texas Health and Safety Code is available online at: http://www.statutes.legis.state.tx.us.
Texas Risk Reduction Program (TRRP) - A program of the TCEQ that provides a consistent
corrective action process directed toward protection of human health and the environment
balanced with the economic welfare of the citizens of the state. The rules for this program are
located in Chapter 350 of 30 Texas Administrative Code. The Texas Administrative Code is
available online at: http://www.sos.state.tx.us/tac/.
7
Exhibit A
1804
VODA PETROLEUM, INC.
STATE SUPERFUND SITE
ADMINISTRATIVE ORDER
EXIDBITB
LIST OF SOLID WASTES AND HAzARDOUS
SUBSTANCES AT THE SITE
Exhibit A
1805
Dichloroethylene, cis-1,2-
Benzene
Propylbenzene, n-
MTBE (methyl tertiary-butyl ether)
Tetrachloroethylene
Toluene
Trichloroethane, 1,1,1-
Trichloroethylene
Trimethylbenzene, 1,2,4-
Trimethylbenzene, 1,3,5-
Vinyl chloride
Xylene, m-
Xylene, 0-
Xylene, p-
Dichloroethylene, 1,1-
Dichloroethane, 1,2-
Exhibit A
1806
VODA PETROLEUM, INC.
STATE SUPERFUND SITE
ADMINISTRATIVE ORDER
EXHIBITC
FIELD SAMPLING PLAN CONTENTS OUTLINE
Exhibit A
1807
FIELD SAMPLING PLAN
TABLE OF CONTENTS
Title and Approval Sheet
Distribution List
Table of Contents
1.0 mtroduction
• Investigation Phase: Purpose - Briefly states the specific purpose of this FSP relative to the
Quality Assurance Project Plan, Work Plan and/or other documents. A schematic presentation of
the project documents and the location ofkey planning components should be presented.
• RA Phase: Purpose - Briefly states the specific purpose of this FSP relative to the RA Contract
Document, Quality Assurance Project Plan and/or other documents. A schematic presentation of
the project documents and the location ofkey planning components should be presented.
• Project/Task Organization - Identifies the key individuals or organization participating in the
project, their role(s) and responsibilities, and the organizational chart for the project. (Project
specific informationfor QAPP Element AY
2.0 Site and Project Summary
• Investigation Phase: Problem Definition/Background - Briefly states the site description,
surrounding area, historical information, previous investigation, suspected contamination
source, probable transport pathways and other site information. Most of this information is
available from the Conceptual Site Model developed during the planning phase. Any specific
data gaps and methods to fill the data gaps should also be discussed. States the specific problem
to be solved or the decision to be made and identifies the decision maker. (Project specific
informationfor QAPP Element A5Y
RA Phase: Problem Definition/Background - Briefly states the site description, historical
information, previous investigation, a summary of the selected remedy, a brief discussion of the
remedial action activities. States the specific problem to be solved or the decision to be made
and identifies the decision maker. (Project specific information for QAPP Element A5Y
Project/Task Description and Schedule - Briefly summarizes the project and the project tasks,
the turnaround time for the project, including the turnaround time requirement for laboratory
analysis. (Project specific information for QAPP Element A6Y
• Describes any special personnel and equipment requiredfor the specific type of work being
planned or measurement being taken and any special trainingicertification requirements.
(Project specific informationfor QAPP Element A8Y
Exhibit A
1808
• Data Acquisition Requirements (Non-direct Measurements) - Defines the criteria for the use of
non-measurement sources, such as computer databases, programs, literature files, and historical
databases. (Project specific informationfor QAPP Element B9Y
• Assessment Techniques - Defines the number, frequency, and type of quality assessment
activities, the responsible staff, the procedures to be performed during the life of the project.
(Project specific informationfor QAPP Element Cl) 1
3.0 Analytical Requirements and Data Quality Objectives
• Data Quality Objectives - Summarizes the project specific quality objectives and measurement
performance criteria. This section should include the summary of the outcomes of the technical
planning process (e.g., the 7-Step DQO process) used to develop the project objectives. The
summary should also include a reference to Appendix B of the FSP, which contains a full
discussion of the proposed DQOs for the project from which the summary was taken. Designates
and briefly describes sampling units (e.g. AOCs, surface soil to 6 inches). States objectives by
sampling unit or media. The project specific calculations or algorithms are also specified in this
section. (Project specific information for QAPP Element A7) J
4.0 Sampling Plan Design
e Sampling Process Design - All the relevant components of the experimental design and the key
parameters to be evaluated are included in this section. This section should include the sampling
activities, the rational for the design (in terms of meeting the DQOs), the sampling design
assumptions, the procedures for locating and selecting environmental samples, a classification
of measurements as critical or noncritical, the type and number of samples required for the
project including the required field QC samples, the sampling locations and frequency, the
applicable sample matrices, and an identification of samples critical to the project. Most of this
information should be available from the output from Step 7 of the DQO process. (Project
specific informationfor QAPP Element Bll
Describes the sampling plan for each media, as applicable, including figures and tables.
Surface Soil
Subsurface Soil
Groundwater
Surface Water and Sediment
Air
Other Matrices
This section should include a summary table containing a list of all chemicals of concern
identifiedfor the project with the corresponding Level of Required Performance (LORP) (e.g.,
action levels and preliminary remedial goals), analytical methods (including the preparation,
analysis and cleanup methods), and the corresponding method quantitation limits for all
analytes of concern.
Exhibit A
1809
5.0 Sampling Methods and Sample Handling
Sampling Method Requirements - Identifies sampling methods and equipment and describes the
procedures for sample collection, preparation, and decontamination. This section should
reference the Standard Operating Procedures located in Appendix A. (Project specific
informationfor QAPP Element B2) 1
• Sampling Handling and Custody Requirements - This section should include the required
sample volumes, container types, and preservation requirements for non-standard or other
analytical methods proposedfor project work that are not listed in Table B2-I of the Superfund
Program QAPP. This section also includes the field sample handling and custody requirements
for the project. (Project specific informationfor QAPP Element B3Y
• This section contains the specific requirements for field instrument/equipment testing,
inspection and maintenance for the project. Additionally, field instrument calibration and
frequency requirements for water level, pH, temperature, conductivity, dissolved oxygen, redox
potential, turbidity and other field measurements are addressed in this section as applicable to
the project. This section also includes the critical field supplies, the inspection or acceptance
testing requirements, and the acceptance criteria. (Project specific information for QAPP
Element B6, Bl, and B8) 1
6.0 Field Survey and Measurements
• This section describes the sampling methods and criteria for field survey and measurements,
such as land surveys, hydrogeological tests and measurements, geophysical surveys and soil gas
surveys, required for the project.
7.0 Additional Field Activities
• This section contains descriptions and procedures for other field activities, such as
presampling/mobilization activities, required notification, property access, site restoration and
investigative-derived waste (ID W) handling and disposal .
. 8.0 Exceptions, Additions and Changes to the TCEQ Superfund Program QAPP
• List any exceptions, additions and changes to the Superfund Program QAPP in each of the
appropriate sub-sections corresponding to the table of contents of the Program QAPP below.
Site specific information (e.g., Group A and Group B elements) specified above should not be
restated in this section. Please refer to the Program QAPP for details. This section should also
include specifications for non-standard methods and other analytical methods not specified in
the Program QAPP.
GROUP A: PROJECT MANAGEMENT
A.I Title and Approval Sheet
A.2 Table of Contents
A.3 Distribution List
A.4 Project/Task Organization
Exhibit A
1810
A.5 Problem Definition/Background
A.6 Project/Task Description
A.7 Quality Objectives and Criteria
A.8 Special Training/Certification
A.9 Documentation and Records
A.9.l Field Operation Records
A.9.2 Laboratory Data Package
A.9.3 Laboratory Performance Criteria Data
A.9.4 Data Handling Records
A.9.5 Data Reporting Package Format and Document Control
A.9.6 Field Records/Data Reporting Package Archiving and Retrieval
GROUP B: DATA GENERATION AND ACQUISITION
B.l Sampling Process Design (Experimental Design)
B.2 Sampling Methods
B.2.l Sample Containers
B.2.2 Sample Volumes, Container Types, and Preservation Requirements
B.3 Sample Handling and Custody
B.3.l Field Sample Handling and Custody
B.3.2 Laboratory Sample Handling and Custody
B.4 Analytical Methods
B.4.l Screening Methods
B.4.2 Definitive Preparation Methods
B.4.3 Definitive Analysis Methods
B.4.4 Non-standard Method Validation
B.5 Quality Control
B.5.1 Definitive Analytical Methods
B.5.2 Screening Methods
B.5.3 Quality Control Measure Descriptions
B.5.4 Elements of Quality Control
B.5.5 Method Detection Limit, Method Quantitation Limit and Sample
Quantitation Limit
B.6 Instrument/Equipment Testing, Inspection, and Maintenance
B.6.l Maintenance Responsibilities
B.6.2 Maintenance Schedules
B.6.3 Spare Parts
B.6.4 Maintenance Records
B. 7 Instrument/Equipment Calibration and Frequency
B.8 Inspection/Acceptance of Supplies and Consumables
B.9 Non-direct Measurements
B.lO Data Management
B.l 0.1 Logbooks and Forms
B.lO.2 Data Storage/Retrieval
GROUP C: ASSESSMENT AND OVERSIGHT
C.l Assessments and Response Actions
C.2 Reports to Management
Exhibit A
1811
GROUP D: DATA VALIDATION AND USABILITY
D.l Data Review, Verification and Validation
D.2 Verification and Validation Methods
D.3 Reconciliation with User Requirements
List of Tables
List of Figures
List of Appendices
• Appendix A - Standard Operating Procedures
• Appendix B - Data Quality Objectives Document
• Appendix C-Z - Other supporting documents as necessary. 1
Guidelines used in the preparation of the QAPP elements are:
• EPA Requirements for Quality Assurance Project Plans, EPA QAlR-5 (EPAl2401B-01l003),
March 2001
• EPA Guidance for Quality Assurance Project Plans, EPA QAlG-5 (EP Al2401R-02/009),
December 2002
Exhibit A
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09-30-2016
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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
A15-1762
Crystal Louise Breezee, petitioner,
Appellant,
vs.
State of Minnesota,
Respondent.
Filed June 6, 2016
Affirmed
Cleary, Chief Judge
Ramsey County District Court
File No. 62-CR-11-7864
Cathryn Middlebrook, Chief Appellate Public Defender, Carol Comp, Special Assistant
Public Defender, St. Paul, Minnesota (for appellant)
Lori Swanson, Attorney General, St. Paul, Minnesota; and
John J. Choi, Ramsey County Attorney, Kaarin Long, Assistant County Attorney, St. Paul,
Minnesota (for respondent)
Considered and decided by Connolly, Presiding Judge; Cleary, Chief Judge; and
Ross, Judge.
UNPUBLISHED OPINION
CLEARY, Chief Judge
Appellant Crystal Louise Breezee challenges the district court’s denial of her
petition for postconviction relief. Appellant petitioned to withdraw her guilty plea to fifth-
degree controlled-substance crime based on several theories relating to the validity of
testing performed by the St. Paul Police Department Crime Laboratory (SPPDCL).
Because appellant received a stay of adjudication, which is not a conviction in the context
of Minn. Stat. § 590.01 (2010), she was not eligible to seek postconviction relief. We
affirm.
FACTS
On January 28, 2011, appellant was pulled over in her vehicle for having no front
license plate. In response to questioning, appellant showed police officers a small plastic
bag that the officers suspected to contain methamphetamine. The substance was later
tested by SPPDCL, which determined it was methamphetamine. Appellant was charged
with violation of controlled-substance law in the fifth degree under Minn. Stat. § 152.025,
subd. 2(a)(1) (2010). Appellant pleaded guilty to the offense. The district court accepted
the plea but granted a stay of adjudication pursuant to Minn. Stat. § 152.18 (2010) and
placed appellant on probation for five years.
On July 18, 2014, appellant filed a petition for postconviction relief seeking to
withdraw the guilty plea based on testing deficiencies at the SPPDCL. While the petition
for postconviction relief was pending before the district court, appellant committed
probation violations. On August 14, 2014, appellant pleaded guilty to misdemeanor
2
driving after cancellation and gross misdemeanor theft, and, on October 20, 2014, appellant
pleaded guilty to misdemeanor theft. In response to the probation violations, on
January 27, 2015, the district court released an order vacating appellant’s stay of
adjudication of guilt as to the controlled-substance crime. However, the court did not enter
a conviction.
On October 20, 2015, the district court denied the petition for postconviction relief,
holding that the “two-year time limit for the filing of [postconviction relief] expired” and
none of the exceptions to this time limit applied. Appellant now challenges the denial of
her petition for postconviction relief.
DECISION
Statutory interpretation is a question of law subject to de novo review. State v.
Riggs, 865 N.W.2d 679, 682 (Minn. 2015). Although the parties’ briefs do not discuss it,
this court must address the threshold issue of whether appellant was eligible under Minn.
Stat. § 590.01 to seek postconviction relief. See State v. Watson, 829 N.W.2d 626, 633 n.2
(Minn. App. 2013) (“We need not accept a party’s concession when the party makes a
concession of a threshold issue that presents a question of law.”), review denied (Minn.
June 26, 2013).
Based on her guilty plea to fifth-degree controlled-substance offense, the district
court granted appellant a stay of adjudication. A district court may stay an adjudication of
guilt for first-time offenders who are found guilty of or plead guilty to specified controlled-
substance offenses. Minn. Stat. § 152.18, subd. 1. In that circumstance, a district court
“may, without entering a judgment of guilty and with the consent of the person, defer
3
further proceedings and place the person on probation upon such reasonable conditions as
it may require and for a period, not to exceed the maximum sentence provided for the
violation.” Id.
Appellant challenges the district court’s denial of her petition for postconviction
relief. Postconviction relief is available to “a person convicted of a crime.” Minn. Stat.
§ 590.01, subd. 1. A stay of adjudication is not a conviction, but rather “functions in effect
as a continuance for dismissal and for purposes of appellate review is treated as a pretrial
order.” Smith v. State, 615 N.W.2d 849, 851 (Minn. App. 2000), review denied (Minn.
Sept. 26, 2000); see also Dupey v. State, 868 N.W.2d 36, 40 n.2 (Minn. 2015) (“[W]hen
adjudication is stayed under section 152.18, there is no conviction.”). This court has
recently reaffirmed that a defendant who received only a stay of adjudication has not been
convicted for the purposes of seeking postconviction relief. Lunzer v. State, 874 N.W.2d
819, 820 (Minn. App. 2016). “Hence, such a person cannot seek postconviction relief.”
Id. at 822.
When appellant filed her petition for postconviction relief on July 18, 2014, she was
subject only to a stay of adjudication for the controlled-substance crime. She had not been
convicted of a crime and therefore was not eligible to seek postconviction relief.
While appellant’s petition for postconviction relief was pending before the district
court, the court issued an order apparently vacating the stay of adjudication. However,
based on the record, this order was without effect and no conviction was entered. Appellant
remains subject only to a stay of adjudication. Nothing in the record indicates that a
controlled-substance conviction was ever entered, nor was probation revoked. In order for
4
an individual to petition for postconviction relief, that individual must have been convicted
of a crime. Despite the order purporting to vacate the stay of adjudication, appellant was
not convicted of fifth-degree controlled-substance offense.
Appellant received only a stay of adjudication, and she was therefore never
convicted of the controlled-substance crime for the purposes of Minn. Stat. § 590.01,
subd. 1. Under Lunzer, appellant was not eligible to seek postconviction relief. The district
court did not err by denying appellant’s petition.
Affirmed.
5
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I agree generally with the dissenting opinion of Judge Richards filed herein, and besides dissent from the majority opinion for the following reasons:
Our statutes on contests of election are found in *Page 167
chapters 47 to 52, inclusive (section 981 et seq.). Chapter 51 (section 1006 et seq.) applies to state officers, and chapter 52 (section 1020 et seq.) applies to contested elections of county officers, chapter 47 (section 981 et seq.) being general provisions applying to all elections, and all these chapters appearing in the Codes of 1924, 1927, 1931, and 1935. Chapter 47 contains section 986, which reads as follows:
"All the provisions of the chapter in relation to contested elections of county officers shall be applicable, as near as may be, to contested elections for other offices, except as herein otherwise provided, and in all cases process and papers may be issued to and served by the sheriff of any county."
The Code of 1897 contains section 1203, and that is carried into chapter 52 of all the Codes since the Code of 1897. Section 1203, Code 1897 was editorially divided in the new Code as sections 1024-1026, and hence stand now as they stood in the Code of 1897. The provisions as to commencing a contest for county office is that the contest must be filed within the time fixed by statute with the county auditor; the contestant must file a bond conditioned to pay all costs in case the election be confirmed, or the statement be dismissed, or the prosecution fail. When the auditor is a party, the clerk of the district court shall receive such statement and approve such bond. By section 1022 of chapter 52, the county auditor is made the clerk of the contest court. There can be no court until it is assembled; i.e., has been appointed and organized. But section 1203 provided in what is now section 1025 that the contestant must also file with the county auditor a bond, to be approved by said auditor, conditioned to pay all costs in case the election be confirmed, or the statement be dismissed or the prosecution fail.
In a contest of a state office, the statement is filed with the secretary of state. The secretary of state, like the county auditor, is made clerk of the court. Also, like the county auditor, he has an alternate person who may act in case he is a party to the contest. A bond is required in both contests, and it must be filed and approved in both state and county contests, else we give no force to the provisions of section 986, "as near as may be".
There was an abortive attempt to contest this election before the votes had been canvassed; i.e., prior to the time of the *Page 168
declaration of the election of the judges in the district in question. That contest, being filed prior to the declaration, was as if nothing had been done, and stood for nought. The candidate bringing the contest was a judge of the district court; he had besides himself his own attorneys to prepare the papers and file a contest, and undoubtedly they had in mind absolutely the provisions of the statute as these provisions were contained in section 1203 of the Code of 1897, for at that time they filed, not only the claimed statement of contest, but filed a bond. This bond is set out in the abstract in this case, and recites: "That whereas the above bonden, Atherton B. Clark, has heretofore commenced an action contesting the election of Charles J. Haas as Judge of the District Court in and for the Eighteenth Judicial District of Iowa, and has filed such action and contest in the office of the Secretary of State, * * * shall pay or cause to be paid all costs which shall accrue in said action and contest filed in the said office of the Secretary of State, * * * or in any Court or tribunal to which said action and contest may be carried or transferred, then this obligation to be void." This bond is dated the 23d day of November, 1934, prior to even filing of the abortive attempt at contest. Subsequently when the incumbent, Haas, was declared elected by the state board of canvassers, he and his attorney realized that it was necessary to commence a contest, as the prior proceeding was not a contest, and could not be filed prior to the declaration of the election. They did commence a contest then, or thought they did, by refiling with the secretary of state the statement filed in the abortive proceeding.
Conceding that it would have the same force and effect as though a new statement of contest were filed, the question arises, Would the refiling of the bond, without approval, containing the recitations it contained, amount to the giving of a bond? It was recited that the proceedings were then pending. There were no such proceedings pending at the date of the bond; hence there was no bond. The bond bears the date of filing with the clerk appointed by the contest court.
What was the object and purpose of the legislature when it enacted section 1203 of the Code of 1897? It was, first, to fix the time within which the contest must be commenced; and, second, to require the giving of a bond to pay all the costs of the proceedings whatever they might be. Section 986 makes *Page 169
provision for county contests "applicable, as near as may be, to contested elections for other offices." That phrase means something. In this case the secretary of state, when he is not a party, takes the place of the county auditor; costs are incurred the moment that a contest court is ordered. The bond, it seems to the writer, should be given in advance to protect the state; to protect the incumbent against costs; and, in other words, to see that all costs that might be made by the contest were secured. So, without the giving of that bond applicable to the new contest as it stood, and the bond first given was not applicable to this proceeding, then there was no authority for calling a contest court, for the moment that was called costs were begun. The court had to assemble; it had to proceed.
Again, this bond must be approved. By whom? Not by the clerk of the contest court, such as is permitted to be appointed in a contest of district judge, by section 1012, in the contest itself, but by the officer with whom the contest is filed, before the court is formed. Such officer in case of state contest, the secretary of state, or, in the event he is a party, the clerk of the Supreme Court, or, in his absence or inability, the auditor of state, as provided in section 1007 of the present Code.
In the election of county officers, section 1022 provides for a court. It provides that the county auditor shall be the clerk of the court; that, when the auditor is a party, the court shall appoint a suitable person as clerk, whose appointment shall be recorded.
In the county officer contest, chapter 52, section 1024, provides that the contest must be filed with the county auditor; by section 1026 it is provided that, when the county auditor is a party, the clerk of the district court shall receive such statement and approve such bond.
As before pointed out, no new bond was given. The claimed bond, as it appears in the record, is as set out before. So far as these proceedings are concerned, it appears to have been filed only with the contest court on December 20, 1934. This was the clerk appointed by the contest court, not the clerk appointed by the statute, the secretary of state. There was then no authority to call the court, until the bond had been filed; then there is no bond in this case filed with anybody who had power to accept it or power to approve it.
These views find support in Wilson v. Matson, *Page 170 110 Neb. 630, 194 N.W. 735. The statute of Nebraska in reference to the contesting of elections was as follows:
"The contestant shall file in the proper court, within twenty days after the votes are canvassed, a complaint, setting forth the name of the contestant, and that he is an elector competent to contest such election, the name of the incumbent, the office contested, the time of the election, and the particular causes of contest, which complaint shall be verified by the affidavit of the contestant that the causes set forth are true as he verily believes. The contestant must also file a bond, with security to be approved by the clerk of the court or county judge, as the case may be, conditioned to pay all costs in case the election be confirmed, the complaint dismissed, or the prosecution fail." Comp. St. Neb. 1922, section 2070.
It will be observed that in the Nebraska statute the contestant shall file a contest in the proper court within twenty days after declaration of the canvass. The statute then describes how it shall be verified, and then says: "The contestant must also file a bond, with security to be approved by the clerk of the court or county judge, as the case may be, conditioned to pay all costs," etc. That in substance is our statute section 1203, as it stood in the Code of 1897, and in the present Code. And under this statute it was held that, not only must the complaint or statement of contest be filed, but that the bond must be filed, and that is mandatory, and it must be filed within the time fixed; i.e., the filing of the complaint. Our statute provides "must also file with the county auditor a bond" (section 1025) conditioned exactly as in the Nebraska statute. In fact, it is the exact language in the two statutes.
If the proper proceedings were not had with the secretary of state, i.e., the filing of a complaint and a bond, then there was no authority to call the court, because these were conditions precedent to the calling of the court, and there was no bond in this case filed with one who had power to accept it or power to approve it.
True, our statute in section 1009 says, upon the filing of such statement, the Chief Justice of the Supreme Court, or the Governor, as the case may be, shall select the membership of the court to try such contest, and shall immediately certify such selection to the court. But there must be a contest initiated, *Page 171
and if the bond is necessary, and I think it is, there was no authority, if we give any effect to the words which import the county contest law into all contests, then the proper preliminary steps to calling the contest court, did not exist.
So giving effect to the phrase "as near as may be", it is the state officer who approves the bond; the state officer who receives a statement of contest. It is not received by him as clerk of the court, but as such state officer, because of the provisions of the county contest chapter. So, on the whole, I am of the opinion that no contest court was ever legally organized; that no bond was ever in proper time filed and approved provided to pay costs of this proceeding, and hence that the writ should be sustained.
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JESSE M. FURMAN, United States District Judge:
In 2014, Plaintiff Lindsey A. Kidd applied for a job with the Georgia Department of Public Health ("GaDPH"). Using a subscription-based online research platform operated by Defendant Thomson Reuters Corporation ("Thomson Reuters"), the GaDPH obtained information indicating that Kidd had been convicted of a crime. That information turned out to be wrong, but in the meantime it appears to have cost Kidd the job. As a result, she now brings claims against Thomson Reuters under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. , ("FCRA"), a statute that protects consumers with respect to the collection and dissemination of personal information collected by "consumer reporting agencies." The question presented here, which raises issues of first impression in this Circuit, is whether Thomson Reuters qualifies as a "consumer reporting agency" covered by the statute. The Court concludes that it does not and, thus, grants summary judgment to Thomson *402Reuters with respect to all of Kidd's claims.
BACKGROUND
The following relevant facts, taken from the Complaint and admissible materials submitted by the parties, are undisputed unless otherwise noted. See Costello v. City of Burlington , 632 F.3d 41, 45 (2d Cir. 2011). At issue in this case is an online research platform-called Consolidated Lead Evaluation and Reporting or "CLEAR" for short-offered by Thomson Reuters to subscribers. (Docket No. 49 ("Def.'s SOF") ¶ 3). CLEAR "provides subscribers with access to proprietary and public records information for investigative purposes." (Id. ¶¶ 4, 8). It is primarily used by federal, state, and local government agencies to investigate crimes and suspected fraud. (Id. ¶¶ 5-7). The platform includes public records information regulated by the Gramm-Leach-Bliley Act ("GLBA") and the Driver's Privacy Protection Act ("DPPA"), so prospective customers are required to have permitted uses under those statutes to access data and must identify and certify those permitted uses to Thomson Reuters in various documents. (Id. ¶¶ 9, 10). Similarly, each time an authorized user seeks access to CLEAR, that user must select a permitted use for undertaking the search (such as a use permitted by the GLBA, the DPPA, or state voter registration laws). (Id. ¶ 11). Only then can the user enter a search query into CLEAR. (Id. ¶ 12). A subscriber searching CLEAR by using a name may retrieve a wide array of records-including aliases, court docket references, criminal history, and other information associated with the name. (Id. ¶ 14; Docket No. 57 ("Pl.'s SOF") ¶ 14).
Significantly, Thomson Reuters explicitly prohibits the sale and use of CLEAR for any purpose regulated by the FCRA. (Def.'s SOF ¶ 18). It communicates and enforces that prohibition in several ways, including employee training, mandatory employee reporting, marketing materials, contractual requirements, mandatory customer certifications, customer vetting, investigations, and remedial actions. (Id. ¶¶ 21-68). Additionally, Thomson Reuters will not sell CLEAR to customers that lack a permitted use for the product or have only FCRA-regulated uses. (Id. ¶ 39). Despite these efforts, Thomson Reuters has discovered instances in which CLEAR subscribers have used the platform for employment screening and other purposes regulated by the FCRA. (Id. ¶ 63; Pl.'s SOF ¶¶ 60, 63). When the company learns of such alleged misuse, it opens an investigation. (Def.'s SOF ¶ 64). There were forty-six such investigations from May 1, 2012, through the filing of Kidd's complaint. (Id. ¶ 68). After conducting investigations in those cases, Thomson Reuters terminated ten CLEAR subscriber accounts; concluded that twelve of the subscribers had not misused CLEAR; and secured new attestations of compliance from the other twenty-four subscribers. (Id. ).
In November 2014, Kidd applied for a job as an Immunization Program Consultant with the GaDPH and agreed in writing to submit to a "criminal history and background check." (Pl.'s SOF ¶ 76). Kidd received word from GaDPH that she was the top candidate for the position and was given an expected start date. (Pl.'s SOF ¶¶ 77, 78). On November 10, 2014, however, GaDPH obtained a "National Comprehensive Report" through CLEAR, which included criminal history information purportedly about Kidd (in addition to her date of birth, social security number, and information on her professional license status). (Id. ¶¶ 14, 94-95). Most significant for present purposes, the report stated that Kidd was divorced and that she had been convicted of a crime in Baltimore, Maryland-both of which were inaccurate. (Id.
*403¶¶ 95, 96). On December 16, 2014, a GaDPH representative advised Kidd that there was a problem with her application because a criminal case had appeared on her background check. (Id. ¶ 79). Kidd did not obtain access to the CLEAR results until after she hired an attorney; in the meantime, the possibility of a job at GaDPH disappeared. (Id. ¶¶ 82, 88, 91-92). Kidd allegedly could not find another suitable job until April 2016. (Id. ¶ 93; Docket No. 64).
On March 4, 2016, Kidd filed putative class action against Thomson Reuters, alleging violations of the FCRA. (Docket No. 1 ("Compl.")). At the initial pretrial conference, the parties proposed, and the Court agreed, to bifurcate the case, with a first phase limited to discovery on the threshold issues of whether Thomson Reuters is a "consumer reporting agency," as defined in Title 15, United States Code, Section 1681a(f), and whether CLEAR reports are "consumer report[s]," as defined in Title 15, United States Code, Section 1681a(d)(1). (Docket No. 19, at 2; Docket No. 27). Thomson Reuters now moves for summary judgment.
THE SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where the admissible evidence and pleadings demonstrate "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Johnson v. Killian , 680 F.3d 234, 236 (2d Cir. 2012) (per curiam). A dispute qualifies as genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; accord Roe v. City of Waterbury , 542 F.3d 31, 35 (2d Cir. 2008). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In ruling on a motion for summary judgment, all evidence must be viewed "in the light most favorable to the non-moving party," Overton v. N.Y. State Div. of Military & Naval Affairs , 373 F.3d 83, 89 (2d Cir. 2004), and the court must "resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought," Sec. Ins. Co. of Hartford v. Old Dominion Freight Line, Inc. , 391 F.3d 77, 83 (2d Cir. 2004). To defeat a motion for summary judgment, a non-moving party must advance more than a "scintilla of evidence," Anderson , 477 U.S. at 252, 106 S.Ct. 2505, and demonstrate more than "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Nor can the non-moving party "defeat the motion by relying on the allegations in [its] pleading or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible." Gottlieb v. Cty. of Orange , 84 F.3d 511, 518 (2d Cir. 1996) (citation omitted).
DISCUSSION
"The FCRA protects consumers with regard to the collection and dissemination of personal information collected by consumer reporting agencies." Ernst v. Dish Network , LLC , 49 F.Supp.3d 377, 381 (S.D.N.Y. 2014). Significantly, by its terms, the statute applies only to a "consumer reporting agency" (or "CRA"), which is defined, in relevant part, as any person or entity "which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling ... information on consumers for the purpose of furnishing consumer reports to third parties." 15 U.S.C. § 1681a(f). A CRA, therefore, is defined in part by reference to a "consumer report."
*404Rather unhelpfully, however, "consumer report" is defined, circularly, by reference to the definition of a CRA. See 15 U.S.C. § 1681a(d)(1). That is, the statute defines "consumer report," in relevant part, as the "communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for" various purposes, including employment. Id. (emphasis added).
In interpreting a statute, a court "must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose." United States v. DiCristina, 726 F.3d 92, 96 (2d Cir. 2013). Doing so here, the Court concludes that whether Thomson Reuters qualifies as a CRA turns in the first instance on whether its subjective purpose in assembling information concerning consumers is to furnish consumer reports to third parties. That is because an entity qualifies as a CRA only if it "regularly" assembles information on consumers "for the purpose of furnishing consumer reports to third parties," and "purpose" means "[t]he reason for which something is done or created or for which something exists" or to "[h]ave as one's intention or objective," OXFORD ENGLISH ONLINE DICTIONARY , https://en.oxforddictionaries.com/definition/purpose (last visited October 25, 2017); see MERRIAM-WEBSTER ONLINE DICTIONARY , https://www.merriam-webster.com/dictionary/purpose (last visited October 25, 2017) (defining "purpose" as "something set up as an object or end to be attained" or "intention"). By its plain terms, therefore, the statute applies only to a person or entity that regularly assembles consumer information with a particular purpose or subjective intention-namely, of providing it to third parties for use (actual or expected) in connection with an FCRA-regulated end, such as employment eligibility.
Notably, that conclusion is consistent with the approach taken by courts in other Circuits, which have looked to the subjective intent of defendants in determining whether they qualified as CRAs under the FCRA. In Liberi v. Taitz , No. 11-CV-0485 (AJG), 2012 WL 10919114 (C.D. Cal. Mar. 16, 2012), for example, the Court concluded that the defendant, which operated a public records search engine similar to CLEAR, was not a CRA because, among other things, it had "established that it did not intend the Background Reports [it issued] to be credit reports." Id. at *6 (emphasis added). By contrast, the court in Lewis v. Ohio Professional Electronic Network LLC , 190 F.Supp.2d 1049 (S.D. Ohio 2002), concluded that the defendant was a CRA because it "knew and in fact intended for parties such as potential employers and insurance companies to access the public arrest data information, and that the information might be used in employment and other decisions." Id. at 1058. And finally, in Mangum v. Action Collection Service Inc. , No. 05-CV-507 (BLW), 2007 WL 1959076 (D. Idaho July 3, 2007), aff'd in part, rev'd in part , 575 F.3d 935 (9th Cir. 2009), the court looked to the defendants' subjective "business purpose" in deciding whether they were CRAs. "There is simply nothing in the record," the Court concluded, "suggesting that [the defendants] assemble[d] or evaluate[d] consumer information for any other purpose than to collect debt on behalf of their clients-the true business purpose of a collection agency. Accordingly, the Court finds that [the defendants] are not 'consumer reporting agencies' for purposes of the FCRA." Id. at *4 ; cf.
*405Houghton v. N.J. Mfrs. Ins. Co., 795 F.2d 1144, 1148 (3d Cir. 1986) (finding no FCRA violation when there was no indication "that [defendant] desired a report on [plaintiff] for a purpose encompassed within the statutory definition of an investigative consumer report").
More broadly, reading the definition of CRA to turn on the relevant entity's subjective intentions is consistent with approaches of the Second Circuit and other courts of appeal to similar language in other statutes. In United States v. Tarantino , 617 Fed.Appx. 62 (2d Cir. 2015) (summary order), for example, the Second Circuit assessed the statutory prohibition on interception of communications "for the purpose of committing any criminal or tortious act," set forth in Title III of the Omnibus Crime Control and Safe Streets Act of 1968. 18 U.S.C. § 2511(2)(d) (emphasis added). The Court held that the defendant's associate did not violate that prohibition, even though he later used the recording at issue for blackmail, because "it is far from clear that blackmail was his 'primary motivation' or 'a determinative factor' at the time he made the recording." 617 Fed.Appx. at 65 ; see Caro v. Weintraub , 618 F.3d 94, 100 (2d Cir. 2010) (holding "that a cause of action under § 2511(2)(d) requires that the interceptor intend to commit a crime or tort independent of the act of recording itself" (emphasis added)); see also, e.g. , Van Hollen, Jr. v. Fed. Election Comm'n , 811 F.3d 486, 491, 497 (D.C. Cir. 2016) (upholding a Federal Election Commission regulation requiring disclosure of donations only if they were "made for the purpose of further electioneering communications," noting that the "purpose requirement" served to exclude those who donated without the requisite subjective intent); Ramos v. INS , 246 F.3d 1264, 1266 (9th Cir. 2001) (construing an immigration statute that precluded an applicant from establishing "good moral character" if he or she gave "false testimony for the purpose of obtaining benefits under this chapter" to require "subjective intent to deceive for the purpose of obtaining immigration benefits").
Conspicuously, Kidd fails to cite even one case holding that an entity's subjective intent is irrelevant to the question of whether it is a CRA under the FCRA.1 Instead, Kidd's principal statutory argument is that the Court should begin with the definition of "consumer report" and work backwards to determine if Thomson Reuters is a CRA. That is, Kidd argues that searches of CLEAR generate consumer reports because they are used (and, by extension, expected to be used), in at least some instances, for FCRA-regulated ends and that, whatever its subjective intent, Thomson Reuters is therefore a CRA because it assembles the information in CLEAR. (See Pl.'s Opp'n 1-4; see also id. at 12 ("The key inquiry in this case, therefore, is not whether Defendant thinks it's a CRA, but whether CLEAR reports are consumer reports.")). But that argument ignores the fact that information qualifies as a "consumer report" in the first instance only if it was communicated "by a consumer reporting agency." 15 U.S.C. § 1681a(d)(1) ; see also, e.g. , *406Sweet v. LinkedIn Corp. , No. 14-CV-04531 (PSG), 2015 WL 1744254, at *6 (N.D. Cal. Apr. 14, 2015) ("To meet the definition of a consumer report, a communication must be made 'by a consumer report[ing] agency.' "); FED. TRADE COMM'N , 40 YEARS OF EXPERIENCE WITH THE FAIR CREDIT REPORTING ACT , 2011 WL 3020575 (F.T.C.), at *13 (the "FTC 40 YEARS FCRA REPORT ") ("Information is not a 'consumer report' if the person furnishing the information is not a 'consumer reporting agency.' "). In addition, Kidd's construction would subject entities to coverage under the statute based solely on the intentions of isolated users , thereby reading the phrase "for the purpose of" out of the statute and violating the cardinal rule of statutory construction that courts should read statutes "so as to give effect, if possible, to every clause and word of a statute." In re Barnet , 737 F.3d 238, 247 (2d Cir. 2013) (internal quotation marks omitted).
The premise of Kidd's argument-that consumer information automatically qualifies as a "consumer report" if it is used for FCRA purposes-is also inconsistent with the views of the Federal Trade Commission ("FTC"), which are arguably entitled to deference (and, in any event, are compelling in their own right). See Skidmore v. Swift & Co. , 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944) ; see also Sweet , 2015 WL 1744254, at *5 n.59 (observing that the FTC 40 YEARS FCRA REPORT "provide[s] persuasive guidance from the agency charged with enforcing and interpreting the FCRA"). Specifically, the FTC has explained that "[i]f the entity supplying the report has taken reasonable steps to insure that the report is not used for [an FCRA-regulated] purpose, and if it neither knows of, nor can reasonably anticipate such use, the report should not be deemed a consumer report by virtue of uses beyond the entity's control." FTC 40 YEARS FCRA REPORT , 2011 WL 3020575, at *16 ; see also Commentary on the Fair Credit Reporting Act, 55 Fed. Reg. 18,804 (May 4, 1990) (noting that a publisher of public records information does not qualify as a CRA "simply because some" of the information "might be used by an occasional subscriber for purposes" within the scope of the FCRA); Fair Credit Reporting Act: Statements of General Policy or Interpretation, 53 Fed. Reg. 29,696, 29,697 (Aug. 8, 1988) (noting that "a claims reporting service should not be deemed a consumer reporting agency because of an occurrence beyond its control-a unilateral use decision by the insurer to which it provides a claims report"). "The entity supplying the report might establish that it does not reasonably anticipate" such misuse "by requiring the recipient to certify that the report will not be used to determine eligibility for a permissible purpose, by auditing report recipients for compliance, and by taking appropriate action against those who violate such certifications." FTC 40 YEARS FCRA REPORT , 2011 WL 3020575, at *16.
None of that is to say that an entity can avoid being treated as a CRA merely by declaring that its purpose is not to provide information for FCRA-regulated purposes. Put another way, disclaimers alone are not enough for an entity that otherwise qualifies as a CRA to avoid the reach of the statute. See, e.g. , Adams v. LexisNexis Risk & Info. Analytics Grp., Inc. , No. 08-CV-4708 (RMB) (KW), 2010 WL 1931135, at *7 n.6 (D.N.J. May 12, 2010) (holding that the defendant could not escape liability under the FCRA based solely on language accompanying its report stating that the "data is not permitted to be used" for FCRA purposes); see also Tony Rodriguez & Jessica Lyon, Background Screening Reports and the FCRA: Just Saying You're Not a Consumer Reporting Agency Isn't Enough , FTC BUSINESS BLOG (Jan. 10, 2013, 2:00 p.m.), https://www.ftc.gov/news-events/blogs/business-blog/2013/01/background-screening-reports-fcra-just-saying-youre-not *407("If a company meets the legal definition of a 'consumer reporting agency,' it's a consumer reporting agency. Including a disclaimer that says, in effect, 'But we're not a CRA!' won't change that.); see also id. (noting that a company that advertised access to "hundreds of thousands of criminal records" for the purpose of "conduct[ing] searches on potential employees as part of the hiring process" was a CRA despite a disclaimer stating that the information could not be used for FCRA-related purposes). Instead, a court must look to the totality of circumstances-in particular, to the actual "activities of [the] company"-to determine whether it regularly assembles information "for the purpose of regularly furnishing 'consumer reports' to third parties." FTC, Advisory Opinion to LeBlanc (June 9, 1998), available at http://www.ftc.gov/os/statutes/fcra/leblanc.shtm.
Here, the totality of the circumstances compels the Court to conclude that Thomson Reuters is not a CRA. That is, all of the evidence in the record demonstrates that Thomson Reuters "did not intend" the reports generated by CLEAR subscribers "to be credit reports." Liberi , 2012 WL 10919114, at *6. Indeed, Thomson Reuters takes affirmative steps-through both words and actions-at every stage of the customer acquisition, application, contracting, and support processes to ensure that subscribers are not using CLEAR for FCRA-regulated purposes. (See Def.'s SOF ¶¶ 21-68). For instance, it trains and tests its employees on prohibited uses for CLEAR, (id. ¶¶ 22-32); it includes admonitions and disclaimers on its marketing materials, (id. ¶¶ 33-38); it requires its subscribers to agree in writing to not use CLEAR for prohibited purposes, (id. ¶¶ 40-42); it mandates that all subscribers complete a certification process, (id. ¶¶ 45-51); it vets its customers before providing them access to the platform through a credentialing process, (id. ¶¶ 52-56); it requires all subscribers to verify the continuing accuracy of their certifications every two years, (id. ¶ 58); it instructs employees to report any misuse, (id. ¶¶ 62-64); and it sets out methodical remediation procedures to weed out those abusing the platform, (id. ¶¶ 62-68). By contrast, there is no evidence in the record that, in making the CLEAR platform available to its subscribers, Thomson Reuters assembled information on consumers with the subjective intention of supplying "consumer reports."
Kidd points to the fact that Thomson Reuters investigated forty-six instances of suspected subscriber misuse as evidence that the company knew that CLEAR would be used for FRCA purposes. (See Pl.'s Opp'n 10-11). That number, however, is miniscule when compared to the number of CLEAR subscribers (more than 80,000) and searches (more than 100,000 per day) (see Def.'s SOF ¶¶ 7, 13), and thus falls far short of establishing that Thomson Reuters "regularly" assembles information for the purpose of furnishing consumer reports to third parties, as required to fall within the definition of a CRA. 15 U.S.C. § 1681a(f) ; see, e.g. , Rugg v. HANAC Inc. , No. 01-CV-9481 (BSJ), 2002 WL 31132883, at *3 (S.D.N.Y. Sept. 26, 2002) (concluding that "isolated instances" of investigations being used for employment purposes cannot form the basis of a claim that an entity "regularly engages" in FCRA-covered conduct); Johnson v. Fed. Express Corp. , 147 F.Supp.2d 1268, 1275 (M.D. Ala. 2001) (construing the term "regularly engages" to require that an entity "provide consumer reports as part of [its] usual, customary, and general course of business if [it] is to qualify as a 'consumer reporting agency' under the FCRA"). Moreover, in every instance of suspected misuse, Thomson Reuters investigated the conduct and either found no actual abuse or took some *408form of remedial action. (Def.'s SOF ¶¶ 64, 68). Far from supporting Kidd's argument, therefore, this evidence supports the conclusion that Thomson Reuters has taken meaningful steps to prevent-and thus does not intend-the use of its platform for FCRA-regulated purposes. See Liberi , 2012 WL 10919114, at *7 ("Here, Plaintiffs' own evidence confirms that Intelius did not intend the Background Reports to be governed by the FCRA.").
Finally, Kidd cites a statement by Thomson Reuters in a single CLEAR marketing brochure-namely, that subscribers can use the platform to "investigate potential clients, employees and other parties," (Docket No. 58, Ex. K)-as evidence that the company subjectively intended for CLEAR to be used for FCRA-regulated purposes. (See Pl's Opp'n 5, 10, 18, 23). In doing so, however, Kidd takes the statement out of context. The very next sentence of the brochure states that CLEAR "shows graphical connections between people, addresses, and phone numbers to help you verify a person's identity ," (Docket No. 58, Ex. K (emphasis added)), a purpose that does not fall within the scope of the FCRA. See 15 U.S.C. § 1681a(d)(1) ; see also FED. TRADE COMM'N, DATA BROKERS: A CALL FOR TRANSPARENCY AND ACCOUNTABILITY 53 (2014) (distinguishing between FCRA-regulated products and products intended merely "to confirm [an individual's] identity"), available at https://www.ftc.gov/system/files/documents/reports/data-brokers-call-transparency-accountability-report-federal-trade-commission-may-2014/140527databrokerreport.pdf. Additionally, at its bottom, the brochure states that "[t]he data provided to you by CLEAR may not be used as a factor in establishing a consumer's eligibility for ... employment purposes or for any other purpose authorized under the FCRA." (Docket No. 58, Ex. K). In the face of the many controls Thomson Reuters has put in place to ensure that CLEAR is not used for any FCRA-regulated purposes, no reasonable jury could rely on that one document (of the hundreds of marketing materials in the record, no less) to find that the company "regularly" assembles information "for the purpose" of providing "consumer reports" to third parties. It follows that Thomson Reuters is not a CRA and is entitled to summary judgment on all of Kidd's claims.
CONCLUSION
For the foregoing reasons, Thomson Reuters's motion for summary judgment is GRANTED, and all of Kidd's claims are dismissed.2 One issue remains: Both parties' submitted briefs or exhibits that were either under seal or partially redacted. (See Docket Nos. 52, 59). Upon review, the Court finds that Docket Nos. 51-2 through 51-4 are "proprietary, confidential, and commercially sensitive internal training materials" of Thomson Reuters, (Docket No. 52), and, thus, may remain under seal. See, e.g. , Tropical Sails Corp. v. Yext, Inc. , No. 14-CV-7582 (JFK), 2016 WL 1451548, at *4 (S.D.N.Y. Apr. 12, 2016) (granting a motion to redact documents "relating to marketing and business development activities [such] as sales training materials, internal marketing strategies, company marketing plans, and internal emails regarding marketing tests"). To the extent that either party believes that other papers should remain sealed or redacted, however, counsel shall file a letter brief, not to exceed five pages, within two weeks of this Opinion and Order , addressing the propriety of doing so. See, e.g. , Lugosch v. Pyramid Co. of Onondaga , 435 F.3d 110, 119-20 (2d Cir. 2006) (discussing the presumption in favor of public access); see *409also, e.g. , United States v. Wells Fargo Bank N.A. , No. 12-CV-7527 (JMF), 2015 WL 3999074, at *4 (S.D.N.Y. June 30, 2015) ("[T]he mere fact that information is subject to a confidentiality agreement between litigants is not a valid basis to overcome the presumption in favor of public access to judicial documents." (citing cases)). If no party files a brief justifying the maintenance of a particular document in sealed or redacted form, the relevant party shall publicly file an unredacted version of the document on ECF within two business days of the letter-brief deadline.
The Clerk of Court is directed to terminate Docket Nos. 47 and 65 and to close the case.
SO ORDERED.
In a supplemental submission, Kidd noted a recent decision by the United States District Court for the District of New Hampshire denying a motion by Thomson Reuters to dismiss claims under the FCRA. (Docket No. 74 (citing Landry v. Time Warner Cable, Inc., & Thompson Reuters Corp. , No. 16-CV-507 (SM), 2017 WL 3444825 (D.N.H. Aug. 9, 2017) ). That decision has no relevance here, however, as it did not address the statutory definition of CRA, let alone whether there is evidence to conclude that Thomson Reuters meets the definition (perhaps because, arising on a motion to dismiss, the Court was obliged to accept as true the facts alleged in the complaint). See 2017 WL 3444825, at *1-3.
The Court need not, and does not, reach Defendant's motion to preclude Plaintiff's proposed expert witness, Brian H. Kleiner. (Docket No. 65).
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07-25-2022
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https://www.courtlistener.com/api/rest/v3/opinions/4073721/
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ACCEPTED
04-15-00090-CR
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
9/25/2015 11:43:40 AM
KEITH HOTTLE
CLERK
No. 04-15-00090-CR
FILED IN
4th COURT OF APPEALS
IN THE FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS
AT SAN ANTONIO, TEXAS 09/25/15 11:43:40 AM
KEITH E. HOTTLE
Clerk
ANTHONY ALEX DELEON
Defendant – Appellant
vs.
THE STATE OF TEXAS
Plaintiff – Appellee
On Appeal from the 25th District Court
of Guadalupe County, Texas
Hon. Dan Beck Presiding
Trial Court Cause No. 13-1992-CR-B
APPELLANT’S PRO SE MOTION
FOR ACCESS TO APPELLATE RECORD
TO THE HONORABLE FOURTH COURT OF APPEALS:
Appellant Anthony Alex Deleon’s court-appointed attorney has filed
Appellant’s Brief pursuant to Anders v. California, 386 U.S. 738 (1967).
Appellant asks this court to provide him access to the appellate record so
that he may review the record in drafting his pro se brief explaining what
issues he thinks may be raised in this appeal.
WHEREFORE, PREMISES CONSIDERED, appellant ANTHONY
ALEX DELEON prays that after review of this motion and any response
filed by the State of Texas, this court grant this motion and grant Mr. Deleon
pro se access to the appellate record in this appeal.
Respectfully submitted,
Anthony Alex Deleon, Appellant
TDCJ # 1985117
Garza East Unit
4304 Highway 202
Beeville, Texas 78102-8981
Certificate of Service
I hereby certify that a true copy of this document was served by first
class U.S. mail upon the 25 th Judicial District Attorney’s Office, 211 W.
Court Street, Suite 260, Seguin, Texas 78155 on , 2015.
Certification of Compliance
According to the WordPerfect program used to create this document,
there are 236 words in this document.
2
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01-03-2023
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09-30-2016
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I respectfully dissent.
I. For a long time the legislature of this state has been endeavoring to make a tax deed, regular on its face, unassailable for procedural defects which do not relate to essential prerequisites. Section 7287, Code of 1939, makes a tax deed presumptive evidence that the property was subject to taxation, that the taxes were not paid, that there had been no redemption, that the property had been listed and assessed, that the taxes were levied, that the property was duly advertised for sale, and that the property was sold for taxes as stated in the deed. Section 7288 makes a tax deed conclusive evidence that the listing, assessment, levy, notice and sale were all conducted as by law directed, that the grantee was the purchaser, and states, in paragraph 3:
"That all the prerequisites of the law were complied with by all the officers who had, or whose duty it was to have had, any part or action in any transaction relating to or affecting *Page 590
the title conveyed or purporting to be conveyed by the deed, from the listing and valuation of the property up to the execution of the deed, both inclusive, and that all things whatsoever required by law to make a good and valid sale and to vest the title in the purchaser were done, except in regard to the points named in section 7287 wherein the deed shall be presumptive evidence only."
These statutes have had an interesting history. Some of the provisions in the presumptive statute were, in earlier Codes, contained in the conclusive statute. See section 784, Revision of 1860; section 897, Code of 1873. Changes in the statutes occurred after interpretive decisions of this court. Without delving deeply into this history, I merely wish to point out the governing principle that should, I feel, guide our interpretation and application of these statutes. The principles are well stated in the opinions in Allen v. Armstrong, 16 Iowa 508, 513, and McCready v. Sexton Son, 29 Iowa 356, 4 Am. Rep. 214. In the Allen case we pointed out that the state's taxing power carried with it the power to take property in default of taxes and to enact laws to make minor matters "in regard to the mode or manner
of exercising the power which may be dispensed with * * * presumed from certain evidence, or certain other facts." And we further stated:
"We state the principle which must be legally and logically true, in this wise: If any given step or matter in the exercise of the power to tax (as for example the fact of a levy by the proper authority), is so indispensable, that without its performance no tax can be raised; then that step or matter, whatever it may be, cannot be dispensed with, and with respect tothat the owner cannot be concluded from showing the truth, by a mere legislative declaration to that effect."
It seems to me that our question here is to determine whether the report provided in section 7287 is "so indispensable" that it "cannot be dispensed with" and the owner "cannot be concluded from showing the truth." If it is not an indispensable step, then quite clearly, it is within the provisions of paragraph 3 of section 7288. The duty imposed by section 7283 is that: *Page 591
"The treasurer shall, upon the filing of proof of service and statement of costs, forthwith report the same in writing to the auditor, who shall enter it on the sale book against the proper tract of real estate."
It seems to me that such a report of service made and costs incurred should not be made essential to the validity of the deed. The report would be a necessary step to enable a proper redemption, for otherwise the auditor would not know the amount of costs necessary for redemption. We have no situation here such as the one that confronted the court in Ashenfelter v. Seiling,141 Iowa 512, 119 N.W. 984, the first case cited in the majority opinion. There no notice was served upon the party occupying the premises, and no report or statement of service of any notice was given by the treasurer to the auditor. Certain lienholders went to the auditor's office and redeemed, "receiving the usual certificate of redemption." The next day the holder of the tax certificate demanded a deed and the treasurer executed and delivered it to him. Of course, the deed is never conclusive evidence "That the real property conveyed had not been redeemed from the sale at the date of the deed." Section 7287 (3), Code of 1939.
The court did not hold that a person duly served with notice of expiration of redemption could redeem after tax deed had issued, after the redemptionary period, because of the treasurer's failure to report to the auditor. The court held that a valid redemption had been made before the deed issued, stating, at page 516 of 141 Iowa, page 985 of 119 N.W.:
"* * * the statute makes it the duty of the treasurer, when return of service of notice is made to him, to forthwith make written report thereof to the auditor, and we think it follows of necessity that until this is done the auditor is justified in assuming that the right of redemption has not expired, and may rightfully receive redemption at the hands of the owner or lienholder; at least from such redemptioners as have not been personally served with notice in due time."
But this opinion was cited in the two later cases, Geil v. Babb, 214 Iowa 263, 242 N.W. 34, and Huiskamp v. Breen, *Page 592 220 Iowa 29, 32, 260 N.W. 70, 72, as authority for the rule that a tax deed issued without the treasurer's report to the auditor is invalid and the right to redeem is not cut off. There is not much discussion about it in Geil v. Babb, supra, and in both cases other statutes were involved. In the Huiskamp case there is a quotation from the Ashenfelter case and an announcement that in Geil v. Babb we held that compliance with section 7283 is "jurisdictional in order for the treasurer to issue a deed."
The statements in these later cases all stem from language in the Ashenfelter opinion. I think the foundation does not support such statements and a reasonable interpretation of the two statutes should compel their repudiation. The redemptioners were served with notice of the expiration of the period of redemption. They were not harmed by the failure of one county official to report to another county official concerning the costs or even the expiration date.
Section 7288 is in the nature of a legalizing act. The purpose is clear. It is to make a tax deed valid and conclusive as to prior proceedings in the steps between property assessment and property transfer for nonpayment of the tax. True, as was said in the Ashenfelter case, this report was one of the duties of the officers. Indeed, we there called it a mandatory duty (as to the treasurer) but this does not mean it was an essential step between assessment and sale. Would this court hold that if this law had never been passed there could be no valid sale for taxes? I think not.
II. The majority opinion is based upon the conclusion that the treasurer did not make the report required under section 7283, Code of 1939, and it was not entered on the sale book in the auditor's office. The treasurer did not testify. When the auditor was asked if the treasurer "gave a written notice of the filing of the proof of service and the statement of costs to the county auditor," he stated, "There was none filed in my office." A page of the auditor's sale book was introduced in evidence showing items of cost of serving notice entered in the book with respect to this property and the auditor testified such items came from the treasurer's office. He stated he had the record of cost of serving the notice before the tax deed was issued. The record also showed the tax deed was issued on October 26, 1937. *Page 593
The very fact that the record showed the cost of serving the notice would prove that the auditor received some information by way of report or otherwise from the treasurer's office.
It seems to me that the record here indicates the wisdom of the legislative provision making the tax deed conclusive proof of the performance of duties by the county officials, or paragraph 3 of section 7288, Code of 1939. Section 7283 is somewhat vague. The treasurer is told to "forthwith report." What is he to report? He is to report "the same," referring back to the "proof of service and statement of costs." Then the auditor is to enter "it" on the sale book against the real estate. Is he to enter the treasurer's written report? Is he to enter the costs and the proof of service which the report shows? It seems to me perfectly obvious that the statute was enacted for the benefit of the certificate holder to enable him to recover the costs he had incurred in the event there is redemption after he has had the notice served but before the expiration of the ninety days. This is manifest by the succeeding sentences of the statute (7283), providing:
"The holder of the certificate of sale or his agent may report in writing to the county auditor the amount of costs incurred in giving such notice, and the auditor shall enter the same in the sale book. No redemption shall be complete until such costs are paid."
It would seem that the certificate holder could give the same report if the treasurer failed. The important thing that is stressed in the statute is "the costs." There is no evidence here that the certificate holder did not report in writing. Here the auditor did enter the costs, which item came from the treasurer's office. I think it illogical to hold that the owner can argue that there was not strict compliance with a statute enacted for the benefit of the certificate holder, and thus upset a tax deed which is presumed to be conclusive upon the matters set forth in section 7288.
I would reverse. *Page 594
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07-05-2016
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Defendants Madsen ("Madsen Motor Company") and Bird ("Tri-State Motor Company") are used-car dealers in Sioux City, Iowa. Plaintiff has lived at Onawa, Iowa, for twenty-eight years and describes himself as "engaged in * * * farming, ranching and rodeoing." He bought this Buick car in question at Gibbon, Nebraska, the last of May 1948 for $2500 and received a "certificate of title" a couple of weeks later, issued by the state of Nebraska. He says he bought the car "for the purpose of selling it again."
He first met defendant Madsen June 21 or 22. After some negotiations he agreed to sell the car for $2275. He knew Madsen was in the business of buying and selling used cars. He delivered the car to Madsen at Onawa in the evening and at the same time took Madsen's check, dated June 22, 1948, on a Sioux City bank, for the agreed price. He testifies he told Madsen: "I will keep the title, and I will pin the title to the check and if the check clears, you can have the car."
The next morning he went to Sioux City and presented the check with the "title" attached. The bank refused payment because Madsen "didn't have no money there." Plaintiff then went to Madsen's used-car lot and Madsen said to leave the check and the "title" at the bank "and the money would be there that afternoon; that his finance company hadn't got around to put the money in there for him."
The next day, June 24, the money still was not there and plaintiff again hunted up Madsen who told him "the money will sure be there tomorrow." This process was repeated the following day and plaintiff demanded the car. Madsen said to him: "Well, no use to take the car; the money will be there by tomorrow at eleven o'clock." Madsen gave him $300 and said: "If the money isn't there at eleven o'clock tomorrow, I will give you the car and the money both." Madsen had already given defendant Bird the bill of sale hereinafter referred to.
When the money to redeem the check was not deposited and Madsen failed to meet plaintiff as he agreed to do when *Page 534
phoned plaintiff went to his attorney. They at once visited Madsen who informed them the car was parked in Noltze's garage. This action was then commenced and the car taken.
In the meantime, according to defendant Bird's testimony, on June 24 he and Madsen who had dealt with each other for two years "in buying cars" made a purported exchange of cars whereby Madsen gave Bird a bill of sale of the Buick car ("to Tri-State Motors") and received in exchange Bird's $1700 check (signed "Tri-State Motor Company") and was also to receive a Dodge car, "worth about $200, maybe $250." The check bore the notation "Dif. on 36 Dodge for 1946 Buick." The Dodge car was never delivered. The bill of sale had written on it, "Title to be delivered today." The check was dated June 24, 1948, the bill of sale was undated but bore a notary public jurat ("subscribed and sworn to") dated June 25.
Defendant Triptew, an employee of defendant Noltze Motor Company engaged in selling cars, was present at appellant's place of business, witnessed the bill of sale and wrote the $1700 check for Bird. He too had had dealings with defendant Madsen "during the past few years." He testifies: "Where it [the bill of sale] says, `Title to be delivered today,' that was in accordance withour understanding." (Italics supplied.)
The bill of sale is clear and unconditional on its face but Bird testifies: "After I bought the car and got the bill of sale from Mr. Madsen, he said that he might want to buy the car back, and I made a written agreement * * * which gave him the right to buy the car back for $1750 within ten days." This curious document is in the record: "This is to sertifi that Leo can have 46 Buick back for $1750 in 10 days from date." It is signed: "Chris Triptew by John Bird," and dated July 1, 1948.
More details of the evidence may be supplied as we discuss the legal questions involved. All testimony is undisputed as Madsen (the only one who could contradict either party) though he filed an answer (not shown in record) and was represented by counsel at the trial failed to appear in person and could not be found to be served with subpoena. Plaintiff's attorney offered to state what he expected to prove by the absent party if defendants would admit the witness would so testify if present. The *Page 535
offer was rejected by defendant Bird's attorney. Madsen's attorney added this significant comment: "Your Honor, as his attorney I doubt very much whether you would get any kind of testimony for reasons that whatever testimony he might give might incriminate him. Of course, that would have to come from himself."
The trial court made findings of fact to the effect: (1) That title never passed from plaintiff to Madsen (2) that plaintiff was not estopped to assert his title, and (3) that defendant Bird was not a purchaser in good faith and for value.
Judgment was rendered for plaintiff against all defendants. Only defendant Bird has appealed. He predicates error upon the three findings above stated.
[1] I. Did title pass from plaintiff to Madsen? Appellant bases his whole argument at this point on the proposition that in Iowa the statute requiring transfer of the certificate of registration "has no reference to the question of transfer of title as between buyer and seller," citing Garuba v. Yorkshire Ins. Co., 233 Iowa 579,9 N.W.2d 817, and Union Bk. Tr. Co. v. Willey, 237 Iowa 1250,24 N.W.2d 796. These cases correctly hold that failure of the parties to comply with our statute requiring transfer of registration certificate does not invalidate a sale.
[2] The argument assumes that the "title" which plaintiff here retained and pinned to the check corresponds in legal effect to the Iowa "certificate of registration." We are not in a position properly to appraise this assumption as we do not have the instrument before us, nor is the Nebraska statute shown. We are of course familiar with the rule that the law of a sister state upon a given proposition is presumed to be the same as our own in absence of proof to the contrary. Pfeffer v. Corey, 211 Iowa 203, 233 N.W. 126; In re Estate of Warner, 209 Iowa 948, 229 N.W. 241. But this rule may not require us to presume that what the witness refers to as "a certificate of title * * * issued by the state of Nebraska" is the same as "a certificate of registration" under our statute, sections 321.67 and 321.45.
[3] We need not pass on the correctness of appellant's assumption. His argument ignores another and controlling *Page 536
circumstance — the fact that plaintiff, though he gave up possession of the car, expressly retained title which was not to pass unless "the check clears." "If the check cleared, he could have the car, but otherwise it was my car of course at all times." We think the term "title" referred not merely to the written certificate of title but to the legal title itself. The parties practically treated the certificate as a symbol representing the legal title. Plaintiff so treated it and there is no suggestion that Madsen did not so understand it. He apparently acquiesced. The "title" was to be attached to the check to be delivered if the check cleared.
As between plaintiff and Madsen there was a clear withholding of transfer of legal title, regardless of any consideration as to whether the Nebraska "certificate of title" is or is not the legal equivalent to the Iowa "certificate of registration."
In Crescent Chevrolet Co. v. Lewis, 230 Iowa 1074, 1077,300 N.W. 260, 262, we held, on authority of Gray Bros. v. Otto,178 Iowa 854, 160 N.W. 293, that acceptance of a check in payment for personal property, sold for cash but delivered to the purchaser at the time the check is delivered by him, "is tentative only and conditioned that the check be honored in due course. If the check be dishonored, title to the property does not pass, as between the parties and subsequent takers with notice of the vendor's equities." See also 46 Am. Jur., Sales, section 446, page 612, note 19; 55 C.J., Sales, 567, section 577 (c).
As between plaintiff and Madsen the instant case is much stronger. It is not dependent alone on failure of the check to clear. There was in effect an express agreement that title would only pass upon payment of the check.
[4] II. Is plaintiff by his conduct estopped to repossess the car in this action? Or more accurately, does the trial court's decision that he is not estopped find sufficient support in the record? We must remember there is here no trial de novo. The trial court's findings have the status of a jury verdict.
Plaintiff did allow Madsen to take possession of the car. Appellant argues there were other "indicia of title" because plaintiff knew Madsen was a used-car dealer, buying for the purpose of resale and, knowing this, unduly delayed commencing *Page 537
action after payment of the check was first refused; also because during this delay he accepted a payment of $300 from Madsen.
The record however shows appellant relied solely on the fact of Madsen's possession. "I relied upon his word and the fact that he had the car with him * * *." There is no evidence he knew or relied on the other circumstances, even assuming they would add any strength to the bare fact of possession. He did not know where or when or from whom Madsen procured the car. He says he did not ask. His deal was only the next day after payment of Madsen's check was first refused and was the same day or the day before Madsen gave plaintiff the $300 to keep in addition to the car itself if the check was not redeemed by eleven o'clock the next day. Appellant's check may even have been the source of the $300 payment. The conveniently present Triptew (who was salesman for another dealer and not "in on this deal") testifies as appellant's witness:
"When we [used-car dealers] buy cars from another dealer we want him to have possession of the car and want him to tell that he is going to give title and that was done in this case. This car bore dealer's registration numbers in Nebraska. Neither I nor Mr. Bird asked Madsen where the car came from; it was none of my business. I didn't ask him, and it was not mentioned." Appellant says: "I didn't ask Madsen where he bought the car."
Whether, in a case such as this, possession alone, relied on by an innocent purchaser, is sufficient to support a claim of estoppel is a question upon which there is little if any conflict. Our own decision in Crescent Chevrolet Co. v. Lewis, supra, does not hold mere possession sufficient. In that case plaintiff had delivered to defendant's mortgagor not alone possession of the car but also an invoice which itemized the various charges making up its purchase price. Beneath this was shown the total sale price, $672, and below that the words "check $672." The plain inference was that the check was accepted in payment and we held the plaintiff was estopped to claim title against defendant, an innocent purchaser or mortgagee.
The opinion in that case cites the annotation in 31 A.L.R. *Page 538
578 to the proposition. The pertinent part of the annotation commences on page 581, under IIa. In every case therein cited as supporting the right of the innocent purchaser to retain the property, it appears there were some indicia of title other than mere possession — indicia having some quality of negotiability, e.g., bill of lading or warehouse receipt, or order on a bailee to deliver. The same is practically true as to cases cited in similar annotations in 13 L.R.A., N.S., 697, 29 L.R.A., N.S., 709, and 47 L.R.A., N.S., 173; and in support of text, 46 Am. Jur., Sales, section 478. We find no case where title was retained in which it has been held that mere delivery of possession was sufficient to clothe the vendee with such indicium of title as to protect an innocent purchaser from the original vendor's right to repossess. See 55 C.J., Sales, 632, section 651 (2), Effect of Possession.
In Young v. Harris-Cortner Co., 152 Tenn. 15, 26, 28,268 S.W. 125, 128, 54 A.L.R. 516, 521, 522, the question is thoroughly discussed and disposed of. The Tennessee court quotes Williston on Contracts, page 718:
"Although intrusting possession to another may lead an innocent third person to believe the possessor is the owner, no court has ever gone so far as to hold that the mere intrusting with possession would preclude the owner from asserting his title. It is an entirely proper thing for the owner of property to intrust another with it either for the advantage of the owner or of the possessor, and the law has never attempted to debar the owner from so doing."
The opinion further quotes Williston as saying that possession intrusted to one who habitually sells such goods does not necessarily invest him with apparent ownership so as to protect an innocent purchaser.
The Tennessee court concludes:
"It is possession coupled with indicia of title that estops the true owner from asserting claim to the goods.
"We have been unable to find a single decision which holds that, where there is no other fact or circumstance that might *Page 539
mislead further than the fact of possession, a purchaser of the goods would be protected against the true owner."
There is no merit in the suggestion that plaintiff here was guilty of any laches or negligence in asserting his claim. The action was commenced June 28. The check was presented promptly. Action was brought within a few days. Plaintiff could not well be criticized for not commencing it sooner. We think there was no estoppel and the trial court correctly so held.
[5] III. Whether appellant was an innocent purchaser for value is a question quite inseparable from that of estoppel and necessary to its existence. What we have heretofore said was on the assumption that appellant was such innocent purchaser. However, the trial court found he was not.
The testimony of appellant and his witness, Triptew, furnishes all the light we have on the question. According to appellant, Madsen had the car at his (appellant's) place of business. They were ostensible competitors. Instead of leaving it there after he dealt with Madsen, appellant took the car "over to Noltze's Garage," the place of business of another competitor. The car remained there until taken under the replevin writ.
Appellant's check was dated June 24 and he says it was cashed the same day. The bill of sale, which he says was delivered with the check, was not "subscribed and sworn to" before the notary public until June 25. And yet, according to appellant the notary was present when the deal was consummated. The discrepancy in dates is not explained. The instrument contained the unusual notation "Title to be delivered today," indicating perhaps a suspicious need for haste in completing the transaction.
The memorandum by which appellant agreed to sell the car back to Madsen for a $50 profit "within 10 days" was dated July 1, two days after this action was commenced, and seven days after the date of appellant's check to Madsen, though in his testimony appellant gives the impression it was practically a part of the same transaction. There is no explanation of this circumstance or of appellant's failure to deliver the Dodge car.
The Buick bore Nebraska dealer's number plates but appellant says he trusted Madsen to deliver him the title certificate *Page 540
later. "Before the car could be licensed in Iowa, the Nebraska title certificate would have to be surrendered, but I didn't have to do that because I could use a Nebraska title because I have a Nebraska dealer's license too."
The burden was on appellant to establish his status as an innocent purchaser without notice. Starr v. Stevenson, 91 Iowa 684, 60 N.W. 217; Wallich v. Sandlovich, 111 Neb. 318, 196 N.W. 317. The trial court, with the witnesses before it, has held the burden was not carried. The circumstances and the apparently close business relationship of the defendants with each other were such as to make collusion easy and direct proof of it difficult.
Appellant made no inquiry of Madsen when the slightest investigation would have revealed plaintiff's ownership of the car. The car still bore Nebraska plates and no effort was made to find out whence and from whom Madsen obtained it. It almost seems there was a studied effort to avoid asking Madsen embarrassing questions under circumstances well calculated to arouse suspicion. The trial court was justified in entertaining a measure of incredulity under the circumstances, and in holding appellant had not proven he was an innocent purchaser. At least we cannot say the holding was without support.
From what has been said it is apparent the decision of the trial court should be affirmed. It is so ordered. — Affirmed.
All JUSTICES concur. *Page 541
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The pleadings in this case are prolix by reason of the number of parties involved as defendants and cross petitioners, but the issues, however, are well defined. The legal problem for solution presents the question of priority of the claimed mortgage liens on the real estate in controversy. The approach to the facts and issues should be through the avenue of title and the mortgages as disclosed by the instant record. It may be visualized as follows:
In 1921, John F. Haidsiak (not a party here) as legal titleholder of the N 1/2 of SE 1/4 and the E. 60 acres of the S 1/2 of NE 1/4 Sec. 8-68-34, Taylor County, Iowa, executed a mortgage for $9000 on the land aforesaid to the Citizens State Bank. This mortgage was duly recorded May 20, 1921. The written assignment of said mortgage to the First Trust Savings Bank of Chicago was duly recorded May 18, 1921. This mortgage remained of record at all times material to the transactions presently noted. On November 11, 1924, John F. Haidsiak and wife Anna conveyed to the defendants J.S. Stephens and F.E. Payton the above described land consisting of 140 acres, together with N 1/2 of SE 1/4 Sec. 9-68-34, Taylor County, Iowa, or total area of 180 acres. This deed was duly recorded March 2, 1925, *Page 1066
and the consideration as stated in the deed "consists of mortgages of record and unpaid interest aggregating $21,827.45 which includes a mortgage of $6,832.08 and unpaid interest thereon which grantees herein assume and agree to pay and cancel of record as part of the purchase price of said premises and to accept the same subject to the remaining mortgages of record." Apparently the grantees (Stephens and Payton) assumed only a mortgage for $6,832.08 and took the land subject to the remaining mortgages. It would seem from the record that in some way or other this mortgage indebtedness was all discharged, except a mortgage for $9000 held by the First Trust and Savings Bank, heretofore mentioned.
On the same date, to wit, March 2, 1925, the defendants F.E. Payton and his wife Nellie conveyed the said 180 acres by quit claim deed to the defendant J.S. Stephens for a recited consideration of $1.00 and other consideration. This deed was duly recorded March 6, 1925. The record discloses that it was understood between said parties to the quitclaim deed that the defendant Stephens would mortgage the premises to Payton to secure two notes, one for $12,000 and one for $2000, the former note being the one declared upon by plaintiff in this suit.
On March 18, 1925, the defendant Stephens (single) did execute a mortgage of $14,000 to the defendant F.E. Payton on the real estate here involved, to wit, 180 acres to secure the two notes above mentioned. Both notes were executed at the same time and had the same date of maturity. This mortgage was duly recorded of record March 19, 1925. On January 26, 1926, the defendant Stephens conveyed by warranty deed the said land to defendant Silas Pullen for a "consideration of $1.00 and other consideration." This deed was duly recorded at 4 P.M. on February 21, 1927. At this point it may be stated that the grantee Pullen was merely a "straw man" in this particular transaction for the purpose of making application and securing a loan from the defendant and cross petitioner Aetna Life Insurance Company. This deed was not produced upon the trial. Stephens testified that this deed when delivered was to Payton as grantee. The trial court so found. The insertion of Pullen's name in this deed was one further evidence of crookedness on the part of Payton.
On February 8, 1927, Silas Pullen and wife Florence, executed *Page 1067
a note secured by a mortgage of $9500 to the Aetna Life Insurance Company on the 180 acres hereinbefore described. The Aetna was ignorant of any connivance between Payton and Pullen in this matter. This mortgage was duly recorded at 4:10 P.M. on February 21, 1927.
On February 26, 1927, the defendant Payton entered on the marginal record of the $14,000 mortgage a junior and inferior agreement, reading as follows: "This is to certify that the within mortgage is junior and inferior to a certain mortgage made by Silas Pullen and wife to the Aetna Life Insurance Company, said mortgage dated February 8, 1927." This marginal record entry was signed by F.E. Payton and witnessed by Richard Campbell, Recorder of Taylor County, Iowa.
On February 18, 1927, a release was executed by the First Trust Savings Bank to John F. Haidsiak and wife Anna of the mortgage assigned to said bank and said release was filed of record February 26, 1927. This release covered the 140 acres heretofore described, which was mortgaged by Haidsiak to the Citizens State Bank and in writing assigned to the First Trust Savings Bank.
The plaintiff-appellant Templeton purchased the $12,000 note secured by the mortgage deed executed by Stephens to Payton, which mortgage was in the sum of $14,000. The assignment of the mortgage to Templeton was not recorded by him for the reason as stated by him that he "would not be bothered by crooked tax collectors." The $2000 note, also secured by the mortgage of $14,000 aforesaid, was sold by Payton to the defendant and cross petitioner Matilda Cobb with a written guaranty by Payton to Matilda Cobb that Payton would pay the same, if not paid at maturity by the mortgagor Stephens.
By way of brief summary of the record it may be said that at the time the negotiations were had with the Aetna Life Insurance Company, the defendant Silas Pullen was the record titleholder of the 180 acres of land in controversy; that the First Trust and Savings Bank of Chicago then had a first mortgage of record for $9000 on 140 acres of the land in controversy; that the defendant F.E. Payton held a duly recorded second mortgage of $14,000 that secured the two notes, one of which was held by Templeton and the other by Matilda Cobb, in the sums of $12,000 and $2,000 respectively; that the application *Page 1068
of Silas Pullen to the Aetna Life Insurance Company for a loan was made about November 1, 1926, and said application was forwarded by Payton to said Company on that date together with a letter from Payton stating that the money would be required to take up the $9000 mortgage held by the First Trust Savings Bank, when it matured December 1, 1926; that altho Pullen applied for a loan of $12,000, the Aetna Life, after it had sent its representative to examine the land, approved a loan in the sum of $9500; that on February 7, 1927, the Aetna Life sent $9500 to Payton Co., the amount of the approved loan, together with the mortgage to be executed by Pullen and wife; that there was also sent an abstract of title to the land and an opinion of one Judge Porter as to the title shown by the abstract in which opinion the title examiner required the satisfaction of the $9000 loan held by the First Trust and Savings Bank and the $14,000 Stephens mortgage; that on February 8, 1927, Payton used $9,451 of the said loan of the Aetna Life to satisfy the mortgage held by the First Trust and Savings Bank; that in September, 1926, the plaintiff Templeton knew that the $14,000 Stephens mortgage was a second mortgage and always had been a second mortgage; that plaintiff Templeton held a promissory note of $12,000 secured by the Stephens mortgage and that Matilda Cobb held a note of $2000 secured by the same mortgage; that plaintiff Templeton, altho he had received from Payton a written assignment of the mortgage, purposely refused to have said mortgage recorded; that Templeton always looked to Payton and depended on him with reference to the payment of interest and principal, not only on the mortgage in question, but also on mortgages running into many thousands of dollars, which Payton handled for Templeton in a similar manner; that Templeton sent the Stephens note and mortgage to Payton about February 1927, by reason of the fact that Payton had written Templeton that there was a first mortgage of $9000 on the land and that Payton wanted the Stephens papers, and Templeton sent them to Payton "so he could release the Stephens mortgage and put a new loan on the land, and on substantially the same date he did put a mortgage on the land to the Aetna Life Insurance Company for $9500"; that Payton was the local correspondent of the Aetna Life Insurance Company, but his powers as such, were limited; that when an application for a loan was made, the Aetna Life *Page 1069
sent its own loan agent to examine the farm and report and recommend the amount of the loan to be made; that the loan could not be approved by Payton; that the abstracts of title were examined by counsel for the Aetna Life; that Payton received no pay from the Aetna Life in this matter; that the notes and mortgages were not drawn by Payton; that Payton knew that a more advantageous loan could be had if the owners resided on the land, and Payton wrote Pullen's name in the deed with Pullen's consent and consequently Pullen made the application to the Aetna Life; that Payton was Templeton's agent and knew of the assignment of the $14,000 mortgage he had made to Templeton; that this matter was not disclosed by Payton to the Aetna Life and Templeton did not record his assignment; that the Aetna Life had no notice of the interest of Templeton or of Mrs. Cobb in the $14,000 mortgage; that the Stephens note and mortgage were sent back by Templeton to Payton to borrow more money on the land; that Templeton told Payton "to make any change he wanted, but a change for the better"; that Templeton was later informed of what had been done, but made no denial of Payton's authority; that as to Templeton there can be no question of the authority of Payton to execute the "junior and inferior" agreement; that Templeton has no standing to complain that instead of releasing his mortgage, Payton merely subordinated it to the mortgage of the Aetna Life Company; Payton was the mortgagee and on the face of the record was the owner of the mortgage; that Payton, the record owner of the mortgage, represented to the Aetna Company that the conveyance by Stephens was to Pullen, and that Pullen was the owner of the land; that Payton procured the Aetna Company to make the loan to Pullen on that representation; that it was understood and required that the loan to be made by the Aetna Company should be a first lien; that the Aetna Company relied upon the representations and the acts of Payton, and under the facts, had the right to so rely; that neither Templeton nor Mrs. Cobb recorded their respective assignments; that the Aetna Company acted in good faith.
In the light of the record title and the matters herein stated, let us turn for a moment to the material portions of the decree entered in this cause. The trial court found and determined that the defendant and cross petitioner Matilda Cobb should *Page 1070
have judgment against the defendant Stephens for the sum of $2,188.77 with interest, and that said judgment shall be a valid first lien on the 40 acres, described as the SW 1/4 of the NW 1/4 Section 9-68-34 from March 18, 1925, the date of the $14,000 mortgage, and that said judgment shall be superior to the liens and claims of all parties to this suit and that the said Matilda Cobb have judgment in rem against this parcel of real estate together with interest and statutory attorney fees. The Aetna Life did not appeal.
[1] We recognize the rule that when two or more notes are secured by the same mortgage, the one which falls due first is entitled to be established as a prior lien against the land described in the mortgage, but this principle of law has no application to the case at bar. The notes secured by the Stephens $14,000 mortgage were of the same date and had the same maturity. Under such circumstances, there is no priority. Whitney v. Eichner, 204 Iowa 1178; Preston, Kean Co. v. Morris Case Co.,42 Iowa 549.
It will be remembered that the defendant Payton made a marginal entry on the record of the $14,000 mortgage. There is no semblance of justification or authority for this act of Payton's, so far as Matilda Cobb is concerned. She did not authorize it or know anything concerning it until long after the unauthorized act was done. Payton had no control over her $2000 note and he knew at all times that she had possession and was the owner of said note. The trial court was clearly correct in its finding that Templeton was bound by Payton's act for the reason that Payton was Templeton's agent in this matter, and in fact, sent all of his papers to Payton with the thought that Payton could arrange this matter satisfactorily to him and release the mortgage, if it served Templeton's interests. Payton was simply doing for Templeton what he had been doing for several years in similar transactions aggregating about $80,000.
It may be here pointed out that the superior right decreed in favor of Matilda Cobb over the Aetna Life as to the 40 acres has not been questioned by the Aetna Life. No appeal was taken by the Aetna, consequently there is no reason why the Aetna should receive the superiority gained by Matilda Cobb in the District Court. She won over the Aetna, and whether right or *Page 1071
wrong, without an appeal on the part of the Aetna, Matilda Cobb is entitled to the fruits of her victory.
Secondly, the trial court found and determined that the defendant and cross petitioner Aetna Life was entitled to subrogation to the extent of the amount expended by the Aetna Life in the payment of the first mortgage held by the First Trust and Savings Bank in the sum of $9000 with interest then due, and that said mortgage was a first lien on the 140 acres of real estate here involved, and that the Aetna Life is entitled to a judgment in rem against the real estate and that said judgment inrem is superior to the lien and claim of the plaintiff Templeton and all other defendants and cross petitioners and that the Aetna Life is entitled to a foreclosure of said lien as against all other parties to this suit. The court further found and determined that the said judgment in favor of the Aetna Life shall be a judgment in rem and a lien on the 40 acres subject only to the senior and superior lien thereon of the defendant and cross petitioner Matilda Cobb as against the said 40 acres. This phase of the decree must be affirmed.
The court gave judgment in favor of Templeton against Stephens for the full amount due on the $12,000 note and established it as a lien upon the forty, subject to the lien of Mrs. Cobb and to the lien of the Aetna Life Company, and also established this judgment as a lien on the 140 acres superior to the liens of all parties except the Aetna Company.
[2] It is immaterial to Templeton whether the $9500 lien be established in favor of the Aetna Company alone or in favor of the Company in part and in favor of Mrs. Cobb as to the rest. As against the Aetna Company, Mrs. Cobb is entitled to a first lien of $2000 on the 40 acre tract. The allowance of a first lien to Mrs. Cobb of $2000 necessarily results in reducing the amount of the lien of the Aetna Company by $2000. In other words, the necessary effect of the allowance of priority to Mrs. Cobb over the Aetna Company took just that amount of the Aetna Company on the 40 acre tract. Templeton's position is not injured to any extent by the fact that Mrs. Cobb in the court below supplanted the Aetna Company in its lien to the extent of the first $2000. A sale on execution of this property was not had at the time of taking this appeal, but the decree determines the rights of the various parties, and when the bidding at the execution sale is *Page 1072
had, the application of the proceeds will be pursuant to the terms of the decree entered, and in conformity to statutory provision.
In conclusion of this matter, it may well be asked, who can successfully question the validity of the Aetna Life Insurance Company's mortgage? Surely the mortgagor Pullen cannot: altho he appealed he has filed no argument. He was the record titleholder and signed the note and mortgage. It was he who endorsed the draft for $9500 which evidenced his loan from the Aetna Life Insurance Company. A mortgagor estops himself from asserting that he did not possess the real estate which he assumed to mortgage, and also from asserting that the mortgage did not convey the rights which it purports to convey. Watts v. Wright, 201 Iowa 1118. The defendant Payton is in no position to question the Pullen mortgage to the Aetna Life. He received the deed to this land from Stephens and thereafter wrote "the junior and inferior agreement" on the margin of the record of the $14,000 Stephens mortgage. This alone is sufficient to remove Payton from the picture. Stephens had parted with his title.
[3] Lastly, is Templeton in a position to now complain? Clearly not. For many years Templeton permitted Payton to have complete charge of the many thousands of dollars of his investments in Taylor County, and permitted Payton to handle his paper as he saw fit. If we concede arguendo that Payton was the agent of the Aetna Life, it is well settled that a principal is not charged with the knowledge of his agent when the agent is adversely interested, as Payton was, in the instant matter. See, Findley v. Cowles, 93 Iowa 389, l.c. 395; Laird Keehner v. McCord,196 Iowa 972. Plaintiff Templeton was the holder of an unrecorded mortgage lien, which mortgage became junior, by the act of his agent Payton, to the mortgage of the Aetna Life Insurance Company. Templeton, therefore, must bear whatever loss resulted. See, Livermore v. Maxwell, 87 Iowa 705.
When an assignee of a mortgage fails to record his assignment, he takes the risk of dishonest dealing on the part of the mortgagee with subsequent innocent persons. Parmenter v. Oakley,69 Iowa 388; Jenks v. Shaw, 99 Iowa 604, 605; Farmer, Thompson and Helsell v. The Bank of Graettinger, 130 Iowa 469; Shoemaker v. Ragland, 202 Iowa 947.
The trial court properly analyzed the record evidence in this *Page 1073
case and correctly solved the determinative propositions by the judgment and decree entered. — Affirmed.
EVANS, STEVENS, ALBERT, FAVILLE, KINDIG, and WAGNER, JJ., concur.
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On the 19th day of August, 1932, there was filed in the office of the city clerk of the city of Sioux City, Iowa, a petition consisting of 353 separate sheets of paper purporting to contain the names of qualified electors of said city, asking the city council to call an election and submit thereat the question of voting general obligation bonds of the city in the sum of $2,500,000 for the purpose of erecting and constructing a municipal electric light and power plant. Pursuant to direction of the city council, the city clerk caused an examination to be made of the said petition in order to determine its sufficiency, and was about to report the result of such examination to the city council when, on the 25th day of August, 1932, the plaintiff herein instituted this action to enjoin the city clerk from certifying the legal sufficiency of said petition either in form or substance, and to enjoin the mayor and defendant commissioners of the said city from passing any resolution providing for or authorizing the calling or holding of any special election as requested in said petition. A temporary injunction was issued as prayed and thereafter issue was joined and the case proceeded to trial before Hon. R.A. Oliver, one of the judges of the district court of Woodbury county, Iowa, on September 26, 1932. Some testimony was taken in open court, but, it appearing that the trial of the case would involve a complicated search of records of registration and comparison with the names on the petition, the court ordered the case referred to a referee for the purpose of taking testimony, with direction to return his findings of fact. Pursuant to such order, further testimony was taken and early in January, 1934, the referee made a preliminary report of certain findings of fact with a request for further instructions. At this time Judge Oliver, who had ordered the reference, had been succeeded in office by F.H. Rice, as judge of the district court of Woodbury county, and the plaintiff filed objections *Page 310
and exceptions to the findings of the report. He also objected to Judge Rice acting in the case on the ground that he was disqualified, and asked that the case be transferred to some other district judge. The court overruled both the motion for transfer and the exceptions to the report, and proceeded to give the referee the instructions requested in his preliminary report. Thereafter, the referee filed his final report, to which the plaintiff filed further exceptions in which he renewed his objections to Judge Rice acting in the case. Upon hearing, all such exceptions and objections were overruled, and the court entered a decree dismissing plaintiff's petition, dissolving the temporary injunction, and taxing the costs to the plaintiff. From this decree and the prior orders and rulings of the court, the plaintiff appealed.
While this action is in equity and, as such, is triable de novo in this court, the plaintiff has set out and argued fourteen errors relied upon for reversal. The propositions involved in these alleged errors go to the insufficiency of the petition to confer jurisdiction upon the city council, and to the disqualification of Judge Rice to hear or act in the case, and it is to these propositions that we now devote our attention.
Section 6239 of the Code, 1931, provides:
"Cities and towns when authorized to acquire the following named public utilities and other improvements may incur indebtedness for the purpose of:
"1. Purchasing, erecting, extending, reconstructing, or maintaining and operating waterworks, gasworks, electric light and power plants, or the necessary transmission lines therefor, and heating plants."
Section 6241 provides that no indebtedness shall be incurred for the purposes enumerated in section 6239 until authorized by an election. And section 6242 provides that proceedings for such election may be instituted by the council, but that, before an election may be called for any of the purposes enumerated in subdivision 1 of section 6239, a petition shall be filed requesting such action and "shall be signed by qualified electors of the city or town equal in number to twenty-five per cent of those who voted at the last regular municipal election."
[1] It is the contention of appellant that the petition in this case is entirely insufficient to furnish a basis for the city *Page 311
council to call an election, because neither the individual sheets nor the petition as a whole had indorsed thereon or attached thereto any affidavit as to the authenticity of the signatures or as to the qualifications of the persons whose names appear thereon in regard to being electors. Appellant cites section 655-a19 of the Code of 1931, which requires that nomination papers for the nomination of candidates for office by petition shall be verified by an affidavit of at least one of the signers of the petition showing the name and residence of the nominee and the office to which he is nominated, that the signers are qualified voters of the state and entitled to vote for such nominee for such office, and that each of the petitioners votuntarily signed the petition. He also refers to sections 541, 640, 5588, 5589, and 6478, of the Code of 1931, in support of his argument that the petitions in this case should have been verified by an affidavit. Section 541 appears in the chapter on nominations by primary election and contains the requirements to be observed in the signing of petitions of nomination. Section 543 in the same chapter provides for an affidavit to be attached to such nomination papers. Section 640, also in the chapter in regard to nominations by primary election, provides that the duty of the county auditor and board of supervisors shall, in municipal elections, devolve upon the city auditor and city council. Sections 5588 and 5589 appear in the chapter concerning the incorporation of towns, the former providing for a petition of qualified electors and the latter requiring proof of the residence and qualifications of the petitioners as may be directed by the court. Section 6478 appears in chapter 326 concerning the government of cities by commission, specifically refers to the petitions provided for in that chapter, and specifically prescribes the requirements of such petitions and the method of proof of the qualifications of the signers thereof. In each of the statutes cited by appellant, the statute itself specifically states the requirements of the petitions in regard to the name, address, and date when signed, and also specifically provides for proof of the qualifications of the signers either by accompanying affidavit or as may be directed by the court. We might add that sections 6497, 6498, 6539, 6544, and 6556, which are not referred to by appellant, although all of them appear in the chapter concerning government of cities by commission, also set out specifically the requirements of the *Page 312
petitions to which they refer and specifically state the proof required as to the qualifications of the signers.
Section 6242, subd. 1, with which we are concerned in the instant case, does not appear in the same chapter of the Code as any of the statutes above referred to, but is found in chapter 319, which contains provisions in regard to the indebtedness of cities and towns. Neither the section itself nor the chapter in which it occurs contains any provision in regard to the addresses of the petitioners, the dates when signed, the proof of the signatures and qualifications of the signers, nor any other requirement except that "the petitions shall be signed by qualified electors of the city or town equal in number to twenty-five per cent of those who voted at the last regular municipal election." Appellant has pointed out no provision of any statute requiring that petitions generally shall show the addresses, dates of signing, or verification of the qualifications of the signers, where such requirement is not specifically imposed by statute. He refers to the case of Eckerson v. City of Des Moines, 137 Iowa 452, 115 N.W. 177, as authority for the contention that, in defining or interpreting a term used in one statute, the court may have recourse to the meaning as shown by another statute. The principle laid down in that case, however, can have no application to the proposition which we are now discussing, because in none of the statutes to which appellant refers is there any attempt to define or give meaning to what is meant by a petition in general. In each of these statutes provision is made for a particular kind of a petition to be used for a particular purpose, and, in addition to requiring a petition, the statute expressly enumerates in detail the requirements that must be complied with in connection therewith.
[2] Appellant contends, however, that, even if the petition be not required to have an affidavit showing the qualifications of the signers, in addition to the name and address and date of signing of each petitioner, it is still insufficient because it contains less than 25 per cent of the qualified electors as required by statute. In support of this contention, appellant argues that the term "qualified electors", as used in section 6242, subd. 1, means those electors who have complied with the provision of chapter 39-B1 of the Code of 1931, in regard to registration, and that the only names on the petition that can be counted as qualified electors going to make up a number equal *Page 313
to twenty-five per cent of those who voted at the last regular municipal election are those that are shown on the registration records of the city of Sioux City. It is the further contention of appellant that only those names on the petition that correspond with like names on the registration records can be considered, and that in determining the sufficiency of this petition the registration records must be the controlling factor, just as the poll lists of the last election were controlling in determining the sufficiency of a petition of consent under the law known as the Mulct Act (Code 1897, § 2448, subd. 1). The statute in reference to the petition to be filed under the Mulct Act expressly provided that such petition should be "signed by a majority of the voters residing in such city, voting therein at the last preceding election, as shown by the poll list of saidelection." (Italics are ours.) Under that statute the names signed to the petition were expressly required to be those of voters "as shown by the poll list." The cases cited by appellant in which such statute was construed held that, according to the express terms of the statute, only those voters who voted at the last preceding election were eligible to sign such petition, and that the poll lists of such election were conclusive evidence as to whether or not one whose name appeared upon the petition had voted. Unless the name on the petition corresponded with that on the poll list, it could not be considered and no other evidence could be introduced, because the poll lists were conclusive evidence. Nothing in either the statute which we are considering in the instant case, or any other statute to which our attention has been called, indicates any intention on the part of the legislature to make the registration records perform a function similar to that of the poll lists under the Mulct Act, and neither the act itself nor the cases construing the act to which appellant has called our attention are, in our opinion, in any way applicable to the question now before us.
Nor do we find anything in chapter 39-B1 concerning permanent registration, to which appellant calls our attention, that in any way indicates that one may not be a qualified voter unless his name appears upon the permanent registration records. Section 718-b3, which prevents one from voting unless registered, says that "no qualified voter shall be permitted to vote at any election unless such voter shall register as provided in this chapter." (Italics are ours.) The language used clearly indicates *Page 314
that one may be a qualified voter although not registered, and that one may not vote unless registered even though a qualified voter. We think it is generally recognized that, as said in 20 C.J. 81, "registration is a regulation of the exercise of the right of suffrage and not a qualification for such right." See, also, Edmonds v. Banbury, 28 Iowa 267, 4 Am. Rep. 177; Minges v. Merced Board of Trustees, 27 Cal. App. 15, 148 P. 816; Madison v. Wade, 88 Ga. 699, 16 S.E. 21; State v. Weaver, 122 Tenn. 198, 122 S.W. 465; Wilson et al. v. Bartlett, 7 Idaho 271, 62 P. 416; Fritch et al. v. State, 199 Ind. 89, 155 N.E. 257; State ex rel. Ellis v. Brown, 326 Mo. 637, 33 S.W.2d 109.
Where the qualifications of an elector are prescribed by a constitutional provision, an elector is one possessing the prescribed qualifications. In O'Flaherty v. City of Bridgeport,64 Conn. 159, 29 A. 466, 467, which is perhaps one of the leading cases on this proposition and has frequently been quoted by this court, it is said:
"The constitution has given to the word `elector' a precise, technical meaning, and it is ordinarily used in our legislation with that meaning only. An `elector' is a person possessing the qualifications fixed by the constitution, and duly admitted to the privileges secured, and in the manner prescribed, by that instrument."
Article II, section 1, of the Constitution of the state of Iowa, provides:
"Every white male citizen of the United States, of the age of twenty one years, who shall have been a resident of this State six months next preceding the election, and of the County in which he claims his vote sixty days, shall be entitled to vote at all elections which are now or hereafter may be authorized by law."
By amendments to the Constitution the words "white" and "male" have both been eliminated, and the provision is now applicable to "every citizen of the United States" who is able to meet its requirements as to age and residence. That any one who possesses the qualifications set out in this provision of our Constitution is a qualified elector, we think there can be no doubt. In Edmonds v. Banbury, 28 Iowa 267, 4 Am. Rep. 177, *Page 315
this court, while sustaining the power of the legislature to enact a registration law containing reasonable regulations to prevent fraud and insure the purity of the ballot box, made it plain that such regulations went merely to the exercise of the right to vote and not to qualifications which gave the right, and, referring to this provision of the Constitution, said:
"Whoever possesses the qualifications there mentioned is an elector; and his right to vote, being thus given and secured by the Constitution, is a right of which it is not within the power of the legislature to deprive or divest him.
"It is admitted that these qualifications confer a right. The right thus conferred is the right to vote. This right is held by a constitutional and not by a legislative tenure. It cannot be destroyed or impaired by the legislature."
In the case of McEvoy v. Christensen, 178 Iowa 1180, 159 N.W. 179, 181, there was involved a statute authorizing a school election upon the petition of one-third of the electors residing within certain territory, and the question was raised as to whether or not women, who were authorized to vote at school elections, would be considered as electors. After quoting the O'Flaherty case with approval, this court held that the term "elector" did not apply to women who might be authorized to vote at such election, and said:
"Whenever the legislature employs the word `elector' without qualification or explanation, the word may be assumed to have reference to persons authorized by the Constitution to exercise the elective franchise. That instrument (section 1, of article 2) defines who are electors."
See, also, Coggeshall v. City of Des Moines, 138 Iowa 730, 117 N.W. 309, 128 Am. St. Rep. 221; In re Application of Carragher,149 Iowa 225, 128 N.W. 352, 31 L.R.A. (N.S.) 321, Ann. Cas. 1912C, 972; Sears v. City of Maquoketa, 183 Iowa 1104, 166 N.W. 700.
We reach the conclusion, therefore, that, under the provisions of section 6242, subd. 1, the term "qualified electors" has reference to those persons having the qualifications prescribed in article II, section 1, of the Constitution of this state, without regard to whether or not their names appear on the registration records of the city in which they may reside. *Page 316
[3] In the instant case the appellant alleged the insufficiency of the petition filed in the office of the city clerk, and asked that the mayor and city council be restrained from calling the election as therein requested. Upon the trial of the case appellant undertook to prove the allegations of his petition and amendments as to the ineligibility of the petitioners whose names appeared upon the petition. Each of the 353 sheets comprising the petition is addressed to the mayor and city council of the city of Sioux City, and has a printed heading containing the statement: "We, the undersigned, qualified electors, residing within the corporate limits of the city of Sioux City, Woodbury County, State of Iowa, * * * do hereby petition the city council of said city to call an election," etc. On their face each of these sheets, therefore, contained the statement that the names thereon were signed by the persons whose names they purported to be, and that the signers were qualified electors residing within the corporate limits of the city of Sioux City. The burden was upon the appellant to prove the ineligibility of a sufficient number of these names to render the petition ineffective. The evidence shows that as filed the petition contained 8,876 names, that the number of those who voted at the last regular municipal election was 19,764, and that the number of qualified electors whose signatures were required on the petition, in order to give the city council jurisdiction to call an election was, therefore, 4,941.
The final report of the referee finds that there should be withdrawn from the petition as filed 149 names designated as forgeries, 1 name withdrawn by written withdrawal, 190 names designated as duplicates, and 9 names designated as combination names, making a total of 349 names in all to be withdrawn from the petition, and leaving a total of 8,527 names which were reported as legal and proper names and should be counted for the petition. Appellant contends, however, that, aside from the insufficiency of the entire petition because it contained no verification, there were 5,422 names thereon which should not be counted, and that there, were only 3,105 names which could be counted as names appearing upon the permanent registration records. Among the 5,422 names which appellant contends should be stricken are 370 names which are alleged to be forgeries and 190 names which are alleged to be duplicates. It should perhaps be said here that the names designated as forgeries, *Page 317
whether by appellant or in the referee's report, are names which were not signed by the parties whose names appear upon the petition but by some other person, and that the names designated as duplicates are those where the name of the same person appears more than once upon the petition. The balance of the 5,422 names which the appellant contends should not be counted is made up of names that appellant alleges do not appear upon the registration records at all, or of names which, although similar to those upon the registration records, do not correspond exactly with the names on such records. The referee found, however, that, among the names thus objected to by appellant, there were 2,097 names where a similar name to that of the signer on the petition was found at the same address as shown on both the petition and on the registration cards; that the signatures on the petition representing said names are the signatures of the same persons who signed the registration cards; and that such persons were qualified electors as shown by the permanent registration cards. If these 2,097 names be added to the 3,105 names which appellant admits correspond to the names on the registration cards, there would be a total of 5,209 names of qualified electors whose names appear upon the registration records, or 261 more names than was required to make the petition valid.
The trial court found, as a matter of law, however, that the eligibility of a name to be counted was not restricted to the names which appeared upon the registration records, but that all names of qualified electors within the city which were signed on said petition by such qualified electors should be counted, and, as we have already stated in our discussion of this proposition, we think that there was no error upon the part of the trial court in so holding. After deducting from the petition all names which were claimed by appellant to be forgeries, and all names which were claimed by him to be duplicates, and even allowing the deduction of names of persons whom appellant claims were not residents of the city of Sioux City, but of which there is no competent proof, there would still remain more than 8,000 names on the petition as to which appellant has furnished no competent proof showing that they should not be counted.
[4] Appellant further contends, however, that the rulings, orders, and decree of the trial court should be set aside and the cause remanded for trial before some other judge upon the *Page 318
evidence taken by the referee, because the Honorable F.H. Rice, before whom the case was tried, beginning with the first report of the referee, was disqualified to act because of his prejudice and interest in the case. Appellant's contention is based upon the fact that the petition to the mayor and city council, which was filed on August 19, 1932, was signed by Judge Rice. Section 10818 of the Code provides that:
"A judge or justice is disqualified from acting as such, except by mutual consent of parties, in any case wherein he is a party or interested, or where he is related to either party by consanguinity or affinity within the fourth degree, or where he has been attorney for either party in the action or proceeding. * * *"
It is claimed that Judge Rice was interested in the case, because he signed the petition along with other electors asking the city council to call an election. The claim that he was prejudiced appears to be based upon the same ground, but, in argument, his holding as to the sufficiency of the petition seems to be stressed as evidence of such prejudice. Inasmuch as we have reached the same conclusion as reached by Judge Rice in regard to the sufficiency of the petition, it would appear that his holding cannot be considered to be evidence of his prejudice.
Appellant cites Foreman v. Hunter, 59 Iowa 550, 13 N.W. 659, in which the justice who tried the case had contributed to a fund for the procurement of a certain witness in that case, and Powell v. Egan, 42 Neb. 482, 60 N.W. 932, in which an applicant for a liquor license obtained the signatures of the village trustees who were required to pass upon the granting or refusal of such license. In our opinion, however, neither of these cases is controlling on the proposition here presented. In the Foreman case, the justice was held not to be disqualified on account of interest, because there was no showing that he had any pecuniary interest in the result of the case. And, although the opinion states that his contribution to the fund for obtaining a witness indicated sufficient feeling to justify a change of venue, no change of venue was asked, and the statement of the opinion in regard to the feeling of the justice being sufficient to warrant a change, if it had been asked, can amount to no more than dictum. Even if this dictum is a correct statement of the law, there is a vast difference between merely signing a petition for *Page 319
the calling of an election on a proposition and contributing to a fund for the benefit of one side of the case. In the Powell case, the petition signed by the trustees requested the granting of a license, and this was the very question which the trustees were required, in the exercise of their discretion, to pass upon. In the instant case, Judge Rice as well as other signers of the petition, in effect, simply asked that an election be called if the city council found that a sufficient number of qualified electors had petitioned for it. It cannot be assumed that any of the petitioners desired or even impliedly requested the members of the city council to violate their duty and call an election if the number of petitioners was not legally sufficient. In 33 C.J. 992, par. 135, it is said:
"The interest which disqualifies a judge is a direct pecuniary, or direct property interest, or one which involves some individual right or privilege, in the subject matter of the litigation, whereby a liability or pecuniary gain must occur on the event of the suit."
In Foreman et al. v. Town of Marianna, 43 Ark. 324, loc. cit. 329, in refusing to hold that a judge was disqualified to act upon an application to annex territory to a municipal corporation because, as a resident of the corporation, he had voted on the proposition of annexation, it was said:
"It may be hoped that every good Judge in the State is deeply interested in everything that may help or hurt the community; and that he will favor the former and oppose the latter in all legitimate ways. Here the question is not one of taxes and burdens, but one of policy. It does not even appear that, on the whole, the result of annexation, would be to increase or diminish taxes. But that is of no importance. This is not a suit of a personal nature, concerning property or rights of persons. A general interest in a public proceeding, which a Judge feels in common with a mass of citizens, does not disqualify. If it did, we might chance to have to go out of the State, at times, for a Judge. The `interest' which disqualifies a Judge, under the Constitution, is not the kind of interest which one feels in public proceedings, or public measures. It must be a pecuniary or property interest, or one affecting his individual rights; and the liability or pecuniary gain or relief *Page 320
to the Judge must occur upon the event of the suit, not result remotely, in the future, from the general operation of laws and government upon the status fixed by the decision."
In Sauls v. Freeman, 24 Fla. 209, 4 So. 525, 528, 12 Am. St. Rep. 190, it was claimed that a judge was disqualified to act upon a controversy as to the change of place of a county seat, because he had signed a petition to the county commissioners asking for an election on the question of such change, and the court said:
"It is true that the same interest that would disqualify a juror will, under our statute, disqualify a judge, but the fact of having signed such a petition is not evidence of any interest within the meaning of the term as used in the statute. Whatever effect it may in its consequences lead to, as to such signers, would result, also, as to any other citizen similarly situated, though not a signer."
In In re Hague, 103 N.J. Eq. 505, 143 A. 836, loc. cit. 838, the vice chancellor was alleged to be disqualified from acting in a habeas corpus proceeding because of bias and interest, and, in refusing to acknowledge such disqualification, the court said:
"But prejudice growing out of business, political, or social relations is not sufficient to disqualify a judge. 33 C.J. p. 1001. And prejudice against the cause or defense of a party is not a disqualifying prejudice. 33 C.J. p. 1001.
"Generally it is held that an interest which a judge has in common with many others in a public matter is not sufficient to disqualify him. 33 C.J. p. 995."
See, also, Elliot v. Scott, District Judge, 119 Tex. 94, 25 S.W.2d 150; Edwards v. Carter, 167 Okla. 282, 29 P.2d 605; Hubbard v. Hamilton County, 113 Tex. 547, 261 S.W. 990; Conkling v. Crosby, Judge, 29 Ariz. 60, 239 P. 506; McMullen v. State ex rel., 93 Fla. 693, 112 So. 462; Los Angeles v. Pomeroy, 133 Cal. 529,65 P. 1049; Holt v. Holt, 23 Okla. 639, 102 P. 187, 197.
In our opinion, the mere fact that Judge Rice signed the petition asking the city to call the election did not disqualify him from acting in the instant case, because of interest, and there is no evidence which indicates that he was disqualified on account of bias or prejudice. *Page 321
[5] Further claim is made that, because the petitions were signed by persons who were not even residents of Sioux City, and because of the forgeries which appeared among the signatures thereon, the petition was so imbued with fraud that this court would be warranted in holding it bad in toto. We have examined the evidence in regard to forgeries to which appellant has called our attention and, while it is undoubtedly true that in some instances the names on the petition were not signed by the persons whose names they purport to be, with the exception of a very few instances, there is no evidence that such names were signed without authority or with any ulterior motive. None of the signatures which are claimed to be forgeries has been counted by us in determining the sufficiency of the petition. Even if some of these signatures may have been signed by some person other than the person whose name appeared on the petition without the permission of such person and with a fraudulent motive, this would be no reason why these fraudulent signatures should completely nullify the effect of a petition containing thousands of names which, so far as the evidence goes, were signed by the individuals whose names they purport to be.
We find no reason to disturb the orders and decree of the trial court. The stay order heretofore entered is, therefore, annulled, and the orders and decree of the trial court are hereby affirmed. — Affirmed.
KINTZINGER, C.J., and all Justices concur, except ANDERSON, J., who takes no part.
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On the 6th day of October, 1927, the defendant, Joe Leasman, and one Arthur Frey were jointly charged by an indictment consisting of two counts. The first count of the indictment charges that the said Joe Leasman and Arthur 1. INDICTMENT Frey, on or about the 29th day of August, 1927, AND did break and enter into a building, to wit, a INFORMATION: granary in which goods and other valuable duplicity: things, to wit, timothy seed, were kept for use, necessary with the specific intent to then and there allegation commit a public offense, to wit, the crime of to obviate. larceny in a building, etc. The second count of the indictment charges that the said Leasman and Frey, on or about the 29th day of August, 1927, did feloniously take, steal, and carry away from a building, to wit, a granary, seven bushels of timothy seed of the value of $9.10, etc.
The defendants were granted separate trials. Frey was first *Page 853
tried and convicted, and perfected an appeal to this court. For opinion in said case, see State v. Frey, 206 Iowa 981.
On October 8, 1927, the defendant, Leasman, entered a plea of not guilty. Thereafter, only for the purpose of a demurrer to be filed, the defendant withdrew his plea of not guilty. In his demurrer he states:
"(1) That it appears upon the face of said indictment that it charges the defendant with two separate, distinct, and disconnected offenses; (2) that it appears upon the face of said indictment that this defendant is charged with two offenses which are distinct, separate, and not compound offenses; (6) that it appears upon the face of the indictment that two complete, distinct, and unconnected crimes are charged therein, which said crimes do not constitute a compound offense."
On October 25, 1927, said demurrer was presented to the court, and overruled. On December 5, 1927, upon motion of the county attorney, the second count of the indictment was dismissed. On December 12, 1927, the trial was begun, and as a result of the trial, the jury returned a verdict of guilty "of the crime of breaking and entering, as charged in the indictment."
On December 30, 1927, defendant's motion for a new trial and his motion in arrest of judgment were overruled, and judgment pronounced, committing the defendant to the Men's Reformatory at Anamosa for an indefinite period, not exceeding ten years. From this judgment, the defendant appeals.
It is the defendant's contention that the court erred in overruling his demurrer, and this complaint of the defendant's presents the first question for our consideration. The defendant's demurrer is to the effect that the indictment is bad for duplicity, in that it charges two separate and distinct offenses, to wit: (1) breaking and entering a building with the specific intent to commit the crime of larceny, and (2) larceny in or from a building. It is provided by our statutory law, Section 13737 of the Code of 1927, that, with certain exceptions hereafter to be noted, the indictment must charge but one offense. One exception is found in Section 13738 of the Code, which provides:
"In case of compound offenses where in the same transaction more than one offense has been committed, the indictment *Page 854
may charge the several offenses and the defendant may be convicted of any offense included therein."
Burglary or breaking and entering is not a compound offense 2. INDICTMENT which includes larceny. State v. McFarland, 49 AND Iowa 99; State v. Ridley and Johnson, 48 Iowa INFORMATION: State v. Rhodes, 48 Iowa 702; 370; State v.
duplication: Frey, supra. Therefore, there was no warrant for compound charging both breaking and entering and larceny offense. in the same indictment, by reason of the provisions of the section just quoted.
Another exception to Section 13737 of the Code, hereinbefore referred to, is the statute which was enacted by the forty-second general assembly, now found in Section 13738-b1 of the Code, which provides:
"An indictment may charge may charge in separate counts: (1) A burglary and one or more other indictable offenses committed inconnection with said burglary. The term `burglary' shall embrace any violation of Sections 12994 to 13004, inclusive." (The italics are ours.)
It was claimed by the defendant in State v. Frey, supra, that this same indictment was bad for duplicity; but the objection was therein raised by motion in arrest of judgment, instead of by demurrer, and we held that, since the question was not raised by demurrer, the objection had been waived by the defendant, and we found it unnecessary to determine whether the crime of breaking and entering the building with intent to commit larceny, and the crime of larceny from the building, were properly charged in the indictment. In the instant case, the question is properly raised by demurrer. Hence, we must now determine whether the two offenses are properly charged in the two separate counts of the indictment, by reason of the provisions of Section 13738-b1 of the Code, hereinbefore quoted. As said in the Frey case:
"It will be observed that the indictment does not in terms charge that the larceny from the building charged in Count 2 was committed in connection with the breaking and entering charged in Count 1."
Perhaps it was the intention of the county attorney, in drawing *Page 855
the indictment, to comply with this section of the Code; but his intention cannot be allowed to prevail unless he has, in fact, done so. A defendant is not put in trial on the intentions of the county attorney not expressed in the indictment. The statutory law is plain and unambiguous. It has not been complied with, in that there is an absolute failure to allege that the crime of larceny was committed in connection with the crime of burglary or breaking and entering. By reading the two counts, one might guess or surmise, but could not determine with any definite degree of certainty that the crime of larceny charged in Count 2 was committed in connection with the crime of breaking and entering charged in Count 1. It is true that the location of the granary in each count is identical, and the date is identical; but it has been repeatedly held, and the rule is so well recognized as not to require the citation of authorities, that the 3. INDICTMENT allegation in the indictment as to the date or AND time of the commission of the offense is INFORMATION: immaterial, and that it is sufficient if the duplicity: evidence shows that the crime was committed at demurrer any time prior to the finding of the indictment as sole and within the period of the statute of remedy. limitations. This applies to the time of the commission of the offense charged in either count of the indictment. There is no allegation in the indictment which ties together the two offenses and alleges their commission as a part of the same transaction. If the defendant should rely upon the allegations of the indictment as charging that the crime of larceny charged in Count 2 was committed in connection with the crime of breaking and entering charged in Count 1, he might be met with proof by the State that the crime of larceny charged in Count 2 was committed at another time, even on the same day, and not in connection with the breaking and entering charged in Count 1. In that event, should objection be made by the defendant to the evidence that it tends to establish a separate and distinct offense not charged in the indictment, the court would be justified in overruling the objection. There is only one proper way for the defendant to raise the question, and that is, as held in State v. Frey, supra, by demurrer to the indictment before the jury is sworn on the trial of the case, as was done by the defendant in the instant case. The indictment was bad for duplicity, and the *Page 856
action of the court in overruling the demurrer was clearly erroneous.
However, it is the contention of the State either that the dismissal of Count 2, on motion of the attorney, before the county trial on Count 1, cured error, or that the defendant has been in no way prejudiced, since he has 4. INDICTMENT been tried only on Count 1. The State in its AND argument declares: INFORMATION duplicity: "In so far as the defendant is concerned, he dismissal stood in the same position on the trial as of count though his demurrer attacking the joining of the effect. two offenses in the same indictment had been sustained and the second count stricken by the court."
The fallacy of the State's argument is that the court could not cure the error previously committed by dismissing a single count. The defendant raised the question of duplicity at the proper time and in the proper manner. It cannot be successfully asserted that the indictment attacked for duplicity is partially good and partially bad. It is either wholly good or wholly bad. The court held, in substance, that it is wholly good. We hold that it is wholly bad. The court should have sustained the demurrer; and, had it done so, it was then its duty, under 5. INDICTMENT Section 13797 of the Code, to determine whether AND the objection to the indictment could be INFORMATION: remedied or avoided in another indictment, and pleadings: if so, order the cause to be resubmitted to the sustaining grand jury. See State v. Sexsmith, 202 Iowa 537. demurrer: In the cited case, this court made the following procedure. pronouncement:
"We are of the opinion that the statute must be construed as providing that, upon the sustaining of a demurrer to the indictment on the ground that it does not substantially conform to the requirements of the statute, the defendant can only befurther prosecuted for the same offense by a compliance withSection 13797 * * *." (The italics are ours.)
The Sexsmith case was twice on appeal in this court. In the first case, reported in 200 Iowa 1244, this court held that the lower court should have sustained the demurrer to the indictment, and reversed solely for that reason. *Page 857
There was no attempt by the county attorney to follow the statutory law provided for an amendment to the indictment. The statutory law provides the procedure for the amending of an indictment. Section 13744 of the Code provides:
"The court may, on motion of the State, and before or during the trial, order the indictment so amended as to correct errors or omissions in matters of form or substance."
It is provided by the following Section 13745 of the Code:
"If the application for an amendment be made before the commencement of the trial, the application and a copy of the proposed amendment shall be served upon the defendant, or upon his attorney of record, and an opportunity given the defendant to resist the same."
No attempt was made, in accordance with the aforesaid statutory law, to obtain an order of court granting the right or authority to amend the indictment; no notice was served upon the defendant; no opportunity was given him to resist the same. 6. INDICTMENT We need not and cannot determine whether the AND defendant could have made such resistance as INFORMATION: would have been valid. We do not know what duplicity: legal, or perhaps constitutional, objection he amendment might have raised by way of resistance to an as cure. amendment, had he been served with notice and given an opportunity, as provided in the statutory law, to make resistance. At any rate, it is not claimed by the State that it made an attempt, under the statutory law, to amend the indictment.
The State, in its argument, refers to the fact that certain counts in an indictment charging separate violations of the intoxicating liquor law are frequently dismissed by the county attorney, leaving for trial only the remaining counts. There is no question about the legality of so doing; for, under Section 1953 of the Code, indictments for such offenses may allege any number of violations by the same party in separate counts, and the accused may be convicted and punished upon each one, as on separate informations or indictments. But there is a vast difference between dismissing a count of an indictment which is wholly good and has not been attacked, and a count of an indictment which is wholly bad, and has been properly attacked *Page 858
and the ruling made. The indictment which is wholly bad and properly attacked can be made good, if at all, only by an amendment, after following the statutory procedure, by giving the defendant notice and giving him an opportunity to make resistance, or by the court's ordering the case resubmitted to the grand jury, and the return by that body of a valid indictment. It cannot be successfully asserted that no prejudice has been committed against the defendant; for, if the demurrer had been sustained, as it should have been, and the case resubmitted to the grand jury, — which is the most the court can do, upon sustaining a demurrer, — that body might not reindict for the crime of breaking and entering with intent to commit larceny, or for any other offense.
We make no pronouncement as to whether the State, by following statutory procedure, could amend an indictment after the ruling of the court in either sustaining or overruling a demurrer thereto, as that question is not before us.
It cannot be successfully asserted that the errors of which defendant complains are mere technical errors or defects, which do not affect the substantial rights of the defendant, as mentioned in Section 14010 of the Code.
Many other alleged errors are assigned by the defendant, which, from what we have hereinbefore stated, become unnecessary for us to consider.
We cannot escape the conclusion that the indictment was bad for duplicity, and that the demurrer should have been sustained.
The judgment below must be reversed, and it is so ordered. —Reversed.
ALBERT, C.J., and EVANS, STEVENS, MORLING, KINDIG, and GRIMM, JJ., concur.
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I. The defendant is a public utility corporation, which owns and operates an electric system, and includes in its service the town of Kingsley. The decedent was a boy nine years and three months of age, who was flying a kite in the streets of Kingsley. His "string" was a fine copper wire, which came in contact with the transmission line of the defendant. The voltage of the transmission line was 33,000. The contact resulted in the death of the boy. The flying of the kite was in violation of a city ordinance forbidding the flying of kites within the city. The plaintiff predicated his action upon the "specific negligence" alleged in his petition. This was: (1) That the defendant was maintaining a transmission line of high voltage (33,000) on the streets of Kingsley without any authority therefor; (2) that it maintained said line without proper insulation or guard against injury therefrom. All the evidence was directed to these propositions.
It is undisputed that the defendant holds a franchise under *Page 1334
Ordinance 44 of the city of Kingsley, to operate an electric power plant for the purpose of supplying the town of Kingsley and its inhabitants with electric energy, the same 1. ELECTRICITY: to be generated inside or outside the town, as franchises: the company may elect. The right to use the construc- streets for such purpose is granted. The point tion. made by plaintiff is that such ordinance did not in express terms confer a right upon the defendant to maintain a transmission line of high voltage over its streets. It appears that the necessary voltage for distribution in the town of Kingsley is 2,300 units. The electric energy furnished by the defendant is generated outside of the town and at a considerable distance therefrom. The transmission line is not for the sole use of Kingsley. It carries the electric energy for other towns, as well as for Kingsley. The ordinance does not in express terms either permit or forbid the construction of transmission lines over the streets of the city. It does contain provisions, however, which clearly imply permission to that end. For instance, under Section 2 it is provided that the electric energy may be generated "outside said town," in which event the "grantee shall erect and maintain a sub-station within said town." In Section 3 it is provided:
"If the electric energy is generated outside of the town, then all transmission wires used shall not be smaller than No. 6 solid copper wire."
Section 4 provides:
"All poles supporting wires carrying current voltage in excessof 2,300 volts shall not be less than seven-inch tops, and 35 feet long. The construction shall be standard, substantial, and of first-class material. Grantee shall, however, have the right to trim trees along the streets and alleys, in order to provide and maintain a safe installation of high-voltage wires."
Section 5 provides:
"Whenever any poles, wires, or other construction of thetransmission lines or distribution system hereby authorized shall be in such a position as to interfere with the moving of any building," etc.
It is not claimed that the authority of the corporation to *Page 1335
maintain these transmission lines has ever been challenged by the public authorities. We deem it apparent that the construction and maintenance of the transmission lines were within the contemplation of the ordinance, and that such has been the construction mutually put upon it by the city and by the grantee. The claim of the plaintiff that the occupancy of the street for the maintenance of the transmission lines was without authority is, therefore, not tenable.
II. The second point urged by the plaintiff is that the transmission lines were not properly insulated or guarded. To this question the testimony of experts was directed. These wires were not covered with any so-called insulating 2. ELECTRICITY: material. It appears from the undisputed transmission testimony of the experts on both sides that line: cons- there is no material known which can be made truction: efficient as an insulating covering for wires negligence: carrying high voltage. In the early history of proximate the art, various devices were used, and cause. successively abandoned. The only practicable means of insulating known to the experts is atmospheric space. Transmission lines are, therefore, carried at a great height. The ordinance under consideration required poles to be 35 feet high. The height actually adopted by the utility company was 40 feet. Isolation of the wire is the objective. A guard wire was extended 29 inches above the transmission line, and this was grounded at the poles. The special purpose of this guard wire was to counteract the effect of lightning.
The only semblance of dispute in the record is at this point. The plaintiff called as witnesses two experts, who described a scheme of insulation or guard which was in vogue to some extent prior to 1916. This was known as the "basket" or "cage" system. It consisted in extending beneath the transmission line three wires, 18 inches apart, and held in place by wooden stays. The principal purpose of this scheme was to prevent the falling of a broken transmission line. That is, it was intended to maintain isolation of the line in the emergency of a break. The contention of the plaintiff is that, if that system had been in use by the defendant, it would probably have prevented the contact of the kite string with the transmission line. It was not claimed by the experts for the plaintiff that this system was in vogue at the present time at any place. By the experts for the defendant it *Page 1336
was stated that the system was not in use anywhere, and had not been since the year 1916. It further appears that, in or about the year 1916, a certain set of rules known as the Safety Code came into vogue. It was formulated through the co-operation of many experts, representing electric companies, telephone companies, and telegraph companies. This Safety Code met the universal approval and adoption of the great body of enterprise engaged in electrical activities. It was adopted by the Bureau of Standards of Washington, D.C., and is universally recognized as standard. This is undisputed. Under the statutes of this state, the railroad commission is empowered to make regulations for the construction of transmission lines within its jurisdiction. It has adopted the Safety Code above referred to as standard. True, its jurisdiction does not extend to cities. The legislature has indirectly recognized such standard by its amendment of Section 1527-c of the 1913 Supplement. By Section 1527-c it was required in the construction of transmission lines that the grantee "shall use only strong and proper wires, properly insulated." In Gravesv. Interstate Power Co., 189 Iowa 227, we held that insulation was mandatory under this statute, whether practicable or not. Thereafter, the legislature eliminated from the statute the words "properly insulated." The corresponding provision of the statute now is:
"Such lines shall be built of strong and proper wires attached to strong and sufficient supports properly insulated at allpoints of attachment." Section 8326, Code, 1924.
In the case before us, the wires were, without dispute, insulated at the points of attachment. Without dispute, too, the line in question conformed in its construction to all the specifications set forth in Section 8326, Code, 1924. Whether we look to the statute, therefore, or to the Safety Code, as a practical standard of construction, the transmission line under consideration was in full conformity with each of them.
It should be noted at this point, however, that the above Section 8326 purports to apply only to transmission lines erected outside of cities and towns. See Section 8309. No different standard, however, is provided for cities and towns. If we assume a legislative purpose to permit the cities and towns to prescribe the method of construction, yet no different standard *Page 1337
was prescribed by the ordinances of Kingsley. Section 8326 does recognize the standard adopted by the Safety Code. In the absence of other regulation, therefore, we know no safer guide than to give it judicial recognition.
This is not saying that either the statute or the Safety Code has in any degree slackened the requirement of vigilance upon the electrical company. On the contrary, it is held to a high degree of vigilance. Isolation being the only practical means of safety, it is held to a high degree of vigilance to maintain that isolation. If its diligence fails in such respect, it becomes responsible. Our own recent cases are quite illustrative of the degree and kind of vigilance exacted from the utility company.
In Lipovac v. Iowa R. L. Co., 202 Iowa 517, a pole was broken, whereby the Wire was brought close to the ground. While it was in that position, a boy came in contact therewith, and lost his life.
In Walters v. Iowa Elec. Co., 203 Iowa 471, the defendant-company failed to maintain isolation, in that it permitted a wire to sag, and to come in contact with a tree, resulting in a fire.
In Beman v. Iowa Elec. Co., 205 Iowa 730, the utility company failed to maintain its isolation in that it placed its wires too close to the "boom" of a bridge gang.
In each of these cases, the defendant was held liable as for negligence.
In the case before us, there was no failure on the part of the company to maintain isolation of its wire. The kite went up 40 or 50 feet, and necessarily invaded the isolation provided for the wire. The flying of the kite was an intentional and independent act, and indeed was unlawful. The accident resulted, not from any failure on the part of the defendant to meet all the statutory requirements of construction, but because the copper wire was carried up to it. Unless the company was already negligent in its manner of construction and maintenance, it did not become negligent by the mere act of another. The fact, if such, that such act was to some degree irresponsible, because of the tender years of the child, could have no influence upon the quality of the defendant's conduct. In such a case, the wrongful act of the injured party is to be deemed the proximate cause of his injury. An exception to this rule arises when a case of "attractive *Page 1338
nuisance" is presented, as in McKiddy v. Des Moines Elec. Co.,202 Iowa 225.
We are of opinion, therefore, that the undisputed evidence disclosed a full compliance with the requirements of the law in the construction and maintenance of the transmission line.
III. The appellant predicates a right of reversal upon Section 8323 of the Code, 1924. Such section is in part as follows:
"In case of injury to any person or property by any such transmission line, negligence will be presumed on the part of the person or corporation operating said line in causing said injury, but this presumption may be rebutted by proof."
The point made is that the plaintiff had no need of specific allegation of negligence or specific proof thereof, and that the burden was upon the defendant to rebut the statutory presumption. The appellant raises the point for the first 3. APPEAL AND time in this court. He did not raise it before ERROR: the trial court. The case is not triable here de
review: novo, but upon errors only. There can be no scope and error upon a question not submitted to the trial extent: court for its consideration. Whether the result fatally would have been different if the point had been belated raised, we need not speculate. The plaintiff contention. tried his case in the district court upon his own theory, and the court passed upon the questions raised by him. He cannot open up new ground in the submission of his appeal here. See, however, Anderson v. Fort Dodge, D.M. S.R. Co.,208 Iowa 369.
Upon the case presented, the district court ruled properly, and its judgment is — Affirmed.
ALBERT, C.J., and FAVILLE, De GRAFF, and KINDIG, JJ., concur.
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On December 8, 1930, Fred Goltry was adjudged a bankrupt, in the Federal Court. More than four months prior to that time, and on July 18, 1930, he had conveyed his farm to his wife, Ollie. This farm consisted of 112 acres, which comprised 40 acres of homestead. It was encumbered by a mortgage of approximately $4000. The consideration for the conveyance was nominal only. On the other hand, the non-homestead part of the farm had no margin of value over and above the mortgage thereon. This portion of the farm is referred to in the record as the "seventy-two acres," and we shall so refer to it.
In the spring of 1931 the bankrupt, by arrangement with his wife, devoted 40 acres out of the 72 acres to a crop of oats seeded by him. The rest of the land was in pasture. This field of oats became the bone of contention. As a growing crop, the plaintiff, as trustee, asserted his right to possession thereof. In support of his asserted right he brought his action in the district court of Lucas County and prayed for a temporary injunction to restrain the defendants from interfering with his alleged right of possession. In his petition he predicated his asserted right upon two grounds:
(1) That under the Bankruptcy Act all right and title of the bankrupt to any and all property was immediately vested in the trustee.
(2) That such asserted right had been twice adjudicated in his favor by the district court of Lucas County prior to the bringing of the present suit. *Page 1120
The final decree entered, did not indicate which ground, if either, was adopted by the district court.
I. So far as the possession of the land was concerned, as distinguished from the possession of the growing, and finally matured, crop, the Bankruptcy Act does not necessarily support the plaintiff's claim. The legal title was in the wife. Even though voidable, it was valid until avoided. No jurisdiction over her was had in the bankruptcy court. The force and effect of her deed was therefore relegated by the bankruptcy court to the state court for determination. The question was in no sense pre-determined by the Federal court before it reached the state court. Perceiving the force of this pronouncement, the plaintiff pleaded herein that the question had been twice adjudicated in his favor in the state court, wherein the transfer was set aside on the ground of fraud. This is the plaintiff's second predicate. It is made to appear that in August, 1930, one of the creditors of the bankrupt levied an attachment upon this real estate under the provisions of Section 12106, and that he filed a creditor's bill challenging the validity of the deed to the wife, as against the creditor of the bankrupt. This creditor prevailed. The decree established a lien in his favor upon the land and made it prior and superior to any claim of the wife's under her deed. In that respect the decree was in the usual form, upon a creditor's bill. The scope of the adjudication was limited to the rights of the particular complaining creditor, and to none other. It did not purport to interfere in any manner with the present right of possession of either the grantor or the grantee in the deed. There was, therefore, nothing in that decree which was available to the trustee-plaintiff in support of his present action. Neither he nor any other creditor was within the scope of the adjudication. To this may be added that the decree itself became wholly nugatory under the Federal statute by the adjudication in bankruptcy within four months after the entry of decree. Nor do we find any support for the plaintiff in the other alleged adjudication relied on by him. The existing mortgage upon the farm was held by the Federal Land Bank of Omaha. It instituted a foreclosure proceeding upon its mortgage and prosecuted the same to a decree. It made no attack upon the transfer to the wife. Both husband and wife were parties to the mortgage. But the plaintiff, trustee, himself intervened in *Page 1121
such action. He claimed a right to have a part of the mortgage debt apportioned and charged to the homestead. This relief was denied to him. He also directed his pleadings as a creditor's bill against the husband and wife, and challenged the validity of the deed from husband to wife. On this feature of his petition of intervention, he was granted relief. The decree awarded him alien, subject to the lien of the Federal Land Bank mortgage and superior to the wife's deed. This was the full extent of the relief awarded him in such decree. It did not give him a right of present possession; nor did it set aside the deed of the wife, in any other sense than that it established a lien in favor of the plaintiff. The decree for the foreclosing plaintiff fixed the amount of the indebtedness as approximately $4400. Special execution was issued, and sale was had thereunder on May 26, 1931. At such sale the property was sold for the exact amount of the judgment, — the attorney for the defendants being the bidder.
The plaintiff contends that the margin of value, if any, of the land over the amount of the bid, is not sufficient to justify a redemption on his part. He disclaims any intention to redeem. His attitude in argument is that, unless he is permitted to take possession and take the crop, or the rental, he will not be able to realize anything whatsoever thereon. This is only saying that the subject matter of the litigation has evaporated, and that the plaintiff is pursuing a shadow of what might have been if the land had had sufficient margin of value to justify controversy.
On the question of the rights and remedies of a trustee in bankruptcy under a creditor's bill in the state courts, and the limitations upon such remedies, see Crowley v. Brower, 201 Iowa 257, and Hoskins v. Johnston, 205 Iowa 1333. To similar effect see McKay v. Barrick, 207 Iowa 1091; and Lambert v. Reisman Co.,207 Iowa 711. We have no need herein to pursue further this feature of the case.
II. Upon this attitude of the plaintiff, the question naturally arises: What interest has he, or can he subserve for the creditors, by his present maintenance of the mere possession of the land? The question litigated below has become largely moot. If it be conceded that there was a time in 1931 when he was entitled to take the mature crop as the property of the bankrupt, *Page 1122
and was therefore entitled to temporary possession, as an incident of taking possession of the crop, yet it does not follow that he was, or is, entitled to a permanent injunction. In July or August, 1931, he took the matured crop and sold it, standing, for $12.50. For that sum the threshing machine delivered to the purchaser 1600 bushels. The plaintiff collected an additional sum of $10.00 for pasture. The decree appealed from was entered in October, 1931. The issue between the parties was very narrow. The only relief which the court could give to the plaintiff was to sustain the continuance of the injunction; and the only possible relief to the defendants was to deny it. And such is the alternative confronting us now. If we continue this injunction in force, we must be able to see some equitable reason therefor. If we dissolve the injunction, our order can operate only in futuro.
The planting and the gathering of 1931 have become a thing of the past. They are fait accompli. A present dissolution of the injunction will not undo what has been done. To that extent the case is moot, and we will not now undertake to collect the water that has passed over the dam. What is clear upon the record is that the plaintiff is not at the present time entitled to a continuation of the injunction. As a witness, he has been unable to suggest any beneficial use available to him by retention of possession. As a witness, he testified as follows:
"I don't know as I need to make any further claim to the land from which the oats were cut off, but if any need arose, I would claim that I had that right."
This is only assuming the attitude of a "dog in the manger." The statutory period of redemption allowed to the owner of the land will expire on May 26, 1932. We may assume it as a possibility that the wife, as the legal owner, might, with the help of her homestead, be able to finance a redemption from the sheriff's sale. Her right to redemption would be exclusive in the last three months of the redemption year. If the plaintiff be permitted arbitrarily to retain the naked possession of the land until May 26, then there can be no planting of crops for the year 1932, and the land must lie fallow for the ensuing year. Such a cloud upon the title would necessarily depreciate the value of the property and its availability as security for a new debt. If the creditors of the bankrupt have any possible financial *Page 1123
interest in the maintenance of such an attitude by the trustee, it ought to be rendered apparent. Equity maintains injunctions sparingly, and only for equitable reasons. The plaintiff has had the full benefit of the injunction throughout the year 1931. He has wiped the platter clean. True, he has realized but little, and perhaps less than he ought. His case has been reduced in magnitude to a "tempest in a teapot." The plaintiff has himself demonstrated that the 72 acres had no appreciable margin of value over the existing mortgage when the transfer to the wife was made. We think he has already received all the equitable aid to which in any event he can be entitled.
Disregarding, therefore, the past operation of the injunction upon the respective rights of the parties, we hold that the injunction should now be dissolved forthwith.
It is so ordered. Reversed.
WAGNER, C.J., and MORLING, KINDIG, and GRIMM, JJ., concur.
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Andrew J. Lipp was the owner of an 80-acre tract of land. On April 1, 1918, he sold said land to his son-in-law, Albert W. Albright, for $16,000. Albright paid $2,000 in cash, and gave his notes and a mortgage on said premises for the 1. EXECUTORS balance of the purchase price, to wit, $14,000. AND ADMINIS- Later, he paid the sum of $500 on said mortgage. TRATORS: as- The appellant-executrix is the wife of the said sets, ap- Albright, and she signed the said notes and praisal, and mortgage. Lipp died testate, bequeathing said inventory: notes and mortgage to his wife, Ella D. Lipp. fraud in Subsequently, said Ella died testate, and the concealing appellant was appointed executrix of her estate. personal Appellant filed an inventory as such executrix, liability of and listed said notes and mortgage among the executrix. assets of said estate, and reported them as having been executed by her husband. Appellees herein are the sisters of the executrix, and jointly interested with her as beneficiaries under the will of the decedent. The evidence shows that Albright became insolvent, and was unable to pay said notes and mortgage. Various negotiations were had with respect to the disposal of said property, and finally a purchaser was found for the said real estate, who agreed to take the same at a price of $10,000, on condition that the said property was conveyed free and clear of all incumbrances; or, in other words, that the outstanding mortgage was satisfied of record by the payment of the said purchase price of $10,000. A written agreement was entered into between all of said beneficiaries and the purchaser of said premises. Said agreement provided that the said purchaser should pay to the appellant, as executrix of the estate of said Ella, the sum of $10,000, and that the executrix was authorized to accept the same in full of the mortgage of $14,000, upon which the sum of $500 had been paid. If the court approved of said agreement, the title holder, Albright, was to convey the real estate to the purchaser, free and clear of all incumbrances. After this agreement was signed, the transaction *Page 411
was consummated, the purchase price paid, and the real estate conveyed to the purchaser. The objections to the final report of the executrix involve only three items.
I. It is contended by the objectors that the appellant's final report should not be approved, for the reason that the written contract providing for the acceptance of $10,000 in cash in settlement of the mortgage of Albright was, it is contended by the appellees, entered into only upon the oral promise by the appellant that she would account to the appellees for their share of the interest accruing on said mortgage from the time the same had last been paid, to wit, on April 1, 1926, until the 12th day of September, 1927, when said agreement of compromise was entered into. It is contended by the appellees that the appellant was personally obligated on said notes and mortgage, by reason of having executed the same with her husband, and that she concealed said fact from the appellees, and in listing said notes as part of the assets of said estate, failed to show that she was liable thereon, and also in procuring the approval of the said compromise of said mortgage for said sum of $10,000, likewise failed to disclose to the court her personal liability on said notes. The trial court held that the appellant should account to the appellees for the said item of interest for the period of time referred to. The trial court found that the appellant had been guilty of a legal fraud in failing to disclose her liability, in the inventory filed by her as executrix, or to disclose the same when obtaining the approval of the court to the compromise of said mortgage.
With regard to appellees' claim of an oral agreement to the effect that the appellant would pay the same item of interest on said mortgage to the appellees in the event that the settlement and compromise of said mortgage was accepted and 2. ATTORNEY AND the property conveyed to the purchaser, it CLIENT: re- appears that the evidence in regard to said tainer and matter pertains wholly to a conversation between authority: the appellees and the attorney for the proof of au- appellant. There is no showing whatever that the thority: ne- attorney had any authority from the appellant to cessity in make an agreement binding her to pay said general. interest. In fact, the evidence tends to show a want of such authority. We therefore must hold that the claimed agreement to pay said interest was not legally established. *Page 412
We are not, at this point, passing upon the question as to whether or not a conversation was had with the attorney for the executrix, as claimed by the appellees. We are limiting our holding to the single proposition that there is a want of authority shown to bind the appellant by any agreement, if one was made, to pay appellees the interest in question.
At this point, the remaining question is whether or not the appellant should account to the appellees for the said interest because of the alleged concealment on her part of her personal liability upon the said notes referred to. It is appellant's contention that she never incurred any personal liability on said notes and mortgage; that she was in no way a purchaser of said premises; that there was no agreement at any time that she should be personally liable thereon; and that she merely signed said notes and mortgage for the purpose of waiving her dower right in the mortgaged premises. If her contention in this regard is true, there would be no personal liability on her part on said notes and mortgage, even though she signed the same. LeFleur v.Caldwell, 196 Iowa 727; Insell v. McDaniels, 201 Iowa 533. The evidence on her behalf, which is without dispute in the record, tends to show that she never intended to incur any personal liability on said notes and mortgage, and signed the same solely for the purpose of waiving her dower interest in the mortgaged premises. If this is true, she was not required to list a personal liability on her part on said notes and mortgage when reporting the same as assets of said estate, and we are constrained to hold that the court erred in holding that there was legal fraud on her part in failing to so report such liability, or in obtaining the approval of the compromise of said mortgage. There is no claim of any negligence on the part of the appellant in failing to collect said notes from her husband, the undisputed evidence showing that he was insolvent. The appellees failed to show that the appellant was liable on any duly authorized oral contract for the payment of interest on said notes and mortgage for the time in question, or that there was any fraud on the part of the appellant, rendering her liable to said appellees for the said interest. We are constrained to differ from the conclusion of the trial court at this point, and to hold that the appellant should not have been held liable for the item of interest charged to her by the order of the trial court. *Page 413
II. The appellant complains of the action of the trial court in fixing the services of the attorneys for the executrix at the sum of $200, instead of the statutory attorney's fees, which would have amounted to $372.21. Sections 12063 and 3. EXECUTORS 12064, Code, 1927, provide for the allowance of AND ADMINI- a "reasonable fee" for attorneys in matters of STRATORS: an estate, to be determined by the court, but accounting not in excess of certain sums named. There is and settle- evidence in this case strongly tending to ment: com- establish the contention of the appellees that pensation of the attorneys for the executrix agreed to executor: perform the legal services in connection with attorney the administration of said estate for the sum of fees: dis- $200. In any event, the matter of the allowance cretion of of a reasonable compensation as attorney's fees court. was within the discretion of the court, and we fail to find that there was an abuse of such discretion in fixing the amount allowed by the trial court. The order in regard thereto is affirmed.
III. With regard to the compensation of the executrix, the statutes above referred to apply. The court fixed the compensation of the executrix at $200, which would be less than the so-called statutory fee. This likewise was a matter within the discretion of the trial court, and we fail to find from the record any evidence of such abuse of discretion as requires interference on our part in this matter. We think the allowance was adequate and proper, under the record. The order of the trial court will be modified by striking therefrom the provision requiring the appellant to pay the interest on said mortgage from the 1st day of April, 1926, to the 12th day of September, 1927. In all other respects, the order of the district court will be affirmed. The costs of this appeal will be taxed one half to the appellant and one half to the appellees. — Modified andaffirmed.
ALBERT, C.J., and EVANS, KINDIG, and GRIMM, JJ., concur. *Page 414
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The defendant-appellee Ottumwa Auto Company is an Iowa corporation, with its principal place of business at Ottumwa, Iowa. It was engaged in the automobile business for several years prior to April 22, 1926, when it sold to the 1. TAXATION: defendant Wapello Motor Company the major part collection of its merchandise and personal property. The and defendant-appellee W.I. Gladish was the enforcement: president and active manager of the Ottumwa Auto personal Company and the owner of substantially all of liability its capital stock. The plaintiff-appellant is of the county treasurer of Wapello County, Iowa. stockholder Taxes on the property of the Ottumwa Auto who Company were levied as of January 1, 1926, in appropriates the sum of $772.98, and it is this tax which is corporate involved herein. The only question presented on assets. this appeal is whether W.I. Gladish, president and general manager of the Ottumwa Auto Company, is personally liable to pay said taxes, on the claim and theory of the plaintiff county treasurer that the proceeds of the sale of the corporate property were diverted and appropriated by Gladish subsequent to the tax assessment in question. This presents a fact question, and both parties concede that no legal proposition is involved.
Section 8378, Code, 1927, is the basis of the action against Gladish. It reads:
"The diversion of the funds of the corporation to other objects than those mentioned in its articles and in the notice *Page 1185
published, if any person be injured thereby, and the payment of dividends which leaves insufficient funds to meet the liabilities thereof, shall be such fraud as will subject those guilty thereof to the penalties of the preceding section; and such dividends, or their equivalent, in the hands of stockholders, shall be subject to such liabilities. If the directors or other officers or agents of any corporation shall declare and pay any dividend when such corporation is known by them to be insolvent, or any dividend the payment of which would render it insolvent, or which would diminish the amount of its capital stock, all directors, officers, or agents knowingly consenting thereto shall be jointly and severally liable for all the debts of such corporation then existing, but dividends made in good faith before knowledge of the occurring of losses shall not come within the provisions of this section."
Under the terms of the preceding section, 8377, it is provided that intentional fraud in failing to comply substantially with the articles of incorporation, or in deceiving the public or individuals in relation to their means or their liabilities, shall be a misdemeanor, and that any person who has sustained injury from such fraud may also recover damages therefor against those guilty of participating in such fraud. Does the evidence show that Gladish, as a corporate officer, did divert the funds of the corporation to other objects than those mentioned in its articles and in the notice published? There can be no question, under this record, that Gladish, as a corporate officer, did take possession of the proceeds of the sale of the Ottumwa Auto Company. He did go to Fort Worth, Texas, and personally engage in a similar business.
The sale of the personal property of the Ottumwa Auto Company to the Wapello Motor Company on or about April 22, 1926, amounted to $31,421.18, and it was paid as follows: April 21, 1926, $5,000; April 24, 1926, $10,000; April 29, 1926, $5,000; April 29, 1926, $11,421.18. The bank account of the Ottumwa Auto Company was kept in the First National Bank of Ottumwa, and it is shown by the books of said bank that the deposits of Gladish in said bank included the amounts paid by the Wapello Motor Company for the property of the Ottumwa Auto Company at or about the time the purchase price payments were made by the purchaser, Wapello Motor Company. It was *Page 1186
agreed, as shown by the record, that all of said checks were made to and indorsed in the name of the Ottumwa Auto Company, and that the indorsement was made by Gladish. It is also shown that Gladish, on April 26, 1926, withdrew by check from said account $18,232.61, and on May 15, 1926, withdrew by check the sum of $15,840.36. The cashier of the First National Bank of Ottumwa testified that these were the largest withdrawals, but that there were withdrawals "every day in between the dates April 23, 1926, and May 15, 1926, in miscellaneous amounts." The cashier Ackley testified that he knew Gladish took money when he went to Fort Worth, Texas, to go into business at that place, and stated that Gladish took somewhere in the neighborhood of fifteen to twenty thousand, when he went to Fort Worth. The cashier further testified that he knew that Gladish used personal securities in his investment at Fort Worth. The record also shows that the Ottumwa Auto Company left notes for collection at the bank, some of which had been collected. Furthermore, a part of those notes were remitted to Mr. Gladish, and a part of them were turned over to a creditor, and all of the proceeds that the bank collected were assigned to a creditor of the Ottumwa Auto Company. The contract of sale of the Ottumwa Auto Company with the Wapello Motor Company included substantially all of its property in its place of business in the city of Ottumwa, Iowa, and it is shown that Gladish received the full purchase price. Prior to the date of the contract of sale and payment for the merchandise sold, the 1926 taxes were due and payable. There was nothing of value left in the possession of the Ottumwa Auto Company two or three months after the sale. Cashier Ackley testified: "I do not know of any property the Ottumwa Auto Company left here in Ottumwa." True, the corporation known as the Ottumwa Auto Company was not formally or legally dissolved, but whether it was or not, Gladish, as officer and owner of substantially all the stock, may not say to the plaintiff county treasurer: "Go to. I have sold the assets of my corporation, received the proceeds, and have repudiated the debt due the sovereign state." It would be a fraud upon the state and upon the plaintiff, as representative of the county of Wapello. The statute of this state prohibits the diversion of corporate funds to other things than those mentioned in its articles, and it is *Page 1187
a well settled rule of the common law that stockholders of a corporation cannot divide its property or assets among themselves without first paying the corporate debts. See Luedecke v. DesMoines Cab. Co., 140 Iowa 223. In the case of Swartley v. OakLeaf Creamery Co., 135 Iowa 573, the defendant company became dormant, and the directors of the company made a distribution of corporate funds among the stockholders, thereby rendering the company insolvent, and without paying existing indebtedness. It was held, in substance, that the directors, knowing that it would render the company insolvent, or materially diminish its capital stock, were personally liable for then existing indebtedness, and that a creditor had the right to recover against said directors either jointly or severally, and without first exhausting the property of the corporation. See, also, Wisconsin Ark. Lbr. Co.v. Cable, 159 Iowa 81.
We cannot escape the conclusion that the defendant Gladish in the instant case appropriated to his own use substantially all the assets of the Ottumwa Auto Company. No corporate property of any value was left in the state of Iowa to pay the debt owed to this plaintiff.
This is an appeal in equity; and in this court, the facts, as well as the law of the case, are reviewed and readjudicated.Pierce v. Wilson, 2 Iowa (Clarke) 20, 26. It is said in Austin Spicer v. Carpenter, 2 G. Greene (Iowa) 131, l.c. 135:
"On appeal, a court of equity, freed from those rigid rules which limit and confine a court of errors, having acquired jurisdiction, will examine into the merits of the case for the purpose of administering justice, guided only by 2. APPEAL AND the universal principles of equity ERROR: jurisprudence. Not confined to errors apparent, review: the court will correct errors of conscience, scope and which sometimes are of such a nature that they extent: cannot be spread upon the record. All appeals in appeal in chancery must be tried de novo, the same as if equity: this court had original jurisdiction, regardless method of of the decision of the court below, except so trial. far as necessary to a correct understanding of the record and the matters at issue."
It may be pointed out that the defendant Gladish did not personally appear upon the trial of this cause, nor was his *Page 1188
deposition taken; but his attorney appeared for and on his behalf, having entered an appearance for Gladish, and participated in the trial. The decree and judgment entered as to the defendant Gladish is — Reversed.
MORLING, C.J., and STEVENS, ALBERT, and WAGNER, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433141/
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This case involves the question of the custody of a twenty-month-old child, the contest being between the young mother and the mother's aunt and uncle with whom the child has resided and been cared for since her birth out of wedlock. Cases of this character tear at the heart strings of all normal human beings and are recognized as perhaps the most difficult and baffling to the courts of all the matters with which they have to deal. Because of the inherent sentimentality of the human heart, courts, necessarily composed of men endowed with ordinary attributes, have found it imperative to brace and steel themselves against these almost overpowering influences, where a mother's love for her baby is involved, and, at every stage of the proceeding, keep an eye single to the best interests of the child, always realizing, of course, that at best it is only problematical, being entirely in futuro. It is a known fact, incapable of disputation, that not infrequently from most unpromising environments and surroundings have emerged men and women of great worth and accomplishments, leaders in church and state far outrivaling many of their more favored compeers brought up in so-called best homes and environments. To have been born poor, to have known what it is to want, to have been forced, from sheer necessity, to struggle and fight for existence, to have learned frugality and industry in the *Page 1213
"school of hard knocks" and to have had, with all, the love of mother — these have, perhaps, been the most potent elements comprising the fulcrum in the lives of countless numbers of successful men and women composing the backbone of this great country; hence, to determine in each particular case what is for the best interests of a little child is a most trying and dubious question.
The defendants alleged in their answer to the petition, in substance, three defenses: (1) That Lela, the mother of Sharon Lee Ellison, on or about the first day of December, 1936, orally agreed to surrender the custody and possession of said child unto the defendants and that they accepted such surrender, custody and care of such child and relying thereon have continuously cared for said child; (2) that the mother, on or about the month of May, 1937, willfully and wrongfully abandoned said child at the farm of the defendants and refused to look after said child, removing herself to Waterloo, Iowa, and, although she was repeatedly invited to return and make her home with them, she refused to do so and abandoned said child to the care, custody and control of the defendants, which abandonment continued to the commencement of this action; (3) that said Lela and her husband have not established a permanent and proper home for the development of a child of such tender years and that the progress, both social and mental, of such child will be greatly impaired should the court remove its custody unto the said Lela and her husband and especially alleging that said home of the said Lela and her husband is inadequate and improper in that the habits of Lela and Joe are immoral in that they are addicted to the use of intoxicating liquors and indulging in the frequent use of profane language. All of said defenses are specifically denied in a reply filed in said case.
There was a trial to the court and, after hearing the evidence, the trial court entered judgment against the petitioner in which judgment the learned trial court made the following pronouncement:
"This proceeding is brought by habeas corpus to recover the custody of the child, Sharon Lee Ellison, a child born unto the said Lela Ellison (now Nardicchio) out of wedlock, which child was taken by the consent of the said Lela, practically at once after its birth to the home of the Defendants in this case, *Page 1214
where the said child has remained at all times since, and was the home in which the said Lela lived for some considerable time and until because of a trivial matter she left that home and the child and went to Waterloo, Iowa, where she lived for several months and finally in the spring of 1938 become intermarried with one Joe Nardicchio and is now known as Lela Nardicchio.
"In this trial the Defendants have been present in Court with their son and their daughter constituting their family, and the Plaintiff, Lela Ellison Nardicchio, has been present in Court and has testified; and her husband, Joe Nardicchio, has been present in Court during the four days of hearing, but he has not testified; the Court, however, has observed him and his conduct in the courtroom as well as the testimony and conduct of the said Lela Ellison Nardicchio, and the conduct of the Defendants and of the witnesses for all parties and is thoroughly satisfied that the best interests of the child demand that it be left with the Defendants and that the said Lela Nardicchio and her husband be not permitted to have the care, custody and control of the said child. The mother, Lela Nardicchio, was upon the witness stand twice during the trial and from the evidence and from her conduct and demeanor the Court is satisfied that she is not capable of giving the said child a proper care, or comfort or home and that the child will be very much better off in the home of the Defendants than to be with its mother.
"The Court is most reluctant whenever a mother asks for her child to give the child to any person other than the mother; but in this case the child was taken away practically at once after its birth and has been cared for and supported by the Defendants ever since and the Court is satisfied that the mother has never become really attached to the child; while on the other hand it is evident that the affection of the child for the Defendants Platts and the affection of the Platts' family for the child is a marked affection.
"It must not be overlooked that the child is of the blood of the Defendants herein and that they have seen fit to incur the expense of the four days trial with their witnesses and attorneys to protect this child and that if left with these Defendants it will be near the grandmother who also resides very near the Platts home.
"On the whole the Court finds that any other disposition *Page 1215
of the child than to award it to the Defendants herein would be a gross injustice to the child."
[1] In matters of this kind, the well settled rule in this state is that the paramount consideration is the best interests of the child. This is so fundamental that no citation of authorities is necessary, but see McDonald v. Stitt, 118 Iowa 199,91 N.W. 1031; Hadley v. Forrest, 112 Iowa 125, 83 N.W. 822; and Knochemus v. King, 193 Iowa 1282, 1285, 188 N.W. 957. Many other cases might be cited to the same effect.
[2] "Moreover, it is a case where so much depends upon the appearance and demeanor of the parties and the witnesses, so much upon the discretion of the trial court, and so much upon the welfare of the child as disclosed by his appearance and affections, that we are not justified ordinarily in disturbing the finding of the trial court." Smidt v. Benenga, 140 Iowa 399,403, 118 N.W. 439, 441.
[3] For many years, in this state, actions of this character were treated as strictly law actions with the finding of the trial court having the same force and effect as the verdict of a jury. Bonnett v. Bonnett, 61 Iowa 199, 201, 16 N.W. 91, 47 Am.Rep. 810. In fact, this rule was announced and adhered to in Knochemus v. King, supra, decided by this court as recently as the year 1922. However, in the more recent cases, this court has treated habeas corpus matters involving the custody of minor children in the nature of an equity proceeding. See Barry v. Reeves, 203 Iowa 1345, 214 N.W. 519; Barnett v. Blakley, 202 Iowa 1,5, 209 N.W. 412; and Jensen v. Sorenson, 211 Iowa 354, 367,233 N.W. 717.
[4] It would serve no useful purpose to attempt an analysis of the long record of the testimony. As is usual in these family matters, "mountains have been made out of molehills" and trivial matters magnified beyond reason and, for the sake of all concerned, the least said about such matters and the sooner they are forgotten by the litigants and the immediate family the better for all concerned. We have carefully read the entire record and given consideration to every proposition presented, and conclude that when we apply the principle of law that the best interest of the child is paramount and above all other questions, under this record we would not be justified in disturbing the *Page 1216
decree of the able and experienced trial court who heard and saw the witnesses.
The case is accordingly affirmed. — Affirmed.
MITCHELL, C.J., and HALE, MILLER, SAGER, OLIVER, STIGER, and BLISS, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433142/
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The instruments in suit are a negotiable promissory note, and mortgage on real estate securing the same, purporting to be in the amount of $9,000, and to have been executed by the defendant Lewis E. Jones unto D.J. Murphy on the 22d day of October, 1921. Said note and mortgage were transferred to plaintiff on the 5th day of December, 1921. The plaintiff has also paid certain amounts for delinquent taxes on the real estate described in the mortgage, and asks that said amounts be included in the judgment, as per the terms and provisions of the mortgage.
The defendant Lewis E. Jones makes defense. In one count he denies the genuineness of his signature to the note and mortgage; in another count he avers failure of consideration; in another count he alleges material alteration; and in still another count he alleges fraud, by reason of alleged false representations, to wit: that Murphy held and had fully paid and satisfied certain obligations incurred by the defendant Lewis E. Jones to various parties in the aggregate sum of several thousand dollars; that Murphy, at the time of the execution of the note, had the notes, mortgage, and other evidences of the indebtedness in his possession; and that he had paid for and *Page 666
procured the same, either for himself, as owner thereof, or for and in behalf of the defendant, as his agent, representative, and attorney.
The plaintiff alleged, in an amendment to the petition, and also in reply to defendant's answer, that it is the holder of the note in due course. The court rendered judgment, dismissing plaintiff's petition, and the plaintiff has appealed.
By reason of the verified denial of the signatures to the instruments in suit, the burden is upon the plaintiff to prove that the defendant signed the instruments (Damman v.Vollenweider, 126 Iowa 327), or a ratification by the defendant Jones of said instruments, or adoption of the 1. BILLS AND signatures thereto as his own. McColl v. Jordan,
NOTES: 200 Iowa 961. Ratification of the instruments by execution: the defendant, or the adoption of the signatures denial of thereto as his own, could be shown under the signature: allegation that the defendant Jones made, avoidance. executed, and delivered the instruments. McColl v. Jordan, supra; Long v. Osborn, 91 Iowa 160.
The burden as to the remaining issues raised by the defendant's answer is upon the defendant.
In the fall of 1921, the defendant Jones claims to have been indebted on a note in the principal sum of $3,000, and he executed unto Murphy a promissory note, for the purpose of enabling Murphy to obtain thereon a sum sufficient to pay said note and other indebtedness which Murphy promised to pay from the proceeds thereof. The amount required for this purpose, as testified to by Jones, was approximately $7,000. Jones testified that he signed a $7,000 note. While the note, for whatever amount it was executed, contained the name of Murphy as payee, it is clearly apparent from the record that the intention of the parties was that Murphy was to transfer the note, and thereby obtain for Jones a loan, — that is, the money with which to pay the indebtedness of Jones.
The testimony fails to establish the alleged false representations in defendant's answer claimed to have been made by Murphy. Those alleged representations are as hereinbefore set out, but the facts as disclosed by the record are that Jones gave Murphy the amount of his indebtedness which he desired paid, and which was to be taken care of by Murphy when Murphy *Page 667
received the money from the "company" by a transfer of the note and mortgage. Therefore, defendant has failed to prove the alleged false representations of fact averred in his answer, and his defense of fraud must fail.
While a false promise made with no intention of performance may constitute fraud (City Nat. Bank of Auburn v. Mason, 192 Iowa 1048), there is no such averment among the allegations of fraud in defendant's answer.
We turn to the record, to ascertain the facts as to the signature attached to the instruments in suit, and defendant's plea of material alteration. The defendant, on being asked as to his signature, equivocated, but finally said that the signature in question was not his signature. The following is a portion of his testimony with reference thereto:
"Q. Do you know your own signature, Mr. Jones, — do you know your own handwriting? A. Well, I don't know whether I do or not; there is lots of others that looks a good deal like my handwriting. Q. Well, here is plaintiff's Exhibit 1, — now did you sign that? A. Well, in my mind it reminds me that I didn't sign that $9,000 mortgage. I signed a seven, it looks to me like that signature here is; but that's not my signature. Q. You didn't sign that? A. I didn't sign that paper. Q. And you didn't sign that signature, `Lewis E. Jones?' A. No, sir, I don't think I did, unless he remade this $7,000 mortgage into a nine. No, I did not sign it. I signed for a note for him, but it was not a $9,000 mortgage. I said it was for $7,000."
In his answer to the petition filed in a suit previously litigated between the Citizens State Bank of Waukon and himself, he pleads the execution of a note to Murphy on or about October 22, 1921. It thus becomes apparent that, on October 22, 1921, the exact date of the note and mortgage in suit, he did execute a note and mortgage unto Murphy. The defendant in his testimony states that he has never seen nor heard of that note and mortgage since. It thus becomes manifest that the defendant's claim, according to his testimony, is not material alteration of the instruments in suit, but that the signature attached thereto is not his genuine signature; and his plea of material alteration, as contended in his answer, must fail *Page 668
The plaintiff introduced in evidence the transcript of defendant's testimony in the previous litigation between him and the Citizens State Bank of Waukon. Said transcript is admissible for the purposes of impeachment, and as admissions or declarations against interest. See Section 11353 of the Code of 1924; Barish v. Barish, 190 Iowa 493.
In his testimony in the former litigation, as shown by the transcript, he makes numerous references to the $9,000 mortgage, some of which are as follows:
"Q. Do you remember giving a $9,000 mortgage to D.J. Murphy on your farm? A. Yes, sir. Q. How long before you gave the $9,000 mortgage was it that you signed the first note for this $1,200 note at the Citizens State Bank that you remember? A. It was just about one year. Q. Now we are going back to the time you gave this $9,000 mortgage, — just before it. Did anybody speak to you about taking up that note before that time, — Murphy or anybody else? A. I spoke to Mr. Murphy to take up that note. I spoke to him about taking up several notes. Q. Do you remember about when it was that you gave this $9,000 mortgage on your farm? You may state whether or not in the fall or early winter of 1921 was when it was. A. Yes, it, was Q. What did he say about the $1,200 note or the $270 note, as to whether they should go in that $9,000 mortgage or not? A. Yes, he did; he figured it into the $9,000 mortgage himself. Q. What did he say? A. He said he would pay for these notes from this $9,000 mortgage. Q. Did you, at the time you gave the $9,000 mortgage, did you get any cash from Murphy? A. No, sir, I did not. Q. Was the money that you had Murphy send to Monona at Orr's bank taken out of this $9,000? A. Yes. Q. State whether or not he paid it out of your $9,000, — that is what I want to get at. A. Yes, he did. Q. Now do you remember any other note that was included in this $9,000 that was not paid? A. There was another note at Postville."
There are numerous other references in the transcript of said testimony to the execution of a $9,000 note and mortgage by Jones to Murphy, and nothing therein as to the execution of a $7,000 note and mortgage.
The plaintiff introduced the testimony of three witnesses *Page 669
familiar with the signature and handwriting of the defendant Jones, who testified that the signatures to the instruments in question were genuine. The notary public before whom the mortgage purported to have been acknowledged testified that, while she had no independent recollection of the transaction, she had seen Mr. Jones's signature a good many times; that she was a stenographer in Murphy's office; and that the signature appeared to be the genuine signature of Jones.
Jones testified that, before making a demand upon Murphy for money to pay a certain note which Murphy was to pay from the money obtained by a transfer of the note and mortgage, he saw the record of the mortgage, and knew that it was for $9,000.
Numerous instruments containing the admitted signatures of Jones were introduced in evidence. No one claiming to be familiar with the signature of Jones gave testimony denying the genuineness of the signature.
With the array of testimony in support of the genuineness of the signatures, which is only feebly denied by Jones himself, and in view of his testimony hereinbefore mentioned, as taken from the transcript of his testimony in the previous litigation, we can arrive at no other conclusion than that the signatures are genuine, and recognized as such by the defendant Jones.
We have left for consideration the defendant's plea of failure of consideration. As hereinbefore stated, Jones testified that he gave to Murphy the amount of his indebtedness which he desired to pay, and which he testified approximated the 2. BILLS AND sum of $7,000. There is no question that some NOTES: of this indebtedness has not been paid by considera- Murphy. But the question is as to whether or tion: when not there has been any failure of considera- consideration for the $9,000 note. One of tion defendant's claims is that he was indebted on complete. a $3,000 note, secured by mortgage; but there was of record a $5,000 mortgage, which, since the execution of the $9,000 note and mortgage, was released. Jones placed implicit faith and confidence in Murphy as his agent or attorney. The transaction between the defendant Jones and Murphy was not that Murphy, immediately upon the execution of the note, was to pay the indebtedness *Page 670
listed by Jones, but that Murphy was to transfer the note and get the money with which to pay the indebtedness mentioned. The defendant knew that this was to be the course of action pursued by Murphy. Murphy was, in fact, the defendant's agent to procure a loan or money for the use and benefit of Jones, and was also his agent to pay the indebtedness of Jones, after procuring for him as a loan the required amount of money. When Murphy transferred the note and procured the money for the use and benefit of Jones, the consideration for the note was complete; and, although he may have failed to apply the money so procured as directed by Jones, there was no failure of consideration for the note. When Murphy transferred the note and procured the money therefor, it was not Murphy's money, but Jones's money in the hands of Murphy, as the agent of Jones.
A brother of defendant's testified that he was present at a preliminary conversation between Murphy and his brother relative to the loan, and that the talk was that Murphy was to get him a loan, and that there was talk as to where Murphy would get the loan. The defendant testified relative to a time subsequent to the execution of the note and mortgage:
"I came to town, and I went in and asked him to see if he had the money yet that was due me to go and pay these notes at the bank, and he said, `I haven't got it yet, but you go over and renew those notes.' He said he would pay the notes when he got the money from the loan."
And the defendant renewed the notes at the bank, which was to be paid by Murphy when he received the money on the $9,000 note. The fact that the defendant subsequently renewed the notes at the bank, as it appears to us, is conclusive that it was the intent of the parties, in the execution of the $9,000 note and mortgage, that said indebtedness, with other indebtedness, was to be paid out of money to be procured as a loan for Jones by the transfer of the latter note and mortgage.
Jones further testified:
"He, Murphy, would always say he hadn't got it [the money] from the company; that he hadn't been able to get it from the company; that he hadn't got the money yet." *Page 671
The plaintiff company paid full value for the note. Since Murphy transferred the note to the plaintiff, as was intended by Jones, and obtained for Jones the money which came into Murphy's hands, as the agent of Jones, there was no failure of consideration. Jones's cause of action, if any, is against Murphy for subsequent misapplication or appropriation by Murphy of the funds, as his agent. Murphy's promise to pay the debts from the money procured by a transfer of the note and mortgage was executory. There could not have been any breach of this executory promise, or misapplication or appropriation of funds by Murphy at the time of the transfer of the note and mortgage to the plaintiff company. Richardson v. Cheshire, 193 Iowa 930; GrinnellSav. Bank v. Gordon, 195 Iowa 208.
Moreover, even if it could be said that there has been a partial failure of consideration, we find from the record that the plaintiff company is a holder of said note in due course. The purchase by the plaintiff company was made by 3. BILLS AND correspondence between Murphy and Reilly, NOTES: secretary and treasurer of the company. The holdership entire correspondence is in evidence. While in due the purchase of the note was authorized by the course: finance committee of the plaintiff company, testimony of there is nothing to indicate that said corporate committee had any information other than what officers. it received through Reilly. Testimony tending to show that the plaintiff is the holder in due course may be direct testimony from witnesses, or it may be established by facts and circumstances. Where the officer of a corporation purchasing a note testifies that the transaction was with him, and that he had no notice of any defense thereto, the evidence may be sufficient to justify a finding that the corporation is a holder in due course, although the other officers of the corporation did not testify on the subject. Des Moines Sav. Bank v. Arthur, 163 Iowa 205; First Nat. Bank v. Dutton, 199 Iowa 468.
"The existence or non-existence of a disputed fact may be established by facts and circumstances, as well as by direct testimony. While a jury or a court is not bound to accept the testimony of any witness as absolutely true, yet neither the court nor the jury has a right to disregard the testimony of a *Page 672
witness or refuse to accept a fact as established, where all the facts and circumstances corroborate the witness, and the testimony of the witness and the facts and circumstances show affirmatively the existence or the non-existence of the disputed fact." Robertson v. U.S. Live Stock Co., 164 Iowa 230.
We find no bad faith upon the part of the plaintiff company in the purchase of the note. It paid full value for the note, without any notice of claimed failure of consideration; and, as hereinbefore held, there is no failure of consideration.
We find that the action of the trial court in dismissing plaintiff's petition is erroneous; that plaintiff is entitled to judgment upon the note and for the amounts paid for delinquent taxes, and to a decree of foreclosure of the mortgage in suit securing the same.
For the foregoing reasons, the action of the trial court is reversed.
Appellee's motion to strike a portion of appellant's abstract and tax a portion of the printing of same to appellant, having been submitted with the case, has had our consideration, and the same is hereby overruled. — Reversed.
STEVENS, C.J., and DE GRAFF, ALBERT, and MORLING, JJ., concur.
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433143/
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On February 6th, 1925, a partnership composed of W.S. Carver and the defendant, John H. Gould, was the owner of certain real estate situated in Trail County, North Dakota. On that date, H.J. Maxfield was the record owner of approximately 2400 acres of land in Buffalo County, Wisconsin. The North Dakota land was encumbered by mortgage indebtedness in the sum of $13,900.00 and the Wisconsin land by mortgage indebtedness in the sum of $23,000.00, consisting of six separate first mortgages upon different tracts thereof. On the aforesaid date, a contract was entered into between the aforesaid parties for the exchange by Carver Gould of the North Dakota land with Maxfield for the Wisconsin real estate. A deed was executed by Maxfield to Carver Gould for the Wisconsin real estate, referring to the mortgages thereon, and containing an assumption clause and an agreement by the grantees to pay the same. The amount remaining due upon one of these separate mortgage notes is what is involved in the Wisconsin judgment, upon which this suit is brought. Said note and mortgage were executed on June 1, 1923, by one Calvin to E.P. Keenan and J.W. Clarey, and the plaintiff in this action became the owner and holder of the note by endorsement, and of the mortgage by assignment. This mortgage indebtedness, as hereinbefore stated, was assumed by the grantees under the provisions to that effect in the deed executed by Maxfield.
Action was brought in the proper court in Wisconsin, asking judgment upon the note and foreclosure of the mortgage. The defendant Gould personally appeared in the action in the Wisconsin court and filed an answer, in which he alleged that *Page 985
the assumption clause was inserted in the deed contrary to the provisions of the agreement of exchange, and through a mistake of the scrivener who drew the deed; that he never agreed with anyone to assume and pay said mortgage indebtedness ($23,000) or any part thereof, and asked that the plaintiff's petition be dismissed as to him. On the issues joined, the Wisconsin court found against the defendant as follows:
"That the defendant John H. Gould has ratified the aforesaid assumption clause in said deed, and that he is estopped from questioning his liability under such assumption clause, and that plaintiff is entitled to judgment of foreclosure and sale herein as prayed for, and that in case of deficiency upon such sale, judgment for such deficiency may be entered in the usual and regular course against said defendant Gould."
The result of the Wisconsin suit was that, in June, 1930, a judgment was entered against the defendant Gould in the sum of $7425.34. No appeal was taken from the Wisconsin judgment.
As hereinbefore stated, the instant suit is upon the Wisconsin judgment. The defendant Gould appeared in the instant suit and pleaded as a counterclaim, in substance, that, on or about June 1, 1923, E.P. Keenan and J.W. Clarey, partners under the firm name and style of Keenan Clarey, were engaged in the real estate and loan business in Minneapolis, Minnesota, and held the title to the Wisconsin real estate; that they, and officers of the plaintiff-corporation, and other parties constituting assignees of Keenan Clarey and assignors of the plaintiff-corporation, entered into a fraudulent scheme to defraud the public generally and the defendant in particular; that the method employed in the perpetration of said fraud was the conveyance of the Wisconsin land by Keenan Clarey to one or more stool pigeons, who executed notes secured by mortgages thereon to Keenan Clarey; that said. Keenan Clarey would then transfer the notes to another confederate in the fraud; that the note and mortgage in suit were executed by Arthur M. Calvin to Keenan Clarey, which note, by endorsement, came into the hands of the plaintiff-corporation, and the latter became the owner of the mortgage by assignment; that in February, 1925, Keenan
Clarey were the holders or guarantors of mortgage *Page 986
indebtedness against the Wisconsin real estate in the sum of $23,000.00; that Keenan and Clarey proposed to trade the equity in the Wisconsin real estate for the equity in the aforesaid North Dakota real estate, the former being subject to $23,000.00 encumbrance and the latter to $13,900.00 encumbrance; that Keenan and Clarey, assuming to act as the agent of the defendant, without his knowledge or consent, prepared and had executed by Maxfield and wife a deed to the Wisconsin land, which recited therein that Carver Gould assumed and agreed to pay the $23,000.00 encumbrance on the Wisconsin land, thereby betraying and defrauding defendant into assuming, or appearing to assume, said $23,000.00 encumbrance upon the Wisconsin land; that by reason of said assumption clause in the deed thus fraudulently obtained, the defendant has been damaged by the amount of said encumbrance, as increased by interest and costs, in the sum of $33,000.00. He further alleges in his counterclaim or set-off false and fraudulent representations by E.P. Keenan, of the firm of Keenan Clarey, as to the condition of the Wisconsin land as an inducement for the contract, and that he was induced thereby to enter into the exchange whereby he has been defrauded by Keenan and his associates into an apparent and seeming assumption of said encumbrance on the Wisconsin land, subjecting him to liability for judgments thereon, amounting to $33,000.00, including interest and costs; that the cause of action set forth in the counterclaim or set-off arose out of the transaction set forth in plaintiff's petition and is connected with the subject of plaintiff's action; that because of the false and fraudulent representations by Keenan, which he believed and upon which he relied, he was induced to enter into the exchange contract for the North Dakota land and the Wisconsin land, and was defrauded by said Keenan and his associates into an apparent and seeming assumption of said encumbrance on the Wisconsin land, subjecting him to a liability in the amount of $33,000.00, including interest and costs; that, because of said representations, he, in trying to make said land suitable, productive and usable, expended about $10,000.00 more, and that he has been damaged in the total sum of $44,000.00, which he pleads as a set-off against plaintiff's claim on the judgment.
The plaintiff in its reply pleads, in substance, that the matters set up in defendant's counterclaim or set-off inhered in the *Page 987
original cause of action in Wisconsin, and that the Wisconsin court found against the defendant and in favor of the plaintiff, and that, because of the Wisconsin judgment, the defendant is estopped from urging the matters alleged in his counterclaim or set-off; that the defendant is individually liable upon said judgment; that, if there is a claim for damages, the same is not the property of the defendant, John H. Gould, but is either the property of the partnership composed of W.S. Carver and John H. Gould, or of the trustees for said partnership, to wit, Paul Hewitt and Chas. L. Snyder; and that the defense alleged in the counterclaim or set-off was barred by the Statute of Limitations at the time this action was brought.
The pleadings of the respective parties constitute seventy-three pages of the abstract, but we deem the foregoing the meat thereof and a sufficient statement upon which to base our conclusion.
At the close of all the evidence, the plaintiff moved for a directed verdict on various grounds, among which are that there is no competent evidence upon which the jury could find for the defendant and against the plaintiff; that if the jury should return a verdict for the defendant, it would be the duty of the court, under the issues and evidence presented, to set the same aside; that the plaintiff's action is based upon its judgment rendered by a court in Wisconsin having full jurisdiction of the subject matter and of the person of the defendant; and that said judgment is entitled to full faith and credit under the Constitution of the United States, and that the matters alleged in the counterclaim or set-off could not constitute a defense to plaintiff's action upon the judgment.
The court instructed the jury that the judgment sued upon is a valid and legal judgment, and that the plaintiff is entitled to enforce said judgment against the defendant, unless he has established, by a preponderance of the evidence, that he has a legal defense or set-off against the same as alleged by him.
[1, 2] A careful examination of defendant's counterclaim or set-off discloses that the damage therein asserted by him arises because of the assumption clause in the deed and his seeming or apparent liability thereunder, and because of money expended by him in an endeavor to make the Wisconsin land "suitable, productive and usable." There is no evidence in the *Page 988
record from which the jury could find any conspiracy as among the plaintiff and its assignors. Any amount expended by the defendant to make the Wisconsin farm "suitable, productive and usable" could not be recovered in an independent action based upon fraudulent representations as to the condition of the farm, and therefore cannot be used as a set-off. The measure of damages recoverable for false and fraudulent representations as to the condition of a farm is the difference between its fair and reasonable market value at the time in question, as it actually is, and what would have been said value at said time, in the condition as represented. See Aldrich v. Worley, 200 Iowa 1009; Stoke v. Converse, 153 Iowa 274. There is no evidence in the record as to the fair and reasonable market value of the Wisconsin farm at the time in question, to wit, February, 1925, nor what it would have been if as represented. For this reason alone, regardless of other matters urged as error relative to the submission of the alleged false and fraudulent representations as to the condition of the farm, the court should not have submitted to the jury the alleged false and fraudulent representations as to the condition of the farm as a basis for set-off against the judgment of the plaintiff. This matter was called to the attention of the court by timely objections and exceptions.
[3] This leaves for consideration the remaining matters alleged in defendant's counterclaim or set-off. It will be observed thatsaid matters relate only to the validity of the assumption clausein the deed, and defendant's seeming or apparent liabilitythereunder for the mortgage encumbrance upon the Wisconsin land.
In other words, it is defendant's claim as to damage in the amount of $33,000.00 that because of the alleged fraudulent manipulations of plaintiff and its assignors, he apparently became liable for the mortgage encumbrance under the assumption clause in the deed. If defendant was liable at all for the claim now merged in the judgment upon which the instant suit is brought, it is only because of liability under the assumption clause in the deed. Action was brought in a proper court in Wisconsin, one having jurisdiction of the subject matter, in which personal judgment was asked against the defendant by reason of said assumption clause. The defendant personally appeared in said action and made defense. The Wisconsin court had jurisdiction of both the subject matter and of the person *Page 989
of the defendant. In his answer to the petition filed in the Wisconsin court, he alleged that the assumption clause was inserted in the deed contrary to the provisions of the agreement of exchange, and through mistake of the scrivener who drew the deed, and that he never agreed with anyone to assume and pay said mortgage indebtedness ($23,000.00) or any part thereof, and asked that plaintiff's petition be dismissed as to him. The Wisconsin court found against the defendant and that he was personally liable under the assumption clause in the deed. It will be noted that his claim in the Wisconsin court was that he was not liable under said clause; he asserts practically the same claim in the instant action. While in the Wisconsin court he based his claim upon mistake, he now bases his claim under a little different cloak and calls it fraud.
It is the appellant's contention in this action that any counterclaim or set-off which the defendant may have as against the plaintiff or its assignors, by reason of the pleaded fraud therein, as affecting the validity of the assumption clause andhis liability thereunder, inhered in the original cause of action in which the Wisconsin judgment was rendered and cannot be used as against the judgment. In an action on a judgment, defendant, in the absence of any plea of fraud in the procurement of the judgment, may not plead as a set-off or counterclaim the invalidity of the original obligation upon which the judgment was rendered. See Ashby v. Manley, 191 Iowa 113, and cases therein cited; Oswalt v. Cronk, 195 Iowa 230. There is no contention in the instant case that the Wisconsin judgment was procured by fraud. A judgment is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might or could have been offered for that purpose. In addition to the aforesaid authorities, see King City v. Southern Surety Company, 212 Iowa 1230; Cromwell v. County of Sac (U.S.), 24 L. Ed. 195. In Cromwell v. County of Sac (U.S.), 24 L. Ed. 195, reading at page 197, the Supreme Court of the United States declared:
"It (the judgment) is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received *Page 990
to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. Thus, for example, a judgment rendered upon a promissory note is conclusive as to the validity of the instrument and the amountdue upon it, although it be subsequently alleged that perfect defenses actually existed, of which no proof was offered, * * * If such defenses were not presented in the action, and established by competent evidence, the subsequent allegation of their existence is of no legal consequence. The judgment is as conclusive, so far as future proceedings at law are concerned, as though the defenses never existed. The language, therefore, which is so often used, that a judgment estops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented, is strictly accurate, when applied to the demand or claim incontroversy. Such demand or claim, having passed into judgment,cannot again be brought into litigation between the parties inproceedings at law, upon any ground whatever." (Writer's italics.)
The matter in controversy in the suit in Wisconsin was as to whether defendant was liable under the assumption clause in the deed. In Ashby v. Manley, 191 Iowa 113, an action was brought upon a foreign judgment which was obtained upon a note. In the third count of the answer, the defendant pleaded a counterclaim or set-off based upon the alleged fraud of appellee in connection with the transaction out of which the note in question originated, whereby it was claimed by the defendant that he was defrauded in the amount of his liability upon the note. In holding that this pleaded counterclaim or set-off constituted no defense to the judgment, we said:
"This count of the answer is the pleading of a counterclaim for fraud in the inception and procurement of the note sued upon. * * * If the judgment is valid and binding on the appellant, he cannot now plead, as a set-off or counterclaim to such judgment,the invalidity of the original obligation upon which the judgmentwas procured. (Writer's italics.) We have held that, in a suit on a judgment, the defendant cannot be allowed to attack the judgment on account of a defense to the cause of action which might be interposed in the action on which the judgment has been recovered, where there is no allegation or *Page 991
proof of fraud in the procurement of the judgment." (Citing numerous cases.)
We likewise held to the same effect in the more recent case of Oswalt v. Cronk, 195 Iowa 230.
In the Ashby case, defendant's liability was on a note. In the instant case, defendant's liability arises under the assumption agreement. The Wisconsin court held as against the defendant that he was obligated to pay the encumbrance against the Wisconsin land because of his assumption agreement. The so-called counterclaim or set-off in the instant action for the $33,000.00, the amount of defendant's liability upon the notes, is not an independent cause of action held by the defendant which he can assert as against the plaintiff and its assignors, but is wholly defensive in character, and strikes at the validity of the assumption agreement under which his obligation to pay the mortgage indebtedness arises. Under the well recognized rules enunciated in the authorities hereinbefore cited, the Wisconsin judgment is a finality as against the pleaded fraud asserted against the validity of said agreement. The court was in error in not sustaining plaintiff's motion for a directed verdict.
The appellee, in his contention that his counterclaim or set-off can be asserted as against the judgment, relies upon Fairfield v. McNany, 37 Iowa 75; Ferguson v. Epperly, 127 Iowa 214; Jones v. Witousek, 114 Iowa 14; Conly v. Scanlin (Iowa), 109 N.W. 300 (not officially reported); Folsom v. Winch, 63 Iowa 477; Price v. Macomber, 163 Iowa 406; Secor v. Siver, 165 Iowa 673. The said cases are clearly distinguishable from the instant case. In each of said cases the matters pleaded as a counterclaim or set-off did not attack or strike at the validity of the original obligation upon which the judgment was procured, but were independent causes of action held by the defendant against the plaintiff. In such case, the defendant may or may not, at his will, assert the same in the original action, or in a separate action against the plaintiff, or in a counterclaim or set-off against an action on the judgment. But such cases have no bearing whatever upon the claim for damage in the amount of $33,000.00, which is pleaded in the instant suit.
It is quite apparent that, for the foregoing reasons, the court should have sustained appellant's motion for a directed *Page 992
verdict. Many other matters are urged for reversal, but it is unnecessary for us to consider the same.
[4] The appellee contends that there is no legal abstract of the record presented on which to base any errors relied upon for reversal. In this he is in error. He raises objection that, in the certificate, the appellant certifies that the abstract contains all the testimony introduced and offered, but fails to state that it contains all the evidence introduced and offered. It is sufficient to say, in response to this contention, that "abstracts shall be presumed to contain the record, unless denied or corrected by subsequent abstracts." See Section 12845-b1, Code 1931; Shull, Gill, Sammis Stilwill v. McCrum, 179 Iowa 1232; Campfield v. Rutt, 211 Iowa 1077. No affirmative statement that the abstract contains all of the evidence, or certificate to that effect, is required. See Shull, Gill, Sammis Stilwill v. McCrum, 179 Iowa 1232. The appellee has not filed any denial of the abstract or additional abstract, as was his right. Before time for appellee's argument, appellant also filed an amendment to its abstract. This was its right and privilege. See Groneweg Schoentgen v. Kusworm, 75 Iowa 237. Neither is this amendment denied by the appellee. There is no merit in appellee's technical objection.
The appellee also contends that "the errors relied upon for reversal" do not comply with Rule 30 of this court. It is sufficient to say that there is substantial compliance therewith, and that the errors material in the consideration and determination of the case are sufficiently pointed out.
Appellee's motion to strike appellant's reply brief and argument which was submitted with the case is overruled.
The judgment of the trial court must be, and the same is hereby, reversed. — Reversed.
EVANS, STEVENS, FAVILLE, ALBERT, MORLING, KINDIG, and GRIMM, JJ., concur. *Page 993
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[1] The ultimate question here may be briefly stated: Is appellee to be compensated under the schedule of specific coverages found in section 1396, Code of Iowa, 1939, (specifically under paragraphs 15 and 20 of said section), or for permanent total disability under section 1395?
The injury occurred in 1936 but the applicable statutory provisions were the same then as in the present Code of 1939. Our references will accordingly be to the latter. Appellee, while in the employ of defendant Pooley Lumber Company, and in the course of his said employment, suffered an injury consisting of a fracture of the surgical neck of the right femur. Whether there were further injuries to be considered is in controversy.
His right to compensation is unquestioned and the basic rate has been fixed by agreement. He has been paid weekly *Page 760
benefits at this agreed rate for a period of 224 weeks. If his present contention is upheld he will be entitled to further payments to make a total of 400 weeks. Code section 1395. Appellants deny his claim for further compensation and say he was originally entitled to 200 weeks only (Code section 1396, paragraphs 15 and 20), and should be required to refund all he has been paid beyond that time, overpayment having been made through inadvertence and mutual mistake.
As the trial court affirmed the finding of the commissioner allowing appellee full 400-weeks' compensation for permanent total disability, our reference will be direct to the record made before the commissioner and to his decision as the decision of the trial court. He sums up his finding of fact concerning the extent of injury as follows:
"The evidence reveals that due to the injury in question, claimant suffered a fracture of the surgical neck of the right femur within the capsular ligaments of the right hip joint, that there is considerable absorption of the bone, and a marked shortening of the leg due to a displacement of the fractured fragments, with a resulting compensatory tilting of the pelvis and curvature of the spine. Claimant has recovered from the injuries to his head and ribs."
I. We have first to determine whether appellee's injuries fall within the schedule. If they do, we are not concerned with the question of the extent of disability. The compensation in that event is definitely fixed according to the loss of use of the particular member. The very purpose of the schedule is to make certain the amount of compensation in the case of specific injuries and to avoid controversies. Schell v. Central Engineering Co., 232 Iowa 421, 4 N.W.2d 399, 401, 143 A.L.R. 576, citing Brugioni v. Saylor Coal Co., 198 Iowa 135,197 N.W. 470. See, also, Moses v. National Union Coal Mining Co., 194 Iowa 819,824, 825, 184 N.W. 746; Soukup v. Shores Co., 222 Iowa 272,277, 278, 268 N.W. 598.
Paragraph 15 of Code section 1396 is as follows:
"15. The loss of two-thirds of that part of a leg between the hip joint and the knee joint shall equal the loss of a leg, *Page 761
and the compensation therefor shall be weekly compensation during two hundred weeks."
The commissioner, in his decision and award, points out that paragraph 15, in and of itself, does not apply because there has been no loss of the leg within the meaning of the paragraph, as there has been no amputation, but that if the injuries of claimant are within the disabilities scheduled in that paragraph, then paragraph 20 of Code section 1396 provides the basis for determining the extent of disability. See, as bearing on this pronouncement, Moses v. National Union Coal Mining Co., supra. Said paragraph 20, sometimes called the "loss of use" subsection, provides:
"20. In all other cases of permanent partial disability, the compensation shall bear such relation to the periods of compensation stated in the above schedule as the disability bears to those produced by the injuries named in the schedule."
We have no doubt of our right to review the commissioner's decision that claimant's injuries do not fall within paragraphs 15 and 20 just quoted. That decision in part clearly involved a conclusion of law in that it indulged in a construction of the pertinent statutory provisions.
Paragraph 15 of Code section 1396 seems never to have been judicially construed. However, paragraph 13 of the same Code section has identical language, except it is applicable to the arm instead of to the leg, and we have had occasion to examine it. Pappas v. North Iowa Brick Tile Co., 201 Iowa 607, 612,206 N.W. 146, 148.
The injury in the cited case was loss of the arm at the juncture of the lower third with the middle third of the humerus. We held there that, as the schedule provided the loss of two thirds of that part of the arm between the shoulder joint and the elbow joint should equal the loss of an arm, the commissioner should determine "how much should be added to the hand schedule, and how much deducted from the arm schedule, in arriving at the compensation to be allowed." In other words, the loss being of something less than two thirds of the humerus *Page 762
and of more than a hand, the compensation should be adjusted accordingly.
It is manifest this decision does not materially help us in the instant case. We have here a loss of more instead of less than "two-thirds of that part of a leg between the hip joint and the knee joint." The commissioner construed the schedule as defining a "legal leg" (as distinguished from the "anatomical" leg), "ending at a point two-thirds of the distance above the knee joint." From that premise he reasons that the loss of more than two thirds of the femur is a loss of more than a leg and therefore not covered by the schedule. He points out the use of the word "more" in paragraph 7 of Code section 1396 as illustrative of his argument, and reasons that because the word "more" or its equivalent does not occur in paragraph 15, the only "loss of leg" covered by the schedule is the one expressly described as "equal" to the loss of a leg.
We cannot agree with this interpretation of the statute. It is true the schedule does not anywhere in express language fix the compensation for the loss of an entire "anatomical" leg or for any part thereof that includes more than two thirds of the femur. But the implication is clear that loss of an entire leg was intended to be made compensable the same as "the loss of two-thirds of that part * * * between the hip joint and the knee joint." The statute says one shall equal the other. We cannot assume the legislature would provide different bases of compensation for "equal" injuries. It seems more logical to interpret the statute as providing a minimum that would be compensable the same as an entire leg. A loss of that minimum or any greater part up to and including the entire leg will be compensated during 200 weeks.
Appellee argues that the word "between" in said paragraph 15 excludes the points which mark the boundaries of the area or space described — in effect, that the hip joint is not included in the schedule. We do not think the language used was intended to fix or limit the definition of a leg. Rather, it was for the purpose of defining a certain portion of the leg that would be considered equal to the whole leg. Neither the hip joint nor the knee joint was referred to as defining the *Page 763
extent of the leg. We agree with the commissioner in rejecting appellee's contention on this point.
[2] II. The commissioner, however, found as a fact that there was damage to the articular surface of the acetabulum or socket of the hip joint, and a permanent tilting of the pelvis, representing a lowering of the right side of the pelvis, "accomplished through relative compensatory changes in the two sacro-iliac and the lumbo-sacral joints of the pelvis"; also "a compensatory curvature of the lumbar or lower spine due to the changed position of the pelvis."
This finding implies injury additional to the mere fracture of the neck of the femur — in other words, injury not confined to the leg. The evidence is sufficient to support it. It seems clear the commissioner was justified in his conclusion that these changes are "of a permanent nature and cause physical functional impairment in addition to the impairments found in and about the right hip joint."
The testimony of both Dr. Fox and Dr. McLeod is to the effect that there has been no union of a solid bony character and that there has resulted "absorption or atrophy changes in the acetabulum [hip socket] although not marked," also that there has resulted the tilting of the pelvis and compensatory curvature of the spine already mentioned. These are injuries to parts of the body which are no part of the leg. Dr. Fox says they are not the usual result of a fracture of the neck of the femur where union of the parts is accomplished.
It appears also by some of the evidence that there has been injury to the muscles connecting the part of the femur known as "greater trochanter" with the ilium.
It is true there is conflict in the evidence as to union or lack of union and also on the question of injury to parts of the body above the leg. This conflict was for the commissioner to resolve. The evidence in support of his findings is not overwhelming but it is more than a mere scintilla. We are bound by his decision on these fact questions. Code section 1453; Enfield v. Certain-teed Products Co., 211 Iowa 1004,233 N.W. 141; Wichers v. McKee Button Co., 223 Iowa 853, 273 N.W. 892.
As the injury suffered by appellee extended beyond the scheduled area, the schedule, of course, does not apply. We *Page 764
must therefore seek some other basis for computing compensation. Before leaving this part of the case, however, it is proper to refer to the briefs on both sides, which discuss cases from other jurisdictions.
Appellants' contention may be best indicated by this quotation from their brief:
"Even though the injury be to a scheduled member we readily concede that if as a result of such injury some other part of the body is affected so as to create a disability separate and distinct from the usual, ordinary and natural results of the injury to the scheduled member, compensation may be awarded in addition to that provided in the schedule. Conversely we contendthat even should the situs of the injury be without the schedule,the workman nevertheless is limited by the provisions of theschedule when the disability and incapacity flowing from theinjury are manifested in and confined to the scheduled member."
(Italics are ours.)
Support for their argument is found in some of the cases they cite from other jurisdictions, but we find ourselves unable to agree with the doctrine of these decisions. The term "total disability," in the sense of loss of earning power, cannot be said to be "manifested in and confined to" any particular scheduled member. It is an inability of the individual, as such, to earn — not a mere inability of a certain member to function. It may arise solely from some injury to or loss of a scheduled member; or it may result from some injury of wider extent. Cases from other states are of little aid to us here. We are disposed, rather, to rest our decision upon an analysis of the language of our own statutes. Code section 1395 provides:
"For an injury causing permanent total disability, the employer shall pay the weekly compensation during the period of his disability, not, however, beyond four hundred weeks."
This section of the statute sets no limitation which concerns the physical location of the injury causing the disability. The only limitation of that sort is found in cases where "permanent total disability" comes from some injury limited by *Page 765
and included in the schedules contained in Code section 1396. Permanent total disability, as we have said, may be caused by some scheduled injury, even though no other part of the body except the scheduled member be affected. This may happen because of lack of training, age, or other condition peculiar to the individual. Such injury, though causing permanent total disability, is arbitrarily compensable according to the schedule. But where there is injury to some scheduled member, and also to parts of the body not included in the schedule, the resultant "permanent total disability," if established, is compensable under Code section 1395.
This seems a logical interpretation of the statute itself. Appellee fortifies it by reference to Clark v. Clearfield Opera House Co., 275 Pa. 244, 119 A. 136, which seems exactly in point as to the location and extent of the injury involved.
It is our conclusion appellee's injury is not within the schedules of Code section 1396 because the actual physical injury extended beyond and outside the scheduled area.
[3] III. There remains the commissioner's finding of permanent total disability. We have consistently held that the test here isindustrial disability — reduction of earning capacity, and not mere functional disability. Oldham v. Scofield Welch, 222 Iowa 764,768, 266 N.W. 480, 269 N.W. 925; Diederich v. Tri-City R. Co., 219 Iowa 587, 258 N.W. 899; Moses v. National Union Coal Mining Co., supra. But functional disability may be taken into consideration. Oldham v. Scofield Welch, supra.
One expert fixed appellee's degree of functional disability at seventy-five to eighty per cent; another at eighty to one hundred per cent. This accident happened June 9, 1936. At the time of the hearing, nearly six years later, he was still unable to walk without the aid of crutch or cane — "two canes part of the time and a crutch and a cane part of the time." He had performed no physical labor since his injury. His education and training were limited so that his only opportunity for earning was in employments that required physical labor. He was sixty-five years old. We think the commissioner's finding of permanent total disability was supported by sufficient competent evidence. The language from our decision in the Diederich *Page 766
case, supra [at page 594 of 219 Iowa, page 902 of 258 N.W.], is pertinent here:
"His disability may be only a twenty-five or thirty per cent disability compared with the one hundred per cent perfect man, but, from the standpoint of his ability to go back to work to earn a living for himself and his family, his disability is a total disability * * *."
It is our conclusion that the trial court properly sustained and confirmed the findings and award of the commissioner. The decision is affirmed. — Affirmed.
MULRONEY, C.J., and GARFIELD, OLIVER, HALE, BLISS, WENNERSTRUM, and MANTZ, JJ., concur.
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The facts in this case have been stipulated. Evelyn M. Whitney, on or about the 14th day of November 1939, entered into a written contract with the board of directors of the Rural Independent School District No. 4 of Lafayette Township, Bremer County, Iowa, to teach the country school of that District for the winter and spring term at an agreed price of $60 per month. That on the 3d day of April 1940, at about 10:30 a.m., the same being during the forenoon recess of said school, one of the pupils attending the Rural Independent School District of Lafayette Township carelessly threw a hard piece of rubber across the schoolroom, the same being a part of the wheel of a toy tractor. That the wheel of the toy tractor which was thrown by the student struck the glasses worn by the said Evelyn M. Whitney, and also her left eye, injuring same. *Page 63
That it was further agreed that the uncorrected vision (vision without glasses) of the left eye of Evelyn M. Whitney prior to the injury was 87 per cent, but that with the aid of glasses her vision in the left eye was increased to 97 per cent of normal. That it was agreed between the parties that if Dr. F.H. Reuling, of Waterloo, Iowa, were placed on the stand, he would testify that there was a linear horizontal scar five millimeters in length and one millimeter in width on the cornea, extending across the lower one quarter of the pupil area, of the left eye, and that it was his opinion it was a permanent injury with a 40 per cent loss of vision in the left eye. That Dr. R.E. Robinson, if he were placed on the stand, would testify in regard to the scar and that she has a loss of vision amounting to 50 per cent of a normal-seeing eye. That the use of glasses will not improve her vision in the left eye. That there was no injury to the right eye and that she is entitled to no compensation for said right eye. That the Rural Independent School District No. 4 of Lafayette Township is a school corporation existing by virtue of the statutes of the state of Iowa, and that John Remley, August Ruth, and Louis Graeser are the duly elected, qualified, and now acting members of the board of directors of said district. That Evelyn M. Whitney is a minor, about 19 years of age, and this action is brought by Samuel L. Whitney, her father and next friend.
That the deputy industrial commissioner, sitting as a board of arbitration, held that the claimant was entitled to compensation in the sum of $486.25 and interest thereon, as provided by section 1391 of the 1939 Code of Iowa, in the sum of $26.79, making a total claim of $513.04. That the claimant was an employee of the school district and the relationship between Evelyn M. Whitney and the school district was contractual and that of employee and employer. That the claimant at the time of her said injury was not a person holding an official position or standing in a representative capacity of the employer, nor was she an official elected or appointed by the defendant school board and school district. That claimant sustained a permanent partial disability equal to a 46.8 per cent loss of *Page 64
vision in her left eye and was entitled to weekly compensation benefits for a period of 46.8 weeks.
The industrial commissioner, on review affirmed the award and decision of the deputy industrial commissioner, sitting as a board of arbitration.
The case was then appealed to the district court of the state of Iowa in and for Bremer county, and that court affirmed the decision of the industrial commissioner. The Rural Independent School District No. 4 of Lafayette Township, being dissatisfied, has appealed to this court.
In a very able and elaborate brief the School District urges that the lower court erred in finding that claimant was not acting in an official position or standing in a representative capacity within the meaning of the law. Section 1362 of the 1939 Code of Iowa provides as follows:
"Compulsory when. Where the state, county, municipal corporation, school district, or city under any form of government is the employer, the provisions of this chapter for the payment of compensation and amount thereof for an injury sustained by an employee of such employer shall be exclusive, compulsory, and obligatory upon both employer and employee, except as otherwise provided in section 1-361."
[1] The only question which we are confronted with here is the status of Evelyn M. Whitney under the Compensation Act, and particularly under Code section 1421. The material parts of section 1421 of the 1939 Code of Iowa are as follows:
"Definitions. In this and chapters 71 and 72, unless the context otherwise requires, the following definitions of terms shall prevail:
"1. `Employer' includes and applies to any person, firm, association, or corporation * * *.
"2. `Workman' or `employee' means a person who has entered into the employment of, or works under contract of service, express or implied, or apprenticeship, for an employer, except as hereinafter specified. *Page 65
"3. The following persons shall not be deemed `workmen' or `employees': * * *
"d. A person holding an official position, or standing in a representative capacity of the employer, or an official elected or appointed by the state, county, school district, municipal corporation, city under special charter or commission form of government."
Section 4125 of the 1939 Code of Iowa provides that the affairs of each school corporation shall be conducted by a board of directors. Section 4228 of the 1939 Code provides, among other things, that the board "shall elect all teachers and make all contracts necessary or proper for exercising the powers granted and performing the duties required by law."
Section 4229 of the 1939 Code provides as follows:
"Contracts with teachers. Contracts with teachers must be in writing, and shall state the length of time the school is to be taught, the compensation per week of five days, or month of four weeks, and that the same shall be invalid if the teacher is under contract with another board of directors in the state of Iowa to teach covering the same period of time, until such contract shall have been released, and such other matters as may be agreed upon, which may include employment for a term not exceeding the ensuing school year, except as otherwise authorized, and payment by the calendar or school month, signed by the president and teacher, and shall be filed with the secretary before the teacher enters upon performance of the contract but no such contract shall be entered into with any teacher for the ensuing year or any part thereof until after the organization of the board."
Section 4237 of the 1939 Code provides as follows:
"Discharge of teacher. The board may, by a majority vote, discharge any teacher for incompetency, inattention to duty, partiality, or any good cause, after a full and fair investigation made at a meeting of the board held for that purpose, at which the teacher shall be permitted to be present and make defense, allowing him a reasonable time therefor." *Page 66
Section 4336 of the 1939 Code of Iowa provides as follows:
"Qualifications — compensation prohibited. No person shall be employed as a teacher in a common school which is to receive its distributive share of the school fund without having a certificate of qualification given by the county superintendent of the county in which the school is situated, or a certificate or diploma issued by some other officer duly authorized by law. * * *"
Section 4339 of the 1939 Code of Iowa provides as follows:
"Daily register. Each teacher shall keep a daily register which shall correctly exhibit the name or number of the school, the district and county in which it is located, the day of the week, month, year, and the name, age, and attendance of each scholar, and the branches taught; and when scholars reside in different districts separate registers shall be kept for each district, and a certified copy of the register shall, immediately at the close of the school, be filed by the teacher in the office of the secretary of the board."
Section 4340 of the 1939 Code of Iowa provides as follows:
"Reports. The teacher shall file with the county superintendent such reports and in such manner as he may require."
The question which we have to decide is whether or not Miss Whitney, who was elected by the school board of the Rural Independent School District No. 4 of Lafayette Township, as a school teacher to instruct the pupils of the district, is holding an official position or stands in a representative capacity of and for the School District within the meaning of the law, or whether or not the relationship of employer and employee exists. We shall first consider whether she stands in an official position or not. In the case of State v. Spaulding, 102 Iowa 639, 72 N.W. 288, there will be found a collection of definitions given by courts and text writers as to what in law constitutes a public officer. It covers several pages and we shall not repeat it here, but to those interested in this question call it to their attention. We quote from that opinion at page 647 of 102 Iowa, page 290 of 72 N.W.: *Page 67
"From all the authorities, we think the following rules may properly be laid down for determining whether one is a public officer within the contemplation of our statute, relating to embezzlement of such officers (Code, 1873), section 3908. (1) The office itself must be created by the constitution of the state, or authorized by statute. (2) If authorized by statute, its creation may be by direct legislative act; or the law making power, when not inhibited by the constitution or public policy from so doing, may confer the power of creating an office upon official boards or commissions which are themselves created by the legislature, when such office is necessary to the due and proper exercise of the powers conferred upon them, and the rightful discharge of duties enjoined. (3) A position so created by the constitution, or by direct act of the legislature, or by a board of commissions duly authorized so to do, in a proper case, by the legislature, is a public office. (4) To constitute one a public officer, at least within the purview of the criminal law, so that he may be liable for the misappropriation of the public funds, his appointment must not only have been made or authorized as above stated, but his duties must either be prescribed by the constitution or the statutes of the state, or necessarily inhere in and pertain to the administration of the office itself. (5) In any event, the duties of the position must embrace the exercise of public powers or trusts; that is, there must be a delegation to the individual of some of the sovereign functions of government, to be exercised by him for the benefit of the public. (6) The following, among other requirements, are usually, though not necessarily attached to a public office: (a) An oath of office; (b) salary or fees; (c) a fixed term of duration or continuance."
One of the cases greatly relied upon by the appellants is the recent opinion of this court of McKinley v. Clarke County,228 Iowa 1185, 1187, 293 N.W. 449, 450. Speaking through Justice Oliver, we said:
"It is practically conceded the death of McKinley arose out of and in the course of the performance of services connected with his position as county engineer. The only question for *Page 68
solution concerns his status under the compensation act, and particularly under Code section 1421. This section defines `workman' or `employee' and then sets out certain exceptions, in part as follows:
"`3. The following persons shall not be deemed "workmen" or "employees":
"`d. * * * an official elected or appointed by the * * * county * * *.'
"If McKinley was an `employee' of the county, his death was compensable, if he was an `official', he was in a class excepted from the benefits of the Workmen's Compensation Act.
"I. The position of county engineer is statutory. Section 4644.17, Code of Iowa, 1939, provides:
"`Engineer-term. The board of supervisors shall employ one or more registered civil engineers who shall be known as county engineers. The board shall fix their term of employment which shall not exceed three years, but the tenure of office may be terminated at any time by the board.'
"The powers and duties of such position are conferred by statute and are largely specifically defined. It is established without dispute that the board of supervisors employed McKinley in this position. The commissioner so found. However, the commissioner also found that a county engineer was not `an official' within the purview of the Workmen's Compensation Act, and upon such finding awarded compensation to appellant.
"Appellant contends this finding was, in part at least, a conclusion of fact which being based upon sufficient evidence was binding upon the district court, and, therefore, that the court erred in setting the same aside and denying the claim for compensation. We do not agree that this was, or could properly have been, a finding of fact. It was predicated upon the commissioner's interpretation of the compensation act, and statutes relating to the employment, powers and duties of county engineers. Where statutes create a position and prescribe its duties and powers, the status of one occupying such position should be thereby determined. We hold the commissioner's finding *Page 69
upon this proposition was a conclusion of law and was subject to review by the court. * * *
"The ultimate question for decision is whether or not a county engineer is an `official'. We are unable to agree with appellant's contention that the services of decedent were performed under a contract with the board of supervisors. Neither he nor the board could alter the status of his position as county engineer in so far as his powers and duties were expressly or impliedly prescribed by statute.
"The use of the word `employ' in the statute did not necessarily constitute the county engineer an employee. As bearing upon this it may be noted that the word `employ' was used in section 4787, Code of 1927, concerning a position held in Hop v. Brink, 205 Iowa 74, 217 N.W. 551, to be a public office. Nor is the use of the word `office' or `officer' in certain statutes, which may refer to the position but do not purport to define it, controlling. The question is not primarily one of language but rather of statutory powers and duties.
"It may be here noted that Code section 4644.19 provides that county engineers shall work under the directions of the board and shall give bond for the faithful performance of their duties. McKinley was hired as county engineer, at a salary of $145 per month, furnished bond and took oath of office. The oath was not specifically required by the statute, but is required of public officers by section 5 of Article XI of the constitution of Iowa.
"State v. Spaulding, 102 Iowa 639, 72 N.W. 288, a leading authority, lays down rules for determining whether a person is a public officer. It concludes that a position created by direct act of the legislature, or by a board of commissions duly authorized so to do, in a proper case, by the legislature, is a public office; that to constitute one a public officer his duties must either be prescribed by the constitution or the statutes, or necessarily inhere in and pertain to the administration of the office itself; that the duties of the position must embrace the exercise of public powers or trusts; that is there must be a delegation to the individual of some of the sovereign functions of government, to be *Page 70
exercised by him for the benefit of the public; and that among other requirements the following are usually, though not necessarily, attached to a public office: a. an oath of office; b. salary or fees; c. a fixed term of duration or continuance.
"Code section 4644.21 provides as follows:
"`Supervision of construction and maintenance work. All construction and maintenance work shall be performed under the direct and immediate supervision of the county engineer who shall be deemed responsible for the efficient, economical and good faith performance of said work.'
"Some other sections of the Code having reference to the powers and duties of county engineer are 4653, 4654, 4655, 4656, 4673, 4674, 4746, 4748, 4749, 4837. These sections in part require bills for work or for repairs designated by the engineer to be certified by him before allowance; provide that, if he certifies work which has not been properly done, he and his bond may be held liable for loss sustained; permit partial payments of contracts and payments of day labor to be authorized upon his certificate; and require him to file plans, specifications and estimates of the cost of bridges and culverts and upon completion detailed statements of cost and record bids. Other statutory provisions might be noted but we think those heretofore mentioned demonstrate that the statutes delegate certain sovereign powers to county engineers. See Hop v. Brink, 205 Iowa 74, 217 N.W. 551. Therefore, the occupant of this position was a public officer rather than an employee.
"That at the time he received the injuries which caused his death, McKinley was performing duties classed as those of an `employee' would not make his death compensable under the statute. Kutil v. Floyd Valley Mfg. Co., 205 Iowa 967, 970, 218 N.W. 613, 615; Hamilton v. Farmer Canning Co., 220 Iowa 25, 261 N.W. 506; Maryland Casualty Co. v. Dutch Mill Service Co.,220 Iowa 646, 262 N.W. 776. His status as a public `official' excepted him from the benefits of the act irrespective of the character of the work he was doing at that time." *Page 71
We cannot agree with the appellants that the McKinley case is controlling in the case at bar.
A county schoolteacher is employed under contract and her powers and duties are confined to that written instrument. None of the statutes impose upon her the exercise of discretion. The course of studies that she teaches is prescribed by the board. While, as pointed out in the McKinley case, many powers and duties are imposed upon a county engineer, under the statutes of the state, he is required to file plans and specifications and estimates of the cost of bridges and culverts and upon completion, detailed statements of costs. If he should certify work which has not been properly done, he and his bond may be held liable for the loss sustained. The statute delegates certain sovereign powers to the county engineer. He is required to use his judgment and discretion in many ways.
Counsel for appellants cites numerous cases in support of the claim that teaching school is a governmental function. However, section 1362 of the Workmen's Compensation law is sufficient in its terms to include a right to recover even though thus engaged, unless otherwise limited. The School District, acting within its statutory rights, entered into a contract of employment with Evelyn M. Whitney. She was not required to give bond or to take an oath. None of the statutes impose upon her the exercise of discretion in any way. They delegate no sovereign power to her. We come to the conclusion that she is an employee within the meaning of the Workmen's Compensation Act and entitled to its benefits.
[2] It is next argued that she stands in a representative capacity. With this we cannot agree. Her duties are prescribed by the contract. The courses that she is to instruct the pupils in are prescribed by the board. She does not hold an executive position. Instructing pupils is no part of the duties imposed upon the school board. Their regular duty consisted in selecting a qualified person to fill the position and to see that the schoolteacher performed the duties prescribed within the contemplation of the contract relation.
The appellants call our attention to the cases of Hamilton *Page 72
v. Farmer Canning Co., 220 Iowa 25, 261 N.W. 506, and Pattee v. Fullerton Lbr. Co., 220 Iowa 1181, 263 N.W. 839. In both of these cases claimant was the general manager, in a certain locality, of the branch of the respective corporation that he worked for. They were in sole charge of those branches, held executive positions and had discretion in regard to various matters. They are not controlling in the case at bar because the schoolteacher does not hold an executive position and her powers and duties are limited to the written contract.
[3] It is next claimed that the industrial commissioner erred in the amount of compensation allowed. Appellants claim that under the undisputed record the claimant sustained only a 32 per cent loss of vision in her left eye as a result of said injury. This seems to be based upon the fact that the record shows that prior to the injury Evelyn M. Whitney had only an 87 per cent vision in the left eye and after the injury the uncorrected vision (vision of the left eye without glasses) was 55 per cent, making a loss of 32 per cent of vision due to the injury. With this we cannot agree. It is true the record shows that the uncorrected vision prior to the injury was 87 per cent, but the record shows that by the use of glasses the vision was corrected to 97 per cent and that after the injury glasses would not help or aid her left eye. Appellants contend that we have to do simply with a normal eye. This, it seems to us, would be very unfair to Evelyn M. Whitney, for with the aid of glasses she could correct, prior to the injury, the vision in her left eye to 97 per cent, while after the injury glasses would not aid her in any way. The injury which she suffered was the injury to her eye. It was the loss of vision from 97 per cent. Her injury is permanent. It will neither be better nor worse, the doctors testify. In addition to this, there is the evidence stipulated to of Dr. Robinson, showing a loss of 51.1 per cent vision in her left eye. Certainly there was sufficient evidence to sustain the verdict of the industrial commissioner as to the injury that this girl suffered. The purpose of the Workmen's Compensation Act was to reimburse the employee for the injury that that employee suffered. *Page 73
Some other questions are argued, all of which have been given consideration. Finding no error, it necessarily follows that the judgment of the lower court must be, and it is, affirmed. — Affirmed.
BLISS, C.J., and HALE, MILLER, WENNERSTRUM, GARFIELD, STIGER, and OLIVER, JJ., concur.
SAGER, J., takes no part.
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In October, 1928, the Iowa Farm Credit Corporation filed a petition in the district court of Polk County, Iowa, asking judgment against the defendants below, Ida M. Wright and J.S. Wright, on two promissory notes, shown as Exhibits "A" and "B," attached to the petition. Each of said notes contain the provision, "payable at the office of the said corporation, Des Moines, Iowa." It appeared from the petition that the said defendants were residents of Woodbury County, Iowa.
On November 5, 1929, the plaintiffs herein (defendants below) filed a duly verified answer to the petition, in which they alleged, "as a complete defense thereto, the execution of the said instruments by these defendants was obtained by fraud, false representations, and deceit, and that the said instruments had their inception in fraud, as more particularly hereinafter *Page 1134
stated." The answer then sets out in detail the alleged fraud. This detailed description is followed with the words:
"That the defendants believed and relied upon the statements and representations of plaintiff, and executed the said instruments only because of their reliance upon said representations."
The answer also sets out in detail the alleged falsity of the said representations, and specifically alleges that the said notes were without consideration.
At the same time, the plaintiffs herein filed a motion and application to transfer the said cause to Woodbury County, Iowa, their place of residence, pursuant to Section 11411 of the 1927 Code of Iowa, to which motion was attached the affidavit of defendants below, and an offer and tender of bond for costs.
On November 9, 1927, the plaintiff in the original action, Iowa Farm Credit Corporation, filed a resistance to defendants' motion for change of place of trial, setting up in said resistance that the answer filed by the defendants failed to plead fraud in the inception of the contract constituting a complete defense thereto, for the reason that the said answer did not allege that the defendants suffered any damage.
On November 13, 1928, plaintiffs herein amended their answer, and alleged specifically in said amendment that they had been damaged by reason of said fraud.
On November 16, 1928, plaintiff filed an additional resistance to defendants' motion for change of place of trial. The court denied the motion for change of place of trial.
Two questions are raised: the first one being that the original answer was sufficient, and the second one being that the plaintiffs herein had the right to file an amendment to their answer. We will consider this last question first.
I. Section 11411 of the Code of 1927 is as follows:
"In an action brought on a written contract in the county where the contract by its express terms is to be performed, in which a defendant to said action, residing in a different county in the state, has filed a sworn answer alleging fraud in the inception of the contract constituting a complete defense thereto, such defendant, upon application and the filing of a sufficient *Page 1135
bond, may have such action transferred to the district court of the county of his residence."
This section was passed by the thirty-third general assembly, effective April 15, 1909, as Subsection 6 to Section 3505 of the Code, 1897. It became Subsection 6 of Section 3505 in the Supplement to the Code, 1913.
It is the contention of the respondent that the word "answer" is to be construed in a strict, narrow sense, and that it does not include an amendment to an answer.
This statute has been under consideration several times. Stateex rel. Erdahl v. District Court, 189 Iowa 1167. In that case, the court discussed the purpose of the statute as follows:
"The general rule of the statute was and is that personal actions must be brought against residents of this state in the county of their residence. The general exception to this general rule is that a defendant may be sued upon a written contract where payable. The purpose of the amendment above quoted is to withhold such exception from a written contract, where there is a good-faith issue of fraud in the inception of the transaction. In order to insure such good faith, it requires that the facts constituting the alleged fraud shall be set forth under oath, and that bond be given for costs, including expenses of plaintiff and his attorney in attending at wrong county, if the defense fails."
The foregoing case involved a number of actions tried together. In one of them, the indorsers on certain promissory notes were joined as defendants. The maker of the notes set up the defense of fraudulent representations, and asked for a change of venue. The indorsers presented two applications for change of venue. The first was filed before answer, and was predicated upon the general statute regulating changes of venue, and not upon Subdivision 6. This application being denied, the indorsers answered, and, in effect, joined with the maker in the defense set up by him. They thereupon filed an application for a change of venue, under Subdivision 6, Section 3505, above quoted. The court says:
"The situation presented by their second application was that all the defendants, maker and indorsers, were before the court, with the same defense of fraudulent representations in the *Page 1136
inception of the contract; all were shown to be actual residents of Winnebago County; and all were asking for a change of venue to that county. We see no impediment to the granting of the change as to all of them, nor any valid reason for refusing the same."
Winneshiek County State Bank v. Winneshiek Dist. Court,198 Iowa 524, was a proceeding under the section under consideration. In that case, suit was brought on two promissory notes. The defendants filed a sworn answer, averring that the notes were obtained through false and fraudulent representations, and without consideration, and that they were residents of another county. With this answer was an application for change of venue. The answer disclosed further that the notes in suit were renewal notes, given for previous notes, and that the alleged fraud was perpetrated upon the defendants for obtaining such notes, and that the discovery of fraud was subsequent to the giving of the renewal notes. The plaintiff in the case objected to the motion for a change of place of trial, on the ground that the issues were not made up. At the same time, plaintiff filed a motion to strike, and for more specific statement. On the following day, it filed an amendment to such motion. Two weeks later, the court sustained plaintiff's motion and the amendment in part, and overruled them in part. Thereupon, on the same day, the defendants amended their answer to conform to the ruling of the court, and on the same day, the court entered an order granting the change of place of trial.
While the point here before us was not directly raised in theWinneshiek County State Bank case, yet the writ based on an amended answer was sustained. See, also, State ex rel. Blunt v.District Court, 199 Iowa 48; McLaughlin-Gormley-King Co. v.Hauser, 200 Iowa 210; Devore v. Municipal Court, 200 Iowa 111.
The respondent relies mainly on Sell v. Mershon, 202 Iowa 627, because of the following language therein contained:
"The ruling on this question on a change of venue must be based wholly upon the sworn answer filed in the case."
In the Sell case, after the motion for the change of place of trial was filed, the plaintiff in the suit below amended its *Page 1137
petition, and attached thereto certain interrogatories, which were answered before the motion for change of venue was ruled upon. It was insisted below, and on the certiorari hearing, that the answers to these interrogatories should be taken into consideration in considering the motion for change of place of trial. It was upon such a state of facts that this court made the statements above quoted. It can only be interpreted to mean that the change must be based upon the sworn answer, unaided by the answers to the interrogatories attached to the petition.
The word "answer" is often, in the law, given a broad significance. Thus a demurrer becomes an answer, within the meaning of the Practice Act, authorizing a clerk to enter default judgment in an action for money or damages arising on a contract, "if no answer has been filed" within the time specified in the summons. Oliphant v. Whitney, 34 Cal. 25.
The word "answer," as used in an original notice stating that, unless the defendant appears and answers by a certain day, default will be entered, includes demurrers and motions, as well as answers. Lyman Co. v. Bechtel Ross, 55 Iowa 437.
Other illustrations and citations might be given. Manifestly, the spirit of the statute under consideration is to enable the defendant to have the action tried at the domicile of the defendant, rather than at the place of performance, as specified in the contract, when the defendant, under oath, has pleaded facts alleging fraud in the inception of the contract constituting a complete defense thereto.
It would be a very narrow and cramped construction of the statute to hold that, with such objects in view, the party seeking the change should be held literally and technically to any error of omission in the original answer filed, regardless of the good faith with which the answer and motion to change were filed, and regardless of the facts in the case. In other words, we think it is more in keeping with the spirit of the statute and the purpose for which it was enacted that if, in good faith, the defendant files an answer in a good-faith and apparent attempt to comply with the terms of the statute, and subsequently it is discovered that, by oversight or otherwise, something important had been omitted from the answer, the defendant should be permitted to amend the answer and set up the allegations and facts. These allegations must be in the answer, not in a motion or demurrer *Page 1138
or other pleading; but we think the good-faith statement of the issue of fraud in the inception of the transaction may be made in either the original answer or in an amendment thereto. To hold otherwise would be to inject into this matter of pleading a technicality not in harmony with the spirit of pleading under the Iowa practice.
II. Inasmuch as the writ must be sustained because of what has hereinbefore been said, it is unnecessary to pass upon the question of the sufficiency of the original answer. To do so would be of no value to bench or bar. No two pleadings are alike in form or in basic facts.
The change of place of trial should have been granted, and the writ is sustained.
MORLING, C.J., and EVANS, FAVILLE, and KINDIG, JJ., concur.
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This is the second appeal of this case. See Goben v. Des Moines Asphalt Paving Company, 208 Iowa 1113.
The petition is in two counts, the first being on an express oral contract in which it is claimed, in substance, that in August, 1923, plaintiff and one Burrows, representing the defendant, entered into an oral contract, by the terms of which the plaintiff was to do some excavating in certain streets in the city of Creston, preparatory to the laying of paving on said streets. *Page 835
It is claimed that the work was to be done at 55c persuperficial yard. It is also claimed that as a part of the contract, the defendant was to pay on semi-monthly preliminary estimates, or, in other words, that every two weeks, money was to be advanced to the plaintiff, by the defendant, on the basis of preliminary estimates of the work done, as said estimates might be made by the city engineer.
It is alleged that the defendant failed utterly to comply with this provision of the contract, and as the result of said breach by the defendant, the plaintiff found it necessary, being out of funds, to leave the work without completing the job.
It is alleged that the superficial yards excavated were 71.31.4 yards and that the defendant is indebted to the plaintiff in the sum of $3,752.95.
The second count is based upon quantum meruit; but as the same was dismissed by the plaintiff, we give it no attention.
The answer of the defendant contains, among other things, the following:
"The defendant admits that on or about the 6th day of August, A.D., 1923, the defendant and plaintiff entered into a verbal contract whereby the plaintiff agreed with the defendant to do certain grading for this defendant in connection with the paving of said streets set out in said contract between the defendant and said city."
The defendant also admits "that the amount of dirt so removed by the plaintiff over an area consisting of approximately 7131.4 yards was the sum total of 910 cubic yards."
The answer further alleges that instead of the parties agreeing to 55c per superficial yard, the work was to be done at 40c percubic yard.
The defendant also alleges that there was a settlement had between the parties. The defendant also filed a counterclaim for damages because of the alleged careless and negligent manner in which the work was performed by the plaintiff. The allegations of the counterclaim are denied. Other features of the pleadings are not material to our determination of this case.
At the close of the evidence, the court dismissed the defendant's counterclaim and directed a verdict in favor of the *Page 836
defendant and entered judgment against the plaintiff for costs. The plaintiff appeals.
I. It is claimed by the appellee that the plaintiff must fail because the plaintiff did not complete his contract and was without justification for not finishing the work. This question cannot be settled as one of law upon the record as made in this case. The plaintiff asserted that one of the definite terms of the contract entered into between the parties was that the defendant should make bi-weekly payments to the plaintiff, based upon preliminary estimates of the work then done. There is no dispute that the company failed to do this. The evidence tends to show that the plaintiff very clearly explained to the defendant the necessity of such payments, the same having relation to the inability of the plaintiff to conduct the work for periods of more than two weeks at a time without payment of a preliminary estimate with which to pay his running expenses.
If plaintiff's evidence is to be believed, then the defendant definitely undertook to make these payments bi-weekly and it failed to do so.
There is sufficient evidence in the record to necessitate submitting this branch of the controversy to a jury.
[1] This court has said upon the former appeal in this case, Goben v. Des Moines Asphalt Paving Co., 208 Iowa 1113:
"If the failure of performance was justified, then the plaintiff was entitled to recover his contract price for the work done."
Other cases might be cited in support of the same proposition.
II. It is claimed by the defendant company (appellee) that the plaintiff has failed in proving the essential elements of the contract and particularly that there is a failure on the part of the plaintiff to show the quantity of earth removed, for the removal of which he claims the compensation specified in the contract. The record upon this phase of the case has been very carefully examined, and we reach the conclusion that it contains sufficient evidence upon which the jury might properly find the amount of work done by the plaintiff for the defendant in accordance with the terms of the contract which the plaintiff claims was made with the defendant. The record contains upon *Page 837
that subject, among other things, an allegation in the answer of the defendant company, as follows:
"That the amount of dirt so removed by the plaintiff over an area consisting of approximately 7131.4 yards, (superficial) was the sum total of 910 cubic yards."
The contention of the defendant is that the agreement between the parties was based upon cubic yard measurements instead of superficial yards, but there is in evidence, by reports of the city engineer, sufficient data from which the jury could very properly determine the total amount of superficial yardage
removed by the plaintiff for the defendant. The defendant company undertakes to defend itself at this point on the claim that superficial yardage is not a proper measurement for work of this kind. About this there was a distinct conflict in the evidence.
There is abundant proof, if the testimony on behalf of the plaintiff is to be believed, from which a jury might properly find that the agreement between the parties was based uponsuperficial yardage and not cubic yardage. Even though it be assumed, for the sake of the argument, that ordinarily, in determining the yardage removed by contractors in work of this kind, the yardstick of measurement is the cubic yard, nevertheless, it was proper for the parties to agree upon another basis, to wit, the superficial yard.
While the evidence may not be as clear and definite and distinct as one would like to have it on the question of the number of superficial yards removed by the plaintiff for the defendant, nevertheless we hold there is sufficient evidence in the record to take the case to the jury.
[2] III. It is claimed by the defendant that the contract, as alleged by the plaintiff, is unreasonable. It is claimed that the cost of removing the earth upon the basis claimed by the plaintiff is unreasonable. While it may be conceded that under ordinary conditions the price as claimed by the plaintiff is high, nevertheless, we cannot say as a matter of law that the contract was not entered into because it appears to be unreasonable in some of its terms. It was legal for the parties to fix an unreasonable compensation for the work which the plaintiff agreed to do for the defendant. Moreover, it may be said parenthetically *Page 838
that the evidence shows that the material which the plaintiff moved was of an unusual character and very difficult to handle. It was peculiarly difficult to handle when it was only being removed in rather thin layers, relatively speaking. When it is borne in mind that the plaintiff was removing only the earth which would be displaced by the slab of pavement to be laid in the street and that the material was of a tough, rubber-like type, the jury might properly find that the price which the plaintiff claims was agreed upon was in fact the price fixed. At all events, the price was not so unreasonable as to enable any court to hold, as a matter of law, that no contract was entered into, or that the contract will not be upheld.
IV. It is claimed by the defendant that there was a full settlement of the issues involved in this case in a suit brought by the plaintiff against the city of Creston. Upon this, as upon other points, the testimony was clearly in dispute. Necessarily, the burden was on the defendant to prove the accord and satisfaction. Upon the record, as disclosed here, that question could not be settled as one of law. There was sufficient evidence to take that question to the jury.
It may be conceded that there are in the record many inconsistencies and contradictions, nevertheless a very careful examination of the entire record discloses that the plaintiff produced sufficient evidence, if his witnesses are believed, to take the case to the jury.
What this court might do, if sitting as a jury, on the facts disclosed in the record, is beside the point.
It would unduly extend this opinion to set out the testimony in support of our conclusions and would serve no useful purpose.
We are convinced the court should not have directed a verdict for the defendant.
The cause is — Reversed.
STEVENS, ALBERT, MORLING, and KINDIG, JJ., concur. *Page 839
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The Decorah Produce Company owns and operates a poultry and produce plant on the north side of Water Street in Decorah, Iowa.
[1] The buildings of the company are located on property of the Chicago, Rock Island Pacific Ry. Co. Water Street, over which state highway No. 9 passes, lies east and west. South of this street there is a residential section of the city. The space on the north side of Water Street between it and South Street, the first street north, is occupied by the main tracks, switches, roundhouse and depot of the Chicago, Rock Island Pacific Ry. *Page 278
Co. and the main track of the Chicago, Milwaukee St. Paul Ry. Co. The depot of the Rock Island Railroad Company lies two and one-half blocks west and a little over one-half block north of the Produce plant. Immediately south of the Produce plant there is a row of residences fronting on Water Street. In the immediate vicinity of the Produce Company's plant and on the same side of Water Street are coal yards, a creamery, ice-house and other buildings. A short distance northeast of the Produce plant is the Rock Island roundhouse, and slightly over two blocks north are the stockyards of the railroad company. Night trains are run by the Chicago, Rock Island P. Ry. Co. over its tracks in the vicinity. Extending east and west across the north one-half of the several blocks between Water and South Streets is what is denominated in the evidence "Dry Run." There are other buildings of a commercial or industrial character in the vicinity of the Produce plant. The industrial district referred to comprises substantially five city blocks. The Produce plant fronting on Water Street lies approximately in the center east and west of this district. Appellant's property is situated on the south side of the street a short distance east of the Produce plant and fronts on Water Street. The distance from the southwesterly corner of the main building to the northeast corner of appellant's house is 140 feet and to the northeast corner of the McAndrews house 197 feet. The residence owned by appellant is occupied by tenants.
It will thus be observed that Water Street separates a distinctly commercial and industrial district on the north from a residential district on the south. The Produce plant now owned and operated by appellee was established in 1910 at which time the killing of poultry was begun. The building then used was 24x80 feet, one story with basement. This plant was entirely destroyed by fire in 1912. A new building was erected and in 1929 as an addition 56x75 feet with basement. The building contains from 75 to 100 windows, all of which are kept open during the warm season. It appears to be equipped with modern equipment and improvements and to be operated in reasonably sanitary manner. It represents an investment of from $65,000 to $75,000. Poultry is brought to the plant by farmers or gathered in trucks from a territory within a radius of fifty miles of Decorah. The poultry is brought to the plant in trucks, the *Page 279
birds removed, weighed and immediately placed in feeding batteries. The feeding batteries are constructed of steel wire and are 5x4x5 feet, each containing four wire floors. Attached to the feeding batteries on the outside of the cage are troughs in which the feed is placed for the poultry. The feed consists of oatmeal mixed with water and buttermilk in clean tanks. Beneath the wire floors in each of the feeding batteries are pans into which the offal is deposited. There are a large number of feeding batteries and many thousand birds are brought to and slaughtered in the plant annually. The poultry is conveyed in groups of five to the basement where they are killed. There are scalding vats in the killing room in which the birds are immersed preparatory to picking the feathers. When the feathers have been removed, the birds are dipped in a vessel containing hot tallow and paraffin for the purpose of removing the pin and other small feathers and dirt from the pores. The floors in the feeding batteries are cleaned daily and disinfected and the offal collected therefrom is hauled away from the plant in an open conveyance. In 1929, about 900,000 pounds of poultry, 24,000 cases of eggs, 8 carloads of feathers and other produce were shipped from the plant. In the operation of the plant, the blood is carried through a funnel into a vessel, preserved, placed in a barrel and hauled away from the plant. The floors of the killing room are cleaned and scraped daily. Much poultry arrives at the plant during the night, mostly before midnight.
The testimony is somewhat conflicting, but numerous witnesses residing in the immediate vicinity of the plant or familiar with the situation in the vicinity of appellant's property testified that there are foul and offensive odors from the plant which interfere with the comfort of those residing in the community and that the crowing of roosters and cackling of hens disturb their rest at night and prevent sleeping. The offensive odors alleged to come from the plant are, according to this testimony, more offensive in the warm weather and when the wind is blowing from the northeast. During the colder season, when the windows of the plant are closed, the peace and comfort of the neighborhood are little disturbed.
There was testimony on the part of some of the witnesses tending to show that the odors were both offensive and nauseating, — particularly such was the testimony of appellant's tenants. *Page 280
Other residents of the immediate vicinity of appellant's property gave similar, though considerably modified, accounts of the annoyance and discomfort produced by the plant. The testimony introduced on behalf of appellee tended to minimize the extent of the odors and noises arising from the plant, but admitted that the interior of the plant is not entirely free from odors. Some of the witnesses were, no doubt, less sensitive to the crowing of the cocks and the cackling of the hens and were not disturbed thereby. It appears that one or more of the residents of the vicinity keep chickens in their backyards. The testimony of medical experts and others tended rather strongly to negative the claim of appellant that foul and decaying matter is left upon the premises and that the plant is not kept as clean and sanitary as it should be. The building abuts directly upon Water Street, which, as stated, is used as a part of State Highway No. 9.
It appears that the offal is kept in, and hauled from the plant in, an open vehicle, and that the odor therefrom at times is very offensive. The paraffin when removed from the dead fowl is replaced in the vat from which it was taken and again heated and used. One or more of the witnesses for appellee testified that much of the odor from the plant comes from these two sources.
The property of appellant, which is a modern dwelling house, has been owned by him for many years. There is a conflict in the testimony as to the extent of the stench or odor that comes from Dry Run and the other plants located and operated in the vicinity.
A poultry and produce plant such as we have described is not a nuisance, per se. If, however, it is so located, maintained and operated as to emit noxious odors or give off noises so as essentially to interfere with the comfortable enjoyment of the property of others, it may constitute a nuisance. A perfectly lawful business, operated under some circumstances and in some locations, may so interfere with the comfortable use and enjoyment of private property as to constitute a private nuisance and, when this occurs, it is subject to abatement as such. McGill v. Pintsch Co., 140 Iowa 429; Bushnell v. Robeson, 62 Iowa 540; Bowman v. Humphrey, 132 Iowa 234; Daniels v. Keokuk Water Wks.,61 Iowa 549; Smith v. City of Jefferson, 161 Iowa 245; Mitchell v. Flynn Dairy Co., 172 Iowa 582. This is the general *Page 281
rule and is well supported by the weight of authority. Gus Blass Dry Goods Co. v. Reinman Wolfort, 143 S.W. (Ark.) 1087; Kinsman v. Gas. Co., 177 Pac. (Utah) 418; Winbigler v. Clift, 172 Pac. (Kans.) 537; Saier v. Joy, 164 N.W. (Mich.) 507; Brede v. Minn. Crushed Stone Co., 173 N.W. (Minn.) 805; Pearson Son v. Bonnie, 272 S.W. (Ky.) 375; Wood v. City of Chickasha, 257 Pac. (Okla.) 286; Lead v. Inch, 134 N.W. (Minn.) 218.
Every property owner or person has a right to have the air diffused over his premises in its natural state and without being unduly impregnated with foreign substances, such as smoke, soot, noisome fumes and other offensive matters; but air in congested centers of population is seldom absolutely pure and cannot reasonably be expected to be. McGill v. Pintsch Co., supra. In every city, smoke, soot and more or less offensive odors and noises calculated to disturb and interfere with the comfort of residents are present and cannot be avoided. The air in such circumstances is more or less necessarily impregnated with foreign substances. Residents and property owners must, therefore, endure, without the right of legal recourse, annoyances and discomforts ordinarily and necessarily incident to urban life. Dixie Ice Cream Co. v. Blackwell, 58 A.L.R. (Ala.) 1223; Holman v. Laundry Co., 6 A.L.R. (Ga.) 1564; Sullivan v. Jones Laughlin Steel Co., 57 Atl. (Pa.) 1065. On the other hand, if a private nuisance is shown to exist and that substantial, material and irreparable injury is resulting therefrom, the nuisance will be abated, irrespective of resulting damage. Rowland v. N.Y. Stable Manure Co., 101 Atl. (N.J.) 521. Not every instrumentality producing more or less disturbance and discomfort to the owners of property and residents in the community can be abated as a nuisance. A person residing near a railway track, for instance, or in the vicinity of switchyards or of a roundhouse must endure such discomforts as are reasonably and necessarily incident to the conduct and operation of the railroad. Dunsmore v. Central Ia. Ry. Co., 72 Iowa 182; Bennett v. National Starch Mfg. Co., 103 Iowa 207; McGill v. Pintsch Co., supra; Sprout v. Levinson, 148 Atl. (Pa.) 511; Strachan v. Beacon Oil Co., 146 N.E. (Mass.) 787; Clark v. Wambold, 160 N.W. (Wis.) 1039; Dolan v. Chicago, M. St. P.R. Co., 95 N.W. (Wis.) 385; Soderburg v. Chicago, St. P.M. O. Ry. Co., *Page 282 167 Iowa 123; Wade v. Miller, 73 N.E. (Mass.) 849. We held, however, in Shively v. C.R., I.F. N.W. Ry. Co., 74 Iowa 169, that the erection of stockyards so near to a dwelling house as that the odors therefrom constitute a nuisance when unwholesome and injurious to health could not be defended on the ground that it was necessary to the operation of the railroad.
It is a matter of common knowledge that live poultry may not be handled even with the most scrupulous care without causing more or less noise and confusion. Chickens confined in coops or feeding batteries or at liberty in ordinary chicken houses will cackle and crow more or less early in the morning and at other times when disturbed. Unless the feeding troughs are promptly cleansed and all decaying feed prevented from remaining therein, or if the offal, blood, feathers and other matter accumulating about appellee's plant are not promptly and carefully disposed of, more or less odor of varying degrees of offensiveness will inevitably arise therefrom. It has been held that the squealing of pigs, odors arising from hen houses, together with the noises incident thereto, do not constitute nuisances. Clark v. Wambold, 160 N.W. (Wis.) 1039; Wade v. Miller, 73 N.E. (Mass.) 849; Ballentine v. Webb, 47 N.W. (Mich.) 485.
Noises may be of such a character and intensity as to so unreasonably interfere with the comfort and enjoyment of private property as to constitute a nuisance, and, in such cases, injury to the health of the complaining party need not be shown. Baker v. Bohannan, 69 Iowa 60; State v. Chicago G.W.R. Co., 166 Iowa 494; Boyd v. City of Oskaloosa, 179 Iowa 387; Pauly v. Montgomery, 209 Iowa 699.
Appellant acquired his property adjacent to the Produce plant many years ago. It appears, however, that the enlargement of the plant and of the business conducted by appellee has increased the extent and intensity of the offensive odors and noisome disturbances resulting from its operation. In any event, he is not necessarily estopped from maintaining this action. Van Fossen v. Clark, 113 Iowa 86, 87; Payne v. Wayland, 131 Iowa 659; City of Waterloo v. Waterloo, C.F. N.R. Co., 149 Iowa 129; Andrews v. West. Asphalt Pav. Corp., 193 Iowa 1047.
As stated, there is much conflict in the testimony in this case. Some of the witnesses called by appellant testified that the odors were not so offensive as they have been at other times and *Page 283
all agreed that they are greatest in warm weather. No one appears to have suffered any particular inconvenience because of the proximity of the railroads, ice, gas and ice cream plants. Some, accustomed to the noise of the chickens, were not disturbed thereby. The plant has become the market place for poultry in large quantities coming from a considerable territory. It employs a large number of people and has a substantial pay roll. The premises were visited and inspected by representatives of the Chamber of Commerce and other citizens shortly prior to the trial, and the testimony of those who were called by appellee tended very greatly to minimize the extent of the odors present at and about the plant. Appellee may not entirely escape liability for nuisance because the plant is located within an industrial district. It is also adjacent to a residential district. It should, however, be noted that the area of the residential section affected by the plant is small and largely confined to a few properties situated in the immediate vicinity of the plant.
We are satisfied from the testimony, when read and considered as a whole, that the extent of the noise and offensive odors coming from the plant is much less than claimed by the testimony of some of appellant's witnesses. One person may be and probably is much more sensitive to such matters than others. In passing upon questions of the character before us, courts must have in mind the effect of such offensive matters upon persons of ordinary and reasonable sensibilities. Nevertheless, it seems to us that some of the possible sources of alleged offensive odors may be largely, if not wholly, avoided. The odor arising from scalding chickens is, no doubt, difficult to minimize to any considerable extent. The accumulation of decaying food, if any, in the feeding troughs may be wholly avoided. The removal of the offal from the feeding batteries should be sufficiently prompt and thorough to eliminate most of the complaint from this source. It should not be permitted to be placed in, or to remain about, the plant in open containers, nor should it be conveyed in open trucks or wagons. This should be remedied. The tallow and paraffin removed from the dead fowls necessarily becomes so mixed with foreign substances that, when repeatedly reheated, it becomes offensive. It appears to be the custom at the plant to replace the tallow and paraffin in the vats for reheating. This operation should not be repeated until the odor *Page 284
arising from the vat is substantially intensified thereby. In other words, too frequent repetition must be avoided. The killing room and all other parts of the plant and premises should be kept scrupulously clean and sanitary. We do not overlook the testimony on behalf of appellee on this point, but there are always possibilities of improvement in sanitation and cleanliness. The odors from the plant are little noticed by appellant or those residing in his immediate vicinity, except when the wind in the warmer season blows from the northeast. This is not the prevailing direction from which the breezes come in the summer season. The property of appellant consists of a valuable modern dwelling house and improved grounds, and while the area in the residential section affected by the matters complained of is very small, this is not a defense to appellant's action. The evidence does show, however, that there are more or less noises in the community from the operation of railway trains, ice and other plants, and that some odor escapes from the gas plant and, no doubt, from the stockyards located farther away. Upon the record before us, we are of the opinion that the operation of the Produce plant should not be enjoined. The decree will be modified, however, to the extent that appellees will be enjoined from placing the offal from the feeding batteries and other sources in open cans or placed about the premises in open containers and from being removed therefrom in open conveyances. Accumulations of this character must be placed in and removed in closed containers. The decree will also be modified so as to prohibit the use of tallow and paraffin with which other substances have been mixed so as to increase the odor from the heating vat in which same are placed.
[2] II. It is the contention of appellant that the plant comes within the definition of a slaughterhouse, and that its operation is prohibited both by the city ordinance of Decorah and Chapter 133 of the Code of 1931. The ordinance of the city, in so far, if at all, as it was designed to apply to poultry houses where killing is done, has been modified by the action of the city council. Chapter 133 of the Code relates to hotels, restaurants and food establishments, and is designed to provide regulations intended to preserve the purity of food products used by the various establishments designated. For this purpose, Subdivision 7 of Section 2808 is made to include establishments *Page 285
in which animals or poultry are killed or dressed for food, and they are defined as slaughterhouses for the purposes of this chapter. This purpose is further indicated by the specific provisions of Section 2825 of the same chapter. Cleanliness and the utmost sanitation in hotels, restaurants and other eating establishments are required by this chapter, which also includes all necessary means and methods of enforcing its purpose. It has no application to a controversy with a private property owner in an action to abate a private nuisance. The decree from which this appeal is taken will be modified and the appellees enjoined from placing, maintaining or removing the offal from the feeding batteries and premises in anything but closed containers, and also so as to restrain the improper use of the tallow and paraffin. In all other respects, the decree is affirmed. Decree may be entered in this court at the election of either party, or the cause will be remanded to the district court for decree. The appellee will be allowed not to exceed sixty days in which to comply fully with the requirements of the decree. — Modified and affirmed.
WAGNER, C.J., and FAVILLE, De GRAFF, ALBERT, and MORLING, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3211388/
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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
A15-0031
State of Minnesota,
Respondent,
vs.
Lorenzo Leontay Washington,
Appellant.
Filed February 16, 2016
Affirmed
Bjorkman, Judge
Hennepin County District Court
File No. 27-CR-13-29611
Lori Swanson, Attorney General, St. Paul, Minnesota; and
Michael O. Freeman, Hennepin County Attorney, Linda K. Jenny, Assistant County
Attorney, Minneapolis, Minnesota (for respondent)
Charles F. Clippert, St. Paul, Minnesota (for appellant)
Considered and decided by Bjorkman, Presiding Judge; Ross, Judge; and Larkin,
Judge.
UNPUBLISHED OPINION
BJORKMAN, Judge
Appellant challenges his convictions of aiding and abetting attempted second-
degree murder and aiding and abetting second-degree assault, arguing that the district court
improperly admitted Spreigl evidence, the prosecutor engaged in prejudicial misconduct,
the evidence was insufficient to sustain the attempted-murder conviction, and the district
court’s sentencing decision was improperly influenced by appellant’s exercise of his trial
rights. We affirm.
FACTS
Appellant Lorenzo Leontay Washington was charged with aiding and abetting
second-degree assault, aiding and abetting attempted first-degree aggravated robbery, and
aiding and abetting attempted second-degree murder following a July 11, 2013 incident.
The state alleged that on that day, Washington, Cartrell Smith, and O.W. confronted D.P.,
chased him for several blocks on their bicycles, and then shot him. Washington and
Smith’s cases were joined for trial. The jury acquitted both men of attempted aggravated
robbery, but could not agree on a verdict on the other charges. Washington and Smith were
retried together on the assault and attempted second-degree-murder charges.
At the second trial, D.P. testified about the relationships among the various
individuals. In 2010 or 2011, Juwon Osborne—also known as “Skitz”—shot D.P. D.P.
did not report this incident to the police because he did not want to be called a “snitch.”1
He knew that Osborne and Washington were associated, and he had issues with
Washington. In 2012, D.P. and Washington resided together at a treatment facility. While
at the facility, the two argued after Washington told other residents that Osborne shot D.P.’s
testicles off. D.P. described himself and Washington as “always . . . in a conflict.”
1
Subsequently, Osborne was fatally shot.
2
D.P. also testified about the July 11, 2013 shooting. On that day, he was confronted
by a group of individuals on bicycles, one of whom called out the name “Skitz.” D.P.
recognized several of the individuals, including Washington, Smith, and O.W. D.P. fled
on his bicycle, and the group followed. When D.P. was approximately one block from his
friend J.J.’s house, he heard gunshots and a “ting sound” on his bicycle, which he thought
was made by a bullet. D.P. attempted to enter J.J.’s house, but no one responded when he
knocked on the door and windows. While standing in J.J.’s backyard, D.P. saw Smith
holding a gun in the middle of the street and Washington standing near the front of the
house. D.P. attempted to run and heard Washington say, “there he goes, there he goes.”
Smith shot at D.P. four times, hitting him in the buttocks. The group then rode away on
their bicycles.
After he was shot, D.P. saw a police car approaching and went to the officer for
help. D.P. told Officer Michael Killebrew that he had been shot and that Washington and
O.W. were members of the group that shot him. D.P. testified that he did not identify the
shooter at that time because he did not “want to be telling on nobody.” D.P. was then
transported to North Memorial Hospital.
Sergeant Kelly O’Rourke testified that he spoke with D.P. in the hospital five days
after the shooting. D.P. reported that Washington and O.W. were in the group that
confronted him, and that Smith shot him. D.P. again stated that a member of the group
called out “Skitz,” and that Washington was the person who said “there he is, there he is”
before the shots were fired. On July 18, Sergeant O’Rourke returned to the hospital with
3
his partner, who administered a photo lineup. D.P. again identified Washington, Smith,
and O.W., and stated that Smith was the shooter.2
Sergeant O’Rourke also testified that he reviewed video footage from public-safety
cameras located in close proximity to the shooting, but the footage did not contain relevant
information. A defense investigator also reviewed the footage and testified that it did not
show any type of chase, but revealed one or two people riding bicycles in a casual manner.
A map showing the location of the cameras demonstrates that none are present at the
intersection where the shooting occurred.
The jury found Washington guilty of aiding and abetting second-degree assault and
aiding and abetting attempted second-degree murder. Washington moved for a downward
dispositional sentencing departure. The district court denied the motion and imposed a
presumptive 131-month sentence. Washington appeals.
DECISION
I. The district court did not abuse its discretion by admitting evidence of prior
contact between Washington and D.P. without conducting a Spreigl analysis.
As a general rule, relevant evidence is admissible. Minn. R. Evid. 402; State v.
Swinger, 800 N.W.2d 833, 839 (Minn. App. 2011), review denied (Minn. Sept. 28, 2011).
Evidence of motive is typically relevant—even when not an element of the charged
offense—because it can explain the reason for a person’s actions. See State v. Ness, 707
2
D.P. previously testified at O.W.’s trial that Washington, Smith, and O.W. were present
at the scene, but he did not know the identity of the shooter. At Washington and Smith’s
second trial, D.P. explained that he did not identify Smith as the shooter at O.W.’s trial
because he did not want to be a “snitch,” and he was concerned for his safety.
4
N.W.2d 676, 687 (Minn. 2006). But “[e]vidence of another crime, wrong, or act is not
admissible to prove the character of a person in order to show action in conformity
therewith.” Minn. R. Evid. 404(b). Such evidence may be admissible for another purpose,
such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or
absence of mistake. Id.; State v. Spreigl, 272 Minn. 488, 491, 139 N.W.2d 167, 169 (1965).
We review a district court’s evidentiary ruling for an abuse of discretion. State v. Loving,
775 N.W.2d 872, 879 (Minn. 2009).
Washington challenges the admission of D.P.’s testimony that Washington
associated with Osborne, that D.P. and Washington argued in 2012 at a treatment facility,
and that D.P. and Washington were “always . . . in a conflict.” The testimony did not
include details of the contacts and relationship between Washington and D.P., and did not
reference criminal acts or gang affiliation. In short, the challenged testimony provided
background about how D.P. and Washington knew each other, and Washington’s potential
motive for the shooting. Because we conclude that this does not constitute Spreigl
evidence, the district court was not required to conduct the five-step process for admitting
such evidence. See Ness, 707 N.W.2d at 686 (stating the five-step analysis for admitting
Spreigl evidence). And even if this evidence did constitute Spreigl evidence, it was
admissible because it explained the relationship between Washington and D.P. and
established a motive for the commission of the offense. State v. Schweppe, 306 Minn. 395,
402, 237 N.W.2d 609, 615 (1975); see also Ness, 707 N.W.2d at 687 (stating that although
motive is not an element of most crimes, the state is usually entitled to present motive
evidence to help explain the reason for an act).
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Although we discern no abuse of discretion by the district court in admitting this
evidence, we note that any prejudicial effect is minimal. The court did not permit any
references to gang affiliations and there was no suggestion that Washington’s prior
encounters with D.P. constituted criminal activity. Moreover, any prejudice that occurred
by admitting evidence of the incident at the treatment facility and the continued animosity
between Washington and D.P. also worked against the state. The strained relationship
between Washington and D.P. could provide an incentive for D.P. to lie, which the defense
expressly asserted in its closing argument.
II. The prosecutor did not commit prejudicial misconduct.
Washington argues that the prosecutor engaged in both unobjected-to and objected-
to misconduct. We look at the trial as a whole to determine whether prosecutorial
misconduct warrants a new trial. See State v. Johnson, 616 N.W.2d 720, 727-28 (Minn.
2000) (stating when courts consider claims of prosecutorial misconduct in closing
argument the arguments are considered as a whole); see also State v. Hoppe, 641 N.W.2d
315, 321-22 (Minn. App. 2002) (holding that a new trial was warranted after considering
all instances of prosecutorial misconduct), review denied (Minn. May 14, 2002). We apply
a different standard of review to unobjected-to and objected-to misconduct. Accordingly,
we address each category in turn.
Unobjected-to misconduct
We review unobjected-to prosecutorial misconduct under a modified plain-error
standard, considering whether there is “(1) error, (2) that is plain, and (3) affects substantial
rights.” State v. Ramey, 721 N.W.2d 294, 302 (Minn. 2006). On the third element, the
6
state bears the burden of proving that the misconduct did not affect the defendant’s
substantial rights. Id.
Washington first argues that the prosecutor disparaged the defense when he stated
that one of its theories was “absurd” and argued that the defense investigator “cherry-
picked” the photographs he described. We are not persuaded. In Hoppe, we held that a
prosecutor committed misconduct when he stated the defendant’s argument was
“ridiculous” and told the jury not to be “snowed” by the defense. 641 N.W.2d at 321. But
in State v. Matthews, our supreme court held that a prosecutor did not engage in misconduct
by describing the defense’s explanation of events as “concocted,” “ridiculous,” and
“unbelievable.” 779 N.W.2d 543, 552 (Minn. 2010). The supreme court reasoned that the
prosecutor’s statement was directed at witness credibility rather than the defendant’s
broader theory of defense. Id. We conclude this case is more like Matthews. The
prosecutor’s statements, considered in context, urged the jurors to find D.P.’s testimony
credible. As such, they do not amount to misconduct.
Next, Washington contends that the prosecutor committed misconduct by telling the
jury that their duty was to find the truth. In State v. Ashby, the supreme court concluded
that the prosecutor’s admonition to the jury to “keep its eyes on the prize” of truth was not
misconduct because the statement was made in the context of the jury’s duty to evaluate
witness credibility. 567 N.W.2d 21, 28 (Minn. 1997). Similarly, in State v. Bailey, the
supreme court held that it was not misconduct for the prosecutor to tell the jurors they were
“truth seekers” and to argue that they should “search for the truth in the evidence.” 677
N.W.2d 380, 403 (Minn. 2004). Here, the prosecutor referred to the jury’s duty to find the
7
“truth” or render a “true verdict” on at least eight occasions. But the majority of these
references were made in the context of evaluating the credibility of witness testimony,
particularly D.P.’s credibility, on which the state’s case largely turned. On this record, we
discern no misconduct.
Washington also asserts that the prosecutor improperly shifted the burden of proof
to the defense by arguing that “if someone wanted to challenge [D.P.]’s assessment that
[Washington and Osborne] were aligned, someone could have done that.” This argument
has merit. A prosecutor may not comment on a defendant’s failure to contradict testimony.
State v. Porter, 526 N.W.2d 359, 365 (Minn. 1995) (concluding that arguing testimony is
“uncontradicted” or is “without impeachment by any cross-examination” constitutes
misconduct). By suggesting that Washington should have presented evidence regarding
Washington’s claimed association with Osborne, the prosecutor violated clear precedent,
thereby committing misconduct.
Because we conclude that the prosecutor committed misconduct, we must determine
whether Washington’s substantial rights were affected. See Ramey, 721 N.W.2d at 302
(stating that the state must prove there is no reasonable likelihood that the absence of the
misconduct would have significantly affected the jury’s verdict). Washington cites Porter,
where our supreme court held that the prosecutor’s misconduct was not harmless beyond a
reasonable doubt. 526 N.W.2d at 365-66. But that conclusion was not solely based on the
prosecutor’s improper burden-shifting comment. Id. Rather, the prosecutor’s misconduct
in Porter included appealing to the passions and prejudices of the jury, arguing the
consequences of the jury’s verdict, bolstering the credibility of the state’s expert witness,
8
distorting the burden of truth, and alluding to the defendant’s failure to contradict certain
testimony. Id. (stating that the prosecutor’s misconduct “permeated the entire closing
argument”).
In contrast, the prosecutor’s misconduct here falls substantially short of Porter’s
mark. The misconduct consisted of one improper burden-shifting statement; it did not
permeate the entire closing argument. The improper statement was only one sentence out
of a closing argument and rebuttal that spanned approximately 45 pages. See Matthews,
779 N.W.2d at 552 (stating misconduct limited to “a few lines in a 48-page closing
argument” did not affect defendant’s substantial rights). Accordingly, we conclude that
the misconduct did not affect Washington’s substantial rights.
Objected-to misconduct
When an objection is made at trial, we first determine whether the prosecutor
engaged in misconduct, and then apply a “two-tiered harmless-error analysis.” State v.
Jackson, 773 N.W.2d 111, 121 (Minn. 2009). If the misconduct is unusually serious, the
court must decide whether it was harmless beyond a reasonable doubt. Id. If the
misconduct is less serious, we consider whether it likely played a substantial part in
influencing the jury’s verdict. Id.
Washington argues that the prosecutor committed misconduct by asking the defense
investigator, on cross-examination, “[s]o your job isn’t to find the truth, right?”
Washington offered no legal basis for his objection, but asserts on appeal that the question
disparaged the defense. Washington points to State v. Griese for the proposition that
disparagement occurs when the prosecutor argues that a particular defense was presented
9
because it was the only one that could succeed. 565 N.W.2d 419, 427 (Minn. 1997).
Because the prosecutor made no such argument, we are not persuaded. Washington also
argues that the question implied that the investigator was not testifying truthfully. The
prosecutor asked the investigator about his job duties, if he worked for the defense, and
whether his job was to assist the defense. The objected-to question may have more directly
challenged the investigator’s credibility but we do not view this as outside the scope of
permissible cross-examination. Moreover, the state essentially conceded the primary
substance of the investigator’s testimony—that the chase and the shooting did not appear
on any of the video footage. On this record, we discern no prejudicial error.
III. The evidence was sufficient to prove that Washington aided and abetted
attempted second-degree murder.
When considering a sufficiency-of-the-evidence challenge, our review is limited to
determining whether the evidence was sufficient to permit the jury to reach the verdict that
it did. State v. Webb, 440 N.W.2d 426, 430 (Minn. 1989). We review the evidence in the
light most favorable to the verdict and assume that the fact-finder disbelieved any
testimony conflicting with that verdict. State v. Chavarria-Cruz, 839 N.W.2d 515, 519
(Minn. 2013); State v. Hokanson, 821 N.W.2d 340, 353 (Minn. 2012). We defer to the
fact-finder’s credibility determinations, State v. Buckingham, 772 N.W.2d 64, 71 (Minn.
2009), and will not disturb a verdict if the jury, acting with due regard for the presumption
of innocence and the requirement of proof beyond a reasonable doubt, could reasonably
conclude that the defendant was guilty of the charged offense. Bernhardt v. State, 684
N.W.2d 465, 476-77 (Minn. 2004).
10
Washington asserts that the evidence was insufficient to prove that he was involved
in the shooting. We disagree. Identification is a question of fact for the jury to decide.
State v. Oates, 611 N.W.2d 580, 586 (Minn. App. 2000), review denied (Minn. Aug. 22,
2000). D.P. testified that Washington was one of the individuals who pursued him on the
day in question and that Washington shouted “there he goes, there he goes” immediately
before Smith shot him. D.P. identified Washington in his initial contact with Officer
Killebrew, his interview with Sgt. O’Rourke at the hospital, during a photo lineup, during
O.W.’s trial, and again in court during Washington’s trial. Whether D.P.’s testimony was
credible is a jury determination to which we must defer. Buckingham, 772 N.W.2d at 71.
Because a verdict can be based on the testimony of a single credible witness, we conclude
that the evidence is sufficient to support Washington’s conviction. See Caldwell v. State,
347 N.W.2d 824, 828 (Minn. App. 1984).
IV. The district court’s sentencing decision was not improperly influenced by
Washington’s decision to exercise his constitutional trial rights.
We review sentences imposed by a district court for abuse of discretion. State v.
Delk, 781 N.W.2d 426, 428 (Minn. App. 2010), review denied (Minn. July 20, 2010). It is
a “rare” case in which we reverse a sentence within the presumptive guidelines range. Id.
But the fact that a defendant exercises his constitutional trial rights must have no bearing
on his sentence. State v. Mollberg, 310 Minn. 376, 388, 246 N.W.2d 463, 471 (1976). On
appeal, the record must show that the district court sentenced the defendant based on the
facts of the case and his personal history, and not as a punishment for pleading not guilty.
State v. Knaak, 396 N.W.2d 684, 689 (Minn. App. 1986).
11
Washington argues that the district court imposed a 131-month presumptive
sentence based, at least in part, on Washington’s decision to exercise his trial rights. He
points out that during a May 5, 2014 pretrial hearing, the district court stated the following
while in chambers:
So I don’t know what a jury would do, but I think that under
the circumstances probation is a reasonable offer given the fact
[that the defendants have] already spent a year in. And I’m not
saying that [the state] should do that. I’m saying that under the
circumstances on a straight plea I would do that . . . .
Washington asserts that these statements create an inference that the district court punished
him for pleading not guilty and going to trial.
Washington cites United States v. Medina-Cervantes to support his assertion that
his sentence was improperly influenced by his decision to stand trial. 690 F.2d 715, 716-
17 (9th Cir. 1982). In that case, the sentencing judge stated that the defendant’s insistence
on proceeding to trial cost the government money, and reflected the defendant “thumbing
his nose at [the] judicial system.” Id. at 716. The Ninth Circuit vacated the defendant’s
sentence because there was nothing in the record to rebut the inference that a more severe
sentence was imposed because the defendant exercised his trial rights. Id. at 716-17. In
contrast to Medina-Cervantes, the record before us rebuts the inference that Washington
was punished for pleading not guilty.
First, the district court’s statement concerning a probationary sentence was made in
the context of the parties’ plea negotiations. On May 5, the district court ruled on various
pretrial motions—primarily evidentiary motions—in open court. The attorneys and the
judge then continued discussing the trial in chambers. The conversation in chambers
12
largely focused on whether the state intended to proceed with trial. In light of that
discussion, the judge’s statements appear to have been directed toward the state to advance
a settlement offer, rather than toward Washington to encourage him to plead guilty.3
Second, the district court articulated several grounds for its decision at the
sentencing hearing. These reasons included Washington’s rehabilitative-treatment history,
criminal history, known gang affiliation, and present conviction. This shows that the
district court based its sentencing decision on the facts of the case and Washington’s
personal history. On this record, we conclude that Washington was not punished for
exercising his trial rights.
Affirmed.
3
The district court was encouraging plea negotiations, but the parties do not contend that
the court’s involvement in the negotiations was excessive. See State v. Anyanwu, 681
N.W.2d 411, 414-15 (Minn. App. 2004) (stating that a court should not inject itself into
plea negotiations and step into the position of one of the parties to the negotiation).
13
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06-09-2016
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LOUIS L. STANTON, U.S.D.J.
Defendant TriPoint Global Equities, LLC ("TriPoint") moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss claims brought by plaintiffs David Nagelberg ("Nagelberg") and Matthew Hayden ("Hayden") for failure to state a claim upon which relief can be granted. For the reasons that follow, the motion is granted in part and denied in part.
BACKGROUND
The following facts are alleged in the amended complaint (Dkt. No. 22).
Between January 2015 and January 2017, defendants Joseph Meli ("Meli") and Matthew Harriton ("Harriton") raised over $97 million from investors, including millions of dollars from Nagelberg and Hayden, in a fraudulent scheme. Am. Compl. ¶¶ 1-6, 89-150, 216.
Meli and Harriton represented to investors that they had exclusive access to bulk premium tickets to some of the biggest live events in the United States. Id. ¶ 34. They told investors that they would pool investor funds to purchase large blocks of tickets for theatrical and live-entertainment events, including the Broadway musical Hamilton, and concerts of popular music artists including Adele, The Rolling Stones, Bob Dylan, Paul McCartney, and others, which they would then resell at a substantial mark-up to secondary market brokers in bulk or directly to fans who attend the events, generating high returns for investors. Id. ¶¶ 1, 37-40, 52-53, 73, 150, 217.
Meli and Harriton set up four entities, 875 Holdings, LLC, Advance Entertainment, LLC, Advance Entertainment II, LLC, and 127 Holdings LLC (the "four entities"), in which plaintiffs and others invested, and which were purportedly to *412act as vehicles to purchase the tickets. Id. ¶¶ 5, 24-27, 41-80.
Meli and Harriton showed investors a 2015 letter agreement with Jeffrey Seller, a Hamilton producer, under which Advance Entertainment, LLC purportedly purchased 35,000 premium Hamilton tickets for $7 million (the "Hamilton agreement"), and a 2016 letter agreement with September Management, Ltd., under which Advance Entertainment, LLC could acquire up to $15 million of premium tickets to Adele concerts. Id. ¶¶ 38-39, 55-68. Meli and Harriton told investors that their investment was "in exchange for an entitlement to certain proceeds from the re-sale of the" Hamilton tickets and Adele concert tickets. Id. ¶¶ 58, 64. However, no agreement existed between the defendants and Mr. Seller or September Management, Ltd. to purchase tickets to those events, and the bulk of the money raised from investors was not used to purchase tickets. Id. ¶¶ 54-68.
Of the more than $97 million raised, over $59 million went directly to prior investors to create the illusion of profitable returns. Id. ¶¶ 33, 219. More than $10.2 million was misappropriated for Meli and Harriton's personal use. Id. ¶ 220. More than $1.8 million was transferred to other entities controlled by Meli and Harriton and to their family members. Id. ¶ 221.
TriPoint
TriPoint is an investment bank located in New York City. Id. ¶ 28. It advertises to investors its trusted advice and proven execution. Id. ¶ 81. TriPoint worked as a placement agent for Meli and Harriton by helping them find investors. Id. ¶ 82. It distributed materials promoting Meli and Harriton's experience, and their plan to buy blocks of tickets to live events in advance of the event and to turn a profit by reselling them in the secondary market. Id. ¶¶ 83-84. Meli and Harriton paid TriPoint a broker fee tied to the gross proceeds that TriPoint introduced into the investment, and a remainder fee based on profits supposedly earned on particular investments. Id. ¶ 88.
In December of 2015, Hayden met with a TriPoint investment banking associate named Robert Nathan during a conference in Los Angeles. Id. ¶ 89. Nathan told Hayden that TriPoint was acting as a placement agent for an investment with Meli and Harriton. Id. ¶ 90. Hayden told Nathan that he was only interested in low risk investments, and asked what due diligence TriPoint had done on Meli and Harriton and their entities. Id. Nathan explained the purported investment scheme to Hayden. Id. ¶ 91. He touted Meli's extensive experience in the live event and concert industry and Harriton's extensive investment experience, and told Hayden that Harriton was his family friend who he had known since high school. Id. ¶ 92. Nathan told Hayden that first he would have to invest in a diversified portfolio of live events, following which he could invest in individual high profile events like Hamilton and Adele concerts. Id. ¶ 93.
Nathan showed Hayden the Hamilton agreement, under which Advance Entertainment, LLC purportedly purchased 35,000 premium Hamilton tickets for $7 million, and assured Hayden that TriPoint had verified the agreement and the relationship between Meli and Harriton and Mr. Seller, the Hamilton producer. Id. ¶¶ 95-96. Nathan told Hayden that TriPoint had examined records of past ticket deals done by Meli and Harriton and verified profits made by investors. Id. ¶ 98. He also told Hayden that TriPoint was verifying all of the wire transfers to the four entities to ensure that all investor money that TriPoint introduced to the investment was being used to fund ticket deals. Id. ¶ 100. Nathan sent Hayden the LLC agreement for 875 Holdings, LLC, as well *413as other investment documents and instructions on how to proceed with the investment. Id. ¶ 103. In January of 2016, Hayden invested $500,000 in 875 Holdings, LLC, in reliance on Nathan's representations. Id. ¶¶ 102-04, 262-63. Nathan then introduced Hayden to Meli, and in the following months Hayden made additional investments in other entities controlled by Meli and Harriton. Id. ¶¶ 105-120.
During their early discussions, Hayden told Nathan that his friend Nagelberg was also considering the investment. Id. ¶ 121. Nathan told Hayden about TriPoint's due diligence investigation of Meli, Harriton, and their entities knowing that Hayden would relay that information to Nagelberg, and knowing that Nagelberg would rely on it in deciding whether to invest. Id. ¶¶ 122, 125. Hayden conveyed to Nagelberg what Nathan told him about the investment opportunity and about TriPoint's due diligence. Id. ¶¶ 123-24. Hayden also introduced Nagelberg to Meli, and Meli then introduced both Hayden and Nagelberg to Harriton. Id. ¶ 126. In reliance on Nathan's representations, Nagelberg decided to invest. Id. ¶¶ 123-49, 262-63. Hayden and Nagelberg lost approximately $4.2 million in funds they invested in the four entities. Id. ¶ 265.1
Hayden and Nagelberg claim that Nathan lied about TriPoint's investigation into Meli, Harriton, and their entities, and accuse TriPoint of assisting in the fraud. They assert claims against TriPoint for fraud, aiding and abetting fraud, negligent misrepresentation, and unjust enrichment. TriPoint argues that it did not know that Meli and Harriton were engaged in fraud, and moves to dismiss the claims for failure to state a claim upon which relief can be granted.
DISCUSSION
Legal Standard
On a motion to dismiss under Rule 12(b)(6), all factual allegations in the complaint are accepted as true and all reasonable inferences are drawn in the plaintiff's favor. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 110-11 (2d Cir. 2010). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id., citing Twombly, 550 U.S. at 556, 127 S.Ct. at 1965. A complaint will not "suffice if it tenders 'naked assertions' devoid of 'further factual enhancement.' " Id., citing Twombly, 550 U.S. at 557, 127 S.Ct. at 1966.
1. Common Law Fraud
"The elements of a fraud cause of action consist of 'a misrepresentation or a material omission of fact which was false and known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury' " Pasternack v. Lab. Corp. of Am. Holdings, 27 N.Y.3d 817, 827, 37 N.Y.S.3d 750, 756, 59 N.E.3d 485, 491 (2016), quoting Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 178, 919 N.Y.S.2d 465, 469, 944 N.E.2d 1104, 1108 (2011).
*414TriPoint argues that the fraud claim must be dismissed because (1) plaintiffs do not allege facts from which one can reasonably infer that TriPoint knew that Meli and Harriton were engaged in fraud, (2) plaintiffs fail to meet Rule 9(b)'s heightened pleading requirements for allegations of fraud, and (3) even if Hayden can state a claim for fraud, Nagelberg's claim should be dismissed because TriPoint did not make any representations to Nagelberg. Those arguments are unavailing.
First, the fraud claim against TriPoint is not based on the fraud Meli and Harriton engaged in, but on false representations that TriPoint made to Hayden. Am. Compl. ¶¶ 257-58. Nathan told Hayden that TriPoint verified the Hamilton agreement and the relationship between Meli and Harriton and Mr. Seller, that TriPoint reviewed prior returns on ticketing arrangements by Meli and Harriton and verified profits made by investors in those deals, and that TriPoint was verifying wire transfers to the four entities to ensure that the money it introduced into the investment went to fund ticket purchases. Id. ¶¶ 96, 98, 100, 257. Plaintiffs allege that those statements were false-i.e., that TriPoint had not actually confirmed the truth of those things-because had TriPoint conducted a proper investigation as it said it did, it would have discovered that there was no agreement to purchase Hamilton tickets, there were no prior profits on ticket deals, and the money it introduced to the deal was not going to ticket brokers but to prior investors and to Meli and Harriton's own use. Id. ¶¶ 96-97, 99, 101, 258. TriPoint knew when it made those statements the thoroughness of its investigation into the scheme, and plaintiffs urge the reasonableness of the inference that TriPoint must have been aware that its investigation was not thorough enough to support those statements. The possibility remains, as TriPoint argues, that when it made those statements it believed that its investigation was adequate and its conclusions correct. Decision of that point requires hearing and consideration of the evidence.
Second, to satisfy Rule 9(b), "a complaint alleging fraud must '(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.' " United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 25 (2d Cir. 2016), quoting Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994). Plaintiffs have satisfied those requirements. The amended complaint specifies the statements that plaintiffs contend were fraudulent, discussed in the previous paragraph. Am. Compl. ¶¶ 96, 98, 100, 257. It identifies Robert Nathan, a Tripoint investment banking associate, as the speaker. Id. ¶ 89. It states that the statements were made in December 2015 during a conference in Los Angeles, California. Id. It explains that TriPoint knew its statements were false because it knew the level of its own investigation into the scheme and knew that its investigation was not thorough enough to support the statement that it had verified those things. Id. ¶¶ 97, 99, 101, 258.2
Third, "Under New York law, a plaintiff may state a claim for fraudulent misrepresentation made to a third party if he alleges that he relied to his detriment on the defendant's misrepresentation and that the defendant intended the misrepresentation *415to be conveyed to him." Sec. Inv'r Prot. Corp. v. BDO Seidman, LLP, 222 F.3d 63, 71 (2d Cir. 2000), citing Rosen v. Spanierman, 894 F.2d 28, 33 (2d Cir. 1990). Here, plaintiffs adequately allege that Robert Nathan, the TriPoint associate, knew that Nagelberg was considering the investment, knew that Hayden would relay his statements to Nagelberg, and knew that Nagelberg would rely on those statements in deciding whether to invest. Am. Compl. ¶¶ 121-25. One can reasonably infer that Nathan intended his statements to be conveyed to Nagelberg.3
Accordingly, the motion to dismiss the fraud claim is denied.
2. Aiding and Abetting Fraud
"To establish liability for aiding and abetting fraud under New York law, 'the plaintiffs must show (1) the existence of a fraud; (2) the defendant's knowledge of the fraud; and (3) that the defendant provided substantial assistance to advance the fraud's commission.' " Krys v. Pigott, 749 F.3d 117, 127 (2d Cir. 2014), quoting Lerner v. Fleet Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006). The existence of a fraud must be pleaded with particularity. Fed. R. Civ. P. 9(b) ; Lerner, 459 F.3d at 292-93.
Unlike the previous claim for fraud, the aiding and abetting claim is predicated on TriPoint's purported assistance to the underlying fraud perpetrated by Meli and Harriton. Am. Compl. ¶¶ 268-70. But plaintiffs do not plead facts showing that TriPoint actually knew of that fraud.
"A failure to allege sufficient facts to support the inference that the alleged aider and abettor had actual knowledge of the fraudulent scheme warrants dismissal of the aiding and abetting claim at the pleading stage." Krys, 749 F.3d at 127, citing Lerner, 459 F.3d at 292-93 and Nat'l Westminster Bank USA v. Weksel, 124 A.D.2d 144, 149, 511 N.Y.S.2d 626, 630 (1st Dep't 1987). Alleging "constructive knowledge, which is knowledge that one using reasonable care or diligence should have, and therefore that is attributed by law to a given person," is not enough to plead the knowledge element of an aiding and abetting claim. Id. (emphasis in Krys ) (internal quotation marks, alteration, and citation omitted).
While plaintiffs allege that TriPoint misrepresented the thoroughness of its own investigation into Meli and Harriton's venture, they do not allege facts showing that TriPoint actually knew that Meli and Harriton were using proceeds not to purchase live event tickets for resale on the secondary market but to repay prior investors and for their own use. See Iqbal, 556 U.S. at 683, 129 S.Ct. at 1952 (rejecting conclusory allegations that defendants' acted with a particular state of mind in the absence of factual allegation sufficient to plausibly suggest that state of mind). Conclusory allegations that "TriPoint knew of the fraud, or it was so obvious that they must have known of the fraud," Am. Compl. ¶ 269, without supporting factual allegations showing that TriPoint actually knew that Meli and Harriton were engaged in fraud, is not enough to plead knowledge.4
Plaintiffs argue that TriPoint misrepresented the thoroughness of its investigation into the ticket scheme, which shows that TriPoint consciously avoided knowledge *416of the fraudulent scheme, and conscious avoidance of knowledge is sufficient to plead the knowledge element here. In Krys v. Pigott, the Second Circuit left unanswered whether alleging facts showing conscious avoidance of knowledge is enough to sustain a claim for aiding and abetting fraud at the pleading stage. Krys, 749 F.3d at 131 ("it is unclear whether a claim of aiding and abetting under New York law is sustainable on a basis not of actual knowledge but of conscious avoidance of knowledge"), citing Krys v. Butt, 486 Fed.Appx. 153, 157 n.5 (2d Cir. 2012). Conscious avoidance is where a "defendant was aware of a high probability of the relevant fact and consciously avoided confirming that fact." Krys, 749 F.3d at 132 (citation and alterations omitted). But overstating its own due diligence does not show that TriPoint was actually aware of a high probability that Meli and Harriton were misappropriating investors' funds and consciously avoided confirming it.
Because plaintiffs have not pleaded factual allegations showing that TriPoint actually knew of the underlying fraud, or that it was aware of a high probability of the underlying fraud and consciously avoided confirming it, the aiding and abetting claim cannot be sustained.
3. Negligent Misrepresentation
"To state a claim for negligent misrepresentation under New York law, the plaintiff must allege that '(1) the defendant had a duty, as a result of a special relationship, to give correct information; (2) the defendant made a false representation that he or she should have known was incorrect; (3) the information supplied in the representation was known by the defendant to be desired by the plaintiff for a serious purpose; (4) the plaintiff intended to rely and act upon it; and (5) the plaintiff reasonably relied on it to his or her detriment.' " Anschutz Corp. v. Merrill Lynch & Co., 690 F.3d 98, 114 (2d Cir. 2012), quoting Hydro Inv'rs, Inc. v. Trafalgar Power Inc., 227 F.3d 8, 20 (2d Cir. 2000).
TriPoint argues that as placement agent for Meli, Harriton, and their entities, its customers with whom it was in a "special relationship," and to whom its resulting duties were owed, were Meli, Harriton, and their entities, and not the plaintiffs.
But plaintiffs plead sufficient facts about the nature of the relationship between TriPoint and Hayden to allege that TriPoint owed Hayden a duty to speak with care.
The New York Court of Appeals has held:
liability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified.
* * * *
Whether the nature and caliber of the relationship between the parties is such that the injured party's reliance on a negligent misrepresentation is justified generally raises an issue of fact. In determining whether justifiable reliance exists in a particular case, a fact finder should consider whether the person making the representation held or appeared to hold unique or special expertise; whether a special relationship of trust or confidence existed between the parties; and whether the speaker was aware of the use to which the information would be put and supplied it for that purpose.
Kimmell v. Schaefer, 89 N.Y.2d 257, 263-64, 652 N.Y.S.2d 715, 719, 675 N.E.2d 450, 454 (1996). "Strong allegations on the first and third factors can overcome weak pleading of the second, somewhat circular factor."
*417LBBW Luxemburg S.A. v. Wells Fargo Sec. LLC, 10 F.Supp.3d 504, 526 (S.D.N.Y. 2014), citing Suez Equity Inv'rs, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 103 (2d Cir. 2001).
" Kimmell distinguished between 'casual statements and contacts' that a seller would make informally in the course of a day's business, and 'deliberate representations' that give rise to a duty to speak with care." Suez Equity, 250 F.3d at 103, quoting Kimmell, 89 N.Y.2d at 263, 652 N.Y.S.2d at 719, 675 N.E.2d at 454.
Plaintiffs allege that Hayden told Nathan that he was interested only in low risk investments where his principal would be secure, and asked what due diligence TriPoint had done on Meli, Harriton, and their entities. Am. Compl. ¶¶ 90, 107. Nathan explained the investment structure to Hayden in detail, and touted Meli and Harriton's extensive experience. Id. ¶¶ 92-94. Nathan also told Hayden that he and Harriton were family friends and had known each other since high school. Id. ¶ 92. Nathan showed Hayden the purported Hamilton agreement and assured Hayden that TriPoint had verified the agreement and the relationship between Meli and Harriton and the Hamilton producer Jeffrey Seller. Id. ¶¶ 95-96. Nathan told Hayden that TriPoint had examined the records of past ticket deals done by Meli and Harriton and verified profits made by investors in those deals, and that TriPoint was verifying all of the wire transfers to the four entities to ensure that all investor money TriPoint introduced to the investment was being used to fund ticket deals. Id. ¶¶ 98, 100. Nathan sent Hayden the LLC agreement for 875 Holdings, LLC, other investment documents, instructions on how to proceed with the investment, and documents for Hayden to execute in order to invest, which Hayden executed and returned to Nathan. Id. ¶¶ 103-04, 114-15.
A jury can find that the alleged communications from Nathan to Hayden crossed the line between "casual statements and contacts that a seller would make informally in the course of a day's business" and "deliberate representations that give rise to a duty to speak with care." Suez Equity, 250 F.3d at 103, quoting Kimmell, 89 N.Y.2d at 263, 652 N.Y.S.2d at 719, 675 N.E.2d at 454. It can reasonably be inferred from plaintiffs' allegations that the relationship between the parties "extended beyond the typical arm's length business transaction." See id. 5
With respect to Nagelberg, a trier of fact might conclude that Nathan knew and intended that Hayden would communicate his statements to Nagelberg, and may conclude on the facts that Nathan envisioned Nagelberg to be included in those who can reasonably rely on his representations.
Accordingly, the motion to dismiss the claim for negligent misrepresentation is denied.
4. Unjust Enrichment
To state a claim for unjust enrichment under New York law, a plaintiff must plead facts showing that "(1) defendant was enriched, (2) at plaintiff's expense, and (3) equity and good conscience militate against permitting defendant to retain what plaintiff is seeking to recover." Ashland Inc. v. Morgan Stanley & Co., 652 F.3d 333, 339 (2d Cir. 2011), quoting Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 55 (2d Cir. 2011). "The *418'essence' of such a claim 'is that one party has received money or a benefit at the expense of another.' " Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000), quoting City of Syracuse v. R.A.C. Holding, Inc., 258 A.D.2d 905, 685 N.Y.S.2d 381, 381 (4th Dep't 1999).
Plaintiffs allege that TriPoint received broker fees from its co-defendants in exchange for introducing Hayden and Nagelberg's money into the scheme. Am. Compl. ¶¶ 88, 284. That does not allege unjust enrichment. While what turned out to be a loss for Hayden and Nagelberg was a gain for TriPoint, TriPoint's enrichment was not at plaintiffs' expense.
TriPoint received fees from its co-defendants for services provided to those defendants. Had TriPoint not been paid those fees, TriPoint's co-defendants, and not plaintiffs, would have retained that money. Plaintiffs' financial position would be exactly the same today whether TriPoint was paid the fees or not. Therefore, TriPoint was not enriched at Hayden and Nagelberg's expense.
CONCLUSION
TriPoint's motion to dismiss (Dkt. No. 59) is granted as to the fifth count for aiding and abetting fraud and the seventh count for unjust enrichment, and is denied as to the fourth count for common law fraud and the sixth count for negligent misrepresentation.
So ordered.
Nagelberg introduced the other plaintiffs to Meli and Harriton, following which each invested money in the four entities. Am. Compl. ¶¶ 151-88. All plaintiffs bring claims against Meli, Harriton, and the four entities for fraud and breach of contract. Id. ¶¶ 226-55. At issue in this motion is only Hayden and Nagelberg's claims against TriPoint. Id. ¶¶ 256-88.
If the evidence ultimately shows that TriPoint believed its investigation was adequate to support the statements it made then its statements would not be knowingly false, and the inquiry would turn to whether it should have known that its investigation was inadequate, i.e., negligence.
TriPoint also argues that the fraud claim arises from alleged nondisclosure of a material fact and that plaintiffs must therefore allege facts giving rise to a duty to disclose. However, as discussed, the fraud claim arises from affirmative statements made by TriPoint that plaintiffs allege were false and no special relationship must be alleged to make that claim.
Plaintiffs' own extensive due diligence into Meli, Harriton, and their entities, did not uncover the fraud. See Am. Compl. ¶ 7.
TriPoint also argues that the negligent misrepresentation claim must be dismissed because plaintiffs have not adequately alleged that TriPoint made a representation that it knew was incorrect. But negligent misrepresentation asks whether "the defendant made a false representation that he or she should have known was incorrect." Anschutz Corp., 690 F.3d at 114 (emphasis added).
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Court of Appeals
of the State of Georgia
ATLANTA, March 26, 2018
The Court of Appeals hereby passes the following order
A18D0361. CENTRAL TRANSPORT et al. v. CALVIN YOUNG.
Upon consideration of the Application for Discretionary Appeal, it is ordered that it be
hereby GRANTED. The Appellant may file a Notice of Appeal within 10 days of the date of
this order. The Clerk of Superior Court is directed to include a copy of this order in the record
transmitted to the Court of Appeals.
LC NUMBERS:
SPCV1701087
Court of Appeals of the State of Georgia
Clerk's Office, Atlanta, March 26, 2018.
I certify that the above is a true extract from the minutes
of the Court of Appeals of Georgia.
Witness my signature and the seal of said court hereto
affixed the day and year last above written.
, Clerk.
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* This opinion was not delivered to the reporter until July 30, 1930; hence could not be published before.
This is the third time that this cause has been in this court. 1. NOVATION: The opinions in the former appeals are found in acts 200 Iowa 585 and 204 Iowa 363. The main facts constitu- are sufficiently set forth in the opinions in ting: intent the former appeals, and it is only necessary as that we refer to them very briefly, to present controlling the questions submitted on this appeal. element.
In 1905, four parties, Talbott, Himmelberger, Beach, and McConnell, formed a partnership, under the name of "M.A. Talbott Company." Later, the same parties organized a corporation called "The M.A. Talbott Company." The general business conducted by both was the construction of public improvements. The personnel of the partnership changed. Beach and McConnell passed out of the partnership. The notes in suit were all made payable to the order of the appellee, Himmelberger. They were signed by the partnership M.A. Talbott Company, and by Talbott and Himmelberger. There is no substantial dispute of the fact that the original notes that were so executed were given to appellee for the purpose of raising *Page 3
funds to be used in the partnership business; that they were negotiated by the appellee; that the proceeds were so used; and that subsequently the appellee took up said notes, and now holds them.
I. Appellant moved for a directed verdict, on the ground that the evidence upon the instant trial discloses that there was a complete novation respecting the notes in suit, and that the appellant was relieved of liability thereon by virtue of the assumption of the same by the said corporation. As we understand the record, a minute book of the corporation was produced upon this trial, which had not been offered in evidence at the former trials, and under date of July 6, 1907, said minute book contained an entry by which the corporation assumed and agreed to pay, at the maturity thereof, all of the indebtedness of the said copartnership. It is contended that this proposition was accepted by the corporation, and that a contract was entered into on July 8, 1907, in accordance therewith.
More than four years later, to wit, on September 12, 1911, the partnership and the corporation entered into a written contract, which is, in part, as follows:
"This agreement made and entered into this 12th day of September, 1911, by and between M.A. Talbott Company, a partnership consisting of M.A. Talbott of Rome, New York, and John H. Himmelberger, of Cape Girardeau, Missouri, hereinafter referred to as `the partnership' and `The M.A. Talbott Company,' of Baltimore City, a corporation organized and existing under the laws of the state of Maryland, hereinafter referred to as `the corporation,' witnesseth: * * * It is now hereby agreed by said corporation, that in consideration of the acts, services, and agreements of said partnership as hereinbefore enumerated, said corporation hereby assumes and takes over as its own, all the liabilities and obligations of said partnership and also agrees to convey to said partnership eight hundred fifty-four (854) shares of the common capital stock of said corporation, heretofore held as treasury stock.
"[Signed] "John M. Himmelberger M.A. Talbott Company. "Morris A. Talbott By Morris A. Talbott "The M.A. Talbott Company "By Morris A. Talbott." *Page 4
It is not contended by appellant that the transaction of July, 1907, constituted a novation, or anything more than an assumption of the debt by the corporation. But appellant insists that the contract of September 12, 1911, went further, and contains all the essential elements of a novation.
It is the general and well recognized rule that the necessary legal elements to establish a novation are parties capable of contracting, a valid prior obligation to be displaced, the consent of all parties to the substitution, based on sufficient consideration, the extinction of the old obligation, and the creation of a new one. Kirchman v. Standard Coal Co., 112 Iowa 668; Benton v. Morningside College, 202 Iowa 15; Foster v. Paine,63 Iowa 85; Harrington-Wiard Co. v. Blomstrom Mfg. Co., 166 Mich. 276
(131 N.W. 559); Parsons Mfg. Co. v. Hamilton Ice Mfg. Co., 78 N.J. Law 309 (73 A. 254); McAllister v. McDonald, 40 Mont. 375
(106 P. 882); Hemenway v. Beecher, 139 Wis. 399 (121 N.W. 150);Miles v. Bowers, 49 Or. 429 (90 P. 905). With these rules in mind, we turn to a consideration of the record in this case, to determine whether or not the contract of September 12, 1911, constituted a novation.
II. At the time of the execution of the contract of September 12, 1911, the appellee occupied a double role: he was a creditor of the partnership, by virtue of his having taken up the notes in suit from the indorsee, and he was a member of the partnership, and liable as such for his proportionate share of the indebtedness evidenced by the notes.
Was the appellee, as a creditor, a party to the contract of September 12th, so that, as such creditor, it constituted a novation? It is contended that the appellee was not a party to the contract, except as a member of the partnership. By the introductory recitals quoted supra, the contract purports to be an agreement between the partnership and the corporation only. Appellee is described therein as a member of the partnership. He signed it personally. It is contended that such signature was only as a witness, and not as a party to the instrument. He testified:
"Q. This contract, afterward, on the 12th day of September, 1911, and of that date, which has been identified, on pages 71 and 72 of the minute book, that the reporter has marked *Page 5
Exhibit 1, you and the other parties executed that contract as there set forth? A. Yes; I acknowledge that."
We are disposed to hold that, under the record, the appellee became a party to the contract, and consented to its terms and provisions and acquiesced therein.
III. We are still confronted with the question: Did the contract effectuate a discharge of the partnership liability to the appellee on the notes in suit, and a substitution of the corporation as the debtor thereon?
One of the essential elements of a novation is the extinction of the old obligation, the discharge of the old debtor, and the creation of a new obligation from a new debtor. In the recent case of Reimers v. Tonne, 207 Iowa 1011, we said:
"It is a familiar rule that the mere fact of the making of a new contract by which a third party becomes obligated to pay to the creditor the previous existing indebtedness of a debtor does not alone give rise to a presumption that the creditor accepts the new debtor and releases the original debtor; and the question as to whether or not there was such a release is one of fact, to be determined by all the evidence in the case. In Michigan StoveCo. v. Walker Co., 150 Iowa 363, we said: `Such release may, of course, be established, like any other agreement, by proof of facts and circumstances from which the implication of such release would reasonably arise.' See, also, Walker v. Wood,170 Ill. 463 (48 N.E. 919); Cutting v. Whittemore, 72 N.H. 107
(54 A. 1098); Dunbar v. Steiert, 31 Ariz. 403 (253 P. 1113); DeWitt v. Monjo, 46 A.D. 533 (61 N.Y. Supp. 1046); Parish Mfg.Corp. v. Martin-Parry Corp., 285 Pa. St. 131 (131 A. 710);Union Cent. Life Ins. Co. v. Hoyer, 66 Ohio St. 344
(64 N.E. 435)."
Applying this rule to the instant case, we are confronted with the necessity of determining whether or not the appellee released the partnership as his debtor and accepted the corporation as his new debtor.
Stress is laid upon the use of the words "hereby assumes andtakes over as its own all the liabilities and obligations of said partnership" in the contract. It is argued that the debts of the partnership had already been assumed by the transaction of July, 1907, and that something other and different was meant *Page 6
by the parties by the use of the words "takes over as its own," which were embodied in the contract of September 12, 1911. The argument is that, by consenting to this contract, appellee agreed that the corporation should take over all the debts of the partnership "as its own," and thereby it was the intention of the appellee to release the partnership and accept the corporation as the new debtor.
The ultimate question at this point is: Did the appellee, by acquiescing in this contract, bind himself that the corporation should alone thereafter be liable on the partnership debts? We do not think that the words "takes over as its own" of themselves should be construed as being a release by appellee of the partnership from all liability on its outstanding obligations. The intent of the parties is the important matter to be considered in this connection. There is nothing in the contract which in terms released the debtor, the partnership, from its obligations which the corporation agreed by the contract to assume and take over as its own. Nor did the contract in terms make any provision by which the creditor, the appellee, consented to accept the corporation as debtor, in lieu of the partnership. The conduct of the parties is proper to be considered, as it may bear upon the construction given the contract by them. Dalton v.Treinen, 191 Iowa 1185; Tooey v. Percival Co., 192 Iowa 267.
Appellant contends that, after the making of said contract of September 12, 1911, the appellee did not call upon the decedent Talbott to pay said notes. All the payments that were made after said date were made by the corporation from its funds. Talbott died in April, 1922.
The fact that the appellee did not make demand upon the decedent Talbott for the payment of the said notes after the execution of the contract of September 12, 1911, during his lifetime, — a period of more than ten years, — is of significance, as tending to indicate an intention on the part of the appellee not to recognize the notes as the obligation of the partnership. During this period of time, the payments that were made upon the notes were made by the corporation. On the other hand, however, it is of significance, as tending to show that the appellee did not intend to release the partnership from its obligation on said notes, although also looking to the corporation, under its contract, that, in September of 1918, Himmelberger was endeavoring *Page 7
to maintain the status of said notes by securing the payment of a portion thereof, which he evidently deemed to be important for that purpose. One Rule, who was a former employee of the partnership, and the corporation, testified regarding the transaction of September, 1918, in part, as follows:
"On that occasion there was discussion as to what the M.A. Talbott Company could pay on all these six notes in evidence, as I recall. I remember telling Mr. Talbott and Mr. Himmelberger both that the state of the funds of the company was such that we could not do anything more than make a very small payment. * * * Mr. Himmelberger told Mr. Talbott, discussing the matter, that it was an important thing that the status of those notes be preserved, and we all understood, to accomplish that, that payments should not be allowed to lapse too long. Mr. Talbott said, `All right,' and Mr. Talbott instructed me to make the payments."
It is also of some significance that no effort was made to take up the original notes and to substitute the notes of the corporation therefor. There is nothing in the record to indicate that Talbott at any time requested or claimed a right to a surrender of the partnership notes and substitution of corporation notes therefor. In 1918, it is evident from the record that Talbott considered the notes as existing obligations of the partnership, and was willing to comply with the appellee's request, to avoid the running of the statute of limitations, as the parties evidently understood it was necessary to do. In view of the entire record in the case, we are of the opinion that the contract itself did not, in terms, contain any agreement on the part of the appellee to release the partnership from its obligations to him and to accept the corporation as a new debtor in lieu thereof, and that the acts and conduct of the parties after the execution of such contract tend, on the whole, to support the contention of the appellee that such was not the intention of the parties.
IV. Over objection, the appellee, as witness in his own behalf, was permitted to testify that, when said contract was executed, he did not intend thereby to in any way release his *Page 8
2. EVIDENCE: claim against the partnership or the individual relevancy, members thereof upon the notes in suit. Under materiality, the facts disclosed in this case, we think the and testimony was admissible. In Brannen v. State
competency: Exch. Bank, 190 Iowa 630, we said: intent.
"It is further contended that the court erred in admitting the answer of the plaintiff in her deposition as to her intent to discharge the defendant bank from liability. We hold the evidence competent. The defendant alleged, by way of defense in his answer, that plaintiff had made a settlement with her brother, and thereby substituted him as her debtor instead of the bank, and that she thereby ratified her brother's act in applying the certificate of deposit to his personal indebtedness to the bank. This issue was submitted to the jury under proper instructions. A person's intent may be a material fact. Declarations of a person regarding his intention, when his intention is a material fact in the case, are admissible in evidence. Kruse v. Seiffert W. Lbr. Co., 108 Iowa 352; Helm v. Anchor Fire Ins. Co.,
132 Iowa 177; Larson v. Thoma, 143 Iowa 338."
V. It is contended that appellee was not a competent witness as to personal transactions between him and the 3. WITNESSES: decedent Talbott, under Section 11257, Code, competency: 1924. Said section did not bar appellee from transaction testifying as to his intentions or purposes. with These do not constitute "personal transactions," deceased: within the contemplation of the statute. intent of Campbell v. Collins, 133 Iowa 152; Gray v.
party. Sanborn, 178 Iowa 456; In re Estate of Newson,206 Iowa 514.
VI. Other questions argued are covered by the opinions in the former appeals. We find no error requiring reversal, and the judgment appealed from is — Affirmed.
ALBERT, C.J., and EVANS, KINDIG, and GRIMM, JJ., concur. *Page 9
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DISSENT: Garfield and Oliver, JJ.
Ellen B. Hayer, whose will is the occasion for this litigation, was a resident of Lamoni, Iowa. She died on February 8, 1940. Her purported will had been executed on February 7, 1939. Objections to the probate of this instrument were filed by Vera Hayer Redenbaugh, an adopted daughter of Ellen Hayer. There were no children born to Ellen B. Hayer and her husband, Christian Hayer, who predeceased her on October 29, 1928. Vera Hayer Redenbaugh was the only adopted child. Mrs. Hayer was past 81 years of age at the time of her death.
The original objections to the probation of the will of Ellen B. Hayer were based on two grounds: First, that Mrs. Hayer was of such unsound mind at the time of the execution of the instrument that she did not have testamentary capacity to make a will and was wholly incompetent and incapable of making a valid will; second, that the purported will as executed by Mrs. Hayer was induced to be made through fraud, duress and undue influence. The court withdrew the issue of undue influence from the jury on the basis of insufficient evidence and the only question that was submitted for consideration was as to the mental capacity of the decedent at the time of the execution of the purported will.
The record in this case is very voluminous, it having taken two weeks to complete the trial of this case in the lower court. The briefs and arguments are also voluminous inasmuch as counsel for both proponents and the contestant have manifested pronounced industry in the presentation of their various contentions *Page 882
relative to this litigation. It will be impossible to set out in detail the various questions raised or enumerate the various phases of the evidence presented. However, inasmuch as the primary question that is before us is as to the mental capacity of the decedent at the time of the execution of the purported will it seems incumbent upon us to first pass upon the question as to whether or not a jury issue was presented at the close of all the evidence and as to whether or not the court should have directed a verdict for the proponents on the question of the mental capacity of the decedent to make a valid will.
In passing upon any controverted issue, and in this particular case upon the question as to the sufficiency of the evidence relative to the submission of this case to the jury, certain guides or tests should be set up. Consideration should then be given to the evidence presented to the trial court for the purpose of ascertaining as to whether or not the facts presented bring them within the rules announced.
In this connection attention is called to the case of In re Fitzgerald, 219 Iowa 988, 996, 259 N.W. 455, 459, where this court makes the following pronouncement:
"* * *. The best test we know of for determining such a question is whether or not, had the case gone to the jury and it had found adversely to what it did in this case, the presiding judge would feel that, under all the record in the case, he would be warranted in setting aside such verdict.
"It is one of the fundamental rules laid down by our cases that the burden of proof is on the contestant to show that the deceased did not have sufficient mental capacity to comprehend the nature of the instrument he was executing, to recollect the property he meant to dispose of, the objects of his bounty, and the manner in which he wished to distribute his property among them. Our last expression on this proposition was in In re Will of Johnson, 201 Iowa 687, 207 N.W. 748. Mere old age, or some deterioration in physical or mental power, peevishness, childishness, or eccentricity, is not sufficient to carry to the jury the issue of mental unsoundness of the testator. Such was our pronouncement in In re Estate of Shields, 198 Iowa 686,200 N.W. 219, and cases there cited. We further said: *Page 883
"`It is not the duty of the court, in disposing of a motion for directed verdict, to submit the case to the jury because there is some evidence introduced by the party having the burden of proof, unless that evidence is of such character that it would warrant the jury in finding a verdict in favor of the party introducing such evidence. Before the question is left to the jury for its determination, the preliminary question for the court is whether there is any evidence to support the verdict, and if so, whether, upon such evidence, the jury can find a verdict for the party producing it, that will stand.'"
See also Bishop v. Scharf, 214 Iowa 644, 653, 241 N.W. 3, 7, and cases there cited. Attention is also called to the case of In re Estate of Johnson, 222 Iowa 787, 793, 269 N.W. 792, 795.
As previously stated the occasion for this litigation was the purported will of Ellen B. Hayer. However, the evidence as permitted to be considered by the jury went far afield in connection with the consideration of matters pertaining to the will of Christian Hayer, the husband of decedent, which had been admitted to probate in 1928; and the deeding of a 320-acre farm in Wright County, Iowa by Ellen B. Hayer in 1930 to the general church organization of the Reorganized Church of Jesus Christ of Latter Day Saints of Independence, Missouri, commonly known as the Latter Day Saints Church. A great deal of consideration was given to this character of testimony during the trial but it shall be our purpose in passing upon the question of the mental capacity of the decedent to endeavor to restrict our consideration to the question as to the testamentary capacity of the decedent at the time of the execution of her will.
Upon the question of the necessary mental capacity of a person to make a valid will at the particular time a will was executed this court has frequently spoken. Our holdings, however, are thoroughly commented upon in the case of Bishop v. Scharf, supra, at page 652 of 214 Iowa, page 7 of 241 N.W., where it is stated:
"The important and controlling fact in the case is the condition of testatrix at the very time the will was executed. It is not sufficient to impeach the validity of the instrument merely to show that testatrix had cerebral hemorrhage in the *Page 884
front part of the brain on the right side; that her mentality was to some extent weakened and impaired; that she had defective memory; that she was unable, upon all occasions, to recognize her acquaintances and friends; that she manifested some change from the quiet dignity and culture formerly observed, to an altered personality and an inclination toward facetiousness and, to some extent, indifference to the character of her speech and conversation.
"The test of mental capacity has been many times stated by this court. Testamentary capacity exists if the testator has sufficient mentality to understand the nature and purpose of the instrument about to be executed, to remember and possess sufficient capacity to know the extent and nature of his property; to know and comprehend the distribution which he desires to make thereof; and to remember and know those having claims upon his bounty. Capacity to transact business generally, to make contracts, and to carry on difficult negotiations are not essential to testamentary capacity. [Citing cases.]
"Mental weakness due to disease does not deprive one of testamentary capacity until it has progressed to the extent that the power of intelligent action has been destroyed. Mere forgetfulness and enfeeblement of the body are not alone sufficient to disqualify one from making a will. Thedisqualification which deprives one of testamentary capacity mustexist at the very time of the execution of the instrument. * * *." (Italics supplied.)
Although a detailed statement of the evidence cannot be presented perhaps it is advisable to state briefly certain facts relating to the execution of the will.
On February 6, 1939 Ellen B. Hayer went to the bank at Lamoni, Iowa, and consulted with Verne Deskin, a member of the Iowa bar and the cashier of that bank. On that occasion Mrs. Hayer inquired of the witness, Deskin, as to the making of a will for her and commented concerning a former will or a copy thereof that she had with her. According to Mr. Deskin's testimony in referring to a portion of the former will that pertained to a bequest to Vera Redenbaugh, the decedent is quoted as saying, "I want that part changed that gives Vera Redenbaugh $5000 to $1000." Further inquiry was made as to other *Page 885
portions of the old will and statements were made by Mrs. Hayer as to the manner in which she wished her property to be disposed of by a new will. In the old will which had been executed during the year 1930 she had made provision for the residue of her estate to go to the Latter Day Saints Church, after the payment of certain bequests, but in her conversation with Mr. Deskin relative to the new will, she told him, "I want the church left out." There was further conversation between Mrs. Hayer and Mr. Deskin relative to the deeding of the Wright County farm to an official of the Latter Day Saints Church, which deed had been executed September 12, 1930, and also concerning the earlier will executed in 1930. The decedent stated to the witness, Deskin, that Vera Redenbaugh had threatened to break the deed and will and that she wanted it fixed so she could not do it. In this conversation she stated who she wanted to witness her will and made arrangements to have these parties come to her home on the following day, February 7, 1939. On that date the witness, Deskin, came to the home of the decedent about five o'clock in the evening and there was present also at that time, Lucile Mader and Martin Hynden. These two persons signed the will as witnesses. Joe Danielson, the person named as executor in the will, was also present as was also Dolores Midgordon. This last-named person is a stenographer and had been asked by the witness, Deskin, to come to Mrs. Hayer's residence. Miss Midgordon took down in shorthand the conversations between the witness, Deskin, and the decedent relative to Mrs. Hayer's statements and wishes in connection with the will. This witness testified as to these facts. Counsel for contestant have criticized the manner in which this will was executed and the taking of the notes by the stenographer but it seems to us that this criticism is without justification. All of the witnesses present at the time of the signing of the will testified to the fact that Mrs. Hayer was of sound mind at that time.
Neighbors and acquaintances who had seen Mrs. Hayer about the time of the signing of her will and before and after that period also testified to her unimpaired mental faculties. Two other witnesses for the proponents testified as to seeing and *Page 886
conversing with the decedent on February 7, 1939 and stated that in their opinion she was of sound mind on that date.
The contestant in support of her claim as to the unsoundness of mind of the decedent presented several witnesses. One of these was a lady who had been employed in the Hayer home to assist Mrs. Hayer at different times. This witness, Mrs. Grant Wise, testified that she was in the Hayer home something like two weeks in 1937, not to exceed eight days in 1938, and about eleven days prior to February 2, 1939. She testified as to certain eccentricities of the decedent and stated that Mrs. Hayer imagined that people were stealing from her. She also testified that Mrs. Hayer made reference to her deceased husband and that she wanted to see him and when some comment was made concerning Vera Redenbaugh, the contestant, the decedent according to Mrs. Wise's testimony stated, "Who is Vera? I don't know Vera." This testimony was refuted by various witnesses who stated that Mrs. Hayer never so expressed herself to them concerning her deceased husband or the contestant. The witness, Mrs. Grant Wise, testified that in her opinion Mrs. Hayer was a person of unsound mind on February 2, 1939 when she left decedent's home. She was later employed during that year and further testified that in her opinion the decedent was of unsound mind after the 2d of February, 1939. Three nurses who were called to assist in the care of Mrs. Hayer at different times from and after September 1939 testified that in their opinion Mrs. Hayer, at the time of their observations, was of unsound mind. The witness, Otis Lysinger, was an assessor in Lamoni. He painted decedent's home in July 1939 and testified that during the time he was painting the house Mrs. Hayer made inquiry of him and said, "Have you seen anything of C.F. around here this morning?" This witness testified that the initials referred to, were those of decedent's husband who had then been dead about eleven years. This witness on cross-examination testified that in discussing the matter of painting the house Mrs. Hayer seemed to be able to carry on an intelligent conversation; that she seemed to know what she wanted done and stated that he thought she had always been strong-minded and a woman of decisive opinions. Fred Lysinger, a witness for the contestant, also testified as to *Page 887
a conversation with the decedent wherein he stated that Mrs. Hayer referred to her deceased husband and said, "She wished C.F. would come home and tend to business." He also testified that he was at the Hayer home on February 10, 1939 when he went there to see about the fire and to inquire as to whether Mrs. Hayer was warm. At that time, according to this witness, Mrs. Hayer said, "Never mind the fire. C.F. will be back after a while to take care of it." It was this witness's opinion that Mrs. Hayer was of unsound mind on February 10, 1939.
The contestant, Vera Hayer Redenbaugh, testified as to various facts bearing upon the claimed unsoundness of mind of the decedent, as also did her husband, Lewis Redenbaugh.
It is entirely beyond the realm of possibility to set out all the facts presented in this case but the entire record has been read with care by this court as well as the numerous exhibits that have been presented. Consideration has been given to the medical testimony presented. The contestant called as a witness Dr. H.E. Stroy, who was the only doctor who testified in her behalf. It is shown that he was called as a consulting physician and saw the decedent on January 18, 1940 and observed her on that day for about forty-five minutes or an hour. It was his opinion that the decedent was suffering from arteriosclerosis and stated that it was a progressive disease which would and had affected her mentality and that in his opinion the decedent was of unsound mind on February 7, 1939. In connection with Dr. Stroy's testimony we can well give consideration to the case of Byrne v. Byrne, 186 Iowa 345, 365, 172 N.W. 655, 662, where the contestant sought to prove mental incapacity by the testimony of a doctor who observed the testator subsequent to the date of the execution of the will. In that case this court stated:
"The testimony of Dr. Walker alone is not enough to raise a jury issue upon this question. In the first place, while he is quite positive that, when he saw Byrne three years after the making of the will, the testator was suffering from paresis and senile dementia, and states as his judgment that the process of deterioration must have covered a period of five to ten years, he does not say, and in the very nature of the case, as he states *Page 888
it, it is impossible for him to say, to what extent that loss of mental power had reached at the date of the will, three years before he ever saw the man. He tells us, as do all the other expert witnesses — as, indeed, we know from common observation and knowledge — that the mental decay attending these diseases is ordinarily of slow development, and, while progressive in character and incurable, its progress is at times remitted or suspended for indefinite periods; and that men sometimes continue in business for several years, without any marked exhibition of mental incompetence, before the deterioration results in complete incapacity. Such being an admitted truth, it is, as just said, impossible that Dr. Walker should be able to say that, on March 1, 1913, Matthew Byrne did not have mind enough to know the nature and extent of his estate, or to appreciate the claims, if any, of his children upon his bounty, or to make an intelligent devise of his property to the very persons whom he desired to receive it.
"We have, time and again, held that mental weakness or decay will not invalidate a will, until it has reached that stage which deprives the testator of capacity for intelligent action. Dr. Walker's testimony indicates the view that, in the scientific sense of the term, a man is insane from the instant when the brain tissue begins to deteriorate. Without attempting to debate that proposition with the witness, it is enough to say that the law recognizes no degree of mental decay as sufficient to deprive the person of testamentary capacity which does not deprive him of intelligent comprehension of the estate he is devising, or of his capacity to appreciate the nature and effect of the distribution he makes of such estate. His memory may be impaired; he may lack the mental qualities or alertness of youth; he may not be able to transact business generally, or to enter into complicated contracts; and still be able to make a valid will. Bearing these propositions in mind, it becomes apparent that Dr. Walker's opinion is insufficient to supply the lack of material support for the verdict which the record otherwise discloses."
On behalf of the proponents, Dr. M.O.E. Gamet, who had attended Mrs. Hayer for several years, was called as a witness. He had attended her on numerous occasions before and after *Page 889
the will was executed. He testified that he saw her on January 14, 1939 and again on February 18, 1939 in his office and that she came in each time and got some medicine and as far as he could remember she was perfectly alright. He stated he did not recall that she was abnormal mentally at these times. She next came to his office on June 10, 1939 for some medicine. He saw her several times during the summer. Doctor Gamet stated that in his opinion Mrs. Hayer was of sound mind from January 10, 1937 when he first was consulted by her until September 1939. It was his further opinion that the decedent was of sound mind on February 7, 1939.
As a matter for further consideration, and as bearing upon decedent's mental capacity, there was admitted in evidence a letter written by Mrs. Hayer, dated February 12, 1939, and which is as follows:
Lamoni Iowa Feb. 12-39
Dear Sister Jennie: — I certainly appreciate your letter am glad your feeling quite well, does the pain compare with the pain you suffered when the children were born?
I think H_____ got to Missoula at time he figured he would but that severe cold spell reached Missou before it struck us here and the man he had engaged wasn't there to meet him and Lyda wouldn't let him go in the severe cold spell. I had a short letter from him Mon. of this week saying he found everything at home all right.
Mentioned Maurice and his near neighbor sawing and packing ice, but I think H's ice house was full before he came.
I found a card written by Mary Jones 4 1/2 years ago If Mary had been with E S_____ all the time Esthers will would read quite differently than it did. You see she called those outsiders bloodsuckers. She mentioned 2 women that came out from Chicago they didnt come together one wanted E. to remember her son the other her nephew, there very likely a lot came from various places but Mary didn't happen to see them.
They say Lamoni is full of flue cases and some small pox cases a woman that just returned from hospital with new born babe has small pox and several other cases they say but I havent learned names. *Page 890
Hope to hear from you soon. Yes I rec a card but not till after H left.
Good Bye E.B.H.
Upon the whole record, having in mind the rules which have been set out for our guidance, we are firmly of the opinion that there was not sufficient evidence presented to raise a jury question and that the trial court was in error in not directing a verdict for the proponents at the close of all the evidence. We are mindful of the testimony of Mrs. Grant Wise and Fred Lysinger, witnesses for the contestant who testified as to facts and circumstances bearing upon Mrs. Hayer's mental capacity on or about the time of the execution of the will in question. However, it appears to us that the very positive and uncontradicted testimony relative to the facts and circumstances at the very time of the execution of the will are so controlling that even when we consider contestant's testimony in its most favorable light we cannot say that the contestant has made out a case for the jury as to Mrs. Hayer's mental incapacity to make a will on the day she executed her purported will. We have given careful consideration to the cases cited by the contestant. The facts in these cases are different from the facts in this case.
Our conclusions as to the question of the mental capacity of the decedent to execute a valid will make it unnecessary for us to pass upon other questions that have been raised in this appeal. It is our conclusion that this case should be reversed. — Reversed.
MILLER, C.J., and BLISS and SAGER, JJ., concur.
HALE, J., concurs in the result.
GARFIELD and OLIVER, JJ., dissent. *Page 891
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1. Corporation: FOREIGN: POWERS OF. The powers possessed by a foreign corporation, organized for the purpose of supplying water for municipal and other purposes, are not restricted to the State in which it is incorporated, but it may extend its operations and do business and acquire interests in other States, although not expressly authorized so to do by the laws of the State where incorporated.
2. Municipal Corporations: FOREIGN CORPORATION: POWER TO CONDEMN PROPERTY. A municipal corporation has authority, under sections 471.4. Code, to contract with a foreign corporation for the construction of water-works, and where it does so contract such foreign corporation under the state and a proper ordinance, may have power to condemn and appropriate private properly necessary for the works.
3. ___: ___" POWER OF STATE TO CONTROL. The fact that the State of Iowa has reserved control over its own corporations, and cannot control foreign corporations, will not prevent the transaction of all ordinary business in the State by foreign corporations, nor prohibit them from appropriating private property when necessary.
4. ____: WATER-WORKS: EXCLUSIVE RIGHT. The plaintiffs, as mere taxpayers cannot raise the question whether the city had power to grant by ordinance to one company, the exclusive right to construct and operate water-works.
5. ____: ORDINANCE: ASSIGNMENT OF RIGHT. Where the ordinance granting the right to construct water-works provided that the company might assign all its rights and privileges, the provision. if void, would not affect the right of the company to proceed with the work.
6. ____: EQUITY: CONTINGENT INJURIES. Courts of equity are not *Page 561
bound to prevent possible or contingent injuries, and a provision of the ordinance that if the special tax was inadequate to pay the water rentals the deficit should be paid from the general revenues, will not warrant interference.
7. Injunction: ORDINANCE: PUBLICATION. An injunction cannot be maintained merely on the ground that the ordinance had not been published for the length of time provided by the city charter.
Appeal from Pottawattamie District Court.
It is not claimed that the defendant city has no power to provide by ordinance for the construction of water-works. It would be conceded that it 1. CORPORATIONS: has the power to do so, and even to provide foreign: powers for their construction by a corporation. The of. claim is that it has no power to provide for their construction by a foreign corporation, and especially by a foreign corporation like the American Construction Company, which is not expressly authorized by the laws of the State in which it is incorporated to extend its operations outside of the State. In our opinion this claim cannot be sustained. It is true a corporation can exercise no powers except such as are expressly granted and such as are reasonably incident thereto. But the power possessed by the American Construction Company to construct water-works appears to be ample. The articles of incorporation are set out, and they expressly provide for supplying water for municipal purposes. But it is said that by fair construction they must be held to mean only, for supplying water *Page 563
for municipal purposes in the State of New York. We are asked to engraft upon the articles, by judicial construction, this restriction. Now, we might, perhaps, feel justified in doing this if we could see anything in the nature of the business to lead us to think that the incorporators contemplated such restriction, but we do not. We think that they designed to make their field of operation as extensive as the cities needing their works. This appears to us to be the fair construction. Having reached this conclusion it only remains to be said upon this point, that the articles of incorporation must be taken to be the measure of the company's rightful power in the absence of any showing that the articles themselves are illegal. They are not, with the construction which we put upon them, in the nature of things, illegal, nor can they be held to be so merely by want of a statute in New York authorizing the company to do business or acquire interests beyond the limits of the State. It has never been held, so far as we are aware, that the right of a corporation to do business, or acquire interests beyond the limits of the State in which it is created, exists only by an express grant from the legislature of such State.
It is true it has been said that "a corporation must dwell in the place of its creation." Bank of Augusta v. Earle, 13 Peters, 519. Being an artificial person, a mere creature of law, it cannot go where the law by which it exists cannot go. An extra territorial corporate meeting, for instance, would be illegal. But a corporation is not for this reason prevented from sending its agents abroad for the transaction of business. Bank ofAugusta v. Earle, above cited.
But is said that conceding that the American Construction Co. might make contracts, and do many kinds of business in Iowa, yet, being a foreign corporation, it cannot 2. MUNICIPAL acquire such rights as the ordinance in Corporations: question purports to confer. The argument foreign corporations: is that it is only by inter-state comity power to that the right of a corporation condemn property. *Page 564
to make and enforce any contracts elsewhere than in the State where it is created is recognized; that the rights granted by the ordinance in question are in the nature of a public prerogative franchise, and that inter-state comity cannot properly be held to extend to such rights.
The ordinance confers upon the company the right to condemn and appropriate private property necessary for the construction and operation of the water works. This right, it is said, cannot properly be granted to a foreign corporation. The plaintiff's rely upon the following authorities: Runyon v. Coster's Lessee, 14 Peters, 128; Nashville Railway v. Cowardin, 11 Humph., 348;State v. Railroad Co, 25 Vt., 435; Ohio M.R. Co. v.Wheeler, 1 Black, 397; Newbury Petroleum Co. v. Weare,27 Ohio St., 353; Arm v. Conant, 36 Vt., 749; Thompson v. Waters,25 Mich., 221; Aspenwall v. O. M.R. Co., 2 Ind., 402; Holbertv. St. Louis, K.C. N.R. Co., 45 Iowa, 26. In the last case it was held that a railroad company incorporated in another State has no power in this State to condemn land for a right of way. Under that decision, and others above cited, we are not prepared to say that the American Construction Co. conld, by reason of considerations of mere inter-state comity, be allowed under any ordinance which the defendant city could pass, to condemn and appropriate private property for the construction and operation of its water-works, but it is certainly competent for the legislature to grant such power, and in our opinion, the legislature has granted it. Section 474 of the Code provides that cites and towns are authorized to condemn and appropriate so much private property as shall be necessary for the construction and operation of water works, and when they shall authorize the construction and operation thereof by individuals or corporations they may confer by ordinance upon such person or corporation the power to take and appropriate private property for said purpose." Now, while in form the power is not granted directly by the legislature to the proprietor of the water-works, *Page 565
where the proprietor is other than the city or town, yet no point of that kind is raised by the plaintiffs' counsel, and one, we think, could be properly. The legislative intent to infer the power is abundantly manifest. This, we think, should not be questioned where individuals or a domestic corporation is proprietor. But it is said that we are not justified in supposing that the legislature contemplated a case where a foreign corporation is proprietor. In our opinion the statute will not justify the narrow construction which the plaintiffs would put upon it. The power given to cities and towns to contract with corporations for the construction and operation of water-works is general. If the intention had been to restrict them to domestic corporations it would have been easy to expressly so provide. But we cannot think that any such restriction was contemplated or deemed desirable. Where works are to be constructed for municipal purposes, requiring no inconsiderable capital, manufacturing facilities, experience, and skill, it is of great importance to cities and towns to be allowed to contract wherever and with whomsoever they can do so to the best advantage. Regarding this statute as conferring upon cities and towns the right to contract for water-works with foreign as well as domestic corporations, it follows, we think, that where a city or town does contract with a foreign corporation, such corporation may, under the statute, and a proper ordinance, have the right to condemn and appropriate private property necessary for the works.
At this point it is proper that we should consider one other objection urged to this view. It is said that it is contrary to the legislative policy of Iowa, as evidence 3. ____: ____: by a provision of statute, whereby corporate power of the powers are granted with a reservation, by state to control. which the legislature has the right to control articles of incorporation, by-laws, rules, and regulations of corporations. Code, § 1090. Now, the plaintiffs' argument is that as the legislature of Iowa cannot control the articles of incorporation, by-laws, *Page 566
rules, and regulations of foreign corporations, the legislature did not intend that cities and towns should be allowed to contract with foreign corporations for water-works. But this reasoning, it appears to us, would carry us too far. Corporations sustain no practical relation to the State or the inhabitants thereof except so far as they do business. The objection, then, is to corporations doing business in this State without their articles of incorporation, by-laws, rules, and regulations being subject to the control of the legislature of this State. But we cannot hold that the legislature intended to prevent foreign corporations from doing business here. The true idea appears to us to be this: Every State has the power to reserve control over its own corporations. Iowa has done so to a limited extent, but this does not prevent the transaction here by foreign corporations of all ordinary business, nor does it indicate that the statute in question should be so construed as to prevent them, under a proper ordinance, from condemning and appropriating private property.
But it is said that conceding that the defendant city had the power to pass an ordinance, providing for the construction and 4. ____: and operation of water-works by a foreign walter-works: corporation, the ordinance passed is excessive objectionable and a court of equity ought to right. declare it void.
The ordinance purports to grant an exclusive right. Whether it was competent for the city to grant such right we need not determine. If we should conclude that it was not, it is manifest that the ordinance would not be void. It would result merely, that the right granted is not exclusive, and the plaintiffs as mere tax-payers cannot properly raise that question. Such question cannot properly be raised until a conflict arises between the American Construction Co. and some person or persons, or corporation, claiming also a right from the defendant city to construct and operate water-works. Grant v. The City ofDavenport, 36 Iowa, 406.
The next objection urged is that the ordinance permits an *Page 567
improper assignment by the American Construction Co. The 5. ____: ordinance: provision objected to is in these words: assignment of "The American Construction Co. shall have right. the right to make an assignment of all its rights and privileges under this ordinance to a water-works company which it may form under the laws of Iowa." Now, it is said that the American Construction Co. assumed certain obligations, and that the contract must have been entered into by the city in reliance upon its responsibility and character; that the city should not be allowed to provide in advance that the company might shift its obligations to another corporation which might lack the requisite responsibility and character. But we do not feel called upon to determine this question Possibly the provision is void, but if so it would not give plaintiffs the right to the injunction prayed for. It would not affect the right of the the company to proceed with its works.
Several other objection, are urged to this ordinance, which do not, in our opinion, go the validity of the ordinance itself, but which raise some merely incidental questions as to what can be done under the ordinance, and which it will be time enough to consider when the things provided for are attempted, and when we have before us as plaintiffs persons aggrieved thereby. Some other objections are urged, but they go merely to the wisdom of the ordinance, and they are not such that we should be justified in declaring it void.
One objection, however, deserves a separate consideration. The ordinance provides, in substance, that if the special tax 6. ____: authorized by law to be levied by the city equity: contingent for the payment of water rentals shall injuries. prove inadequate for that purp se, the city shall pay the deficit out of its current annual revenues.
Section 475 of the Code provides for the levy of a special five mill tax for the payment of water rentals. There is certainly some reason for thinking that that was designed to be the limit. Now it is said that the company was proceeding to construct *Page 568
its works in reliance in part upon the general revenues of the city, and it behooved the plaintiffs to interpose their objection in the outset to any payments therefrom; for they would be estopped from doing so after the company had expended money under the provisions of the ordinance. It has certainly been held that tax-payers may by delay and apparent acquiescence estop themselves from applying to a court of equity for an injunction to prevent the improper use of public funds. Tash v. Adams, 10Cash., 253. On the other hand it has been held that such estoppel does not arise where the complaint's rights are clear, and the party setting up the estoppel must be deemed to have acted at his peril. Burden v. Stein, 27 Ala., 104. The defendants, in the case at bar, claim that whatever rights the plaintiffs have, if any, must be determined by a construction of the statute of which the defendants were bound to take notice. Whether this is a sufficient answer to the plaintiffs' position we need not determine. It is not certain there will be any deficit to be made good out of the general revenue. This action, so far as this point is concerned, is brought upon a mere countigency. Courts of equity lend themselves to prevent injuries which are imminent, not merely possible. The plaintiffs, it is true, after that there will be a deficit; but we cannot hold that the demurrer admits the truth of this averment, because it is impossible, in the nature of things, to know that there will be a deficit.
Finally it is said that the ordinance is invalid for want of due publication. The plaintiffs rely upon a provision of the original 7. INJUNCTION: charter requiring ordinances to be Ordinance: published ten days, and the petition publication. avers that this ordinance was not published that long. But an action of this kind cannot be maintained merely on the ground that at the time the action was brought publication of the ordinance was incomplete.
In our opinion the judgment of the District Court must be
AFFIRMED.
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This case is brought to collect on a policy of fire insurance by J.H. Stoner, who claims as the owner of the property insured, and J.D. Raitt, who claims under a mortgage on the property insured.
It has been before this court twice before this, same title, the first time being reported in 215 Iowa 665, 246 N.W. 615, and the next time being reported in 218 Iowa 720, 253 N.W. 821.
The facts upon which it is based are that prior to April 25, 1931, one James M. Fadden was the holding of the legal title to lots 43 and a part of 44 in the town of Prescott, Iowa. On that date he transferred the property by deed to J.H. Stoner, one of the plaintiffs herein, whose copartner, J.D. Raitt, held a $1,500 mortgage on the property. The insurance originated as follows: Raitt applied to R.F. Sullivan of Afton, Iowa, for insurance upon the building on the property. Sullivan, agent of the defendant, forwarded an application prepared by him for such insurance to the Chicago office of the appellant insurance company. The insurance company sent the policy insuring Fadden against loss on the building to the amount of $4,500 to Sullivan, signed by the officers of the insurance company, and Sullivan countersigned it of date March 19, 1931. It was then mailed to Raitt.
[1] Subsequently, Raitt took the policy to Sullivan to have an indorsement made to protect his interest under the mortgage. The policy was left with Sullivan, who sent it to the insurance company. The insurance company attached a "loss payable" clause, printed on a sheet of paper, to the policy, and returned it to Sullivan, who signed the "loss payable" clause and sent the policy to Raitt. The signature of no officer of the company was affixed to the clause at the time it was sent to Sullivan, and *Page 986
at the time it was returned to Raitt it contained the signature of Sullivan, of date April 30, 1931.
The question has been raised by the appellant as to the right of Sullivan to bind the company by so signing the "loss payable" clause. We think there is nothing in that question for the reason that Sullivan sent the policy to the company, accompanied by a letter, in evidence in the case, saying: "Please attach a mortgage clause for $1500 in favor of J.D. Raitt, of Omaha, Nebraska, to the herewith enclosed policy, and oblige R.F. Sullivan, Agent." The company defendant sent back to Sullivan the policy with the "loss payable" clause attached, but unsigned. In view of the contents of the letter, we think the attachment of this clause to the policy by the company, and sending it with the clause so attached to Sullivan, was a direction and an authority by the company for Sullivan to sign and deliver the same.
In all the transactions up to the time of the fire, Raitt, in procuring the insurance, and in all of the things, without question, represented Stoner. In other words, he was acting to protect the interest of himself in the mortgage, and the interest of Stoner as the owner of the legal title after Stoner became such owner. Whatever he did was because he was acting with Stoner's consent and in Stoner's place, and was binding on Stoner. Besides, Stoner testified on this trial in reference to these matters that Raitt, his copartner, handled the deal for him in all particulars in his purchase of the Prescott property.
Subsequent to the attachment of the "loss payable" clause Raitt told Sullivan of the transfer of the property from Fadden to Stoner, and had at the time with him the policy with the signature of Fadden to the "assignment of interest" clause on the policy. The blank spaces left for the insertion of the names of the interested parties had not been filled in. Raitt asked Sullivan to take care of the policy to protect Stoner's interest in the policy. Sullivan, in the presence of Raitt, filled in the "assignment of interest" clause, and signed the consent of assignment, which was printed on the policy, and handed the policy to Raitt, and says he told Raitt before that it should be sent to Chicago. All this was done on the 18th day of May, 1931. Sullivan never notified the insurance company of this situation. June 1, 1931, the insured building was totally destroyed by fire. Formal proof of loss was never furnished to the insurance company. *Page 987
This is immaterial under the present issues in the case, for under the issues as they stand now the defendant waived the formal proof of loss. The insured properly was encumbered by another mortgage prior to Raitt's, which was in the process of being foreclosed.
In the first case, reported in 215 Iowa, at page 665, 246 N.W. 615, it was held that plaintiff, as assignee, before loss of a policy of fire insurance, has the burden, in the case of loss and action on the policy, to show that the insurer consented to the assignment. If the consent is in the form of a writing signed by a purported agent of the insurer the assignee must show, if the agent was a soliciting agent, the agent's authority. Of course, the insurer may negative such showing of authority.
In the second case in this court, reported in 218 Iowa 720, 253 N.W. 821, there was introduced in evidence as bearing upon the authority of Sullivan, the request of the defendant to the commissioner of insurance of the state of Iowa, for a license for R.F. Sullivan, of Afton, as its agent. The body of the request, was as follows: "Farmers of Cedar Rapids Department of the First American Fire Insurance Company of New York, State of New York, hereby certifies that the above named, a resident of Iowa, is a qualified and reliable individual of good character and has been appointed agent for the transaction of its authorized business of Insurance in the State of Iowa until the first day of April, 1931." The court held that certain exhibits were admissible for the purpose of showing Sullivan was the company's agent. The trial court instructed the jurors they might take the exhibits into consideration in determining Sullivan's scope of power. This court then said, 218 Iowa 720, on page 724, 253 N.W. 821, 823, on appeal:
"We have reached the conclusion that the exhibits were admissible only for the purpose of establishing that Sullivan was an agent of the company and that they were neither relevant nor material to the question of Sullivan's power as agent. The requests are made upon forms provided by the commissioner of insurance, and were used to procure a license for Sullivan in compliance with the law. To have any relevancy to the question of Sullivan's power, the request must be construed to be a statement by the company that Sullivan had been appointed agent for the transaction of any and all of its authorized *Page 988
business in the State of Iowa. We think the language used and the circumstances under which it was used preclude such construction. In this situation, it would be little short of a perversion of the law to admit the exhibits in evidence as bearing upon the question of the scope of the agent's power, or to permit the jury to consider the exhibits in passing upon that question."
[2] When the time came for the trial of the case now before us, an amended and substituted answer was filed by the defendant waiving proof of loss, and in that answer specifically denied that Sullivan had any authority or power to bind the defendant by signing the consent to assignment of contract of insurance sued upon, as alleged in plaintiff's petition, and set up several other defenses. Division V of the amended and substituted answer is as follows:
"This defendant by way of affirmative defense states that one of the terms and conditions contained in the contract of insurance herein sued upon is as follows: `Unless otherwise provided by agreement of this company, this policy shall be void if any change other than by death of the insured, whether by legal proceedings, judgment, voluntary act of the insured, or otherwise, takes place in the interest, title, possession or use of the subject of insurance, if such change in the possession or use makes the risk more hazardous;' and defendant states that without the knowledge or consent of this defendant, and without any agreement by this defendant, the said James Fadden did, on or about the 15th day of May, 1931, execute a deed, transferring said property to J.H. Stoner, and that, therefore, said contract of insurance is void."
Division VI of the amended and substituted answer is as follows:
"This defendant, by way of affirmative defense, states that one of the terms and conditions contained in the contract of insurance herein sued upon is as follows: `Unless otherwise provided by agreement of this company, this policy shall be void if said policy is assigned before loss;' and this defendant shows the Court that contrary to and in violation of said provision above quoted, and without the knowledge, consent or agreement of this defendant company, an assignment of said policy was *Page 989
made on or about the 16th day of May, 1931, and that, therefore, said policy is void."
In this case there was introduced in evidence the appointment or certificate of agency issued by the defendant company to R.F. Sullivan. That certificate was as follows:
"By authority of This Commission R.F. Sullivan of Afton, County of Union, State of Iowa, is hereby appointed soliciting agent of this company and as such is authorized to receive applications for insurance upon property located within the limits or in the vicinity of Afton, Iowa.
"Except in the Towns Where This Company Has a Recording Agency in accordance with written or printed instructions from this company and to receive and transmit with such application the premiums therefor, in accordance with the terms of the form of application issued by this company, but in no case except upon special written order from this company, to collect amounts due for premiums on policies previously issued, or for notes payable to the company for premiums."
This authority expressly named Sullivan as a soliciting agent, and says, "and as such is authorized to receive applications for insurance upon property located within the limits or vicinity of Afton, Iowa."
Here, then, in a certificate of authority, issued by the company, is the appointment of Sullivan, not as a general or recording agent, but as a soliciting agent. So he had only the authority as between him and the company, of soliciting agent.
At the conclusion of the evidence, the defendant moved the court to withdraw certain exhibits from the jury, and then stated following that:
"And without prejudice to the above motions, the defendant now moves to withdraw from the consideration of the jury the issue of waiver and the part plead by the plaintiff in regard to any acts or circumstances of A.L. Lucas constituting a waiver in this case; and as reasons therefor respectfully shows to the court as follows: That there is no evidence in this case to show that Mr. Lucas, even if the testimony for the witnesses for the plaintiffs is true, knew or had knowledge at the time of the claimed telephone conversation in regard to this assignment. He had never seen it and didn't know in regard to it." *Page 990
The court, in ruling on this motion, says:
"The second motion filed by the defendant to withdraw from the consideration of the jury the question of waiver is sustained, and the plaintiffs given an exception."
The court then ruled against the defendant on the motion to withdraw from the consideration of the jury the issue of the waiver, and the part pleaded by the plaintiff in regard to any act and circumstances of Lucas constituting a waiver in the case, and sustained this ground of the motion. It then overruled the motion to direct a verdict.
So then, with this motion sustained as to the conversation with A.L. Lucas, there was no evidence in the record to show that Sullivan had authority to act for the company in signing the consent to the transfer of the property of Fadden to Stoner.
67 C.J. 289 says:
"`Waiver' has been defined as a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right would be surrendered and such person forever deprived of its benefits."
So, had this case stood without the lower court sustaining the motion to strike, it would be incumbent upon the plaintiff to prove that it was first a voluntary and intentional relinquishment or abandonment of a known advantage, benefit, claim, or privilege, which, except for such verdict, the party would have enjoyed.
We see no evidence in this record that would permit the court submitting to the jury any question of waiver supported by the evidence aimed at in the motion to withdraw or strike, which the court sustained. It is not conceivable in this case that the company defendant knew or that Lucas knew, or that either intended to waive any right of defense existing by reason of the transfer to Stoner. Further, this cannot be proven by the mere fact that Sullivan was the agent of the defendant. A mere showing of agency without any designation would leave the burden of proof upon the plaintiff to show whether he was a soliciting agent, or a general or recording agent. *Page 991
In the case of Green v. Phoenix Ins. Co., 215 Iowa 1220, 247 N.W. 660, it appears that this same property and farm involved in this case were involved in that case. One Jake Stoner was the holder of a first mortgage on this property for $1,500, and on the 12th of January, 1931, he commenced an action to foreclose the mortgage, and on the 19th of January applied to the agents of the Phoenix Insurance Company for insurance upon the house, and had a policy for $1,800 issued thereon in the name of Bernice Hagaman as owner, with loss, if any, payable to Stoner as his interest might appear. Decree was entered March 3, 1931, and the property was sold by special execution and purchased by Jake Stoner for the amount of the mortgage, interest, and costs. On the first of June, 1931, the house was totally destroyed by fire, and on the 10th of July, 1931, the plaintiff filed an action in the district court of Adams county, Iowa, to recover the amount of the policy of insurance. There was judgment against the Phoenix Insurance Company in the case. The insurance company appealed, and amongst other things raised the question that the court erred in refusing to sustain the first ground of its motion to dismiss plaintiff's case. That ground was that the property covered by the policy sued upon was transferred after the policy had been written, without the knowledge or consent of the defendant, contrary to the terms of the policy. The terms relied on were the same pleaded in this case in division V of the defendant's answer herein.
It was contended in the cited case that the provisions of the policy were violated because after the issuance of the policy the premises were transferred to James Fadden, and by him to Stoner. The appellee claimed that at the time the insurance was applied for defendant's agent was told that Stoner wanted insurance to cover his interest as mortgagee during foreclosure and redemption period; and that the actual owner was not known to Stoner, but the records showed the title to be in Bernice Hagaman, and the defendant's agent was notified of the filing of the conveyance from Bernice Hagaman to Fadden, and from Fadden to Jake Stoner; and that the appellant company, having written the policy with this knowledge on the part of its agent, could not avoid its liability by the provision of its policy in regard to a transfer of the title to the property. The opinion says on page 1223: "It must be borne in mind that this suit is *Page 992
brought by the plaintiff upon the policy which was issued. Plaintiff attached a copy of this policy to his petition and introduced the policy in evidence. This policy contains the provision in regard to change of interest or title referred to above. It was accepted and retained by Jake Stoner, and no objection was made by him, or by the plaintiff as his assignee, to any of its provisions. This is an action at law upon the policy itself, to enforce payment of the amount claimed due thereunder, and is not an action in equity to reform such policy. As this case is now presented to us, this court is powerless to modify or ignore any of the provisions of the contract contained in the policy, and the provision in regard to change of interest or title must be given full force along with all its other provisions." The opinion says further on page 1224: "It appears without dispute in the evidence that the agent to whom it is claimed this notice was given is a soliciting agent of the defendant-company, and that there is nothing to show that he had any power or authority other than such as is ordinarily exercised by soliciting agents. It seems to be the established law of this state that knowledge which is brought to the soliciting agent of an insurance company in connection with the application for and issuance of insurance will be imputed to the company," citing authorities. It also said: "It seems equally well established that knowledge on the part of a soliciting agent as to things which occur after the issuance of a policy will not be binding on the insurance company, and that no waiver or estoppel can be established against an insurance company because of notice to or knowledge of its agent in regard to violations of provisions of a policy which occur after it has been issued," citing authorities. It further says: "It appears without dispute in the evidence in this case that the defendant's agent did not notify it of the transfers affecting the changes of title which the evidence shows to have occurred after the policy was issued. It is well established that a violation of a provision in regard to a change of interest or transfer of title will be sufficient ground to relieve an insurance company from liability. The defendant-appellant in this case pleaded the violation of this provision as a defense, and, in view of the record to which we have referred, the first ground of defendant's motion to dismiss plaintiff's action should have been sustained."
There is no evidence in this case which tends to show that *Page 993
Sullivan, the soliciting agent of the defendant, or any other person, ever gave the company notice of any change in the title until after the fire occurred. Sullivan being only a soliciting agent, facts coming to him after the issuance of the policy will not be held as notice to the company under this ruling. The policy in this case was the same as the policy in the Green case, issued upon the Iowa statutory form policy for fire insurance.
[3] It is also claimed by the plaintiff in this case that the payment of the premium was made by Raitt to Sullivan; that the company accepted and retained the premium, and had not paid any of it back, and that hence the company could not now defeat the plaintiff without at least tendering back the premium.
In the Green case, the court further says, on page 1228:
"There is nothing in the record to show that any objection was made by the said mortgagee, Jake Stoner, or by any one in his behalf, in regard to the form of the policy, and there is nothing in the record to show that any knowledge was brought to the appellant-company in regard to any violation of any of the conditions of the policy prior to the time of the fire which destroyed the house which was insured." The Green case then says: "The weight of authority is to the effect that no foundation for a waiver or estoppel is furnished by the failure of the insurer to return the unearned portion of the premium where it did not acquire knowledge of the breach of condition until after loss and then denied liability." Then cited Houdeck et al. v. Merchants
Bankers Insurance Co., 102 Iowa 303, 71 N.W. 354; Kahler v. Iowa State Insurance Co., 106 Iowa 380, 76 N.W. 734. The court says: "The acceptance and retention of the premium by the appellant in this case did not, therefore, constitute a waiver or estoppel, and did not preclude it from claiming the invalidity of the policy because of the violation of any of the terms or conditions thereof." The Green case is decisive of this case.
[4] So the discussion of further questions is not necessary, except that the record in this case shows in the amendment to abstract filed by the plaintiff, as follows:
"On the first trial plaintiff recovered a verdict for $4,694.70 and on appeal the judgment was reversed in 215 Iowa, at page 665, 246 N.W. 615. *Page 994
"On the second trial plaintiffs recovered a verdict for $4,933.50 and on appeal the judgment was reversed in 218 Iowa, at page 720, 253 N.W. 821.
"On the third trial the jury disagreed.
"On the fourth trial plaintiffs recovered a verdict for $5,445.00. Judgment was rendered thereon and it is from such judgment that this appeal was taken."
The matters discussed herein necessitate that we reverse this case. We think it is about time this litigation is stopped. We agree with the sentiment expressed in the printed argument of the appellee that "there should be an end to this litigation." Of course he desired a particular end, and so does the other party. One or the other party to the suit is sure to object to whatever efforts we may make to end the litigation, but we can only enter such order ending it as in our opinion is proper.
Every possible question has been litigated; the defendant was entitled to a directed verdict below on the ground set out herein. We find that it is proper, and the thing that should be done is for this court to direct the district court to dismiss the case and enter judgment for the defendant, and sustaining the defendant's motion for instructed verdict. Section 12871 of the Code provides, among other things, as to the power of the court in such matters: "The court may reverse, modify, or affirm the judgment, decree, or order appealed from, or render such as the inferior court should have done." Under this section, in Bookhart v. Younglove, 207 Iowa 800, 218 N.W. 533, we directed the correction of judgment after allowing a credit. In Cram Sons v. Central Trust Co., 205 Iowa 408, 216 N.W. 71, 73, we said: "The record presents, therefore, a proper case, in which we may reverse without order for new trial, under the rule that this court may render such judgment as the lower court should have done," citing section 12871; First Presbyterian Church v. Dennis,178 Iowa 1352, 161 N.W. 183, L.R.A., 1917C 1005; McCarl v. Clarke County, 167 Iowa 14, 148 N.W. 1015; First Sav. Bank v. Edgar,199 Iowa 1136, 199 N.W. 1011.
Hence, for the reasons herein given, this case is reversed, with directions to the district court of Union county, Iowa, to sustain the defendant's motion for directed verdict, and to enter judgment for the defendant. — Reversed.
KINTZINGER, C.J., and ALBERT, DONEGAN, and RICHARDS, JJ., concur. *Page 995
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[1] On or about March 10, 1930, appellant sold appellee a radio at the agreed price of $214.50. Appellee selected the radio from appellant's stock in his retail store. At the time of the sale appellee signed a purchase contract in which she agreed to pay the $214.50 and mortgaged the machine to secure the payment of the purchase price. The machine delivered to appellee was the one selected by her, but in the mortgage clause of the purchase contract it was described as being "Style 53" whereas it was "Style 52". The machine proved unsatisfactory to appellee. Appellant made efforts to remedy the sources of trouble, but the record indicates that he was not successful in such efforts. Between the time of purchase and following May, appellee paid $105 on the purchase *Page 582
price. Subsequent to May of that year she made no further payments, and this suit was brought in equity to secure judgment for the unpaid balance and to foreclose the chattel mortgage. In the answer appellee pleads somewhat indirectly that appellant represented the machine to be new, whereas the machine was secondhand. She also pleads that the machine was defective in construction and deficient in operation in a great many enumerated respects, and that she has paid appellant more than the machine was worth, in its defective condition. She does not plead that any warranties or representations were made to her in relation to the construction or efficiency of the machine, her only allegation in relation to representations or warranties being the one before referred to, i.e., that the machine was new.
In an amendment to the answer appellee alleges that the machine did not conform to the representations of the purchase contract. This allegation undoubtedly alludes to the error in the style number. In this amendment she also tenders back the machine and rescinds the contract of purchase.
Appellant filed an amendment to the petition in which he alleged that the style of the machine had been described as "53" instead of "52" by inadvertence and asked that the contract be reformed in that respect. A motion to strike this amendment was overruled. This was a matter resting within the discretion of the court. While appellee complains of this in argument, she has not appealed.
There is very great conflict in the evidence. We have come to the following conclusions as to the facts: The radio was a new machine at the time it was sold. It was defective in construction and deficient in performance. Appellee has paid as much as the machine was reasonably worth. Appellee discovered the defective condition of the machine shortly after its delivery to her, but made no effort to rescind the contract of purchase until the amendment to the answer was filed on January 16, 1932, a year and ten months after the purchase.
[2] The case is in equity and is triable anew in this court. The petition contains a prayer for general equitable relief. Still the case must be tried in this court on the pleadings exactly as cases are tried in the lower court. The allegations of the petition will not permit an offset of damages for the defective construction and inefficient operation of the machine against the claim for the unpaid portion of the purchase price because it is not alleged that any *Page 583
representations or warranties were made in relation to such matters. Such offset is in the nature of a counterclaim and the facts in relation to the representation or warranty as well as the breach thereof must be pleaded. 55 C.J. 828, section 815. Disregarding appellee's delay in tendering back the machine and endeavoring to rescind the contract, it is obvious that the answer pleads no facts which will sustain rescission in the absence of representation or warranty in relation thereto, neither of which is pleaded. 55 C.J. 293, section 276.
Appellee cannot be given any relief because of the allegations in relation to the radio being a secondhand machine, for she has not sustained the burden resting upon her to prove that it was a secondhand machine. As against appellee's evidence that there were some scratches and mars on the cabinet, and some extra holes bored in the inside parts of the cabinet which hold the mechanism in place, and a knob was loose on the machine, is the testimony of appellant and his employees that the radio was new and had been in stock but little over a week. It is a matter of common knowledge that new machines have scratches and mars and loose knobs and extra holes. And it is truly regrettable that many new machines are lamentably deficient in construction and performance. The parties who testified for appellant were in a position to know whether the machine was new. Notwithstanding their interest in the outcome of the action, their evidence convinces us that the machine was new when purchased by appellee.
Concerning the allegations of the amendment to the answer to the effect that in the mortgage clause of the contract the radio is described as a "Style 53" machine rather than a "Style 52", it may be noted, in passing, that appellee does not testify that anything was said to her about the style number of the machine, or about the number that was inserted in the contract, or that the style number had any influence or bearing on the purchase of the machine. The fact is that she bought the machine that she looked at and wanted. We are satisfied to abiding certainty that the insertion of the number "53" instead of "52" was an error on the part of appellant's stenographer, who prepared the contract, and that the incident neither had nor has any significance in the case.
We reach the conclusion, under the issues tendered by the pleadings and the evidence in the record, that appellant is entitled to judgment against appellee for the unpaid balance of the purchase *Page 584
price, to wit, $109.50, with interest thereon as provided by the contract, and to the foreclosure of the mortgage upon the radio. A writ of attachment was issued and levied at the time of the commencement of the suit. The decree will provide for the enforcement of such rights as appellant has preserved under the writ. The decree may provide for the reformation of the contract by the correction of the style number of the machine. The case is remanded to the trial court for the entry of decree and further proceedings in conformity herewith. — Reversed and remanded.
ALBERT, C.J., and EVANS, KINDIG, and DONEGAN, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3211166/
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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
A15-1013
State of Minnesota,
Respondent,
vs.
Dana Jerome Duncombe,
Appellant.
Filed April 18, 2016
Affirmed
Jesson, Judge
Ramsey County District Court
File No. 62-CR-13-9964
Lori Swanson, Attorney General, St. Paul, Minnesota; and
John J. Choi, Ramsey County Attorney, Elizabeth Lamin, Assistant County Attorney,
St. Paul, Minnesota (for respondent)
Bradford Colbert, St. Paul, Minnesota (for appellant)
Considered and decided by Schellhas, Presiding Judge; Jesson, Judge; and
Klaphake, Judge.
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
JESSON, Judge
After police obtained a warrant and searched his home, appellant was convicted of
possession of a firearm by an ineligible person. Appellant challenges his conviction
arguing that the warrant and supporting affidavit did not contain sufficient facts to establish
probable cause. Because we conclude that the issuing judge had a substantial basis for the
probable cause determination, we affirm. Appellant also argues that the circumstantial
evidence is insufficient to support his conviction. We do not reach this issue. By
submitting the matter to the district court pursuant to Minn. R. Crim. P. 26.01, subd. 4,
appellant waived the right to challenge the sufficiency of the evidence on appeal.
FACTS
In December of 2013, police executed a search warrant at appellant Dana
Duncombe’s home. The home was a duplex with separate units in the upper and lower
levels. Police only entered the lower-level unit where Duncombe lived with his girlfriend.
Duncombe’s girlfriend was the only person in the home when the warrant was executed.
In one of the bedrooms in the lower unit, police found a black backpack containing
a firearm, a loaded magazine, a scale and clear baggies holding a green leafy substance.
Police also found a photograph of Duncombe and a letter addressed to Duncombe in the
room. Duncombe’s girlfriend told police that she shared the bedroom exclusively with
Duncombe. She also said that she was not aware of any guns or drugs in the bedroom.
Police originally sought the warrant based on information provided by a confidential
reliable informant (CRI) and a controlled buy. According to the supporting affidavit, the
2
CRI had assisted police in three separate cases in the past year-and-a-half. Each case
resulted in “seizures of narcotics, arrests, and/or currency forfeitures.”
The CRI told police that Duncombe sold cocaine, marijuana, pills, and heroin out
of his home. The CRI had purchased narcotics from Duncombe in the past. The CRI
provided the approximate location of Duncombe’s home and told police that it was a multi-
family home and Duncombe lived in the basement. Police showed the CRI a driver’s
license photograph of Duncombe, and the CRI confirmed Duncombe’s identity.
Less than 72 hours before applying for the warrant, police conducted a controlled
buy at Duncombe’s home using the CRI. Prior to the controlled buy, police searched the
CRI and the CRI’s vehicle for money and controlled substances. Police provided the CRI
with U.S. currency to purchase a specific amount of a controlled substance. Police kept
the CRI under constant surveillance as the CRI entered and exited the home. After the
controlled buy, police followed the CRI to a pre-arranged location, and the CRI turned over
a controlled substance. The CRI told police that the CRI had purchased the controlled
substance from Duncombe inside the residence.
Duncombe, who has prior first-degree aggravated robbery and second-degree
controlled-substance convictions, was charged with possession of a firearm by an ineligible
person. He moved to suppress the firearm on the grounds that the search warrant and
supporting affidavit did not contain sufficient facts to establish probable cause. The district
court denied the challenge.
Later, Duncombe challenged the warrant a second time. A different district court
judge considered the matter based on the warrant, supporting affidavit, and the testimony
3
of the officer who submitted the warrant affidavit. The district court denied the challenge.
Duncombe then stipulated to a body of evidence provided by the state, preserved his right
to appeal pre-trial issues relating to the warrant, and submitted the matter to the district
court pursuant to Minn. R. Crim. P. 26.01, subd. 4. The district court found Duncombe
guilty. This appeal follows.
DECISION
I.
Duncombe first argues that the firearm must be suppressed because the search
warrant and supporting affidavit lacked sufficient facts to establish probable cause. He
claims that that the information provided regarding the CRI’s reliability was “so generic it
is worthless.” He also claims that the tip provided by the CRI contains only conclusory
statements that are insufficient to support probable cause. Lastly, he argues that the
controlled buy cannot establish probable cause because the warrant and supporting
affidavit do not contain information regarding the type of controlled substance purchased
from Duncombe or how police identified the substance. We disagree.
The United States and Minnesota Constitutions provide that no warrant shall issue
without a showing of probable cause. U.S. Const. amend. IV; Minn. Const. art. I, § 10.
Generally, a search is lawful only if executed pursuant to a valid search warrant issued by
a neutral and detached magistrate after a finding of probable cause. See Minn. Stat.
§ 626.08 (2012); State v. Yarbrough, 841 N.W.2d 619, 622 (Minn. 2014).
When reviewing probable cause to issue a warrant, we give “the district court’s
determination great deference.” State v. Rochefort, 631 N.W.2d 802, 804 (Minn. 2001).
4
We limit our review to considering whether the issuing judge had a substantial basis for
determining that probable cause existed to support the warrant. Yarbrough, 841 N.W.2d
at 622. The substantial-basis determination is based on an examination of the totality of
the circumstances. State v. Holiday, 749 N.W.2d 833, 839 (Minn. App. 2008).
The task of the issuing [judge] is simply to make a practical,
common-sense decision whether, given all the circumstances
set forth in the affidavit before [the judge], including the
“veracity” and “basis of knowledge” of persons supplying
hearsay information, there is a fair probability that contraband
or evidence of a crime will be found in a particular place.
State v. Wiley, 366 N.W.2d 265, 268 (Minn. 1985) (quoting Illinois v. Gates, 462 U.S. 213,
238, 103 S. Ct. 2317, 2332 (1983)).
The crux of the application for the search warrant included information on the recent
controlled buy, a description of Duncombe by the CRI, and the allegation that the CRI had
purchased narcotics from Duncombe in the past, as well as the following two sentences:
“The CRI has assisted the [drug task force] with three separate cases in the past year and a
half. The past three cases the CRI provided [sic] have resulted in the seizures of narcotics,
arrests, and/or currency forfeitures.”
Duncombe first argues that the application for the warrant does not adequately
establish the CRI’s reliability. See State v. Munson, 594 N.W.2d 128, 136 (Minn. 1999)
(“Having a proven track record is one of the primary indicia of an informant’s veracity.”).
“[A]n informant’s reliability may be demonstrated where the informant has previously
given police correct information, but the affidavit must explicitly state this to be the case.”
State v. Ward, 580 N.W.2d 67, 71 (Minn. App. 1998). Here, the warrant affidavit states
5
that the CRI provided police with information leading to “seizures of narcotics, arrests,
and/or currency forfeiture” on three occasions within the last year-and-a-half. Contrary to
Duncombe’s contention, further elaboration concerning the specifics of the CRI’s record
of reliability is not required. Munson, 594 N.W.2d at 136. As the Minnesota Supreme
Court held in Wiley, a statement that the informant “has been used over several years
successfully” is sufficient to establish reliability. Wiley, 366 N.W.2d at 269 & n.1
Reliability was reinforced, as described in the affidavit, by police confirmation of
Duncombe’s identity by obtaining and showing the CRI a driver’s license photograph of
Duncombe. The CRI confirmed that the picture was of Duncombe. Police further
corroborated the CRI’s tip by conducting a controlled-buy at the home where the CRI said
Duncombe resided. Corroboration of information, even minor details, provided by the CRI
adds further credence to the informant’s tip. State v. McCloskey, 453 N.W.2d 700, 704
(Minn. 1990). There was enough information in the affidavit for the judge to make an
independent determination regarding the reliability of the CRI.
Duncombe next points to the absence of specifics in the application regarding the
controlled buy. He notes that the warrant and supporting affidavit lack information
regarding the type of controlled substance purchased or how police confirmed that a
controlled substance had indeed been purchased. But Duncombe fails to cite any authority
for the proposition that such a controlled buy cannot provide support for a probable-cause
finding. In Holiday, this court concluded that a controlled buy may corroborate an
informant’s tip even when the controlled buy yields no controlled substance. 749 N.W.2d
at 842-843. In that case, a CRI went to the door of Holiday’s home and asked Holiday for
6
drugs. Id. at 837-38. Holiday told the CRI that he did not know the CRI and would not
sell the CRI anything. Id. at 838. This court concluded that because Holiday’s comment
indicated that Holiday would have sold the CRI narcotics if he had known the CRI, the
statement corroborated the report of a different informant, who told police Holiday was
selling drugs out of the home. Id. at 837, 843.
In this case, there are more specifics regarding the controlled buy than in Holiday.
Police searched the CRI and the CRI’s vehicle for money, drugs, and other contraband.
Police then provided the CRI with a specific amount of U.S. currency which they had
photographed for identification purposes. Police observed as the CRI entered and later
exited Duncombe’s home. The CRI, who had previously identified Duncombe from a
driver’s license photograph, returned with a controlled substance and told police that he
purchased the substance from Duncombe. Although the affidavit does not state how the
officers knew it was a controlled substance or what type of controlled substance it was, the
officer who applied for the search warrant is a trained narcotics officer and labeled the
substance as a controlled substance in his affidavit.
The reliable informant’s tip was based on first-hand information that Duncombe
was selling drugs out of his home and was corroborated by a controlled buy at the home.
Even if we considered this a close case, “the resolution of doubtful or marginal cases should
be largely determined by the preference to be accorded warrants.” Wiley, 366 N.W.2d at
268 (quotation omitted). The reason for this deference is straightforward: we want to
encourage police officers to obtain warrants, not deter them from doing so. State v. Nolting,
312 Minn. 449, 456, 254 N.W.2d 340, 345 n.7 (1977). We are further guided by the
7
supreme court’s direction to view the affidavit as a whole, rather than examining each
component in isolation. State v. Jenkins, 782 N.W.2d 211, 223 (Minn. 2010). In light of
these principles, we conclude that the warrant and supporting affidavit provided the issuing
judge with a substantial basis to find probable cause.
II.
Duncombe next argues that the evidence is insufficient to support his conviction.
The state maintains that Duncombe is precluded from challenging the sufficiency of the
evidence because he proceeded pursuant to Minn. R. Crim. P. 26.01, subd. 4. We agree.
Minn. R. Crim. P. 26.01, subd. 4, allows a defendant to preserve a dispositive
pretrial issue for appeal by, among other things, “stipulat[ing] to the prosecution’s evidence
in a trial to the court” and “acknowledg[ing] that appellate review will be of the pretrial
issue, but not of the defendant’s guilt, or of other issues that could arise at a contested trial.”
Minn. R. Crim. P. 26.01, subd. 4(e), (f). An appellant may not challenge sufficiency of the
evidence on appeal if he proceeded in the district court under rule 26.01, subd. 4. State v.
Busse, 644 N.W.2d 79, 88 (Minn. 2002).
In his reply brief and at oral argument, Duncombe claimed that he did not intend to
waive his right to appellate review of his guilt, but rather meant to submit to either a “Trial
Without a Jury” under rule 26.01, subd. 2, or a “Trial on Stipulated Facts” pursuant to rule
26.01, subd. 3. He acknowledges that aspects of what occurred in district court are
consistent with Minn. R. Crim. P. 26.01, subd. 4, and that the district court labeled the
matter as a rule 26.01, subd. 4, proceeding in its findings of fact, but argues that because
he “did not stipulate to the prosecution’s case, he is entitled to appeal the determination of
8
guilt.” “The interpretation of the rules of criminal procedure is a question of law that we
review de novo.”1 Dereje v. State, 837 N.W.2d 714, 720 (Minn. 2013).
The transcript of the proceedings shows that the parties conducted a valid rule 26.01,
subd. 4, proceeding. The parties agreed that the pretrial issues relating to Duncombe’s
warrant challenge were dispositive and that a trial would be unnecessary if Duncombe were
to prevail on these issues on appeal. Minn. R. Crim. P. 26.01, subd. 4(c). Duncombe
maintained his not guilty plea. Id., subd. 4(b). He waived his right to a jury trial, right to
testify, right to question prosecution witnesses, and right to call his own witnesses. Id.,
subd. 4(d). Duncombe stipulated to the prosecution’s evidence, and he acknowledged that
the court would consider that evidence and could enter a finding of guilt based on that
evidence. Id., subd. 4(e). Duncombe also clearly acknowledged that appellate review
would only be of the pretrial issue and not of his guilt or any other issues that could arise
at a contested trial. Id., subd. 4(f).
1
The supreme court recently held “that plain error analysis applies to unobjected-to errors
committed under Rule 26.01, subdivision 4.” State v. Myhre, __ N.W.2d __, __, 2016 WL
626048, *6 (Minn. Feb. 17, 2016). Myhre argued that because of errors in his rule 26.01,
subd. 4, proceeding, his conviction should be reversed. Id. It is unclear whether Myhre
applies to the instant case. Duncombe does not argue that there were errors in his rule
26.01, subd. 4, proceeding; he instead argues that the parties did not proceed under rule
26.01, subd. 4. The district court, however, did categorize the matter under rule 26.01,
subd. 4, in its findings of fact, and Duncombe could have filed an objection to the district
court’s findings or made a motion to reconsider. He did not. Nevertheless, because the
parties have not briefed this issue and because Duncombe’s claim fails under either the
plain error standard or the more favorable de novo standard, we need not determine the
appropriate standard of review. See State v. Silvernail, 831 N.W.2d 594, 598 (Minn. 2013)
(“We need not resolve the parties’ dispute regarding the standard of review because, even
under the more favorable standard proposed by Silvernail, the record contains sufficient
evidence to support the jury’s verdict.”).
9
Duncombe claims that because his attorney argued that he was not guilty and the
district court made a finding of guilt and findings of fact, the district court conducted a trial
without a jury or a trial on stipulated facts. But rule 26.01, subd. 4, requires the defendant
to “maintain the plea of not guilty” and provides that if the district court finds the defendant
guilty, “the [district] court must also make findings of fact on the record or in writing as to
each element of the offense(s).” Id., subd. 4(b) (h). Duncombe also argues that he did not
stipulate to the prosecution’s case. Rule 26.01, subd. 4, does not require the defendant to
“stipulate to the prosecution’s case.” Instead, it requires the defendant to “stipulate to the
prosecution’s evidence in a trial to the court.” Id., subd. 4(e). This is exactly what
happened in the district court. The prosecution submitted the case to the district court based
on a body of evidence stipulated to by the defendant. The district court made a finding of
guilt and findings of fact based on that evidence.
Finally, Duncombe argues that a statement by his defense attorney at sentencing
that the parties did not do a “Lothenbach”2 but instead conducted “a court trial through
police reports” supports his claim. This statement was made nearly three months after the
proceeding and has no bearing on what actually occurred. The district court’s order clearly
designates the matter a rule 26.01, subd. 4, proceeding, and Duncombe did not object to
that designation. Our review of the transcript satisfies us that the parties intended to
conduct such a proceeding and fully complied with the requirements of the rule. Because
2
The procedure described in rule 26.01, subd. 4, superseded the procedure originally
outlined in State v. Lothenbach, 296 N.W.2d 854, 858 (Minn. 1980). State v. Diede, 795
N.W.2d 836, 842 n.2 (Minn. 2011).
10
we conclude that Duncombe was tried pursuant to Minn. R. Crim. P. 26.01, subd. 4, he is
not permitted to challenge his guilt on appeal.
Affirmed.
11
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01-03-2023
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06-09-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433262/
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I have no disagreement with the majority opinion respecting any propositions of law stated therein but I think the issue of undue influence should have been submitted to the jury, and I dissent because of the failure of the trial court to do so.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/4065515/
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ACCEPTED
04-14-00899-cv
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
3/31/2015 4:47:38 PM
KEITH HOTTLE
CLERK
04-14-00899-CV FILED IN
4th COURT OF APPEALS
In the SAN ANTONIO, TEXAS
03/31/2015 4:47:38 PM
Fourth Court of Appeals KEITH E. HOTTLE
Clerk
SITTING AT SAN ANTONIO
LETICIA ZEPEDA VASQUEZ, Individually and on Behalf of the Estate of
Jose Abraham Vasquez, Jr.,
Appellant,
v.
LEGEND NATURAL GAS III, LP; LEGEND NATURAL GAS, LLC;
LEWIS ENERGY GROUP, LP; LEWIS PETRO PROPERTIES, INC.;
ROSETTA RESOURCES OPERATING, LP; VIRTEX HOLDINGS,
LLP; VIRTEX OPERATING CO., INC.; ENTERPRISE PRODUCTS
HOLDINGS, LLC; ENTERPRISE PRODUCTS COMPANY; and XTO
ENERGY, INC.,
Appellees
Appealed From the 81st District Court
La Salle County, Texas
Trial Court Cause No. 14-07-0019-CVL
APPELLANT’S OPENING BRIEF
JEFFREY L. DORRELL
State Bar No. 00787386
jdorrell@hanszenlaporte.com
11767 Katy Freeway, Suite 850
Houston, Texas 77079
Telephone: 713-522-9444
FAX: 713-524-2580
ATTORNEY FOR APPELLANT
APPELLANT REQUESTS ORAL ARGUMENT .
IDENTITY OF PARTIES & COUNSEL
Appellant certifies that the following is a complete list of the parties,
the attorneys, and any other person who has any interest in the outcome of
this matter:
PARTIES COUNSEL
Leticia Zepeda Vasquez, Jeffrey Lee Dorrell
Appellant H. Mark Burck
Daniel Dutko
Hanszen Laporte, LLP
11767 Katy Freeway, Suite 850
Houston, Texas 77079
Telephone: 713-522-9444
FAX: 713-524-2580
Attorney for Appellant
Legend Natural Gas III, LP, Isaac J. Huron
and Legend Natural Gas, LLC Davis, Cedillo & Mendoza, Inc.
Appellees McCombs Plaza, Suite 500
755 E. Mulberry Avenue
San Antonio, Texas 78213
Telephone: 210-822-6666
FAX: 210-822-1151
Attorney for Legend Natural Gas III, LP, and
Legend Natural Gas, LLC
Lewis Energy Group, LP, and David L. Ortega
Lewis Petro Properties, Inc. Naman Howell Smith & Lee, PLLC
Appellees 1001 Reunion Place, Suite 600
San Antonio, Texas 78216
Telephone: 210-731-6300
FAX: 210-785-2953
Attorney for Lewis Energy Group, LP, and
Lewis Petro Properties, Inc.
ii
XTO Energy, Inc. Jose E. Garcia
Appellee Garcia & Villareal
4311 N. McColl Road
McAllen, Texas 78504
Telephone: 956-630-0081
FAX: 956-630-3631
Attorney for XTO Energy, Inc.
Rosetta Resources Oper., LP William A. Abernethy
Appellee Donnell, Abernethy & Kieschnick, P.C.
555 N. Carancahua, Suite 1770
Corpus Christi, Texas 78401
Telephone: 361-888-5551
FAX: 361-880-5618
Attorney for Rosetta Resources Oper., LP
Virtex Operating Co., Inc., and Christopher Lowrance
Virtex Holdings, LLP Royston, Rayzor, Vickery & Williams, LLP
Appellees 802 Carancahua, Suite 1300
Corpus Christi, Texas 78401
Telephone: 361-884-8808
FAX: 361-884-7261
Attorney for Virtex Operating Co., Inc., and
Virtex Holdings, LLP
Enterprise Products Holdings, E. Michael Rodriguez
LLC, and Enterprise Products Atlas, Hall & Rodriguez, LLP
Co. P.O. Box 6369 (78523-6369)
Appellees 50 W. Morrison Road, Suite A
Brownsville, Texas 78520
Telephone: 956-574-9333
FAX: 956-574-9337
Attorney for Enterprise Products Holdings,
LLC, and Enterprise Products Co.
iii
TABLE OF CONTENTS
Page
IDENTITY OF PARTIES AND COUNSEL...….……………………….ii
TABLE OF CONTENTS ………………………………………………….iv
INDEX OF AUTHORITIES ………………………………………………v
STATEMENT OF THE CASE ……………………………………………2
STANDARD OF REVIEW ……...…………………………………………3
ISSUE PRESENTED FOR REVIEW ……………………………………4
STATEMENT OF FACTS.……………………………..………………….5
SUMMARY OF ARGUMENT…………………………………………….6
ARGUMENT ..…………………….…………………………………………7
Issue 1. Did defendants have a legal duty to act to prevent
Vasquez’s death from the dangerous situation on
Krueger Road that defendants themselves
negligently created? ……………………………………………..7
CONCLUSION …...……………………………………………………10
PRAYER ….……………………………………………………………11
CERTIFICATE OF SERVICE ………………………………………12
CERTIFICATE OF WORD COUNT COMPLIANCE .……………14
APPENDIX ……………………………………………………………15
iv
INDEX OF AUTHORITIES
CASES
Page
Abalos v. Oil Development Co. of Texas,
544 S.W.2d 627 (Tex. 1976) …………………………………………9
Buchanan v. Rose,
159 S.W.2d 109 (Tex. 1942) …………………………………………9
Cactus Drilling Co. v. Williams,
525 S.W.2d 902 (Tex. Civ. App.—Amarillo 1975, writ ref’d n.r.e.)…9
Chrysler Corp. v. Dallas Power & Light Co.,
522 S.W.2d 742 (Tex. Civ. App.—Eastland 1975, writ ref’d n.r.e.).…9
City of Austin v. Liberty Mut. Ins.,
431 S.W.3d 817 (Tex. App.—Austin 2014, no pet.) …………………3
Courville v. Home Transportation Co.,
497 S.W.2d 788 (Tex. Civ. App.—Beaumont 1973, writ ref’d n.r.e.)..9
Dailey v. Thorpe,
445 S.W.3d 785 (Tex. App.—Houston [1st Dist.] 2014, no pet.).……3
Dallas Ry. & Terminal Co. v. Archer,
167 S.W.2d 290 (Tex. Civ. App.—Dallas 1942, writ ref’d w.o.m.) ….9
Devoll v. Demonbreun,
2014 Tex. App. LEXIS 13865 at *4
(Tex. App.—San Antonio December 31, 2014, n.p.h.) ………………3
GoDaddy.com, LLC v. Toups,
429 S.W.3d 752 (Tex. App.—Beaumont 2014, pet. denied) …………3
San Benito Bank & Trust Co. v. Travels,
31 S.W.3d 312 (Tex. App.—Corpus Christi 2000) …………………..9
SmithKline Beecham Corp. v. Doe,
903 S.W.2d 347 (Tex. 1995) ………………………………………8-9
Wooley v. Schaffer,
447 S.W.3d 71 (Tex. App.—Houston [14th Dist.]
2014, pet. filed) …………………………………………………….3, 7
v
RULES
TEX. R. CIV. P. 91a .………………………………………………Passim
vi
04-14-00899-CV
LETICIA ZEPEDA VASQUEZ, Individually and on Behalf of the Estate of
Jose Abraham Vasquez, Jr.,
Appellant
v.
LEGEND NATURAL GAS III, LP; LEGEND NATURAL GAS, LLC;
LEWIS ENERGY GROUP, LP; LEWIS PETRO PROPERTIES, INC.;
ROSETTA RESOURCES OPERATING, LP; VIRTEX HOLDINGS,
LLP; VIRTEX OPERATING CO., INC.; ENTERPRISE PRODUCTS
HOLDINGS, LLC; ENTERPRISE PRODUCTS COMPANY; and XTO
ENERGY, INC.,
Appellees
APPELLANT’S OPENING BRIEF
Appellant Leticia Zepeda Vasquez files her opening brief. Appellant
will be referred to individually by name, or as “plaintiff,” as she was
designated below. Appellees Legend Natural Gas III, LP; Legend
Natural Gas, LLC; Lewis Energy Group, LP; Lewis Petro Properties,
Inc.; Rosetta Resources Operating, LP; Virtex Holdings, LLP; Virtex
Operating Company, Inc.; Enterprise Products Holdings, LLC;
Enterprise Products Company; and XTO Energy, Inc., will be referred to
individually by name, or collectively as “defendants,” as they were
designated below.
1
STATEMENT OF THE CASE
Nature of the case. On July 21, 2014, plaintiff sued the ten defendants
for negligence and gross negligence. (CR 5-6.) On October 2, 2014,
plaintiff filed her first amended original petition asserting the same claims.
(Tab C, CR 84-86.) The various defendants generally denied, raised
affirmative defenses, and counterclaimed. (CR 8-56.) The defendants’
affirmative defenses and counterclaims are not at issue in this appeal.
Course of proceedings. No trial was held. Defendants Legend
Natural Gas III, LP, and Legend Natural Gas, LLC, filed a motion to dismiss
plaintiff’s claims Under TEX. R. CIV. P. 91a. (CR 62.) A similar motion
was included in the body of the answer filed by defendants Lewis Energy
Group, LP, and Lewis Petro Properties. (CR 52-53.) On October 16, 2014,
the trial court held an oral hearing on defendants’ motions to dismiss.
Trial court disposition. The trial court granted defendants’ motions to
dismiss on November 20, 2014, but failed to dispose of certain other claims.
(CR 147-48.) Plaintiff filed a premature notice of appeal. (CR 159.) On
January 5, 2015, the trial court entered a final order granting all defendants’
motions to dismiss and severing the undisposed claims. (2d SCR 7-8.) (Tab
A.) On January 29, 2015, plaintiff filed an amended notice of appeal of the
new order. (2d SCR 1.)
2
STANDARD OF REVIEW
This Court reviews the trial court’s dismissal of Vasquez’s claims
pursuant to TEX. R. CIV. P. 91a de novo. Devoll v. Demonbreun, 2014 Tex.
App. LEXIS 13865 at *4 (Tex. App.—San Antonio December 31, 2014,
n.p.h.); Wooley v. Schaffer, 447 S.W.3d 71, 75 (Tex. App.—Houston [14th
Dist.] 2014, pet. filed); Dailey v. Thorpe, 445 S.W.3d 785, 787 (Tex.
App.—Houston [1st Dist.] 2014, no pet.); City of Austin v. Liberty Mut.
Ins., 431 S.W.3d 817, 822 (Tex. App.—Austin 2014, no pet.);
GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754 (Tex. App.—Beaumont
2014, pet. denied).
3
ISSUE PRESENTED FOR REVIEW
Issue 1: Did defendants have a legal duty to act to prevent
Vasquez’s death from the dangerous situation on Krueger Road that
defendants themselves negligently created?
4
STATEMENT OF FACTS
On August 4, 2012, Jose Vasquez was tragically killed when his
vehicle flipped over in an accident that could have been avoided if not for
the negligence of defendants. (CR 82.) Vasquez was operating his vehicle
on Krueger Road in La Salle County, Texas, when he was blinded by a dust
cloud and drove into a ditch. (Id.) Once a safe, paved road for the public
(CR 83), Kruger Road has now become dangerously dilapidated as a result
of defendants’ negligent use of the road to operate their oil and gas wells in
the area. (CR 81-82.) The road now has potholes, crevices, bumps, and the
road has no markings to determine the proper lanes of travel. (CR 83, 85.)
Defendants’ negligent operation of their trucks and businesses
includes sending hundreds or thousands of trucks every year—some over
legal weight limits—driving “recklessly” or at too high a rate of speed down
Krueger Road. (CR 83.) Defendants knew that their operations had created
the dangerous conditions on Krueger Road that eventually killed Jose
Vasquez. (CR 83-85.) Defendants did nothing either to repair Krueger
Road or warn others of the dangerous conditions they have negligently
created. (CR 83-85.)
5
SUMMARY OF THE ARGUMENT
The trial court was bound to take plaintiff’s factual allegations pled as
true and liberally construe them in her favor. The trial court implicitly found
that defendants owed no legal duty to Jose Vasquez when it dismissed his
widow’s claims under TEX. R. CIV. P. 91a because her claims allegedly had
“no basis in law.” However, Texas courts have long recognized at least two
species of duty when a defendant creates a dangerous condition. If the
defendant created the dangerous condition negligently, he has a duty to
repair it. If the defendant created the dangerous condition without being
negligent, he nevertheless still has a duty to warn those who may be injured
as a result. The trial court erred when it failed to recognize defendants’ duty
to repair or to warn Jose Vasquez of the unreasonably dangerous condition
their trucks had negligently created.
6
ARGUMENT
Argument and Authorities—Issue 1
Issue 1: Did defendants have a legal duty to act to prevent
Vasquez’s death from the dangerous situation on Krueger Road that
defendants themselves negligently created?
Yes. However, the trial court implicitly found that there could be no
such duty when it dismissed plaintiff’s claims pursuant to Rule 91a as
having “no basis in law.”
Rule 91a allows a party to move to dismiss a baseless cause of action
on the grounds that it has no basis in law or fact. TEX. R. CIV. P. 91a.1. In
the case at bar, fact issues are not in dispute—the trial court’s order is
expressly limited to dismissal because the claims allegedly had “no basis in
law.” (Tab A.)
A cause of action has no basis in law if the allegations, taken as
true, together with inferences reasonably drawn from them, do
not entitle the claimant to the relief sought.
TEX. R. CIV. P. 91a.1. The trial court must decide a Rule 91a motion to
dismiss based solely on the pleading of the cause of action, together with
any exhibits permitted by Rule 59. TEX. R. CIV. P. 91a.6.
In conducting our [Rule 91a] review, … we must construe the
pleadings liberally in favor of the plaintiff, look to the pleader’s
intent, and accept as true the factual allegations in the
pleadings….
Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.]
2014, pet. filed) [emphasis added].
7
Thus, factual allegations the trial court was obliged to “take as true”
and liberally construe in favor of plaintiff included:
(i) It takes 1200 trucks to bring one oil or gas well into production;
(Tab C, CR 81)
(ii) It takes 350 trucks a year to maintain one oil or gas well; (Tab
C, CR 81)
(iii) The service life of roads in areas around oil or gas wells is
reduced more than 30% per year due to well operations; (Tab
C, CR 81-82)
(iv) Defendants knew that La Salle County could not repair Krueger
Road as fast as defendants destroyed it; (Tab C, CR 82)
(v) Some of defendants’ trucks travelled at an unsafe speed; (Tab
C, CR 83)
(vi) Some of defendants’ trucks travelled “recklessly;” (Tab C, CR
84)
(vii) Some of defendants’ trucks were overweight; (Tab C, CR 83,
85)
(viii) Krueger Road was once a safe, paved road for the public; (Tab
C, CR 83)
(ix) Krueger Road is now in a dangerously dilapidated condition,
with potholes, crevices, and bumps; (Tab C, CR 83, 85)
(x) Defendants knew they had created Krueger Road’s dangerously
dilapidated condition; (Tab C, CR 83, 85)
(xi) It was foreseeable that Vasquez (or others) could be injured
while in the lawful exercise of his right to drive on Krueger
Road; (Tab C, CR 83) and
(xii) Defendants did nothing either to repair Krueger Road or warn
others of the dangerous conditions defendants had created there.
(Tab C, CR 83)
8
Texas courts have long held that if a party creates a dangerous
condition, he has a duty to prevent injury to others if it is reasonably
foreseeable that others in the exercise of their lawful rights may be injured
by the dangerous condition he created. SmithKline Beecham Corp. v. Doe,
903 S.W.2d 347, 353 (Tex. 1995); Buchanan v. Rose, 159 S.W.2d 109, 110
(1942); San Benito Bank & Trust Co. v. Travels, 31 S.W.3d 312, 319 (Tex.
App.—Corpus Christi 2000).
[I]t may be said generally, on the one hand, that if a party
negligently creates a dangerous situation it then becomes his
duty to do something about it to prevent injury to others if it
reasonably appears or should appear to him that others in the
exercise of their lawful rights may be injured thereby.
Buchanan, 159 S.W.2d at 110; see also Abalos v. Oil Development Co. of
Texas, 544 S.W.2d 627, 632-33 (Tex. 1976); Cactus Drilling Co. v.
Williams, 525 S.W.2d 902, 911 (Tex. Civ. App.—Amarillo 1975, writ ref’d
n.r.e.); Chrysler Corp. v. Dallas Power & Light Co., 522 S.W.2d 742, 744
(Tex. Civ. App.—Eastland 1975, writ ref’d n.r.e.); Courville v. Home
Transportation Co., 497 S.W.2d 788, 790-91 (Tex. Civ. App.—Beaumont
1973, writ ref’d n.r.e.); Dallas Ry. & Terminal Co. v. Archer, 167 S.W.2d
290, 293 (Tex. Civ. App.—Dallas 1942, writ ref’d w.o.m.).
Nor does it absolve a defendant of all duty if he creates the dangerous
condition on a “public way”—even if he does so without being negligent:
9
We think it may also be said that if one by his own acts, although
without negligence on his part, creates a dangerous situation in
or along a public way and it reasonably appears that another in
the lawful use of such way in the exercise of ordinary care for his
own safety may be injured by the dangerous situation so created,
the one creating the same must give warning of the danger or be
responsible for the consequences. To illustrate: One who in the
exercise of a lawful right, and without negligence on his part,
makes an excavation across a street or sidewalk or on his
premises in close proximity to a public way, or parks a vehicle in
a road, or otherwise obstructs the road with a foreign substance,
is bound to give warning of the danger created thereby.
Buchanan, 159 S.W.2d at 110 [citations omitted]. Although the duty may
be different—to warn others of the dangerous condition as opposed to a duty
to repair the condition—there is nevertheless still a duty.
Defendants owed the Buchanan duties to Jose Vasquez. When they
breached their duties, defendants caused Jose Vasquez’s death.
CONCLUSION
The trial court was bound to take plaintiff’s factual allegations pled as
true and liberally construe them in her favor. The trial court implicitly found
that defendants owed no legal duty to Jose Vasquez when it dismissed his
widow’s claims under TEX. R. CIV. P. 91a as having “no basis in law.”
Because Texas courts have long recognized a duty when a defendant creates
a dangerous condition, the trial court erred when it failed to recognize
defendants’ duty to repair or to warn Jose Vasquez of the unreasonably
dangerous condition defendants’ trucks had created.
10
PRAYER
For these reasons, appellant Leticia Zepeda Vasquez prays that the
Court reverse the trial court’s dismissal of her claims and causes of action
against defendants as having “no basis in law,” and remand to the trial court
for a trial.
Respectfully submitted,
By: /s/ Jeffrey L. Dorrell .
Jeffrey L. Dorrell
State Bar No. 00787386
jdorrell@hanszenlaporte.com
11767 Katy Freeway, Suite 850
Houston, Texas 77079
Telephone: 713-522-9444
FAX: 713-524-2580
ATTORNEYS FOR APPELLANT LETICIA ZEPEDA VASQUEZ
11
CERTIFICATE OF SERVICE
I hereby certify that on 3-31 , 2015, a true and correct copy of the
foregoing was sent by:
Hand delivery
Certified mail
Telephonic document transfer
X E-service in accordance with TEX. R. APP. P. 9.5(b)
in accordance with TEX. R. APP. P. 9.5(c) to the following counsel of record:
Mr. William A. Abernethy
Donnell, Abernethy & Kieschnick, P.C.
555 N. Carancahua, Suite 1770
Corpus Christi, Texas 78401
Telephone: 361-888-5551
FAX: 361-880-5618
COUNSEL FOR DEFENDANT ROSETTA RESOURCES
OPERATING, LP.
Mr. David L. Ortega
Naman Howell Smith & Lee, PLLC
1001 Reunion Place, Suite 600
San Antonio, Texas 78216
Telephone: 210-731-6300
FAX: 210-785-2953
COUNSEL FOR DEFENDANTS LEWIS ENERGY GROUP, LP, and
LEWIS PETRO PROPERTIES, INC.
Mr. Christopher Lowrance
Royston, Rayzor, Vickery & Williams, L.L.P.
802 Carancahua, Suite 1300
Corpus Christi, Texas 78401
Telephone: 361-884-8808
FAX: 361-884-7261
COUNSEL FOR DEFENDANTS VIRTEX OPERATING CO., INC.,
and VIRTEX HOLDINGS, LLP
12
Mr. Isaac J. Huron
Davis, Cedillo & Mendoza, Inc.
McCombs Plaza, Suite 500
755 E. Mulberry Avenue
San Antonio, Texas 78213
Telephone: 210-822-6666
FAX: 210-822-1151
COUNSEL FOR DEFENDANTS LEGEND NATURAL GAS III, LP,
and LEGEND NATURAL GAS, LLC
Mr. E. Michael Rodriguez
Atlas, Hall & Rodriguez, L.L.P.
P.O. Box 6369 (78523-6369)
50 W. Morrison Road, Suite A
Brownsville, Texas 78520
Telephone: 956-574-9333
FAX: 956-574-9337
COUNSEL FOR DEFENDANTS ENTERPRISE PRODUCTS
HOLDINGS, LLC, and ENTERPRISE PRODUCTS CO.
Mr. Jose E. Garcia
Garcia & Villareal
4311 N. McColl Road
McAllen, Texas 78504
Telephone: 956-630-0081
FAX: 956-630-3631
COUNSEL FOR DEFENDANT XTO ENERGY, INC.
/s/ Jeffrey L. Dorrell
JEFFREY L. DORRELL
13
CERTIFICATE OF WORD COUNT COMPLIANCE
In compliance with TEX. R. APP. P. 9.4, relying on the word count
function in the word processing software used to produce this document, I
certify that the number of words in this document including footnotes
(excluding captions, identity of parties and counsel, statement regarding oral
argument, table of contents, index of authorities, statement of the case,
statement of issues presented, statement of jurisdiction, statement of
procedural history, signature, proof of service, certification, certificate of
compliance, and appendix) is 1,343.
/s/ Jeffrey L. Dorrell
JEFFREY L. DORRELL
14
04-14-00899-CV
LETICIA ZEPEDA VASQUEZ, Individually and on Behalf of the Estate of Jose
Abraham Vasquez, Jr.,
Appellant
v.
LEGEND NATURAL GAS III, LP; LEGEND NATURAL GAS, LLC; LEWIS
ENERGY GROUP, LP; LEWIS PETRO PROPERTIES, INC.; ROSETTA
RESOURCES OPERATING, LP; VIRTEX HOLDINGS, LLP; VIRTEX
OPERATING CO., INC.; ENTERPRISE PRODUCTS HOLDINGS, LLC;
ENTERPRISE PRODUCTS COMPANY; and XTO ENERGY, INC.,
Appellees
APPELLANT’S APPENDIX
LIST OF DOCUMENTS
1. January 5, 2015, Order Appealed From ……………………………Tab A
2. TEX. R. CIV. P. 91a. …………..……………………………………Tab B
3. Plaintiff’s First Amended Original Petition ..………………………Tab C
15
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Order entered March 31, 2015
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-01423-CR
JAMES RAMSEY MITCHELL, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 283rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. F-1352061-T
ORDER
The State’s motion to extend the time for filing a brief is GRANTED. The State’s brief,
received on March 30, 2015, is ORDERED filed as of the date of this order.
/s/ DAVID L. BRIDGES
PRESIDING JUSTICE
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I. The information charges:
"That the said William Blair, on or about the 28th day of May, A.D. 1927, in the county of Carroll and state of Iowa, * * * did willfully, unlawfully, and feloniously, carnally know and abuse one Eldora Struve, she being then and there a female child under the age of 16 years, all against the peace and dignity of the state of Iowa, and contrary to the statute in such case made and provided."
The defendant's principal point is that the only evidence offered by the State on the subject is to the effect that a completed rape by actual penetration was accomplished; that such proof "disproves a charge of attempt to rape * 1. INDICTMENT * * disproves assault with intent to commit;" AND that the verdict of guilty of assault with INFORMATION: intent acquits the defendant of the only offense rape: of which there is any evidence, namely, included completed rape; that the testimony to the effect offense. that sexual intercourse was consummated was rejected by the jury as incredible, and that such rejection of the evidence left nothing upon which to base a conviction of assault with intent; that the verdict also discredits the corroboration. Defendant argues that the consummated crime and attempt to commit it are separate and distinct offenses; that a *Page 231
failure of consummation is an essential element of the offense of attempting to commit.
The argument and the cases cited are largely devoted to a discussion of common law or statutory crime of "attempt" in other jurisdictions, rather than the crime of assault with intent to commit defined by our statute, of which the defendant was convicted. Whether there is a distinction between the common-law or statutory offense of attempt to commit rape in states where such attempt is made a crime, and the offense of assault with intent to commit as defined by our statute (Sections 12966, 12968, Code, 1927), we do not pause to consider, there being no common-law crimes in this state (State v. Banoch, 193 Iowa 851). See Flower v. Continental Cas. Co., 140 Iowa 510, 512; State v.Russell, 64 Kan. 798 (68 P. 615); In re Stahlnaker, 93 Kan. 622
(144 P. 832). The prosecutrix was 11 years old. Defendant, at the time charged, was working for her father, and sleeping in the father's home. There were two rooms on the second floor of the house. Defendant and the 10-year-old brother of prosecutrix slept together in one of the rooms, and prosecutrix and a 7-year-old sister slept together in the other. The testimony of prosecutrix is to the effect that, at the time in question (as she says he had done previously), defendant came into her bed while her sister was in bed with her, and fully accomplished the act alleged, causing her much pain "inside." The sister testifies that defendant came into the bed, and she saw him get on top of the prosecutrix. The brother says he saw defendant, in his underclothes, get out of the bed in which they were both sleeping, and go to the bed where the sisters were (on the night in question not having his underwear on), and that he heard the bed squeak. The testimony of a physician is to the effect that he examined both the prosecutrix and defendant; that defendant was normal; that the hymen of prosecuting witness was not broken; that there had been no vaginal, though he could not say but that there might have have been some labial, penetration. The prosecuting witness also gave testimony that defendant, several months before the act for which defendant was tried, made an obscene proposal. The prosecutrix's testimony to this fact is said by defendant in argument to be without dispute. The evidence offered in behalf of defendant is confined to the testimony of witnesses to absence of bad reputation of defendant in respect to his *Page 232
relations with women, the physician's testimony above referred to, and testimony tending to impeach that of the prosecutrix's father. The legal competency of the State's witnesses is not denied.
Defendant leans heavily on State v. Mitchell, 54 Kan. 516
(38 P. 810), and State v. Barkley, 129 Iowa 484, citing that case with approval. In State v. Mitchell, 54 Kan. 516 (38 P. 810), the court says, with respect to acquittal of the charge of rape and conviction of attempt:
"In so doing they have found against the truth of her statements as to the principal fact testified to, while accepting her testimony as to minor matters. The explanation, and the only explanation, offered by the State for this result, is that the jury must have regarded her statements as to the manner in which the offense was consummated as incredible, and that they accepted so much as might have been true. * * * There is no other testimony in this case of any fact or circumstance, or of any act or declaration of the defendant, which is inconsistent with his entire innocence of any offense. The conviction, therefore, rests solely on the testimony of a witness whom the jury by their verdict have discredited and disbelieved as to the most important fact stated by her on the witness stand, and the fact concerning which, above all others, she could not possibly be mistaken. * * * Section 418 * * * `No person shall be convicted of an assault with intent to commit a crime, or of any other attempt to commit any offense, when it shall appear that the crime intended or the offense attempted was perpetrated by such person * * *." (We have not such a statute.)
In that case, the prosecuting witness was of the age of 18. She testified to the completed perpetration of the act while in a position in a buggy which the jury evidently found would make it impossible. The prosecuting witness here was 11 years old, inexperienced and uninformed in such matters. Her testimony was corroborated. On the record here, the jury might find that the defendant entertained toward the prosecuting witness lewd intentions, and therewith, in a state of partial or entire undress, got into the bed of the prosecuting witness with her, as testified to by the State's witnesses, and that his purpose was to have sexual intercourse with her. State v. Roby, 194 Iowa 1032; State *Page 233 v. Sherman, 106 Iowa 684; State v. Mueller, 202 Iowa 1067. Defendant says in argument:
"We cannot too often say that our position does not challenge decisions like State v. Barkley, 129 Iowa, at 485, to the effect that, when the proof of rape of necessity includes every included offense, than one who has been guilty of one of the included offenses only, may not `complain of the leniency or mistake of the court in his favor.' We are not saying that when, under the evidence, defendant might rightfully have been convicted of rape, that he can complain of a conviction for less than rape. * * * The question is whether there may be a conviction for assault to commit where the only evidence is to a completed act."
If a consummated rape was perpetrated, there was necessarily an assault with intent to commit rape. The jury might find that the completed offense of rape was not consummated, and still find sufficient evidence of the assault.
It is further urged that there is no dispute on whether there was a consummated act; that the testimony does not dispute it; that it contradicts only the degree of penetration.
It is true that, on the doctor's testimony, there might have been sufficient penetration to constitute the crime of rape. The jury might well have found the defendant guilty of that crime. Nevertheless, it remains true that there is 2. INDICTMENT sufficient evidence of the commission of the AND crime of assault with intent, and the case is INFORMATION: within the rule that defendant may not complain included of conviction of a crime of a lesser degree than offenses: that which the evidence requires or warrants. estoppel State v. Barkley, 129 Iowa 484; State v.
to complain. Williams, 197 Iowa 813.
II. Defendant argues that evidence of good character "may of itself, by the creation of a reasonable doubt, produce an acquittal," and that the court did not so charge. The instructions upon this point are to the effect 3. CRIMINAL that accused may prove, as a circumstance in his LAW: defense, his previous good character as to the evidence: trait involved; that previous good character is good not in itself a defense, but is a circumstance character. to be considered with all the other evidence in determining guilt or innocence; that it may be sufficient to *Page 234
generate a reasonable doubt, and entitle the defendant to an acquittal, even though, without such proof of good character, the jury would convict; that it should be given consideration, regardless of whether other evidence is conclusive or inconclusive; and that it was for the jury, under all the facts and circumstances in the case, to determine what weight should be given to such evidence. We are of the opinion that the defendant has no cause to complain of this instruction as not giving him the benefit of the full value of his evidence of good character.State v. Bosworth, 170 Iowa 329; 16 Corpus Juris 980.
III. Error is assigned on the refusal of a number of requests to charge. One requested instruction was that a reasonable doubt might arise from the fact that the State put in no testimony of medical men, and that there was no testimony of 4. CRIMINAL injury to the parts, or of hemorrhage. Another LAW: was that reasonable doubt might arise from the instruc- failure of prosecutrix to make an outcry, and tions: undue that, if she made the complaint at all, it was particula- not made reasonably close to the time of the rization or offense. Another was, in substance, that, while emphasis. it cannot be expected that children of tender years will give testimony as clear and free from contradictions as might be expected of an adult of average intelligence, still the jury should take into consideration the appearance of the children, whether their testimony is clear and candid, frank, as ready in response to one side as to the other; and that, though the court had found them to be legally competent, they were still of such tender years that the jury were at liberty to find that they did not have as full an understanding of the obligation of an oath as is possessed by the adult of average intelligence.
Another request was to the effect that the fact that the court has found that the children were legally competent witnesses does not take from the jury the right to weigh their testimony in the light of matters of common knowledge, and that it is a matter of common knowledge that a child of tender years is capable of being "molded like clay in the potter's hands," more easily influenced than the average adult by what is repeated to it; that in children of tender years no reasonable person would expect complete power of discrimination; and that "more or less undesigned coloration and miscoloration is almost inevitable, and it is a matter of common knowledge, because even among mature *Page 235
witnesses it is not always easy to discriminate" between knowledge and hearsay.
It is not, of course, the province of the court to tell the jury what are and what are not matters of common knowledge. It is not the duty of the court to attempt to marshal the evidence, nor to emphasize particular phases or circumstances and resultingly to minimize or obscure by silence others. The court should not, by selection or otherwise, create in the minds of the jury the impression that certain phases of the evidence have particularly appealed to the court, or have been accepted by him. Instructions should not be argumentative, or unreasonably long or confusing, or misleading. It is not a proper use of requests to charge to utilize them as a snare to involve the court in error. The court is invested with reasonable discretion in the scope, plan, and formulation of his instructions. State v. Mueller, 202 Iowa 1067; 16 Corpus Juris 954, 955, et seq., 980, 982, 1035, 1036, 1038. See, further, State v. Young, 55 N.D. 194 (212 N.W. 857); Gordonv. State, 147 Ala. 42 (41 So. 847).
The court gave the usual instructions on the subject of reasonable doubt, and told the jury that they were the sole judges of the weight and credit to be given to the testimony of the several witnesses, and that they should take into consideration, among other things specified, the witnesses' particular intelligence or want of intelligence, reasonableness or unreasonableness of their story, and whether they were disputed or corroborated; that, in determining the weight to be given to the testimony of the three children, the jury might, in addition, take into consideration their understanding of the obligations of an oath, their capacity to comprehend the distinction between right and wrong, as disclosed by their voirdire; that, though the court had found the children legally competent, the fact remained that they were of such tender years that the jury were at liberty to find that they did not have as full an understanding of the obligation of an oath as that possessed by an adult of average intelligence. The jury were told what was meant by understanding the obligation of an oath.
We are of the opinion that the court sufficiently stated to the jury the rules of law governing the consideration of the evidence in the determination of the case.
The court submitted, as an included offense, that of simple *Page 236
assault, but not that of assault and battery. The defendant complains because of the failure of the court to submit to the jury the crime of assault and battery. The 5. RAPE: indictment having charged the crime of statutory included rape, it charged the included offense of assault offense: and battery. See State v. Hoaglin, 207 Iowa 744. assault and However, the evidence does not justify the battery. submission to the jury of either assault or assault and battery. The submission of simple assault was error without prejudice to the defendant. The defendant cannot complain because the court allowed the jury to find a verdict in his favor which the evidence fails to justify. One cannot read the record without reaching the conclusion that whatever was done by the defendant was with the consent of the prosecutrix. She could lawfully consent to such acts as without her consent would constitute simple assault and assault and battery. See State v.Roby, 194 Iowa 1032. Had the defendant been charged solely with the crime of assault and battery, it would have been the duty of the trial court to direct a verdict in his favor. See State v.Hoaglin, supra. Under the evidence in this case, the crime was voluntary on the part of the prosecutrix, and the court would have been justified in not submitting any included offense other than assault with intent to commit rape. See State v. Hoaglin,
supra; State v. Herrington, 147 Iowa 636; State v. Stevens,133 Iowa 684; State v. King, 117 Iowa 484.
Under the record in this case, the defendant was guilty of either rape or assault with intent to commit rape, or not guilty at all. We find no prejudicial error. — Affirmed.
ALBERT, C.J., and De GRAFF, KINDIG, and WAGNER, JJ., concur.
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https://www.courtlistener.com/api/rest/v3/opinions/3433275/
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The defendant, Bert Johnson, was indicted for the crime of first degree murder committed on his father, Elmer Johnson, on the 31st day of December, 1935. Briefly stated, the facts connected with the crime charged are substantially as follows: The deceased, Elmer Johnson, lived with his wife, Frieda Johnson, and his son, Bert Johnson, on a farm operated by him and his son, about eight or nine miles west of Clarinda, in Page county. This farm was situated something more than a mile south of paved highway No. 3, which runs westward from Clarinda to Shenandoah, and between the paved highway and the Johnson farm there was an ordinary dirt road. On December 31, 1935, the deceased and his son, Bert Johnson, left their home in a Ford automobile, with a stock trailer attached, and proceeded to Maryville, Mo., for the purpose of attending a stock sale. No purchase was made at the sale and toward evening they started to return to their home. Their route home was by way of Clarinda where they stopped and visited a few minutes with another son of Elmer Johnson and then spent some time in two different beer taverns. Sometime between seven and eight o'clock in the evening, the Johnsons started westward from Clarinda on their way home, traveling westward on paved highway No. 3 until they reached the dirt road leading from the pavement to their home. They turned southward on this road and had proceeded between 400 and 500 feet when they came to a hill which they were not able to ascend, *Page 964
because it had rained some during the day and the dirt road was slippery. After the son, Bert Johnson, who had been driving, had tried unsuccessfully to get up the hill, he got out of the automobile and tried to push, while his father took the steering wheel. Instead of being able to get up the hill, the automobile and trailer slipped around until they went off the traveled part of the road into a shallow ditch on the west side thereof. During this time Elmer Johnson began to curse his son, called him vile names, said it was his fault, and said he would kill him. The son then said that he would go home and get a team and pull the automobile and trailer out of the ditch. Bert Johnson proceeded home and arrived there sometime between eight and nine o'clock. He harnessed up a team and hitched it to a low wagon, with flat-rimmed steel wheels, on which there was a box with sideboards and front endgate but no rear endgate. While at home he got a flashlight off a table and took a double-barreled shotgun and three shells from the pantry. While in the house he told his mother that his father had another one of his spells, that the automobile and trailer were in the ditch, and that he was taking the team and wagon to go to the place where they were and try to pull them out, and his mother said that she would accompany him. While at home Bert Johnson put two of the shells that he had taken from the pantry in the shotgun and put the other shell in the right pocket of his overalls. He procured a log chain from a granary, and he and his mother, both standing up in the wagon in which there was no seat, then proceeded toward the place where the automobile and trailer were stalled in the ditch.
While Bert Johnson was on his trip home to get the team and wagon, his father, Elmer Johnson, went to the home of a man named Henry Lawson, who lived on the south side of the paved highway about 40 rods east of its intersection with the dirt road leading to the Johnson home, and asked Mr. Lawson if he and his son would help get the car and trailer out of the ditch. Lawson and his son went with Elmer Johnson to the place where the car and trailer were in the ditch, and Eugene Lawson, the son, found that the ground cable to the battery of the car had become loose and he tried to fix it. He was able, however, to move the car only a few feet and was not able to get either the car or the trailer out of the ditch. About this time, the wagon in which Bert Johnson and his mother were riding *Page 965
approached from the south. As they came toward the place where the car and trailer were located, they did not stop, but proceeded northward to the intersection of the road with the paved highway, in order to make the turn, so that they would be facing southward toward their home. As they went past the place where the automobile and the trailer were in the ditch, Elmer Johnson had an automobile crank in his hand and in a loud voice he threatened to kill his son, Bert, at the same time calling him a vile name. As he did so, he approached the wagon from the west or left side of the road, in an apparent attempt to get into it, but slipped and fell in the mud. Mr. Lawson and his son remonstrated with Elmer Johnson and then proceeded to follow the wagon toward the paved highway on their way home. After the wagon had been turned around at or near the intersection of the dirt road with the paved highway, it proceeded southward toward the place where the car and trailer were in the ditch. As it approached this place, Elmer Johnson came toward it with the automobile crank in his hand, called the son vile names, and again threatened to kill him. Omitting, at this point, the details shown by the evidence, we confine ourselves to the statement that, while the wagon, in which Bert and his mother were standing up, was passing the place where the automobile and trailer were in the ditch, Bert Johnson discharged the two shells that were in the shotgun into the body of his father, then placed the other shell in the gun and discharged it into the head of his father, who was then lying down or in a squatting position on the road. The wagon was then driven a short distance southward to the top of the hill, where it was again turned around toward the north, and, with Bert and his mother standing up in it, proceeded northward past the place where Elmer Johnson was lying on the left or west side of the road, onto the paved highway, and east thereon to the Lawson home, where Bert Johnson told Mr. Lawson what had happened. Mr. Lawson immediately called the sheriff, who arrived at the Lawson home a short time thereafter, accompanied by two other men, Hoskins and Gray. They were told what happened and the sheriff and his two companions and Bert Johnson proceeded to the place where the automobile and trailer were stalled. They there found the dead body of Elmer Johnson lying at the west side of the road, his head toward the northwest and his feet toward the southeast. While waiting in the sheriff's car for the *Page 966
coroner to arrive, Bert Johnson told the sheriff, in the presence of Hoskins and Gray, how the shooting occurred.
Bert Johnson was arrested and taken to Clarinda, and later that same night he signed a written statement, in the presence of the sheriff, the county attorney, Max Gray, and J.E. Davidson. He was thereafter indicted and, upon the trial of the case, he was found guilty of the crime of manslaughter. A motion for new trial and exceptions to instructions were filed by the defendant and overruled by the court, and judgment was entered on the verdict rendered. From this judgment, and from all rulings of the trial court, the defendant appealed.
The record in this case is voluminous, and the briefs and arguments of both appellant and appellee are quite extensive. Appellant sets out seven separate allegations of error upon which he relies for a reversal. It is impossible to discuss in detail the conflicting contentions of appellant and appellee in reference to these alleged errors, and we necessarily confine our opinion to a consideration of the essential propositions involved.
[1] I. Appellant's first alleged ground of error is that the court erred in overruling the first ground of defendant's motion for a directed verdict, made at the close of the State's evidence, and renewed at the close of all the evidence. The portion of said motion which is here involved is as follows:
"The evidence utterly fails to meet the burden required by law of the State to negative the essential and necessary allegations of an indictment of this character charging this crime of self-defense, but on the other hand the evidence as produced in this case affirmatively shows the act was done in self-defense, anyway it is not negatived as required by law."
We confess that we have some difficulty in determining just what is meant by this ground of the motion, but we think that its meaning may be gathered from the brief points and argument in which it is contended that, — "If the State's case fails to show that the alleged slaying was not in self-defense, or in defense of another, the accused is entitled to a directed verdict of acquittal."
Conceding the rule to be, as claimed by appellant, that the burden was on the State to prove beyond a reasonable doubt, not only that the death of the decedent was caused by the act of the defendant, but also that such act of the defendant was criminal *Page 967
and was not justifiable or excusable on the ground of self-defense, we think there was ample evidence in the record from which the jury could find that the State had sustained the burden thus imposed upon it. As stated in 30 C.J., 43:
"There are four recognized elements of self-defense as a justification or excuse for a homicide: (1) The slayer must not be the aggressor or provoke the difficulty which results in the killing; (2) as a general rule he must retreat as far as he reasonably and safely can before taking his adversary's life; (3) he must actually and honestly believe that he is in imminent danger of death, great bodily harm, or some felony, and that there is a necessity to kill in order to save himself therefrom; (4) and he must have reasonable grounds for such belief. The acts which accused may do and justify under a plea of self-defense depend primarily upon his own conduct and secondarily upon the conduct of the deceased. That is, in order that the plea of self-defense may be available, it must appear that accused did not provoke the difficulty and that he performed his duty under the circumstances to resort to all available means of escape or retreat; and where it appears that he was without fault up to the time of the homicide it then remains to determine from all the circumstances whether the conduct of deceased preceding and at the time of the killing was sufficient to justify accused in an honest belief as a reasonable man that he was in imminent danger of death or great bodily harm."
See, also, Wharton on Homicide (3d Ed.), section 223.
The evidence in this case was such that the jury could have found therefrom that the killing of Elmer Johnson by defendant was not done in self-defense or in defense of his mother, and could have found beyond a reasonable doubt that the defendant was guilty of the crime of which he was convicted. Not only were the statements made, at the scene of the crime, by the defendant to the sheriff and the two other persons who accompanied him, sufficient to negative the claim of self-defense, but, even the testimony of the defendant himself and of his mother, as to the acts of the defendant and the circumstances preceding and at the time of the shooting, could be considered by the jury as leading to a conclusion quite different from that contended for by appellant. The jury were the sole judges of the credibility of the witnesses and the weight they would give to the testimony *Page 968
of each of the witnesses, and the court cannot interfere with the jury's finding if there is a sufficient basis in the evidence to support it. There was ample evidence as to defendant's own statement to the sheriff and the two other witnesses who accompanied him from which the jury could have found that the shooting was not in self-defense. The defendant's own evidence, as to his position in the wagon, the location of the gun in the wagon, the distance between him and the deceased, the manner in which he claimed to have fired the first two shots, his reloading the gun and firing a third shot, was such that, when contrasted with the explanation of the shooting given by him to the sheriff and his two companions, and with other undisputed facts, such as the position of the body after the shooting and the location of the wounds on the body, the jury might have cause to disbelieve it. We find no merit in appellant's contention that the evidence was not sufficient to support the verdict rendered.
[2] II. The second ground upon which the appellant asks for a reversal is, that the trial court failed to specifically instruct the jury as to the weight, importance, definition, interpretation, meaning and effect of impeachment, as applied to the defendant, who testified as a witness for himself. In connection with the cross-examination of the defendant, when on the witness stand, he was questioned as to contradictory and inconsistent statements made by him in a written instrument which was signed by him in the presence of the sheriff, county attorney and two other persons, either late on the night of December 31, 1935, or early in the morning of January 1, 1936. This instrument was signed by the defendant and was offered in evidence by the State, but was allowed to be introduced only for the single purpose of the impeachment of the defendant as a witness. The trial court gave an instruction in reference to this instrument, in which the jury was told that, "This evidence was admitted solely upon the question of impeaching him as a witness. That is, such evidence may be considered by you as reflecting upon his credibility as a witness in this case, and for no other purpose whatsoever. You may give it such weight as you deem it justly entitled to and none other."
In State v. Brandenberger, 151 Iowa 197, loc. cit. 205,130 N.W. 1065, 1068, where complaint was made because the trial court did not give any instruction as to previous good character, this court, in refusing to reverse on that account, said: *Page 969
"Now, while it is the duty of the court in a criminal case to fairly present the issues in its charge to the jury in order that they may have a clear and intelligent notion as to what they are to decide, yet it is not necessary that the court on its own motion instruct upon every matter arising in the case. While mere failure to instruct may constitute reversible error, if it should be apparent that this failure resulted in depriving defendant of a fair trial, yet, where the instructions given are correct as far as they go, the defendant should, if he desires further instructions, ask them, or he will not be heard to complain." (Citing cases.)
In the instant case, there was an instruction in regard to the evidence as to impeachment. After referring to the signed statement of the defendant, which was introduced, and to other statements against his interest, alleged to have been made by him, the instruction told the jury that this evidence was introduced solely for the purpose of impeaching the defendant as a witness, and explained the meaning of impeachment by further telling the jury: "That is, such evidence may be considered by you as reflecting upon his credibility as a witness in this case, and for no other purpose whatsoever." No request was made for any further instruction in regard to the instrument introduced or in regard to the question of impeachment. We think that, with the explanation given by the court in its instruction, the jury would have understood the purpose of the introduction of the written statement and the meaning of the word impeachment. Had the defendant desired a further and more detailed instruction in regard to these matters, he should have asked for it. In the absence of such request, we find no reversible error on the part of the trial court.
[3] III. Complaint is made that the trial court did not instruct the jury in regard to the right of the defendant to defend his mother from a felonious attack by the deceased. Attention is called to the 12th instruction, which referred to murder in the first degree, to the 14th instruction, which referred to murder in the second degree, and to the 16th instruction, which referred to manslaughter, in each of which the jury was told, among other things, that, before they could find the defendant guilty, the State must show: "That said killing of said Elmer Johnson was not done by the said defendant in lawful *Page 970
self-defense under the rules hereinafter given you." In neither of these instructions was any express reference made to the defendant's right to kill deceased in defense of his mother, and the claim is made that, by omitting any reference to his right to defend his mother, the defendant was seriously prejudiced. Without passing on the question, we think there may be at least some doubt whether the facts in evidence in this case were such that the defendant could be found therefrom to have killed his father in defense of his mother. But, assuming that the facts were such as to make this a proper matter for instruction, we think it sufficient to say that the court, in each of the instructions above referred to, directed the jury's attention to "lawful self-defense under the rules hereinafter given you."
(Italics are ours.) In instruction 19, which dealt specifically with the matter of self-defense, the jury was told that "the defendant had the same right to do everything in the protection of his mother that he could lawfully do in protection of himself," and, in instructions 20 and 21, which also dealt with the doctrine of self-defense, the same thought was clearly stated. We think the instructions concerning which complaint is made were such that, when taken in connection with instructions 19, 20 and 21, the jury was told and would readily understand that, if the killing was done in defense of his mother, the defendant could not be found guilty.
[4] IV. It is alleged that the court erred in failing to fully and carefully instruct the jury that the defendant had a right to take into consideration and to justify his suddenness in his act of self-defense and in defense of his mother, because of his knowledge of the insanity and insane spells to which his father was subject, and which he was having at the time of the shooting by the defendant. Not only instructions 19, 20 and 21, already referred to, but also instructions 22, 22 1/2 and 23, explained very comprehensively the doctrine of self-defense and its application to the facts of this case.
Certainly, the appellant was allowed great latitude in introducing, not only evidence as to the violent and quarrelsome disposition of the deceased, but also evidence as to specific instances of threats and assaults made by the deceased upon the defendant and his mother. In instruction 22 1/2 the court told the jury that: "In determining upon whether or not the said Bert Johnson acted at the time in question as a reasonably cautious *Page 971
and prudent person would under like or similar circumstances, you should consider all the facts and circumstances surrounding such act. You should consider the matter in the light of his belief ofthe necessity of his acts rather than on the fact of suchnecessity." (Italics are ours.) In instruction 23 the jury's attention was specifically called to the evidence in regard to the acts of violence and threats and bad treatment by Elmer Johnson of the defendant and his mother, and to his quarrelsome and vicious disposition and insanity, and the jury was told that: "This evidence was admitted because you should consider it in determining whether or not the defendant was afraid of the saidElmer Johnson, and was in apprehension of danger from thedeceased for his own life or that of his mother, or whether or not he stood in fear of great bodily injury to himself or his mother from the said Elmer Johnson at the time he fired the said shot or shots." (Italics are ours.)
We think the appellant's rights in regard to the matters herein complained of were fully protected by the instructions given by the court. However, had the defendant required further instructions along this line, he should have requested the same.
[5] V. The appellant complains of the court's failure to instruct the jury that the defendant had a right to be on the public highway with his mother at the time of the shooting; that he was not trespassing and was not in any place where he was forbidden, and claims that, because no such instruction was given, the court was guilty of error which was prejudicial to the defendant. We think the objection here presented is hyper-critical, and that the instruction which the appellant contends should have been given was in no way called for by the evidence in the case. The right of the appellant to defend both himself and his mother from the attack which he claims was made upon them was fully explained to the jury in the instructions given in regard to self-defense. Defendant cites and seems to rely on a statement found in the opinion in State v. Borwick,193 Iowa 639, 187 N.W. 460. The point involved in that case was the trial court's refusal to give an instruction that the defendant had a right to defend the passengers and guests in his car, as well as himself, from the assault made, and the case was reversed for that reason. There is nothing in that case which holds that, because a party is assailed on a public highway, he is at liberty to *Page 972
kill his assailant without regard to the law governing self-defense. Moreover, no request was made for any such instruction. We find no error on the ground here alleged.
[6] VI. Complaint is made of the court's failure to instruct the jury as to the importance and effect, in a murder case, as to who was the first assailant. In its instructions 19 to 26, inclusive, the court, in our opinion, quite fully and fairly instructed the jury in regard to every phase of the doctrine of self-defense, as applicable to the facts of this case. From these instructions the jury could and would easily understand that one who was assailed would have the right to defend himself, even to the extent of taking the life of the assailant under the rules laid down in these instructions. No specific complaint is made as to the incorrectness of any of the rules laid down in the court's instructions; the matter complained of was considered in these instructions; and no request was made for any further instruction along these lines. We find no error as to the matter concerning which complaint is here made.
[7] VII. Finally, complaint is made that the State's assistant counsel, in his closing argument to the jury, over the objection of the defendant, made a clear misstatement of the record on a vitally important subject, and that this constituted prejudicial misconduct on the part of counsel for the state. The misstatement which it is alleged was made was:
"That Frieda Johnson was asked what the said Bert Johnson said when he came home and she stated that he said Elmer (or his father) had another one of his spells and he was going to kill him."
Appellant alleges in argument that this "was not a correct statement of the testimony of the said Frieda Johnson, that her testimony was that Bert Johnson had said that Elmer Johnson was going to kill him, Bert Johnson, and called the said Frieda Johnson in which she stated that when Bert Johnson came home he said in substance that Elmer Johnson was going to kill him — Bert Johnson." It is true that the testimony of Mrs. Johnson contained the statements substantially as alleged by appellant. It is also true, however, that the appellant's abstract of record shows that Frieda Johnson was called as a witness for the State and that, on direct examination, in testifying to what was said *Page 973
by Bert Johnson when he came into the house and got the gun, she stated:
"I asked him what he was going to do with the gun, and he said that Elmer was up the road and had said he was going to kill him and that he had one of those spells again."
The appellant also filed an additional abstract which sets out what occurred when the assistant counsel for the State was making his closing argument. From such additional abstract the following appears:
"I want you to read what Mrs. Johnson testified to and I do all this in all fairness because I don't want to misstate one word.
"Q. Mrs. Johnson well now how long have you gone out of the house before you saw him again? A. When I went out of the house I asked him what he was going to do with the gun, he said Elmer was up the road and he said he was going to kill him.
"Mr. Stephens: We except to the statement of counsel Your Honor.
"The Court: That is their argument that it is in the record.
"Defendant excepts.
"And she told him she was going with him. Does that give this jury any idea of what this case is about, does that suggest to you anything about that a murder was to be committed that night?
"Mr. Stephens: We except to the statement of counsel that Mrs. Johnson testified that Bert Johnson said he was going to kill Elmer Johnson as not the facts in this record. On the other hand the statement of Mrs. Johnson was that Bert Johnson said to her that Elmer was having another spell and told him that he was going to kill him, Bert Johnson. That is the record.
"Mr. Davidson: Let the record show I had the reporter run this off and I read it from the record, I make the statement that this is what this woman testified to."
The appellant has not denied that this evidence appears in his own abstract and amendment to abstract; and he has not alleged that there is any mistake in either the abstract or amendment to abstract, or that the quotations from Frieda Johnson's testimony are not correct. In this situation, the statement appearing in the testimony of Mrs. Johnson, as shown by the abstract and amendment to abstract, must be taken as having been *Page 974
made by her, even though it may be inconsistent with or contradictory to statements made by her in other parts of her testimony. It must be admitted that the statement of Mrs. Johnson, which is here under consideration, is such that an interpretation might be given to it that differs quite radically from that placed upon it by the appellee. However, we do not think that we can say that the interpretation placed upon this statement by appellee is clearly wrong, or that the appellee had no right to draw therefrom the inference for which he contended in argument.
On the whole case, the record indicates that the appellant had a fair and impartial trial, and, as we find no error in the judgment or rulings of the trial court, they are, therefore, affirmed. — Affirmed.
RICHARDS, C.J., and ANDERSON, KINTZINGER, PARSONS, HAMILTON, STIGER, and SAGER, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433276/
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The defendant was indicted by the grand jury of Polk County, Iowa, for the third offense: operating a motor vehicle while intoxicated. He entered a plea of not guilty but upon trial was convicted. From the sentence imposed he has appealed to this court.
The case comes to this court on a clerk's transcript, together with the defendant's motion for a new trial, the instructions of *Page 275
the court, and the shorthand reporter's transcribed notes. No argument, either oral or written, was made by either party.
The appeal having been taken by the defendant herein, it becomes our duty under the statute to examine the record without regard for 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, Code of Iowa, 1939.
I. Various questions have been raised by the defendant in his motion to set aside the verdict and reverse the judgment of the lower court. All of these have been considered and we find it necessary to pass upon but four of them. These questions are (1) the verdict was contrary to the law and the evidence (2) identity of the defendant as related to the claim of the State that he had two prior convictions for the crime of operating a motor vehicle while intoxicated (3) errors in various instructions and (4) the failure of the court to submit to the jury proper forms of verdict.
The indictment charged the defendant with the crime of operating a motor vehicle while intoxicated and further that this was a third offense for so operating a motor vehicle. Therein it was charged that on two prior occasions, in Polk County, Iowa, to wit, November 24, 1941, and January 31, 1944, said defendant in the district court of said county had entered a plea of guilty to that charge and received a sentence in each case.
The indictment was based upon section 5022.02, Code of 1939, which is as follows:
"Operating while intoxicated. Whoever, while in an intoxicated condition or under influence of narcotic drugs, operates a motor vehicle upon the public highways of this state, shall, upon conviction or a plea of guilty, be punished, for the first offense by a fine of not less than three hundred dollars nor more than one thousand dollars, or by imprisonment in the county jail for a period of not to exceed one year, or by both such fine and imprisonment; for the second offense by a fine of not less than five hundred dollars, nor more than one thousand dollars, or by imprisonment in the penitentiary for a period of not to exceed one year, or by both such fine and imprisonment; *Page 276
and for a third offense by imprisonment in the penitentiary for a period not to exceed three years."
II. The defendant questioned the sufficiency of the evidence to convict him of the crime of operating a motor vehicle while intoxicated. We have examined the transcript of the evidence and hold that there was ample evidence in the record to warrant the court in submitting that issue to the jury. There was a conflict in such evidence and it was proper for the jury to pass thereon.
Defendant in his motion for a directed verdict, and later for a new trial, makes the claim that the evidence as to prior convictions was so lacking that such allegations should not have been submitted to the jury. We have examined the transcript of the evidence and are of the opinion that this claim is without merit. The court records showing convictions of Claude Lowe on the dates set forth in the indictment were offered in evidence. There was other evidence that the defendant was one and the same person as the Claude Lowe named in the prior convictions. The evidence included statements made by the defendant himself that he had been previously convicted for the offense of operating a motor vehicle while intoxicated. When asked as a witness whether he had ever been convicted of a felony he answered that, if a conviction for operating an automobile while intoxicated was a felony, he had been. We think that there was ample evidence in the record to warrant the court in submitting that matter to the jury. See State ex rel. Hammond v. Franklin, 215 Iowa 384,245 N.W. 283.
III. Defendant in his motion for a new trial claims that the trial court erred in submitting to the jury but two forms of verdict. Form No. 1 is as follows:
"We, the jury, find the defendant, Claude Lowe, guilty of operating a motor vehicle while intoxicated, and we find that he has been twice heretofore convicted, and that he is guilty of the third offense as charged in the indictment."
Form No. 2 is as follows:
"We, the jury, find the defendant, Claude Lowe, not guilty." *Page 277
The jury rendered a verdict using form No. 1, thereby finding the defendant guilty.
The transcript showing the judgment entry of the presiding judge in overruling the motion for a new trial and referring to prior convictions is as follows:
"That said record conclusively shows the first and second convictions of driving while intoxicated, and identity is established, and the court takes judicial notice of the same."
[1] Under the statute prior convictions are included in the offense, and the indictment, in the charging part thereof, designated and described two prior convictions for a similar offense, to wit, operating a motor vehicle while intoxicated.
This language of the court seems to indicate that the court could take judicial notice of the two prior convictions and that the jury need not pass directly thereon. Under our holdings the matter of former convictions is for the jury, and the court is not authorized to take judicial notice obviating such a finding.
It is a rule of law in this state and in other jurisdictions that where prior convictions are charged in the indictment they are considered a part of the offense and must be proved beyond a reasonable doubt the same as any other material allegation. State v. Parsons, 206 Iowa 390, 220 N.W. 328; State v. Smith, 129 Iowa 709,106 N.W. 187, 4 L.R.A., N.S., 539, 6 Ann. Cas. 1023; State v. McCarty, 210 Iowa 173, 230 N.W. 379; People v. Reese, 258 N.Y. 89, 179 N.E. 305, 79 A.L.R. 1329, 1337.
[2] Defendant's claim in regard to this matter is that the court should have submitted to the jury forms of verdict so that the jury could have found the defendant guilty of the crime charged in the indictment; also, of any lesser offense included therein, to wit, operating a motor vehicle while intoxicated, operating a motor vehicle with one prior conviction, and operating a motor vehicle with two prior convictions, and that its failure to do so was error. The defendant's claim is that the court, in submitting but one form of verdict as to the guilt of the defendant, in effect told the jury that there could be no conviction for any other offense contained in the indictment.
An examination of the record and the authorities bearing *Page 278
thereon leads us to hold that there is merit to the claim made by defendant. The forms of verdict given the jury afforded them no opportunity to determine separately whether or not the State had shown the prior convictions beyond a reasonable doubt.
The statute does not provide the method of submitting the matter of prior convictions to the jury. In some cases that matter has been handled by submitting special interrogatories to the jury on the question of prior convictions. State v. McCarty, supra. Such interrogatories would, in effect, be the equivalent of a form of verdict, especially as applied to former convictions. We are of the opinion that the court should have submitted to the jury forms of verdict wherein they might find the defendant guilty of operating a motor vehicle for the first, second, and third offenses; also, one finding the defendant not guilty.
The matter of prior convictions necessarily includes the identity of the defendant as the person formerly convicted. State v. Parsons, supra. In that case the defendant was charged with the crime of bootlegging and the indictment alleged that the defendant had prior convictions for violating the liquor law. The statute under which the defendant was indicted and tried provides punishment for the first, second, and subsequent convictions of a violation of such law. There, as here, the jury found the defendant guilty. In dealing with the matter of prior convictions of the defendant, the court quoted from the Smith case the following:
"`By the uniform current of authority, the fact of the prior convictions is to be taken as part of the offense instantly charged, at least to the extent of aggravating it and authorizing an increased punishment.' State v. Smith, 129 Iowa 709 [713], (4 L.R.A. [N.S.] 539, 6 Ann. Cas. 1023)."
Following the above, the court said:
"Defendant's plea of not guilty puts in issue not only all matters of fact essential to the crime charged, but the fact of the alleged former conviction of the defendant. In a sense, there were two issues: (1) not guilty to the crime of bootlegging, as *Page 279
set forth in the indictment, and (2) not guilty to the alleged prior conviction of the liquor law of this state." State v. Parsons, 206 Iowa 390, 393, 220 N.W. 328, 329.
In the case of State v. Smith, supra, the defendant was indicted for the crime of burglary (larceny) and the indictment alleged that defendant had prior convictions for the same offense. In that case the court held that the statute requires a special finding at the hands of the jury as to the fact of such former convictions and the number thereof.
The statute under which the defendant was convicted in that case, aside from the nature of the offense charged, is similar to the one under which the defendant was charged in the present case. The force of the holding in that case is that the former convictions, when charged, are a part of the offense and that such former convictions must be specially found by the jury.
In the Parsons case, the court, in discussing the matter of the former convictions and the necessity of submitting the matter to the jury, used the following language:
"In the instant case, there was no special finding or form of verdict submitted to the jury with respect to the issue of former conviction. It is the rule of better practice for a trial court to so submit specially the issue of former conviction to the jury, under such circumstances, as it is quite apparent that a defendant could be convicted by the jury on the primary charge in the indictment on evidence independent of and not referable to the issue of former conviction. In a strict legal sense, within the purview of the statute (section 1964) the former conviction is not germane to the primary issue, but relates to the penalty to be imposed by virtue of a prior conviction. The matter, however, is an issue joined on the indictment by the plea of not guilty. The views herein expressed necessitate a new trial and a remand of the cause."
In that case the defendant was indicted for bootlegging and therein it was charged that there had been prior convictions. In discussing the case, this court quoted from its decisions which held that the prior convictions would enhance or increase the penalty, and therein referred to the holding in State v. Smith, *Page 280
dealing with the identity of the person charged and former convictions. We quote from the opinion in the Parsons case, at page 394 of 206 Iowa, page 330 of 220 N.W., the following:
"The identity of the defendant as the person who suffered such former convictions remains to be proven. We grant that the identity of names may be some evidence of the identity of persons; but, standing alone, it is not enough. Every fact essential to the infliction of legal punishment upon a human being must be proven beyond a reasonable doubt. * * * The matter for the jury to determine is the historical fact involved in the charge, and this they must determine as any other fact in the case."
See, also, State v. Logli, 204 Iowa 116, 214 N.W. 490; State v. Merkin, 198 Iowa 900, 200 N.W. 437; State v. Lambertti, 204 Iowa 670,215 N.W. 752; State v. Bergman, 208 Iowa 811, 225 N.W. 852.
It is our conclusion that the court erred in failing to give the jury proper forms of verdict in order to enable it to deal specifically with the charge of former convictions. Had the jury been afforded this opportunity it could have found that either or both of the alleged prior convictions had not been established beyond a reasonable doubt and in such case could have returned a verdict finding the defendant guilty simply of driving a car while intoxicated or that of not guilty.
Other matters were urged as error in the motion to set aside the verdict and grant a new trial. We find that they are without merit.
The error in failing to give the proper forms of verdict necessitates a reversal of the case, and same is reversed and remanded. — Reversed and remanded.
All JUSTICES concur. *Page 281
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433278/
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This is an action by the grantee against the vendor, to recover a sum paid to vendor as insurance for the loss of a dwelling house by fire upon premises sold on contract, between the date thereof and its final consummation. The case was tried in equity upon an agreed statement of facts. *Page 45
Before the time for the completion of the sale by the execution of a deed, the plaintiff, by contract in writing, agreed to convey the farm to J.T. Walton, who has intervened herein, claiming the benefit of the insurance. It appears from the stipulated facts that, on June 2, 1919, a contract in writing was entered into between Brady and Welsh for the purchase by the former of a farm of 160 acres in Buchanan County. Settlement under the contract was had, and possession given, on March 1, 1920. On June 19, 1919, Brady entered into a separate contract with intervener, agreeing to convey the property to him, which contract was also to be consummated March 1, 1920. On or about November 15, 1919, the dwelling house was totally destroyed by fire. At the time the contract was entered into, the building was insured in the name of appellee in the Farmers' Mutual Fire Insurance Company of Black Hawk County. On January 20, 1920, $1,000 was paid on this policy to appellee, which he still retains. Brady, on March 1, 1920, paid appellee the purchase price agreed upon for the farm in full; and this action is to recover the insurance paid.
The conflicting theories of respective counsel are each supported by authority, appellee contending that the theory advanced by him has already been adopted by this court. He contends, — and such appears to have been the view of the trial court, — that the contract of insurance was a mere personal contract between the insurer and the insured for his own benefit, and that upon no theory has appellant any interest therein, and that thereafter the proceeds of the policy belonged exclusively to him; whereas it is the view of counsel for appellant that, as the equitable title to the premises, upon the execution of the contract, passed immediately to the purchaser, the legal title being retained by appellee merely as security for the payment of the purchase price, the loss of the building fell upon appellant, and that, having paid the full purchase price, appellee holds the proceeds of the insurance as trustee only, and that appellant is now entitled to recover the same in this action.
It is the rule in England, and in a few jurisdictions in this country, that a contract of insurance, being one of indemnity, is personal between the insurer and the insured, and that the amount paid for a loss thereunder belongs solely to the vendor, *Page 46
and that the vendee has no interest therein. 27 Ruling Case Law 560; 2 May on Insurance (3d Ed.), Section 450; King v. Preston,
11 La. Ann. 95. See, also, 26 Corpus Juris 351, Section 450. The great weight of authority in this country, however, favors the view for which appellant contends. The rule is well stated in 27 Ruling Case Law 559; 39 Cyc. 1644; 1 Warvelle on Vendors (2d Ed.), Section 193; 5 Joyce on Insurance (2d Ed.), Section 3569. The following cases are in point: Skinner Sons' Ship-building D.D. Co. v. Houghton, 92 Md. 68 (48 A. 85); Williams v.Lilley, 67 Conn. 50 (34 A. 765); Kaufman v. All Persons,16 Cal.App. 388 (117 P. 586); Brownell v. Board of Education, 123 Misc. (N.Y.) 64 (204 N.Y. Supp. 150); Smith v. Phoenix Ins. Co.,91 Cal. 323 (27 P. 738); Phinizy v. Guernsey, 111 Ga. 346
(36 S.E. 796); Millville Aerie No. 1836 F.O. of E. v. Weatherby,82 N.J. Eq. 455 (88 A. 847); Baker v. Rushford, 91 Vt. 495
(101 A. 769); Reed v. Lukens, 44 Pa. St. 200; Brakhage v. Tracy,13 S.D. 343 (83 N.W. 363).
Possibly in a few of the above cases the court's decision was influenced, to some extent, by the terms of the contract considered; but in each of them the doctrine stated is recognized with approval.
There can be no question, under all of the authorities, but that both the vendor and the vendee in a contract of sale by the terms of which the equitable title passes to the vendee, have an insurable interest in the property. Depreciation in the value thereof, whether by reason of fire which consumes the buildings or by other causes, must be borne by the vendee; likewise, any appreciation in value of the property belongs to him. The only loss suffered by appellee herein was such depreciation in his security as resulted from the destruction of the building by fire. He has been paid the full purchase price of the farm, and, if permitted to retain the money received by him as insurance, he will profit to that extent. The rule that the vendor who receives insurance money paid to him in settlement of the loss of a building by fire upon premises sold by him under an executory contract to convey after full payment of the purchase price, holds and retains the same as trustee for the vendee, is a wholesome one, and tends to effect justice between the parties. *Page 47
The contention of appellee that this court has already adopted the English rule is based upon what is said in Ayres v. HartfordF. Ins. Co., 17 Iowa 176; Simeral v. Dubuque Mut. F. Ins. Co.,18 Iowa 319; Merrett v. Farmers' Ins. Co., 42 Iowa 11; and Davidsonv. Hawkeye Ins. Co., 71 Iowa 532.
In each of the above cases, the insured, or the assignee of the policy, sued the insurer on the policy for the loss. In none of them was the doctrine of the English court involved or discussed. The defense in Ayres v. Hartford F. Ins. Co., supra, was that the conditions and stipulations of the policy had been breached by a sale or transfer of the title to the property. Aside from the mere statement that a contract of insurance is a personal one, not running with the land, and that the insured must have an interest in the property destroyed, at the time of the loss, there is nothing in the decision of the court in any way applicable to the point before us. It is, of course, elementary that there can be valid insurance in favor only of one who has an insurable interest in the property. The same doctrine is declared in Simeral v. Dubuque Mut. F. Ins. Co., supra, the court holding that a contract of insurance is a personal contract with the assured; and that the right of recovery does not pass to his assignee unless the insurer has given its consent to the assignment.
The only portion of the opinion of the court in Merrett v.Farmers' Ins. Co., supra, which can have the slightest bearing upon the question before us is the discussion of the question as to what constitutes an insurable interest.
Davidson v. Hawkeye Ins. Co., supra, is authority for our holding in O'Brien v. Paulsen, 192 Iowa 1351, that, under an executory contract to convey, a loss by fire of a building upon the premises must be borne by the vendee. This holding is, of course, in harmony with the majority rule on the subject. The real question, however, involved in the Davidson case was whether the policy was forfeited by the contract of the insured for the sale of the property without the written consent of the insurer, in violation of the specific terms of the policy. The court held that, as the equitable title passed to the purchaser, and as the consent of the insurer to the assignment had not been *Page 48
obtained, the policy was forfeited. In discussing this question, the writer of the opinion said:
"Now, it is not to be denied that any vendor of real estate who has not received full payment, and retains the legal title for security, has an insurable interest. But it does not follow, we think, that there cannot be a sale of real estate where the legal title has not been conveyed, and a part of the purchase money remains unpaid. The very theory that the vendor who retains the legal title, with a right to enforce the payments of the purchase money, holds the legal title for security, is based upon the idea that there has been a sale; and in such cases it is manifest that a loss by fire must fall upon the purchaser as owner, and affects the seller only as it impairs his security. The seller may, indeed, have an insurable interest, but his interest is substantially that of a mortgagee, which is quite different from a proprietary interest. Different rates are charged; and in case of the insurance of a mortgage interest, and payment to the mortgagee of a loss, a right of subrogation accrues to the company to the extent of the amount paid. The law will not allow an insured mortgagee to be subjected to the temptation that he would be subjected to if he had a right to collect his insurance, and at the same time to collect and hold his whole mortgage debt besides. There is a fundamental and vicious error in the doctrine contended for by the plaintiff. He would collect the insurance upon the theory that there has been no sale, and would collect his purchase money upon a theory which is just the reverse. If the doctrine for which he contends is correct, he would be able to collect the full amount of his policy, though only a single dollar of the purchase money remained unpaid."
The illustration given proceeds on the theory that the result would be as assumed, but the point was neither involved nor decided. The language quoted was argumentative only. The question that must be decided upon this appeal, so far as anything is disclosed by the record in that case, was never even suggested to any member of the court. It is true that the Davidson case has been cited by a few courts, and by text-writers generally, as upholding the English rule. If it does in any respect do so, it is by the merest inference. Every case must be read with especial reference to the questions involved *Page 49
and necessary to be decided. If the point had been involved in the Davidson case, even though not decisive thereof or decided therein, the language quoted might well be understood as a correct expression of the attitude of the court, as then constituted, upon the proposition. Even this would not make it binding upon the court as a precedent. When, therefore, the opinion is read with a clear understanding of the questions involved and decided, it by no means approves the English doctrine. Both reason and the great weight of authority sustain the opposite rule. We are, therefore, without further discussion, disposed to follow it.
The order of the court below dismissing the petition of intervention is, accordingly, reversed, and the cause remanded, with directions that judgment be entered in his favor in harmony with this opinion. — Reversed and remanded.
FAVILLE, C.J., and De GRAFF and VERMILION, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433424/
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Defendant Arthur Lund is an attorney at law and during the times in controversy was acting as attorney and advisor of plaintiff's ward, John W. Reeder. Reeder was at the time of the trial, June or July, 1929, about 93 years of age. Plaintiffs base their suit upon allegations of mental incompetency and of express and implied fraud.
Lund since October, 1926, had had a power of attorney signed by Reeder, the provisions of which are not in evidence. At various dates in 1927 and 1928 Reeder signed numerous promissory notes payable to Lund for various sums ranging from a few dollars up to $4200, among them three notes dated October 23, 1928, one for $1179.62, one for $3,000, one for $2500, a total of $6679.62, secured by real estate mortgage to Lund of the same date signed by Reeder and purporting to "be security for other indebtedness and also for future indebtedness to Arthur Lund." Under date of January 26, 1929, February 5, 1929, March 27, 1929, John W. Reeder signed three warranty deeds describing various tracts of farm and town property, each stated to be for One Dollar, and other valuable considerations. The deeds named as grantee Arthur Lund "as trustee with sole and absolute power and exclusive authority to convey an absolute title in fee simple to premises herein described without any restrictions or reservations whatsoever." Under date of March 27, 1929, Reeder and Lund signed and acknowledged a trust agreement, which recited that Reeder was the owner of real property requiring considerable time and attention for its proper management; that he desired to make provision for the *Page 302
disposition of his estate; that he had deeded to Lund real estate known as the Reeder Block, Reeder farms and the Reeder residence; that such real estate should be in trust for the persons and purposes therein enumerated. The trust agreement is very elaborate, conferring on Lund power to manage, collect income, apply net income on principals of mortgages, including any that Arthur Lund might find it necessary to place as provided; "that the notes and other accounts and moneys due Arthur Lund personally or otherwise shall be paid by the use of the income of the premises herein described and that if the said Arthur Lund desires said moneys out of said notes or accounts or other matters that he shall have the right to mortgage real estate to borrow money to pay the same, and said mortgage or mortgages so executed shall be considered and construed the same as if executed by me personally and shall be paid from the income referred to herein the same as other mortgages. The said Arthur Lund, as trustee, * * * shall not execute any bond for the performance of his duties hereunder so long as he holds notes or other indebtedness against the said J.W. Reeder or mortgages on real estate in or about the aggregate amount of four thousand dollars, but should said indebtedness to him be reduced below that amount said Arthur Lund shall execute a surety bond in the sum of five thousand dollars, for the use and benefit of the said J.W. Reeder. * * *" It was further stipulated that the title to the premises described in the deeds therein referred to should be absolute in the trustee Arthur Lund without any reservation or restriction. The trust agreement revoked the power of attorney. The petition is to cancel the mortgage and these deeds and agreement and for accounting. Lund answered, in substance, by general denial and afterwards amended setting up loans of various sums to Reeder on notes then held by Lund, namely, note dated September 7, 1928, for $4200, interest 5 per cent; note dated August 18, 1928, for $1000, 5 per cent; note dated April 7, 1928, for $600, 6 1/2 per cent; two notes for $500 each dated September 3, 1927, 5 per cent; note of $50 dated August 18, 1928, 6 per cent; note for $75 dated February 28, 1929, signed by John W. Reeder and Arthur C. Reeder, 7 per cent. Also three notes secured by mortgage, all dated October 23, 1928, to wit, one note for $3000 on which there is a credit of $2000 under date of December 20, 1928, leaving a balance *Page 303
due thereon of $1000 and interest; one note for $2500 upon which there is a credit under date of December 20, 1928, of $1837, leaving a balance due of $663; one note for $1179.62. The defendant alleged that there was unpaid on the mortgage notes $2842.62, with interest, and on the unsecured notes $6925, with interest, and that he was not indebted to Reeder in any sum. The answer also alleged that at the time the mortgage was given John W. Reeder requested defendant to take the note of Arthur C. Reeder for $850 and if collected from Arthur the amount paid was to be credited on the mortgage. By amendment to petition plaintiff asked cancellation of all notes.
The printed abstract and amendment contain more than 800 pages, a lengthy statement of which will not be attempted.
There was the usual conflict of opinion between witnesses, expert and lay, concerning the mental competency of the ward. There had been for a period of two years and more prior to the signing of the trust agreement discussions between Reeder and Lund concerning the disposition of Reeder's estate in which references to possibility of future guardianship had been made. It is not disputed, in fact Lund asserts that repeated explanations to Reeder of various matters under discussion had been made. We shall not undertake to determine whether or not at the particular times in controversy the ward had sufficient mental capacity to contract. We have two first hand pictures of his mental condition, one furnished by a letter written by him March 12, 1929, to a son, and the other his testimony given on the witness stand in this case in June, 1929. The ward had attended the presidential inauguration on March 4, 1929, and had had the honor of holding the President's hat while on the platform. The letter reads: "Art says it was Grant (the ward's son) that was with me at the Vice Presidents while they were elected and went with me to the Presidents platform and saw me go to him and shake his hand and bid him good by Mrs. Rosevelt or Mrs. Hoove — also — Now when I arrived at the platform and during the Address I was at the opposite end of the Platform from Hoover as directed by the Platform Chairman and at once told to go forward meet the President — at once I did as ordered met the President shook his hand bid him good by c at once met Mrs. Hoover as I retired from the platform as the people around surrounded. Dr. Grant (the *Page 304
ward's son) did you see it all — or was Dr. Wm (another son) behind me, I do not know exactly but people called me at once Mr. J.W. Reeder shook my hand very kindly. I do not know but Art (a son) Said you had followed me from the Vice Presidents office. I was helped Stand on a barrell quite a while in the Vice Presid Presidents room during the election and at once proceeded when they were done to the Presidents platform * * *" J.W. Reeder was a witness on the trial of this case. He denied remembering any promissory notes or bonds given to Lund, denied ever signing any notes to Lund. Testified that he had loaned Lund money at different times.
"Q. Do you remember anything about any trust deed? A. Never heard of such a thing, and when that word came to my mind from Mr. Hoover when I came from the south a few days afterward, he says, `J.W., they have got you on for a talk,' he says, `we are going to make a president of you' and I says, `I guess it will,' and I just met Mr. Hoover and he says, `they have enough presidents.' Q. Now, there appears to be filed of record a deed to Arthur Lund as trustee, marked Exhibit 8, it consists of five typewritten pages and purports to bear your signature and that of Mr. Lund, and purports to be acknowledged by you and Mr. Lund before Hollyce Roberts, notary public? A. I never saw this one, I had never signed this one before I — I said and after the regular statements had been made, now I could not say this was done by an artist, and I could not say but what she printed that correctly after me, but it is not quite correct, the president did not sit at my right hand when it was done or he would have had it done better, now as to the line below, I said, if there is anything on your mind, President, that would seem necessary to change, it will be necessary to change, it will be all right with me, but he did not change it and then he gave me his name to sign, also president occupying the chair at that time, both presidents signed it, but I did not sign it just at that moment, I had signed it though, but that I never signed, that never passed through my hands. Q. When you were talking about having signed something, what was it you thought you signed? A. I signed something in regard to my occupying a position on the board and being present and my two sons with me, and he gave that promise and he fulfilled it, and I should have brought them, I have got *Page 305
a good many more friends that wants to know Mr. Hoover has asked me for one and I have got one for those gentlemen here. * * * Q. Did you ever have any intention of turning over to Mr. Lund as trustee any of your real estate or property? A. I had no such thought in my mind, I am a pretty stubborn fellow, I will do my own business, and have done it, except through my sons and neighbors, of course I ask a man occasionally if he has got something to sell. Mr. Hoover and I transacted a great deal of business in that way. No, I never thought of such a thing. * * * No, sir, I never seen those notes at all, they never came into my hands until now, I never saw them at all, he would have known better than to pass them over to me, I don't know, he never asked me anything for this reason, he wanted me on account of Mr. Hoover or these gentlemen here, and when he wanted money if I had it, he knew he would get it for a short time, but he would not get it on these conditions, that I would have paid for it at that time if I would give him interest, I had money, plenty, coming in from my different lines of business at that time, I had money, and sometimes I could not get the money just the day he wanted it perhaps, but he got it soon, because I could get this money I had, I was handling live stock and handling a great deal of it, and it took a great deal of money to do it, and I never wanted to get rid of it, had to have money. * * * I signed a paper, but I signed it to Cornell College for a business transaction of the college and I was asked about it today, it was to secure my daughter's tuition and that is paid, I gave her the money and she got the paper, and that is all there was to it. * * * Now in regard to those contracts that the government makes between the men that has lived his time out there, some of the old men did that, got your land warrant, that is all you paid for it, now he has got two or three of those away from me. * * * Q. Arthur has been with you looking after some of your business the last year or two? A. Well, he has gone into an enterprise to waken the people up at the upper end of the town."
One of the deeds and the trust agreement in question were signed after the date of the letter, the other deeds within two months preceding that date. The notes for $6679.62 and the mortgage securing them were signed within five months preceding the date of the letter. At the time of signing the letter *Page 306
and at the time of giving his testimony three or four months later Reeder's mental operations were manifestly incoherent. His memory failed him and he was laboring under delusions of a grandiose type. This condition, on the record before us, cannot be held to have been a sudden manifestation or break with the past.
Defendant Lund at the time of the trial was about 35 years of age. He graduated in law in 1916, located first at Marion and later in Tipton — Reeder's place of residence — in 1917. Business relations between the ward and Lund began in 1920. Lund testified to making numerous and large loans to Reeder in currency. He testified:
"The $2000 in currency in 1924 I took out of my safe in my office. My safe was an old-fashioned large safe. This $2000 in currency had been in that safe a long time. There was $4500 in the safe being the accumulations of different deposits. I expect during the summer of 1924, I don't remember just now — quite awhile ago — I had as much as $4500. I was carrying this volume of currency in this safe in my office at the same time that I was paying interest on moneys to the amount of thousands of dollars borrowed at one of the local banks."
He further said:
"The office safe that I kept the $4000 in during the year 1923 was one of those old style large safes. It was probably four feet high, and I presume eighteen inches deep, and probably thirty inches — I don't recall the make of it."
Going back to trace the money which appellant claims he had in his safe in 1924, he testified:
"Q. How much did you have at Iowa City at that time (when a student)? A. I don't just recall the exact amount. I suppose between $500 and a thousand dollars. I don't remember just now. Q. Where did you keep it in Iowa City? A. I had some in my room. As I recall I had some in the envelope I left at one of the banks at Iowa City."
The appellant further testified:
"Q. How much currency did you have at the time of your graduation with your belongings and personal effects in that *Page 307
house? A. Several hundred dollars, I don't remember just now — it was hidden among my personal belongings in that house. About the time I graduated and started practice at Marion I put it in my safe at Marion. When I moved from Marion to Tipton I brought what currency I had, I don't know how much. It might have been $2500, and it might not have been that much. * * * Those packages that I brought from Marion were not opened for quite awhile. Some of it was opened in 1927. I could not say how much there was in the packages that I opened in 1927 that had been brought from Marion in 1918. Might have been $2000, might have been $2500, I cannot say. * * * Nobody but myself saw it. I was married then but my wife did not see it. When I brought it to Tipton I put it in the safe at the office here. * * * The packages of currency that I brought from Marion in 1918 were some of them not opened until 1927, four or five of them probably."
He further testified:
"I might have owed the Cedar County Bank in 1923, I probably did but I don't remember now. It might have been upwards of $1000, or it might have been less. I don't know. During the same time I think I was owing Wright Brothers $4000. I was owing Elizabeth Burrows or Elizabeth Snyder at that time $700 and paying 6% on it. I think I borrowed some from the three banks in Tipton some time. I don't remember whether it was this particular year or not. At the time that the $4000 was in my safe I might have had a note at the Farmers and Merchants Bank at Marion. It seems to me at that time Frank D. Wingert and I were owing Bruce Lash $2000, drawing 6% interest, I think. There was a Federal Land Bank loan mortgage against the land I referred to of $5000. Some had been paid on it. Probably $4500 on it at that time bearing 5%. I was indebted to my father at that time but I cannot say how much. I gave him a note in 1927 for $4767. * * * I think that I opened the last of the packages that I brought here in 1918 along in September of 1928. I think it was about $500 that I took out of this package.
Appellant further testified:
"The box in which I stated that I kept some currency was *Page 308
one of those small tin boxes, metal box I suppose you would call it, about ten inches or a foot long. I kept it in the room that we had reserved in the house that Nelson rented. I remember the currency transaction when I took $2000 out of my safe in September, 1924. After taking out this $2000 there was left in the safe $2500 or $3000 more. I probably took out $3000 shortly before to buy Liberty Bonds. I think I had $8000 in currency in the safe at that time that I bought the Liberty Bonds. At times I had as much as seven or eight thousand dollars in currency. Q. And yet you cannot point out a single transaction or point to a single time or place when you got $1 of that seven or eight thousand dollars from any particular bank or institution or person, can you, any record of it? A. Not now. Q. Now you cannot recall of anyone ever being present when J.W. Reeder gave you any notes, other than those mortgage notes of October, 1925, except the one for $475 and the one for about $289; that is true, isn't it? A. Well, I recall there were some others but I don't recall who they were. I did not get the $500 that I spoke about getting from Cedar County during the time I was County Attorney. Q. And that was during 1925 when your whole income for the year 1925 from any and all practice did not amount to a thousand dollars, isn't that true? A. I think it amounted to more than a thousand dollars. Q. How much more? A. Oh, probably $1500."
He says Reeder did not want the bank to know about his affairs. Reeder, however, was doing an extensive business with the banks, making deposits and drawing cash and Lund was participating therein.
During all of these transactions Lund kept checking accounts with different banks. He says he presumes the balance generally ranged from $100 to $150. He did not just know. In these accounts he deposited collections and other funds belonging to clients and checked against them for his own use. For instance, in the fall of 1924 he was administrator of an estate and something like $3500 of the estate funds came into his possession and was deposited to his own account. He testified, "Probably that particular money of the trust fund of that estate I was using in payment of my own personal matters and obligations." He was then asked: "Q. Now show me any record anywhere where you had any corresponding amount of money *Page 309
at any time to take the place of that in the estate. A. Well, I had considerable money in the safe at that time." He says Reeder did not want the bank to know about his affairs. Reeder, however, was doing business at the banks by making deposits and drawing cash and Lund participated to some extent at least in the transaction of Reeder's banking business. During the times here in question his checks, even for small amounts, frequently went to protest. During this time also he was "kiting" checks between the banks in which he was depositing. Based upon his bank statements he estimates that he drew $40,000 out of the three banks during the period in question.
During the period under consideration Lund was owing several thousand dollars to banks and others on which he was paying interest at six and seven per cent. He was owing mortgages on land drawing five per cent. He gave his father in 1927 a note for $4767 and says "that indebtedness might have gone back to 1923." Though he says he got money from his father in purchasing his home for which he paid $5,000 or $6,000, it was mortgaged for $5,500. In the fall of 1924 he went to California with the evident intention of taking up his residence there. At that time attachments were levied on his property. One of the attachment suits was settled by Lund's wife's people. He confessed a judgment. On his return in a few months from California he was owing for law books, claim for which was in the hands of local attorneys and which he paid in small installments. He kept no books but produced a large number of memoranda made on slips of paper claimed to represent transactions with Reeder concerning the execution of the trust agreement in question. Lund was county attorney for four years and engaged in the general practice. He made no income tax returns. He made different estimates as to his earnings. He says that during the four years he was county attorney his salary was $1400, which together with commissions probably averaged $1800 a year and his office practice amounted to $800 or $1000 per year. He furnishes no evidence of his business or family expenses. He testified: "I think I was a little low on the estimate that I made of my fees as an attorney during the four years that I was County Attorney, other than my salary as County Attorney. I would think they would be at least $1000 to $1200 a year in addition to the County Attorney's salary and fees." *Page 310
No witness was produced who ever saw the currency which Lund claims to have had in his possession. Lund though borrowing money of banks on collateral says he never designated any notes on any property statement. Considerable business with Reeder was by checks. In paying Arthur C. Reeder $850, the amount which he loaned October 23, 1928, later referred to, he made use of checks in small amounts extending over a period of two or three months. Lund testified:
"Q. Do you realize that the total of all your checks and record items which you can produce here and on which you claim any indebtedness arose that is included in your present claim does not amount in the aggregate to over $1500? A. I never figured them up. Q. So you are here claiming $10,000 on loans made in the last two years and you cannot point out any portion of that evidenced by any check, bank record, or anything else that you can refer to except what you have identified here? A. No, sir."
Investigation by plaintiffs of such records as were available, including bank records, fail to disclose receipt by Reeder of the cash payments alleged by Lund to have been made.
While Lund was in the relationship of attorney and confidential advisor to Reeder and had his confidence he obtained from Reeder promissory notes, mortgages, deeds and a trust agreement in respect to Reeder's private affairs and property, which on their face were very beneficial to Lund, and not merely incidental to the relationship. To prevent abuse of such confidential relationship by removing temptation the law presumes such contracts to be fraudulent. Shropshire v. Ryan, 111 Iowa 677; 6 C.J. 686; 2 Pom. Eq., 4th Ed., Sec. 960, et seq.; 2 R.C.L. 966; 1 Id. Perm. Supp. 586. The burden of proving consideration and good faith is upon the attorney. Id. Healy v. Gray, 184 Iowa 111; Haman v. Preston, 186 Iowa 1292.
In his dealings under review Lund was in the exercise of his important office of attorney, which demanded the utmost good faith and fidelity. His client was, to say the least, of manifestly failing mentality. Fiduciaries are required to keep accounts of their trust. Lund is unmistakably dishonest. His testimony as a whole and in its details (except as to relatively few matters in which he is substantiated) is both inherently and *Page 311
circumstantially incredible. Consideration for and good faith in obtaining the instruments under attack are not proved. The trial court properly decreed the cancellation of which Lund complains.
The trial court did not cancel a note for $850, one for $600, one for $50 and one for $1179.62 but held plaintiff's ward liable upon them and directed plaintiffs to pay them.
The $850 is duplicated in the note for $1179.62.
Lund claims that the $600 came from an estate. He testified:
"I received some fees out of it. Part of the money went through the bank * * * Q. Then you got some money from one uncle's estate and sent it to a cousin and that indirectly affected the Reeder transaction? A. Because the original $600 — Mr. Johnson: What $600? A. I may be wrong on this, let's see that statement again, as I recall it, it was returning my cousin a portion of the money that was in that $600 note."
This note is dated April 7, 1928, endorsed to L.T. Savin, or order, but the deposit from which he claims to have got the money was $737.92 made on May 16, 1928, a month later than the note, and Lund testifies that he gave Reeder for this note $600 in currency. The $600 note must be cancelled.
The $50 note is dated August 18, 1928. Lund's explanation of it is that it was given in renewal of the balance of a note for $100 for which he gave Reeder a check July 11, 1927, and on which Reeder paid $50 and interest. Lund's testimony in support of this note is unsatisfactory, without corroboration and is insufficient to remove the presumption.
The note for $1179.62 was one of the three secured by the mortgage dated October 23, 1928, for the aggregate amount of $6679.62. Lund explains that Reeder requested him to negotiate a mortgage loan for the purpose of taking up an existing mortgage to a bank for $4219.48, and interest, and that he (Lund) demanded that the mortgage be made to secure notes of Reeder held by Lund. Lund says that he made up three notes aggregating $6679.62 computed as follows: Amount owing the bank, including interest, $4355.58; two notes held by Lund, one for $1000 and one for $289; note of Arthur C. Reeder, the ward's son, for a loan to be made to Arthur $850, commission on the loan to be negotiated $66. The three notes into which he divided *Page 312
this sum were for $3000, $2500 and $1179.62 as specified in the mortgage. Lund secured for Reeder a real estate loan for $5400 for which the loan company after paying for release of the existing mortgage $4398.61, deducting interest $9, remitted to Lund check payable to Reeder for the balance — $992.39. This check was endorsed by Reeder to Lund and used by him. Thus the $5400 is to be deducted from the three notes aggregating $6679.62. Lund made endorsements on the $3000 note and the $2500 but none on the $1179.62. To support the notes for $6679.62 Lund claims to have held a note given to him by Reeder in March, 1927, for $1000, which with interest $41.70 he cancelled and gave back to Reeder as a part of the $6679.62. Arthur Reeder was present during the transactions concerning the three notes and mortgage aggregating $6679.62, which as has been said, was furnished him not in cash (except $50) but small checks. Arthur Reeder testifies that he owed the City National Bank; that his father was on the note and it was necessary to pay the bank off and take a new loan, which they did; that he was particularly interested in getting the loan for $850; that Lund claimed his father owed him $1000 for services and that was to be included in the loan his father was obtaining to pay the City National; that he never knew of his father's getting currency from Lund at any time and Lund did not claim to have loaned his father any currency previously; was never present at any other transaction between Lund and his father: that on the date his father signed the notes and mortgage it was explained to him several times and his father appeared to understand what he was signing and Arthur understood it; that he thinks that Lund stated that he had some other notes of his father's; that Lund did not say what kind of notes they were, nor the amount, nor how his father came to give them or what he gave them for; that there was no talk about mortgages or notes running to Lund himself and he (Arthur) did not know that Lund had drawn the papers to himself. It is evident that Arthur's interest was in his own needs, that he knew nothing about his father's business relations with Lund or alleged indebtedness to Lund (except on the notes signed for Arthur), relied upon Lund and that from Arthur's presence the father got no independent advice or the benefit of any independent knowledge or investigation. *Page 313
Lund testifies that the $1000 note was given originally for currency and was renewed while Arthur testifies that Lund said that the note was given for fees. Lund's claim to this note, amounting to $1041.70, is unsustained by the proof and this sum must also be deducted from the $6679.62. The $289 note was for the balance of a loan originally made to Arthur, which is not contested as is also the $850 note. Plaintiffs do not claim forfeiture of right to commission for malfeasance. Lund should be allowed the commission of $66.
In 1927 Reeder turned over to Lund on different dates four Government bonds for $1000 each. Lund testified that October 26, 1928, he held in his possession four notes for $1000 each, dated respectively July 9, 1927, July 29, 1927, September 12, 1927, and April 19, 1928, each describing as collateral to it a Liberty Bond.
"Q. And you had not given him any credit for any collateral sold, had you, on those notes? A. No, sir. * * * Q. He had receipts for bonds that you had sold and got the money on and had not (been) given any credit for, that is true, isn't it? A. Yes, sir. Q. Now the way these transactions, each one of them, represented by Exhibits 9, 10, 11 and 12, occurred was this: On the same day that Mr. Reeder would sign one of these collateral notes for you, and give you his bond, and sign over the registered bond to you, you would take that bond to one of the banks here and put it up as collateral to your note to the bank? A. Sometimes. Q. You did that in every one of these cases, didn't you? A. Perhaps I did."
The evidence shows the sources of the advancements to Reeder on these collateral notes to the amount of $2531.08. A balance of $1000 on one bond and $468.92 on another is not shown to have been paid except by Lund's unsupported testimony that he paid these sums to Reeder in cash. Lund admittedly got these four bonds for $1000 each. Nevertheless, he obtained from Reeder Reeder's four notes for $1000 each. In this case, as in the others, he has the burden of proof. In his fiduciary dealings it was his duty to keep accounts. He did not do so. His evidence as to the $1000 and $468.92, as in other respects, is more consistent with an intention to defraud than with good faith. He has not successfully met the burden of proof. Lund is entitled *Page 314
as against the amount of the bonds, $4000 and the $992.39 received from the loan, credit for the $2531.08 and for the three notes for $850, $289, $75 and interest. For the balance of the $4000 and the $992.39, with proper interest allowances, the plaintiffs are entitled to judgment against Lund.
On Lund's appeal the judgment is affirmed.
On plaintiffs' appeal reversed.
EVANS, STEVENS, ALBERT, KINDIG, WAGNER, and GRIMM, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/4261437/
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Court of Appeals
of the State of Georgia
ATLANTA, April 03, 2018
The Court of Appeals hereby passes the following order
A18D0354. JOHN OXENDINE, P.C. v. GOVERNMENT TRANSPARENCY &
CAMPAIGN FINANCE COMMISSION.
Upon consideration of the Application for Discretionary Appeal, it is ordered that it be
hereby DENIED.
LC NUMBERS:
2017CV294699
Court of Appeals of the State of Georgia
Clerk's Office, Atlanta, April 03, 2018.
I certify that the above is a true extract from the minutes
of the Court of Appeals of Georgia.
Witness my signature and the seal of said court hereto
affixed the day and year last above written.
, Clerk.
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01-03-2023
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04-05-2018
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https://www.courtlistener.com/api/rest/v3/opinions/3433280/
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[1] Since the intent of the contracting parties is the controlling factor in the determination of the issues of who was the owner and who was in possession of the personal property sold, on January 1, 1942, and since intent is a question of fact, we will set out the pertinent facts. It is to be kept in mind that the only relationship involved is that of the seller and the purchaser, uncomplicated by any third party claiming an interest in the property. There is no material dispute about any of the facts. The plaintiff for over fifty years had been engaged in the manufacturing and wholesaling of leather coats, gloves, etc., on its own property in Des Moines, Iowa. Sometime prior to September 1941, negotiations were begun between the plaintiff and the Kenosha Full Fashioned Mills, Inc., of Kenosha, Wisconsin, looking to a sale of plaintiff's business and property, excepting the real estate, book accounts, and certain other items, to the Kenosha company. Representatives of the latter spent some time in plaintiff's plant in September 1941, and on or prior to October 8, 1941, the seller and the purchaser reached a complete agreement as to the sale and all of its terms, and on the latter date a written contract evidencing the sale and its terms was executed by plaintiff as the seller and the Kenosha company as the purchaser. By its terms the seller agreed to sell and the purchaser agreed to buy:
"(a) The name, good will, trademarks, machinery, manufacturing equipment including office equipment, cutting tables, sewing machine tables, books, records and files and stationery of the seller * * * (b) The goods and merchandise of the seller, that is, its merchandise inventory consisting of raw materials, materials in process of manufacture and finished materials as ofthe close of business on the 31st day of December, 1941."
(Italics ours.)
The contract provided that the purchase price shall be computed as follows:
"$25,000.00 plus the seller's cost price of the said merchandise inventory taken as of the close of business on the said 31st day of December, 1941. In arriving at such cost price with respect to raw materials the same shall be taken at the actual acquisition *Page 321
cost (price paid plus all transportation charges) to the seller; merchandise in process of manufacture or completely manufactured shall be computed at the actual acquisition cost to the seller of the raw material used to which shall be added the seller's cost of processing as determined and disclosed by the books of the seller for the processing of like merchandise during the year 1941; providing however, that the purchaser shall not be required under this contract to purchase such inventory in excess of $25,000.00 computed as above specified, nor shall the purchaser be required to purchase unusable scraps of raw materials."
Under the contract the purchase price was to be paid to the seller as follows:
"$25,000.00 upon the execution of this contract and shall pay the balance due as determined by the inventory taken at the close of business December 31st, 1941 (not, however, in excess of $25,000.00) on or before the 31st day of January, 1942, failing which the amount or amounts theretofore paid to the seller by the purchaser shall be forfeited as liquidated damages."
The first payment of $25,000 was made on October 8, 1941, on the execution of the contract.
The contract provided that the seller would not permit any waste or removal of the machinery or operational equipment while in its custody; that the "bulk sales" law would be complied with; that the sale did not include book accounts of the business remaining unpaid as of December 31, 1941, or the books and records necessary in their collection; "that from and after the execution of this contract the purchaser may install and keep on the business premises of the seller during all business hours its President and/or other officers or business representative for the purpose of familiarizing itself with the business of the seller;" that the purchaser will not contract any debts or liability upon the credit of the seller, and will advise all to whom it becomes indebted that it is the successor to the seller, and that it will so indicate on any stationery of the seller which it uses; that "in the event the purchaser sees fit to remove from the premises of the seller any of the machinery, equipment, merchandise or supplies, such removal shall be so conducted *Page 322
with such care as to avoid undue damage to the said premises"; that the seller would not engage in a competing business prior to January 1, 1947. Just before Christmas 1941, the plaintiff mailed to the trade or the mills, tanners, etc., from whom it had purchased goods or with whom it had transacted business, a notice that it was discontinuing its business and would dissolve its partnership on December 31, 1941, and that it was not to be liable for any debts contracted in its name thereafter.
In the same envelopes in which these notices were mailed another communication signed by the purchaser was enclosed. It stated in substance that in supplementing the seller's letter it was glad to advise it had purchased the assets of the Cownie Company, except the book accounts and the real estate, which property it intended to remove to its home location in Kenosha, where it would continue to carry on the business as operated by the Cownie Company, under the name of the J.H. Cownie Company Division of the Kenosha Full Fashioned Mills, Inc.
After the execution of the contract on October 8, 1941, the seller continued to operate its business of manufacturing and selling about as it had before. Several officers or representatives of the buyer were about the plant during December 1941. The seller stopped manufacturing about December 20, 1941. It did no more cutting and finished all garments several days before December 31, 1941. Prior to that time they filled such orders as they could and such as they did not fill they turned over to their purchaser. As of December 31, 1941, they had some raw materials and some finished goods, but no partly processed materials. Plaintiff stopped purchasing materials early in the fall in order to cut the inventory down and to avoid small odd lots and pieces of small yardage. Mr. Schlitz, of the plaintiff, testified:
"There was no argument with Mr. Edge [president of purchaser] about unusable scraps because we did not have anything like that. The stock was very clean, and odds and ends towards the tail end of the season, we would work all these odds and ends so we wouldn't have to put them in the inventory. Enough to make a garment, we would make it up, try to get rid of it."
The inventory of the merchandise stock was made and completed *Page 323
in the last week of December 1941. This inventory included only the raw materials and manufactured goods and not the machinery or equipment. This inventory, computed in accord with the formula of the contract, at the close of business on December 31, 1941, was $20,500.
The contract did not provide when the purchaser would remove the purchased property to Kenosha, as it stated it was going to do in its letter to the trade. The terms of the contract, however, were such that all of the merchandise could not be removed until the inventory was completed at the close of business on December 31, 1941. There was testimony that the purchaser may have moved some of the property before December 31, 1941. There is testimony that the property had to be crated and packed and there was some delay in getting vans.
On December 15, 1941, plaintiff sold the building and ground where its business had been conducted to Harry Lang of St. Paul, Minnesota, excepting certain shelving, tables, benches, and other property belonging to the firm or its partners which had not been sold to the Kenosha company. Under this real-estate contract Lang was entitled to possession of the premises as of the close of business on December 31, 1941, but the seller was to have until January 31, 1942, to remove from the premises all trade fixtures, machinery, equipment, shelving, tables, cabinets, benches, and other personal property. This reservation was to enable the plaintiff and the Kenosha company to remove such property as belonged to either. On January 1, 1942, and thereafter until it was removed by the purchaser, sometime during that month, the personal property sold, except such as may have been removed previously by the purchaser, was in the building sold to Lang, and, as Mr. Schiltz testified, over objection, "it was in the possession of [Mr.] Edge" (president of the purchaser). Mr. Olson, who had been an employee of plaintiff, was an employee of the Kenosha company as of January 1, 1942, and thereafter, and carried keys to the building. The plaintiff leased the office of the premises of Lang, the purchaser of the building, for occupancy and use from and after December 31, 1941, in collecting its accounts. Mr. Schiltz testified:
"I was around the premises * * * after December 31, 1941. Mr. Edge had about a half dozen of his employees there after *Page 324
January 1st. They were getting the stock in shape to move, finishing up the machines, packing and so on. Q. Did you or any of the partners of your firm or any employees of your firm fill any orders, make any shipment after December 31st? A. [over objection] Absolutely not. * * * The unpaid balance due under the contract figured up to $20,501 and some cents, but there were a number of items there was a dispute as to the price, and in order to close the matter I finally offered to settle on a flat $20,000.00 basis. Mr. Edge accepted it. I handled the dispute myself. The money was paid about the 7th or 8th of January, 1942 * * * the same day we finally settled that dispute * * * I think they moved some of the stuff before that day. * * * I supervised taking the inventory with several employees. * * * We never delivered a bill of sale to Mr. Edge. The only thing there is is this contract, nothing else. * * * I told Mr. Langdon that Kenosha Full Fashioned Mills did no business on the [Cownie] premises at 106 Third Street; but by that I meant manufacturing. He did fill a few orders from down there out of merchandise they had. Mr. Edge or his representative from and after December 31sttook over this inventory and filled orders out. That included orders which had not been filled by us and any new orders that might arrive on the 2d 3rd or 4th, — all orders received after December 31st. Neither Mr. Cownie nor any of the partners oremployees supervised the operation in any manner after December31st."
The assessment taken over the protest of the plaintiff and to which objection was made by it to the defendant was reported by he assessor as follows:
"Assessment Roll for 1942, District 2, No. 3454. Des Moines, Polk County, Iowa, 4-6-1942 Name: J.M. Schiltz J.H. Cownie J.H. Cownie Co. Duplicate Mailed.
Description of Personal Property.
14. Furniture and Fixtures .............. $ 250.00 15. Merchandise ($20,000 @ 60%) ........ 12,000.00 26. Machinery Equipment .......... 1,500.00 ----------- Total Assessed Value of Personal Property ..$ 13,750.00" *Page 325
Plaintiff never signed nor in any way assented to this roll.
The trial court entered decree dismissing the appeal at plaintiff's cost, upon its findings of fact and conclusions of law which were, in substance: That the parties to the contract of sale intended the plaintiff should retain title and control over the property referred to in the assessment until the same was divided and any unusable scraps of raw materials eliminated from the purchase price, and until a full and complete check was made of the inventory to determine whether or not it amounted to more or less than the $25,000 limit in the contract; that from the conduct of the parties sufficient action was not taken to transfer possession of the personal property to the Kenosha company by January 1, 1942; and that it is the court's conclusion of law that the Cownie Company were "owners" of the property, and said company is liable for said assessment under the provisions of sections 6959 and 6964 of the 1939 Code of Iowa.
Section 6959 provides that personal property shall be listed and assessed each year in the name of the owner thereof on the first day of January.
Section 6964, in defining "owner," states:
"* * * persons having in their possession property belonging to another subject to taxation in the assessment district where said property is found, when the owner of the goods does not reside in the county, are, for the purpose of taxation, to be deemed the owners of the property in their possession."
We find no basis of fact in the record to sustain the trial court's findings of fact, and no basis of fact or law to sustain its conclusion of law. The trial court found that title did not pass from Cownie Company until the property was divided and the unusable scraps of raw material were eliminated. This finding misconceives the record as presented to the court. The contract itself specifically eliminated from the sale "unusable scraps of raw materials." There is no evidence that any such scraps were inventoried, or that there were any scraps in the stock of raw materials at the close of business on December 31, 1941. The undisputed testimony of Mr. Schiltz, set out herein, was: "There was no argument with Mr. Edge about unusable scraps because wedid not have anything like that." As he *Page 326
further testified, such "odds and ends" as they had in the fall were made into garments. There was no separating, "dividing," or identification of goods necessary in this case. Plaintiff sold and the purchaser bought a specific body of goods, to wit, plaintiff's equipment as of October 8, 1941, and its stock of merchandise as it would be at the close of business on December 31, 1941. It is true that the stock varied from time to time between October 8th and December 31st, but on the latter date that stock, which the purchaser bargained for and bought and agreed to pay for, was a fixed body of goods of definitely ascertained character, amount, and selling price, needing nothing more to be done to it to make it deliverable. Differences of opinion very often arise in bulk sales of merchandise as to the value, cost, or price of specific items in the inventory. These are matters for adjustment. They may reduce the total purchase price, but they do not defeat the sale, or change the time of, or postpone the passing of title or ownership of the goods bought and sold.
Likewise, there is no merit whatsoever in the court's finding that there was no sale until it was determined that the inventory did not exceed the $25,000 limit of the contract. That provision was never a factor in the transaction. The inventory itself determined that the merchandise stock was less than that figure on December 31, 1941. The trial court conjectured so-called facts that the record discloses were never in the minds of the contracting parties.
We will refer first to some principles of law many times announced by this court and by courts generally, and to some statutory provisions, before discussing the trial court's conclusion of law.
[2] I. Whether a sale was made, and whether and when the title passed, and whether the sale was executed or executory, are questions of intent, depending for their determination upon the wording of the contract, whether written or oral, and upon the conduct of the parties, and the surrounding circumstances. See, among the many decisions of this court so holding, Bishop v. Starrett, 201 Iowa 493, 495, 207 N.W. 561; Allen v. Elmore,121 Iowa 241-244, 96 N.W. 769; Welch v. Spies, 103 Iowa 389, 391-393,72 N.W. 548; Thompson v. Frakes, 112 Iowa 585, 588, *Page 327 84 N.W. 703; Clark v. Shannon Mott Co., 117 Iowa 645, 648,91 N.W. 923; Wesco Supply Co. v. Town of Allerton, 156 Iowa 695,698, 137 N.W. 1046; Smith Son v. Bloom, 159 Iowa 592, 603, 604,141 N.W. 32; Rhynas v. Keck, 179 Iowa 422, 432, 435,161 N.W. 486; Madden v. Eldridge, 210 Iowa 938, 940, 941, 230 N.W. 371; Van Drimmelen v. Converse, 190 Iowa 1350-1353, 181 N.W. 699; Moats v. Strange Bros. Hide Co., 185 Iowa 356, 364-368,170 N.W. 456; Rudy-Patrick Seed Co. v. Roseman, 234 Iowa 597, 601,13 N.W.2d 347, 349, 350.
Section 9947 of 1939 Iowa Code is:
"Property in specific goods passes when parties so intend. 1. Where there is a contract to sell specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. 2. For the purpose of ascertaining the intention of the parties, regard shall be had to the terms of the contract, the conduct of the parties, usages of trade, and the circumstances of the case."
Section 9948 of the same Code is:
"Rules for ascertaining intention. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer: Rule 1. Where there is an unconditional contract to sell specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment, or the time of delivery, or both, be postponed. Rule 2. Where there is a contract to sell specific goods and the seller is bound to do something to the goods, for the purpose of putting them into a deliverable state, the property does not pass until such things be done. * * * Rule 4. Where there is a contract to sell unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made." *Page 328
Code section 9970 provides that:
"Seller must deliver and buyer accept goods. It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract to sell or sale."
Code section 9971 provides that delivery of the goods and payment of the price shall be concurrent unless otherwise agreed upon, and section 9972 provides that the time, place, and manner of delivery may be as provided in the contract.
[3] II. This court has many times stated, and decided, the law to be that where the entire lot or quantity of the subject matter of a sale is specified, ascertained, and identified, and is located in a place by itself, needing nothing further to be done to it to make it deliverable, and the sale thereof has been agreed upon, the title and ownership then passes from the seller to the buyer, even though the exact price to be paid must await the measuring, weighing, counting, or the otherwise ascertaining of the value or quantity of the property sold. Welch v. Spies,103 Iowa 389, 391-393, 72 N.W. 548; Allen v. Elmore, 121 Iowa 241
-244, 96 N.W. 769; Clark v. Shannon Mott Co., 117 Iowa 645,647, 648, 91 N.W. 923; Rhynas v. Keck, 179 Iowa 422, 432-435,161 N.W. 486; Madden v. Eldridge, 210 Iowa 938, 940, 941,230 N.W. 371; Moats v. Strange Bros. Hide Co., 185 Iowa 356, 364-368,170 N.W. 456, all supra; Augustine v. McDowell, 120 Iowa 401, 404,405, syllabus 3, 94 N.W. 918; Latta v. Menching, 186 Iowa 975,979, 173 N.W. 229; Pope v. Cheney, 68 Iowa 563-567, 27 N.W. 754; Semple v. Northern Hardwood Lbr. Co., 142 Iowa 586, 591, 592,121 N.W. 23; Harris v. Beebe, 144 Iowa 735, 737, 738, 123 N.W. 938.
[4] III. Appellee argues that there was no delivery or change in the possession of this property because its physical situs was the same after December 31, 1941, as it was on and before that day. This fact is not controlling or of material importance on the issue of change of title or ownership of the property if it is in accord with the agreement or intention of the contracting parties. The plaintiff sold and the purchaser bought the stock of merchandise as it was on the close of business December 31, 1941, and agreed to pay for it on or before *Page 329
January 31, 1942. What that stock was and the items thereof were definitely fixed on the last day of December. It was then the property of the purchaser. The delivery to it was final and complete in the building in which the stock was and had been located. The plaintiff had not agreed to deliver it to the Kenosha company at any other place. That company had possession, dominion, and control of the property, to do with as it pleased. It accepted the property on December 31, 1941, and had possession and control over it every day thereafter. It made sales from the stock on the premises. It packed, crated, and removed the remaining property to Kenosha. The plaintiff had no possession of the property after December 31st. It had no title to or ownership in the property thereafter. It did not retain naked title even as security. It exercised no dominion or supervision over the property. It did not own or have possession of the building in which the property was housed after December 31, 1941, although it rented office space therein.
We have repeatedly held that if the seller and buyer so agree or intend there may be a completed sale, delivery and acceptance, and passing of title, even though there be no physical change in the location of the property sold. Delivery may be either actual or constructive. Aultman, Miller Co. v. Nilson, 112 Iowa 634,636, 84 N.W. 692; Barrows v. Harrison, 12 Iowa 588, 592-595; Clark v. Shannon Mott Co., supra, 117 Iowa 645, 647, 648,91 N.W. 923; Augustine v. McDowell, supra, 120 Iowa 401, 404, 405, syllabus 3, 94 N.W. 918; Hamilton v. Schlitz Brewing Co.,129 Iowa 172, 178, 179, 105 N.W. 438, 2 L.R.A., N.S., 1078; Cable Co. v. Miller, 162 Iowa 351, 356, 357, 143 N.W. 94; Madden v. Eldridge, supra, 210 Iowa 938, 940, 941, 230 N.W. 371; Latta v. Menching, supra, 186 Iowa 975, 977, 978, 173 N.W. 229; Hess v. Dicks, 181 Iowa 342-344, 164 N.W. 639; Hess v. Dicks, 192 Iowa 378,383, 184 N.W. 742; Farmers Sav. Bk. v. Newton, 154 Iowa 49,52, 134 N.W. 436; Gluck Co. v. Therme, 154 Iowa 201, 205, 206,134 N.W. 438; Dysart Sav. Bk. v. Weinstein, 152 Iowa 260, 263,132 N.W. 18; Limburg v. Ontjes, 196 Iowa 753, 756, 757,195 N.W. 361; Peycke Bros. v. Hazen, 119 Iowa 641, 642-645, 93 N.W. 568; Brown v. Wade, 42 Iowa 647, 649-651; Pope v. Cheney, 68 Iowa 563 *Page 330
-567, 27 N.W. 754, supra; Van Drimmelen v. Converse, supra,190 Iowa 1350-1353, 181 N.W. 699; Moats v. Strange Bros. Hide Co., supra, 185 Iowa 356, 364-368, 170 N.W. 456.
[5] IV. The above-noted cases and others of this court hold that what constitutes delivery depends largely upon the character and situation of the property. Nothing more should be required than what is usual, convenient, and proper. The intent to pass title to ascertained and identified personal property, with the right of possession, dominion, and control of it, is sufficient to establish a completed sale, or to take the contract out of the statute of frauds. Manual custody or actual possession is not always necessary. See, also, First Nat. Bk. v. Cook, 171 Iowa 41,50, 153 N.W. 169; Western Silo Co. v. Gogerty, 187 Iowa 1, 3,171 N.W. 176; Willey v. Backus, 52 Iowa 401, 402, 3 N.W. 431; First Nat. Bk. v. Reno, 73 Iowa 145, 147, 148, 34 N.W. 796.
[6] V. The fact that the plaintiff under the contract of sale could have forfeited the down payment of the purchaser as liquidated damages had the latter not performed does not aid the appellee. Such contract provision did not prevent or postpone the passing of title, ownership, or possession of the property to the purchaser. We have repeatedly held that in conditional-sale contracts, as commonly known, though the naked title remains in the seller for the purpose of security, the possession, use, and ownership of the chattel is in the purchaser. He becomes the beneficial owner, the equitable owner, the substantial owner, immediately upon execution of the contract. Donnelly v. Mitchell,119 Iowa 432, 436, 437, 93 N.W. 369; Hansen v. Kuhn, 226 Iowa 794,797, 285 N.W. 249, 252; Universal Credit Co. v. Mamminga,214 Iowa 1135-1139, 243 N.W. 513; Craddock v. Bickelhaupt,227 Iowa 202, 205, 288 N.W. 109, 135 A.L.R. 474; State v. A Certain Automobile, 208 Iowa 794-796, 226 N.W. 48; Heyl v. Beadel,229 Iowa 210, 215, 294 N.W. 335, 130 A.L.R. 994.
The contract involved in the appeal before us is not a conditional-sale contract. It is an unconditional sale. But other than the retention of title for security purposes, a conditional sale, in structure and contemplation, is not different from an absolute, unconditional sale. Hansen v. Kuhn, supra, *Page 331 226 Iowa 794, 797, 798, 285 N.W. 249; Mercier v. Nashua Buick Co., 84 N.H. 59, 146 A. 165, 168. Under such a conditional sale the vendee, and not the seller, is liable for any tax against the chattel before repossession by the seller. Universal Credit Co. v. Mamminga, supra, 214 Iowa 1135, 243 N.W. 513. And this is true where the security is not by retention of title but by chattel mortgage. Arie v. Burnside, 182 Iowa 1107, 166 N.W. 376. The same rule applies to sales of real estate on contract retaining title in the seller. Meyer v. City of Dubuque, 49 Iowa 193; Miller v. Corey, 15 Iowa 166. Decisions from other jurisdictions hold the conditional vendee liable for the tax on the chattel, and are, State v. White Furniture Co., 206 Ala. 575, 90 So. 896; Bowls v. Oklahoma City, 24 Okla. 579, 104 P. 902, 24 L.R.A., N.S., 1299; San Diego County ex rel. Whelan v. Davis, 1 Cal. 2d 145,33 P.2d 827; Municipal Acceptance Corp. v. Canole, 342 Mo. 1170, 119 S.W.2d 820; State v. J.I. Case Co., 189 Minn. 180, 248 N.W. 726; Massey-Harris Co. v. Lerum, 60 S.D. 12, 242 N.W. 597; Landis Machine Co. v. Omaha M. T. Co., 142 Neb. 389, 6 N.W.2d 380,384, 9 N.W.2d 198.
It is likewise true that in the case of an unconditional sale, such as is involved in this appeal, the purchaser, as the absolute owner of the property sold, owning it on January 1st, would be liable for the taxes assessed against it for that year, and not the seller who parted with his title, ownership, and possession prior to that date.
It is our judgment that the plaintiff was not liable for the taxes assessed against the property listed in the assessment roll, under either section 6959 or section 6964 of the 1939 Code of Iowa. The decree of the trial court is therefore reversed, and the cause is remanded to the trial court with directions to render and enter judgment and decree in conformity herewith. — Reversed and remanded.
All JUSTICES concur. *Page 332
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The appellant assigns as error rulings of the court on the introduction of evidence, the sustaining of a motion for directed verdict, and the sustaining of a motion striking an amendment to the petition. The action of the court in striking the amendment to the petition is the principal matter involved in this appeal.
The action is for damages to plaintiff's farm, alleged to have been caused by the flooding of the same by defendant's dam across the Maquoketa River. The appellant's farm, consisting of approximately 53 acres, is above the dam, and 1. PLEADING: lies adjacent to said river. The petition asks issue- for damages in the sum of $3,000, and alleges changing that the defendant, in order to attain as great amendment: a head of water at its said dam and power plant right as it can reasonably do, has raised and to reject. maintains continuously the water at such level as to flood and overflow, or render valueless, a large portion of plaintiff's land; "and that the injury sustained by the plaintiff, as therein detailed, as sustained by the loss and damage to her land, is a permanent loss and damage." (The italics are ours.)
The appellee in its answer pleads the Statute of Limitations and the facts upon which said plea is based, and also that the *Page 1054
right of action for damages, if any, accrued to plaintiff's grantors, and that no assignment of same was made to plaintiff; that said claim for damages does not accrue to the plaintiff by reason of the conveyance to her of the land in question.
At the time of the trial, it was stipulated between the parties that a concrete dam was erected in 1904, which raised the water above the dam 8 1/2 feet from the bed of the stream; that, during the same year, there were flashboards placed on the top of said concrete dam to a height of 16 inches, which have been continuously maintained at said height ever since, and have continuously maintained the head of water 16 inches above the height maintained by the original concrete dam, except at such times as they were taken out or damaged by high water; but that they were repaired and replaced at the same height as soon after they were taken out as the work could conveniently be done; that said flashboards consisted of a 12-inch plank, with a 4-inch strip, commonly known as a 2 x 4, nailed on top thereof; that, sometime in the year 1918 or 1919, the defendant placed on top of the 16-inch flashboards two 2 x 4's; and that said flashboards, with the 2 x 4's on the top, have been maintained continuously by the company since that date, maintaining an additional head of water above the dam, by reason of the addition of the two 2 x 4's, as stated.
The plaintiff called the division manager of the defendant company as a witness, who testified that the flashboards on top of the concrete are two 2 x 12's, edgeways; that the top of the concrete dam is floored with planks, set flush with the concrete; that the flashboards are nailed to blocks, fastened to the top of the floor, and that said flashboards are further supported by being wired back to the back edge of the dam; that the support does not always hold, but at times, during high water, the rubbish coming down the river breaks some of the planks off, but that they are replaced when the river subsides; that there has been no change of any kind made on the dam within the past four or five years; that, in 1916, when he first became familiar with the dam, there was a 2 x 12 and a 2 x 4 on top of it, which was constructed in the same manner as the present construction, spiked and built permanently on top of the dam; that the additional raise of 8 inches was constructed in 1919, the flashboards at that time consisting of a 12-inch plank and three 2 x 4's; that *Page 1055
the additional head of water of 8 inches has been maintained continuously since 1919.
The appellant then called as a witness the owner of land above the dam and above the land of the plaintiff, and propounded to him questions relative to the conditions caused by the water during the last five years, to which interrogatories the appellee's objections, containing, among other things, that the answers called for are not within the issues, were sustained.
Thereupon, the plaintiff, without obtaining leave of court, filed an amendment to the petition. In said pleading she asks leave to amend her petition to conform to the stipulation of the parties and the evidence thus far introduced. It is therein alleged that the record now affirmatively shows that the damage which plaintiff suffers and has suffered, and for which she is seeking a recovery, is a result of temporary construction at defendant's dam, to wit, flashboards, of timber construction, which are fastened to said dam and on the top thereof with nails and wire only; that said planks or flashboards are sometimes removed by floods and then replaced; that said flashboards increase the water level approximately 24 inches, which is causing her irreparable loss and injury; and that the plaintiff is entitled to an abatement of said cause by a mandatory injunction requiring the defendant to remove the flashboards; that the loss for which she is entitled to recover for five years prior to the bringing of this action is $200 per year. She prays judgment for said amount, and a mandatory writ of injunction.
The court struck the amendment, on motion of the appellee. This ruling by the court is provocative of the principal contentions of the respective parties to this litigation.
Before passing to the consideration of the same, additional facts should be stated. On August 25, 1915, H.C. Smith, the prior owner of the real estate, entered into a contract with Lemrond for the sale and conveyance of said real estate, upon the payment of the purchase price and the performance of certain conditions by the vendee. On December 10, 1920, Lemrond assigned his equity in the farm to the appellant, who, in March, 1923, received a deed of conveyance from Smith, the original owner.
Now, what as to the ruling of the court in striking the aforesaid amendment? It will be observed that, in the original *Page 1056
petition, the plaintiff asked damages for $3,000, for permanent injury to the real estate; while in the amendment she prays for damages caused during the last five years prior to the commencement of the action, in the amount of $1,000, and prays for a mandatory writ of injunction, to remove the flashboards from the dam. In her original petition, she asks for permanent or original damages; while in the amendment she prays for damages claimed to have been caused by an abatable nuisance. The entire theory of the case was changed by the amendment. When an injury is permanent, it is spoken of in the cases as original, and but one action can be maintained, and recovery allowed is for all damages, past, present, and prospective. Where the nuisance is permanent, the damage is to the land itself, and the cause of action arises when the land is first flooded, and successive actions cannot be brought. See Irvine v. City of Oelwein,170 Iowa 653; Bizer v. Ottumwa Hydraulic Power Co., 70 Iowa 145. Where the alleged nuisance is abatable, and of a continuing or recurring character, the damages are regarded as continuing; and one recovery against the wrongdoer is not a bar to successive actions for damages thereafter accruing from the same wrong.Harvey v. Mason City Ft. D.R. Co., 129 Iowa 465; City ofOttumwa v. Nicholson, 161 Iowa 473; Soderburg v. Chicago, St.P.,M. O.R. Co., 167 Iowa 123; Bennett v. City of Marion,119 Iowa 473. Thus it will be seen that, in the original petition, the plaintiff was asking for permanent original damages to the real estate; while in the amendment she is asking for damages upon the theory that the damage caused by the maintenance of the flashboards is the result of a continuing abatable nuisance. Upon the theory advanced in the original petition, the cause of action was barred by the Statute of Limitations; upon the theory advanced in the amendment, the plaintiff could recover the damages accruing for five years prior to the commencement of the action, and successive actions for damages hereafter occurring could be maintained.
Upon the theory advanced in the original petition, plaintiff could not succeed, as original damages accrue to the owner of the real estate at the time of the flooding of the land by reason of the construction. No assignment of the owner's claim was executed unto the plaintiff. Smith, or some one of his prior grantors, was the owner of the land at the time of the construction *Page 1057
of the 16-inch raise by reason of the flashboards. Smith was under contract to convey the same to Lemrond at the time of the execution of the additional raise of 8 inches. Lemrond assigned nothing unto the plaintiff, except his equity in the farm. Smith's deed to the plaintiff conveyed nothing but the farm. The grantee in a deed cannot recover original or permanent damages which accrued to the owner of the land prior thereto. Peden v.Chicago, R.I. P.R. Co., 73 Iowa 328; Irvine v. City of Oelwein,170 Iowa 653. The plaintiff knew, or should have known, that she could not recover for permanent or original damages, as claimed in her original petition.
Relative to amendments to pleadings, our statutory law, Section 11182 of the Code of 1927, provides:
"The court may, on motion of either party at any time, in furtherance of justice and on such terms as may be proper, permit such party to amend any pleadings * * * by inserting other allegations material to the case, or, when the amendment does not change substantially the claim or defense, by conforming the pleading or proceedings to the facts proved."
The limitation in said statutory law, "when the amendment does not change substantially the claim," applies to cases where the amendments are offered to conform the pleadings to the facts proved. Roberdee v. Bierkamp, 160 Iowa 687. While the amendment states that the allegations therein are made to conform to the stipulation and the evidence thus far introduced, and asks for damages for five years prior to the bringing of the action, at the time of the amendment there was no proof of damages for said period. Therefore, it cannot be said that the entire amendment conforms to the proof. The sustaining of the objections relative to the conditions during the five-year period was undoubtedly what provoked the desire on the part of the plaintiff to file the amendment. The language of Section 11182 of the Code, hereinbefore referred to, is: "The court may * * * permit such party to amend." The word "may," as therein used, is not mandatory, but discretionary. This court has universally held that the matter of permitting amendments rests in the sound discretion of the court, and that the ruling of the court will not be disturbed on appeal, unless there has been an abuse of discretion. We have rarely reversed on the ground of *Page 1058
abuse of discretion. In Emerson Co. v. Converse, 106 Iowa 330, this court declared:
"Coming, as this amendment did, after the trial had begun, we cannot say that it was any abuse of the court's discretion to disallow it. No good reason is given why this matter was not set up at an earlier date. While great liberality should be shown by the courts in the allowance of amendments that are in furtherance of justice, the right is not absolute, and attorneys should not be encouraged to wait until the last moment before presenting their cases. There was no error in sustaining the motion to strike."
In Thoman v. Chicago N.W.R. Co., 92 Iowa 196, we said:
"Appellant complains that, at the end of plaintiff's evidence, leave to file an amendment to its answer setting up a settlement and release was refused. There was no error in the refusal. The settlement and release alleged were made long prior to the trial, and, if desired to be pleaded, should not have been withheld until the trial."
In Dobson v. Clemens Co., 194 Iowa 1155, we declared:
"There was no claim that the sole defense as originally pleaded was through inadvertence. Under such circumstances, we have held that, where the proposed amendment sets up a new defense which was known to the defendant before trial, the court may properly reject it, if offered after the trial commences, or where no excuse was offered for not sooner pleading the defense."
In Exchange State Bank v. Buckley, 198 Iowa 437, we said:
"The allowance of amendment to pleadings rests in the sound discretion of the trial court."
In National Horse Imp. Co. v. Novak, 105 Iowa 157, this court made the following pronouncement:
"While the rule is to allow amendments, and to refuse them the exception, yet the trial court is necessarily vested with a large discretion in such matters, and this court will not interfere, in the absence of a showing of legal abuse of this *Page 1059
discretion. * * * No good reason appears for not filing it [the amendment] before that time. Indeed, it appears that defendant knew of the defense at all times, and that either he or his counsel were negligent, or that they had a `masked battery' which they did not uncover until the last moment. In either event, the trial court was justified in not considering it."
In Allen v. North Des Moines M.E. Church, 127 Iowa 96, we declared:
"The granting of leave to amend at that stage of the case, setting up a new and distinct issue, was addressed to the discretion of the court; and the refusal of the request is not an error requiring a reversal."
In Moyers v. Fogarty, 140 Iowa 701, we made the following pronouncement:
"When nearing the close of the trial, plaintiff offered an amendment to his petition, alleging a conspiracy between Fogarty, Dunigan, and Hoey to defraud him by the sale of worthless trees; but, upon objection by the defendant, the court refused to permit the amendment. In view of the fact that the proposed amendment would effect a radical change in the issues, and was offered so late in the progress of the case, the court did not abuse its discretion in the ruling complained of."
See, also, on this proposition, Union Mill Co. v. Prenzler,100 Iowa 540; Vorhes v. Buchwald, 137 Iowa 721; Dumont v. Peet,152 Iowa 524; Bruhn v. Fort Dodge Street R. Co., 195 Iowa 454;Bradbury v. Chicago, R.I. P.R. Co., 149 Iowa 51; Breen v. IowaCent. R. Co., 184 Iowa 1200.
The court is justified in striking an amendment which was filed without leave, if it is one which would not have been allowed, if leave had been asked. Dunham v. Dunham, 189 Iowa 802.
In view of the aforesaid statute and the foregoing authorities, we cannot hold that the court abused its discretion in striking the amendment.
Much has been said in the arguments of the respective parties concerning election of remedies, which we find it unnecessary to consider.
The appellant complains because of the direction of a verdict *Page 1060
by the court; but it is apparent from the record that appellant's contention at this point is without merit.
The plaintiff assigns as error the ruling of the court in sustaining objections to the proffered testimony of various witnesses, referring only to the lines and pages 2. APPEAL of the abstract. This assignment is not in AND ERROR: accordance with our rules, and presents nothing assignment for review on appeal, and we give the same no of errors: consideration. In re Estate of Mott, 200 Iowa sufficiency. 948; Central Trust Co. v. City of Des Moines,204 Iowa 678.
The appellant complains of the rejection by the court of certain exhibits offered in evidence. We find no error in the court's ruling in this respect. Even had the exhibits been admitted, the plaintiff would not have made a case for the jury.
We find no prejudicial error in the record, and the judgment of the trial court is hereby affirmed. — Affirmed.
ALBERT, C.J., and STEVENS, De GRAFF, and MORLING, JJ., concur.
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In 1908, and for some time previous, Frank M. Hartwick and Fred A. Hartwick (brothers) were the owners of a 164-acre farm in Davis county, Iowa. Frank resided in Clinton, Michigan, and Fred in Moline, Illinois, and Fred looked after the renting of this farm.
In November, 1926, Fred commenced an action in partition. That action was settled by stipulation and decree based thereon. The material part thereof with which we are concerned in the *Page 759
present case was a provision that Fred was indebted to Frank in the sum of $1,500, which amount, under the stipulation, was made a lien on Fred's share in the aforesaid tract of land. When that settlement was made, it was decreed that Nels W. Hartwick, another brother, who lived near this land, should look after the same for both Fred and Frank, which he did until the date of his death on December 19, 1929. Immediately after the death of Frank (March 7, 1930), Fred instituted the present action for the partition of this land. Frank, prior to his death, made a will, which was duly probated in Michigan, willing all his property to his wife, Christina V. Hartwick, who is a party defendant to this action. She filed an answer to this case, and it is stipulated that she and Fred each own an undivided one-half interest in the land in controversy, but in her answer she asserts that she has a lien on Fred's share for the $1,500 referred to above. In reply to this answer Fred pleads the payment of the aforesaid $1,500, and that said debt was fully settled and discharged on the 28th day of January, 1930, and to sustain this charge he pleads a writing purporting to be signed by Frank and Fred Hartwick, as follows:
"This closes the books for N.W. Hartwick with $1,500 lien paid in full.
"[Signed] Frank Hartwick "F.A. Hartwick."
For reply to this answer, Christina V. Hartwick denies that Frank Hartwick ever signed the statement in the book where it states:
"This closes the books for N.W. Hartwick with $1,500 lien paid in full."
She denies the purported signature of Frank Hartwick and specially denies the genuineness of the signature of Frank Hartwick affixed thereto and states that the signature of Frank Hartwick is not the signature of Frank Hartwick. This pleading was under oath. During the trial Christina amended her answer to the reply for the purpose of conforming the pleadings to the proof and to make her answer thereto filed more definite and specific. She renews her denial of the genuineness of the signature of Frank Hartwick to said writing, pleads that said writing was materially altered and changed by adding thereto the words "with $1,500 lien paid in full," *Page 760
and says that said instrument did not constitute settlement, satisfaction, or release of the lien by Frank Hartwick against the interest of Fred Hartwick in the premises described.
The district court in the instant case, under the agreement of parties, held that Fred and Christina are each respectively the owners of an undivided one-half interest in the property. It further found under the evidence that the aforesaid $1,500 lien against the share of Fred had never been paid and satisfied, and decreed accordingly. Hence this appeal by Fred Hartwick.
From the foregoing statement, it will be seen that the real contest in the case is over the writing purported to be signed by these two brothers. This writing was attacked from two angles: First, that the signature of Frank Hartwick was not his genuine signature; second, that if it was found to be his genuine signature, the written instrument had been materially changed and altered since he signed the same.
On the death of the brother Nels, who died in December, 1929, Frank and his wife, Christina, came to Iowa to attend the funeral. They stayed over for some time thereafter at the home of Nels, whose children were Mae and Harry Hartwick. On the 22d day of January, 1930, Frank was taken sick at the former home of his brother Nels. This alleged writing was made at that place about the 28th day of January, 1930. On the 3d of February following, Frank was taken to the hospital at Centerville, and from thence to his home in Michigan, where he died on the 7th day of March, 1930.
The crux of this lawsuit lies in the facts and circumstances surrounding the making of this writing. The details of the testimony in relation thereto cannot, of course, be set out in full. The substance of the appellant's evidence is that on the 28th day of January, 1930, this writing, as it appears, was properly signed by the brothers Frank and Fred. To support this contention the appellant produced Mae Hartwick, who testified in substance with reference to this tract of land that she kept the books for her father (Nels), noting all transactions in relation thereto. This book is introduced in evidence and one page contains the writing in controversy. While Fred attended the funeral of Nels, he went home to Moline and came back about the 28th day of January. Frank was then sick in bed, and, on the arrival of Fred, the two brothers, alone in the bedroom, had a discussion of their business affairs lasting possibly an hour or longer, whereupon the witness Mae Hartwick was called *Page 761
to the bedside of Frank and he stated to the witness, in the presence of Fred, that settlement had been made between them and that he wanted the witness to put it in the books. Frank dictated to the witness what she was to write and she laid the book on the bed and wrote as he dictated; and she testified that her uncles (Frank and Fred) both signed the same, that she saw Frank Hartwick sign the same, as did Fred. After the signing of the same:
"Frank had the old contract in his hand, and he said, `Your father is dead and you can close the books now. The contract is of no value.' The contract referred to the $1,500 lien. My brother Harry was present in the room at the time." (Witness identified the $1,500 contract, or copy thereof. This was the stipulation on which the first decree was entered, fixing the $1,500 lien on Fred's share.)
"At the time he had the contract in his hand and handed it to me and stated that it would not be of any more use. He said it was all done now and they would start new, and Frank asked my brother Harry if he would look after his business with reference to the farm for a time, and Uncle Fred would do his own. At that time Frank had some money in his hand. I don't know how much. It was given to him by Fred. There were some bills and some silver. This money was given by Fred to Frank when we first went into the room."
On cross-examination she testified:
"At the time Frank came to our house he seemed quite well. Took sick about a month after he arrived. I think he had been in bed a day before the 28th."
After this alleged settlement witness went to Ottumwa and Fred drove as far as Belknap.
"Frank showed me the money and said he had settled and I saw Fred give it to him. I did not count it or inquire how much. There was some money on hand belonging to them and some in the bank. I wrote Fred Hartwick a check for one half of the partnership land, $43.75, and Frank's check for $43.75 plus $37.50. I did the writing with a pen and ink. I remember setting the ink bottle on the window and dipping into it. I bought the pen a long time ago and bought the ink at Welch's store. The bottle had a cork in it."
The witness was adjusting certain matters in her father's books *Page 762
and did some writing therein aside from the writing in controversy. She continued:
"I just can't recall. I was almost on the verge of collapse myself at my father's death. The writing was all done with the same pen and same ink. I think Fred and Frank both used the same pen when they signed. Frank signed first and then Fred."
After the book was signed by Fred he handed it to the witness.
"I just saved it. I did not make Fred a copy of the entry. I gave them each one the book to turn through and see that everything was square. Frank told me that he and Fred had settled and he wanted me to write the settlement in the book and he opened his hand and showed me the money but I didn't count it. Tena wrote a letter back. It seems as though they had sent the money home and they expected to go home when he had to go to the hospital. He told Harry that he might not have saved back money enough to meet all expenses, and he said, `If I shouldn't have, may I borrow of you until I get home, and I will send it as soon as I get home?' Harry gave him his check book and said, `Yes, write your checks, what you need.' As to the $54 item (hospital bill) I think Aunt Tena wrote it to me in a letter or that Frank said to take it out of the rent. In the conversation between Frank and Harry, Frank said they had sent their money home, and he became worse and was unable to go and we were afraid he hadn't kept enough since he had found he had to go to the hospital, and he asked Harry before he went to the hospital whether or not he could help him or let him have money until he got home, and Harry gave him his check book and told him to use what he wanted. I don't know when Aunt Tena sent the money home, nor how much, or whether it was by express, parcel post, special delivery, or how."
The substance of Harry Hartwick's testimony is that when Fred came to the house, on January 28th, he told Harry that he had come to settle with Frank.
"Frank was sitting up in bed at the time. Fred was there about two hours and Fred and Frank were alone in the room for an hour. I heard them talking but paid no attention to what they were doing. Finally Fred came out and called Mae and me in the room. After we went in Frank told me that he had settled and that Fred had *Page 763
paid him the $1,500 in full and settled everything, and he wanted me to look after his part of the farm. There was nobody present except Mae and me and Frank and Fred. Frank told Mae what to write in the book and she read it to them to see if it was right. I heard her read it." (The writing in controversy was here presented to the witness, who testified that it was read by his sister and he saw his two uncles sign it.)
"Before it was signed Fred handed Frank a handful of money, paper bills and silver money, mostly bills. There was more than one or two bills. There was a whole lot of them. I didn't see the denominations of the bills, but it looked like a good deal of money. I saw my sister give Frank some money for rent after that. Frank told Mae what to write, and after she had written she read it to them. Frank signed it in bed and Fred took it and signed it. After it was signed Frank said that he was glad it was settled and Fred now owns his part of the farm clear, and we own the land, each one half of it. He wanted me to look after his half and Fred to look after his half. Mae and I then went to Ottumwa and Fred went with us as far as Belknap. Mrs. Hartwick stayed with us in our home till Frank went to the hospital. I let Frank have money while he was at the hospital, gave him my check book and told him to take all he wanted. He had to borrow some money, said he didn't know how much he wanted, and I said, `I will just give you a check book and you can check for what you want.' If he checked any of it I took it out of the rent. I have seen the entries on that book, hospital bill $54.00, fares $25.05; another entry of fares $105.75. I got that out of the rent. When I took Fred in Frank's room he was not bad then. He could have gotten up himself. Frank's wife was in the house but not in the room. Frank told me that he had settled with Fred, that he paid him $1,500 in full. Frank was counting the money himself, he had it in his hand. Mae gave him some more, just a little bit. He was putting the bills down one at a time. I never asked Fred where he got the money. He had it in his hand when I first saw him. When I went into the room Fred handed Frank a bunch of money. After the writing was made Mae said, `You can sign now, Frank.' She said first, `Who wants to sign first?' and Fred said, `let Frank sign first.' He said then, `You sign it,' and Frank signed it. I claim that Frank dictated all those words, `This closes the book for N.W. Hartwick with $1,500 lien settled in full.' I heard Frank say it and I seen Mae write it. She wrote *Page 764
it all at one time. Fred did not ask for a receipt for the $1,500 that I heard, only for the book to be delivered to him. The words last above quoted were there when the name Frank Hartwick was placed there at the end of those three lines, and the words and writing were at the time of the signature in the same condition as it now is, and it was read over before it was signed. There has been no change or alteration of those words there and the writing there from the time it was signed until this time. They were just the same as they are now. I say Frank and Fred put their names there."
The writing in question was then offered in evidence and the plaintiff rested.
The substance of the testimony of the appellee Christina Hartwick, so far as material, is that her husband, Frank, was sick in bed since January 22, 1930; that he was attended by a doctor; and that he had a temperature running over 100. She accompanied him to the hospital in Centerville, and then to their home in Michigan. It was almost a year after her husband's death that she learned of the present action. In March, 1930, she received a letter from Fred, which, after acknowledging receipt of the death message, and expressions of sorrow, continued:
"Well now since Frank's death we will have to make some changes. Did he leave a will or papers of any kind or did he make any request what he wanted done with the land, the taxes are now due, I would like to know if he left any request so I will know how to meet the obligation."
She testified:
"During that sickness Frank and Fred had a conversation. It was about Harry taking his father's place in handling the 164 acres. I do not think it extended over half an hour. I was not present and did not hear what they said. There never was a time when Harry and Mae Hartwick were called in by Fred Hartwick and stayed in there for any length of time. Never a time when the three of them stayed in there for an hour or two. During that sickness there was no time when Frank had about him any considerable money, a big handful. Never was a time when any money or funds were sent home by either of us. I asked Harry if he could help me until I got some money back. He said he would let me *Page 765
take his check book. I drew checks for hospital bills, I think $54. I am acquainted with Frank's signature." (The witness then identified several of the genuine signatures.)
"The signature Frank Hartwick on the book and the writing in question is not Frank Hartwick's writing. I would say it is not his genuine signature."
This witness, in testifying to a written transfer of the automobile to the witness by Frank while he was in the hospital at Centerville, said:
"He knew me all the time, and the other parties around at the time. He was in strong physical condition. He knew everything he was saying and doing. During all the time that Frank Hartwick and I were in the home of Harry Hartwick, Frank was in bed, not out of bed at all. Fred Hartwick was there. I remember he went in the room and talked to my husband and they talked about the farm they owned jointly. Fred was in there at one time with the door closed. There was no one in the room at that time but the two men. Talked about something in connection with the farm. I helped about the housework. From January 25, 1930, on down until we left there my husband was a sick man. While my husband was sick I was not out or away from home other than a trip to Bloomfield to get a fever thermometer. There never was a time there when Fred Hartwick came and went into the room of Frank Hartwick and stayed for an hour or two. Harry and Mae were never called into my husband's room at any time when Fred Hartwick was there and the door to the room was never closed. There was no time there when my husband had any considerable sum of money, or handful, or roll of bills about him, and no money was sent home by either me or my husband. When I took my husband to the hospital we did not have sufficient funds to pay his doctor bill, so I asked Harry Hartwick for some money, if he could help me with some money until I got back home, and he authorized me to draw checks on him for what I needed. I drew a check on Harry for $54, and I sent him a check for that immediately upon reaching home, and he returned it and stated that he would take the amount out of the rent money."
Paul Howell, a witness for the appellees, testified that he is a mail carrier on the route which led past the Fred and Frank Hartwick farm. *Page 766
"I bought corn from Fred in January 1930, and made settlement for it. Gave Fred Hartwick two checks in settlement of the corn, one made to Fred and the other to Frank."
On January 28, 1930, when he reached the Hartwick farm, Fred was there.
The witness Hockersmith testified that he is assistant cashier in the Bloomfield bank. He testified as to the check above referred to, to Frank Hartwick, that it was cashed in his bank on the 30th of January, 1930.
The witness Kimball testified that he is president of a bank in Clinton, Michigan, and has been such for forty-one years. He is acquainted with the signature of Frank Hartwick, who was a customer of the bank, and identified certain instruments as bearing the true signature of Frank Hartwick, and as to the writing in dispute here, he testified:
"I would not recognize that signature as being his, and the same is not the signature of Frank Hartwick."
As to the signature in controversy, this witness further says:
"I suppose it is perfectly possible that this signature could have been written by Frank in an enfeebled condition, from sickness, or otherwise."
Frank W. Hogan, another witness living in Clinton, Michigan, and vice president of the State Savings Bank, said that he knew Frank Hartwick for ten or fifteen years; that he was a depositor in his bank, and he was familiar with his signature. As to the signature in controversy, he was asked whether or not he would identify that as the signature of Frank Hartwick. His answer was:
"Well, now, I really don't believe that is Frank's signature. It don't look like his signature. If it was he certainly was awfully nervous. He was not in his usual condition. If it had been presented to me I would not have accepted it without investigating it pretty thoroughly first. I don't believe I would say that was Frank's signature."
On cross-examination he said that a man's physical condition at the time he writes his name often affects the appearance of his signature; that if a man is enfeebled or sick, his signature does *Page 767
not appear as his normal signature. On being presented with Frank's signature on the photostatic copy of his will, he said:
"I think that is his signature all right. These gentlemen here, I know both of them, they were witnesses to that. I think that is his signature all right. If he wrote it he was either in a nervous condition or affected by ill health. He must have been."
Another witness, Maddy, an attorney at law, said he has been making a study of questioned documents and handwriting for fourteen or fifteen years. As to the writing in question he said that, if all of this writing was written at the same time, there was a change of ink during the process.
"The words `with $1,500 settled in full' was written with different ink or ink in a different condition. The writing of the first part of the clause the ink flowed freely and last part ink was congealed or thick. The last part of the second line and the entire third line is written in a cramped slow hand, in a crowded position. It shows too much care and too slow a motion to have been freehand. Also the writing is crowded between the lines more than anything else and shows to me it was written in after."
Another witness, Shaw, who was a commercial photographer and had handled document cases, pointed out certain things in the writing and said that certain parts were somewhat crowded, and pointed out what he called certain distinguishing features as to certain letters in the words. He testified as to the kind of ink and its flowage, and that in part of the writing the ink was not in the same fluid condition as in the other part. He made some enlarged photographs in which he pointed out the defects he saw in the writing.
In rebuttal the witness Maish testified as an expert on questioned documents, and from his experience in the banking business, in which he has spent most of his life, and after having inspected the document in question, said that in his judgment the words therein were written at the same time and by the same person. He testified that in his opinion the apparent difference in the ink grew out of the fact that the ink was not fresh, but that when it sets awhile it separates and that the pen may have been dipped in deeper and got some of the sediment in the bottom of the bottle.
H.C. Brown testified in substance that he measured the spacing *Page 768
of the words and letters in this document and that from such measurement and the punctuation, in his opinion same was written by the same person, with the same pen and ink, at the same time.
We have also before us the original exhibits in the case, including the original writing in controversy. From a careful review of the evidence and a comparison of the writings before us, we reach the undoubted conclusion that the signature of Frank Hartwick to the instrument in question was his genuine signature.
As to the other issue in the case, whether or not there was a material alteration of the writing after it was signed by Frank Hartwick, a conclusion thereon cannot be reached without giving attention to the law governing such issue. A question is raised as to the right to file any amendment at the time it was filed raising this issue, but in view of the conclusion we reach in this case, it is not necessary for us to pass on that question.
It is a fundamental doctrine in this state that where one seeks to raise an issue of this kind, he has the burden of alleging and proving the same. Turning to the pleading filed in relation to this matter, we find it in the following form:
"Comes now Christina V. Hartwick * * * and for the purpose of conforming the pleadings to the proof and to make her answer heretofore filed more definite and specific, states the following:
"She renews her denial of the genuineness of the signature of Frank M. Hartwick to the writing set forth in plaintiff's reply and does not, by this pleading, admit the genuineness of said signature or that said Frank Hartwick ever signed the instrument, and she further states that after the name `Frank Hartwick' was signed thereto, said instrument was materially altered and changed by adding thereto the words `with $1,500.00 lien settled in full,' and because of all of said matters, together with those hereinbefore pleaded by this defendant, said instrument did not constitute a settlement, satisfaction or release of the lien held by Frank Hartwick against the interest of Fred Hartwick in the premises hereinbefore set forth and described in the pleadings herein."
In the case of Tharp v. Jamison, 154 Iowa 77, 134 N.W. 583, 39 L.R.A. (N.S.) 100, this court said:
"An erasure or alteration apparent upon the face of the instrument raises no presumption that it was made after delivery. * * * *Page 769
The contention of the appellant at this point is that the only burden upon him is to show that an alteration was in fact made, and that the burden is then cast upon the plaintiff to show that such alteration was made before delivery or otherwise to explain or excuse. There are some jurisdictions where this rule is maintained. (Citing cases.) None of these cases sustain appellant's contention in this respect. Some of them are cases wherein the alleged alteration was shown to have been made after delivery, and where the burden of explanation was thereby thrown upon the party offering the instrument. But none of them dispense with the necessity that it be made to appear that the alleged alteration was made after delivery before any presumption of fraud can arise therefrom."
In Monona County v. Gray, 200 Iowa 1133, 206 N.W. 26, this court said:
"It is the settled rule in this state that an alteration apparent on the face of an instrument raises no presumption that it was made after delivery, and that the burden is upon the party alleging a material alteration to establish that it was made after delivery of the instrument. * * * Mere proof that an alteration was in fact made is not sufficient to cast upon the party relying on the instrument the burden to show that it was made before delivery, but it must be made to appear that the alleged alteration was made after delivery, before any presumption of fraud arises therefrom. * * * `The fact that an alteration appears, without showing that it was a material alteration, made after delivery, would not defeat recovery, even though made by the plaintiff.'"
In Council Bluffs Savings Bank v. Wendt, 203 Iowa 972, 213 N.W. 599, it is said:
"* * * The burden is upon the party alleging the material alteration in such written instrument to show that it was made after delivery of the instrument."
The same doctrine is announced in In re Estate of Thorne,202 Iowa 681, 210 N.W. 952.
Referring now to the pleading filed and just above set out, it will be noticed that it is not pleaded that the instrument was altered after its execution, or that, if it was altered after its execution, the consent of Frank Hartwick to such alteration was not given. With *Page 770
this rule in mind we turn to the testimony heretofore set out. As above shown, the burden was upon the appellees to show, first, that there was a material alteration, and, second, that such alteration was made after the instrument had been duly executed by Frank. We find it is apparent from the foregoing that the appellees have failed to sustain their burden of proof on this issue. In fact, as we read the record, the weight of testimony tends to show that there was no material alteration of the instrument in question, and, in reaching this conclusion, we do not lose sight of some testimony that was introduced by way of assessment rolls made out by Fred in the year in question.
The district court having reached the contrary conclusion, we find that it was in error in relation thereto, and its action is reversed.
CLAUSSEN, C.J., and KINDIG, DONEGAN, and EVANS, JJ., concur.
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The accident, resulting in alleged serious and permanent injuries to plaintiff, occurred at 10:50 o'clock a.m., on the 9th day of January, 1933. At that time plaintiff was riding in the rear seat of an automobile belonging to P.H. *Page 1102
Jones. The car was traveling in a westerly direction on highway No. 30, and approaching the rest of a viaduct at Gladstone, Iowa, when the collision and injury resulting therefrom occurred. The defendants' car was driven by Leonard Cherry, a son of the defendant Louise Cherry, who was riding in the rear seat at the time of the collision.
[1] In her petition, plaintiff alleges that the driver of the car was negligent in several particulars, and that the plaintiff was not guilty of any negligence contributing to or causing the injury complained of.
Defendants filed a general denial which put at issue the question of plaintiff's contributory negligence.
Although the evidence was conflicting as to the negligence of the drivers of the respective cars, as to speed, yielding one-half of the traveled roadway, having the cars under control, and driving at a careful and prudent speed, there was evidence from which the jury could find that the defendants' driver was guilty of negligence.
The court, however, in submitting the issues to the jury, omitted all reference to the issue raised by the pleadings on the question of plaintiff's freedom from contributory negligence.
In instruction No. I, the court said:
"The plaintiff in her petition alleges that the collision was caused by the negligence of the defendant in the following particulars:
"1. In failing to yield one-half of the traveled way by turning to the right when meeting the motor vehicle in which plaintiff was riding.
"2. In driving said Cadillac automobile without having the same under control and in failing to drive at a careful and prudent speed not, greater than, nor less than, is reasonable and proper, having due regard to the traffic, surface and width of the highway, and of the conditions of the highway then existing."
In the first paragraph of instruction No. II, the court said:
"1. It is admitted that the defendant, Louise Cherry, was the owner of the Cadillac automobile, and that the defendant, Leonard Cherry, was operating it with her knowledge and consent. *Page 1103
"This leaves for your consideration the following disputed propositions:
"(1) Whether the driver of the Cadillac car was negligent in one or both of the particulars specified in plaintiff's petition, as set out on page two of these instructions.
"(2) Whether such negligence, if any, was the proximate cause of the injury to, and damage of, the plaintiff.
"(3) The amount of damages, if any, the plaintiff is entitled to recover."
In paragraph two of said instructions, the court said:
"In order to recover damages in this case, the burden of proof is upon the plaintiff to establish by a preponderance of the evidence each of the three disputed propositions set out in the preceding instruction."
The instructions of the court omit entirely all reference to the question of plaintiff's freedom from contributory negligence; and nowhere in any of the instructions does the court charge the jury that the burden is upon plaintiff to establish her freedom from contributory negligence before a recovery can be allowed.
The defendants requested and the court refused to give the following instructions upon contributory negligence:
"XI. You are instructed that the plaintiff was bound to exercise reasonable care for her own safety and would not be justified, in the exercise of reasonable care, to proceed blindly under the circumstances shown in this case, but she also had a duty to observe the conditions surrounding her and the road ahead."
I. Appellants contend that the court erred in failing to instruct the jury that the burden was upon plaintiff to show her freedom from contributory negligence. It is the settled rule of law in Iowa and many other states that in actions of this kind it is necessary for plaintiff to both plead and prove freedom from contributory negligence, and a failure to so instruct the jury is reversible error.
It is the settled rule that in states where such burden is upon the plaintiff, "it is firmly established as part of the common law that, in all actions to recover damages for injuries alleged to have been caused by the negligence of the defendant, *Page 1104
the burden is upon the plaintiff to establish as an affirmative fact and as a necessary part of his case not only the negligence of the defendant, but that at the time of the accident plaintiff, or the person killed or injured, was in the exercise of due care and caution or was not guilty of negligence on his part contributing to the injury complained of. This burden * * * rests upon the plaintiff throughout the entire case and never shifts to the defendant." 45 C.J. 1182, section 759. See, also, a large number of cases in 45 Corpus Juris, pages 1182 and 1183, under section 759.
"In jurisdictions where the burden of proving freedom from contributory negligence is on the plaintiff as a part of his case and there is no statute changing the rule the absence of contributory negligence as a general rule cannot be presumed but must be proved, and the mere fact of the accident and the resulting injury to the plaintiff does not ordinarily authorize an inference, that he was in the exercise of due care." 45 C.J., 1154, section 743; Nelson v. Chicago, R.I. P.R. Co., 38 Iowa 564; Gwynn v. Duffield, 66 Iowa 708, 24 N.W. 523, 55 Am. Rep. 286; Gamble v. Mullin, 74 Iowa 99, 36 N.W. 909; Baker v. Chicago, R.I. P. Ry. Co., 95 Iowa 163, 63 N.W. 667; Quinn v. Chicago, R.I. P.R. Co., 107 Iowa 710, 77 N.W. 464; Steele v. Crabtree,130 Iowa 313, 106 N.W. 753; Cahill v. Illinois Cent. R. Co.,137 Iowa 577, 115 N.W. 216; Fitter v. Iowa Tel. Co., 143 Iowa 689, 121 N.W. 48; Grosjean v. Chicago, M. St. P.R. Co., 146 Iowa 17, 123 N.W. 162; Bradley v. Interurban R. Co., 191 Iowa 1351, 183 N.W. 493; Eaton v. Elman, 192 Iowa 719, 185 N.W. 601; McSpadden v. Axmear, 191 Iowa 547, 181 N.W. 4; Gipe v. Lynch, 155 Iowa 627, 136 N.W. 714.
In the case of Gamble v. Mullin, 74 Iowa 99, loc. cit. 100, 36 N.W. 909, 910, this court said:
"Defendants complain that the court failed to instruct the jury properly in regard to the issue of contributory negligence. The charge of the court stated a part of the issues, but failed to inform the jury that plaintiff was charged with having caused or contributed to the injury and damage sustained. That this was a material issue in the case cannot be denied. It was therefore error in the court to omit reference to this when stating the issues to the jury. Owen v. Owen, 22 Iowa 270 [274]; State v. Brainard, 25 Iowa 572 [578]; Potter v. Chicago, R.I. P.R. *Page 1105
Co., 46 Iowa 399 [402]; Hill v. Aultman, 68 Iowa 630, [632], 27 N.W. 788."
In McSpadden v. Axmear, 191 Iowa 547, loc. cit. 561, 181 N.W. 4, 6, the court said:
"It is contended by appellant that the question of contributory negligence should not have been submitted to the jury. With this statement we cannot agree. He alleged his freedom from negligence contributing to his injuries, as he was bound to do, and with the testimony in conflict as to speed of his car, where his car was, and other matters in dispute, either directly or circumstantially, it was the province of the jury to decide. Contributory negligence is ordinarily a question for the jury, and except in cases where the facts are clear and undisputed, and the cause and effect so apparent to every candid mind that but one conclusion may be fairly drawn therefrom, the court must submit the question to the jury."
In Bradley v. Interurban R. Co., 191 Iowa 1351, loc. cit. 1353, 183 N.W. 493, 494, the court said:
"The first and most earnestly argued proposition in support of the appeal is that the plaintiff should be held chargeable with contributory negligence as a matter of law. The argument, stated briefly, follows along this line: First, that although plaintiff was an invited passenger or guest in a car of which he had neither ownership nor control, yet he was still bound to exercise reasonable care for his own safety. * * * With the first proposition that the invited guest or passenger is not absolved from his obligation to use reasonable care for his own safety, there is no room for dispute."
In Baker v. Chicago, R.I. P. Ry. Co., 95 Iowa 163, loc. cit. 169, 63 N.W. 667, 669, this court said:
"Contributory negligence is not a defense. Its absence is a matter to be pleaded and proven to justify a recovery."
The fact that the person injured is a guest in the automobile in which she was riding does not relieve plaintiff from the duty of both pleading and proving her freedom from contributory negligence. Hoover v. Haggard, 219 Iowa 1232, 260 N.W. 540; Dow v. Des Moines City R. Co., 148 Iowa 429, 126 N.W. 918; Wagner v. Kloster, 188 Iowa 174, 175 N.W. 840; Willis v. *Page 1106
Schertz, 188 Iowa 712, 175 N.W. 321; Butterfield v. Chicago, R.I. P.R. Co., 193 Iowa 323, 185 N.W. 151; Johnson v. Omaha C.B. St. R. Co., 194 Iowa 1230, 190 N.W. 977; Glanville v. Chicago, R.I. P.R. Co., 196 Iowa 456, 193 N.W. 548; Hutchinson v. Sioux City Serv. Co., 210 Iowa 9, 230 N.W. 387.
"The fact that her husband was acting as driver of the car did not absolve her from responsibility in regard to the exercise of care on her own part, under the circumstances, to avoid an accident." Johnson v. Omaha C.B. St. R. Co., 194 Iowa 1230, loc. cit. 1233, 190 N.W. 977, 978.
The question of contributory negligence is ordinarily one for the jury. Howard v. City of Waterloo, 206 Iowa 1109, 221 N.W. 812; Gilliam v. Chicago, R.I. P.R. Co., 206 Iowa 1291, 222 N.W. 12; Burke v. Town of Lawton, 207 Iowa 585, 223 N.W. 397.
Under the instructions given, plaintiff might recover, although her own negligence may have contributed to the injury. Plaintiff alleged her freedom from contributory negligence, and with the testimony in conflict as to the speed of the car, where the car was, and other matters in dispute, either directly or circumstantially, it was necessarily within the province of the jury to decide the questions of negligence and contributory negligence. The burden of proving freedom from contributory negligence was upon the plaintiff, and a failure to so instruct the jury was erroneous.
[2] II. Appellants also contend that the lower court erred in not specifically instructing the jury that any damages awarded plaintiff must be such as directly and proximately resulted from the injuries received as a result of defendants' negligence. We have carefully examined the instructions given in relation to the question of damages, and while the court gave long instructions relative to damages, we find, upon a careful examination thereof, that nowhere in the instructions was the jury charged that any damages awarded must be such as directly and proximately resulted from injuries sustained as a direct result of the negligence
alleged. We think the damages recoverable for the negligence alleged should be such damages as were shown by the evidence to have been a direct result of defendants' negligence, and a failure to so instruct the jury is reversible error.
Appellants assign over one hundred errors as grounds for *Page 1107
reversal. Many of these errors are included in those relating to the court's failure to instruct on the question of plaintiff's contributory negligence, and upon the question of damages.
A large number of other assignments alleged do not comply with rule No. 30, which requires appellants to set out reasons for the errors assigned, and for that reason are not considered. In view also of the necessity for a new trial, we refrain from reviewing all other errors assigned.
For the reasons hereinabove set out, the judgment of the lower court must be and is hereby reversed. — Reversed.
All Justices concur.
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On the 18th day of December, 1933, W.E. Thompson was the owner of the title to a farm of approximately 204 acres of land in Clay county, Iowa, subject to a mortgage *Page 721
thereon in the principal sum of $5,000, which was then owned by the Brotherhood of American Yeomen. On that date Thompson rented the farm to L.A. White by written lease for the period from March 1, 1934, to March 1, 1935, for a rental of $600, $300 payable December 15, 1934, and $300 payable February 1, 1935. The rent payments were evidenced by two separate promissory notes which were referred to in the lease. The granting clause of the mortgage conveyed the rents, issues, and profits, and the mortgage further provided for the appointment of a receiver to collect the rents, issues and profits during the pendency of a suit for foreclosure and up to the time the purchaser at foreclosure would be entitled to possession. The mortgage was indexed and recorded as a real estate mortgage but was not indexed or filed as a chattel mortgage.
On January 23, 1934, approximately five weeks after the execution of the lease from Thompson to White, the two rent notes, endorsed by Thompson without recourse, were purchased for value by the City National Bank of Clinton, Iowa, from Flambeau River Lumber Company, the holder thereof, and both notes and the lease were delivered to said bank.
On or about April 1, 1934, an action was commenced to foreclose the mortgage, and Thompson and White were made defendants. The City National Bank of Clinton was not made a party defendant, and no notice of the foreclosure action was served upon it. Thompson appeared and filed an admission that he had no claim in the land superior to that of the plaintiff, and White made no appearance.
On the 10th day of August, 1934, a decree was entered in that action foreclosing the mortgage and appointing J.H. Peterson, clerk of the district court, receiver. Shortly thereafter, the receiver told White that the rents would be the same as in the lease with Thompson, but that they would have to be paid to the receiver. On the 15th day of December, 1934, the day upon which the first of the notes became due, the lessee White instituted the instant action in which J.H. Peterson, clerk of the district court of Clay county, Iowa, as receiver in the foreclosure action, and the City National Bank of Clinton, Iowa, were made defendants.
In his petition said White alleged the execution of the lease and notes, the foreclosure of the mortgage, the appointment of the receiver, the conflicting claims for the rent made by the *Page 722
receiver and by the bank. He offered to pay the $600 into court and asked that he be released from further liability for rent, and that the receiver and the bank be required to settle between themselves the dispute as to which of them was entitled thereto.
To this petition the defendant, City National Bank of Clinton, filed an answer and an amendment thereto. The defendant receiver also filed an answer to the petition and a reply to the answer of the bank. The Brotherhood of American Yeomen, although not a party to the action, also filed a separate answer to the petition and a separate reply to the answer of the bank. Upon the trial of the case some of the facts were stipulated and evidence was received as to others. It was also stipulated that the petition of interpleader filed by White should be sustained, that the parties would have the right to file further pleadings and briefs, and that the court could take the case under advisement and render judgment in vacation. Additional pleadings were thereafter filed by both parties, the material allegations of which will be hereafter referred to. Briefs were filed and, on the 31st day of August, 1935, the court filed his opinion and decree holding that the $600 rent fund belonged to the receiver. From this decree the defendant. City National Bank, appeals.
In his opinion the trial judge based his decision upon three separate grounds. We shall confine ourselves to a consideration of one of the grounds relied upon by the trial court. It is the contention of the receiver and of the Brotherhood that the bank is not entitled to the rent comprising the fund now in court, because such fund does not consist of the rentals payable by the tenant White under the lease made by him with the owner and mortgagor Thompson, but that such fund represents the rentals payable to the receiver under a new lease made by him with White. Thompson, the owner and landlord in the lease given by him to White, and White, the tenant, were both parties to the foreclosure action. The petition in the foreclosure action alleged "that by the terms of said real estate mortgage, the plaintiff was granted upon the commencement of a suit of foreclosure thereon the rights to have a receiver appointed by the court for the land and to collect the rents, issues and profits thereof, during the pendency of such suit, and up to the time the purchaser of such sale shall be entitled to possession thereof and to apply the rentals upon interest, taxes and upon the principal of this mortgage." The petition also alleged that the defendants, L.A. *Page 723
White and Mrs. L.A. White, were tenants in possession of the premises under a lease from the title holder. The prayer of the petition asked that a receiver be appointed immediately upon the filing of the petition; that he take possession of the premises and of the rentals thereof, and rent the premises and apply the rentals upon the taxes, interest and mortgage; that any and all rights of the defendants be decreed to be junior and inferior to the lien of plaintiff's mortgage; that the mortgage be foreclosed and special execution issue for the sale thereof; that the purchaser be placed in possession, "and that the receiver be given possession during the pendency of this suit and the redemption period." The decree of foreclosure found "that the plaintiff is entitled to foreclosure of the mortgage and to a receiver for the collection of the rentals and for renting the premises and that the plaintiff has a lien upon said rentals and income of the property, by the terms of their mortgage." It adjudged and decreed that "the Clerk of this Court, J.H. Peterson, is hereby appointed receiver to collect the rentals from the defendants, L.A. White and Mrs. L.A. White and to rent the premises and collect the rentals after the expiration of their lease and from the beginning of this suit to the end of the period of redemption." It further adjudged and decreed that "the lien of said mortgage is from the 7th day of December, 1923, and the rights of W.E. Thompson and Mrs. W.E. Thompson are hereby foreclosed and cut off including their rights of redemption of said premises, and the rights of L.A. White and Mrs. L.A. White are hereby foreclosed and cut off, save their right of occupancy until March 1, 1935, upon payment to the receiver of the rentals and they are decreed to have no other rights in the premises."
[1] It is the claim of the Brotherhood and of the receiver that the decree of foreclosure, in appointing the receiver and authorizing him to take possession and collect the rents, in limiting the rights of the tenant White to occupy the premises by the condition that he pay the rents to the receiver, and in cutting off all other rights of Thompson and White, fixed and adjudicated the receiver's right to the rentals comprising the fund now in court. As far as this particular phase of the appellee's argument is concerned, we think it is fully met by the contention of the appellant that, since the bank was neither a party nor privy to the foreclosure proceeding, it cannot be bound or estopped by any adjudication in the foreclosure decree. It is admitted that the *Page 724
bank was not a party to the foreclosure action, and we find no basis for holding that it was in privity with any party to that action. As said in Leach v. First National Bank of Fort Dodge,206 Iowa 265, 270, 217 N.W. 865, 868:
"Privity is said to be a mutual or successive relationship to the same rights of property, and if it is sought to bind one party as privy by an adjudication against another with whom he is in privity, it must appear that, at the time he acquired the right, or succeeded to the title, it was then affected by the adjudication; for, if the right was acquired by him before theadjudication, then the doctrine cannot apply." (Italics are ours.)
[2] It is the contention of the Brotherhood and of the receiver, however, that, even though the bank be not barred by the adjudication, as a party or privy in the foreclosure action, it cannot recover the rent comprising the fund now in court, because such fund does not contain the rentals payable by the tenant White under the lease made with the owner Thompson, but said fund represents the rentals payable to the receiver under a new lease made by him with White. The contention of the receiver in this regard is that, by the terms of the decree, Thompson, the owner, and White, the tenant, who were both parties to the action, were deprived of all rights in connection with the lease between them, that the receiver was given the possession of the land and the right to collect all rentals from the commencement of the action to the end of the period of redemption; that the tenant White was deprived of all right to possession of the land except on condition that he pay the rentals to the receiver; that, after the decree had been entered, the receiver notified White of his appointment and told him that the rents would have to be paid to the receiver; and that White agreed to pay the rentals to the receiver and thereby entered into a new lease with the receiver. It is argued that under this decree, from which no appeal was taken, all of Thompson's rights and all of White's rights were cut off; that White was given the privilege of remaining on the land to the end of the year for which he had rented it from Thompson, but on the condition that he pay the rent to the receiver; that, because of the express provisions of the decree and the new lease made by the receiver pursuant thereto, there was a constructive eviction of the tenant White under the old lease given to him by Thompson; and that the bank, as the assignee *Page 725
of the Thompson lease, was burdened with the duty to maintain the tenant in possession, as a condition to its right to collect the rent thereunder.
In the case of Browne v. Willis, 199 Iowa 453, 455, 202 N.W. 220, 221, Willis leased certain land, on which there was a mortgage, from one Haltom, the owner thereof, and delivered to Haltom a written lease and two notes evidencing the rent thereon. The mortgage pledged the rents and profits and provided for the appointment of a receiver in case of foreclosure. Haltom sold the rent notes for a good consideration to Browne, the plaintiff. Following this, the mortgage was foreclosed by its owner, Stewart, and another person named Stewart was appointed as receiver. Immediately after his appointment the receiver demanded possession from Willis, and Willis surrendered the premises by accepting a lease from the receiver and executing new notes for the rent to accrue. Browne, the assignee of the rent notes given by Willis to Haltom, brought action thereon against Willis and made the receiver a party to such action. Stewart, the receiver, filed a cross-petition claiming right to the rents as receiver in the mortgage foreclosure. Willis paid the amount of rents as represented by the notes into court for the benefit of whichever party should be found entitled thereto, and the trial court found that the fund in court belonged to Stewart, the receiver. In the opinion, which was written by the late Mr. Justice Evans, it is said:
"That the mortgagee Stewart had a perfect adjudication as against the defendant Willis in his decree of April 5, 1923, is beyond question. The receiver, therefore, was entitled to enforce his lease and to collect the rent notes thereunder by force of such prior adjudication alone, and regardless of any question of prior liability incurred by Willis to Haltom. * * * The sole consideration moving to Willis as lessee was the executory undertaking of the lessor that he would maintain the lessee's right of possession of the premises during the period of the lease. If Haltom had sought recovery upon the lease, he would have had to show performance of his undertaking in that respect. True, he would be entitled to some initial presumption in the first instance. But if it were made to appear, as against him, that he had failed to maintain the right of possession in his tenant, and that the tenant had been evicted, it would be a complete defense as against *Page 726
him. It would be no less a defense as against his assignee. The assignment of the lease by Haltom did not terminate his obligation to perform its covenants, both expressed and implied. His assignee took with knowledge that a failure of his assignor to perform such covenants would amount to a failure of consideration, and would destroy the right of recovery against the tenant. He was, therefore, bound to see that such covenants were performed, either by Haltom or by himself in Haltom's behalf. Todd v. State Bank of Edgewood, 182 Iowa 276, 165 N.W. 593, 3 A.L.R. 971. But the tenant was not required to look further than to his own landlord for the performance of such covenants. The decree against Willis and against Haltom worked a legal eviction. It is no answer to say that Browne was not a party to the decree. Willis and Haltom were parties. The mortgagee Stewart, as plaintiff, served as defendants all parties who appeared to have any interest in the premises, either upon the public records or by possession of the property. He does not appear to have had either actual or constructive notice of the right of Browne. He was not bound to discover him as a condition to the assertion of his claim against Willis and against Haltom. Having thereby accomplished an eviction of both the tenant and his landlord, it was immaterial to whom the receiver should thereafter rent the land for the season of 1923. If he had rented to a stranger, this plaintiff could not have recovered rent from him nor could he have regained from him the possession which had been taken away from Willis and Haltom. The receiver did rent the premises to Willis. This was considerate to Willis, but it involved him in new relations, and put him under new obligations. It did not enlarge the rights of this plaintiff, nor did it restore to him the rights that he had lost. These questions are decisive of the case. Granted that the adjudication pleaded was not binding upon Browne in a conclusive sense, it was enough that it be binding upon Willis and Haltom, in order to constitute an eviction. Granted that the plaintiff, under the lease, had a potential lien upon the crops to be grown during the season, and that the mortgagee had none, prior to default and foreclosure, yet such lien could not survive a dead cause of action on the lease."
The rule laid down in the Browne case was followed in Keenan v. Jordan, 204 Iowa 1338, 1342, 217 N.W. 248, 249. In *Page 727
that case, although raised by a different situation as to the pleadings, the question presented was practically identical with the question presented in the Browne case, and the similarity in the facts was set out quite fully in the opinion. Taylor, the owner and mortgagor, gave a quitclaim deed covering certain land to Jordan and Jordan gave Taylor a lease upon this land. Thereafter, and prior to the institution of the foreclosure action, Jordan gave Keenan a chattel mortgage upon his share of the rents under said lease to Taylor. In the foreclosure action, which asked for the appointment of a receiver, both Taylor and Jordan were made parties defendant. The decree foreclosed the mortgage and appointed the receiver, with orders to take possession of the real estate and collect the rents and profits. The receiver made a new lease with Taylor and proceeded to take possession of the share of grain due as rental under this lease. Thereafter, Keenan instituted action to foreclose his chattel mortgage and, upon the trial, the lower court held the chattel mortgage was superior to the rights of the holder of the real estate mortgage or of the receiver. In reversing the case, this court said:
"In the instant case, the mortgagee in the foreclosure proceedings had no notice or knowledge of the appellee's chattel mortgage upon the rentals, to accrue under the lease which Jordan had given to Taylor. He made Jordan and Taylor parties defendant in the foreclosure proceedings, and, as before stated, they pleaded the existing lease between them, and in that action it was adjudicatd that the appellee's rights to the rents and profits of said land under the receivership were senior and superior to the rights of either Jordan or Taylor under their lease. This was, in effect, an eviction of Taylor. By said decree Jordan was adjudicated to have no rights in said premises under his lease with Taylor. It was also adjudicated that Taylor had no rights under his lease with Jordan. There was, therefore, a total failure of the subject-matter of the chattel mortgage held by appellee Keenan, — namely, Jordan's share of rentals. There was nothing upon which it could operate. There had been an adjudication as against both Taylor and Jordan that neither of said parties had any rights under said lease, as against the mortgagee."
The holding of the Browne and Keenan cases, supra, has *Page 728
been approved and followed in Miller v. Sievers, 213 Iowa 45, 238 N.W. 469, and in Equitable Life Ins. Co. v. Leaven et al.,214 Iowa 121, 241 N.W. 446.
We are unable to see any essential difference between the facts of the instant case and those presented by the cases above cited. It is admitted that in the instant case the mortgagee had no knowledge of the assignment of the lease and rent notes prior to the entry of the foreclosure decree. Both the landlord, Thompson, who was the owner of the title at the time of the foreclosure, and the tenant, White, who was the lessee, were made parties to the foreclosure proceedings. No appeal was taken from the decree. The decree appointed the clerk of the court receiver "to collect the rentals from the defendants, L.A. White and Mrs. L.A. White, and to rent the premises and collect the rentals from the expiration of their lease and from the beginning of this suit to the end of the period of redemption." It established the lien of the mortgage from the date of its execution, December 7, 1923, foreclosed and cut off the rights of W.E. Thompson and Mrs. W.E. Thompson, the owner and wife; and it foreclosed and cut off the rights of L.A. White and Mrs. L.A. White, the tenants and lessees, "save their right of occupancy until March 1, 1935, upon payment to the receiver of the rentals and they are decreed to have no other rights in the premises."
Although not very skillfully stated, we think the provisions of the decree were sufficient to give to the receiver the right of possession of the mortgaged property, including the rents and profits, and to rent the premises. And, while not entirely satisfactory, we also think that the evidence as to what transpired after the entry of the decree is sufficient to show that the receiver took possession of the premises, that he demanded the rentals be paid to him, and that the tenant White agreed to pay the rentals to him. Not only does the decree by its express terms cut off White's right to occupy the premises under the lease from Thompson, but by the demand of the receiver that the rent be paid to him and White's agreement to do so, a new lease was, in effect, entered into, and there was a constructive eviction of the tenant, White, under the old lease made with Thompson. The bank as assignee of the landlord's rights under the Thompson lease, failed to maintain the lessee in possession; the rents paid into court represent the rentals due under the lease made *Page 729
by the receiver with the tenant; and the receiver's right to such rentals is, therefore, superior to any right that the bank may claim as assignee of Thompson.
Considerable argument is devoted to other propositions upon which the trial court based his opinion and decree, but, as the conclusion we have reached on the proposition considered is determinative of the rights involved in this action, we deem it unnecessary to devote further discussion to the other propositions discussed by the trial court.
The decree of the trial court is affirmed. — Affirmed.
PARSONS, C.J., and ALBERT, ANDERSON, STIGER, and HAMILTON, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433333/
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Appellant Board alleges that it was established in 1904, covering an area of 62,867 acres; that it was and is the lower or outlet district through which waters from the tributary districts found their way to the Missouri River; that the total area covered by all the districts is approximately 250,000 acres; that during the years 1936 to 1939, inclusive, repairs were deemed necessary to restore the outlet to its original usefulness, and to that end, extensive repairs were made; and that the cost of such repairs was assessed to the various tributary districts in the proportions to which they were benefited.
While reference is made to other tributary districts, this action involves only Losey Drainage District of Monona County. The Board of Supervisors of Monona County, as representatives of that district, will be spoken of as if sole appellee. Appellee filed what is rightly designated "an answer which contained a multitude of defenses." That this multitude was thrown together in one division or count, contrary to the rules of good pleading, has not simplified the problem before us.
The answer challenges generally everything alleged in the petition except the legal status of the parties. It does admit that it refused to pay the portion of the repair assessed against it. It alleges further that it is not liable to pay on these principal grounds: (1) That the law which permits an assessment to be made without notice and a chance to be heard, violates the *Page 1100
provisions of State and Federal Constitutions (sections 6 and 9 of Article I of the Constitution of Iowa, and Fifth and Fourteenth Amendments to the Constitution of the United States) guaranteeing due process and equal protection of the law; (2) that there is no provision of law for an appeal in which the correctness of the assessment could be investigated; and (3) that if it be conceded that the provisions of the drainage statutes do permit an appeal to the district court, the remedy is inadequate because there was no way of knowing when to appeal.
Appellants' motion to strike the answer in effect challenges the right of appellee to raise any of the issues tendered, on the ground that its remedy is to be found exclusively within the provisions of the drainage statutes. The argument is that, having failed to avail itself of the provisions of the law therein provided, appellee may not be heard here. Appellants cite in support of their contention at this point, sections 7513, 7514, 7515, and 7527, 1939 Code. Basing their arguments on these sections, appellants say that appellee is without right to assert any defense here.
The lower court overruled the motion. We think the ruling was right so far as the general denial put in issue the matters properly the subject of proof as hereinafter indicated. We have held that a quasi municipal corporation may not challenge the authority of its creator. Hewitt Sons Co. v. Keller, 223 Iowa 1372, 275 N.W. 94. Even if this were not so, the constitutional question has been settled against appellee. See Breiholz v. Board of Supervisors, 186 Iowa 1147, 173 N.W. 1; Id., 257 U.S. 118, 42 S. Ct. 13, 66 L. Ed. 159; Board of Trustees v. Board of Supervisors, 198 Iowa 117, 197 N.W. 82; and Baldozier v. Mayberry, 226 Iowa 693, 285 N.W. 140.
[1] It is to be kept in mind that we are not now considering the complaint of a property owner. Appellee is a legislative creation which has no rights or powers other than those found in the statutes which gave and sustain its life. We quote with approval from a New York decision in City of Des Moines v. Iowa Tel. Co., 181 Iowa 1282, 1292, 162 N.W. 323, 326, this:
"`The true view is this: Municipal corporations owe their origin to, and derive their powers and rights wholly from, the *Page 1101
legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. If it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the state, and the corporation could not prevent it. We know of no limitation on this right, so far as the corporations themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature.'"
See also Faitoute Iron Steel Co. v. City of Asbury Park,316 U.S. 502, 62 S. Ct. 1129, 86 L. Ed. 1629, and cases therein cited.
[2] Appellee, then, must base its refusal to bear its part of the cost of repairing the outlet on legislative declaration. We have found none. Section 7563 provides for the repair of the common outlet; and section 7567 declares:
"If the amount finally charged against a district does not exceed ten percent of the original cost of the improvement in said district, the board shall proceed to levy said amount against all lands * * * in accordance with the original classification and apportionment."
The assessments made in this case do not exceed ten per cent of the original cost.
[3] Sections 7513, 7514, and 7515 provide for appeals and section 7527, which appears in chapter 353, Title XVII, declares:
"* * * The remedy by appeal provided for in this chapter shall be exclusive of all other remedies."
Appellee says that there is no time fixed when the right of appeal begins. We do not decide this question, though it may not be out of place to suggest that such time might well have been when the report of the commissioners duly appointed was filed with the auditor of Monona county. The claim of appellee Board that it had no notice of the assessment can be accepted only on an assumption of indifference to what was going *Page 1102
on in Monona county affairs, which we think appellee would scarcely admit.
As we have said, the answer, in addition to a general denial, sets up a multitude of defenses consisting of specific denials. By these the appellee denies, among other things, that the outlet of the appellant district became clogged, that repairs were made, or that the cost of repairs was legally apportioned.
Appellants contend that the issues thus asserted cannot be raised in these proceedings because section 7527 of the Code provides, "The remedy by appeal provided for in this chapter shall be exclusive of all other remedies." In the trial below appellants relied upon our holding in Petersen v. Sorensen,192 Iowa 471, 479, 185 N.W. 42, 45, wherein we state:
"If an improper classification were adopted, or if lands properly assessable were omitted from the levy, or if the assessment was not according to benefits, or for other reasons was inequitable, the remedy by appeal was sufficient and exclusive. This remedy having been provided, it must be followed."
The court below in the case before us held as follows:
"The Court concludes that an appeal from the allocation of assessment made by the Commission to the defendant District is not the only remedy given the defendant for the reason that there was nothing from which the defendant might appeal."
The above holding is erroneous. Section 7515 provides that all "appeals shall be taken within twenty days after the date of final action or order of the board." The petition alleges, as to the repair work in 1936 and 1937, that "a full and complete report of said repair work to said waterways of the Monona-Harrison drainage system was prepared and filed by Engineer B.H. Davis, who was appointed by plaintiffs to investigate condition of said waterways in the Monona-Harrison Drainage District, in the office of the County Auditor of Monona County, Iowa, and a further report as to said repair work was prepared and filed by Commissioners H.M. Baldwin, Tyler Johnston and B.H. Davis, relating to proportionate benefits and sum total to be assessed to drainage districts, as provided by statute, which are tributary to the Monona-Harrison drainage system for *Page 1103
repair work done in said system in 1936, and 1937, and which said report was filed in the office of the County Auditor in Monona County, Iowa." The petition further alleges:
"That on June 4, 1938, the plaintiff Board of Trustees by resolution duly passed and adopted by them authorized a demand on the several defendant Boards for a contribution by said defendants of their proportionate share of said expense for repair work done in the Monona-Harrison Drainage System in 1936 and in 1937, according to the report of the Commissioners appointed for said purpose, and filed in the office of the Monona County Auditor, as hereinabove mentioned; which demand was thereupon made of the said defendant Boards * * *."
The trial court was wrong in holding that there was nothing to appeal from. The order of June 4, 1938, fixed the apportionment and authorized a demand on appellee for its proportionate share. When that demand was made, appellee surely had something from which to appeal. The answer admits:
"Nor did these answering defendants or the taxpayers within their district appear and protest against making the said allocation, nor did they, or any of them, appeal from the alleged order of allocation."
This admission is sufficient to warrant the holding that, under section 7527 of the Code, the allocation upon which appellants rely herein cannot be the subject of the collateral attack attempted by the specific denials and related allegations asserted in the answer herein.
We return, then, to the question as to what issues are to be tried under the general denial. We have said that appellee may not raise any constitutional questions as to the power of appellants. We have said, too, that the power and authority of appellants to make repairs in the outlet district could not be questioned except by appeal.
There seems to remain, then, under the general denial, only the burden of appellants to prove that appellant district is the outlet district, that it made the repairs, that the cost thereof did not exceed ten per cent of the original cost of the improvement, and lastly, that appellee has not paid its assessment. *Page 1104
The cause is affirmed in part, reversed in part and remanded for further proceedings in conformity herewith. — Affirmed in part; reversed in part and remanded.
WENNERSTRUM, C.J., and MITCHELL, HALE, GARFIELD, MILLER, and STIGER, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433334/
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[1] Both the challenge to the probate of the will and codicil and the supporting and opposing testimony are of a type very familiar to the courts. The propositions of law involved for the most part have been before this court many times. Whether the maker of a testamentary disposition of property had sufficient mental capacity, and whether the disposition was the desired and voluntary act of the maker or that of someone else unduly influencing or effecting the act are usually determined by the facts. This case is no exception. The facts are the determining factors.
Viola Coe was seventy-nine years old when she executed the will on August 12, 1939, and the codicil on the 27th day of the next month. She had never married and had spent her life as the housekeeper of her bachelor brother, S.N. Coe, who died January 21, 1939, at the age of approximately eighty-one years. By his will, made in 1924, he gave all of his property — an estate of about $25,000 — absolutely to his sister, Viola. They were born at a crossroads settlement in Illinois, known as French Grove Corners, where their parents operated the grocery store and post office. There were four other children. The eldest, Anna, who married a Hardenburgh and moved away into Iowa, or other state to the west, had three children, and they are the proponents, Alora H. Dunn, Bertha Lewis, and Edna Bell. Another child, James E. Coe, married a neighbor girl, Harriet E. Wyckoff, and they lived on a forty-acre farm near by, which the wife inherited, until their deaths. This branch of the family is represented by their only child, Royce W. Coe, the most active contestant. Another child, Jennie, married Reed, and the other proponents are their children or grandchildren. The youngest child of the old folks at the Corners, was Laura, *Page 1115
who married a McRill. They moved to Kansas and never kept in very close touch with the other brothers and sisters and their families. The other contestants are the sons and daughter of Laura McRill.
Viola and S.N. Coe stayed with the parents. Viola helped about the home and store and worked in the neighborhood and her brother, S.N., operated a farm near by. In 1892 they both came to Henry County, Iowa, where S.N. bought a farm near Mount Pleasant, which he and his sister operated until about 1914 or 1915, when he bought a home in Mount Pleasant, which they moved into and occupied until their deaths. Some years after they came to Iowa their parents came and lived with them until the mother died in 1903 and the father in 1911. Their bodies were taken to French Corners for burial. S.N. and his sister went back to French Corners occasionally for visits and to attend funerals and for other purposes. They sometimes stayed at the James E. Coe home, and the latter and his wife and their son, Royce, and his children occasionally visited the Mount Pleasant home of S.N. and Viola. There appears to have been no particular friction between any members of the various branches of the family. Members of the Reed family visited at the Mount Pleasant home, and there were visits back and forth between the Alora Dunn family at Fairfield, Iowa, and Viola and S.N. The latter was a capable and thrifty business man. Both were active in church work. Viola taught a class in Sunday school for some years. After retiring from the farm they spent several winters in California. Viola was a bright, pleasant, companionable woman, neat in dress and clean in person. During her brother's life she had no occasion to attend to business matters.
The contestants introduced testimony that in 1936 she was struck by an automobile in Mount Pleasant, and that this was the inception of a mental decline which became quite precipitate after her brother's death in January 1939. This testimony, if it is true, tends to prove that she became more forgetful of persons and events, halting in her speech, careless of her appearance, untidy and unclean in her dress and person, and indifferent to matters going on about her. Much of this testimony covers a period a year and two years after the execution *Page 1116
of the will and codicil. There is undisputed testimony that in the spring or early summer of 1941, Miss Coe, before daylight one morning, slipped out of her home, without the knowledge of the maid, in her night clothes, and was found wandering confusedly about the streets and in the city park of Mount Pleasant, and it was with some difficulty that she was returned to her home. Some months later she fell in her home and injured her arm. She died January 21, 1942, at the age of eighty years and five months. Two local doctors, in response to long hypothetical questions, not always in keeping with the testimony and including some matters of little importance, gave opinions against her mental capacity. Dr. Soucek, superintendent of the state hospital at Mount Pleasant, in answer to a hypothetical question, testified that it indicated the subject "was showing some signs of mental derangement — insanity," but did not confine his answer to any particular time or date. On cross-examination he frankly and freely stated that several of the hypotheses in the question were not evidential of insanity.
For the proponents, lay witnesses gave testimony directly contradictory to that of the lay witnesses of the contestants. Dr. Sternberg, who was the doctor whom Miss Coe and her brother called when in need of a doctor's attention, and who gave her a physical examination the day she executed the will, testified that he considered her of sound mind on that day. While we have briefly referred to this testimony as to the mentality of the testatrix for its bearing on the issue of undue influence, it is our judgment that the trial court rightly submitted the issue of testamentary incapacity to the jury.
I. Contestants urge that the most important error committed by the trial court was the withdrawal of the issue of undue influence from the consideration of the jury. We will set out, in substance, testimony bearing upon this issue.
The objections of contestants allege that the will and codicil were not the acts of Miss Coe, but were the expression and will of Alora H. Dunn, and the result of duress and undue influence exercised by her over the testatrix. Alora H. Dunn, a niece of the testatrix, is the wife of Irving H. Dunn, of Fairfield, Iowa. She is a lady of some business experience and the owner of property. On the morning of the day when he was *Page 1117
taken to the hospital just preceding his death, S.N. Coe told his sister to be sure to get Mrs. Dunn to come down from Fairfield. She came that afternoon and took Mr. Coe to the hospital. After his funeral, and within two or three weeks, she returned to the Coe home and gave personal attention to much of the business affairs of Miss Coe. She spent some time each week with her. A.M. Van Allen, lawyer at Mount Pleasant, had drawn the will of S.N. Coe and it was in his custody. It named Viola A. Coe as executrix. Mr. Van Allen notified her of the will and she came to his office and told him that because of her feeble health she thought best to decline the appointment of executrix, and asked that an old friend, James T. Gillis, be appointed. She signed and swore to such a declination and request on January 31, 1939, ten days after her brother's death. On February 15, 1939, Miss Coe and Mrs. Dunn came to the Van Allen office and Mrs. Dunn said that Miss Coe had determined to serve as executrix. On that day Miss Coe signed and swore to a withdrawal of her declination to serve, and on February 28, 1939, she was appointed executrix of her brother's estate. On March 22, 1939, she signed and swore to the inventory prepared by Mr. Van Allen, listing three pieces of real estate estimated to be worth $10,200, and fourteen items of cash and personalty valued at $11,151.07, and expenses of last sickness and burial of $855.30. She signed and swore to the final report on August 14, 1940, before Harold McLeran, and the estate was closed and she was discharged as executrix on November 26, 1940. The final report was prepared in the Van Allen office. She also signed all other papers required of her as executrix. George O. Van Allen, of the law firm, testified that when Miss Coe and Mrs. Dunn were in the office at the time Miss Coe signed the withdrawal of her declination to serve as executrix, "Miss Coe was apparently acting on Mrs. Dunn's directions," and "after the first time she came to the office, following her brother's death, Mrs. Dunn was always along and in charge thereafter," and "in the latter part of the administration, the instructions to our office came from Mr. McLeran." He also testified:
"Until Mrs. Dunn appeared on the scene, Mr. Gillis was the man she wanted to look after her business, because she had *Page 1118
confidence in him, but after Mrs. Dunn appeared, that didn't work because Mrs. Dunn didn't want him to act. Miss Coe did not do any of the work of Executrix. Mrs. Dunn did it. Of course Miss Coe signed the papers, but Mrs. Dunn did the business. Miss Coe didn't have any idea about it. * * * We never got any orders from Miss Coe in this estate. We got no explanation or satisfaction from Miss Coe herself. I am not sore at all because Mrs. Dunn took a hand in this estate instead of allowing Miss Coe to look after it herself. It was Miss Coe's suggestion that Mr. Gillis act — that wasn't our suggestion at all. We were allowed and paid the regular statutory fee [$325] for our services in the S.N. Coe estate, although it was objected to by Mrs. Dunn."
Both the Van Allens testified that Miss Coe objected to the doctor's charge of $264 for S.N. Coe's last illness, and to the inheritance tax of $1,032.84, because she said she could not afford it and would have nothing left to live on. When George Van Allen called at her home to see about the payment of the doctor's bill, he testified that she told him "she would have to wait until she saw Mrs. Dunn." Later Miss Coe consulted Mr. McLeran about the doctor's bill and he advised her to pay it, according to his testimony. There is nothing in the record showing that any executrix' fee was charged against the estate by Miss Coe or by Mrs. Dunn. The senior Van Allen testified that Miss Coe told him that a relative of hers had told her that Mr. Gillis was a very undesirable party and that she herself should assume the burden of the estate, and that she (Miss Coe) seemed very much set against Mr. Gillis. He testified that he could neither get Miss Coe to come to his office nor could he reach her by telephone; that the hired girl "would * * * inform me that I would have to wait until Mrs. Dunn came down before the matter could be attended to. That happened on several occasions, in the spring or summer of 1939. I finally entirely gave up attempting to contact Miss Coe, after Mrs. Dunn took over, and thereafter I was in touch with the estate only through Mr. McLeran, who had been retained by Mrs. Dunn as her attorney. * * * In the latter part of the administration, I could never get past Mrs. Dunn, nor in touch with Miss Coe." A witness testified that Mrs. Dunn said she "never had any use *Page 1119
for the Van Allens." Mr. Van Allen, senior, testified: "Yes I was kind of feather-edged toward Mrs. Dunn and I didn't care to have any conversation with her and I was just as peeved as I could be toward her." On cross-examination, when asked if he had not expressed a wish that Mrs. Dunn be beaten in this lawsuit, he answered: "I am not clear, what I said, but it wouldn't grieve me if she lost the case." Mr. McLeran testified: "I was advised by the Van Allens and by Miss Coe and by Mrs. Dunn that there was some disagreement between the parties and I tried to act as a go-between in order to enable them to finish up the estate."
Mr. and Mrs. Miner, neighbors of the Coes, who took Miss Coe to church regularly after Mr. Coe's death, until she quit going sometime before her death, testified that Miss Coe told them that Mrs. Dunn had told her to sign no papers unless she was with her. Mr. Miner testified that she had asked his advice in some matters after her brother's death, and a little later she said to him:
"`I am not going to bother you any more about the business, because my niece from Fairfield is going to take charge of things.' She said that the niece from Fairfield told her positively to do nothing in regard to anything until she was there. She said `I have never made a will and I am afraid of it.' I know it was less than three weeks after Mr. Coe's death that Miss Coe told me I was too old and said that the niece from Fairfield would take care of her business."
A maid who stayed nights with Miss Coe just after her brother's death testified that Mr. Gillis had been at the house several times talking to Miss Coe. She testified:
"She [Miss Coe] said that she didn't sign anything that he had over there that day. * * * Then Mrs. Dunn came on Tuesday, following that, and Mrs. Dunn said to me `The way Miss Coe carries on about me, Mollie — she cries so much all the time — she doesn't know what she is signing or anything.!' And I said, `If it were me, I wouldn't let Mr. Gillis come in here all the time. She will be signing something, some of these days, that you will be sorry for.' And Mrs. Dunn said `I know she will.' * * * At times, in 1939, when Mrs. Dunn was there, she had *Page 1120
difficulty in getting Miss Coe to do what she wanted her to. That happened more than once. Mrs. Laura Shawver was there, a niece from Abingdon, while I was staying there in 1939, and she could do more with Miss Coe than anyone else could. Mrs. Shawver and Mrs. Dunn didn't get along very well. * * * When Mrs. Shawver was there, Mrs. Dunn was kind of an outcast. * * * The reason I told Mrs. Dunn that she ought to keep Mr. Gillis out of there was because Miss Coe would cry and feel bad and couldn't sleep at night and would worry after Mr. Gillis was over there. Miss Coe complained to me that Mr. Gillis wanted her to sign papers and she said she didn't know what they were. She cried after Mr. Gillis left, quite a few times."
Mr. Gillis denied that he asked Miss Coe to sign any paper. The record shows that he had an option contract with S.N. Coe, under which, on the payment of $2,500, Mr. Coe would convey a residence property to him. This contract was in force at Mr. Coe's death. Mr. Gillis proposed to Mr. McLeran that he pay $500 and take a deed and give a mortgage back. Mr. McLeran insisted on a payment of $1,000. On August 9, 1939, Miss Coe signed the deed in McLeran's office, and the next day Mr. and Mrs. Gillis executed a note and mortgage for $1,500. Mr. Gillis testified that Miss Coe was of sound mind.
Mr. McLeran testified that sometime in July 1939 Miss Coe came to his office and said she wanted to draw her will; that she did not wish to remember Royce Coe and some others, and was not sure of their exact names; McLeran asked her to write to Mrs. Dunn for the names of the relatives, and later Miss Coe and Mrs. Dunn came to the office together; later, by correspondence, some of the names were procured, and McLeran was called to the Coe home; Mrs. Dunn was there; Miss Coe discussed her relatives and said she did not wish to leave anything to the McRills because she had been out of touch with them for years; McLeran suggested that each living child of Laura McRill, the deceased sister of Miss Coe, be given $25 to avoid any legal complications, and Miss Coe acquiesced; she stated that some money had been loaned to James and Hattie Coe which had never been repaid and that she still held the note and mortgage; she decided to give the son and only heir of James and Hattie a credit of *Page 1121
$500 on the note and the unpaid interest, which took care of the James Coe branch of the family.
Among the assets of S.N. Coe which passed to the testatrix was a promissory note for $3,000, dated September 1, 1930, payable to S.N. Coe in five years, with interest at six per cent per annum, bearing the names of J.E. Coe and Hattie E. Coe as makers. Payment of one year's interest was endorsed on the back. With the note was an agreement between S.N. Coe and Harriet E. Coe that, to secure the debt of the latter to S.N. Coe, the debtor and her husband, James E. Coe, deeded a described thirty-six acres in Peoria County, Illinois, which land was to be reconveyed to Harriet E. Coe on payment of the debt. This agreement bears date of June 29, 1931, and the names of S.N. Coe and James E. Coe. No such deed was found in the safe-deposit box of S.N. Coe. Jennie Coe, the wife of the contestant Royce W. Coe, testified that at the funeral of James E. Coe in 1933, she overheard but took no part in a conversation between S.N. Coe and Harriet E. Coe and Viola A. Coe. Her testimony is as follows:
"Then Uncle Newtie [S.N. Coe] came in and said that he forgot to bring along that $3,000.00 note that Father Coe [James E. Coe] had made him take. He said it was to be canceled if he didn't demand it while he and father were alive, and he said he would destroy it. And Mother Coe [Harriet E. Coe] said `All right, Newtie' and Aunt Ola [Viola A. Coe] said she wanted it destroyed too."
The note was not destroyed. The contestant Royce Coe and his son Howard testified that the name of Hattie E. Coe on the note was not her signature.
According to Mr. McLeran's testimony, Miss Coe, after directing that $100 be given to her niece, May Reed, in trust for Dorothy Reed, daughter of Charles Reed, ordered that the property remaining, after paying debts and expenses of funeral, last sickness, and of administration, should be divided into two equal parts, one of which should go equally to the three Hardenburgh children, Alora Dunn, Bertha Lewis, and Edna Bell, and the other part should go equally in four shares to the Reed heirs, *Page 1122
Ethel Bowers, May Reed, Laura Shawver, and to Harley Reed's children.
The will was prepared as directed, by Mr. McLeran, and he and his secretary then went to the Coe home. Miss Coe was there and also Mrs. Dunn, and Dr. Sternberg, whom Mr. McLeran had called to examine Miss Coe as to her mentality. The will was there read to Miss Coe. She declared it to be her will and it was duly signed by her and three witnesses.
On September 27, 1939, Miss Coe and Mrs. Dunn came to the McLeran office and the codicil was prepared canceling the bequest in the fourth paragraph of the will to Royce W. Coe, and giving him instead the $3,000 note of his father. This note was of no value. No claim therefor had been filed against the estate of either James or Harriet E. Coe.
Shortly after S.N. Coe's death, Royce W. Coe and his son Howard, about thirty-five years old, called upon Miss Coe. Several more calls were made upon her by them in the next few months. They inquired about how her brother had disposed of his property, and how she was getting along with it, and offered to look after it. They inquired for an attorney and were directed to Mr. McLeran and he took them to the courthouse and they read the will. Howard and Miss Coe went to the bank and the contents of S.N. Coe's safe-deposit box were examined. While Royce Coe was usually present, the son testified to all of the conversations and transactions with Miss Coe. Each time they called he said they found Aunt Ola worse mentally. He testified that she said her mind did not work right any more; she could not remember; she seemed cheerful "until we started asking how she was getting along with Uncle Newtie's property. We wanted to know how he left her and if he left all of it to her but she said she didn't know. She said she thought there was a will but she didn't know that * * * she wanted him [Mr. Gillis] to be administrator. She said she wasn't able herself; that she wasn't capable of doing any business because she was very forgetful * * * but that Alora wouldn't allow him to be." The matters just related took place on the second Saturday after Mr. Coe's death and before the will had been probated. The third visit was on a Saturday a little later. Howard testified that she told them about the $3,000 note, of which neither his *Page 1123
father nor himself had ever heard, and that the state was trying to tax her on it, and that we need not worry about it, as her brother and James had fixed it up long ago. Of the fourth time he and his father were out, he testified:
"She said Alora Dunn was handling the business. She said `I am not going to make any will. I don't need a will. I just want it to go as Uncle Newtie wanted it to go. * * * I don't need a will.' She had no inclination for a will then."
On May 9, 1939, she mailed Howard a post card that she was going to Abingdon, Illinois. He testified that about the second Saturday after that he and his father again came to Mount Pleasant:
"We had not seen anything of her on her Illinois trip. * * * I asked her how she got along on her trip. She said all right she guessed. We were talking and Aunt Ola said `Well they want me to have a will. They want me to make a will.' And my father said, `Who are they?' [An objection prevented the answer she made.] Well after that question was answered she said she didn't need a will and that she didn't have any use for one."
Howard and his father made their seventh trip in the latter part of July 1939. Howard said she was much worse physically and mentally then. It was Saturday and she thought it was Sunday. They were next out to see her on a Saturday in the latter part of August 1939. Howard testified:
"There was hardly anything you could talk about to her * * *. Her mind was no good at all any more. We didn't say anything about business at all. She was so bad she didn't remember much of anything. I went out there again in September * * *. I was alone that time. She seemed to be a little better but not much better. Finally she said, `Well we made a will. It suits us. It don't make any difference whether it suits the rest of you or not.' I said, `Well, who are we? What do you mean by we?' She said, `Alora Dunn and Laura Shawver and I.' Then I said `That is a kind of funny way to make a will. I thought you were supposed to make the will.' `Well,' she said, `we did; it suits us.'" *Page 1124
Howard also testified that Mr. McLeran told them that he would see that no one got Miss Coe's property and that he would look after her as much as he could, as that was one of his duties as county attorney to see about those things, and that later he told them he had drawn her will and "that everyone had been well remembered."
Mrs. Royce W. Coe, a witness for contestants, testified to many matters of much importance. When the funeral party was going from Mount Pleasant to French Corners, Laura Shawver and Bertha Lewis rode in the back seat of the Royce Coe car, driven by him. His wife sat with him. She testified:
"I heard Laura Shawver say to Bertha Lewis, `If Alora and I hadn't gotten the will made, we would have had to put Aunt Ola in the asylum.' She said that Aunt Ola was very hard to handle."
Laura Shawver denied this. Bertha Lewis did not testify. Mrs. Dunn gave no testimony bearing upon the issue of undue influence. The estate of the testatrix had a value of $30,000 or more.
It fairly appears that Mrs. Dunn attended to the business affairs of Miss Coe, in large part. She looked after the farm and the other property. While Miss Coe signed various receipts for money, and some checks, they were usually written by Mrs. Dunn. On December 16, 1939, Mr. McLeran prepared and Miss Coe executed a power of attorney to Mrs. Dunn giving her quite general authority to manage the property and business of Miss Coe.
On August 5, 1941, Mr. McLeran prepared and Miss Coe signed a petition asking the court to appoint Mrs. Dunn as the guardian of her person and property. It recited that she was of sound mind, but because of her age and physical infirmities she was handicapped in taking care of her business affairs, and that Mrs. Dunn, who had been assisting her in these matters, was well qualified. Judge Newell, after talking with Miss Coe, made the appointment and Mrs. Dunn qualified.
[2] It is our conclusion that under the record the issue of undue influence should have been submitted to the jury. Some of the witnesses, notably the contestant Royce W. Coe, his wife, and son, were interested in the outcome of the action, and *Page 1125
this interest bears upon their credibility and the probative value of their testimony. The will as made gives to Mrs. Dunn and her sisters and to Mrs. Shawver and her sisters more than they would receive as heirs of Viola Coe. All of these matters are for the consideration of the jury, and this court is in no way intimating any conclusion thereon. As said in James v. Fairall,154 Iowa 253, 257, 134 N.W. 608, 609, 38 L.R.A., N.S., 731, in reversing a ruling withdrawing the issue of undue influence from the jury:
"We are not to determine the very truth of the matter; on the contrary, we must give to the testimony the most favorable aspect it will bear in support of plaintiff's claim of fraud and undue influence, and, if rational minds might fairly reach the conclusion from this testimony that the will was the result of either fraud or undue influence, then the question is for a jury. We should indeed put it stronger than this, and say that, if reasonable minds might reasonably differ in their conclusions, then the question is for a jury."
The controlling principles of law applicable to the issue are well recognized and have many times been stated and discussed by this court. Further review of them would serve no purpose. We have recently applied them in a number of cases. See the following decisions and the authorities cited therein: In re Estate of Hollis, 234 Iowa 761, 12 N.W.2d 576, 581; In re Estate of Heller, 233 Iowa 1356, 11 N.W.2d 586, 591; In re Estate of Brooks, 229 Iowa 485, 493, 294 N.W. 735; Shaw v. Duro, 234 Iowa 778,14 N.W.2d 241, 246.
Because of our conclusion on this issue we find it unnecessary and of little benefit to pass upon numerous other assignments of error in appellants' unduly long argument of two hundred seventy-five pages.
The judgment is — Reversed.
MANTZ, C.J., and MILLER, OLIVER, GARFIELD, WENNERSTRUM, MULRONEY, and SMITH, JJ., concur. *Page 1126
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The plaintiff Allen was receiver of the Victor J. Silliman Company, Inc., which was engaged, prior to the appointment of the receiver, in selling securities or as brokers. The Silliman Company had purchased what is known as a brokers blanket bond from the Massachusetts Bonding Insurance Company, defendant-appellee, the material part of which, so far as this case is concerned, is as follows:
"Section 1. The Massachusetts Bonding Insurance Company, a corporation of the Commonwealth of Massachusetts, with its home office in the City of Boston, hereinafter called the Underwriter, in consideration of an annual premium agrees to indemnify Victor J. Silliman Company, Inc., hereinafter called the Insured, against the direct loss, sustained while this bond is in force and discovered as hereinafter provided, of any money or securities, or both, as defined in Section 5 hereof, in which the Insured has a pecuniary interest, or held by the Insured as collateral, or as bailee, trustee, or agent, and whether or not the Insured is liable therefor (such money and securities being hereinafter called Property), in an amount not exceeding Twenty-Five Thousand Dollars as follows."
After the appointment of Allen as receiver, he brought an action upon the bond seeking to recover the sum of $1,220.88 by reason of a loss sustained by the Silliman Company by reason of the dishonest *Page 296
acts of certain of its employees. While said action was pending, David M. Witter and several other persons and parties claiming to be similarly interested obtained leave of court to intervene in said action. The intervenors claiming in their petition that each of them had deposited certain sums of money and certain securities with the Silliman Company as collateral security for the payment of the unpaid purchase price of certain shares of corporate stock purchased by each of said intervenors from the Silliman Company, and that, upon the appointment of the receiver for said company, the said funds and securities so deposited by the intervenors were not found in the possession of the Silliman Company, and were lost by reason of the dishonest acts of Victor J. Silliman, while acting as president of the Silliman Company; that such funds and securities so deposited with the Silliman Company were lost to the said intervenors; that the said intervenors have not been paid therefor; and that the broker's blanket bond in suit covers such loss; and the intervenors pray for judgment in favor of the receiver, Allen, for the use and benefit of the intervenors, against the defendant bonding company in the several amounts of the sums of money and the value of the securities so deposited by each of said intervenors. To the petition of intervention the defendant answered denying any liability by reason of the matters and things alleged in the petition of intervention, and alleging that there is no privity of contract existing as between the intervenors and the defendant company; that the contract or bond referred to in the petition of intervention does not in any way provide for the intervenors as beneficiaries under said bond; that there was no intent on the part of the defendant or the Silliman Company at the time the bond was executed to make any one the beneficiary thereunder other than the Silliman Company. The defendant Massachusetts Bonding Insurance Company also filed an answer to the petition of Allen, receiver. The cause proceeded to trial on the part of the plaintiff, and shortly thereafter a settlement was effected between the plaintiff Allen and the defendant bonding company, and the plaintiff dismissed his cause of action with prejudice. The court then permitted the defendant company to withdraw its answer to the petition of intervention, and the defendant filed a demurrer to such petition; the demurrer stating that the petition of intervention did not state a cause of action against the defendant, that the intervenors were not parties to the bond, were not named as beneficiaries therein, and that the action could not be maintained *Page 297
against the defendant for the reason that there was no privity of contract as between the intervenors and the defendant company. The demurrer was sustained by the court and the intervenors elected to stand on their petition. Judgment was entered dismissing the intervenors' petition. The intervenors appeal.
The intervenors contend that the court erred in sustaining the demurrer; that privity of contract was established by law; that recovery on a bond may be had by an unnamed beneficiary; and that under proper construction of the bond involved the intervenors were entitled to recovery thereon.
The defendant-appellee claims that the intervenors did not bring themselves within the statutory requirements permitting intervention under section 11174 of the 1931 Code; that there is no privity of contract between the intervenors and the bonding company, and there could be no recovery on the bond by the intervenors until there was a showing made that the Silliman Company had a loss which was covered by the terms of the bond, and until such loss had been paid by the Silliman Company; that the bond in question is purely a contract of indemnity.
We will not discuss or determine the question as to the right of the intervenors to intervene in the action brought by the receiver. The case will be determined on the question as to the liability under the bond. The appellants concede that if the bond in suit is a contract limited to the indemnification of the Silliman Company, for pecuniary loss sustained by it through the dishonest acts of its officers or employees, an affirmance of the ruling of the trial court must necessarily follow, but that the bond should not be so construed; that the intent of the parties gathered from the language of the bond and its provisions make it something more than purely a contract of indemnity; and that the intervenors are within the protection of the bond.
We cannot agree with the intervenors' construction of the provisions of the bond. The bond recites that, in consideration of the annual premium, the bonding company agrees to indemnify the Silliman Company against the direct loss of any money or securities in which the insured has a pecuniary interest, or held by the insured as collateral, or as bailee, trustee, or agent, and whether or not the insured is liable therefor, in an amount not exceeding $25,000. This is purely a contract to indemnify the Silliman Company. No reference is made in its terms to any one else. It might be true that, *Page 298
if the Silliman Company had paid its obligations to the various intervenors for their losses, the receiver representing the Silliman Company could have recovered from the bonding company therefor, but such is not the situation. In the event the Silliman Company, or its receiver, had paid its loss to its customers, the intervenors, then the bonding company could have no defense as against an action on the bond even though the Silliman Company had paid something that it was not liable for, and this we think is what is meant by the clause inserted in the bond "whether or not the Insured is liable therefor." The contract is one of indemnity against loss and not against liability. The protection of the bond was for the protection of the Silliman Company alone. The intervenors were not parties to the contract, were not named or referred to therein, and had no legal rights thereunder.
"There is a well-recognized difference between contracts of indemnity against loss and contracts of indemnity against liability. In the former the insurance company does not become liable until loss has actually been suffered and the amount of the insurance does not become available until the insured has paid the loss, whereas in the latter case the obligation of the insurance company becomes fixed when the liability attaches to the insured." Klotzbach v. Auto Fire Ins. Assn. (Mo. App.) 267 S.W. 39, 40, cited with approval in Zieman v. U.S.F. G. Co.,214 Iowa 468, 238 N.W. 100.
"We are unable to conceive more explicit terms in which condition E could have been phrased to express the idea that no liability shall exist under the policy by the company to the assured until the assured has sustained a loss covered by the policy and has been paid by him in money, or for money expended by him under the policy. The terms of this condition clearly make the contract one of indemnity and must be so regarded within the decisions of this and other courts." Glatz v. General Accident, Fire Life Assur. Corp., 175 Wis. 42, 183 N.W. 683, 685.
"The law recognizes a well-defined difference between covenants of indemnity against loss, and covenants to assume or pay a liability. In the former class the covenant is not broken, and no right of action accrues, until a loss has been suffered against which the covenant runs, while in the latter class the covenant is broken, and a right of action accrues, whenever the liability is fixed and absolute. This distinction grows out of the express terms of the contract, *Page 299
and must be recognized, otherwise a new contract would be made for the parties, and their rights determined thereunder, instead of by the contract which they made." Cousins v. Paxton
Gallagher Co., 122 Iowa 465, 98 N.W. 277, cited with approval in Duke v. Tyler, 209 Iowa 1345, 230 N.W. 319. See, also New England Equitable Ins. Co. v. Boldrick, 192 Iowa 763, 185 N.W. 468.
In the Cousins v. Paxton Gallagher case, supra, we used the following language:
"If the obligee of the bond has paid nothing, he has suffered no damage as a matter of fact; a mere liability to pay may ripen into an actual loss, but if it is never paid no damage results to the obligee by reason thereof, and in such circumstances the liability to pay constitutes no damages for which the indemnity was given."
"One not a party to a contract of indemnity and for whose benefit it was not made, cannot maintain an action thereon against the indemnitor. Accordingly, it has been held that an agreement by a building contractor to indemnify the owner of the building against any loss resulting from injury to others in the progress of the work will not sustain an action against the contractor by person injured." 14 R.C.L. 61.
In the case at bar the intervenors are contending for a recovery on the theory that the contract is one to insure the liability of the Silliman Company, or that it was executed with the intent and purpose to cover the loss now claimed to have been sustained by the intervenors. We can see no merit in this contention.
Sections 8581-c11 and 8581-c14 provide for the filing of a bond by dealers and salesmen of securities conditioned that such dealers or salesmen "shall properly account for any moneys or securities received from or belonging to another and shall pay, satisfy and discharge any judgment or decree that may be rendered against such dealer in a court of competent jurisdiction in a suit or action brought by a purchaser of securities against such dealer," and that such bond shall run in favor of the state for the use and benefit of any purchaser of securities sustaining damages by or through his dealings with such dealers or salesmen. The statute referred to also provides that any person injured by a breach of the bond may sue thereon for the recovery of his damages. The bond provided for by these sections is clearly for the use and benefit of persons *Page 300
in the situation of the intervenors in this case. It is a statutory bond. The bond in this suit and upon which the intervenors are attempting to recover is a private bond running between the bonding company and the Silliman Company, indemnifying one obligee only. Such a bond is not broken until the indemnitee has suffered an actual loss or damage. The provisions for filing the dealers' and salesmen's bond to which we have referred dispels any thought and answers any argument that the private bond involved in this suit was executed with the intent and purpose of securing or indemnifying the customers or clients of the Silliman Company. The dealers' bond provides for the liability which the intervenors are attempting to assert in this case. The bond upon which the intervenors are attempting to fix liability is entirely separate and distinct in its terms and in its purpose and intent from the so-called dealers' bond.
It seems to be the consensus of the decisions and texts on this subject that no precise rule for the construction of contracts of this kind exists, but each case must rest upon the construction of the particular contract under consideration, and the contract must be given that construction which will most nearly carry out the intention of the parties. Moriarity v. Tomlinson, 58 S.D. 431, 235 N.W. 363.
It is also the general rule that the liability of surety is to be determined by the specified conditions of the bond, and such liability cannot be enlarged beyond such specified conditions. Kuhl v. Chamberlain, 140 Iowa 552, 118 N.W. 776, 21 L.R.A. (N.S.) 766; Hay v. Hassett, 174 Iowa 601, 156 N.W. 734.
The rule therefore is that sureties are never held responsible beyond the clear and absolute terms and meaning of their undertakings. Presumptions, implications, or equities are never allowed to enlarge or change their legal obligations.
We reach the conclusion therefore that the purpose and intent in the execution of the bond here involved was to indemnify the insured, Silliman Company, against direct loss through the dishonesty of its employees, and that it was not executed for the benefit of any other or for any other purpose. This being so, the intervenors cannot recover on the bond here involved. It follows that the court did not err in sustaining the demurrer to the intervenors' petition, and an affirmance necessarily follows. — Affirmed.
CLAUSSEN, C.J., and STEVENS, KINDIG, KINTZINGER, and MITCHELL, JJ., concur. *Page 301
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The preceding statement as to the issue submitted calls for a brief recital on the factual side. It is alleged that the note in suit was executed on the first day of August, 1924, and payable on the first day of October, 1924, in the sum of $240, with interest at 8% after maturity; that the note was given by the defendant Fisher in consideration for 1500 pounds of hog remedy manufactured and sold to defendant by T.E. Welch, the payee of the note in question, and that subsequently and on the 10th day of August, 1924, the payee Welch sold this note for a valuable consideration to the plaintiff B.A. Seibel.
With this introduction of the parties it may be noted that evidence was offered and introduced by both the plaintiff and the defendant on the issue of fraud and on the issue of forgery. The plaintiff at the close of all testimony moved to strike from the record and withdraw from the consideration of the jury all the testimony on the question of fraud and misrepresentation in the sale of the hog medicine and based his motion on specific grounds. In the second division of plaintiff's motion he moved for a directed verdict on the two issues (1) fraud and *Page 390
misrepresentation and (2) forgery. In ruling on this composite motion the court said: "The motion for a directed verdict is overruled and the plaintiff excepts and the issue of fraud will be withdrawn from the consideration of the jury in the instructions." It resulted, therefore, in giving Instruction 2 by the court as follows:
"The sole issue for your determination in this case is whether the defendant Robert Fisher signed the promissory note received in evidence. All other issues between the parties are withdrawn from your consideration and you will give no consideration to any issue other than the issue as to the genuineness of the signature to said note."
The defendant in his answer under oath having alleged that the signature on the note in suit was not his genuine signature, but a forgery, the burden of proof was upon the plaintiff to establish by a preponderance of the evidence that the note in suit was signed by the defendant Robert Fisher. Grimes Savings Bank v. McHarg, 204 Iowa 322, l.c. 324; Farmers Traders State Bank of Bonaparte v. First Nat. Bank of Farmington, 201 Iowa 73; Ainsworth Savings Bank v. Colthurst, 197 Iowa 363; Douglass v. Matheny, 35 Iowa 112. The Douglass case supra is clearly distinguishable on the fact side from the case at bar altho the legal principle announced herein is recognized and approved in the Douglass case supra. See Section 11218, Code, 1927.
The payee (T.E. Welch) named in the instant note testified that the defendant Fisher signed the note in his presence. Two witnesses, qualified as experts on handwriting, compared the admitted signature of the defendant Fisher with the signature on the note in suit and expressed their opinion that the note signature was in the handwriting of the defendant. The defendant on the contrary testified that the signature on the note was not in his handwriting. "I never put my name on that note. I can say positively that that is not my handwriting." This presents a square conflict in the evidence and consequently a fact question was presented to the jury for its decision. It is well settled that this court does not determine disputed facts on appeal in a law case. As heretofore pointed out, the burden of proof was on the plaintiff. The credibility of plaintiff's witnesses *Page 391
was for the jury. The case of In re Chismore's Estate, 166 Iowa 217, did not involve a sworn denial of the genuineness of the signature to the instrument, but a statutory denial. The opinion reads:
"This burden is not satisfied by some showing which might perhaps justify the court in permitting the instrument to go before the jury as a basis for recovery, but the denial follows to the end, and requires the claimant to establish the genuineness of the signature, by a preponderance of the evidence, as a basis for recovery. Whether she has done this is a question of fact. * * * The jury were entitled to make comparison between the claimed signatures and the proven signatures, and therefrom say whether or not the signature in question was the genuine signature of the deceased. The fact that witnesses have testified affirmatively to the existence of a disputed fact does not necessarily establish the existence of the fact in favor of the party asserting."
The jury in the case at bar did find under the conflicting evidence that the signature of the defendant to the note in suit was not genuine.
The appellant bases reversible error on Instructions 2 and 4 given by the court to the jury. It is sufficient to state that no exception was taken by the plaintiff to the challenged instructions.
The judgment entered on the verdict of the jury is — Affirmed.
FAVILLE, C.J., and STEVENS, ALBERT, and WAGNER, JJ., concur.
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Appellants are heirs of decedent, Eva L. Huston. Though also named as legatees under her will, their participation in her estate as such would not equal what it would be as heirs; hence their interest in establishing its invalidity. The appellee is executor of her will. *Page 298
The will was admitted to probate without objection. No appeal was taken from the order admitting it and no claim is now made of any irregularity in the proceedings. Administration of the estate was commenced by appointment of an executor, who has converted the assets (mostly real estate) into cash, preparatory to payment of legacies and distribution under the will.
In the course of administration the executor caused to be serve upon all heirs a notice under section 11007 (3), Iowa Code, 1939, now section 614.1 (3), Code, 1946, limiting to one year from date of such service the right to commence action to set aside the order of probate. No such action was commenced, though within the limitation period an abortive effort was made to commence one, which failed because of insufficient notice.
The executor in his final report submitted a proposed schedule of distribution in accordance with the terms of the will. To this appellants objected on the ground the testatrix was mentally incompetent and under undue influence when the will was executed. They argue here that a distribution under the terms of the will "would [for that reason] be a wrongful and illegal distribution and not a proper accounting by the executor of the remainder assets of this estate." They insist they have the right to raise these issues in this way.
The executor's position is that original proceedings or appellate proceedings within the meaning of section 633.38 of the Code, 1946 (formerly section 11882, Code, 1939), "are exclusively the only methods of setting aside the order of probate of a will, or questioning the due execution of a will which has been admitted to probate."
[1] I. The parties agree that determination of the case depends upon the meaning of the words "due execution" in said Code section 633.38, which provides:
"Wills * * * shall not be carried into effect until admitted to probate as hereinbefore provided, and such probate shall be conclusive as to the due execution thereof, until set aside by an original or appellate proceeding." (Italics ours.)
Objectors contend that "due execution" means merely the *Page 299
mechanical process of signing, witnessing, and publishing; the executor claims the words include an assumption that testator was mentally competent and not under undue influence.
The case has been ably argued on both sides, though perhaps too much emphasis has been placed upon the technical or abstract meaning of the two words and not enough upon the necessary implications of the language of the statute as a whole. The section clearly provides the only method by which a will may be"carried into effect." The order "admitting the instrument to probate" is for the very purpose of making it effective as awill. This involves more than a mere finding that it has been properly signed and witnessed and the necessary formalities complied with in its preparation. When the purpose of the statute is considered it seems clear the words "due execution" must be given a meaning broad enough to recognize that the order of probate constitutes an adjudication that the instrument is thewill of decedent, not merely that formal requirements have been complied with.
When an instrument is offered for probate proponent in effect asserts that it is decedent's will and asks the court to so find. He assumes the burden of proving compliance with certain technical, formal rules requiring signing, witnessing, and publishing. He does not assume the burden of negativing testamentary incapacity and undue influence, which, if present, would prevent the instrument from becoming decedent's will.
Mental capacity and freedom from undue influence are presumed. A contestant who denies their existence or asserts any fact that would render the instrument ineffective as a will, notwithstanding compliance with all formal requirements, assumes the burden of proof on such issue.
Mental incompetency and undue influence are in the nature of affirmative defenses that must be pleaded and proved by contestant. He may urge them at the probate hearing and if unsuccessful may appeal from the adverse decision; or he may allow the instrument to be probated without contest and later (within the statutory limitation period) may institute original proceedings to set aside the order of probate. But the *Page 300
instrument, once admitted to probate, is adjudged to be the will of decedent and it remains in effect as such "until set aside by an original or appellate proceeding." We cannot conceive that an adjudication, the very purpose of which is to permit the instrument to be carried into "effect," can be said not to include the elements necessary to that purpose. The words "due execution" must imply every condition essential to an effective will.
The fact that mental incompetence and undue influence were not pleaded as defenses in the proceeding which resulted in admitting the will to probate is not material. A judgment determines not only matters in issue but also those which might or should have been alleged. Fulliam v. Drake, 105 Iowa 615, 619, 75 N.W. 479, and cases cited; Benedict v. Nielson, 204 Iowa 1373, 1377, 215 N.W. 658.
II. It must be admitted there are to be found in our opinions isolated statements which, removed from their context, seem to support objectors' contention. Two are heavily relied on in appellants' argument. In one, Fallon v. Chidester, 46 Iowa 588, 591, 26 Am. Rep. 164, 167, it is said:
"The probate of the will, under the statute * * * had the effect to establish its execution, and rendered it admissible as an instrument of evidence * * * and nothing more. * * * It did not establish the testamentary character of the instrument, andgive validity to a title based upon it. The effect of the will and its interpretation, whereon titles under it rested, were not determined * * *. These were matters for adjudication when rightsand property were claimed under the will." (Italics as in appellants' brief.)
What was actually decided there, however, was that plaintiff, as heir of her father, having been born before he died but afterhis will was executed, could assert title to his real estate notwithstanding the terms of his will, probate of which had not been set aside. This was on the common-law principle that the birth of a child after the will is made has the effect of revoking it.
To the argument of defendant that the probate of the will was conclusive and therefore the will was valid until set aside *Page 301
by proper proceeding, the opinion says: "The premise of thisproposition is correct, but the conclusion is not admissible." (Italics supplied.) Then follows the language first above quoted.
The real holding, therefore, was that plaintiff's contention depended not on setting the will aside as invalid but on determining its legal effect by interpretation in the light of the circumstances. We need not express an opinion as to the soundness of that reasoning or attempt to justify all the language used in expounding it. We cannot, for example, subscribe to the broad, unqualified dictum that the probate of the will "did not establish the testamentary character of the instrument, and give validity to a title based upon it."
It is sufficient, perhaps, to say the case does not furnish authority for a holding here that the order of probate was not an adjudication of testatrix' mental competency and freedom from undue influence — conclusive until set aside. Those are matters that necessarily inhere in the order.
Maloney v. Rose, 224 Iowa 1071, 1075, 277 N.W. 572, 575, also relied on by appellants, involved a controversy between the respective heirs of a husband and wife who had made mutual and reciprocal wills. Each owned separate property. The husband died first and under his will his property went to his wife. After the wife's death her will was admitted to probate but her executor, in his final report, took the position that her will was ineffective, being the "expired portion of mutual and reciprocal wills," and that her estate should be distributed to her heirs as intestate property.
The husband's heirs, on the other hand, argued that, as the wife's will gave everything to her husband, and as he predeceased her, they, as his heirs, were entitled to the property under the so-called "antilapse" statute, section 11861, Code, 1939 (now section 633.16, Code, 1946).
The controversy became transformed into and was tried as an equitable proceeding for construction of the wife's will. In passing on the appeal, we used the language now relied on by defendants here:
"It has been the repeated pronouncement of this court that *Page 302
an order admitting a will to probate decides nothing but its due execution and publication. In re Will of Tinsley, 187 Iowa 23, 174 N.W. 4, 11 A.L.R. 826. The adjudication admitting the will to probate being conclusive only of matters determined, the petition of the plaintiffs [wife's heirs] for a construction of the will * * * and a determination of property rights thereunder does not constitute a collateral attack on the judgment admitting the will to probate."
As in Fallon v. Chidester, supra, the context in the Maloney case reveals that the language of the opinion is no authority for the contention made here. The case was held to be one for interpretation and not for a determination as to the "due execution" of the will. The same may be said as to the language in the cited Tinsley case.
Notwithstanding these (and perhaps other) cases in which language was used which seems to support appellants' contention, the language of many of our decisions unmistakably points the other way. (The italics appearing in the following quoted passages are supplied by us.)
In Lorieux v. Keller, 5 (Clarke) Iowa 196, 201, 68 Am. Dec. 696, 699, it is said:
"The question to be tried by the Probate Court in the first instance, and by the District Court, on appeal, is simply whetherthe writing is the last will of the deceased, and whether it was duly executed, and published by him as such. * * * The admission * * * to probate, decides no question, but that relating to its due execution and publication."
See, also, In re Estate of Sternberg, 94 Iowa 305, 308, 62 N.W. 734, 735, which quotes this language.
In Havelick v. Havelick, 18 Iowa 414:
"The Revision (§ 2329) declares that wills proved and allowed * * * are to be carried into effect; and such allowance shall be taken as evidence of the due execution of the same, unless set aside by an original or appellate proceeding * * *."
In Murphy v. Black, 41 Iowa 488, 490: *Page 303
"The court determined that the joint instrument should be admitted as duly executed. That is, that the persons executing itwere of sound mind, not under any undue influence, and theinstrument was properly attested as a will."
In Niemand v. Seemann, 136 Iowa 713, 716, 114 N.W. 48, 50:
"Ordinarily the only matters necessary to be considered and determined on the [probate] hearing are whether there has been execution in accordance with the formalities prescribed by statute, and whether the testator had mental capacity at the timeof execution."
In Kelly v. Kelly, 158 Iowa 56, 61, 138 N.W. 851, 853:
"Thus it has been said by the Illinois court that the original probate of a will `is not designed as a final and conclusive determination of the testamentary capacity of the testator upon all the evidence that may be produced. The purpose is only toestablish testamentary capacity prima facie in order that the will may be recorded, the estate cared for, and administration proceed.' * * *
"In short, the accepted doctrine in jurisdictions having statutes similar to our own appears to be that admission of a will to probate originally without contest is a preliminary order or judgment which effects a prima facie establishment of theinstrument, and gives the court and executor authority to proceed with the administration and settlement of the estate, but does not operate to cut off the right of contest in an original action within the statutory period of limitation. This court is * * *committed to that construction of the statute."
In In re Estate of Zachary, 165 Iowa 309, 318, 145 N.W. 883, 887, we said:
"In such preliminary offer, without contest, the adjudication is only as to its due execution, and prima facie determines as anincident to it that the testator was competent."
In Wendt v. Foss, 161 Iowa 122, 129, 140 N.W. 881, 884, it is said: *Page 304
"The order admitting the will to probate is in effect a finding that the will was duly executed, and was the testatrix's lastwill and testament."
We realize these various quotations are open to the same comment or qualification we have applied to those submitted in appellants' brief. Each must be read in the light of the issues involved. Some may be dictum. They indicate, in any event, the trend of judicial thought. It is impossible within the reasonable limits of an opinion to analyze the various cases at greater length.
Search of Words and Phrases for a discussion of the meaning of "due execution" yields Puritan Mfg. Co. v. Toti Gradi, 14 N.M. 425, 430, 94 P. 1022, 1023, in which it is said (quoting from Cox v. Northwestern Stage Co., 1 Idaho 376, 380):
"The `due execution' of an instrument goes to the manner and form of its execution according to the laws and customs of the country, by a person competent to execute it." (Italics supplied.)
See, also, 13 Words and Phrases, Title "Due Execution," 482. Surely, if a contract cannot properly be said to be "duly executed" if one or both contracting parties were incompetent, a similar construction should prevail in the case of a will.
[2] III. Appellants concede that the procedure followed by them was neither "original" nor "appellate" within the meaning of the statute under discussion. No contention is made (as was made in Kelsey v. Kelsey, 57 Iowa 383, 10 N.W. 753) that their attack was in effect the timely commencement of an original action. They assume, on the contrary, that the administration is a mere continuation of the probate proceeding and that, notwithstanding it has not been appealed from or set aside, the order of probate can be ignored in the subsequent stages of the case, just as on final settlement of an estate parties may object to the payment of claims that have been already approved by the executor and allowed by the clerk. They cite In re Estate of Baker, 226 Iowa 1071, 285 N.W. 641. *Page 305
The argument is not sound. The probate of a will, upon proper notice, with full opportunity to all interested parties to contest upon the hearing, with right to appeal from it or to maintain timely original proceedings to set it aside, is certainly not analogous to the allowance of a claim by an executor (or administrator) and clerk, without notice to legatees or heirs, and with no opportunity given them to object.
The admission to probate is not a mere intermediate order but an appealable one, designed for the very purpose of determining the course to be followed by the executor and court in the administration of the estate. Kelly v. Kelly, supra.
There are other possible fallacies in appellants' argument at this point. It is not so clear that the administration proceeding is a continuation of the probate hearing. See discussion in Crossan v. McCrary, 37 Iowa 684, as to the meaning of the word "administration." It might be plausibly argued that the probate proceeding ends with the admission, or denial of admission, of the will to probate and that administration is a new and different matter. This view is somewhat sustained by the statutory reference to a subsequent "original or appellate
proceeding" which seems to assume the proceeding leading to the order of probate is concluded.
Nor is it clear that appellants' objections here pertain to a mere matter of "accounting." No complaint is made as to the executor's accounts or as to his conduct of the estate. Appellants seek rather to accomplish by indirection what we think can only be done directly, either by appeal from the probate order or by an original proceeding to set it aside.
As to these two direct methods there are statutory time limitations to protect those who must eventually rely on the order of probate of a will as a finality. But if heirs may question it, as here contended (after statutory bars have arisen) by a third method, i.e., by objecting to the distribution of the personal estate under the terms of the will, we see no logical reason why they might not be permitted to question the title to real estate based on the instrument, long after the statutory limitation periods have expired. We apprehend the profession would be surprised, *Page 306
if not indeed shocked, by the announcement of such a rule.
It is suggested that there is logic in a statute making probate conclusive as to formal requirements but that notwithstanding mental capacity is presumed and not usually inquired into, "To make the order conclusive" on that issue "on such slight [evidence] or absence of evidence is ridiculous."
The answer is, of course, that the order is "conclusive" if notset aside. Ample opportunity is afforded every interested person to contest the issue if he so desires.
The industry of counsel has not revealed, nor have we found, a case in which a will was contested for mental incapacity or undue influence in the manner contended for here. We have tried to give the case study and attention commensurate with the sincerity and ability displayed by counsel in presenting it. The conclusion reached by the trial court is, we think, sound, and it is affirmed. — Affirmed.
WENNERSTRUM, C.J., and OLIVER, BLISS, GARFIELD, MANTZ, MULRONEY, and HAYS, JJ., concur.
HALE, J., takes no part.
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This action is based upon three promissory notes, executed by the appellees to the Riverside Savings Bank. One of the notes was in the principal sum of $1,500, bearing *Page 458
date November 27, 1922; another note was in the principal sum of $200, bearing date, August 15, 1923; and the third note was in the principal sum of $200, bearing date, March 29, 1923.
During the fall of 1923, the Riverside Savings Bank ceased operations as a bank, and the appellant bank was shortly thereafter organized, and began doing business. An arrangement was entered into, whereby a considerable portion of the Riverside Savings Bank's assets, including the three notes in suit, became the property of the appellant.
The appellant frankly admits in its argument that it is not an innocent purchaser of the notes, and that the appellees are entitled to make any defense which they might have interposed against the Riverside Savings Bank.
The defenses pleaded by the appellees in their answer are: (1) A general denial; (2) that two payments, to wit, $640 and $735, have been made upon the $1,500 note; and (3) that, for some time prior to December, 1921, the appellees R.E. Tobin and S.K. Bacon were engaged in a farming partnership, and were indebted to the Riverside Savings Bank; that an oral agreement was entered into between the Riverside Savings Bank and said partnership and its individual members, whereby a public sale of the personal property of said partnership was had, and whereby the Riverside Savings Bank undertook to, and did, clerk said sale, and agreed to, and did, collect and accept, and receive as cash, any and all notes or other items taken for the purchase price at said sale, and whereby the said bank agreed to pay out of the proceeds of said sale the partnership debts owed to the bank and others, and the expenses of the sale, and to pay the balance thereafter remaining in equal shares to Tobin and Bacon, and apply any amount to which the appellee Tobin was thus entitled, on his individual indebtedness to said bank, and to pay to him any balance thereafter remaining; that he has not received credit and payment for the amount to which he was entitled, out of the proceeds of said sale; and that he is entitled to a set-off for said amount, as against the amounts owed upon the notes in suit. The reply of the appellant, consisted of only a denial.
A public sale of the partnership property of Tobin and Bacon was had in December, 1921. One of the bones of contention is as to the oral agreement between the Riverside Savings *Page 459
Bank and members of the partnership of Tobin Bacon. The cashier of the Riverside Savings Bank testified, in substance, that there was an agreement, but that the agreement was that the bank would take enough of the sale notes to pay the notes owed by the partnership to the bank; while the testimony of the appellees tends to establish the contract as averred in their answer.
It is apparent from the record that, after the payment of the expenses of the sale and the payment of partnership indebtedness, including the partnership indebtedness to the Riverside Savings Bank, there was a sum of approximately $3,000, belonging in equal shares to the two members of the partnership. Both members of the partnership bought property at the sale, the amount of Tobin's purchases being $1,841.10, he paying by check at the time a sum of $440, and giving his note for the balance, $1,401.10. Bacon also purchased heavily at said sale, giving his note for the amount. These sale notes of Tobin Bacon's were not introduced in evidence. The appellee testified that his note was made payable to the Riverside Bank, and has been paid. The cashier of the Riverside Savings Bank testified that the notes of the individual partners were given to the partnership, and were not purchased by the bank.
The trial court gave to the jury the following instruction:
"It is undisputed that the defendants signed the three notes, Exs. A, B, and C. But it is the contention of the defendants that said notes have been fully paid, by payments made thereon by the defendant R.E. Tobin, and by money or notes obtained by the Riverside Savings Bank from the sale of Tobin Bacon. And as to this proposition the burden is upon the defendants to establish by a preponderance of the evidence this claim of the defendants': And if the defendants have satisfied you by a preponderance of the evidence that the defendant R.E. Tobin made certain payments upon said notes, and that it was the arrangement between the Riverside Savings Bank, through its cashier, Griffin, that it would accept proceeds of the sale of Tobin Bacon, both the cash and the notes taken by the said Griffin at said sale, and would apply such proceeds upon the payment of the notes of Tobin
Bacon, and certain other indebtedness, and would turn over to the defendant Tobin one half of the balance of the proceeds of said sale, then you should *Page 460
allow the defendants a credit on said notes to the amounts you have so found he paid, and also of the amount of one half of the proceeds of the sale of Tobin Bacon, after the payment of the notes of Tobin Bacon and the other items the bank paid out, and give the defendants credit for one half of the balance of the proceeds of the said sale. And if the amounts you have found, if any were paid by the defendant Tobin, and the balance you have found, if any, due him from the proceeds of the said sale, amount to more than the notes sued upon at the time such payments were made and such sale was had, your verdict should be for the defendants."
The appellant assigns as error the giving of said instruction, the reason given being that it eliminates from the consideration of the jury the question as to whether Tobin paid the note which he claims he gave to the bank for property purchased at the sale. The exception to the instruction is:
"The court erred in giving instruction Number 2, in stating that it was undisputed that the defendants signed the three notes Exhibits A, B, and C, and stating that it was the contention of the defendants that the notes had been fully paid, for the reason that the answer of the defendant did not admit the execution and delivery of the notes sued upon, either by way of answer or any amendment thereto, and the defendants put the plaintiffs to proof thereof."
The court also gave to the jury the following instruction:
"If the defendants have satisfied you by a preponderance of the evidence that the defendant Tobin gave his note to the Riverside Savings Bank for property bought at the sale of Tobin Bacon, and was taken possession of by said bank, it would be immaterial whether said note has or has not been paid, as affecting the issues in this case."
The appellant assigns as error the giving of said instruction, the reason being that said instruction directs the jury that, if Tobin had, in fact, given his note for $1,400 for property purchased at the partnership sale, it would be immaterial whether said note has or has not been paid. The exception to the instruction is, in substance, that the evidence did not support the contention of the appellee Tobin that he had given his note to the Riverside Savings Bank for property bought at the sale. *Page 461
Section 11495, Code of 1924, provides that all exceptions to instructions shall specify the part of the instructions excepted to, and the grounds of such exceptions.
It is apparent from the exceptions to the foregoing instructions that the objections now urged against the same were not presented to the trial court, and this 1. APPEAL AND eliminates same from our consideration. ERROR: Moreover, under the issues, there being no review: affirmative plea in the reply, the instructions scope and are correct, and the appellant has no ground to extent: complain. The appellant not having pleaded in exceptions its reply anything to avoid the affirmative presented on defense alleged in the answer, if the appellees appeal only. established their alleged defense by a preponderance of the evidence, they were entitled to a set-off.
It is also contended by the appellant, in its assignment of errors, that the court erred in the giving of Instructions Nos. 3 and 4. The sufficient answer to said contention is that there is no exception to Instruction No. 3, and the matters complained of as to Instruction No. 4 are not included in its exception thereto.
The appellant also complains of the giving by the court of Instruction No. 5, wherein the court says that it is undisputed that the appellant took the notes sued upon by assignment,
whereas it is appellant's claim that it obtained 2. BILLS AND the notes by indorsement. Even if this be true, NOTES: the use by the court of the word "assignment," actions: instead of "indorsement," becomes immaterial; indorsement: for the court, in the same instruction, properly harmless instructed the jury that the notes in the hands inaccuracy. of the appellant are subject to the same defenses as if said notes were in the hands of the Riverside Savings Bank, — which is conceded to be true by appellant in its argument.
At the close of the evidence, the appellees requested the right to open and close the argument; and by the granting of said request, it is contended by the appellant, the 3. TRIAL: court erred. This contention is devoid of merit. arguments: It is provided by our statutory law, Section right to 11487, Code of 1924, that in the argument the open and party then having the burden of the issue shall close. have the opening and closing. In the case at bar, at the close of all the evidence, the appellant *Page 462
was entitled to recover, were it not for the affirmative defenses pleaded by the appellees. The ultimate issues to be determined were those arising with reference to the affirmative defenses pleaded in the answer.
There is no allegation in the reply that the appellant was the holder in due course, whereby the appellant would be entitled to recover, regardless of the affirmative defenses pleaded in the answer, such as was the case in Louisa County Nat. Bank v. Burr,198 Iowa 4.
Moreover, we have held that, as a rule, much discretion must be allowed the trial court in determining, at the close of the evidence, on whom the burden rests, and that, unless such discretion is abused, and prejudice appears, a reversal will not follow. O'Conner v. Kleiman, 143 Iowa 435;McLaughlin-Gormley-King Co. v. Hauser, 200 Iowa 210.
Thirteen of the alleged errors assigned are with reference to the rulings of the court on the introduction or exclusion of testimony. It is the appellees' contention that Tobin made a payment of $640 on the $1,500 note in the fall 4. BILLS AND of 1923. The Riverside Savings Bank, at that NOTES: time, was not receiving deposits, but was open payment and for the transaction of its other business. Mr discharge: Teener, the president of the bank, and Mr. Ball, apparent an attorney of Iowa City, were endeavoring to agency. collect and secure notes owed the bank. The appellee Tobin testified that Mr. Ball and Mr. Teener were back of the counter in the bank, transacting its business, when they were not out in the country, taking mortgages and getting payments on notes. He testified, with reference to demands made upon him by Teener and Ball for the payment of $1,500, prior to the time when he claims he made the $640 payment, and over objection to the question "What transaction did you have with Mr. Ball at that time, with respect to this $1,500 note?" "They [Teener and Ball] were wanting me to pay this obligation." And over objection, he was permitted to answer the question "What did you say to Mr. Ball and Mr. Teener, and what did they say to you?" And he answered that "At that time they asked me to try and pay the $1,500 note;" and that a little later he paid $640 to Mr. Ball in the bank, who made the indorsement of payment upon the note. Appellant made a motion to exclude the answer that *Page 463
Mr. Ball made the indorsement on the note, for the reason that there is no evidence that Mr. Ball had any authority to bind the bank, or authority to transact business for them, — which motion to exclude was by the court overruled.
The court was clearly correct. The conversation inquired about was the conversation that he had with Ball and Teener, the president of the bank; and the agency of Ball is implied by the conduct of the bank in holding him out as its agent and vesting him with apparent or ostensible authority as its agent. A payment made in a bank that is open and transacting business, to one behind the counter, with the permission of the managing officers of the bank, and with apparent authority to receive the money, constitutes a payment to the bank. A payment would be, in law, a payment to the payee if the one receiving the payment was authorized by the payee to receive the money for him, or if the payee had held the one receiving the money out in such a way that the payer was justified in supposing that the one receiving the money had authority from the payee to receive it. Artley v.Morrison, 73 Iowa 132.
The appellee Tobin, on direct examination, was permitted to testify as to the conversation which he had with 5. APPEAL AND Griffin, the cashier of the Riverside Savings ERROR: Bank, at the time of the borrowing of the harmless $1,500; and on cross-examination relative to the error: same conversation, the court, on the ground that cross- it was not proper cross-examination, sustained examination: the objection to the following question: improper exclusion.
"Didn't you say that it didn't appear exactly right for you to have to borrow $1,500 and pay interest on it, when they had $1,500 of yours, and not paying any interest on it?"
The objection was not good; and, while the court might properly have permitted the witness to answer the question, yet the appellant was given wide latitude in the cross-examination of said witness, and it is apparent from the record that the answer elicited was otherwise obtained in the cross-examination of said witness. In this there was no reversible error.McLaughlin-Gormley-King Co. v. Hauser, 200 Iowa 210.
The ground urged being that it is incompetent, irrelevant, *Page 464
and immaterial, the court overruled an objection to the following question:
6. EVIDENCE: relevancy, "Now, referring to this note, Exhibit A, did materiality, you consent at any time, or authorize any person and to remove any credits or indorsements that were competency: upon the back of this note?" And the answer was, cancellation "I surely did not." of indorse- ments.
The claim of the appellees is that they made payments upon the note, which were indorsed thereon by Ball and Mr. Sargent, which did not appear thereon at the time of the trial, and that the note bears evidence that an erasure has been made. The ruling of the court is clearly correct.
The court permitted a witness, Riggs, over objection, to answer the following questions:
"Did you see Mr. Sargent give Mr. Tobin credit for something over $600 on some note there that day?" And he 7. APPEAL AND answered in the affirmative. "And do you ERROR: recollect Mr. Tobin, paying cash in addition to harmless this?" And he answered, "Yes, — $100." error: conclusion It is the contention of the appellant that answers. these questions called for the conclusion of the witness, and were leading. If this be true, it could not be prejudicial to the appellant, as the witness had just previously testified, without objection thereto, that Tobin was given the credit on the note.
The appellant also complains of the ruling of the court in overruling appellant's objection to seven exhibits of a documentary nature. The same has had our consideration, and all of same have a bearing on the issues for trial; and, since they were properly identified, the complaint of the appellant is without merit.
The remaining complaints of this character are on the ruling of the court in sustaining appellees' objections to questions 8. APPEAL AND propounded to witnesses for the appellant; but ERROR: the record fails to disclose, either by the form harmless of the question propounded or by an offer of error: testimony, or otherwise, what was expected to be exclusion of elicited by the questions. In such situation no non- prejudicial error is shown. Reynolds Heitsman
explanatory v. Henry, 193 Iowa 164; Schooley v. Efnor, 202 questions. Iowa 141.
The appellant assigns as error the overruling by the court *Page 465
of motion for new trial, based on the ground of newly discovered evidence. In order that the party may be 9. NEW TRIAL: entitled to a new trial based on said ground, grounds: the newly discovered evidence must be material, newly and such that the party making the motion could discovered not, with reasonable diligence, have discovered evidence: and produced it at the trial. Section 11550, diligence. Code of 1924.
The alleged newly discovered evidence which it is claimed by appellant would tend to nullify the testimony offered by the appellees consists of the two sale notes, one given by appellee Tobin, and the other by his copartner, S.K. Bacon, and of evidence tending to refute the testimony of appellee Tobin and the witness Riggs as to a payment on the $1,500 note. It is not stated in the affidavit attached to the motion from whom, when, or where the newly discovered evidence was obtained. Appellee Tobin and the witness Riggs testified that the payment was made at the appellant bank to one Sargent. Sargent was not called, and no reason is shown why he could not have been called as a witness by appellant. It is alleged in the affidavit that the two sale notes were made payable to Tobin Bacon, and that they have not been paid. It is not shown that the note of the appellee Tobin was not the property of the Riverside Savings Bank, and no showing is made as to what, if any, indorsements appear thereon.
Under the issues as made by the pleadings, if the note was the property of said bank, it is immaterial whether same has been paid, and the court so instructed the jury. The affidavit contains merely the conclusion that the appellant had made diligent effort to obtain the evidence, and there are no facts stated as to what constituted the diligent effort. It is stated by the counter affidavit that, as early as August, 1925, eight months before the trial, the appellee and two of his attorneys visited the banking office of the appellant bank, and told its cashier that he had never been able to procure his money or a settlement from the Riverside Savings Bank of the moneys due him from the Tobin Bacon sale, and that no notes given by appellee to the Riverside Savings Bank would be paid until credit was given therefor.
Whether a new trial shall be granted on newly discovered evidence, although it be material, is largely discretionary with *Page 466
the trial court. There is no sufficient showing of materiality of the newly discovered evidence or of diligence on the part of appellant, and there was no abuse of discretion by the trial court. — Affirmed.
EVANS, C.J., and De GRAFF, ALBERT, and MORLING, JJ., concur.
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A few days before the Fourth of July, 1931, a young American boy, whose name does not appear in the record, filled with enthusiasm and the desire to demonstrate his patriotism like boys of his age at that time of the year, entered a drug store which had a large display window filled with fire crackers and other explosives used to awaken the patriotism of the people of this country on the Fourth of July. In some way or other, no doubt by crowding or pushing, the young boy came close to the display window. Whether it was a lighted match, a piece of punk, or a torpedo he dropped into the window, probably never will be known. But, before the fire that followed was extinguished, the business section of the beautiful city of Spencer was practically destroyed, and out of this fire arose the case which is now before us.
The First National Insurance Company of America, the appellant in this case, is an insurance company, engaged in the writing of fire and tornado insurance, and was duly authorized to transact insurance business in the state of Iowa. It had as its general agent for the territory, including Iowa, one Arthur Cobb, whose offices were located at Omaha, Nebraska. C.H. Tyrrell was a resident of Spencer, Iowa, and was duly appointed local agent for the appellant company early in 1930 by the general agent. After his appointment, there was forwarded to Tyrrell by the insurance company a box containing twenty or twenty-five fire insurance, tornado, and combined policies, together with forms, indorsements, and blanks such as are used in writing policies. The policies were the usual Iowa form, signed by an officer of the company, with a blank space for the agent to sign when the policy was issued. According to Tyrrell's testimony, — and it is not contradicted, — at the time he received the blank policies and supplies he received a letter from the insurance company, stating he could figure contracts of insurance, and issue policies and indorsements, and make remittances to the company of the amounts of premiums he collected. He also received a certificate from the insurance commissioner of the state, stating that he was appointed agent of the appellant company. *Page 1337
Tyrrell's office was also located in one of the buildings destroyed by the fire, and all of the papers and blank policies were destroyed. Some time after the fire, he received a request from the appellant company to return the policies to the company, but, as they had been destroyed in the fire, he could not do this and made an affidavit that they were lost.
In April of 1930 Tyrrell solicited the appellee, who was a practicing dentist in Spencer, and who had his office in one of the main buildings of the city. The appellee agreed to take an insurance policy with appellant company for a period of twelve months, from May 5, 1930, to May 5, 1931. No formal application was prepared. Tyrrell, however, took the necessary information and sent it to Cobb, the general agent, and asked him to send out the policy. Cobb prepared the policy and sent it to Tyrrell. The policy was in the usual form, and stated, among other things, "issued at its Spencer, Iowa, agency, Clarence H. Tyrell, Agent". Tyrrell delivered the policy to the appellee, and received the full premium from Dr. Fillgraf in the amount of $38.70. However, Tyrrell did not send in the premium to the company at that time. On August 27, 1930, the general agent, Cobb, wrote a letter to appellee, advising that the company had elected to cancel the policy in five days, and directed him to apply to Tyrrell for return premium, if any. The appellee immediately took the matter up with Tyrrell, and asked why the policy was being canceled, and Tyrrell stated to him that he had not sent the premium to the company, but promised he would see that it was paid within five days. Tyrrell did write to the general agent on September 6, 1930, with reference to delay in remitting the premium, and at that time inclosed his check for the amount which was due the insurance company. But, unfortunately, the check was not honored. About December 4, 1930, the appellant company received from Tyrrell's father remittance for the premium which was due, and wrote a letter to the appellee, stating that the policy had been reinstated and that it was in full force and effect. As soon as Dr. Fillgraf received the letter, advising him that the policy was in force, which letter was received on or about December 4, 1930, he went to Tyrrell and asked why this policy had been canceled from the first part of September until the first part of December, and was told by Tyrrell that it had been canceled during that time because he (Tyrrell) had not sent the premium to the company, and on account of the fact that the appellee *Page 1338
had no insurance during that time the policy was automatically extended after May 5, 1931, for the length of time it had been canceled, and this would and did give to the appellee extended insurance for approximately three months, because Dr. Fillgraf had paid for the full year of insurance, and would receive such extension. At the time that Dr. Fillgraf received the letter from the company, on or about December 4, 1930, informing him that the policy had been reinstated, that letter referred him back to the letter which he had received on or about the 1st of September, which letter referred him to Tyrrell to see about the return premium. Tyrrell never reported to the appellant company or its general agent the conversation he had, wherein the insurance was extended for a period of three months. The company records show, both at the office of the general agent and at the home office, that the policy was canceled on September 3, 1930, and was reinstated on December 4th. The fire occurred on January 27, 1931. After the fire, the appellee reported it to Tyrell, who then informed the appellant company which company immediately denied liability.
The appellee commenced an action against the appellant company, asking first that the policy be reformed and corrected by inserting therein the correct legal description of the premises; that the policy be further reformed and corrected by inserting in lieu of the expiration date of May 5, 1931, the date of August 6, 1931; that the cause be docketed on the equity side of the calendar for the purpose of making such corrections, and, when the same were so made, that the cause be transferred to the law side of the calendar for trial of the law questions involved. The appellant company filed a motion to transfer the case to equity, and, upon order of the court, the case was transferred to the equity side of the calendar and tried as an equitable case. The insurance company filed an answer, denying that it was indebted to the appellee in any amount, and specifically denied that C.H. Tyrrell was the representative of the insurance company or that he was authorized to represent the insurance company in the city of Spencer except as a soliciting agent, and denied that there was any holding out to the public that Tyrrell was anything more than the soliciting agent of the insurance company. The amount claimed by the appellee was $2,999, with interest and costs. The case was tried to the court. The court found in favor of the appellee and against the insurance company, and entered a decree, reforming the policy as prayed for, and entered *Page 1339
judgment against the insurance company in the amount of $2,700, together with interest from September 1, 1931, and the costs of the action. It appears that both sides were dissatisfied with the finding and decree of the lower court, and both have appealed. The insurance company, having perfected its appeal first, is designated as the appellant.
We will consider first the appeal of the insurance company, the appellant in this court.
[1] The first and important question in this case to decide is whether or not Tyrrell was a soliciting agent or a recording agent. It is the contention of the appellant that Tyrrell was only a soliciting agent, and, while they cite many errors, most of them rest upon the question of whether or not Tyrrell was a soliciting or a recording agent.
We are impressed with the words of the late Justice Weaver in the case of Johnson v. Farmers Ins. Co., reported in 184 Iowa 630, on page 637, 168 N.W. 264, 266:
"There is no magic in the mere name `soliciting agent', `recording agent', or `general agent'. Our statute provides that ever person who shall in any manner, directly, or indirectly, transact business for any insurance company is the agent of such company. * * * The scope and extent of his authority is shown, not merely by reference to his title or to his written commission or credentials, but by the business which he is permitted to do and perform, and does do and perform in the company's name, or by its apparent acquiescence and consent. His act in that behalf is the company's act and his neglect with respect to such business is the company's neglect."
Code section 9002 of the 1931 Code is as follows:
"9002. `Soliciting agent' defined. Any person who shall hereafter solicit insurance or procure application therefor shall be held to be the soliciting agent of the insurance company or association issuing a policy on such application or on renewal thereof, anything in the application, policy, or contract to the contrary notwithstanding."
Code, section 9004, is as follows:
"9004. Agent — specific definition. Any officer, agent, or representative of an insurance company doing business in this state who may solicit insurance, procure applications, issue policies, adjust *Page 1340
losses, or transact the business generally of such companies, shall be held to be the agent of such insurance company with authority to transact all business within the scope of his employment, anything in the application, policy, contract, by-laws, or articles of incorporation of such company to the contrary notwithstanding."
These sections were under consideration in Cooper Wagon Buggy Co. v. National B.F. Ins. Co., reported in 188 Iowa 425, 431, 176 N.W. 309. There the defendant sought to deny liability on the ground that a rider was later attached to the policy, permitting additional insurance when the agent knew that additional insurance was being carried in companies not authorized to do business in the state. In its discussion of the authority of the agent to bind the company, the court, on page 436, said:
"The plaintiff was a foreign company. It secured the right to do business in the state of Iowa. It had a right to do business in the state of Iowa. It placed the agent here to transact that business for it. He was in every sense the general agent of the company, with authority to transact its business in the state of Iowa. It was a corporation. It can act only through agents. Its agents are its hands, its eyes, its feet. What its agent does in respect to the matters committed to his charge is the act of the company, and binds the company just as effectually as though the company were a living and breathing entity, with power to act for itself, and acted. * * * All it can know must come to it through this avenue, and the knowledge of its agents is its knowledge. The act of the agent, within the scope of his authority, is its act."
Considering the facts in this case in the light of the cases cited, this insurance company sent to Tyrrell twenty-five blank policies. For what purpose were these policies sent, if not for the purpose of being issued by Tyrrell? They authorized him to collect the premiums. True, the only policy that Tyrrell wrote was the one upon which this lawsuit is based, and it is also true that Tyrrell did not draw up the policy in his office. But it seems to us immaterial as to the number of policies that Tyrrell had written. If he was the agent of the appellant company, with authority to write policies, it matters not whether he had written a great many or only this one. But the appellant argues that Tyrrell did not write this policy. It is true that the mechanical part of making out the policy was done in the office of the general agent at Omaha, but it is interesting *Page 1341
to note that the policy itself recites that it was issued at the Spencer, Iowa, agency of the appellant company, C.H. Tyrrell, agent. In view of the fact that the company forwarded to Tyrrell blank policies, twenty or twenty-five in number, policies that were ready to be issued upon the signature of Tyrrell as the agent of the company; and in view of the fact that the policy that was issued specified that it was issued at the Spencer, Iowa, office of the appellant company, C.H. Tyrrell, agent; in view of the fact that Tyrrell was authorized to collect premiums and did collect the premium from the appellee in this case; in view of the fact that, when the company canceled the policy, it wrote to the appellee, directing him to see Tyrrell about the return premium, the company cannot now, after a loss has occurred, come in and say that Tyrrell was not the recording agent of this company; that he did not have authority to issue this policy and was merely the soliciting agent of the company. The appellant argues that, even if Tyrrell was a general agent or recording agent, Tyrrell had no apparent authority to bind the appellant by the agreement extending the insurance to August, 1931. The very recent case of Northwestern Mutual Life Insurance Company v. Steckel, reported in 216 Iowa 1189, 250 N.W. 476, has discussed at length "implied" and "apparent" authority. On page 1195, the court said:
"There is a distinction pointed out and recognized by the authorities between `implied' and `apparent' authority. `Implied' authority is actual authority, circumstantially proved; while `apparent' authority is not actual authority, and may often be authority not actually possessed by the agent, but is such as the principal holds the agent out as possessing.
"In the case of Nertney v. National Fire Ins. Co., 199 Iowa 1358, on page 1361, 203 N.W. 826, 827, this court said: `Implied authority is said to be actual authority circumstantially proved — the authority which the principal intended the agent to possess. Apparent authority is not actual authority, but is such as the principal holds the agent out as possessing.'
"And in the same case our court quotes from the United States Supreme Court case of Union Mut. L. Insurance Co. v. Wilkinson, 13 Wall. (80 U.S.), 222, 20 L. Ed. 617, as follows: `The powers of the agent are, prima facie, coextensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the persons with whom he deals.' *Page 1342
"In 2 C.J., p. 564, section 206, the general rule is announced as follows: `Where the third person has ascertained the general character or scope of the agency, he is authorized to rely upon the agent having such powers as naturally and properly belong to such character, and, in the absence of circumstances putting him upon inquiry, is not bound to inquire for secret qualifications or limitations to the apparent powers of the agent.'
"This quotation is cited with approval in Boylan v. Workman,206 Iowa 469, 474, 220 N.W. 49, 51, and, in addition thereto, that case uses the following language: `The inquiry of a stranger in dealing with an agent must be to ascertain whether or not such person is an agent, and in general, the character of that agency, but when that has been ascertained, not by what the alleged agent may say or do, but by what the principal has done, then the stranger has a right to rely thereon. And even though the agent, in such event, be a special one, yet the stranger has a right to rely upon that person having such authority under the special agency as the principal has "apparently" given him.'"
Thus applying the rule laid down to the case at bar, we find that the appellant company had appointed Tyrrell as its agent at Spencer, Iowa. It forwarded to him blank policies and forms, a policy register, and a certificate from the state of Iowa to do business, and all things that were necessary to represent it at Spencer, Iowa. Tyrrell solicited the policy from the doctor. When that policy was issued, there was noted on the policy the fact that it was issued at the appellant's office at Spencer, Iowa, and that Tyrrell was the agent. Tyrrell had authority to issue policies; he had authority to collect premiums. He did collect from the appellee premium in this case, the full amount required by the company for the policy to run for one year. When on September 3, 1930, the appellant company wrote to the appellee and told him the policy was canceled, without giving any reason for such cancellation, the company directed the appellee to see Tyrrell about his return premium. The doctor did exactly what the company told him to do. He went to see Tyrrell, and Tyrrell informed him the premium had not been sent in, but that he would send it in immediately. During the next three months the record shows there was correspondence between the company and Tyrrell in regard to the payment of the premium. Finally, Tyrrell's father sent in the premium, and the company on or about the 1st of December wrote the appellee, informing him *Page 1343
that the policy had been reinstated, and referred him to the letter which he had received on or about the 1st of September, which informed him that the policy was canceled and which directed him to see Tyrrell. The doctor did just what the company told him to do; he went to Tyrrell the early part of December; and Tyrrell told him that the premium had not been sent in until December, and that the policy would be extended for a period of three months.
[2] But the appellant now argues that the policy was never legally canceled, and that, if a loss had occurred between September 3d and December 6th, the company would have been liable. We do not find it necessary to pass upon the question of whether or not the company would have been liable during the three months' period. The company was asserting is nonliability by declaring the contract at an end. The record shows clearly that in the home office of the company it was considered canceled as of September 3, 1930, and that it was reinstated December 4, 1930. To permit the insurance company now to say that such was not the fact, as against the appellee, who relied upon the representations of the agent, would be to perpetrate a fraud upon him and make him bear the burden of the agent's wrong. The correspondence as shown by this record throws a great deal of light upon the apparent powers of the agent. The insurance company issued the policy without receiving the cash premium its agent had collected. It gave notice of cancellation on August 27th because it had not received the premium. It did not tell the doctor that he had not paid the premium and gave no reason for canceling the contract, but told him to see Tyrrell to secure the return premium, if any. The doctor was not a lawyer, and cannot be blamed for taking the company's declaration of cancellation at its face value. He assumed the cancellation was complete and that the policy would not be reinstated until Tyrrell remitted to the company the amount due. The company notified the doctor to see Tyrrell, and Tyrrell certainly had at least apparent authority to discuss the subject of cancellation with the doctor. The appellee was kept in ignorance of the true reason that caused the company to cancel the policy. There then follows considerable correspondence between Tyrrell and the company, in which the company was trying to secure the payment either of the earned premium, which was the amount due up to the time that the company had canceled the policy, or of the full year's premium so that the policy might be reinstated. The company even threatened, *Page 1344
if the earned premium of $9.44 was not paid, they would report it to the insurance commissioner of the state of Iowa. Finally, the premium was paid, but for three months the policy was considered canceled by the company. When it was reinstated, the company sent a letter to Dr. Fillgraf. In this letter was the statement, "Cancellation effective date 9-3-30; effective date of reinstatement 12-4-30." And in this same letter Dr. Fillgraf was referred to the former letter, received about the 1st of September, 1930, to see Tyrrell. The doctor did see Tyrrell and Tyrrell there and then told him that the company had agreed to extend the policy for a period of three months, to wit, the period that the policy had, in the eyes of the company, been canceled. At that time the appellee had a legal right to demand a return of his money during the period when the company said he had no insurance. He waived this right to demand a refund because of the agreement that his insurance would be extended so as to give him protection until August 5, 1931. He accepted the reinstatement of the contract which he believed and which the company then believed had been terminated and of no effect during the preceding three months, relying on the information from the company and the statements made by its duly authorized agent Tyrrell. If the appellant now is permitted to change its position, it will result in damage to the appellee, and enable the appellant to take advantage of its own acts. This the appellant is estopped from doing. In the case at bar, Tyrrell was the recording agent, with authority to speak for the company. The appellee does not ask to change or modify the policy, but to continue on the same property, in the same way, and only to give to him protection for the period of time that he paid for, to wit, the period of one year. This he certainly is entitled to.
The appellee appealed from the judgment and decree of the lower court, fixing the amount of recovery at $2,700, with interest at 6 per cent from September 1, 1930. We have carefully reviewed the evidence covering the question of the amount of appellee's loss, and we find no error in the finding and decree of the lower court in the amount fixed by it, to wit: the sum of $2,700, with interest at 6 per cent from September 1, 1930.
Judgment and decree of the lower court must be, and it is hereby, affirmed.
EVANS, STEVENS, CLAUSSEN, ANDERSON, KINTZINGER, and DONEGAN, JJ., concur. *Page 1345
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[1] Plaintiff's petition alleged: On December 31, 1943, Clinton Melvin, son of defendants, made an oral contract to marry plaintiff; by reason thereof he seduced and debauched plaintiff and she is pregnant; plaintiff was chaste and of good moral character and at all times has remained so with the exception of her sexual relations with defendants' son; the contemplated marriage was set for May 31, 1944, and would have taken place but for the acts of defendants; defendants, with knowledge of plaintiff's said seduction, "by agreement among themselves, working and cooperating together with a common purpose, have since plaintiff's said engagement to their son, Clinton Melvin, wrongfully and maliciously and with intent to injure the plaintiff, conspired together to alienate and destroy the affections of said Clinton Melvin for plaintiff and to bring about a breach of the marriage contract between them, and in accordance with such wicked agreement the defendants have each, separately and jointly, annoyed, harassed and abused plaintiff, made trouble between her and her fiancé, telling various and malicious stories about her and maliciously and intentionally continued to poison the mind of said Clinton Melvin against her until she became sick in body and mind and unable to stand such abuse; and said defendants pursuing said conspiracy, and in accordance with their agreement, wrongfully and maliciously persuaded and induced said Clinton Melvin to breach his contract of marriage with her and to refuse to carry same out"; defendants sent plaintiff the following telegram: "Miss Arlene Nelson, 1213 1/2 Iowa St., Sioux City, Iowa, Mr. and Mrs. Nelson be advised — as guardian of my son. Drastic action will be taken against you for harboring him about your premises — "; the sending of said telegram was preceded by oral, false, and defamatory remarks of the defendants to and about her, "and as part of their intentions to wrongfully and maliciously breach the contract of marriage between Clinton Melvin and this plaintiff, and to maliciously slander and libel her, all of which said defendants succeeded in doing"; as a result of the foregoing plaintiff's good reputation has been destroyed, she has lost the consortium and companionship of her expected husband and has lost his love and affection; plaintiff has become *Page 606
grieved and distressed and her nervous system has become impaired. The prayer demanded actual damages of $10,000 and punitive damages of $5,000.
Defendant J.A. Melvin filed a special appearance, which was sustained and no appeal has been taken therefrom. Defendant Anna Melvin filed a motion to have the petition of the plaintiff stricken in its entirety for the reason that the petition states no cause of action against defendant, and for the same reason moved to have the cause of action dismissed. This motion was sustained and plaintiff appeals to this court. The only question presented by the appeal is whether the petition states a cause of action.
I. The principal ground of the complaint of the appellant is that appellee, as mother of appellant's fiancé, caused him to break his contract to marry appellant. Insofar as the action is for breach of a marriage contract, or for alienation of affections, there is no right to recover on the part of a fiancé as distinguished from a spouse. In the case of Homan v. Hall,102 Neb. 70, 72, 165 N.W. 881, L.R.A. 1918C, 1195, the court states:
"Where the marriage relation exists and third parties entice away the spouse or alienate the affections, a recovery is allowed, but the cause of action rests upon the right to the society, companionship, conjugal affections and fellowship of the estranged spouse. There is no such right in the fiancé. An alienation suit, therefore, is maintainable only for interference with the conjugal rights of the plaintiff."
The foregoing pronouncement is supported unanimously by the courts of this country where the question has been passed upon. Ableman v. Holman, 190 Wis. 112, 208 N.W. 889, 47 A.L.R. 440; Conway v. O'Brien, 269 Mass. 425, 169 N.E. 491, 73 A.L.R. 1448; Lukas v. Tarpilauskas, 266 Mass. 498, 165 N.E. 513; Clarahan v. Cosper, 160 Wn. 642, 296 P. 140; Leonard v. Whetstone,34 Ind. App. 383, 68 N.E. 197, 107 Am. St. Rep. 252; Davis v. Condit,124 Minn. 365, 144 N.W. 1089, 50 L.R.A., N.S., 142, Ann. Cas. 1915B, 544; Stiffler v. Boehm, 124 Misc. 55, 206 N.Y. Supp. 187; Minsky v. Satenstein, *Page 607
6 N.J. Misc. 978, 143 A. 512; Case v. Smith, 107 Mich. 416,65 N.W. 279, 31 L.R.A. 282, 61 Am. St. Rep. 341; Cooley on Torts, Third Ed., 494; 9 C.J. 342.
The reason for the rule is well stated in Conway v. O'Brien, supra, 269 Mass. 425, 428, 169 N.E. 491, 492, as follows:
"Upon grounds of public policy we are of opinion that this action cannot be maintained. Although marriage is a civil contract, it is a relation between the parties which intimately concerns the welfare of society and the State, and the parents and other relatives and friends of the contracting parties ought to be free to advise them without incurring a liability to be called upon to respond in damages where such advice results in the breach of the contract to marry.
"Upon consideration of the authorities and of the principles involved, we are of opinion that the ends of justice will be best served by holding that no action of this kind can be upheld. To decide otherwise would be to open the door to unwarranted litigation, to promote unfortunate engagements and to encourage unjustifiable attacks upon any relative or friend who could respond in damages. We are of opinion that a plaintiff is given an adequate remedy by having a right of action for slander or libel, as the case may be, whereby a contract to marry has been broken."
Appellant contends that all of the cases in this country have been decided erroneously. We are not disposed to so hold. On the narrow question of a recovery of damages for a parent, such as appellee herein, inducing her child to break a marriage contract, we hold that that alone does not suffice to support a cause of action.
[2] II. Appellant contends that the petition states a cause of action based upon conspiracy and malicious libel and slander. On this feature of the case, in Conway v. O'Brien, supra,269 Mass. 425, 426, 169 N.E. 491, the court states:
"It is also held that no one with impunity can by the use of slanderous or libellous words concerning one of the parties induce the other party to repudiate a contract to marry. In *Page 608
such a case an action will lie for slander or libel but not for inducing a breach of the contract. Leonard v. Whetstone,34 Ind. App. 383, 386 [68 N.E. 197, 107 Am. St. Rep. 252]. Overhultz v. Row, 152 La. 9, 12 [92 So. 716]. Homan v. Hall, 102 Neb. 70
[165 N.W. 881, L.R.A. 1918C, 1195]. Ableman v. Holman, 190 Wis. 112
[208 N.W. 889, 47 A.L.R. 440]."
In determining whether a civil cause of action has been alleged, the charge of conspiracy alone does not state a cause of action. In Olmsted, Inc. v. Maryland Cas. Co., 218 Iowa 997, 998,253 N.W. 804, this court stated:
"This court is committed to the rule that a conspiracy cannot be the subject of a civil action unless something is done pursuant to it which, without the conspiracy, would give a right of action. Beechley v. Mulville, 102 Iowa 602, 70 N.W. 107, 71 N.W. 428, 63 Am. St. Rep. 479; DeWulf v. Dix, 110 Iowa 553,81 N.W. 779; Jayne v. Drorbaugh, 63 Iowa 711, 17 N.W. 433; Dunshee v. Standard Oil Co., 152 Iowa 618, 132 N.W. 371, 36 L.R.A. (N.S.) 263."
[3] Similarly, the allegations that defendant acted maliciously do not suffice alone to state a cause of action. In 34 Am. Jur. 684, the author states:
"Since malice in law is predicated upon the doing of an unlawful act, or the doing of a lawful act in an unlawful manner, it follows that malice, in contemplation of law, cannot exist where the thing done is lawful and the means employed are lawful."
Applying the foregoing rule of law to the type of complaint here before us, the New Jersey court, in the case of Minsky v. Satenstein, supra, 6 N.J. Misc. 978, 980, 143 A. 512, 514, stated:
"A contract to marry stands upon a different footing from the general commercial contract. In the former the state has an interest to see that the contract when consummated by marriage results in a union which will not only prove happy and lasting, but will fit well into the general social scheme. The *Page 609
protection of this interest of the state rests primarily with the parents of those contemplating marriage, therefore, it is generally recognized that parents have the right to advise their children whether they shall enter into contracts to marry, and also to advise the breach of such contracts already entered into, when in the judgment of the parents a marriage ought not to take place, and such advice or the result thereof is not actionable. Leonard v. Whetstone, 34 Ind. App. 383; 68 N.E. Rep. 197; 107 A.S.R. 252, and 15 R.C.L. 18. If the parents thus have the right to act, their motive in acting cannot, of itself, make the act wrongful. 15 R.C.L. 59, § 19. If any other rule were to be pronounced, it would be inviting litigation of a character which would do much to break down family discipline and control."
[4] III. Thus it readily appears that the assertions that appellee conspired with her husband or acted maliciously do not of themselves suffice to state a cause of action. Appellant contends that there is a cause of action stated, based on slander and libel. Appellee contends that the petition is fatally defective because neither libel nor slander is properly pleaded in that the words relied upon are not set forth.
In 37 C.J. 26, the rule is stated thus:
"The plaintiff must recover, if at all, for the publication of the particular matter referred to in the complaint or petition. Other actionable words not pleaded, although published at the same time, cannot be made the basis of recovery. The complaint or petition should allege sufficient facts to enable the court to determine whether the words are actionable."
The same rule is stated in 33 Am. Jur. 214, 215, thus:
"The complaint or other pleading must contain allegations sufficient to show that the statement or matter complained of is defamatory as to the plaintiff. While some courts have held that the libel or slander complained of may be set out in substance and effect, the great weight of authority supports the view that in the absence of any statutory provision to the contrary, it must be reproduced verbatim, not only in order *Page 610
to enable the court to determine whether it is in fact defamatory, but also to apprise the defendant of the exact charge that he will be called upon to answer."
Section 12412, Code, 1939, provides as follows:
"In an action for slander or libel, it shall not be necessary to state any extrinsic facts for the purpose of showing the application to the plaintiff of any defamatory matter out of which the cause of action arose, or that the matter was used in a defamatory sense; but it shall be sufficient to state the defamatory sense in which such matter was used, and that the same was spoken or published concerning the plaintiff."
While our statute does not explicitly require that the petition set forth the defamatory words relied upon, it does not change the common-law rule which required that the words be set forth. Thus, in Kinyon v. Palmer, 18 Iowa 377, 383, we stated:
"We answer, that if the words used, without the aid of the alleged meaning, or without the assistance derived from the general averment, show a cause of action, plaintiff need do no more than set them out in his petition. So far the rule is left as at common law. If there is no such averment, it is for the court to determine the actionability of the words upon the face of the petition; and if not actionable, to so declare."
Again, in Swearingen v. Stanley, 23 Iowa 115, 120, 121, we stated:
"Under our statute, Revision, section 2928, it is not necessary to state in a petition for slander or libel, any extrinsic facts showing the application of the defamatory matter to the plaintiff. It is enough to allege that it was spoken of and concerning him."
And in Clarke v. Jones, 49 Iowa 474, 478, we stated:
"It is sufficient for the pleader, so far as the question before us is concerned, to set out the words and the defamatory sense in which used." *Page 611
We have not been cited to any decisions of this court inconsistent with the foregoing and we have found none. Accordingly, in an action for defamation, it is necessary to state in the petition the words that were spoken or written, upon which the action is based, and the defamatory sense in which they were used concerning the plaintiff. The only words attributed to appellee that are set forth in appellant's petition are those contained in the telegram. These alone are insufficient to support an action for libel by appellant against appellee.
[5] Rule 70 of the Rules of Civil Procedure provides as follows:
"The petition shall state whether it is at law or in equity, the facts constituting the cause or causes of action asserted, the relief demanded, and, if for money, the amount thereof."
Rule 104 (b) provides as follows:
"Failure to state a claim on which any relief can be granted, may be raised by motion to dismiss such claim, filed before answer."
Undoubtedly, the trial court determined that neither slander nor libel was properly pleaded in appellant's petition. This ruling was proper. The petition failed to state facts upon which relief could be granted.
The cause is affirmed. — Affirmed.
All JUSTICES concur. *Page 612
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433379/
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The alleged contempt is predicated on a publication, to wit:
"It is perhaps ungracious to criticize a man who has furnished so much of what we newspaper slaves call `hot copy' as Judge Hume. But for months I have had a growing feeling of disgust with the opinions which he has handed down — a feeling which I believe is shared by the bar and the public in general. Filled with puerile personalities and what the lawyers call `obiter dicta,' they have presented a strained effort at humor and sensationalism wholly unbecoming in a judge who of all men should be the last to become intoxicated by the exuberance of his own verbosity. They remind me of nothing so much as the labored efforts of a village smart alec. His opinion in the street car franchise case is an instance in point. With his conclusions I have no quarrel, for Judge Hume is learned in the law and I am not. He is an able lawyer and a profound student of human affairs in general, but I regret that he is not a candidate for election that I might have the pleasant duty of opposing him as a man temperamentally unfitted for the bench."
The adjudication giving rise to the instant proceeding is bottomed on Section 4460, Code of 1897, which reads:
"The following acts or omissions are contempts, and are punishable as such by any of the courts of this state, or by any judicial officer, including justices of the peace, acting in the discharge of an official duty, as hereinafter provided:
"1. Contemptuous or insolent behavior toward such court while engaged in the discharge of a judicial duty which may *Page 478
tend to impair the respect due to its authority; * * *."
The primary question then is: Does the foregoing publication, within the purview of the statute, constitute contemptuous or insolent behavior toward the court while engaged in the discharge of a judicial duty, and such as to impair the respect due to its authority?
The only opinion of the presiding judge specifically mentioned in the published article refers to what is termed the "Street Car Franchise Case." This opinion was filed with the clerk of the district court on the day preceding the publication in question, and is part of the record before us. There was also introduced and made a part of the record one other opinion of Judge Hume's, filed on May 6, 1922, in a case entitled "Lex v. Selway SteelCorporation," 194 Iowa 193.
The petitioner contends that the comments made by him as the city editor of the Des Moines Daily News on the opinions of Judge Hume were proper and justifiable, and that the language of the court as used in the opinions aforesaid was such as to invite comment by the press. It will be observed that the challenged article recites and declares that the writer (petitioner herein) has no quarrel with the legal conclusions reached by Judge Hume, and that he recognized him as learned in the law and a profound student of human affairs in general. In brief, it is the claim that the publication in question referred only to the temperamental qualities of Judge Hume and his literary and humoristic idiosyncrasies.
It is too plain for amplified statement that a court has the power to punish acts which tend to diminish a proper respect for its authority, or which interfere with the performance of duties affecting public or private rights. However, there is another angle of vision in the consideration of a case of this character, that involves the preservation of personal liberty in relation to the freedom of speech and of the press, finding expression in constitutional guaranty. The question presented is not without difficulty, since a court of review is called upon to define not only an alleged contempt, but also the reasonable limits of the constitutional guaranty, under the record facts.
Our state Constitution provides:
"Every person may speak, write and publish his sentiments *Page 479
on all subjects, being responsible for the abuse of that right. No law shall be passed to restrain or abridge the liberty of speech, or of the press." Article 1, Section 7.
The article in question does not attack or attempt to impeach the character and integrity of the presiding judge. The only reference to him as a judge, or his fitness for the responsible office, is in the line in which the writer asserts that it would be "a pleasant duty of opposing him as a man temperamentally unfitted for the bench," in the event that he was a candidate for office. This statement in itself neither tended to obstruct the course of justice nor to prejudice the trial of any pending action or proceeding. The right is well defined that the merits and qualifications of a candidate for public office, including judicial office, may be discussed by the press.
At the threshold of this case, it is essential to note the elements of the definition of contempt which must find application to the particular facts which constitute the alleged contempt. At common law, a criminal contempt was defined as any act which tends either to obstruct the court of justice or to prejudice the trial in any action or proceeding then pending in court. We are, however, not dealing with the common-law rules in these matters, but with a statute. Drady v. District Court ofPolk County, 126 Iowa 345; Barber v. Brennan, 140 Iowa 678. It is universally recognized that the power to punish contemptuous acts is inherent in the court, and "arises by implication from the very act of creating the court. A court without this power would be, at best, a mere debating society, and not a court." State exrel. Atty. Gen. v. Circuit Court for Eau Claire County,97 Wis. 1 (72 N.W. 193).
Since the power to punish for contempt is arbitrary in its nature and summary in its execution, it must be measured and limited by the necessity which calls it into existence; and our statute does not attempt or intend to destroy or impair the power of a court to punish for contempt. On the contrary, it recognizes the power as inherent in the court, and a part of its very life, and a necessary incident to the exercise of judicial function. A court may well challenge the authority of a legislature to destroy or sensibly impair the power of a court to punish for contempt; but limitations placed thereon by statute are *Page 480
universally recognized as valid. With the rules of the common law, however, involving what is termed the scandalizing of the court, we are not concerned. The classification of contempts by Lord Hardwicke (Roach v. Garvan [or Hall], 2 Atk. 469 [26 Eng. Rep. R. 683]) has undergone a change in England, and committals for contempt by scandalizing the court have become obsolete in that country. It is said in McLeod v. St. Aubyn, 68 L.J.R. (Privy Council Cases) 137 (1899):
"Courts are satisfied to leave to public opinion attacks or comments derogatory or scandalous to them."
It is well settled in this state that the power to punish for contempt may only be exercised that the law may be fairly and impartially administered, uninterrupted by any influence affecting the safety or tending to direct the conclusion of the judge. Field v. Thornell, 106 Iowa 7. So long as published criticism does not impede the due administration of the law, it were better that we maintain the guaranty of our Constitution, than undertake to compel respect to punish libel by the summary process of attachment for contempt. State ex rel. Metcalf v.District Court, 52 Mont. 46 (155 P. 278); State v. Sweetland,3 S.D. 503 (54 N.W. 415); Cheadle v. State, 110 Ind. 301
(11 N.E. 426.)
As indicated heretofore, our courts have not been drawn into the vortex of constructive contempts, as defined by the earlier common law; and we have construed many of such acts to have no tendency to obstruct the administration of justice, but simply to wound the feelings or offend the personal dignity of the judge. The latitude of contempt which finds expression in the earlier decisions is not in harmony with the genius of our life or the spirit of our institutions. The primary purpose of a contempt proceeding is to vindicate the integrity and independence of the court. The judge is the judicial administrator; but it is not who is aggrieved. His own personal feelings are not in the case. It is the court; not the individual.
True, every published impeachment involves the personal, as well as the official, phase; but the criticism must impede the due administration of law. The power to punish for contempt is a trust imposed in the courts, not to protect the individual judge, but the people, whose laws they interpret and whose *Page 481
authority they exercise. Watson v. Williams, 36 Miss. 331. As said in State v. Sweetland, supra, it would be a perversion of the salutary doctrines governing the proceedings of courts and its power to punish for contempt, to permit a judge to summon before him and punish by fine and imprisonment one who challenges in a public newspaper his learning, integrity, or impartiality as a judge, except when the interests of the state demand it, to vindicate the independence and integrity of the courts and protect them from publications directly calculated to embarrass, impede, intimidate, or influence them in the due administration of justice in proceedings pending before them.
In Dunham v. State, 6 Iowa 245, Wright, C.J., speaking for the court, said, in construing the instant statute:
"It would be a perversion of the entire language used, and a palpable violation of the spirit and policy of the provision, to say that a judge could bring before him every editor, publisher, or citizen who might, in his office — in his house — in the streets — away from the court, by printing, writing, or speaking, comment upon his decisions, or question his integrity or capacity. The law never designed this. It is not thus that an independent and intelligent court will be apt to secure public confidence. * * * No court can or should hope that its opinions and actions can escape discussion or criticism. * * * It is perfectly competent and lawful for anyone to comment upon the decision and expose its errors and inconsistencies. * * * It is insisted, however, that the courts of this state may punish other acts and omissions as contempts, than those mentioned in the Code. We are strongly inclined to think, however, that the provisions of the Code upon this subject must be regarded as a limitation upon the power of the courts to punish for any other contempts."
See, also, State v. Anderson, 40 Iowa 207; In re Pryor,18 Kan. 72 (26 Am. Rep. 747.)
The Supreme Court of the United States declared that, when a case is finished, courts are subject to the same criticism as other people. Patterson v. Colorado ex rel. Atty. Gen.,205 U.S. 454 (51 L. Ed. 879).
We do not condone the press when it transcends the limits of decent criticism. Newspaper license under the guise of constitutional guaranty is not within the purview of the freedom of *Page 482
the press; but whether a publication is contemptuous or not must be determined by the facts in the particular case. It must be an act calculated to embarrass or obstruct the court in the administration of justice, to come within the definition of contempt; and the statutory limitation of this power, rather than its enlargement, tends to strengthen the judiciary and attach to it the affections and esteem of the people. If every adverse criticism on the official conduct of a presiding judge constituted contempt of court as such, it would prevent all public or private discussion of court doings. Stuart v. People,
4 Scam. (Ill.) 395.
We make but brief reference to the opinions of record in the case at bar, but content ourselves in stating our conclusion. TheSelway case involved the liquidation of an insolvent corporation, and the primary evidence concerned itself with the fraud practiced by its promoters in obtaining property and promissory notes from numerous individuals. The opinion covers some 20 pages of the abstract. It dealt, in the first instance, with data pertaining to the history of the United States and this state, with allusion to the flora and fauna of Iowa. This was the basis for the recital of an imaginary visit of a stranger from Wisconsin (Selway), and is termed "the arrival of Vandemark," — the hero of Herbert Quick's novel. Then follows a history of Budke, the partner of Selway; but to recount the details of the cunning scheme, as told by Judge Hume in his figurative recital of the facts, would serve no purpose here. The opinion is readable, and quite interesting, from a literary viewpoint, but unusual in the realm of judicial opinion. The story of the Selway
case not only is told in the opinion, but it is dramatized by the judge; and, as said by him, "the characters are real people," appearing in person as witnesses on the trial; and, as indicated by the judge, the story made an interesting sequel to "Vandemark's Folly." The program, as outlined, is as complete as ever printed for theater comedy, including scene, time, anddramatis personae. It is vivid in word painting and colorful in characterization.
In the opinion in the street car franchise case, the judge also gave full rein to his imagination and literary inventions; and the statement in the publication, "the exuberance of his own verbosity," finds its origin here. It is quite evident that it is *Page 483
the manner of saying, and not the thought intended to be conveyed, that provoked the newspaper comment of which the petitioner is the author. After a careful reading of the opinions by Judge Hume as found in the record before us, we feel that the published article would in no manner influence the court in any pending matter. Both opinions had been filed, and became subject to public inspection and to public and individual comment. The ruling of the court was not criticized, nor the reasoning of the court in reaching its conclusion. The comments of the petitioner find their provocation in the literary style of the author. Rule 21 of the proposed Canons of Judicial Ethics, reported by a committee of which Chief Justice Taft is the chairman, reads:
"Justice should not be moulded by the individual idiosyncrasies of those who administer it. A judge should adopt the usual and expected method of doing justice, and not seek to be extreme or peculiar in his judgments, or spectacular or sensational in the conduct of the court."
To violate this canon is to invite comment by the press.
We conclude that the publication in question, in the light of the opinions which were the subject of comment, is not within the purview of contemptuous and insolent language toward the court in the performance of a judicial duty, and such as to impair the respect due to its authority.
The judgment is — Reversed.
FAVILLE, C.J., and ARTHUR, VERMILION, and ALBERT, JJ., concur.
EVANS, J., takes no part.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433380/
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There was a motion to dismiss this appeal and a resistance, but upon our view of the case it is unnecessary to consider the same.
For the sake of brevity, the First State Bank of Fredericksburg, Iowa, will hereinafter be called "the bank," and the Northern Lumber Company "the lumber company."
Very briefly stated, it appears that in August, 1926, one Shaffer executed a certain note to the bank for $7,250.00 and a mortgage on 122 acres of land to secure the payment of the note. In October, 1926, George L. Westendorf purchased the land subject to the mortgage, the possession of the land and the deed therefor to be given on March 1, 1927. The contract provided that the buildings were to be "in good shape at that time."
On February 18, 1927, the dwelling house on the mortgaged land, while occupied by the tenant, was destroyed by fire. The bank collected the $3,000.00 fire insurance. Westendorf indicated that he would not complete the transaction unless a suitable house were built on the farm, whereupon it was agreed between Westendorf and the bank that the $3,000.00 collected for insurance would be used to replace the house. Westendorf then secured plans for a house from the lumber company and contracted for the delivery of the material to construct the same. The cost of the material exceeded the $3,000.00. The lumber company filed its lien and seeks to enforce it as prior to the mortgage lien of the bank on the land. Among other things, the *Page 477
lumber company in substance claims that Westendorf became the agent of the bank in procuring the material, and as such agent bound the bank to pay for the entire bill of material under a mechanic's lien. The trial court held the mortgage lien superior.
The real question for consideration and determination is as to the priority of the bank's mortgage or the lumber company's mechanic's lien.
[1] I. The appellant assigns as error that the court did not permit the sale and removal of the building from the land for the satisfaction of the lien of the lumber company. The record shows that the house is a modern one, with plumbing and electric wiring, with a basement 26 x 48 feet under the entire house. The evidence shows that it would cost a substantial sum of money to remove the house from the premises and that the farm would be seriously damaged by the removal of the house. This court has said in Crawford-Fayram Lumber Company v. Mann, 203 Iowa 748 (l. c. 752), the following:
"Where a valuable dwelling is constructed according to modern methods, and connected with the real estate by an improved basement, and equipped with the modern conveniences of water, heat, gas, and sewerage, with valuable plumbing extending from basement upward, it becomes almost unavoidably an integral part of the real estate, and cannot be removed without destruction of a substantial part of its value."
Other cases upon the same point might be cited. We are clearly of the opinion that under the facts in this case the rule above quoted is controlling.
[2] II. It is contended by the appellant that the court erred in not decreeing under the last sentence of subsection 1 of Section 10290 of the Code, which reads as follows:
"If the court shall find that such building should not be sold separately, it shall take an account of and ascertain the separate values of the land, and the building, and order the whole sold, and distribute the proceeds of such sale so as to secure to the prior lien, incumbrance, or mortgage priority upon the land, and to the mechanic's lien priority upon the building."
In considering this question, it must be borne in mind that *Page 478
at the time of the transaction between the bank and Westendorf, there was a house on the land.
The $3,000.00 of insurance, in reality, was a part of the bank's security. That $3,000.00 was, in fact, paid to the lumber company on its account for material furnished. The lumber company has not seen fit to introduce any evidence to show whether the land with the new house is more valuable than it was with the old one. No evidence has been introduced as to the value of the land or the value of the building or the value of the land and the old building or the value of the land and the new building. Without any evidence on the subject, nothing can be done other than as the trial court decreed: that, in the event that the property sells for more than sufficient to satisfy plaintiff's prior claim and judgment, any surplus shall be first applied towards the payment of the mechanic's lien of the Northern Lumber Company.
[3] III. The appellant contends that Westendorf became the agent of the bank in contracting for the material furnished for the erection of the house, and as such agent, bound the bank to pay the entire price of the material purchased or surrender the priority of its mortgage.
By the undisputed evidence, it appears that Westendorf called upon the lumber company for plans and specifications for a house. Westendorf desired to know how much the house, as represented by the plans, would cost. The evidence does not show what the response was, but it clearly appears that Westendorf complained the house was too big, and then explained to the lumber company that the money which was available for the building of the house was the $3,000.00 proceeds of the fire insurance on the house which burned on the farm.
The following is a part of the testimony of the agent and representative of the lumber company in reference to what transpired immediately before the purchase of the material.
"They told me they were going to turn this insurance money over for the payment of building a new home. I couldn't say the exact date of the talk, but it was before I sold the estimate.
"Q. Did they tell you they had been to see Mr. Koerth (the cashier of the bank)? A. Yes, they said that he had told them that he would turn over the money that he got for the insurance to put up a new building." *Page 479
It clearly appears from the record that the lumber company knew that the bank held a mortgage on the premises upon which the house was to be erected. It is not contended that any agent or representative of the bank ever had any personal conversation or correspondence with any agent or representative of the lumber company, except as it is claimed that Westendorf became the agent of the bank in purchasing the material.
A very careful examination of the entire record convinces us against the appellant's contention in this regard. There is nothing in the record to show that in the original sale of the material by the lumber company to Westendorf the lumber company relied, in any regard whatsoever, upon the credit of anyone save and except Westendorf. The lumber company understood that the $3,000.00, the proceeds of the insurance on the old farm house, would be used in payment of the building, and it was so used. The claim of the lumber company is for the excess of the bill over the $3,000.00.
The only evidence in the record of authority by the bank to Westendorf is to the effect that the bank authorized Westendorf to advise the lumber company that the $3,000.00 insurance money would be used to pay for the material for the house. There is nothing in the record even tending to show that the bank authorized Westendorf to say anything to the lumber company about the bank's promise to loan some money to Westendorf to complete the house. There is nothing in the record to support either an express or implied agreement on the part of the bank to pay the excess over the $3,000.00.
In Hunt Hardware Company v. Herzoff, 196 Iowa 715, this court said:
"Mere knowledge by the owner that a purchaser of real property from him under a contract for a deed, to be executed upon the payment of the purchase price, has placed improvements on the property, is not sufficient to create an implied promise upon his part to pay for such improvements, nor to charge his interest therein with a lien. Young v. Swan, 100 Iowa 323; Beh v. Moore,124 Iowa 564; Oregon Lbr. Co. v. Beckleen, 130 Iowa 42; Cedar Rapids S. D. Co. v. Dubuque Realty Co., 195 Iowa 679; Sheppard v. Messenger, 107 Iowa 717."
This court said in Joyce Lumber Co. v. Wick, 200 Iowa 796: *Page 480
"Mere knowledge on the part of the vendor that the vendee had made improvements on the building is not sufficient to create an implied promise on the part of the vendor to pay for the improvement. Hunt Hdw. Co. v. Herzoff, 196 Iowa 175. Nor does it create a lien on the interest of the vendee in favor of the materialman, superior to the lien of the vendor. Ellis v. Simpson, 199 Iowa 671; Royal Lbr. Co. v. Hoelzner, 199 Iowa 24."
In Kimball Bros. Company v. Fehleisen, 184 Iowa 1109, at 1115, this court said:
"To bind the vendor's interest or title in the land then, the improvement must have been made by his inducement or on his authority, express or implied."
Westendorf owned the land, and had a perfect right to contract for improvements thereon. The mortgage to the bank was on record, and the lumber company knew of the said mortgage at the time the materials were sold and delivered. Mere knowledge on the part of the bank (if the bank knew) that the owner was contracting for a house which would cost more than the $3,000.00 placed the bank under no obligations to the lumber company to pay for said material or surrender its prior lien.
[4] IV. The appellant seeks to establish an estoppel against the bank on the excess price of the material over the $3,000.00 paid.
As has been previously said, prior to and at the time the estimate of the cost of the materials was furnished by the lumber company and the bill of lumber was sold to Westendorf, the lumber company was definitely informed that the building was to replace the one burned on the farm and it was to be built from the insurance money which the bank possessed, amounting to $3,000.00. By the oral contract with the lumber company, payments were to be made in installments, and the evidence shows that about the time the first installment was paid, some conversation took place between Westendorf and the lumber company in reference to the fact that $3,000.00 was insufficient to pay for the material.
It appears without contradiction from the testimony of the representative of the lumber company that after they knew the total amount of the material to be used in the house, Westendorf told them he didn't think he would have enough money from *Page 481
the insurance to pay the bill. Nevertheless, no representative of the lumber company made any effort to see any representative of the bank or communicate with them in relation to the balance. A reading of the entire record on this subject indicates that the lumber company was relying upon the credit of Westendorf for the cost of the material over the $3,000.00. It appears from the record that after the construction of the house had been commenced, Westendorf, realizing that the $3,000.00 would not pay for the house, asked the cashier of the bank if he (Westendorf) could borrow the money to complete the job. It is claimed that the bank promised to loan Westendorf the money.
It is also claimed that Westendorf told the agent of the lumber company that the bank had agreed to loan to Westendorf some money to finish the job. The amount, however, was never agreed upon between the bank and Westendorf. Later, it appears, the bank limited the amount of its loan to $250.00, which was not enough. This was on August 3, 1927, at which time the bank wrote Westendorf a letter to that effect.
As previously stated, it is not claimed that the bank agreed to loan Westendorf any particular sum of money. It is probable that Westendorf was disappointed in the amount he was subsequently allowed to borrow from the bank, but at the time of the conversation between Westendorf and the lumber company, the bank had not fixed any amount, and necessarily the lumber company was not told that the bank was going to loan to Westendorf any particular amount of money. Regardless, however, of this question of amount, the money was to be loaned by the bank to Westendorf, and it clearly appears that the lumber company was relying upon the credit of Westendorf, and not upon the bank, to pay the balance of the material.
It cannot be claimed by the lumber company that the bank perpetrated any fraud upon it, nor can it be claimed that Westendorf perpetrated any fraud. The lumber company was told that the bank had agreed to furnish some money, but not how much. The bank did furnish some money in excess of the insurance money, but not enough to satisfy the lumber company's claim. It satisfactorily appears that the lumber company was willing to trust Westendorf for the excess.
Upon this question of estoppel, this court, in McIntosh v. McIntosh, 211 Iowa 750 (l. c. 757), said: *Page 482
"In an early decision of this court it is said that `estoppel is not favored in law, and must always be clearly proved.' Baldwin v. Lowe, 22 Iowa 367. In Anfenson v. Banks, 180 Iowa 1066, l. c. 1091, it is said: `The courts do not hesitate, however, to uphold a claim of estoppel wherever it is essential to prevent fraud.' In the instant case, the evidence fails to disclose fraud. It is essential to an equitable estoppel that the representation or statement, howsoever it arises, must be of material facts, and must have been willfully intended to lead the party setting up the estoppel to act upon the same, or there must have been reasonable grounds to anticipate that he would change his position or in some way act on the faith of the conduct or representations to his detriment. 21 Corpus Juris 1120 et seq.,
Paragraph 123 et seq."
In City Bank v. Alcorn, 188 Iowa 592, this court said:
"An estoppel is not favored in the law, and strict proof of all its elements is demanded."
See also Baldwin v. Lowe, 22 Iowa 367; Cheshire v. McCoy
Henry, 205 Iowa 474. Other cases might be cited.
The lumber company has not met the test for the establishment of an estoppel. All of the claims of the appellant have been carefully considered, and we conclude that, upon the whole record, the trial court correctly ruled the mortgage lien of the bank prior to the lien of the lumber company, and in all respects the decree is correct.
It follows that the cause must be, and is, — Affirmed.
FAVILLE, C.J., and EVANS, MORLING, and KINDIG, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433381/
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Plaintiff's petition, filed May 25, 1939, alleged an oral agreement with defendant to marry, on or about August 1928; her willingness at all times to marry him, and his failure to carry out his contract; that such promise was constant and continuous and she relied thereon until on or about January 1939, when she discovered that defendant had, in August 1938, married another, which fact he concealed; and that by such false promise she was deceived, seduced, and debauched; and that, relying on such promise, plaintiff has remained single, and has suffered injury, and asks recovery of actual and punitive damages. Defendant's answer admits his marriage to a person other than plaintiff; alleges plaintiff was unchaste, which he did not know until November 1937; and denies generally. Further, for the purpose of conforming the pleadings to the proof, he pleads, if there was such promise, an oral release by plaintiff. Trial was had, verdict rendered for plaintiff, and defendant's motion for judgment notwithstanding verdict, motion for new trial and exceptions to instructions, were overruled, and defendant appeals.
It is unnecessary to set out in detail the evidence except *Page 779
as it pertains to the errors charged. Plaintiff, in 1928, was employed as a waitress and lived with her parents in Harlan. She testifies that in May of that year she met the defendant, that she "kept company" with him continuously; that in the summer of that year he proposed marriage; that he made protestations of love and affection, and suggested that they be married when his means would permit. She testified, and defendant in his testimony did not deny, that they went together for more than ten years. He bought her presents, and, as she did not belong to his church, he gave her instructions and books relating to his church, which she agreed to join. She visited his family, attended his mother's and father's funerals, and his brother's wedding. He wrote her affectionate letters, some of which were in evidence, showing his love for her and the child born to her. In the summer of 1928, according to her testimony, their sexual relationship began, at defendant's solicitation and promise and understanding of marriage; such relations continued, and as a result she twice became pregnant and had two abortions, and as a result of a third pregnancy a girl child was born to her on May 27, 1938, in Colorado. Defendant married another woman August 8, 1938, but plaintiff testified she did not discover this fact until the following January. Defendant denies any promise to marry plaintiff; denies that he was sexually intimate with her and that he is the father of her child. While admitting writing love letters, he testifies that they were not seriously intended, but "idle prattle," and denies that he ever loved her. He testified further to an oral release on May 27, 1938, which she denied.
The case was called for trial November 1, 1939. Plaintiff testified at length to facts the substance of which is given above. Other witnesses testified as to corroborating facts, and several letters from defendant were introduced. There was ample evidence to submit to the jury the questions of breach of promise and seduction. No motion for directed verdict was made.
[1] I. Defendant's first claim of error was in overruling his objection to displaying plaintiff's child to the jury. The girl, then about 18 months old, was present with her mother *Page 780
during the trial, and plaintiff, against the objection of defendant, was permitted to testify as to the child's paternity. There was no calling attention or reference to the physical resemblance between the child and its alleged father. Under these circumstances, under our rules there was no error. Cases cited by plaintiff are: State v. Clemons, 78 Iowa 123, 42 N.W. 562; State v. Hunt, 144 Iowa 257, 122 N.W. 902; State v. Stark, 149 Iowa 749,129 N.W. 331, Ann. Cas. 1912d 362; all of which support plaintiff's argument that there is not error unless the child is offered on the question of resemblance. In State v. Danforth,48 Iowa 43, 30 Am. Rep. 387; State v. Smith, 54 Iowa 104,6 N.W. 153, 37 Am. Rep. 192; State v. Harvey, 112 Iowa 416, 84 N.W. 535, 52 L.R.A. 500, 84 Am. St. Rep. 350; State v. Meier, 140 Iowa 540,118 N.W. 792, cited by defendant, the error consisted in so offering the child. The record here does not disclose any reference to or offer to show any supposed resemblance. Both parties cite 40 A.L.R. 120, which discusses quite thoroughly the differing rules prevailing in different states. But the rule seems established in Iowa as stated. Also defendant's letters, in which he frequently mentioned the child, were in evidence. From these letters we gather that there was a resemblance between defendant and the child, especially as to the color of hair, evidence of which is supplied by defendant himself in such letters. We find no error here.
[2] II. Defendant objects to the court's instruction No. 9. This instruction first sets out the claim of plaintiff as to seduction in aggravation of damages. It then defines seduction, giving previous chaste character as an element, and tells the jury that if they find seduction it may be considered on the question of whether there was a promise of marriage and also in aggravation of damages. It next states that defendant had pleaded that plaintiff was in 1937 a woman of unchaste character, but that in the judgment of the court he had not established such claim, and that the jury could not consider such claim in mitigation of damages, but could consider that question in determining whether or not plaintiff was seduced by defendant.
We do not think that the use of the phrase as to claim of plaintiff that she "lost her virtue" goes to the extent of *Page 781
alleging previous chastity. In ordinary language, as here used, it means that she submitted to intercourse, and the jury could not have misunderstood what was intended. In its definition of seduction the instruction is more favorable to the defendant than he is entitled. The plaintiff did not plead previously chaste character. Such issue was tendered by defendant. And previous chaste character is not a necessary element in a civil action for seduction. Gardner v. Boland, 209 Iowa 362, 366, 227 N.W. 902,904; Olson v. Rice, 140 Iowa 630, 119 N.W. 84; Wilson v. Mangold,154 Iowa 352, 134 N.W. 1072. The defendant having so charged, in a matter not necessary to plaintiff's right of recovery, it would be unfair to place the burden to disprove this charge upon plaintiff. The rule was approved that the jury should treat prosecutrix as having been virtuous before the alleged seduction, unless the evidence, direct or circumstantial, satisfied them that she had lost her virtue by having illicit intercourse. See Washington v. State, 124 Ga. 423, 52 S.E. 910. And see, McTyier v. State, 91 Ga. 254, 255, 18 S.E. 140. In the latter case, a statement in an instruction that: "The presumption of the law is that the female alleged to have been seduced was virtuous, and that presumption remains until removed by proof", was approved. In the absence of any evidence to the contrary, the presumption of law is in favor of her chastity. 57 C.J. 29, section 75.
The court was right in stating that defendant had not established his claim that plaintiff was, in 1937, of unchaste character. The evidence on that question is only by defendant, and his entire testimony, on direct or cross-examination, reduced itself to a mere charge. He states:
"I don't know that she had sexual relationships with anybody else. I know that she went with traveling salesmen. I have seen her with one. I can't mention names. I can't say that I ever saw her under any circumstances where she might have had illicit relationships with anyone else."
Other testimony was given, much of the same indefinite character. The court was right in holding such evidence insufficient. The defendant cannot now complain, having raised the question, of an instruction thereon more favorable to him than that to which he was entitled. *Page 782
[3] III. Defendant objects to instruction No. 8, in which the court stated the elements of damage which the jury might consider, including disappointment, mortification, humiliation, and other matters. Defendant does not argue to any great extent the matters which were submitted, but calls attention to the use of the word "damages" instead of "advantages." In the connection in which it is used we think the jury could not in any way be misled by the court's stating as one element "the loss of worldly and pecuniary damages, including a home and the comforts thereof." We think the instruction was justified and has the sanction of our authorities. Royal v. Smith, 40 Iowa 615, which permitted as one element "personal pain and mortification"; Lauer v. Banning, 152 Iowa 99, 131 N.W. 783, where seduction was considered as aggravation; Holloway v. Griffith, 32 Iowa 409, 7 Am. Rep. 208, where pecuniary advantages might be considered, as in McKenzie v. Gray, 143 Iowa 112, 120 N.W. 71. In Rime v. Rater,108 Iowa 61, 78 N.W. 835, an instruction including mental suffering was approved. See also, McKee v. Mouser, 131 Iowa 203,108 N.W. 228, and Morgan v. Muench, 181 Iowa 719, 156 N.W. 819. We think there is no merit in the objection to the instruction.
[4] IV. The next error relied upon for reversal consists in the court's overruling defendant's motion for a new trial, which alleged that the verdict was unsupported by evidence and that plaintiff is not entitled to more than nominal damages, and that the evidence does not show any seductive arts or promises. This motion was rightly overruled as to these grounds. Not only was there evidence by the plaintiff of an express promise of marriage, but there was evidence as to surrounding circumstances which bore directly on that question. In Fisher v. Bolton,148 Iowa 651, 654, 127 N.W. 979, 981, the rule is stated that:
"For the purpose of such an action as this, a promise of marriage need not be proved in express terms, nor by direct evidence."
There is evidence tending to sustain plaintiff's claim of an understanding and agreement of marriage during the period *Page 783
in which the parties were going together, and, as to damages, we have heretofore summarized some of the evidence, and we hold that the cause was properly submitted to the jury.
[5] V. Defendant next argues that the court should have granted his motion for more specific statement, in which he asked that plaintiff be required to allege how much of her claim was for breach of promise and how much for seduction and debauching. This was not necessary and there was no error in refusing it. See Rime v. Rater, supra, wherein it is said at page 67 of108 Iowa, page 837 of 78 N.W.: "Proof of specific elements of damage was not required." The seduction in this case was an aggravation of damage for the breach of promise.
[6] VI. Error is assigned in overruling defendant's motion to withdraw from the consideration of the jury the evidence in relation to abortions. This testimony was admitted without objection and was proper to be considered in connection with all the other evidence as to the conduct of the parties. It was not given to the jury as an element of damage. There was no error here.
We have examined all the assignments of error which the defendant has called to our attention and find none which would require a reversal. No complaint is made as to the amount of the verdict, and in our opinion the case should be affirmed. — Affirmed.
BLISS, C.J., and STIGER, SAGER, OLIVER, MILLER, GARFIELD, and WENNERSTRUM, JJ., concur. *Page 784
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The right of appellants, as administrators, whose decedent was not a party to or the owner or holder of the mortgage involved, to prosecute this action to foreclose the same is predicated upon the equitable doctrine of subrogation. The essential facts are in no sense complicated and may be briefly stated. *Page 1007
On or about September 3, 1919, Arda Brubaker McNulty, guardian of her minor son Burl Brubaker, was, upon proper application and showing to the court, authorized to make sale of the southwest quarter of the northeast quarter of section 22, township 74, range 15, Mahaska county, the property of her ward. The land was sold, full report of sale made to, and approved by, the court. Before consummating said sale, the guardian executed a bond in the penal sum of $20,000 conditioned as by law required with C.W. Randell, appellant's decedent and another as sureties thereon. The order approving the sale of the aforesaid real property authorized the guardian "* * * to loan any balance of the ward's money in her hands at the rate of six per cent interest per annum and only upon first mortgages upon Iowa farm land, the land securing same to be worth at least twice the amount of the loan. * * *"
On or about March 2, 1920, the guardian loaned to her brother Eugene McEwen $5,000 of the money of her ward for a term of five years, receiving as security for the payment thereof a first mortgage upon an eighty-acre tract of land located in Keokuk county, Iowa. The mortgage was duly recorded in the office of the county recorder of that county.
On January 23, 1922, a purported release bearing date December 23, 1921, of said mortgage reciting that "* * * it is redeemed, paid off, satisfied and discharged in full, * * *" was filed in the office of the county recorder of Keokuk county. No part of the loan was paid by the mortgagor at the time such purported release was executed and filed. The only payments at any time made by him thereon were of interest, the last of which was made five years after the date of the purported release and one payment of $500 on principal on August 29, 1927.
Burl Brubaker, the ward, attained his majority on November 22, 1929. The final report of the guardian showed that she was in default in the sum of $5,797.50, the balance due on the aforesaid loan to her brother Eugene McEwen. Thereupon, Burl Brubaker filed a claim for the amount due him with the administrators of the estate of C.W. Randell, deceased, surety on the bond of his guardian. The claim thus filed was allowed by the court and paid in full by appellants. Thereupon, and shortly thereafter, this action against C.W. Fellers, the present owner of the eighty-acre tract covered by the McEwen mortgage, was commenced. Although other issues were joined in the court below, the relief sought in this court is the establishment of the said mortgage lien upon the real estate *Page 1008
described therein as of the date of its execution; the right of appellants to be subrogated to all the rights and remedies of Burl Brubaker, the ward for whose benefit the loan was made, and his guardian, and for the foreclosure of the said mortgage. Appellee acquired title through several mesne conveyances from the mortgagor.
The foregoing statement of the facts at once suggests the probable defenses urged to appellants' cause of action. Paramount above all others is the contention that appellee is an innocent purchaser of the land in controversy for value without notice or knowledge, actual or constructive, of any defect in the purported release executed and caused to be placed of record by the guardian. The release was executed without application to, or prior authorization of, the court. The mortgage named Arda Brubaker McNulty, guardian of Burl Brubaker, a minor, of the county of Mahaska and state of Iowa, as mortgagee. The release was executed by her in her name as guardian.
[1] It is obvious that the payment by the debtor of the indebtedness secured by a mortgage upon real estate operates immediately to discharge the lien. It is equally true that an unauthorized release without payment by a guardian would, as between the immediate parties, including the ward and the sureties on the guardian's bond, have no such effect. It, therefore, does not require argument to demonstrate that the lien of the mortgage here involved continued to exist in spite of the purported release thereof by the guardian. It is provided by section 12581 of the Code of 1931 that:
"Guardians of the property of minors must prosecute and defend for their wards, may employ counsel therefor, lease lands, loan money, and in all other respects manage their affairs, under proper orders of the court or a judge thereof."
Loaning of the money of the ward by the guardian and the release of a mortgage given to secure the payment of such loan under the language of the foregoing statute certainly constitutes management of the affairs of the ward. Andrew v. Sac County State Bank, 205 Iowa 1248, 218 N.W. 24; Andrew v. Farmers Sav. Bank,207 Iowa 394, 223 N.W. 249; Slusher v. Hammond, 94 Iowa 512, 63 N.W. 185; Bates, Guardian v. Dunham, 58 Iowa 308, 12 N.W. 309.
It is provided by section 12772 of the Code of 1931 as follows:
"All proposed investments of trust funds by fiduciaries shall first be reported to the court or a judge for approval and be *Page 1009
approved and unless otherwise authorized or directed by the court under authority of which he or it acts, or by the will, trust agreement or other document which is the source of authority, a trustee, executor, administrator or guardian shall invest all moneys received by such fiduciary, to be by him or it invested, in securities which at the time of the purchase thereof are included in one or more of the following classes: * * *"
At the time the loan in question was made, section 364 of the 1913 Supplement to the Code and section 365 of the Code of 1897 were in force. These sections are as follows:
"Sec. 364. Where investments of funds are to be made, including those to be made by executors, administrators, trustees and guardians, and no mode of investment is pointed out by statute, they may be made in the stocks or bonds of this state, or of those of the United States, or in bond or mortgage upon real property of the clear, unincumbered value of twice the investmentor under order of court in bonds issued by or under the directionof cities, towns, countries, school or drainage districts of thisstate.
"Sec. 365. When such investment is made by order of any court, the security taken shall in no case be discharged, impaired or transferred without an order of the court to that effect, entered on the minutes thereof."
[2] The court is divided in opinion as to the correct interpretation of the foregoing statutes. A minority of the court are of the opinion that section 365 of the Code of 1897 must be limited in its application to the italicized portion of section 364. The italicized portion of section 364 first appeared in the section upon the enactment of chapter 38, Laws of the Thirty-fifth General Assembly. The legislative history of section 365 begins with the Code of 1851, appearing therein as section 2508. It has continued through the several revisions of our statutes to the present without change. It would seem from this legislative history that the legislature, by the enactment of chapter 38, Laws of the Thirty-fifth General Assembly, expressed no intention to limit the terms or scope of section 364. The loan by the guardian to McEwen was not reported to, or specifically authorized by the court, but that it was made in pursuance of the general order and authorization previously entered must be conclusively assumed. The loan was, therefore, made under *Page 1010
authority and order of the court and could be legally released only upon compliance with section 365 of the Code of 1897. To hold otherwise would be, in effect, a denial by the court of the protection vouchsafed to wards by solemn legislative enactments. These statutes were not enacted for the benefit of guardians or third parties, but solely for the benefit and protection of the property of the wards of the court.
The precise question now before us does not appear to have been previously passed upon by this court. The case nearest in point is Citizens State Bank v. Victoria Sanitorium, 179 Iowa 671, 161 N.W. 664. The action there involved was in equity to foreclose a mortgage upon real estate. Acting under the authority of the court, the administrator who appeared with others as an intervener in the case had released a prior mortgage of record. The contention of interveners was that the order of the court, for reasons stated, was illegal and void. Interveners asked that it be canceled. set aside, and held for naught. The court, under the facts of that case, sustained the order, but, in the course of the discussion, this court gave serious consideration to the necessity for such order and authority. Manifestly, the attempted release by the guardian of the mortgage in question without payment was constructively fraudulent as against the ward and the sureties upon the guardian's bond. The release was illegal and wholly ineffective as between the parties, the ward, and the sureties on the guardian's bond for at least two reasons, namely, the debts secured thereby were not paid and it was not preceded by a proper order of court. Of course, if the execution of the release had been preceded or accompanied by payment of the mortgage indebtedness and the guardian had made proper accounting thereof in the ward's estate, the lien would, of necessity, have ceased to exist.
The question to be answered at this point presents much greater difficulty and possible uncertainty. It is not uncommon for an issue as to the actual or apparent authority of a mortgagee to release a mortgage to arise. It is clear that the release in question was executed without authority. Whether an issue of apparent authority is, under the facts of this case at this time involved, we deem it unnecessary to consider. It is conceded that appellee and each of his predecessors in title through McEwen, the mortgagor, had actual notice of the mortgage and of the purported release. They were shown upon abstracts of title exhibited to each grantee prior to the *Page 1011
consummation of the purchase. No element of actual fraud is involved under the issues. Were the respective purchasers of real property, including appellee, charged with notice of the defect in the authority of the guardian to release the mortgage?
It is the law long settled in this state that actual notice exists where the facts and circumstances were such as to lead a reasonably prudent person to make inquiry which, if made, would have resulted in ascertaining the truth. This is sufficient to constitute actual notice. Mill Owners Mut. Life Ins. Co. v. Goff,210 Iowa 1188, 232 N.W. 504; Johnson v. Chicago, B. Q.R. Co.,202 Iowa 1282, 211 N.W. 842; Aultman Taylor Machinery Co. v. Kennedy, 114 Iowa 444, 87 N.W. 435, 89 Am. St. Rep. 373; Weare
Allison v. Williams. 85 Iowa 253, 52 N.W. 328; Traer v. State Board of Medical Examiners, 106 Iowa 559, 76 N.W. 833; Benton County Savings Bank v. Boddicker, 105 Iowa 548, 75 N.W. 632, 45 L.R.A. 321, 67 Am. St. Rep. 310; Allen v. McCalla, 25 Iowa 464, 96 Am. Dec 56; Wilson v. Miller Beeson, 16 Iowa 111.
Appellee and his predecessors in title were bound to know and to take cognizance of statutes defining and limiting the authority of guardians and other similar trustees. Such officers are a part of and act under the authority and direction of the court. Both the language of the mortgage and of the release gave notice that the mortgagee was the guardian of her minor son and acted solely in her capacity as such. The statute in specific terms forbade her to discharge or impair the security she held for the protection of her ward's estate without previous authority of the court entered on the minutes thereof. The purported release contained no recital that it was executed in pursuance to and observance of an order of court. Actual knowledge of the statutory requirements and the limited authority of the guardian were not essential to impart legal notice and knowledge to appellee. Manifestly, if the statutes imposing limited authority upon the guardian had been actually familiar to appellee, he would have at once demanded a showing upon the abstract of full and complete compliance therewith. He was bound by the law and must be held to have had notice and knowledge thereof. The slightest inquiry upon his part would have resulted in full knowledge of all the essential facts including the all important fact that the indebtedness secured by the mortgage was not paid. This precise question was before the Court of Civil Appeals *Page 1012
of Texas in Freiberg v. De Lamar, 7 Tex. Civ. App. 263,27 S.W. 151. The court said:
"The guardian, Mrs. De Lamar, had no power without authority from the probate court to discharge Merritt from his liability for the debt, and release the lien by which it was secured; and, notwithstanding her act in receipting the note and executing the instrument to Freiberg, the debt was not discharged, and the lien to secure it continued in full vigor. Freiberg knew of the existence of the charge against the property in favor of the minor, was charged by law with notice of the guardian's want of power to release it, and must abide the legitimate consequences of the failure to pay the debt."
See, also, International Trust Co. v. Preston, 24 Wyo. 163, 156 P. 1128.
Some reference is made by counsel to section 11826 of the Code of 1931 which requires certified copies of orders or judgments affecting real estate in any county other than that in which administration or guardianship is originally granted to be forwarded to the clerk of the county in which the real estate is situated. The guardianship in this case was in Mahaska and the mortgaged premises in Keokuk county. No record or order approving or authorizing the guardian to release the mortgage here involved was ever made in Mahaska county. There was, therefore, nothing, even if required in cases of this character, to be certified by the clerk of the district court of Mahaska county to the proper officer in Keokuk county. It is not easy to perceive just how appellee would claim advantage under this statute. Both the guardian and the mortgagor knew that the purported release was fraudulent as against all interested parties. This is true whether they, in fact, intended to perpetrate a fraud upon innocent parties or not.
Another circumstance to be considered is that the note secured by the mortgage did not mature until 1925. Perhaps little weight should be attached to this fact. This court, however, in Day v. Brenton, 102 Iowa 482, 71 N.W. 538, 63 Am. St. Rep. 460, in which a release by a trustee without payment and after the note secured thereby had been transferred was involved gave great emphasis in argument to the fact that the note was past due when the release was executed. Some reliance is placed by appellee upon the holding of the court in the above case sustaining the release. We find nothing in the language of the court in any sense in conflict with *Page 1013
the conclusion reached herein. The cases are distinguishable upon the facts.
It is the conclusion of the court that appellee must be held to have purchased the mortgaged premises with notice or knowledge of the invalidity and ineffectiveness of the purported release and may not now assert, as a defense, the right of an innocent purchaser for value or defeat the claimed right of appellants to subrogation under the doctrine of equal equities. In the absence of such notice or knowledge, a contrary conclusion must necessarily have followed. We deem it unnecessary, therefore, to discuss or refer to the many authorities cited and relied upon at this point by appellee.
[3] The doctrine of subrogation is of equitable origin, but is supplemented to some extent in this state by statute. Section 11667, Code 1931. It has been too often defined and the principle stated to require elaborate discussion at this time. The court, quoting in part from Jackson Co. v. Boylston Mut. Ins. Co.,139 Mass. 508, 2 N.E. 103, 52 Am. Rep. 728, in Kent v. Bailey,181 Iowa 489, 164 N.W. 852, said:
"`Subrogation is the substitution of one person in place of another, whether as a creditor or as the possessor of any other rightful claim, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its right, remedies, or securities.' * * * See Heuser v. Sharman,89 Iowa 355, 56 N.W. 525, 48 Am. St. Rep. 390.
"It has been styled a legal fiction whereby an obligation which has been discharged by a third person is treated as still subsisting for his benefit, so that by means thereof one creditor is substituted to the rights, remedies, and securities of another."
See further Mill Owners Mut. Life Ins. Co. v. Goff, supra, Heuser v. Sharman, 89 Iowa 355, 56 N.W. 525, 48 Am. St. Rep. 390, and Leach v. Commercial Sav. Bank, 205 Iowa 1154, 213 N.W. 517.
The doctrine is universally applied in behalf of a surety who has been compelled to pay the debt of his principal. Having held that appellee does not stand in the position of an innocent purchaser for value without notice of the mortgage in controversy and of the invalidity of the purported release, the right of appellants as the legal representatives of their decedent whose estate has been compelled to make good the defalcation on the guardian's bond, to be *Page 1014
subrogated to all the rights and remedies of the guardian and Burl Brubaker follows as a matter of course. As a part of the order of the probate court establishing the claim of Burl Brubaker against the estate of C.W. Randell, the court said:
"It is further ordered and adjudged by the court that upon the payment of the claim herein allowed by the estate of C.W. Randell, deceased, the said estate and Frank G. Randell and Charles A. Randell, as administrators thereof, shall be and they are hereby subrogated to any rights that Arda Brubaker McNulty, as guardian of Burl Brubaker, and Burl Brubaker, claimant herein, may have in and to the note and mortgage referred to in claimant's claim, to the amount of $5,797.50 and interest thereon at six per cent per annum from this date and to the judgment rendered on said note."
An appeal was taken from the order of the court allowing the claim of Burl Brubaker against the estate of C.W. Randell. The order was, however, affirmed. See In re Guardianship of Burl Brubaker, 214 Iowa 413, 239 N.W. 536. It is now urged by appellee that, because of appellants' plea in resistance to the claims of Burl Brubaker that the mortgage had been released, the judgment entered in said action has become res adjudicata and that they may not now assert any right in conflict with such judgment. The record does not disclose any adjudication of the point urged, nor do we find in the record in this case a plea of former adjudication. The point is without merit, and in no sense necessarily involved in the proceeding in probate.
There is also a plea of estoppel based in part upon the fact that the purported release was executed for the purpose of enabling the mortgagor to sell and convey the real estate free from incumbrance and, partly, upon the theory that the purchaser thereof paid value therefor without notice of the invalidity of the release. Manifestly, the plea is without equity. We have already announced the conclusion that McEwen's immediate grantee was not an innocent purchaser without notice of the prior equity now asserted by appellants.
[4] Another plea is the statute of limitations. This plea is also without merit. The right to which appellants were subrogated was to enforce the lien of the mortgage upon the real estate described therein. The debt was not barred by the statute and necessarily the right of foreclosure was not barred. *Page 1015
Other issues are tendered by appellee and ably presented in argument supplemented by the citation of many authorities. But, as what we have already said necessarily disposes of the appeal, it would not be profitable to prolong this opinion by an extended discussion of each of the many propositions urged. We deem further discussion unnecessary. The judgment and decree of the court below must be and it is in all particulars reversed, and the cause will be remanded to the district court of Keokuk county for decree in harmony with this opinion. — Reversed.
CLAUSSEN, C.J., and KINDIG, STEVENS, DONEGAN, ANDERSON, and KINTZINGER, JJ., concur.
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I am unable to agree with the majority opinion. The action is brought against the defendant alone to reestablish a pre-existing mortgage lien on a certain forty-acre tract of land acquired by the defendant under warranty deed. A release of said mortgage by the mortgagee thereof had been delivered and recorded many years before the acquisition of the land by this defendant. The mortgagee was a guardian and took, held, and released the mortgage, as such. The mortgage was taken in March, 1920, and released in December, 1921. The release expressly asserted the fact that the mortgage had been paid in full. The mortgagor was a brother of the mortgagee-guardian. The evidence shows that the purpose of the release was to enable the mortgagor to sell the mortgaged real estate to a prospective customer, one Knaak. Upon the filing of the release, the mortgagor conveyed the property to Knaak by warranty deed and received from Knaak the full purchase price of $12,000. Some years later Knaak conveyed the property to Dewey; and Dewey thereafter to Harter; and Harter to this defendant, Fellers, in 1927. All these conveyances were by warranty deed. The validity of such release was never challenged until the bringing of this suit in 1932. The mortgaged land is situated in Keokuk county, Iowa. The guardianship proceeding was pending in the probate court of Mahaska county. The ward became of age in 1929. In a hearing upon her final report, the guardian and her bondsmen were held liable to the ward for the full amount of the mortgage loan. The plaintiffs are the administrators of the surety and they stand here in his shoes. They ask in this proceeding that they be subrogated to whatever rights were possessed by the guardian or *Page 1016
by the ward. As against this forty-acre tract now owned by the defendant, they aver in substance that the purported release of the mortgage by the guardian in 1921 was null and void ab initio
for want of an order by the probate court authorizing the same. They ask to adjudicate such nullity of the instrument and to re-establish the lien of the mortgage thus released. It is the theory of the plaintiffs that this ward could have maintained an action against this defendant to re-establish his mortgage lien upon this land. To this right of the ward they ask to be subrogated.
In this first division of the dissent I wish to call attention to the rule which governs a court of equity in the application of the doctrine of subrogation. Assuming it to be true that the ward in this case could have nullified the instrument of release and could have enforced the mortgage against the defendant, it does not follow that the right of subrogation in the appellants is coincident with such right of the ward. It is not enough for the appellants to show that the rights of the ward were superior in equity to the rights of the defendant. On the contrary, it is incumbent upon them to show that as between them and thisdefendant their equities are superior to those of the defendant.
Subrogation is one of the schemes of equity, which is brought to bear upon a case where two innocent parties may become the victims of liability for the wrong done by a third party and whereby the injured party or creditor may select the defendant at his own election. The defendant so selected may discharge the liability and may thereby become entitled to ask subrogation as against the other innocent party. In such a contest between the two innocent parties, the plaintiff therein must show a superior equity over that of the other. If, as between them, the equities are equal, no relief by subrogation will be granted. This subject was quite fully discussed by this court in Baker v. American Surety Company, 181 Iowa 634, 159 N.W. 1044. In that case one Brown was the financial secretary of a certain organization known as the Local Union. Said Local Union kept its funds in a local bank. Brown was under bond. He forged various orders and checks and by means of such forgeries collected the amounts thereof out of the bank account of the Local Union. By reason of these delinquencies, his surety became liable; the bank likewise became liable for the payments made by it upon the spurious checks. The Local Union proceeded against the surety and recovered. The surety sought subrogation as against the bank. *Page 1017
We held that the bank had the weightier equities notwithstanding its liability. From the opinion in that case we quote:
"Subrogation is defined by Bispham as: `The equity by which a person who is secondarily liable for a debt, and has paid the same, is put in the place of the creditor, so as to entitle him to make use of all the securities and remedies possessed by the creditor, in order to enforce the right of exoneration as against the principal debtor, or of contribution against others who are liable in the same rank with himself.' * * *
"Subrogation is said in section 1 of Sheldon on Subrogation to be: `The creature of equity, and is so administered as to secure real and essential justice without regard to form, independently of any contractual relations between the parties to be affected by it. It is broad enough to include every instance in which one party pays a debt for which another is primarily answerable, and which in equity and good conscience should have been discharged by the latter.' * * *
"Wherever the doctrine (of subrogation) is made use of it is always for the promotion of justice and the prevention of inequitable results. It will never be enforced, when doing so would be inequitable, or where it would work injustice to others having equal equities. Makeel v. Hotchkiss, 190 III. 311, 60 N.E. 524, 83 Am. St. Rep. 131; 37 Cyc. 370. It necessarily follows that the equities of one seeking subrogation must be greater thanthose of him against whom subrogation is sought. Fort Dodge B.
L. Ass'n. v. Scott, 86 Iowa 431, 53 N.W. 283.
"`The doctrine of subrogation never interferes with equal or superior rights of others.' Vaughan v. Jeffreys, 119 N.C. 135,26 S.E. 94.
"See Musgrave v. Dickson, 172 Pa. St. 629, 33 A. 705, 51 Am. St. Rep. 765. As remarked in Acer v. Hotchkiss, 97 N.Y. 395: `The doctrine of subrogation is a device to promote justice. We shall never handle it unwisely if that purpose controls the effort, and the resultant equity is steadily kept in view.' * * *
"The surety company then is entitled to subrogation, if at all, to any claim the local union may have against the principal, on the bond, Brown, or against any security said union may have on his property. But it had none, and the surety company is praying for no relief as against Brown or his property. Its cross-petition is based on the bank's liability to said union for the amount paid out *Page 1018
by it on the forged checks, orders, or indorsements, and it prays therein for subrogation to the claim of the local union on the theory that the bank's liability is primary and its liability secondary thereto. Of course, the bank necessarily assumed the risk in paying others than those to whom genuine instruments were payable, and in paying to others it acted without authority, and might not charge sums so paid to the account of the local union. The Local Union could have insisted that the bank account for all moneys on deposit, including those wrongfully applied on the forged checks, orders, or indorsements, and on refusal maintain an action therefor. German Sav. Bank v. Citizens Nat. Bank,101 Iowa 530, 70 N.W. 769, 63 Am. St. Rep. 399. But the wrongful diversion of these moneys was induced by the dishonest conduct of Brown to whom the money was paid, and were the bank held for the payment of the funds dissipated it would have a cause of action against Brown therefor. The plain difference in the situation of the two is that were recovery had by the local union against Brown, he could not recoup in an action against the bank, whereas the bank, if compelled to restore to the union the moneys paid on the forged instruments, might demand reimbursement from Brown and upon refusal recover judgment against him. The local union has elected to sue the surety on the bond of Brown rather than the bank. If the surety is adjudged liable thereon and pays the alleged loss occasioned by Brown's dishonesty, it will merely pay Brown's indebtedness and not that of another, even though the other may also be liable therefor. At the most it is a case where each of two parties may be held for the dissipation of the same moneys, the bank because of paying out without authority, and the other because of fraudulently inducing the bank so to do. In such a case both are absolutely liable and neither entitled to subrogation, for either in paying is satisfying his own indebtedness. But the bank on payment undoubtedly could recover over from the wrongdoer. Moreover, the equities of the surety upon payment would be measured by those, if any, existing in behalf of its principal, Brown, and, as between Brown and the bank, all are in favor of the bank, and under the rules stated subrogation must be denied. Otherwise the forger or his surety would be preferred to the one swindled by his forgeries."
To similar effect as the foregoing is Kent v. Bailey, 181 Iowa 489, 164 N.W. 852; Day v. Brenton, 102 Iowa 482, 71 N.W. 538, 63 Am. St. Rep. 460; Livermore v. Maxwell, 87 Iowa 705, *Page 1019
55 N.W. 37. Cases from other jurisdictions to the same effect are Northern Trust Co. v. Consolidated Elevator Co., 142 Minn. 132, 171 N.W. 265, 4 A.L.R. 510; Rowley v. Towsley, 53 Mich. 329, 19 N.W. 20; and American Bonding Co. v. State Savings Bank, 47 Mont. 332, 133 P. 367, 46 L.R.A. (N.S.) 557.
In the Northern Trust Company case here cited, the plaintiff seeking subrogation was a surety on a bond. The principal of the bond was a grain company, which received grain in storage, as bailee. Such bailee converted the grain and retained the proceeds. The grain thus converted was sold to a certain elevator company, which purchased and paid for the grain in good faith. The surety having paid the loss caused by the breach of the bond, sought subrogation and impleaded the defendant-elevator company as the purchaser of the grain from the surety's principal. The court held that the equities of the innocent purchaser were superior to that of a surety on the bond and denied the subrogation. To similar effect were the cited cases from Michigan and Montana. We find no conflict in the authorities on this question. Granting therefore that the ward in this case would have prevailed in enforcing his mortgage as against the defendant, it is equally true that he could have prevailed, and did prevail against the surety himself who was represented by the plaintiffs herein. If the rule of recovery in subrogation cases simply required the plaintiff to prove the liability of the defendant to the third party, then litigation on that branch of the law would naturally become a matter of manipulation and jugglery. The first to be sued of the innocent parties could satisfy the claim as against himself and could recover it back in full by the mere process of subrogation. This is why equity interposes its discretion and weighs the equities as between the two innocent parties. It thus leaves no motive to a race between the two innocent parties as to which of them shall become first entitled to demand subrogation. The defendant herein claims the status of an innocent purchaser in good faith and for value. In all the cases that have come under our consideration, the equities of a surety in his relation to his principal have always been deemed inferior to those of innocent purchasers of property for value. The liability of a surety is deemed legal rather than equitable and falls upon him strictly pursuant to his express contract.
II. The answer to the foregoing, as made in the majority opinion, is that the defendant was not a good faith purchaser *Page 1020
without notice. It is held in substance that he had sufficient notice to charge him with knowledge of all the material facts. The theory advanced at this point by the majority is that the record of the mortgage gave notice of the trusteeship of the mortgagee and that the record of the release disclosed the absence of any order of the court authorizing the release; that the purchaser had an abstract of title and that this furnished him sufficient notice to put him upon inquiry and that he was therefore charged with knowledge of all that an inquiry would have disclosed. It is further contended that the mortgage itself was one made pursuant to an order of the court; that for such reason it could not under section 12773 be released except upon order of the court. The majority opinion quotes section 12772. This section was enacted by the 43d General Assembly, chapter 259, section 1. It is more peremptory in some respects than any statute that preceded it. It was not in existence in 1920 nor 1921 when the mortgage and release under consideration here were executed. The two corresponding statutes, which were in force at the time of the execution of these instruments, were section 364 of the 1913 Supplement to the Code and section 365 of the Code of 1897. These were as follows:
"Sec. 364. Where investments of funds are to be made, including those to be made by executors, administrators, trustees and guardians, and no mode of investment is pointed out by statute, they may be made in the stocks or bonds of this state, or of those of the United States, or in bond or mortgage upon real property of the clear, unincumbered value of twice the investmentor under order of court in bonds issued by or under the directionof cities, towns, counties, school or drainage districts of thisstate." (The italics are ours.)
"Sec. 365. When such investment is made by order of any court,
the security taken shall in no case be discharged, impaired or transferred without an order of the court to that effect, entered on the minutes thereof."
It will be noted that under section 365, an investment made by order of the court may not be discharged without an order of the court. It may be noted further that in section 364, two classes of investments are set forth and I may refer to them as classes 1 and 2. Class 1 points out certain investments, which a fiduciary may make. This includes a "mortgage upon real property of the clear *Page 1021
unincumbered value of twice the investment." Class 2 describes certain other investments including municipal bonds as being permissible "under order of court". It seems clear to me that the prohibition contained in section 365 has reference to class 2, described in section 364, and has no reference to the investments described in class 1. The statute itself, section 364, permitted a fiduciary to invest the funds of his beneficiary in first mortgages on real estate where the value of the real estate is twice the amount of the investment. The majority opinion relies upon the prohibition contained in section 365, now section 12773, as referring to investments expressly permitted by section 364. Unless therefore this prohibition shall be deemed as applying in 1921 to all investments by a fiduciary, then the guardian in this case did have power in good faith to make the investment defined in section 364; nor did the release thereof come under the prohibition of section 365. That prohibition by its very terms applied only to such investments as were required to be made "under order of court".
It should be noted here that the appellant claims, and the majority opinion holds, that this particular loan was made "under order of court". It appears from the record that in 1919, before any money had come into the hands of the guardian for investment, the court had entered upon the probate record of that case a general order substantially in the language of section 364. That order had no reference to any particular investment. The appellants rely upon that order as bringing this investment within the prohibition of section 365. The order was a mere repetition of the statute in general terms and in my judgment served no particular function; nor did it purport to put any restrictions upon the guardian other than those appearing in the statute itself. Prior to the enactment of section 12772, by the 43d General Assembly, chapter 259, section 1, there was no statute in force, which restricted the terms of section 364, as herein set forth. It was, of course, the duty of the guardian to make reports of all her doings. But the existence of that duty did not abridge the power of the guardian under then existing law to make the investment, which conformed to section 364, and to release the same upon payment thereof.
III. I proceed to the question of notice to the defendant as a purchaser. It is the express view of the majority that the defendant had notice sufficient to put him upon inquiry and thereby to charge him with notice of all the facts, which an inquiry would develop. *Page 1022
The evidence in this case consists almost wholly of stipulations of the parties. It was stipulated that the defendant and his predecessors had no knowledge that the mortgage was unpaid. I am not quite able to see why such a stipulation should not confine the plaintiffs to a claim of constructive notice only. What the appellants do claim is that the possession of abstract of title was sufficient to give actual notice and the majority opinion so holds. The majority opinion concedes that, if the mortgage had in fact been paid, the release would have been good. Surely that proposition ought to be deemed sound, even if it were not conceded. This release was executed in ordinary form before a notary public. It asserted in express terms that the mortgage was paid in full. Did the purchaser have a right as a reasonably prudent man to rely upon that solemn assertion? The argument of the majority is that the record of the release disclosed that it had not been presented to the court and had not been approved by the court. But it did disclose that the mortgage had been paid.
That fact would release the mortgage regardless of any approval of the court. It is urged that because of the absence of court approval the purchaser was put upon inquiry and that an inquiry would have developed all the facts. Upon this record it is a mistake to say that the record of the release, as made in Keokuk county, affirmatively apprised the purchaser of any infirmity in the release. The claim of the appellants at this point is a negative one. It is that the record of the release in Keokuk county did not purport to show that the release had been approved by the court; and that in the absence of an affirmative showing that the release had been approved by the court, it was incumbent upon the purchaser to know the law and thereby to recognize the infirmity of the release. There is nothing out of the ordinary in the circumstance thus relied on by the majority. This release was recorded by the county recorder of Keokuk county in the real estate mortgage record. The mortgage itself was so recorded. These records are not intended, under the statute, as probate records. If the circumstance here relied on should be deemed as sufficient warning to the purchaser, it was a warning that he refer to the probate records of Keokuk county. It is the policy of our statutes to provide for a county record of all instruments, which affect titles to real estate in such county.
Sections 11826, 11949, and 12585, provide: *Page 1023
"11826. A certified copy of any order, judgment, or deed, affecting real estate in any county other than that in which administration or guardianship is originally granted, shall be furnished to and entered by the clerk of the district court of the county where such real estate is situated in the probate records of said court."
"11949. When the subject of the sale, conveyance, or mortgage is located in a county other than that in which administration is granted, a complete transcript of the record of all proceedings relating thereto shall be filed by the administrator in the office of the clerk of the district court in such county, and he shall cause the same to be copied at length in the probate records of such county."
"12585. If an order is made by such court affecting the title of lands lying in another county, a certified copy of such order, and of all the papers on which it is founded, shall be transmitted to the clerk of the district court in the county where such lands are situated, who shall enter the same on the proper docket, index, and make a complete record thereof, in the same manner as if the cause in which the order is made had been commenced in his court."
None of the probate proceedings in Mahaska county were made of record in Keokuk county at any time. And this is true of the blanket order of September, 1919. This is the order upon which appellants rely for bringing into operation the prohibition contained in section 12773. The argument at this point is that the purchaser was bound to know the order of September, 1919; and that therefore he was bound to know that this order brought the case within the prohibition of such latter section. This is only saying that these orders entered in the probate record in Mahaska became constructive notice to the purchasers of land in Keokuk county. I submit that the very fact that the probate records of Keokuk county disclosed no order affecting the title of land in Keokuk county was calculated to assure the purchaser that there was no such order; that he had a right to believe that the mortgage had been made by the guardian pursuant to the provisions of section 364; and that he was justified in believing in good faith the assertion of the release that the mortgage had been fully paid.
Some stress is laid by the majority upon the fact that the mortgage was not yet due. Granting that such a circumstance would carry an element of warning, the circumstance itself is reduced to a vanishing point in this case. Though the mortgage was dated *Page 1024
March, 1920, and drawn payable in March, 1925, it was also provided therein that it should be payable at the election of the mortgagor on any interest-paying date and that the interest should be payable semi-annually.
Furthermore, so far as the present defendant is concerned, he became a purchaser in 1927. If therefore we may regard this circumstance as of some degree of significance as against the first purchaser, Knaak, it has none whatever against the good faith of the purchaser in 1927.
It is the general rule that in order to put a purchaser upon inquiry, it is incumbent upon his adversary to show some source of information to which the purchaser could have reasonably resorted and which would have disclosed the true facts. That rule is quite ignored herein. Let me confine the discussion for the moment to the purchaser, Knaak. He was the first purchaser. He bought and paid the purchase price in cash. He had before him the solemn assertion of the mortgagee-guardian, whose interests were adverse to the mortgagor, that the mortgage was fully paid. She executed the release in South Dakota. The release appears to have been delivered to the mortgagor, who caused the same to be recorded. What was the source of information that was fairly available to Knaak, from which he could ascertain that the mortgage was not paid? Was he required to go to South Dakota and to ask the guardian whether her assertions were true? Would he have been better entitled to rely upon her oral assertions than upon her written ones? The mortgagor caused the release to be recorded and received from the purchaser the full purchase price. Was his conduct less solemn than an oral statement would have been? The very conditions that enabled the mortgagor to obtain the purchase price of the land required a full warranty deed. There is not a line of evidence in the record, which indicates any other source from which information could have been had. These sources of information had already spoken. The probate record of Keokuk county was silent. The very silence of the record was calculated to lull the purchaser into security. Did good faith and ordinary prudence on the part of the purchaser require him to distrust or to accuse? The very fact that the purchaser was trustful and unsuspicious was an evidence of his good faith and not of bad faith. If this mortgagee and this mortgagor had verbally assured the purchaser that the mortgage was paid, and if he had relied upon such representation, could he not *Page 1025
thereby have assumed the status of a good faith purchaser without notice; and this even though he might not prevail over the rights of the ward?
So much for Knaak, the first purchaser. Suppose we abandon him and concede that he was nearer to the facts and in a better condition to discover the fraud than any of the subsequent purchasers. What about this defendant, Fellers? He purchased in July, 1927. So far as appears, he had no proximity to the facts pertaining to the probate case. The release had been on record for more than five years unchallenged. The mortgage was long past due. The deed record showed three conveyances of the land since the release was recorded. The recitals of the release were reassuring and unchallenged. He was assured thereby that the mortgage was paid. If that fact had been true, nothing else would have been material. No ready sources of information to him are suggested other than the later probate proceedings in Mahaska county. The question at this point is not whether the ward lost his rights in the mortgage, but whether Fellers was an innocent purchaser in good faith. He could have been such and yet have fallen short of a defense as against the ward. Right here is a crucial point in the discussion. The argument of the majority presupposes that in order to prevail against these plaintiffs it was incumbent upon the defendant to show a defense that would have prevailed against the ward; whereas the equity rule referred to in the first division hereof presupposes that both innocent parties were inferior in their equities to the rights of the ward. If it is incumbent upon the defendant to show a defense good as against the ward in order to prevail as against the plaintiffs, then the equity rule referred to serves no function whatever. The question of duty of a purchaser to inquire is akin to the question of his negligence in failing to inquire. In Kent v. Bailey, 181 Iowa 489, 164 N.W. 852, we had under consideration the question herein raised. In that case Kent had agreed to loan to Bailey a sum of money upon a first mortgage on certain lots, which already carried a mortgage. The purpose of the parties was to pay off the existing mortgage with the money to be loaned by Kent. There was in fact a judgment of record against Bailey, which fact was unknown to Kent. While in ignorance, Kent prematurely paid off the first mortgage in the expectation of receiving a substitute mortgage from Bailey. He thereupon discovered the existence of the judgment, which was equal in amount to the value of the *Page 1026
property. He brought an action and asked for subrogation to the lien of the first mortgage, which he had discharged. The right of subrogation was resisted by the judgment-holder and it was urged that plaintiff's predicament was the result of his own negligence. We held that Kent was guilty of a degree of negligence, but that it was not sufficient under the circumstances to defeat his right to equitable relief. We said:
"But where no one is injured by the mistake other than the party himself, and no one has changed his position, in consequence of what has been done and of the mistake, no tenable reason appears for denying a correction of such mistake, even though a high degree of care has not been exercised. * * *
"Possibly cases may be found to the contrary, but in the absence of something else appearing, we are not inclined to denounce a mortgagee as negligent as a matter of law on the sole ground that instead of searching the records he relied on the solemn assurance of his mortgagor's agent, though the mortgagor himself must have known otherwise."
Another case in which this same question was involved was Day v. Brenton, 102 Iowa 482, 71 N.W. 538, 63 Am. St. Rep. 460. In that case a trust deed was released by a purported trustee without authority to release. A certain loan was secured by the trust deed. The trustee purported to release and acknowledge receipt of payment. The notes secured by the trust deed had been transferred. An innocent purchaser of the land resisted the later foreclosure of the trust deed. It was claimed that the purchaser was negligent in failing to discover the facts. In that case we established the title in the innocent purchaser as against the true holders of the notes. A like situation was involved in Livermore v. Maxwell, 87 Iowa 705, 55 N.W. 37. In that case also a trust deed was released and payment acknowledged by one, who had no authority to do so. We held also in that case that an innocent purchaser had a right to rely upon the apparent authority and was not negligent in failing to inquire further into the integrity of the release. The discussion in all the foregoing cases runs counter to the argument of the majority, on the question of negligence or failure to pursue a sufficient inquiry.
I submit that the records of Keokuk county fully support the title of the defendant and this alone made a prima facie case of good faith on his part. There is no suggestion of bad faith in fact on the *Page 1027
part of the defendant, as distinguished from a breach of legal duty in failing to pursue an inquiry. His duty in that respect is to be weighed in this case not as against disabilities of the ward, but as a comparison of equities between the plaintiffs and himself.
I am conceding, for the purpose of the argument, that the equities in favor of this defendant are inferior to those of the ward. In such assumption, account is necessarily taken of the disability of the ward. In an action between him and any purchaser, such disability would constitute the major strength of his case. The plaintiffs cannot be subrogated to such disability; nor can the superiority of the ward's equity over the equity of the defendant operate as a cause of action for the plaintiffs. The equity of the ward was superior to that of the plaintiffs as well. In that respect they occupy no better position than the defendant. If inferiority to the equities of the ward be destructive of defendant's defense, it must be deemed equally destructive of the plaintiffs' cause of action.
This only illustrates the reason for the equity rule, which confines the contest to a comparison of equities as between the parties to the suit.
My discussion has become prolix and I shall pursue it no further. The case is unique in its facts. It has conflicting plausibilities. It has been argued very skillfully. I am persuaded that the finding of the district court should be sustained.
MITCHELL, J., joins in this dissent.
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This is an action in probate, to recover on a claim against the administrator of the estate of C.C. Mateer, deceased, for board, lodging, washing, ironing, mending of clothing, care, and nursing, furnished to the decedent for a period of nearly twenty years. The defendant-administrator filed a motion for more specific statement, and especially with reference to the nature and terms of the agreement on which *Page 859
the claim is predicated. Claimant filed resistance to said motion, and the motion was overruled.
The reversible error is primarily based on the instructions given to the jury. The case, however, presents fact questions, to wit: whether or not the claimant and the decedent were members of the same family; whether the services claimant rendered the decedent were gratuitous; whether there was an express or implied contract for the payment of the services claimed to have been rendered; whether the decedent had paid for said services, and the value of same. No instructions were requested by the claimant.
Before we pass to the challenged instructions, the salient facts may be briefly stated. Claimant is the son-in-law of the decedent. The latter lived with claimant and his wife, daughter of decedent, from October 1, 1905, to the date of his death, August 4, 1925, except certain intervals of temporary absence. Claimant is a farmer. The wife of claimant performed the major part of the services claimed to have been rendered the decedent. It is contended by claimant that decedent did not pay him any money from 1905 to 1921, but it is admitted by claimant that subsequently decedent did pay claimant the sum of $2,077.25. No demand was ever made by claimant or his wife for payment, nor was any bill ever rendered to the decedent for services rendered. The physical condition of the decedent was reasonably good during the years he lived in claimant's home, sharing full and equal privileges in said home. Decedent was never bedfast until his last sickness, which was of a short duration. Further facts will be stated as seem necessary in the review of the court's instructions.
It is a well settled rule that all the instructions should be read and construed together, for the purpose of determining the correctness of any part of the charge to the jury.
1. Instruction I. This instruction is devoted to the issues of the case and it is said therein, in conformity to Section 11961, Code of 1924, that:
"All claims filed, and not expressly admitted in writing signed by the executor or administrator, with the approbation of the court, shall be considered as denied, without any pleading on behalf of the estate * * *."
The administrator, however, did deny, in answer, each and *Page 860
every allegation of the claim, and specifically pleaded the relationship of the parties, and that the decedent lived in claimant's home "as a member of his family," and 1. TRIAL: that any services claimed were gratuitous. It is instruct- apparent that the court explicitly defined the ions: issues, and limited the consideration of the stating evidence bearing on the issues. Fact questions issues in were presented, and the statement of the issues language of made plain for the consideration of the jury. pleading. The controversy is plainly stated in the pleadings, and a court is privileged to use the same language in the statement of the issues. Crawford v. Nolan, 72 Iowa 673. If the pleadings are involved and prolix, then it is better practice for the trial court to condense the pleadings and make a statement thereof which will remove any doubt or confusion.German Ins. Co. of Freeport v. Chicago N.W.R. Co., 128 Iowa 386; Stillman v. Chicago, R.I. P.R. Co., 196 Iowa 612; Stephensv. Brill, 159 Iowa 620. The intent and content of Instruction I could not mislead the jury.
2. Instruction II. This instruction attempted a legal definition of the phrase "members of the same family," and stated, in substance, that if, at the time the claimed services were performed, the claimant and his wife and 2. WORK AND said decedent were members of the same family, LABOR: the burden is upon the claimant to show by a family preponderance of the evidence that the services relation: rendered were not gratuitous. This instruction presumption. is in harmony with the declared legal rule of this state. Feltes v. Tobin, 187 Iowa 11. It was for the jury to decide whether the decedent was a member of the claimant's family. In re Estate of Bishop v. Pearson, 130 Iowa 250. The administrator pleaded that the services rendered were rendered gratuitously. This was in the nature of a special defense.Saddler v. Pickard, 142 Iowa 691. There is no error in the instant instruction.
3. Instruction IV. In this instruction the jury was told that, if the claimant and his wife and the decedent were not members of the same family, and the claimed services, including board and lodging, were furnished with the knowledge and consent of the decedent, then, in that event, there would be an implied contract that the said decedent was to pay the fair and *Page 861
reasonable value thereof. The principle stated is well recognized. Snyder v. Nixon, 188 Iowa 779.
4. Instruction V. Here the jury was instructed that, if it was found that plaintiff and his wife and the decedent were members of the same family, and if they further found from a preponderance of the evidence that there was an express contract or agreement by which the deceased was to pay, and the claimant was to receive pay, for the claimed services, including board and lodging, or if it was determined, from all the facts and circumstances, that the services were rendered with the expectation on the part of plaintiff to receive pay therefor, and with the expectation on the part of the deceased to pay therefor, then, in that event, the plaintiff was entitled to recover the fair and reasonable value of the said services. We find no fault in the language used.
A member of a family, rendering services to another member of the same family, cannot recover therefor "unless there is an express promise to pay for the services, or unless the showing made negatives the thought that they were gratuitous, or, that is, unless it is shown that they are rendered under such circumstances as makes it manifest that there was both an expectation of receiving remuneration and an intention of paying for the services." Snyder v. Nixon, supra. See, also, Scully v.Scully's Exr., 28 Iowa 548. In passing, it may be said that the evidence is quite conclusive that the decedent was a member of the claimant's family, within the legal meaning of that term.
5. Instruction VI. The gist of the criticism to this instruction is that the court erred in submitting, as a condition precedent to recovery, either "that there was an express contract or agreement between the claimant and the 3. TRIAL: decedent * * * or such facts and circumstances instruct- must be shown by a preponderance of the evidence ions: as will authorize the jury to find" that the estoppel to services, including board and lodging, were question furnished and rendered in the expectation on the submission part of the claimant of receiving pay therefor, of issue. and an expectation on the part of the decedent to pay therefor. The specific complaint is that there was no issue of an express contract in the case. It will be remembered that plaintiff alleged in his petition that, for a period of nearly twenty years, plaintiff furnished a home to decedent, *Page 862
which included his board, lodging, washing, etc., and that the fair and reasonable value of the said services for said time was in the aggregate sum of $9,480, and that, after credit is given for what has been paid, there remains due and unpaid from the estate of the decedent the sum of $7,480. True, the claimant did not allege whether he was relying upon an express or an implied contract. The defendant attempted, by his motion for a more specific statement, to secure an allegation whether or not there was any agreement between the parties for the claimed services, and to state whether the same was in writing or in parol, "and the terms of said agreement, if there was such an agreement." This motion was resisted, and the plaintiff was not required to file an amendment in conformity to said motion. In effect, the plaintiff did not, and further refused to, state whether he was basing his recovery on an express or an implied contract. Consequently, the claim filed is equally consistent with a recovery either upon an express contract or upon an implied agreement. There were no facts alleged upon which it could be determined whether the service was rendered with or without an express agreement. As said in Wise v. Outtrim, 139 Iowa 192:
"But it is hardly correct to say that the claim as originally filed is founded upon an implied contract. The statement is a mere skeleton account, stating no facts from which the court or jury could determine whether the services for which payment is demanded were rendered without any agreement as to the time of payment thereof, or under an express agreement providing for the payment at some future date."
The nature of the evidence upon which the claimant may attempt to support his claim is properly left to be revealed in case of a contest at the time of a trial. See White v. Almy, 34 R.I. 29
(82 A. 397). It may also be kept in mind that no petition or formal pleading is required in filing a claim in probate.Harrison v. Harrison, 124 Iowa 525; Craig v. Estate of Craig,167 Iowa 340. The rule that a pleading must proceed upon a single definite theory, and the trial had and judgment pronounced upon the theory indicated, has little or no application to claims against estates. Chariton Nat. Bank v. Whicher, 163 Iowa 571. See, also, Newell v. Estate of Newell, 198 Iowa 710 *Page 863
; Dean v. Estate of Atwood (Iowa), 212 N.W. 371 (not officially reported).
In the instant case, plaintiff went to trial without stating the theory of his cause of action, and left the adverse party and the court in the dark whether he was suing on an express or an implied contract, or both. Under the instructions of the court, the jury found that plaintiff was entitled to recover in a certain amount. Consequently, the plaintiff is now in no position to object as to the manner of the submission of this issue. The plaintiff may not complain of an instruction which gives him a chance for a verdict, in the absence of evidence to justify it.Ball v. Davenport, 170 Iowa 33; Fitzgerald v. Meyer, 37 Neb. 50
(55 N.W. 296); Taylor v. Kelly, 31 Ala. 59 (68 Am. Dec. 150). At any rate, the alleged error was not prejudicial, because there was a verdict for plaintiff. Worez v. Des Moines City R. Co.,175 Iowa 1.
6. Instruction VII. In this instruction the jury was told that ordinarily, where one renders services for another which are known to and accepted by the latter, the law implies the promise on his part to pay therefor; but if the plaintiff and his wife and the decedent were members of the same family, then the presumption arises that such services are gratuitous; but this presumption arises only when the family relation is shown by the evidence, and when it is shown that the services are such as members of the family usually and ordinarily render to each other by reason of said relationship; but that this presumption is not conclusive, and may be rebutted by evidence. The foregoing instruction finds approval in Snyder v. Nixon, supra.
7. Instruction VIII. The court in this instruction told the jury that:
"A family is defined to be a collection or collective body of persons who live under one roof and under one head or management."
A term, whether legal or otherwise, is not always subject to exact definition. To define a term is to state 4. WORK AND its connotation, or to enumerate the attributes LABOR: which it implies. A definition is such a family description of the thing defined, including all relation: essential elements and excluding all "family" nonessential, as to distinguish it from all defined. other *Page 864
things and classes. Porter v. Mapleton Elec. Light Co., 191 Iowa 1031. It may be that a better definition of a "family" could be framed, but we are constrained to hold that the term as defined herein is sufficiently descriptive. This matter has been ruled inSnyder v. Nixon, supra.
8. Instruction IX. Payment or settlement was pleaded by the defendant, and in this instruction the jury was told that the onus rested upon the defendant to establish this plea. This was correct. Sheldon v. Thornburg, 153 Iowa 622; 5. PAYMENT: Kern v. Kiefer, 204 Iowa 490; Section 11962, pleading: Code of 1924. Again, the challenge cannot avail burden of the plaintiff, since the jury found that the proof. plaintiff was entitled to recover, and it follows that the plea of defendant was found not to be established.
9. Instruction X. This instruction has to do with the presumption of payment arising from lapse of time. Nearly twenty years marks the interim between the first services alleged to have been rendered and the death of the 6. PAYMENT: decedent. It is to this entire period that the lapse of claim relates, and by reason of the time time: element, the court instructed the jury that effect. there is no presumption from lapse of time that the claim of claimant has been paid by C.C. Mateer in his lifetime; but that lapse of time less than twenty years may be considered by the jury as an auxiliary to other facts and circumstances on the question of payment; and that lapse of time may, in connection with other facts and circumstances, be sufficient to establish payment. The law does raise the presumption of payment of a claim, irrespective of the statute of limitations, after the lapse of twenty years, which is conclusive, unless rebutted by distinct proof. The instruction given by the court covers this proposition, and further, that the "no-presumption rule" applies to the instant case.
Is the time element, as stated by the court, to be considered as an auxiliary to other facts and circumstances on the question of payment pleaded by the defendant? We answer in the affirmative. See 21 Ruling Case Law 134, Section 153.
It is the quite universal rule that lapse of time may be decisive in connection with other circumstances although those circumstances in themselves would not establish the fact of payment. See Hutton v. Pederson (Tex. Civ. App.), *Page 865
153 S.W. 176; Macaulay v. Palmer, 125 N.Y. 742 (26 N.E. 912); Dowling v.Hastings, 211 N.Y. 199 (105 N.E. 194); Jameson v. Rixey, 94 Va. 342
(26 S.E. 861); Graves v. Stone, 76 Wn. 88 (135 P. 810). This rule is founded on experience in the ordinary course of business and of human affairs, and finds its legal justification in the interest of repose and the ending of litigation. It is founded upon the rational ground that a person naturally desires to possess and enjoy his own, and that an unexplained neglect to enforce an alleged right for a long period casts suspicion upon the existence of the right itself.
There is testimony in the instant case that the decedent was paying his way during the time in question, and also that he had given to his daughter his pension checks at different times. It was for the jury to say whether full payment of the claim had been made by him. The jury answered in the negative, and permitted the plaintiff to recover the sum of $301.05, in addition to the sum of $2,077.25 that had admittedly been paid.
10. Instruction XI. The claimant also complains of this instruction, which is, in effect, that an administrator may, on the trial, subject the claimant to an 7. EXECUTORS examination on the question of payment, but that AND ADMINIS- the estate shall not be precluded or bound TRATORS: thereby. This is statutory. Section 11962, Code claims: of 1924. Upon the trial, the administrator did examination subject the claimant to an examination on the of claimant. question of payment. This was permissible and proper.
11. Instruction XVIII. Complaint is made that the court instructed that the original sworn claim of the claimant may be considered "for impeachment purposes only." It appears from the record that plaintiff in the first instance 8. PLEADING: alleged the sum of $5,944 as due and unpaid, and amendments: by amendment, the sum of $7,480. Thereafter, use for upon the conclusion of the evidence, amendment impeaching to the claim was filed, to conform to the proof, purposes. and prayed recovery in the sum of $7,382. On the trial of this case the claimant testified: "I amended my claim, and raised it from $6,000 to $9,000."
There is also a variance in the amount admitted to be paid by decedent as stated in plaintiff's original claim, and the amount of the credit to which the decedent was entitled, as *Page 866
testified to by plaintiff upon the trial. Claimant also testified that he had never made any claim against the decedent during the last ten years of the life of the decedent, although he had transacted business with the decedent. In brief, there is considerable variation in the claims as filed, and the testimony of the claimant respecting his claims. The law is liberal in permitting amendment to pleadings, and a party may amend his claim by increasing or diminishing it; but it is competent for an adverse party, in cases of this character, to urge that the final claim made against an estate has been greatly enlarged. Hoyt v.Hoyt, 137 Iowa 563.
In the light of the instant record, the trial court committed no error in directing the attention of the jury to the pleadings and the evidence, and in stating the import of the matter in the manner recited in the instruction.
12. In conclusion, it may be said that exceptions to certain other instructions are too general, indefinite, and sweeping in character to merit attention, under the rules of 9. TRIAL: this court. For instance, the twentieth error instruct- assigned includes many different grounds, but ions: presents no specific question for review. See indefinite Reynolds Heitsman v. Henry, 193 Iowa 164; exceptions. Riggs v. Hatfield, 187 Iowa 685; Wine v. Jones,183 Iowa 1166; In re Estate of Pauly, 174 Iowa 122.
We have sufficiently indicated that the alleged errors relied upon for a reversal are not meritorious. We are satisfied that the claimant has had a fair and impartial trial. The instructions given by the learned trial court are exhaustive, and state the controlling legal principles in language easily understood by the layman. The jury has spoken, and we discover no reason for an interference with the verdict returned. The judgment entered is — Affirmed.
STEVENS, ALBERT, and MORLING, JJ., concur.
WAGNER, J., not participating.
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Appellee Olson had about thirty years' experience in the coal-mining business. The appellant Hugh M. Shuler, together with others, was interested in operating coal mines in Iowa. In 1919, appellee was employed by the Shulers to procure coal leases for them in the vicinity of Grimes, Iowa. As a result of such employment, 30,000 acres were contracted for, out of which 6,184 acres were accepted by appellants. Appellants *Page 520
paid appellee, to apply on services, the sum of $7,000. This action is to recover the claimed balance due for such services.
Appellee pleads his cause of action in three separate counts, which, of course, he is entitled to do, under the statutes.
The first disputed question before the court is whether or not any of these counts is based on an express contract, or whether each one states a cause of action based on a quantum meruit. We find, upon careful reading and comparison, that 1. TRIAL: they do not state a cause of action based on an instruc- express contract. The appellee's action, tions: therefore, is one on a quantum meruit, in which issues: employment is alleged for services performed, quantum without any express agreement for compensation meruit. therefor. This is the theory upon which the case was submitted by the court to the jury. Appellants' answer is a general denial.
In the trial of the case, however, it was the contention of appellants that the contract between the parties was other and different than that alleged by appellee. They further claim that, in accordance with the terms of the contract, as they said it existed, they had paid appellee in full.
In one of the instructions given by the court, the jury was told, in substance, that the burden was on the appellants to show that the contract was as they claimed and that they had paid in full for the services under such contract, in which event the verdict was to be for appellants.
We are furnished with a very able brief on both sides of the case, touching the questions, first, as to what can be proven under a general denial, and second, where the burden of proof lies in case of a claim for payment. The law cited on both sides, however, seems quite inapplicable to the situation, as it goes to the question of a plea of payment of appellee's contract. In other words, if appellants had answered admitting the contract, and pleading that the same was paid in full, we would have a situation where the authorities cited, pro and con, would be applicable; but, in the instant case, such is not the situation. Appellants deny the contract sued upon by the appellee, and say that there was a contract between them, but that it was other and different from that claimed by appellee, and that, in pursuance of the terms of the contract claimed by appellants, appellee *Page 521
was paid in full. The burden of proof was on appellee to establish his contract as he alleged it, and on failure so to do, he was not entitled to recover, regardless of the question of whether appellants, by their evidence, established their claimed contract, or whether they paid in full under the contract claimed by them. In other words, appellants were entitled to introduce any testimony which would defeat appellee's contract, but the burden still rested on appellee to establish his contract as he alleged it. The instruction above referred to put the burden on appellants to establish, by preponderance of evidence, the contract claimed by them, and also to establish payment of such contract. It is therefore apparent that this instruction is entirely inapplicable and erroneous. So, if by appellants' testimony they could create such a situation as that the appellee had not met the preponderance of evidence, appellants would be entitled to a verdict, and they need not establish their contention by preponderance of evidence.
Instruction No. 8 is attacked as inapplicable to the facts in the case. This instruction is based on the following section of the statute, Section 11275, Code of 1924:
2. TRIAL: "When the terms of an agreement have been instruc- intended in a different sense by the parties to tions: it, that sense is to prevail against either applicabi- party in which he had reason to suppose the lity to other understood it." pleadings: unders- tanding as to contract.
This instruction should not have been given, as the facts and situation in the case do not warrant it. Park v. Best,176 Iowa 7.
Instruction No. 11 is also attacked as an incorrect statement of law. The only question involved is whether or not, if this appellee recovered, he was entitled to interest on the amount due him. The jury was instructed to allow such 3. INTEREST: interest. Aside from our own cases, the general right in rule seems to be that, on unliquidated claims, general: interest is not allowed. 33 Corpus Juris 210, when damages Sections 70-74. Iowa, however, has uniformly complete held otherwise. The rule as expressed in this state in damage cases is fully set out in Bridenstine v. IowaCity Elec. R. Co., 181 Iowa 1124, where it is said that, when the damages are complete at a particular time, interest is allowable. The same is held in Collins v. Gleason Coal Co., 140 Iowa 114;Chamberlain v. City of Des Moines, 172 Iowa 500 *Page 522
; Black v. Minneapolis St. L.R. Co., 122 Iowa 32;Moore v. Fryman, 154 Iowa 534.
While it is true that these cases are tort cases, at the same time logic and, to our minds, better reasoning warrant us in saying that the same rule should be applied in the present case. The equity is that, where one owes a debt and fails to pay it, and the holder is compelled to litigate, he is entitled to interest on the amount then due. Such we hold the rule to be.
A lease contract with one Carney, designated as Exhibit 171, was admitted in evidence, over objection of appellants. It was undoubtedly error to admit this contract, as it 4. APPEAL AND was wholly res inter alios; but, as the court ERROR: instructed the jury not to consider the same, it harmless was error without prejudice. error evidence res inter alios.
Other objections to the testimony grew out of the following situation: At a previous time, Shuler had employed appellee Olson and another to buy coal leases for him in Boone County. Under the terms of that contract, they were to 5. EVIDENCE: receive $10 per acre. That contract was admitted relevancy, in evidence over the objections of appellants, materiality, and such ruling is now assigned as error. The and real question the jury had to decide was the competency: reasonable value of the services of appellee. So quantum long as this was the question, and the fact was meruit that appellants had employed appellee before, under similar circumstances and conditions, to perform similar services, we are disposed to hold that such evidence was admissible; not that it could, alone, prove the services worth $10 per acre, but it was a circumstance which might be taken into consideration by the jury in determining such question. In one sense, it might be said to be an admission on the part of appellants that the amount contracted to be paid was a reasonable amount for such services.
Appellants, at the end of appellee's testimony, and also at the close of all the testimony, made a motion to direct a verdict in their favor. Both of these motions were properly overruled, as there was a substantial conflict in the testimony on the matter in dispute.
One other ground, however, in the motion needs attention. It is the claim of appellants that the contract relied on by appellee was void for uncertainty. It is true that, in one or more *Page 523
places in his testimony, appellee says there was 6. CONTRACTS: nothing said about pay except that appellants requisites: would "pay in a big way." In other places in his uncertainty testimony, however, he puts it squarely that as to appellants "agreed to pay him." The court compensa- instructs the jury, under this situation, that, tion. if appellee is entitled to recover, he is entitled to a reasonable compensation for his services; but appellants urge that, by use of the term "pay in a big way," the contract was uncertain, and void for that reason. They vigorously discuss the question, supporting their contention with numerous authorities. The argument made, however, does not quite fit the situation in the case. This is not a suit on executory contract. The services were completely performed before suit was commenced; hence, so far as appellee is concerned, the contract was executed. Generally speaking, the lean of the law is against the destruction of a contract for uncertainty; but, be that as it may, we have been unable to find any case holding that, after the services are completed, compensation therefor may be denied because the contract is indefinite or uncertain. The law seems to be the other way. Vickery v. Ritchie, 202 Mass. 247
(88 N.E. 835, 26 L.R.A. [N.S.] 810); United Press v. New YorkPress Co., 164 N.Y. 406 (53 L.R.A. 289).
It would really be a discredit to the law, were we to hold that, after the employment is completed and the services performed, under a contract for service, payment could not be recovered therefor because of the indefiniteness or uncertainty of the contract. We refuse to so hold.
Much attention is given in argument to the question of accord and satisfaction. It is not in the case, because not pleaded, and because the facts would not give rise to such a question. There must first be a good-faith dispute as to 7. ACCORD AND the amount due, followed by an agreement of the SATISFAC- parties that the dispute is to be settled by an TION: agreed amount, and that amount is then paid and nature and accepted in accordance with the agreement. requisites: Beaver v. Porter, 129 Iowa 41; Sparks v.
executions. Spaulding Mfg. Co., 158 Iowa 491; Ferguson v.Grand Lodge of I.L. of H., 174 Iowa 61; Shahan v. Bayer VehicleCo., 179 Iowa 923. More than this, the instruction here criticized was in square conflict with Instruction No. 3, given by the court. *Page 524
Some other matters are discussed, but they will not arise on a retrial of the case, and hence we give no further attention to them.
The court erred, and the case is reversed. —Reversed.
De GRAFF, C.J., and FAVILLE and MORLING, JJ., concur.
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The intestate was Frank Robertson, who died in Denver, September 29, 1922. At the time of his death, he had apparently on deposit in the defendant bank the sum of $10,980, represented by several certificates. Prior to October 6, 1922, these certificates were forwarded by a Denver bank to the defendant bank for payment. They carried the purported indorsement of the payee. They were paid by the defendant on October 6, 1922. The plaintiff, as administrator, sued upon the certificates as being unpaid, though in the possession of the defendant. He averred that the indorsements appearing upon said certificates were forgeries. The defendant bank pleaded payment of the certificates, and denied the alleged forgery. It also pleaded the bar of a former election of remedies by the plaintiff. On the trial, evidence was introduced in support of both defenses, and both issues were submitted to the jury. The jury rendered a general verdict for the defendant. It made no special findings. It does not appear therefrom whether the jury sustained both defenses or only one. This uncertainty rendered both defenses subject to review here. The plaintiff, however, as appellant, has *Page 489
confined his grounds of reversal to the second defense, and we shall have no need to review the record on the issue of forgery. The defendant's plea of a former election of remedies by the plaintiff was predicated upon a former action prosecuted by the plaintiff in the state of Colorado against the alleged forger, Lucille Palmer, who had caused the collection of the certificates through the Denver bank. The facts pertaining to said action in Colorado may be stated briefly.
In 1923, Lucille Palmer brought an action in the district court of Denver against Sackett, administrator (plaintiff herein), and against all the alleged heirs of Frank Robertson, deceased, in which she set up an alleged contract between herself and Frank Robertson, whereby she promised to become his housekeeper and to care for him the rest of his life, and whereby, in consideration thereof, she should take all of his estate at the time of his decease. Her complaint set forth a description of considerable property owned by the decedent in Denver, and averred that the administrator (plaintiff herein) was in possession thereof, and was holding the same adversely to her. Her complaint also averred that she had received from Frank Robertson the certain certificates of deposit, duly indorsed by him, which certificates are the subject of this controversy. She prayed for a decree confirming her contract and her title to all the property. The administrator (plaintiff herein) appeared to the action, and filed an answer, denying substantially all the allegations of the complaint. As a further defense, he pleaded a cross-complaint, in which he averred that the said plaintiff (Lucille Palmer) had maliciously and fraudulently obtained possession of the certificates (in controversy herein), and had fraudulently collected the same, and that she held the proceeds thereof; that he had made demand upon her for said "certificates of deposit or the proceeds thereof." He prayed judgment against her for $10,980, with interest at 4 per cent from March 1, 1922 (date of certificates), to October 6, 1922, and at the rate of "8 per cent from October 6, 1922, to the date plaintiff shall repay thisdefendant said sum." He also prayed that the court find malice and fraud, and that a body execution issue on that ground. Decree was awarded, as prayed. From this judgment an appeal was prosecuted to the Supreme Court of Colorado, which affirmed the judgment below. This is the former proceeding which is relied *Page 490
upon by the defendant herein as an election of remedies on the part of the plaintiff herein.
It is the contention of the defendant herein that the former remedy sought by the administrator in the cross-complaint herein referred to was necessarily inconsistent with the relief which he now seeks in this proceeding.
The broad rule pertaining to the bar of election of remedies was concisely stated in an early day in the case of Kearney Mill. Elev. Co. v. Union Pac. R. Co., 97 Iowa 719, as follows:
"`A man may not take two contradictory positions; and, where he has a right to choose one of two modes of redress, and the two are so inconsistent that the assertion of one involves the negation or repudiation of the other, his deliberate and settled choice of one, with knowledge, or means of knowledge, of such facts as would authorize a resort to each, will preclude him thereafter from going back and electing again.'"
The foregoing has been recognized and adhered to by us in many subsequent cases. The accuracy of the statement is not challenged by the appellant. The appellant stoutly contends, however, that his cross-complaint in the Denver court was not such an election of remedies as would operate as a bar against the present action. He predicates his argument upon three main grounds: (1) There is no inconsistency between the remedy sought by him in his former cross-complaint and the remedy now sought by him in this action; (2) that, when he pursued his cross-complaint and took judgment thereon, he was lacking in knowledge of requisite facts and circumstances, and that his want of knowledge was such as to avoid the bar of the alleged election; (3) that he was a mere administrator of an estate, without authority from the court to make an election of remedies or to waive any remedy which was then available to him as such administrator. These contentions are made to appear in the record by proper objections to evidence and to instructions and by proper request for instructions. We deal with the argument as a whole, rather than with the specific offers and objections appearing in the record.
I. The law is prolific in the remedies which it affords to an injured party to redress a wrong. This is particularly so as to wrongs which sound in tort. Some remedies are concurrent and *Page 491
cumulative. Many others are optional and inconsistent, and therefore exclusive. The doctrine of election of remedies has application only to inconsistent remedies. Where two or more optional remedies are provided which are inconsistent in theory and contradictory in their logical premises, the doctrine of election arises, as a logical necessity. In such a case, to select and pursue one is to discard the others. Our first inquiry, therefore, is directed to the question of the alleged inconsistency of the remedy sought by the plaintiff in the Denver court with the remedy sought by him herein. That we may have before us definitely the relief sought by him in the Denver court, we incorporate herein a copy of material portions of his cross-complaint, and sufficient thereof to indicate its general character:
"Fourth: That, after the decease of the said Frank Robertson, and on or about October 6, 1922, the plaintiff took possession of said certificates of deposit, and thereafter collected from said Farmers State Bank of Boone, Iowa, or caused to be collected from said Farmers State Bank of Boone, Iowa, the full amount of principal represented by said certificates of deposit, and as hereinabove set forth, together with interest thereon to the date of such payment by said Farmers State Bank of Boone, Iowa.
"Fifth: That the plaintiff, in taking possession of said certificates of deposit and in the collecting of the proceeds
thereof, and as hereinabove alleged, has been guilty, and is guilty, of willful malice, fraud, and deceit; and that the said plaintiff, in taking possession of said certificates of deposit and the securing payment of the proceeds thereof, did so with the intent to deceive and defraud this defendant, as administrator of the estate of Frank Robertson, deceased, and with the intent to deceive and defraud the lawful heirs at law of the said Frank Robertson, deceased.
"Sixth: That this defendant has made demand upon the plaintiff to return said certificates of deposit, or the proceeds thereof, to him, as administrator of said estate, but that the plaintiff fails and refuses so to do."
If the certificates were horses, and if Palmer had stolen them and had sold them to this defendant bank as an innocent purchaser, we would have a typical case of multiplicity of optional remedies wherewith to illustrate the doctrine of election of *Page 492
remedies. In such a case, Robertson, as the owner, would be afforded, under the law, a variety of optional remedies. For the purpose of our illustration, we select two of them: (1) He could sue this defendant in replevin or detinue; (2) he could sue Palmer for the proceeds of sale that she had received from defendant.
To pursue Remedy No. 1 would be a repudiation of every act of Palmer's and an assertion of plaintiff's original title. In such event, the purchaser's remedy would be by an action against Palmer. If the owner should pursue Remedy No. 2, this would be an election to confirm the sale and to take the benefit thereof and to treat the proceeds of the sale as having been received by Palmer to the use and benefit of the owner. In legal effect, it would bar the purchaser of the property from any right of action against Palmer for the wrongful sale thereof.
Such, in brief, is the method of operation of the doctrine of election of remedies. Our cases on the subject are too numerous for complete citation. Some of them are the following: Keene FiveCents Sav. Bank v. Archer, 109 Iowa 419; Kearney Mill. Elev.Co. v. Union Pac. R. Co., 97 Iowa 719; Klocow v. Patten, 93 Iowa 432; Homire v. Rodgers, 74 Iowa 395; Boysen v. Petersen, 203 Iowa 1073; and Murray v. McDonald, 203 Iowa 418.
The plaintiff did pursue a remedy in the Denver court, and pursued the same successfully to a final money judgment for the full amount of his claim. Which of the above defined remedies did he pursue? The court below construed his pleading as a suit for the proceeds of the collection. We think that such was the proper interpretation of the pleading. The plaintiff challenges the interpretation, and contends that his cross-complaint was a claim for damages for conversion. With this contention, he concedes in argument that, if he had sued for the proceeds, he would be barred by the election. We need, therefore, give no further attention to the particular question whether a former suit for the proceeds, without judgment, would be such an election of remedies as would bar the present action. Nor do we consider whether it would avail anything to plaintiff to show that his former action was for damages for conversion.
We have already set out sufficient of the plaintiff's pleading in the Denver court to indicate its general character. It did not denominate itself. It did not in terms purport to claim *Page 493
damages. It did not contain the word "damages." It made no reference to the value of the property as a measure of damages. It prayed for a specific liquidated amount, and averred that such was the amount of the proceeds received by Palmer on October 6, 1922. On its face, the money judgment was a complete remedy. Plaintiff's answer to this suggestion is that his judgment would
be a complete remedy, and that the bar of the election would be complete if satisfaction of the judgment were had. At this point, plaintiff relies upon the analogy of a right of action against joint wrongdoers. Such an action may be prosecuted by the injured party either severally or jointly. A judgment against one does not operate as a bar to an action against the other until satisfaction is had. This is not such a case, and the rule of law has no application hereto. The defendant-bank was not a joint wrongdoer with Palmer. It was simply one of the innocent parties who suffered potential injury by her wrongful act. As between the two innocent parties, the right of election of remedies was primarily with the plaintiff. The remedy open to this defendant was subject in the first instance to the plaintiff's election. The plaintiff did elect. By prosecuting his remedy to judgment against Palmer, he fixed the status, not only of himself and Palmer, but of the defendant-bank as well.
II. Did the plaintiff have adequate knowledge of the facts and circumstances affecting his rights, to bring into operation the doctrine of election? This doctrine is not intended either as a trap or as a penalty for a mere mistake. If a litigant, without adequate knowledge of the facts affecting his rights, mistakenly selects a remedy to his disadvantage, he may, upon timely discovery, abandon it and pursue another. Whether he may do so after judgment in his favor, we need not now consider. It is true, also, that, if a litigant mistakenly pursues a remedy to which he is not entitled, and in the pursuit of which he fails, he will not thereby be barred from pursuing a proper remedy.Zimmerman v. Robinson Co., 128 Iowa 72. Of this latter hypothesis we have nothing in this case. The remedy pursued in the Denver court by plaintiff was a proper one. Nor did he fail in the pursuit thereof.
As to his knowledge of facts, we find no conflict in the evidence. The testimony introduced on behalf of the plaintiff herein discloses that he had as much knowledge of the facts then as *Page 494
he has now. Under his contention, from the beginning the large fact in the case was the alleged collection of the certificates upon forged indorsements. Plaintiff and his counsel asserted their belief from the beginning that the indorsements were forgeries. They prepared their evidence for the Denver trial in support of such contention, and they prevailed thereon. The record herein contains the substance of the opening statement of appellant's counsel at the trial of the Denver case. It comprised substantially the following:
"We expect to prove that, at the time of the death of Frank Robertson, in September, 1922, there were $11,900 in certificates of deposit which had been issued from that bank sometime previously, and that, on October 6, 1922, a little over a week after he died, the certificates were cashed by the Farmers State Bank of Boone, Iowa. The proof will further show that the indorsement of the name `Frank Robertson' on the back of the certificates are forgery. The proof will further show that the claim of the plaintiff in this case was, the certificates were indorsed by Frank Robertson, a week prior to his death, by him with his own hand, and turned over to her by his own hand, and turned over to her in satisfaction or part performance of the contract which is alleged in the complaint. If we establish that these signatures are forgeries, we believe the court will find against the plaintiff and in favor of the defendant for the full face of the certificates, together with 8 per cent interest per annum. We have also asked for a finding that plaintiff was guilty of fraud in that transaction."
Prior to filing the cross-complaint, the appellant's counsel came to Boone to interview the defendant bank and to inspect the certificates and their indorsements. He did so inspect them, having been allowed full liberty in that regard. At his request, the certificates were sent by the defendant bank to a bank in Denver, in order to enable the appellant to make further inspection and to do so with the aid of an expert. The defendant's expert (King) made an extended expert examination of every signature, and pronounced them all forgeries. He testified to that effect as the appellant's witness in the Denver case, and again in the case at bar. While the certificates were in the possession of the Denver bank, as bailee for this defendant, they were impounded *Page 495
by the appellant, and were used as evidence in the trial of the Denver case. Nowhere in the record has the appellant specified or suggested any new material fact which has come to his knowledge since the filing of the cross-complaint in the Denver case. His contention is not that any new facts have come to his notice, but that he did not know to a certainty that he was correct in his belief, or that his expert was correct in his judgment. It is argued, therefore, that, in prosecuting his cross-complaint, he was acting without actual knowledge of the facts. This is only saying that he did not personally know the facts which he proposed to prove by his witness. He does not yet personally know them, nor will he ever acquire personal knowledge thereof. To adopt such a criterion of knowledge would be to destroy the whole doctrine of election. Knowledge, within the meaning of the law, may consist of credible information of the material facts and circumstances of the transaction under review, such as to enable the litigant to form a reasonable belief in relation thereto. The instructions of the court conformed to this criterion. Notwithstanding that there was no conflict in the evidence, and that a peremptory instruction might properly have been given on the subject, the court, nevertheless, submitted the issue to the jury as a question of fact.
In our judgment, the appellant has no ground of complaint at this point.
III. It is further contended that the appellant, as administrator of an estate, had no authority from the appointing court to waive any right accruing to the estate, and therefore no authority to make an election of remedies. He does not claim that he lacked authority to prosecute his cross-complaint. The bar of the election of remedies arises, if at all, of legal and logical necessity. If he had authority to pursue his remedy, he had equal authority to take its consequences. In the operation of the rule, we know of no exception in favor of a person suing in a representative capacity. The plaintiff pursued his remedy in a court of general jurisdiction, both in the Denver case and in the case at bar. The jurisdiction of each court was, and is, complete. He may not impeach his own authority to the detriment of the litigants whom he has impleaded. If he has violated any duty, as laid upon him by the appointing probate court, he is subject to the discipline of that court. For the purpose of this litigation, *Page 496
he stands before the court like any other litigant. Appellant cites no authorities in support of his contention, and we find none. We have held that an administrator appearing as litigant in this court stands upon the same footing as any litigant, regardless of any permissive order by the court which appointed him. Mortenson v. Knudson, 189 Iowa 379; In re Estate of Clark,203 Iowa 224. We are of opinion that this ground of reversal is not tenable.
Our foregoing pronouncements are decisive of all grounds of reversal presented by the appellant.
The judgment below is, accordingly, — Affirmed.
All the justices concur.
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[1] Some time prior to the year 1905, there was platted and laid out, in the city of Cedar Rapids, an addition known as Sampson Heights. This addition contains four blocks described by a stipulation of facts as follows:
"The addition to the city of Cedar Rapids, designated and known as Sampson Heights Addition fronts on First Avenue and Third Avenue, and is intersected by Second Avenue; that First Avenue is 120 feet wide, Second Avenue is 80 feet wide, and Third Avenue is 80 feet wide; that said addition extends from 17th to 19th streets, and is intersected by 18th street; generally speaking the Avenues run East and West and the streets run North and South; 17th, 18th, and 19th streets are each 80 feet wide; that said addition consists of Blocks 1, 2, 3, and 4; Block 1 consists of Lots 1 to 14, both inclusive; Block 2 consists of Lots 1 to 16, both inclusive; Block 3, 1 to 16, both inclusive; and Block 4, 1 to 20, both inclusive; each of said lots is 60 feet wide, with the exception of Lots 1 and 14 in Block 1, which are 45 feet wide. * * * Each of the lots in Sampson Heights Addition is 140 feet long; and each block is intersected by an alley running East and West, and such alleys are 20 feet wide."
The defendant-appellee Mary O'Meara owns lot 11, in block 3, of Sampson Heights Addition, on which is constructed a single family dwelling house. It is difficult to determine from the record *Page 1142
how long the appellee has owned this property. In any event, she owned it before and at the time the zoning ordinance hereinafter described was adopted by the city of Cedar Rapids.
On July 22, 1926, the city of Cedar Rapids passed a zoning ordinance, in which it classified the Sampson Heights Addition as being within the limits of the A residence district and the A height and area district. Section 55 of the zoning ordinance provides:
"In the `A' Height and Area District the height of the buildings, the minimum dimensions of yards and setback, and the minimum lot area per family shall be as follows: * * *
"Sec. 62. Lot Area Per Family: Every building hereafter erected or structurally altered which is located in the `A' Residence District and the `A' Height and Area District shall provide a lot area of not less than six thousand (6,000) square feet per family."
According to the record, the appellee's lot contains only 8,400 square feet. For a two-family house, there should be a lot of 12,000 square feet.
After the city of Cedar Rapids adopted the aforesaid zoning ordinance, the appellee, in June, 1930, regardless of the foregoing restrictions, made application to the building inspector of that city for permission under the aforesaid ordinance to remodel her single family dwelling house in such a way as to make of it a duplex with two entrances. It was the intention of the appellee to have two families live in the duplex. The appellee's application was for authority to "structurally alter" her single dwelling house, then located on the aforesaid lot, in Sampson Heights addition. See section 62 of the Zoning Ordinance, above quoted. When this application was made to the building inspector, he rejected it. Thereupon the appellee purported to take an appeal to the board of adjustment provided for under the zoning ordinance.
This board, on July 1, 1930, granted the appellee's request by the following resolution:
"Be it Resolved by the Board of Adjustment that the (appellee's) application be granted for the following reasons:
"1. That the owner and applicant (appellee) is the sole occupant of the dwelling in question.
"2. That the exterior changes will be slight.
"3. That other dwellings in the same locality have a larger number of occupants. *Page 1143
"4. That the location is contiguous to a `B' Residence District.
"5. The refusal of permit would work unnecessary hardship on the applicant (appellee)."
That resolution was passed without any notice to the plaintiff-appellants, who were property owners in Sampson Heights addition. There are, according to the abstract, fifty-five appellants. These appellants did not learn of the appellee's purpose to transform her single dwelling house into a double dwelling until more than 30 days after the aforesaid resolution was adopted by the board of adjustment. Finally, the appellants learned of appellee's intention to thus "structurally alter" her house when she commenced to make the necessary changes on the building. She had spent, according to a stipulation, approximately $300 on the work when the action for an injunction to restrain her from structurally altering the house was commenced by the appellants. Upon the submission of the cause to the district court, that tribunal refused to allow the appellants the relief. Therefore, they appeal.
The appellants seek the injunction on two theories: First, because of a restriction in the deeds for the lots in the Sampson Heights addition; and, second, because of the aforesaid restrictions in the zoning ordinance. We find it unnecessary to discuss the restriction in the deeds, and therefore confine our consideration to the zoning ordinance.
I. Chapter 324 of the 1924 Code provides that municipal corporations, by zoning ordinances, may "regulate and restrict the height, number of stories, and size of buildings and other structures, the percentage of lot that may be occupied, the size of yards, courts, and other open spaces." Section 6452. No such regulation or restriction, however, shall become effective "until after a public hearing in relation thereto, at which parties in interest and citizens shall have an opportunity to be heard. At least fifteen days' notice of the time and place of such hearing shall be published in a paper of general circulation in such city or town." Section 6455 of the 1924 Code.
According to section 6456 of that Code:
"Such regulations, restrictions, and boundaries may, from time to time, be amended, supplemented, changed, modified, or repealed. * * * The provisions of the previous section [6455, 1924 Code] relative to public hearings and official notice shall apply equally to all changes or amendments." *Page 1144
Section 6457 of this Code provides for a zoning commission, and section 6458 authorizes the appointment of a board of adjustment. This section reads:
"The council shall provide for the appointment of a board of adjustment and in the regulations and restrictions adopted pursuant to the authority of this chapter shall provide that the said board of adjustment may in appropriate cases and subject to appropriate conditions and safeguards make special exceptions to the terms of the ordinances in harmony with its general purpose and intent and in accordance with general or specific rules therein contained and provide that any property owner aggrieved by the action of the council in the adoption of such regulations and restrictions may petition the said board of adjustment direct to modify regulations and restrictions as applied to such property owners."
Following the foregoing sections of the 1924 Code is section 6461, which provides that an appeal may be taken from the decision of an administrative officer to the board of adjustment by any person aggrieved thereby. Then section 6463 of the 1924 Code provides:
"The board of adjustment shall have the following powers:
"1. To hear and decide appeals where it is alleged there is error in any order, requirement, decision, or determination made by an administrative official in the enforcement of this chapter or of any ordinance adopted pursuant thereto.
"2. To hear and decide special exceptions to the terms of the ordinance upon which such board is required to pass under such ordinance.
"3. To authorize upon appeal in specific cases such variance from the terms of the ordinance as will not be contrary to the public interest, where owing to special conditions a literal enforcement of the provisions of the ordinance will result in unnecessary hardship, and so that the spirit of the ordinance shall be observed and substantial justice done."
The foregoing statutes relating to the right of municipalities to zone conforms "with some incidental variations * * * to a standard in force in a number of states." Anderson v. Jester,206 Iowa 452, 221 N.W. 354, 356. In an attempt to comply with the foregoing statutes, the city of Cedar Rapids, as before stated, adopted the zoning ordinance above referred to. Section 135 of the zoning *Page 1145
ordinance, providing for appeals from administrative officers to the board of adjustment, is practically identical with section 6461 of the 1924 Code. When endeavoring to confer power and authority upon the board of adjustment, as authorized by section 6463 of the 1924 Code, the city of Cedar Rapids provided in its zoning ordinance as follows:
"Sec. 137. In specific cases the Board of Adjustment shall have the following powers:
"Sec. 138. To hear and decide appeals where it is alleged there is error in any order, requirement, decision or determination made by the building inspector in the enforcement of this ordinance. * * *
"Section 143. (To) vary the application of the setback, side and rear yard regulations in specific cases where this ordinance would impose practical difficulties or unnecessary hardships. * * *
"Sec. 145. To authorize upon appeal in specific cases such variance from the terms of the ordinance as will not be contrary to the public interest, where owing to special conditions a literal enforcement of the provisions of the ordinance will result in unnecessary hardship, and so that the spirit of the ordinance shall be observed and substantial justice done."
There is no claim by either party that the ordinances thus adopted by the city of Cedar Rapids do not conform to the authorizing statutes; nor is it claimed by either the appellee or the appellants that the zoning ordinance of Cedar Rapids is unconstitutional. Both the appellants and the appellee argue the case upon the theory that the zoning ordinance of Cedar Rapids is a valid, existing municipal law.
After setting forth the foregoing statutes and ordinances, and making the above preliminary statements, it is now convenient to consider whether the resolution of the board of adjustment is contrary to the ordinances, and therefore illegal and of no effect. As before indicated, section 62 of the ordinance requires that there shall be a lot area of not less than 6,000 square feet per family. The lot in question has an area of only 8,400 square feet. Because two families are to be in the house, there should be a lot area of 12,000 square feet. Consequently, the resolution of the board of adjustment is contrary to, and unauthorized by, the ordinance unless such *Page 1146
board had a right to except the appellee's lot from the terms of the aforesaid ordinance.
It is claimed by the appellee that the board of adjustment had a right to suspend the application of the zoning restriction in her behalf because of sections 138, 143, and 145 of the ordinance, above quoted. These sections thus relied upon by the appellee are based, as before related, on section 6463 of the 1924 Code, previously set forth. When discussing this section of the Code, we said in Anderson v. Jester (206 Iowa 452), supra, reading on pages 459 and 460, 221 N.W. 354, 358:
"The power of the board of adjustment is to vary, to make special exceptions to the application of the zoning and use regulations, not to vary, further than as the incidental effect in the specific case, boundaries or the provisions of the ordinance. Prusik v. Board of Appeal, 262 Mass. 451,160 N.E. 312. The variance must be reasonable, not arbitrary. It may not under the same circumstances be granted to one and withheld from another. The power is to be used in subordination to the general welfare, and not for the benefit of one who does not bring himself within the terms of the statute. * * * The power may not be arbitrarily exercised and its exercise must be confined strictly within the limitations of the statute. Prusik v. Board of Appeal, 262 Mass. 451, 160 N.E. 312, supra; Bradley v. Board of Zoning Adjustment, 255 Mass. 160, 150 N.E. 892.
"The reservation of this power of variance and adjustment and the delegation thereof to a special board are not unconstitutional. Gorieb v. Fox, 274 U.S. 603, 47 S. Ct. 675,71 L. Ed. 1228, 53 A.L.R. 1210; Sundeen v. Rogers, 83 N.H. 253,141 A. 142 [57 A.L.R. 950]; Harden v. City of Raleigh, 192 N.C. 395,135 S.E. 151.
"If the reasonableness of the classification established by the ordinance or of the exception or variance granted by the board of adjustment is fairly debatable, and not clearly arbitrary, the judgment of the local authorities will not be disturbed by the courts. Zahn v. Board of Public Works, 274 U.S. 325, 326,47 S. Ct. 594, 71 L. Ed. 1074. * * *
"But the statute does not by language or inference, confer arbitrary power upon the board. On the contrary, it lays down conditions and limitations within which the board must confine itself. The power of the board is to grant such exceptions and variances in specific cases as will bring them within, not totake or leave them *Page 1147 out of the spirit, intent, and general purpose of the ordinanceof zoning." (The italics are ours.)
Of course, the board of adjustment in no case can exceed the power conferred upon it by the zoning ordinance. Under the zoning ordinance, in Cedar Rapids, there is no express power conferred upon the board to except the appellee's property from the operation of section 62 thereof, before mentioned. Section 143 of the ordinance provides that the board, under proper circumstances, may make variations in reference to the setback, side, and rear yard regulations in specific cases. It is provided in section 57 for the rear yard, in section 58 for the side yard, and in section 59 for the setback. But, as before indicated, section 62 refers to the lot area. Assuming, however, without deciding, that section 145 of the ordinance, above referred to, may apply to section 62, above named, yet it is apparent that the board of adjustment in the case at bar nevertheless acted illegally. While it is true that section 145 authorizes the board of adjustment to allow variances from the terms of the ordinance in specific cases, yet such variance must be within the spirit of the ordinance. Sampson Heights addition contains many beautiful and valuable homes. According to the evidence, the alteration of appellee's single dwelling house into a duplex will reduce the value of the other property in the addition. There is nothing in the record to indicate that an unnecessary hardship will be imposed upon appellee if she cannot thus reconstruct her house. If the addition is retained as restricted, the appellee's property accordingly will be worth more. She does not stand in an exceptional position. The argument offered to support the desirability of reconstructing the appellee's house into a duplex will apply equally to any other house in the addition. No exceptional or peculiar circumstances appear which place appellee's property in a different position from the other properties in the addition. Whatever hardship the restriction imposes upon the appellee is likewise inflicted upon the other property owners. In other words, the appellee is restricted in the use of her property by the zoning ordinance, as the other property owners in the district are curtailed by that municipal regulation in the use of their property. Nevertheless the very restriction imposed by the zoning ordinance is a benefit to appellee and the other property owners.
While it is said that there are now two or three apartment *Page 1148
houses in the addition, yet it does not appear exactly when they were constructed. If these other apartment houses were built before the zoning ordinance went into effect, then, by the terms of that ordinance, they were not governed thereby. Regardless of that, however, it does not appear that these other so-called apartment houses are situated in such a way with reference to the appellee's property as to require a variation of the ordinance in her behalf; that is to say, the appellee's property is not affected any differently by the aforesaid apartment houses than is any other property in the district. Furthermore, the appellee suggests that there is another addition in Cedar Rapids near her house in which the building of duplex houses is not restricted. Apparently apartment houses in the other addition above mentioned were permitted when the zoning ordinance was adopted. Many, if not all, of the houses in Sampson Heights addition are near the other addition of which appellee speaks. There is no peculiar circumstance existing because of said other addition, so far as the appellee is concerned. She is in practically the same situation in reference thereto as are many, if not all, of the other property owners in Sampson Heights addition.
It was expressly found by the board of adjustment that the appellee is the sole occupant of the dwelling house in question, and that other dwellings in the same locality have a larger number of occupants. This, however, is no basis under either the ordinance or the statute for permitting the appellee to avoid the regulation concerning the lot area. The purpose of the zoning ordinance is not to so adjust the occupation of the various houses in the district in such a way as to have an equal number in each house. On the other hand, it appears to have been the thought of the city council, in establishing the zone, to make the family the basis for the lot area. Assuming that in the first instance "the proceedings of the board are presumed to be regular" and that it "is presumed to have found the existence of such facts as were necessary to sustain its action" [Anderson v. Jester (206 Iowa 452), supra, local citation 461, 221 N.W. 354. 358], yet under the record in the case at bar it is apparent that there was no basis whatever for the action taken by the board of adjustment. No basis for such action appears either in the specific findings of the board of adjustment, or in the record made in the present case. Such action of the board of adjustment does not preserve the spirit of the zoning ordinance, but rather defeats it. There is no consistency between the action of the board and the *Page 1149
spirit of the zoning ordinance. Obviously the one is antagonistic to the other. According to the statute, it is the theory of the law that the review of the board's action by the court shall bede novo. See Anderson v. Jester (206 Iowa 452, 221 N.W. 354), supra. Under all the circumstances, it is apparent that the action of the board of adjustment is arbitrary and without legal right or justification.
[2] Regardless of this, however, it is claimed by the appellee that under the building permit issued to her, she commenced the reconstruction of her single dwelling house, and thereby expended money. Consequently she declares that under the holding in Rehmann v. City of Des Moines, 200 Iowa 286, 204 N.W. 267, 40 A.L.R. 922, the permit now cannot be revoked. The Rehmann case is readily distinguishable from the case at bar. In the Rehmann case, the city itself attempted to revoke the permit after it had been legally granted. Here the property owners, and not the city, are seeking to overcome the permit because it was not legally granted.
Each appellant owned valuable property in the district. This property of each appellant will be injured if the action of the board of adjustment is permitted to stand. That action of the board, however, being arbitrary and without legal authority, cannot stand. Therefore, if an injunction is the proper remedy under the circumstances of this record, the appellee must be restrained from transforming her single residence house into a duplex.
[3] II. But it is said by the appellee that an injunction is not the proper remedy. A remedy in certiorari is provided for the appellants, the appellee declares, by section 149 of the ordinance and section 6466 of the 1924, as well as of the present, Code. Hence, because the appellants did not bring an action in certiorari within thirty days, as required by both the ordinance and the Code, the appellee asserts they have no remedy by injunction. Manifestly, under the record, the appellants did not bring their action within thirty days because they did not learn within that time that the appellee intended to convert her single dwelling house into a duplex. The information that the appellee would thus transform her house came to the appellants after thirty days had passed. No notice of the hearing was served on the appellants. Whether the ordinance is void because it does not provide for such notice, we do not now decide or suggest.
When, after the thirty days had passed, as before said, the appellants asked the board of adjustment for relief, that body refused *Page 1150
the same because the thirty-day limitation named in the ordinance and statute had run. So, at the time the appellants learned of the appellee's intention to reconstruct her house, the remedy provided in the ordinance and Code was no longer available to them. Therefore, they commenced the proceeding in equity to enjoin.
[4] Even if, as claimed by the appellee, an injunction proceeding is not the proper one, nevertheless no motion was made by her to transfer this injunction proceeding into the alleged proper proceeding, to wit, certiorari under the general (Code 1931, section 12456 et seq.), or the aforesaid special, statute as provided by section 10944 of the 1931 Code. At this point, read Hoover v. Iowa State Highway Commission, 207 Iowa 56 (local citation 65), 222 N.W. 438. As in an injunction case, the proceeding authorized by statute is to be tried de novo. Anderson v. Jester (206 Iowa 452, 221 N.W. 354), supra. Moreover, the action of the adjustment board was without legal authority and in violation of both the city ordinance and the statute. Accordingly, under all the circumstances, an injunction will lie to restrain the appellee from converting her single dwelling house into a duplex. See Hoover v. Iowa State Highway Commission (207 Iowa 56, 222 N.W. 438), supra.
Wherefore, the judgment of the district court must be, and hereby is, reversed. — Reversed.
STEVENS, C.J., and EVANS, MITCHELL, De GRAFF, ALBERT, and WAGNER, JJ., concur.
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This is an action at law for damages because of personal injuries received by the plaintiff while on the premises of the defendant hotel company. The petition alleged that the hotel company also operated a drug store for the convenience of its guests; that the plaintiff, while a guest of the hotel, went into the drug store for the purpose of making a purchase, and, while waiting to be waited upon, asked permission of the manager of the drug store to use the telephone, which was there located and kept for the use and convenience of customers of the store and guests of the hotel; that the manager advised plaintiff she could use the telephone and pointed it out to her; that it was located adjacent to and partially behind the prescription case, could not be used except by passing partially behind the case and pushing to one side a small swinging door about 3 or 4 feet in height; that, at the time the consent was given and plaintiff was invited and directed to use the telephone, there existed a dangerous, hazardous, obscure and hidden opening in the floor immediately in front of the telephone and adjacent thereto made by the lifting of a trap door, which led from the floor of the drug store proper to the basement below, concerning which dangerous opening the manager had full knowledge, or should have had such knowledge through exercise of ordinary care; that the dangerous opening was hidden from the plaintiff's view and plaintiff had no knowledge of the same; that plaintiff, while exercising due care and caution, and while attempting to use the telephone with the express consent of the manager of the store, and upon his invitation and direction, without being apprised by him of the dangerous and hazardous conditions, and with no knowledge of such, stepped into the open pit, fell to the basement below and was injured on account thereof.
Plaintiff alleged that the defendant was negligent (1) in directing, inviting and permitting her to use the telephone in *Page 1063
front of a dangerous opening in the floor well knowing she could not possibly use the telephone without stepping into the pit; (2) in directing, inviting and permitting her to use the telephone located as aforesaid without giving any warning of the hazards and dangers surrounding it; (3) in creating and maintaining a dangerous and hazardous condition and permitting it to exist at a place where guests of the hotel and customers of the drug store, and the public generally, were permitted to use the telephone, well knowing that it could not be used without exposing one to the hazards and dangers of falling into a hidden opening.
The defendants' answer was a general denial.
The testimony showed that the plaintiff and her husband were guests at the Hotel Montrose, operated by the defendant; that, in connection with the operation of such hotel, the defendant also operated a drug store and distributed in the rooms of the guests placards which constituted an invitation to use the drug store for the purchasing of drugs, toiletries, candies, luncheons, sandwiches, perfumes, novelties, etc. On the evening of the accident, the plaintiff and her husband were seated in the lobby of the hotel visiting with one Dr. Harmon, a dentist. Plaintiff was desirous of using the telephone and getting something to eat. She knew that the hotel maintained public telephones in the lobby and knew where they were located. She learned from Dr. Harmon that she could use a telephone in the drug store, that was not a pay telephone. She testified that she entered the drug store alone for the purpose of getting something to eat and using the telephone. Upon entering the drug store, she found that the place was busy and "passed up" getting anything to eat. She looked for Mr. Wolf, the manager of the drug store, to inquire about the telephone. Failing to see him, she started back toward the lobby and gave up the idea of using the telephone for the moment. As she was walking out of the drug store, she saw Mr. Wolf seated at one of the tables with a couple of ladies. He said to her, "What can I do for you, Mrs. Mac?" She asked if she could use the telephone. He said, "Certainly, right over there," and pointed to the telephone. In attempting to use the telephone, the plaintiff fell into an open stairway and was injured.
There were introduced in evidence, and certified to this court, photographs showing the location of the telephone in *Page 1064
question. In a corner of the drug store is a partition which forms a small, approximately square, prescription room. The entrance to the prescription room is open, except for a swinging door, extending approximately 3 feet up from the floor. As one approaches this entrance, the telephone in question is located at the left side of the swinging door and inside the prescription room, but accessible through the opening above the swinging door. Plaintiff testified that she approached the telephone, reached for it, but being short of stature, 5 feet 1 inch in height, and having short arms, she could not reach the telephone without entering partially the prescription room. She pressed her knee against the swinging door in attempting to reach the telephone. It opened. She fell forward and down the steps to the basement.
The evidence showed that there was a trap door over the steps to the basement, which constituted the floor of the prescription room. When trap door was open, the prescription room could not be used. The trap door extended to within a few inches of the swinging door and was open at the time the plaintiff fell. She testified that she did not see the opening. Her reasons for not seeing it are asserted, (1) that it was hidden by the swinging door and (2) that she was looking at the telephone. The drug store appears to have been well lighted and there is no evidence justifying any conclusion that the prescription room was dark at the time. The photographs, introduced in evidence, demonstrate that it must have been lighted from the lights of the drug store, if from no other source. There was also evidence that guests of the hotel, customers of the drug store, and the public generally, had been permitted to use the telephone when permission was asked, and that often the telephone was used without asking permission. One of plaintiff's witnesses testified that, in using the telephone without permission, he acted as an interloper.
At the close of the testimony, the defendant made a motion for a directed verdict, on the following grounds: (1) that plaintiff failed to sustain the allegations of her petition and, if a verdict were returned in her behalf, it would be the duty of the court to set it aside for lack of sufficient evidence to sustain it, (2) that the undisputed evidence showed that the plaintiff was a mere licensee toward whom the defendant owed no *Page 1065
duty, except to refrain from wantonly or intentionally injuring her, and that there was no evidence of such an injury, (3) there was no evidence to disclose who opened the trap door, nor how long it was open, and no showing that defendant had any knowledge of the dangerous condition existing at the time of the injury, (4) that the plaintiff entered the prescription room, which was not a part of the drug store into which customers were invited, for a purpose of her own to use the telephone and save the cost of using the public telephone and, while plaintiff was so acting, defendant owed her no duty except to refrain from wantonly or maliciously injuring her, (5) that the situation, at the place where the gate or barrier separated the prescription room from the drug store, was open and observable to anybody who would look, was not concealed, if plaintiff had looked, she could not help seeing the open cellar-way and steps, she did not look and was guilty of contributory negligence as a matter of law.
The motion for directed verdict was sustained generally. Plaintiff appeals from such ruling.
The first question presented to us for determination is the status of the plaintiff at the time of her injury. She contends that she was an invitee, whereas defendant contends that she was a mere licensee. In defining these two terms and the duties owed to those coming within the contemplation of such terms, this court states in the case of Printy v. Reimbold, 200 Iowa 541,546, 202 N.W. 122, 205 N.W. 211, 41 A.L.R. 1423, as follows:
"It is the universal rule that persons entering voluntarily upon the premises of another, out of idle curiosity or for their own pleasure or advantage, take the same as they find them, and the owner or occupier thereof is bound only to avoid wanton or willful injury to them; but, if the purpose of going upon the premises is the common interest, or for the mutual advantage of the parties, an implied invitation, which makes it the duty of the owner or occupier to maintain the same in a reasonably safe condition, may be inferred. Keeran v. Spurgeon Merc. Co.,194 Iowa 1240[191 N.W. 99, 27 A.L.R. 579]; Davis v. Malvern L. P. Co., 186 Iowa 884 [173 N.W. 262]; Noyes v. Des Moines Club,178 Iowa 815 [160 N.W. 215]; St. Louis S.F.R. Co. v. Stacy,77 Okla. 165 (171 P. 870); Spain v. *Page 1066
St. Louis S.F.R. Co. (Mo.App.), 190 S.W. 358; Southern R. Co. v. Bates, 194 Ala. 78 [69 So. 131] (L.R.A. 1916A 510); Glaser v. Rothschild, 221 Mo. 180 (120 S.W. 1); Turess v. New York S.
W.R. Co., 61 N.J. [L.] 314 (40 A. 614); Lawrence v. Kaul Lbr. Co., 171 Ala. 300 (55 So. 111); Plummer v. Dill, 156 Mass. 426
(31 N.E. 128) [32 Am. St. Rep. 463]; Mandeville Mills v. Dale,2 Ga. App. 607 (58 S.E. 1060); Foster Lbr. Co. v. Rodgers (Tex.Civ.App.), 184 S.W. 761."
The foregoing pronouncement was followed by this court in the case of Wilson v. Goodrich, 218 Iowa 462, 252 N.W. 142, wherein a doctor had gone upon the premises of an employer to secure some blanks to send to an insurance company in reference to certain employees that had engaged him as their attending physician. He secured the blanks and then inquired if the men were working. Upon being told that they were, he undertook to look them up and while so engaged was injured by falling down an open elevator shaft. The trial court directed a verdict for the defendant, and on appeal the judgment was affirmed. At page 467, of 218 Iowa,252 N.W. at page 144, this court states as follows:
"An invitee to a place of business is one who goes there, either at the express or implied invitation of the owner or occupant, on business of mutual interest to both, or in connection with the business of the owner; while a licensee is one who goes on the property of another, either by express invitation, or with implied acquiescence, solely in pursuit or furtherance of business, pleasure, or convenience of the licensee."
Again, at page 468, we state:
"The plaintiff was injured at a place in the building where he was neither invited nor expected to be. He was a mere licensee and not entitled to protection as an invitee. Even if plaintiff was an invitee, the duty to him would not extend so far as to make the defendant liable for unsafe conditions existing on his premises in a place not intended for the reception of visitors or customers and where they were not expected or invited to go. Nelson v. Woolworth Co., 211 Iowa 592, 231 N.W. 665. If the invitee goes for purposes of his own to some part of the premises other than which he was invited, he becomes a mere licensee. Peebles v. Company (C.C.A.) [6 Cir.] *Page 1067
15 F.2d 335; Bennett v. Butterfield, 112 Mich. 96,70 N.W. 410. When an invitee steps beyond the limits of his invitation he becomes a mere licensee and must take the premises he then enters as he finds it. Menteer v. Company, 240 Mo. 177, 144 S.W. 833; Corbett v. Spanos, 37 Cal. App, 200, 173 P. 769; Ryerson v. Bathgate, 67 N.J. Law 337, 51 A. 708, 57 L.R.A. 307; Schmidt v. Hurd, 170 Minn. 322, 212 N.W. 903; Nelson v. Woolworth, supra; Wilmes v. R. Co., 175 Iowa 101, 156 N.W. 877, L.R.A. 1917F 1024; Knote v. City of Des Moines, 204 Iowa 948, 216 N.W. 52."
The two cases above-quoted from cite with approval and follow the holding of this court in the case of Keeran v. Spurgeon Merc. Co., 194 Iowa 1240, 191 N.W. 99, 27 A.L.R. 579. In that case, this court reviews at length the rules of law relative to the duty owed an invitee and a mere licensee, and the authorities which sustain such rules. After such a review of the authorities, this court states, 194 Iowa at page 1243, 191 N.W. at page 100, as follows:
"Applying these general rules to the facts of this case, we find from the evidence that in the forenoon the appellant entered the store building occupied by the appellee, and asked of the clerk permission to leave his grips and his overcoat. The permission was granted by the clerk, and the overcoat was taken by the clerk and placed inside a door leading from the room in which the parties then were. The appellant returned in the afternoon and stated to the clerk, `I will have my coat now.' The clerk replied, `You know where I put it,' to which the appellant replied, `Yes, I saw you hang it up in that little room back there,' and to this remark, the clerk replied, `Yes.' Thereupon, nothing more being said or done, the appellant proceeded to the door referred to, which was located behind the counter, and not where customers having business in the store were accustomed to go; and opening the door, the appellant fell, and was injured. * * *
"The door leading to the stairway in question was located behind the counter, in the storeroom, and at a place where customers of the store could not be expected to go in the course of transacting business in the store. There was no invitation, express or implied, to the public generally to go to this place. It had no connection whatever with the place of entrance or *Page 1068
exit from the store, and was not at a place where the appellee could reasonably expect a customer at the store to go. The appellant was at the store at the time of the injury for his own accommodation. He was a mere licensee in going to the store to procure his coat, and the appellee could not be liable for injury by reason of his falling down the stairway, under the circumstances disclosed, unless there were some facts and circumstances that made the appellant an invitee at the time of the accident."
We have carefully examined the various authorities cited to us by counsel and have made an independent investigation of the decisions as well. We are satisfied that the rules of law, announced by us in the foregoing quotations, are definitely established by the decisions of this court. Applying such rules to the record herein, we are satisfied that, under the undisputed record, the plaintiff was a mere licensee at the time of her injury, took the premises as she found them, and cannot recover from the defendant hotel company unless her injury was the result of willful or wanton misconduct on the part of the defendant.
When plaintiff entered the drug store, she had the intention of getting something to eat and using the telephone. Finding the place busy, she "passed up" getting something to eat. Failing to find the manager, she also gave up the idea of using the telephone for the moment. When the manager inquired of her what he could do for her, she merely asked to use the telephone. The telephone was located in a part of the premises to which the public was not invited. Plaintiff relies upon the fact that there was no sign on the swinging door, "Private — Keep Out". Such a sign was not necessary under the record herein. It was obvious to even a casual observer that the prescription room was a private room and not one into which the public was invited. It was also obvious that the telephone she undertook to use was not a public telephone. The fact that she asked for permission to use it definitely shows that she realized she was undertaking to use a private telephone. In undertaking to step into the prescription room, she stepped beyond the limits of any invitation extended to her as a possible customer of the store, and became a mere licensee. She was, therefore, required to show that her injury was the result of *Page 1069
willful or wanton misconduct on the part of the defendant, as a condition precedent to her right to recover damages because of such injury.
Plaintiff contends that, even considering that she was a mere licensee, nevertheless, she sustained the burden of proof thus cast upon her. Her counsel argue that the manager of the store knew, when he gave her permission to use the telephone, that the trap door was located beyond and immediately adjacent to the swinging door right under the telephone, knew that if the trap door was lifted, plaintiff, because of her short stature, could not use the telephone without being exposed to the danger of falling into the opening, knew that the trap door was concealed by the swinging door, knew that plaintiff could not use the telephone without falling directly into the opening, and, with full knowledge of all of the facts, failed to give plaintiff any warning whatsoever, but directed her into a hidden, unguarded and dangerous opening. The difficulty with plaintiff's argument lies in the fact that there is no evidence that the manager knew that the trap door was open at the time he gave permission to the plaintiff to use the telephone. He was seated at a table with his back to the prescription room. If the situation was concealed from plaintiff, it was even more concealed from the manager of the store. There is no evidence showing who opened the trap door, when it was opened or how long it had been open before the injury occurred. There is no evidence that the manager knew that it was open at the time. Plaintiff seeks to overcome this difficulty by contending that the manager, as a reasonably careful and prudent man, should have known, under all the circumstances, that the door was open. Such contention is without merit. To adopt it would be to disregard the rule as to a mere licensee, and permit recovery on the basis of ordinary negligence. Under our decisions above reviewed, such is not the law. Recovery by a licensee must be based upon wanton or willful misconduct on the part of the party to be charged. The evidence failed to sustain plaintiff's contention that the defendant hotel company was guilty of any such misconduct.
The trial court was warranted in sustaining the motion for directed verdict on the first four grounds thereof. Ground 5 questioned the sufficiency of the evidence to establish plaintiff's *Page 1070
freedom from contributory negligence. In view of our holding on the first four grounds of the motion, it is unnecessary for us to discuss or decide the questions presented by the fifth ground.
The judgment appealed from is right. It is affirmed. — Affirmed.
HAMILTON, C.J., and BLISS, SAGER, HALE, and STIGER, JJ., concur.
RICHARDS, OLIVER, and MITCHELL, JJ., dissent.
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Carl Misbach was an employee of the city of Cedar Rapids, Iowa, since the 31st day of October, 1934, in the capacity of a fireman and as a member of the fire department of said city; that he continued in such employment down to and including the 11th day of January, 1940; that he received a monthly compensation of one hundred fifty dollars ($150) per month.
On the 30th day of September, 1939, the chief of the fire department of Cedar Rapids wrote Misbach a letter to the effect that it would be necessary for him to discipline Misbach for certain misconduct on the 28th day of September, 1939; that his discipline would be to remain on continuous duty for a period of forty-five (45) days and to abstain from drinking intoxicating liquors in the future.
On the 30th day of September, 1939, Misbach acknowledged to the chief of the fire department the aforesaid letter and disciplinary action and agreed to accept and abide by the penalty and punishment set forth.
On the 5th day of October, 1939, the chief of the fire department addressed a letter to Edw. E. Lowe, chairman of the Civil Service Commission of Cedar Rapids, Iowa, advising him and the Civil Service Commission of his disciplinary action taken against Misbach.
On the 11th day of October, 1939, the Civil Service Commission adopted a resolution to make a thorough investigation into the case.
On the 20th day of October, 1939, the Civil Service Commission addressed a letter to Carl Misbach reviewing his record as a member of the Cedar Rapids fire department and notified him that a hearing would be had and held in the superior court room in the city hall building on October 31, 1939, at 8:30 a.m., *Page 325
and at said hearing his entire record as a member of the Cedar Rapids fire department would be investigated and the Commission would determine at said hearing from investigation of his record whether or not he had violated the rules of the Cedar Rapids fire department, and further notifying him that should said Commission from the investigation of his record find that he had violated the rules of said department, the Commission would exercise its right to either suspend or discharge the plaintiff from the department; and further notifying him to appear at said hearing at said time and place and to offer evidence and explanation of his alleged acts.
On the 30th day of October, 1939, the Civil Service Commission was enjoined by the district court in and for Linn county from holding said hearing. The injunction action was brought by Carl Misbach and on the 4th day of January, 1940, it was dissolved.
On the 5th day of January, 1940, the Civil Service Commission again addressed a communication to Carl Misbach, advising him that the hearing which was to have been held on October 31, 1939, and which was not held due to the injunction which he obtained, would be held on the 8th day of January, 1940, at 10 a.m., and further notifying him that the matters referred to in the Commission's letter of October 20, 1939, would be considered and investigated by the Commission. Misbach was again notified in said communication that he would be required to appear on the 8th day of January, 1940, and that he was privileged to have counsel and offer evidence.
On the 8th day of January, 1940, at 10 a.m., the Civil Service Commission held an investigation and hearing on the record of Carl Misbach as a member of the fire department in and for the city of Cedar Rapids, Iowa, and after hearing all witnesses who desired to be heard closed said hearing.
On the 10th day of January, 1940, the Civil Service Commission rendered its decision or ruling and suspended the said Misbach for a period of six months without pay, effective January 11, 1940, alleging that he had been guilty of misconduct, neglect of duty and failure to properly perform his duties.
On the 13th day of January, 1940, Carl Misbach filed his petition in the Linn county district court praying that a writ *Page 326
of certiorari be issued commanding the Civil Service Commission, and each member, to certify a transcript of the proceedings in the matter of Carl Misbach, and asking that said order discharging Misbach be set aside. The writ was issued, a hearing held and the lower court dismissed plaintiff's petition and annulled the writ of certiorari. Misbach being dissatisfied has appealed to this court.
[1] The first question to confront us is, has the Civil Service Commission original jurisdiction under section 5702 of the 1939 Code, or is its jurisdiction to suspend or remove civil service employees limited exclusively to appellate proceedings?
Section 5702 of the Code of 1939 is as follows:
"No person holding civil service rights as provided in this chapter shall be removed, demoted, or suspended arbitrarily, except as otherwise provided in this chapter, but may be removed, demoted, or suspended after a hearing by a majority vote of the civil service commission, for neglect of duty, disobedience, misconduct, or failure to properly perform his duties."
This section first appears in section 1056-a32, subsection c, Code Supplement of 1913. In the Code of 1924 the chapter was broken into sections and the one in question appears as section 5702, in the Code of 1939.
It is the contention of appellant that section 5702 only has the effect to give the Commission appellate jurisdiction because the section prohibits arbitrary removal "except as otherwise provided," and because of the following sections providing for appeals in certain cases. But in order to make such a contention tenable it would be necessary to delete all of the words in the section following "except as otherwise provided" and to treat them as of no effect, thus violating the cardinal rule in the construction of statutes that every sentence, word and phrase must, if possible, be given effect.
In appeal cases the Commission has jurisdiction to hear and determine all matters involving the rights of civil service employees, and may affirm, modify or reverse any case on its merits. *Page 327
Section 5702 provides that one holding civil service rights may be removed, demoted or suspended by the Commission, but not until a hearing has been held, and only by a majority vote of the Commission, and for certain specified reasons set out in the statute.
Dual functions are delegated to and imposed upon the Commission; first, to protect civil service employees in their jobs or positions as long as they are not guilty of misconduct or failure to perform their duties; and second, and equally, to protect the public from the consequences of the misconduct and neglect of duty of its employees. No civil service employee may be arbitrarily discharged or suspended by his superiors. He has a right of appeal to the Commission, which has power, after a hearing, to set aside or overrule a capricious removal. The Commission is protection and a shield to the civil service employee against an arbitrary or capricious removal.
In the case of Dickey v. Civil Service Commission, 201 Iowa 1135,1139, 205 N.W. 961, 963, where there was no appeal by the civil service employee, this court said:
"Section 5702, Code of 1924, prohibits the arbitrary removal of any person appointed from the civil service list which is furnished by the commission after proper examination of applicants, but authorizes such removal by a majority of such commission, after hearing, for misconduct or failure to perform the duties assigned."
Again in Fetters v. Guth, 221 Iowa 359, 363, 265 N.W. 625, 627, where on appeal from an order of indefinite suspension the Commission after a hearing dismissed the appeal and ordered a final discharge and it was claimed that the Commission had exceeded its jurisdiction by going beyond the appeal, this court on certiorari overruled such contention, saying:
"Without any appeal whatever, the civil service commission, under section 5702 of the Code of 1931, had jurisdiction to try appellee upon the charges and specifications of misconduct filed against him, and discharge him if they were established. Mohr v. Civil Service Commission, 186 Iowa 240, 172 N.W. 278." *Page 328
Also, in Luke v. Civil Service Commission, 225 Iowa 189, 196,197, 279 N.W. 443, 447, it was said:
"In Dickey v. Civil Service Commission, 201 Iowa 1135,205 N.W. 961, no specifications of charges whatever were filed, but in that case this court held that the filing of certain other documents and the adoption of a resolution by the city council, together with a notice sent to the accused to the effect that if misconduct was shown the officer found guilty would be discharged, were held sufficient to give the commission jurisdiction, whether in strict compliance with the statute or not. Mohr v. Civil Service Commission, 186 Iowa 240,172 N.W. 278; Riley v. Crawford, 181 Iowa 1219, 165 N.W. 345; Fronsdahl v. Civil Service Commission, 189 Iowa 1344, 179 N.W. 874."
So we find that this court has consistently said that the Civil Service Commission under section 5702 has original jurisdiction. If the statute should be changed it is for the legislative branch of the government and not the judicial.
[2] The only case cited by the appellant is the recent case of Sandahl v. City of Des Moines, 227 Iowa 1310, 290 N.W. 697, the record in that case clearly showing that the charges filed were prepared and filed by the Civil Service Commission. Reading from page 1313 of 227 Iowa, page 698 of 290 N.W., the court said:
"This record shows, without dispute, that the charges filed against Sandahl were prepared and filed by the Civil Service Commission, the same body that under the statute was to `hear and determine' the case."
In the case at bar, the Civil Service Commission did nothing whatever until the chief of the fire department called the matter to the attention of the Commission and advised the Commission that the appellant had been guilty of misconduct on more than one occasion and was not a fit person to be employed on the department.
The Sandahl case holds that a civil service employee is entitled to a fair and impartial trial, by a tribunal that was open-minded. That the Civil Service Commission cannot both prosecute and fairly try one charged with a violation of the rules. It must be kept in mind that the charges in the Sandahl case were *Page 329
prepared and filed by the Civil Service Commission. In the case at bar the chief of the fire department forwarded to the Civil Service Commission a detailed statement of the conduct of Misbach. In addition to the chief's statement, the Civil Service Commission had before it Misbach's service record, showing his conduct since he entered the fire department. No one, it seems to us, can read the chief's letter and come to any other conclusion other than that the charges against Misbach were so complete and specific that Misbach knew definitely what he was charged with. It was the chief of the fire department who commenced the proceedings before the Civil Service Commission and not the Civil Service Commission itself. Misbach had due notice of the hearing. Many witnesses testified before the Commission. Misbach was given the privilege of appearing and being represented by counsel if he desired. He did not appear, nor did he offer any evidence. There was sufficient evidence to sustain the findings of the Civil Service Commission, and the lower court was right in annulling the writ of certiorari and dismissing the petition. — Affirmed.
HALE, C.J., and SAGER, OLIVER, MILLER, WENNERSTRUM, BLISS, and GARFIELD, JJ., concur.
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07-05-2016
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[1] At the threshold of this case we are met with the contention that the proceedings in this court should be dismissed, under the claim that a writ of certiorari will not lie, for the reason that, under the statute, the decree entered by the contest court is final. We had this question before us in the case of Jones v. Fisher, 156 Iowa 582, 137 N.W. 940, and we there settled the question, under the same fact situation as in this case, that certiorari is the proper remedy.
Under section 12456 of the Code, the scope of questions in this kind of proceedings is limited, so far as the matters involved herein are concerned, to a review of the acts of an inferior tribunal, board, or officer exercising judicial functions who is alleged to have exceeded his proper jurisdiction or otherwise acted illegally, and there is no other plain, speedy, and adequate remedy.
So far as this case is concerned, the only question before the court is whether or not the contest board exceeded its jurisdiction. The basis on which this claim is founded consists, first, in a claim that there was lack of jurisdiction because of certain failure to comply with the statutes in reference to the filing of the statement of contest and a bond; and, second, a claim that there was a lack of jurisdiction because of a want of proper parties.
Under chapter 51 of the Code, referring to contesting election of state officers, we have section 1008, reading as follows:
"The statement as provided in chapter 52 must be filed with such clerk within thirty days from the day when incumbent was declared elected."
Also section 1012, reading as follows:
"In case of contests relative to the office of district judge, such selected members of said court shall meet, qualify, and transact the business of said court of contest at such place or *Page 153
places as they may designate, and in such case, after organizing, may select a clerk other than the one heretofore specified."
Chapter 52 deals with contesting elections of county officers, and among other provisions are section 1024, reading as follows:
"The contestant shall file in the office of the county auditor, within twenty days after the day when the incumbent was declared elected, a written statement of his intention to contest the election, setting forth the name of the contestant, and that he or she is qualified to hold such office, the name of the incumbent, the office contested, the time of the election, and the particular causes of contest, which statement shall be verified by the affidavit of the contestant, or some elector of the county, that the causes set forth are true as he verily believes."
And section 1025, reading as follows:
"The contestant must also file with the county auditor a bond, with security to be approved by said auditor, conditioned to pay all costs in case the election be confirmed, or the statement be dismissed, or the prosecution fail."
Code, section 986, under the general provisions for contesting elections, reads as follows:
"All the provisions of the chapter in relation to contested elections of county officers shall be applicable, as near as may be, to contested elections for other offices, except as herein otherwise provided, and in all cases process and papers may be issued to and served by the sheriff of any county."
The general election for the year 1934 was held on the 6th day of November, and the state board of canvassers met and canvassed the returns on the 3d day of December, 1934. At this election the Republican candidates for district judges for the Eighteenth judicial district were Ellison, Moffit, Ring, and Clark (the contestant). The Democratic candidates were Cash, Mekota, Pew, and Haas (the incumbent). According to the determination of the state board of canvassers, Ellison, Moffit, Ring, and Haas were declared by such board to be elected. On the 24th of November, 1934, the contestant, Clark, filed a statement of his contest against Haas, accompanied with a bond. These two papers were filed with the secretary of state. On the 4th day of December, 1934, the contestant filed *Page 154
with the secretary of state what is denominated in the record as a memorandum of refiling, in the following language:
"Comes now the contestant, Atherton B. Clark, and states that on the 24th day of November, 1934, at the hour of about 10:15 A.M., he filed herein a statement of contest in the above entitled matter in the office of the Secretary of State of the State of Iowa.
"That it now appears that at the time of the filing of said statement of contest as aforesaid the Executive Council of the State of Iowa, sitting as the State Board of Canvassers, had not at that time canvassed the vote cast at the general election held on November 6, 1934.
"That at this time, towit, the 4th day of December, 1934, the State Board of Canvassers has fully completed the canvass of the votes cast for State Officers at the general election of November 6, 1934, and has declared elected Charles J. Haas, against whom this contest is lodged.
"Therefore, the contestant, Atherton B. Clark, hereby refiles his statement of contest filed as aforesaid on November 24, 1934, and each and every allegation thereof with the Secretary of State of the State of Iowa and asks that this memorandum of refiling be made a part of the files and records in this proceeding."
[2] The first question urged on our attention at this point is that, under section 1008 above set out, no statement as therein required was filed within thirty days from the date when the incumbent was declared elected; therefore the contest court had no jurisdiction to hear and determine the contest; in other words, it is contended that the filing made on the 24th day of November was of no force and effect because it was premature, and that the paper known as a memorandum of refiling did not amount to a filing of the statement as required by sections 1008 and 1024.
No authority is cited by either side directly on this question, and the only case that we have been able to find that bears on the same is Broadbent v. Keith, 15 Cal. App. 382, 114 P. 996. California had a statute providing that, in order to institute a contest, a written statement should be filed setting forth certain facts, which statement "must be filed within thirty days after the declaration of the result of the election by the *Page 155
body canvassing the returns thereof." Code Civ. Proc. Cal. section 1115. In that case the canvassing board declared the result of the election on the 16th day of April, 1910. The statement of contest required to be filed was made on the 15th day of April, or one day prior to the official action of the board of canvassers. Later, and within the limits of the statute, the contestant filed what he denominated as an amendment to his complaint, which amendment in itself was such a statement as the law required. The holding of the case was that, although the second statement filed was denominated as an amended complaint, it was sufficient in form and that the first filing might be disregarded.
As applied to the case at bar, in the memorandum filed by Clark on the 4th day of December (which was one day after the official action of the state board of canvassers), he refers to the statement of contest which he had heretofore filed on the 24th day of November, and says that he "refiles his statement * * * and each and every allegation thereof * * * and asks that this memorandum of refiling be made a part of the files and records of this proceeding." We feel that, under the circumstances, the result of this refiling memorandum was, in effect, to make all the allegations of the original statement a part of this memorandum, and this was a sufficient compliance with the requirements of the statute. The real purpose of the filing of this statement is to make of record the objections and complaints that the contestant has, and to make a showing of why the incumbent is not entitled to hold the office to which he has been declared elected.
[3] The sufficiency of the statement thus filed is not a jurisdictional question. This is recognized by reason of the provisions of sections 1033 and 1034 of the Code, which provide for amendments to such contest statements.
[4] The next question raised is as to the filing of the bond. The bond was originally filed on the 24th of November, and the memorandum does not state that the bond is refiled. However, it develops under the fact situation that the bond bears the filing stamp of the clerk of the contest court on the 20th day of December, 1934. It will be noticed that section 1025 states that:
"The contestant must also file * * * a bond, with security *Page 156
* * * conditioned to pay all costs in case the election be confirmed, or the statement be dismissed, or the prosecution fail."
[5] Originally this section and the section preceding it (1024, providing for the filing of the statement of contest) were one section of the Code. We are of the opinion that under these two sections of the Code a bond filed at any time within the thirty-day period is sufficient. As we view it, it is not necessary that the bond accompany the petition at the time it is filed; in other words, we do not think it is compulsory, under this section, that the bond and the statement of contest be filed at the same time, so long as both are filed within the thirty-day period.
Reference is made to the case of Marsh v. Huffman, 199 Iowa 788,792, 202 N.W. 581, 583, an opinion written by the writer hereof. In that case, referring to the statutes of Iowa, we said:
"They require that the contestant, in order to institute proceedings, must file a statement of his contest with the county auditor, accompanied by a bond. When this is done by the contestant, he has completed his duties under the statute."
In the Marsh case the statement of contest and the bond were filed with the auditor at the same time, and the word "accompanied" in the opinion was used as applying to the facts in that case. The question we have here was not raised in that case, and that case is not authority for the rule contended for here by the incumbent. We hold that, if the statement of contest and the bond are both filed within the statutory period of thirty days, that is sufficient compliance with the statute, regardless of whether they are filed on the same day or not. The bond here filed, as above stated, was filed with the clerk of the contest court on the 20th day of December, which was within the thirty-day period, and bears that clerk's indorsement.
In addition to this, the bond bears the following indorsement: "Bond accepted November 24, 1934. Mrs. Alex Miller, Secretary of State, by James O. Green, Deputy."
This bond, of course, in the first instance, was prematurely filed; but we do not think that this is disastrous to the appeal. Many cases have held that the premature filing of a bond will *Page 157
not defeat an appeal. Among others, we note the following: Pierce v. Manning, 1 S.D. 306, 47 N.W. 295; Wores v. Preston, 4 Ariz. 92,77 P. 617; McClellan v. Pyeatt (C.C.A.) 49 F. 259; Stillings v. Porter et al., 22 Kan. 17.
It appears, therefore, from the record that, while the bond was prematurely filed, it was duly accepted by the secretary of state and was approved by the clerk of the contest court within 30 days after the canvassing board had proclaimed the result.
It is also to be noted that the statute specifically provides (section 1009):
"Upon the filing of such statement, the chief justice of the supreme court, * * * shall select the membership of the court to try such contest."
So therefore, under this section, immediately on the filing of the contest with the secretary of state, the chief justice was authorized to and did appoint this court of contest. The bond in controversy was then in the office of the secretary of state and had been officially accepted. It evidently went with the contest papers into the hands of the contest court and was approved by its clerk. As stated above, the bond bore the acceptance thereof by the secretary of state, and the general rule is that the approval required by the statute need not be evidenced by a certificate or endorsement on the bond or undertaking, and, where the bond or undertaking is received and filed without objection by the official designated to approve it, his approval is presumed. 3 Corpus Juris, p. 1175.
On this question our attention is called to the case of Wilson v. Matson, 110 Neb. 630, 194 N.W. 735. In that case there was no bond filed within the time provided by statute, and the court held rightfully that the statutory limitation applied to the bond as well as to the petition of contest, and that the statutory requirement fixing the time within which the bond must be filed was mandatory. This is the only point decided in the case bearing on the question we have before us.
We think that the filing of this bond as above stated was a sufficient compliance with the statute, and it is our conclusion, therefore, as to both of these questions, that the court had jurisdiction.
[6] The other material question in the case, on which the incumbent bases his claim of want of jurisdiction, is that proper *Page 158
parties were not brought into this proceedings, and arises from the following situation:
The Republican ticket, as heretofore stated, had four candidates, and the Democratic ticket had four candidates. Of the four Republican candidates, Clark was the low man, and received fewer votes than any of the other three Republican candidates. Haas was the high man among the Democratic nominees, and received more votes than Clark received; hence the state canvassing board, as between these two men, determined that Haas was duly elected. It is contended by the incumbent that under these conditions, in order properly to institute this kind of a proceedings, it is not sufficient, under section 1024 of the Code heretofore set out, to make one candidate the contestee, but that all four of the successful candidates should be made parties, and, this not having been done, the contest board had no jurisdiction to entertain or proceed with the contest. Logically we can see nothing in this contention. We can conceive of no reason why the unsuccessful candidate cannot contest with the low man among the successful candidates. There is no apparent reason why he cannot concede the election of the three candidates who are the three high men on the successful ticket and carry on his contest against the low man on the successful ticket. It is argued, however, that because the statute, in sections 1024 and 1028, providing for notice, uses the word "incumbent" in the singular form, and because there are four incumbents, they ought all to be made parties defendant. We do not believe this to be the rule. It is true that 20 C.J. p. 223, lays down the rule contended for by the relator. As authority for that rule two cases are cited, Conway v. Sexton, 243 Ill. 59, 90 N.E. 203, and Lyons v. Becker,272 Ill. 333, 111 N.E. 980.
In the Lyons case, the contest was over an election of commissioners, under a commission form of government, and the single question decided was whether or not the men, who had all been elected at the same time, had the right to pass upon the contest of their own offices, and thus be judges of their own elections. This was the only question decided.
In the Conway case five trustees of a drainage district were to be elected. In the contest proceedings the five who were declared elected were named as parties defendant, and the relief asked was against each and all of the five who were declared *Page 159
elected. When the notice of the contest was served, only three of those who were declared elected were served with notice, and the court held that, as the contest was against each of the five, the notice must be served on each of them, which was a correct holding.
In a later case in the same court (Wells v. Robertson, 277 Ill. 534,115 N.E. 654, 657), there was a contest over the office of judge of the municipal court of Chicago. There were ten offices to be filled, and there were four tickets — Progressive, Socialist, Democratic, and Republican — and each ticket bore the names of ten candidates. Wells, who was an unsuccessful candidate, in the first instance filed a contest against all of the candidates elected except Robertson. Donahoe, an unsuccessful candidate, filed an answer to that petition. Later Donahoe filed a cross-petition against one Heap, in which Heap was made sole defendant. The original proceedings seem to have passed out of the picture, because the case is disposed of wholly on the cross-petition and the answer of Heap; and the sole question in the case is whether or not, in Donahoe's contesting cross-petition, all the other parties interested should have been made defendants. The court there said:
"If the demurrer be carried back to the cross-petition, said cross-petition was not demurrable because other candidates in said election were not made parties thereto, as argued by appellant. Both the cross-petition and the answer of appellee to the original petition show that it was unnecessary to make any other candidates parties, because they disclose, and in fact it is asserted in both of them, that the true votes were certified and canvassed and tabulated by the canvassing board. There was only one question presented, so far as disclosed by the pleadings, for the court to determine, and that is whether appellant was elected or appellee, who is now holding the office, and the only one holding the office whose right thereto is questioned. It was not necessary to make other candidates parties" — citing Brents v. Smith, 250 Ill. 521, 95 N.E. 484, and Mayfield v. Miles, 266 Ill. 186, 107 N.E. 152, both Illinois cases.
The Mayfield case, 266 Ill. 186, 107 N.E. 152, decided subsequently to the Conway case, 243 Ill. 59, 90 N.E. 203, says, in substance, that a candidate for public office, who according to the official canvass receives the least number of votes among *Page 160
three candidates and does not make any claim to the office, is not a necessary party to an election contest between the other two candidates.
In the Brents case, 250 Ill. 521, 95 N.E. 484, 487, the canvass showed that Smith (the Republican candidate) had a majority of three over Brents (the Democratic candidate). Each of these candidates had over 3,200 votes. Hart (the Socialist candidate) had 172 votes, and Bickerdike (the Prohibition candidate) had 100 votes. Brents instituted a contest against Smith, but did not make Hart and Bickerdike parties. It was claimed that, under the Conway case, supra, the petition should be dismissed because Hart and Bickerdike were not made parties. The court said:
"* * * it would be most unreasonable to believe that one of them [Hart or Bickerdike] could gain enough on a recount to entitle him to be declared elected. The result of the contest proved that fact. In the Conway v. Sexton case the pleadings did not show, and in the light of the facts in that case could not honestly show, that the candidates who were not made parties might not on the recount have been necessary parties."
Reference is also made in the brief to the case of Craft v. Davidson, 189 Ky. 378, 224 S.W. 1082. In that case the question decided, and the only question decided, was whether the city council or the circuit court of appeals had jurisdiction over a contest between the members of the city council. This in no way involves the question here under consideration, and whatever is said in that opinion, as well as what is said in the Conway case, is purely dictum.
By selecting the low man of those elected with whom to contest, the contestant, by his failure to make the other three high men parties to the contest, concedes that the three high men received enough votes to elect them under any circumstances; and it necessarily follows that, if on a recount he got more votes than any one of the three high men, Haas could not be elected under such circumstances. So the determining question and the only question in which Haas could be interested, is whether or not Clark got more votes than he (Haas) got. There were four offices to fill, and if Clark got more votes than Haas, he (Clark) would be entitled to the election certificate; and neither Clark nor Haas, nor any of the three high men, is interested in *Page 161
any other question than, as between Clark and Haas, which one got the larger number of legal votes. This being true, we cannot see where either of the three high men who were declared elected can in any way be affected by the determination of this question between Clark and Haas.
[7] Aside from this, we have doubts as to whether or not the failure to make the proper parties defendants is jurisdictional.
Code, section 1032, provides that:
"The proceedings [in this kind of a matter] shall be assimilated to those in an action, so far as practicable, but shall be under the control and direction of the court, which shall have all the powers of the district court necessary to the right hearing and determination of the matter, * * *."
Section 10981 provides that:
"The court may determine any controversy between parties before it, when it can be done without prejudice to the rights of others, or by saving their rights; but when a determination of the controversy between the parties before the court cannot be made without the presence of other parties, it must order them to be brought in."
If we assimilate the procedure in this case, as provided by the above statutes, to the ordinary action, then under the last section above quoted, the remedy, if there were not proper parties, would not be to dismiss the action for want of proper parties, but to ask the court to make an order bringing in such parties as it is claimed are necessary; and, where such situation exists, the court still has jurisdiction of the parties before it, and therefore the contention is not well taken that there was a lack of jurisdiction for want of proper parties.
We reach the conclusion that, as said in the Wells case, supra:
"There was only one question presented, so far as disclosed by the pleadings, for the court to determine, and that is whether appellant was elected or appellee, who is now holding the office, and the only one holding the office whose right thereto is questioned. It was not necessary to make other candidates parties."
We conclude, therefore, as a summary of the whole case, *Page 162
that the contest court did have jurisdiction to hear and determine this contest. This being the only real question involved under this writ, it must follow that the writ should be annulled.
That this opinion may not be misunderstood, it is limited to the identical record we have before us, and is not a rule or guide for a different situation, where, for instance, the contest is made against some candidate or candidates elected other than the one who received the smallest number of votes. — Writ annulled.
DONEGAN, C.J., and ANDERSON, MITCHELL, KINTZINGER, and HAMILTON, JJ., concur.
RICHARDS and PARSONS, JJ., dissent.
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Court of Appeals
of the State of Georgia
ATLANTA,____________________
March 28, 2018
The Court of Appeals hereby passes the following order:
A18D0296. ANTONIO D. JONES SR. v. THE STATE.
On January 26, 2018, we granted Antonio D. Jones, Sr.’s application for
discretionary appeal from the trial court’s order denying his “Motion for an Out of
Time Appeal.” Our order required Jones to file a notice of appeal in the trial court
within ten days of its entry. See OCGA § 5-6-35 (g). On February 12, 2018, Jones
filed a “Notice of Written Objection” asking this Court to vacate its order. Jones
argues that he was unable to comply with our order because it was not sent until four
days after it was entered. As an exhibit, Jones attached a copy of the envelope that
included the January 26, 2018 order which shows that the envelope was stamped with
postage on January 30, 2018 (four days after this Court entered the order).
Accordingly, this Court VACATES its January 26, 2018 order and RE-
ENTERS that order GRANTING Jones’s application for discretionary appeal under
OCGA § 5-6-35 (j). See generally Western Electric Co. v. Capes, 164 Ga. App. 353,
354 (1) (296 SE2d 381) (1982) (denying appellee’s motion to dismiss appeal where
Court vacated and re-entered an order granting an application for interlocutory appeal
because clerk of court sent the original order to wrong address and notice of appeal
was filed within ten days of the re-entered order). He shall have ten days from the
date of this order to file a notice of appeal with the trial court. If, however, he has
already filed a notice of appeal, he need not file a second notice.
The clerk of the trial court is DIRECTED to include a copy of this order in the
record transmitted to the Court of Appeals.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____________________
03/28/2018
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.
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On the 1st day of February, 1920, J.E. Johnson executed and delivered to the defendant, Wm. Kilpatrick, a promissory note for $5,000.00. Later Kilpatrick transferred said note to the plaintiff and indorsed the same, and the plaintiff is now seeking to recover on this note against Kilpatrick on said indorsement.
On the face of the note appears the following memorandum:
"$5000.00 4.85 Protest ----------- $5004.85 Protested for Non Payment W.R. Springer, Notary Public."
Substituted pleadings were filed by both parties on October 29, 1929. The offered evidence in the case related to events in August 1920 when the note became due by its terms. As against Kilpatrick, the plaintiff pleaded a legal demand and protest of the note and notice of dishonor to the endorser. These *Page 808
allegations were put in issue by defendant's general denial. This issue became decisive under the rulings of the district court. The questions presented to us are whether the offers of proof made by the plaintiff were sufficient to sustain the allegations of the petition in relation to protest and dishonor.
We have set forth above a memorandum appearing upon the face of the note referring to the protest thereof. The plaintiff was not able to produce any notarial certificate, nor any notarial record on the subject of protest and notice. His offers of proof in various forms were rejected and the alleged errors presented for our consideration are predicated upon such ruling.
The plaintiff testified to having purchased the note from his son on February 2, 1920. He testified also that prior to August 1, 1920, he sent the note through a certain bank to the Oskaloosa Savings Bank for the purpose of collection; and that the note was returned to him a few days later and certain notarial papers were attached thereto; that such papers had been lost and he was unable to produce them. The plaintiff offered to prove by himself the contents of the assumed notarial certificate, and such offer was refused. Other similar offers were made with other witnesses. Preliminary to a consideration of the questions presented, we set forth herein the various sections of our statute on the subject matter involved:
"9531. Presentment — instrument payable and not payable on demand. Where the instrument is not payable on demand, presentment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof."
"9532. What constitutes a sufficient presentment. Presentment for payment, to be sufficient, must be made:
"1. By the holder, or by some person authorized to receive payment on his behalf.
"2. At a reasonable hour on a business day.
"3. At a proper place as herein defined.
"4. To the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made." *Page 809
"9533. Place of presentment. Presentment for payment is made at the proper place:
"1. Where a place of payment is specified in the instrument and it is there presented.
"2. Where no place of payment is specified and the address of the person to make payment is given in the instrument and it is there presented.
"3. Where no place of payment is specified and no address is given and the instrument is presented at the usual place of business or residence of the person to make payment.
"4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence."
"9534. Instrument must be exhibited. The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it."
"9535. Presentment where instrument payable at bank. Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the person to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient."
"9550. To whom notice of dishonor must be given. Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged."
"9552. Notice given by agent. Notice of dishonor may be given by an agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not."
"9557. Form of notice. The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument and indicate that it has been dishonored by nonacceptance or nonpayment. It may in all cases be given by delivering it personally or through the mails."
"1208. Record to be kept. Every notary public is required to keep a true record of all notices given or sent by him, with *Page 810
the time and manner in which the same were given or sent, and the names of all the parties to whom the same were given or sent, with a copy of the instrument in relation to which the notice is served, and of the notice itself."
"11284. Notarial certificate of protest. The usual protest of a notary public, without proof of his signature or notarial seal, is prima facie evidence of what it recites concerning the dishonor, and notice thereof, of a bill of exchange or promissory note, and a copy from his record, properly certified by him, shall receive such faith and credit as it is entitled to by the law and custom of merchants."
It will be noted from the foregoing that the protest of a negotiable note may be proven like any other fact, by any evidence, written or oral, admissible under common law rules. Such protest may also be proved, and more conveniently, by special statutory evidence consisting of the notarial certificate attested by the signature and seal of the notary. As an alternative to this latter method, the statute also provides for a certified copy of the notarial record duly attested by the notary.
I. The plaintiff did not produce herein any notarial certificate, nor certified copy of a notarial record. He attempted to prove by oral evidence, the alleged contents of a notarial certificate of protest, which was alleged to be lost. He offered to prove such contents first by the plaintiff and by his son, E.J. Frank, neither of whom had anything to do with or had any personal knowledge of, the alleged process of protest; and second by Springer, the notary whose signature appeared in the memorandum upon the face or margin of the note. This evidence was rejected by the court as inadmissible. The novel question is presented whether the contents of a purported notarial certificate, proved if at all by secondary evidence, will constitute the legal equivalent of the certificate itself or of the certified copy of the notarial record thereof. In 8 C.J. Section 1353 authority is cited to the following proposition:
"* * * the facts in a protest of a note cannot be proved by showing that a notarial certificate stating those facts has existed and has been lost, since the statute creates a species of evidence unknown to the common law; and where it cannot be produced, proof of the facts must be made in the usual manner." *Page 811
See Dutchess County Bank v. Ibbotson, 5 Den. (N.Y.) 110.
The question is one which could hardly arise in ordinary transactions of protest. An extraordinary feature of the case before us is that more than nine years had expired since the act of alleged protest before the date of proof arrived. In the meantime the Oskaloosa Savings Bank, of which the notary was assistant cashier, had gone out of business and had burned its records, including the notarial record, and the plaintiff claims to have lost the original notarial protest. Is it available to him to reconstruct the contents of the body of the notarial certificate and to dispense with sanction of the notarial certificate and seal? If so, by what authority?
The notarial protest with its recitals does not constitute a contract or obligation binding upon the parties as such. If it did, its contents would be provable by secondary evidence upon a proper showing of ground therefor. In the absence of the particular statute such notarial certificate would not be admissible. Under the statute such certificate is self-proving as to the signature and seal of the notary. It is accepted under the statute as prima facie evidence of the facts therein recited. Such facts may be supported or refuted by other evidence, either written or oral. Inasmuch as the admissibility of the certificate or certified copy rests solely upon statutory permission, we see no logical ground for saying that an uncertified copy may be introduced without sanction of statute. The solemnity of the instrument is provided by the notarial signature and seal made at the time of the protest. The solemnity of the certified copy is likewise provided. Behind these is the official record. These sanctions afford a large protection to the continuing integrity of the instrument. Its contents are thereby protected against mutilation by the imperfect memory of an honest witness or by the perjury of a dishonest one. Where signature and seal and record become lost, these sanctions are likewise lost. Seal and signature constitute the very essence of the instrument as a statutory instrument of evidence. The plaintiff still has his alternative to prove the fact of protest by other legal evidence. But the statute gives him no alternative to prove the recitals of the notarial certificate other than the seal and signature of the notary. In the absence of these, the recitals do not become prima facie evidence. The existence of the notarial certificate *Page 812
is not essential to the proof of protest. It is, however, a statutory method of convenience. If the certificate be lost, the convenience is lost. The fact of protest, if such, still remains and may be proved by other appropriate evidence. Such evidence, however, must be directed to proof of the fact of protest and not to the contents of the lost certificate. And such is the objective of all the evidence whether proved by certificate or proved orally. Such objective is not changed by the loss of the certificate. The burden still rests upon the plaintiff to prove the protest by other legal evidence. He is under no obligation to prove the contents of the lost certificate; nor does it avail him if he does prove the same. In the absence of notarial signature and seal the statute loses its application and leaves the plaintiff to his other sources of legal proof.
The court did not err in rejecting oral evidence of the contents of the alleged certificate for the purpose of provingdemand and refusal of payment.
Whether such contents could be shown for the purpose of provingnotice of protest is a different question and we have no occasion to consider it at this point. If it appeared that notice of protest to the endorser was given by delivering to him a duplicate certificate of protest, then there would be plausible reason for saying that the contents of such certificate, when lost, might be proved by secondary evidence. We do not now pass upon it.
II. The plaintiff attempted to prove the fact of due protest by the oral testimony of the notary, W.R. Springer, who is the notary who is alleged to have protested this instrument. Springer was the assistant cashier in the bank to which plaintiff sent this note for collection, and if the same was ever protested, it was by Springer, who was a notary public. By reference to the copy of the note heretofore set out it will be seen that on the face thereof there were some figures and the words "Protested for Nonpayment. W.R. Springer, Notary Public." This indorsement seems to have been written in red ink and Springer identifies the figures and writing as his handwriting and his signature. He was asked to state what he had done with reference to the protesting of the note. Objection was made that this question called for the opinion and conclusion of the witness, no evidence that the witness had any recollection *Page 813
of the transaction, or knew what was done nine years before, and not the best evidence. He was then asked to give the form of the notice and the form of certificate he made at the time he says he protested the note for nonpayment. The same objection was made to this question. He was then asked if he could give the form of certificate that was made by him or the substance. A like objection was made to this question. All of these objections were sustained and the plaintiff excepted.
The plaintiff then offered to show by the witness, in response to the question, that he made the following certificate of protest to this note. A like objection was made and sustained. Defendant's counsel then, on permission of the court, asked the witness if he had any recollection at this time as to what he did with reference to this matter as a matter of his own knowledge and recollection at that time. The witness answered: "Only that it is my signature." "Q. That is all you know about it? A. Yes." The witness was then asked to refresh his recollection from his signature and of the "protest on the face of the note" and to state whether he had made a demand on Johnson for the payment of the note. Objection was made to the question and the same was sustained. The plaintiff then offered to show in response to this question that the witness would testify that he made a demand on J.E. Johnson on August 2, 1920. Objection was made to this offer and sustained. The witness was then asked: "Well, Mr. Springer, from refreshing your recollection from your signature and the protest can you tell what you did in protesting that note?" Objection was made to this question and sustained. Plaintiff then made the following entry "to show that in response to this question the witness can testify and would testify as to what he did when protesting this note was he made demand on J.E. Johnson, and that J.E. Johnson refused payment and same demand was made on the Peoples Trust Savings Bank at which bank the note was payable and payment was refused, that he served and mailed to Wm. Kilpatrick on the 2d day of August, 1920, a notice of protest and failure to pay on said note by J.E. Johnson, that he mailed said notice in the postoffice at Oskaloosa, Iowa, in a stamped envelope addressed to Wm. Kilpatrick, Oskaloosa, Iowa. And that he also served notice of protest on the Peoples Trust Savings Bank in the same manner and upon E.J. Frank and *Page 814
the Iowa National Bank, and that same was done on the 2d day of August, 1920, the 1st of August being on Sunday."
When this offer was made, the defendant objected that the evidence showed affirmatively that the witness was not competent to make the proof contained in the offer, witness having repeatedly testified that he had no recollection of what was done in this matter and could not so testify at this time. This objection was sustained.
We are of the opinion that the court erred. After having refreshed his recollection from the entries he made on the note, the witness could then testify that he did the things necessary to perfect a protest of this note so as to bind Wm. Kilpatrick, and he should have been permitted to so testify. The offer was that the witness "would testify as to what he did when protesting this note" etc. We feel that the court erred in refusing to permit the witness to give the testimony thus offered, and had such testimony been admitted supporting the offer it would have made a case for the jury; hence there was prejudicial error in rejecting it. — Reversed.
FAVILLE, C.J., and STEVENS, GRIMM, MORLING, and KINDIG, JJ., concur.
WAGNER and De GRAFF took no part.
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Certain facts are not in dispute. It thus appears that, on January 14, 1914, the parties entered into a written contract for the purchase by the plaintiff from the defendant of a farm for an expressed consideration of $25,500. The land 1. PLEADING: was described in the contract as the fractional Construc- northwest quarter of a designated section, tion: "containing 150.46 acres according to the U.S. multifarious government survey be the same more or less." On theories in June 17, 1915, pursuant to this contract, the one count. defendant executed and delivered to plaintiff his warranty deed, in which the land was described as it was in the contract. The plaintiff paid $3,000 of the purchase price in cash, and gave a mortgage on the land to secure the balance, of $22,500, which mortgage is still held by the defendant. Interest has been paid on the mortgage, but none of the principal has been paid. A survey of the land in 1923 disclosed the fact that the tract described contained but 124.9 acres. In August, 1924, the plaintiff commenced this action, to recover for the shortage in the acreage of the land.
It is fairly established by the evidence that the sale was by the acre, and was of 150 acres, at $170 per acre, not counting the fraction of an acre mentioned in the contract and deed.
The defendant pleaded the bar of the statute of limitations applicable to actions founded on fraud and all actions not otherwise provided for, and alleged that the cause of action did not accrue within five years before the commencement of the action. In reply, the plaintiff alleged that the defendant had been a non-resident of the state for a sufficient length of time to toll the pleaded statute of limitations.
The petition was in two counts. The second count, alleging fraud in the sale of the land, was admittedly not sustained by the proof, and requires no consideration.
The appellant contends that the first count of his petition *Page 882
set up a cause of action founded on the written contract for the sale of 150 acres of land, as embodied in the deed, and that it would, therefore, be barred only at the expiration of ten years. Paragraph 6, Section 11007, Code of 1924. Appellee insists that this count of the petition stated a cause of action grounded upon mutual mistake, and that the action was barred at the expiration of five years from the time the mistake was, or should have been, discovered. Paragraph 5, Section 11007. If appellant's contention at this point be sustained, it will be unnecessary to consider questions presented by the pleaded defense of the 5-year statute of limitations, and matters relied upon by appellant to toll that statute.
The first count of the petition pleaded a purchase of the land by the acre and the execution and delivery of the contract and deed, copies of which were set out, and alleged payment for the land, as above stated, and that plaintiff relied upon the belief that the tract contained 150.46 acres. It was further alleged that, "as a matter of fact, there was a mutual mistake on the part of plaintiff and defendant as to the number of acres contained in said premises," and that the actual number of acres was only 124.9, which fact plaintiff did not discover until recently. The prayer of the petition was for judgment for the total amount claimed, or judgment for the excess interest paid and interest thereon, and credit on the mortgage for $170 per acre for each acre the land was short of 150 acres, and that the mortgage be corrected and reformed to show such credit, and for general equitable relief.
In Gardner v. Kiburz, 184 Iowa 1268, where the deed was of several tracts, each described as containing a stated number of acres "more or less," or "more or less according to government survey," we said:
"The deed made by the defendants * * * conveys and warrants a 2. VENDOR AND farm of 500 acres; * * * more or less. This PURCHASER: warranty was not merely of the defendants' performance title, or their right to convey, but, subject of contract: only to slight and unimportant inaccuracies, it acreage: constitutes at least a representation, if not a representa- warranty, on which the buyer may rely, as a near tions in approximation to the actual quantity of land. In deed: other words, while not a warranty of `the effect. precise quantity of land, it does import that the *Page 883
actual quantity is a near approximate to that mentioned' * * * and if there be more than a reasonable deficiency, there is a breach of such covenant."
See, also, Kitzman v. Carl, 133 Iowa 340; Prenosil v. Pelton,186 Iowa 1235.
If the tract actually conveyed was less in area than the deed stated it to be in such a substantial amount that it was not a near approximation to the acreage covenanted for, there was a breach of the covenant.
The petition alleged the execution and delivery of the deed, and set out its terms. The breach of the covenant and the resulting damages were alleged. Nothing more was required to state a cause of action for the breach of the written contract found in the deed.
The allegation of mutual mistake as to the number of acres in the tract was wholly unnecessary to a statement of such a cause of action, and was merely incidental to it. Union Ice Co. v.Doyle, 6 Cal. App. 284 (92 P. 112); Banks v. Stockton, 149 Cal. 599
(87 P. 83); Yancey v. Tatlock, 93 Iowa 386. The same thing is true of the prayer for reformation of the mortgage. A recovery of the damages arising from the breach of the contract, or the abatement of the purchase price by a credit on the mortgage of the amount by which, by reason of the shortage in acreage, it was excessive, and a recovery of the excessive interest paid, would afford full relief. With the mortgage debt so reduced, a reformation, strictly speaking, of the mortgage would be unnecessary.
In Sims v. Miller, 151 Ark. 377 (236 S.W. 828), the court, in holding that the action was upon a written contract, notwithstanding that an account was set up, and that a 5-year statute of limitations was applicable, and not a 3-year statute, said that the account was a mere specification of the items, and that a party was bound by his pleadings in designating the particular right of action declared upon, and was entitled to the protection afforded by the statute of limitations applicable to the cause of action declared upon, if the facts justified it.
We held, in Russell Co. v. Polk County Abst. Co., 87 Iowa 233, that, although an act was alleged to have been negligently done, if the duty arose under contract, the statute of limitations applicable to actions founded on contract governed. *Page 884
It is said in Corpus Juris that the statute of limitation with respect to relief on the ground of fraud or mistake does not apply where the relief on the ground of mistake is merely incidental to, or involved in, another and real cause of action. 37 Corpus Juris 794.
We are of the opinion that the first count of the petition stated a cause of action founded upon a written contract, and that the action thereon was not barred short of ten years following its accrual on the date of the deed. Yancey v. Tatlock,
supra; Mitchell v. Kepler, 75 Iowa 207.
The facts of the case do not present a situation calling for the application of the doctrine of laches. The appellee has been in no manner prejudiced by the delay. Gray v. La Plant, 183 Iowa 844; McNair v. Sockriter, 199 Iowa 1176.
Under the evidence, the plaintiff was clearly entitled to have credited on the mortgage the sum of $4,267, being $170 per acre for the 25.1 acres the tract was short, and to recover the interest paid on that amount of the mortgage debt, with interest thereon. The cause is reversed and remanded for decree in accordance with this opinion. — Reversed and remanded.
De GRAFF, C.J., and STEVENS and FAVILLE, JJ., concur.
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DISSENT: Stiger and Miller, JJ.
Action at law by Fred W. Olson to recover upon a $1,000 policy insuring the life of Frank C. Olson. The application and physical examination of decedent were made December 20, 1938, the policy was issued December 29, 1938, and the assured died May 25, 1939. Defendant set up as an affirmative defense fraud based upon answers to certain questions in decedent's application: (a) Have you ever consulted a physician or suffered from any ailment or disease of the heart, blood vessels or lungs? No. (b) Have you ever consulted a physician for any other ailment or disease? No. (c) What physicians have you consulted or been examined or treated by within the past five years? None. Defendant alleged insured was then suffering from pulmonary tuberculosis and had consulted Dr. McCreery, on November 8, 1938, giving the doctor a history indicating tuberculosis and was advised to have tuberculosis tests made. Defendant also alleged that applicant gave the cause of the death of his father and mother as pneumonia and that the cause of the death of each was pulmonary tuberculosis. It was further alleged that each of said answers was falsely made with intent to deceive the examining physician and the insurance company and did so deceive them and did cause the physician to issue a report to the company declaring the applicant to be a fit subject for insurance, and that, had the physician known of the falsity of said answers, he would not have so declared and the company would not have issued said policy.
In November, applicant had gone to Dr. McCreery's office complaining of weakness, loss of weight, a cough and dizziness. He had some temperature, high pulse and a stethoscopic examination disclosed bubbling sounds in the lungs. The doctor gave him some medicine to relieve temperature and cough. "It is my opinion I told him to come back for a more thorough examination. I do not have a definite recollection at this time. I may not have done so. Those symptoms are found in pneumonia, tuberculosis and other diseases. They could be present in many cases. They are common in flu. Either decedent or his brother mentioned tuberculosis in connection with the parents. I am not positive which one but the statement was made and written down in my record that the parents died of pulmonary tuberculosis."
Dr. Mueller testified that in the summer of 1938 applicant *Page 1076
came to his office for a minor ailment and that in December 1938 he examined applicant for the life insurance company. Applicant told the doctor he was too young to know what his parents died of or know anything about the cause of their death, and the agent for defendant gave the doctor a slip of paper upon which was written information that answered the questions as to the ages of the parents, causes of death and how long ill, which the doctor copied into the application. In the latter part of January 1939, Dr. Mueller again examined and treated assured. At that time the doctor found no tuberculosis. His diagnosis was a leukemic condition, which has no connection with tuberculosis and which could very well have developed subsequent to the physical examination in December. Acute leukemia is invariably fatal within a few months.
At the conclusion of the evidence the court sustained plaintiff's motion for directed verdict and later overruled defendant's motion for new trial. Defendant has appealed.
[1] I. At the outset we are met with appellee's motion to dismiss the appeal for that the abstract of record fails to show the entry of judgment against appellant. As to the judgment itself this motion appears well founded. Deal v. Marten, 214 Iowa 769, 240 N.W. 686; Harmon v. Hutchinson Ice Cream Co., 215 Iowa 1238, 247 N.W. 623; Lotz v. United Food Markets, Inc., 225 Iowa 1397, 283 N.W. 99. But the appeal was also from the motion denying a new trial, the entry of which is shown by the abstract, and is effective as to questions properly raised by said motion.
Appellee's motion to dismiss is also founded upon appellant's failure to properly assign errors as required by Rule 30 of this court. Division I of appellant's brief consists of an omnibus assignment of all the alleged errors in excluding evidence. The form of presentation adopted may have been logical and convenient from the standpoint of appellant, but it does not comply with Rule 30 in various respects. However, in view of the brevity of the record, we have concluded to consider the errors grouped in said division.
[2] II. Appellant complains that the court refused to permit Dr. Mueller to state what he would have done if the applicant *Page 1077
had correctly revealed his medical history of loss of weight and dizziness. The question, as asked, was somewhat different than the foregoing. It called for an answer by the doctor as an X-ray expert, although Dr. Mueller had testified in substance that he was not an X-ray expert. In any event there was no showing or attempted showing as to what the answer would have been. Consequently, no reviewable error is presented. Mitchell v. Automobile Underwriters, 225 Iowa 906, 281 N.W. 832.
[3] III. The court excluded a purported photostatic copy of a proof of the death of assured furnished defendant by Dr. Mueller. No attempt was made to excuse the nonproduction of the original, and appellant does not seriously deny that, under the best evidence rule, the photostat was not competent. We think the objection covered this point and was properly sustained. Perhaps it should be noted that the doctor testified his statements in said proof as to the cause of death were not based upon his own personal knowledge.
[4] IV. In division II of the brief appellant complains that the record generated a fact question for the jury and that the court erred in sustaining appellee's motion for directed verdict. Before considering this question we will refer to some of the legal propositions involved. Section 8770, Code of Iowa, 1939, provides that in any case where a medical examiner or physician of any life insurance company shall issue a certificate of health or declare the applicant a fit subject for insurance, or so report to the company, it shall be thereby estopped from setting up the defense that the assured was not in the condition of health required by the policy, unless the same was procured by or through the fraud or deceit of the assured. This section is applicable to the case at bar. Faber v. New York Life Ins. Co.,221 Iowa 740, 265 N.W. 305; Boulting v. New York Life Ins. Co.,182 Iowa 797, 166 N.W. 278. To establish the affirmative defense of fraud required by this section the proof must be clear, satisfactory and convincing and must show (1) a material representation of an existing fact, (2) its falsity, (3) scienter, (4) intent that it be relied upon, (5) that the examining physician relied and acted thereon, and (6) that the company was thereby defrauded. Ley v. Metropolitan Life Ins. *Page 1078
Co., of New York, 120 Iowa 203, 94 N.W. 568; Bohen v. North American Life Ins. Co., 188 Iowa 1349, 177 N.W. 706. The estoppel operates against the insurance company unless the certificate of the examining physician was procured by or through such fraud. Foy v. Metropolitan Life Ins. Co. of New York, 220 Iowa 628, 634, 263 N.W. 14, 17; Stewart v. Equitable Mutual Life Assn., 110 Iowa 528, 533, 81 N.W. 782, 783; Weimer v. Economic Life Assn.,108 Iowa 451, 79 N.W. 123; Peterson v. Des Moines Life Assn.,115 Iowa 668, 671, 87 N.W. 397, 398; Boos v. Mutual Life Ins. Co.,205 Iowa 653, 216 N.W. 50; Mickel v. Mutual Life Ins. Co.,204 Iowa 1266, 1270, 213 N.W. 765, 767.
[5] The answer alleged assured was suffering from pulmonary tuberculosis at the time he applied for and secured the policy. There is no competent evidence to substantiate this contention or to indicate that appellant was not then in good health. Dr. McCreery did not testify assured had tuberculosis or any other serious ailment. Nor did the examining physician find evidence of tuberculosis in his original examination or later when he attended assured. His later examination disclosed assured was then suffering with acute leukemia, which probably had developed subsequent to the former physical examination. That disease, which is invariably fatal within a few months, has no connection with tuberculosis.
[6] It was also alleged that decedent gave the death of his parents as pneumonia and that the cause of the death of each was pulmonary tuberculosis. The sufficiency of the proof of the cause of the deaths of the parents is questionable. Moreover, the record is clear that applicant told the examining doctor that when his parents died he was too young to know anything about the cause of their deaths and this particular information was secured by the doctor from a slip of paper handed him by an agent for defendant. We do not think these circumstances constitute substantial proof that the certificate of health was procured by fraud of the applicant. The information was only hearsay and opinion concerning occurrences many years ago of which the doctor knew applicant had no personal knowledge. Refusal to submit this question to the jury was not error. Teeple v. Fraternal Bankers Reserve Soc., 179 Iowa 65, 161 N.W. 102, L.R.A. 1917C 858. *Page 1079
[7] Another allegation of the answer was that the application fraudulently stated applicant had consulted no doctor within five years. Concededly he had on one occasion walked into the office of Dr. McCreery, who examined him, gave him medicine for cough and temperature and may have suggested his return for further examination. Applicant's ailment appears to have been merely a temporary indisposition from which he shortly recovered. He did not again consult Dr. McCreery, and apparently no ailment existed at the time of his physical examination for the insurance. Coincidentally applicant had shortly prior thereto been treated by the examining physician himself for an injured hand. The examining doctor testified: "I did not consider it of sufficient importance to write in the report. I don't remember recalling it at the time." See Sargent v. Modern Brotherhood of America,148 Iowa 600, 609, 127 N.W. 52, 55.
We have repeatedly held that the provisions of Code section 8770 apply to answers made by the applicant concerning his health or medical history. Ley v. Metropolitan Life Ins. Co. of New York, 120 Iowa 203, 210, 94 N.W. 568, 570.
In Peterson v. Des Moines Life Assn., 115 Iowa 668, 671, 672, 87 N.W. 397, 398, 399, we said:
"There may, no doubt, be warranties as to other matters not relating to the health of the assured, — such as his place of residence or occupation, — breach of which will avoid the policy notwithstanding the statute; * * *. Statements as to previous sickness, treatment, accident, etc., bear only upon the health and physical condition at the time the company is asked to accept the risk, * * *. * * * the estoppel relates to all matters inquired about so far as they bear on the health and physical condition of the applicant as affecting the risk, whether they refer to the time the policy is issued or to some previous time; * * *."
See also Stewart v. Equitable Mutual Life Assn., supra; Weimer v. Economic Life Assn., supra; Boulting v. New York Life Ins. Co., supra.
In the case at bar appellant plead that the examining doctor relied upon and was deceived by the alleged false and fraudulent statements. However, pleading that the doctor's report was secured by fraud practiced upon him was not sufficient to establish *Page 1080
the defense. Appellant was also required to prove the doctor relied upon it. Brown v. Modern Woodmen of America, 115 Iowa 450, 88 N.W. 965. In Boos v. Mutual Life Ins. Co., 205 Iowa 653, 655, 216 N.W. 50, 51, the court said:
"* * * Was he mislead and deceived thereby and induced to issue a certificate of health, when, had he been apprised of the facts, he would not have done so? This question must be answered by the testimony of the physician himself."
In the cited case there was some evidence that had the answers been true the examining physician would have recommended the applicant for insurance, with reservations. Under the record in that case the question was for the jury. But in the case at bar the doctor, who was a witness for appellant, gave no testimony which would warrant any inference that he relied upon or was deceived by applicant's allegedly fraudulent answers. Because of the absence of such proof no jury question was here generated. Roe v. National Life Ins. Assn., 137 Iowa 696, 702, 115 N.W. 500, 502, 17 L.R.A., N.S., 1144; Wood v. Farmers Life Assn., 121 Iowa 44, 46, 95 N.W. 226, 227.
[8] V. Appellant plead that the statements of applicant deceived not only the examining physician but also the insurance company and sought to prove that a member of its medical board, who examined the application, recommended its approval in reliance upon said alleged false and fraudulent statements and that had the answers not been false this board would not have approved the application and the policy would not have been written. Error is predicated upon the exclusion of this evidence.
We have already held that the court properly directed a verdict for failure of proof of the elements essential to show that the certificate of the examining physician was procured through fraud. With the record in this condition the court properly excluded the evidence proffered to prove that the home office also relied upon and acted upon said alleged fraudulent statements. Wood v. Farmers Life Assn., 121 Iowa 44, 95 N.W. 226. In that case we held that to permit the invalidation of a policy upon such proof alone would destroy the effect of the statute because the company could, in every case, contend that *Page 1081
the policy was fraudulently procured from it by false statements in the application which deceived the home office and thus avoid the statutory provision by which it is estopped from setting up the defense that the assured was not in the condition of health required by the policy unless the certificate of the examining physician was procured by fraud.
[9] VI. Objections were sustained to certain other questions in the deposition of said member of the medical board which had been taken prior to the trial. Without detailed discussion it may be said these questions were largely based upon an assumed state of facts not in accord with the record. Apparently, appellant had expected to prove this state of facts at the trial but was unable to do so. Therefore the objections were properly sustained.
The foregoing holdings render unnecessary the consideration of other propositions relied upon by appellee to sustain the rulings and decision of the trial court. The judgment is affirmed. — Affirmed.
HALE, C.J., and MITCHELL, SAGER, BLISS, GARFIELD, and WENNERSTRUM, JJ., concur.
STIGER and MILLER, JJ., dissent.
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Appellee E.B. Myers, on February 10, 1924, commenced an action of forcible entry and detainer in justice of the peace court against appellant for the possession of certain real estate in the city of Sheldon. A change of venue was taken to the next nearest justice, who, deeming himself disqualified, on his own motion transferred the papers to another justice, who assumed jurisdiction of the case. On March 5, 1924, appellant forwarded a motion to the justice before whom the case was pending, for a continuance, which was filed on that date. The motion was sustained, and the case set down for trial March 7th. On the date fixed, neither party appeared, but the court entered judgment in favor of the plaintiff, appellee in this court, as prayed.
No notice was given appellant of the time fixed for trial, and he did not learn that judgment had been entered against him until on or about the 21st day of March. Appellant further alleged that an attorney who appeared of record for the plaintiff (Myers) in the justice of the peace court informed him that the plaintiff had decided to abandon the case and to dismiss it and commence an action in the district court. This conversation was set up in an amendment to the original petition, and also made a part of a later amendment, which is denominated an "amended and substituted petition."
Appellant does not ask that the judgment be set aside or that execution be enjoined on the ground that it was obtained by fraud, but contends that notice of the time fixed for trial was essential to the jurisdiction of the court. It would seem to be clear that the statements made by counsel that the plaintiff had decided to abandon and intended to dismiss the case and commence an action in the district court did not have the effect *Page 852
to deprive the justice of jurisdiction to enter judgment in the case.
The case at bar differs from Rowley Co. v. Baugh, 33 Iowa 201, which, with others, is relied upon by appellant, in that the continuance in that case was by agreement of the parties, and was to an uncertain and indefinite date. Beck v. Juckett, 111 Iowa 339, was an action in equity to cancel a judgment entered in the district court upon the ground of fraud alleged to have been committed in its procurement; whereas in Schiele v. Thede,126 Iowa 398, the justice sustained a motion to transfer the cause to the district court, and it was held that he thereby lost jurisdiction of both the subject-matter and the person, and that a judgment subsequently entered by him was void. None of the other cases cited by appellant are in any way decisive of the question before us.
Appellant was, of course, bound to know that a continuance, unless based upon the absence of witnesses, could not be granted for a longer period than three days. Since he had asked that the cause be continued, it was his duty to ascertain to what date the trial had been postponed. It was he who invoked the machinery of the court to secure a continuance, and he could not sit idly by and wait for the justice to advise him of the day fixed for trial. His situation is exactly the reverse of the aggrieved party in Rowley Co. v. Baugh, supra. The continuance in the case at bar was to a certain and definite time, and appellant, by the exercise of the least diligence, could have familiarized himself with the court's ruling. Furthermore, he knew of the judgment in plenty of time to have appealed therefrom to the district court. The rulings of the court on the demurrer and the motion to dismiss were correct, and the judgment dismissing the petition and taxing the costs to appellant is, accordingly, —Affirmed.
FAVILLE, C.J., and De GRAFF and VERMILION, JJ., concur. *Page 853
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On January 20, 1927, the plaintiff slipped and fell upon an icy sidewalk on the north side of Fifth Street in the defendant city. The particular place of the accident is *Page 1214
1. MUNICIPAL known as 45 West Fifth Street. No. 45 consists CORPORA- of a building extending east and west along the TIONS: sidewalk in question. At its west end it abuts torts: icy upon a north-south alley, which also intersects condition of the sidewalk. This building has an eaves-trough, walk: which conducts water from its roof to the west negligence end, and deposits it on the sidewalk at the per se. alley intersection. Close to the west end of the building is an entrance thereto, opening to the south upon Fifth Street. Two stone steps lead from the sidewalk to the doorsill. The place of accident, according to plaintiff, was at the base of the lower step and upon the sidewalk. It is the claim of the defendant that the accident happened on the lower step. The plaintiff was familiar with the conditions of the sidewalk at this point, and had been familiar therewith for several days. He passed over the same daily into an office in the building referred to. He was severely injured. At the close of the evidence, the defendant moved for a directed verdict, on the ground that the plaintiff had failed, as a matter of law, to prove freedom from contributory negligence. His motion was overruled. Error is assigned here upon such ruling; and likewise, error is assigned upon certain instructions.
I. The burden of the argument submitted on behalf of the defendant is that the plaintiff failed to prove freedom from contributory negligence. It appears that he knew of the icy condition. He testified that he had passed over it daily, and had done so carefully, and that he was moving carefully at the time of the accident. The general point of argument for appellant is that the plaintiff did not prove any affirmative fact, to show that he was free from contributory negligence. The point thus made by appellant is not tenable. The plaintiff necessarily has the burden of proving the circumstances of the accident. The question of contributory negligence must be determined from the facts and circumstances attending the accident. Nor is the plaintiff bound to go beyond them in his proof. If these facts and circumstances failed to disclose contributory negligence, then the plaintiff is deemed to have proved his freedom from contributory negligence. The facts and circumstances may be such as to disclose contributory negligence as a matter of law. If so, it becomes the duty of the court to direct a verdict against the plaintiff upon his own proof. If *Page 1215
the facts and circumstances do not show contributory negligence, as a matter of law, then the plaintiff is entitled to go to the jury on the question. In this case, according to the plaintiff's testimony, he was stepping carefully from the lower step onto the sidewalk, and with his first step on the walk he slipped and fell. The contention of the defendant is that he slipped on the lower step and fell therefrom to the sidewalk. That dispute was for the jury to settle. The plaintiff testified that he had been wearing rubbers in passing over this icy place, and that he wore the same at the time of the accident; that, in passing from the steps to the walk, he had in mind the icy character, and was expecting to be cautious; that he stepped carefully from the step to the walk; and that he slipped immediately upon his first step. If he had been walking over an icy place for some distance, the method of his walking and the degree of attention given by him to the condition of the walk while so passing would furnish some evidence on the question of care. But inasmuch as he slipped with his first step, his field of evidence on the question of his care became very much circumscribed. But that fact did not increase his burden of proof. He was still entitled to rely upon the actual circumstances surrounding the accident, be they many or few, and to make these the criterion of his care or negligence, as the case may be. In Gregg v. Town of Springville, 188 Iowa 239, we said:
"Direct affirmative proof of particular acts constituting due care by the plaintiff was not required. It is sufficient if, upon all the facts and circumstances of the case, the jury could reasonably find that plaintiff was exercising the reasonable care of an ordinarily prudent person * * *."
Sufficient to say herein that the facts and circumstances, as testified to by the plaintiff, did not, as a matter of law, disclose contributory negligence.
II. Complaint is directed to some of the instructions, and first of all to Instruction No. 1. This instruction stated only the issues as made by the pleadings. It contained the following (Italics are ours):
"That the sidewalk on the northerly side of said street, in front of the property known as Number 45 West Fifth Street, was, on and before the 20th day of January, 1927, allowed to *Page 1216
become dangerous and unsafe to persons passing over the same, by reason of an accumulation of rough, rounded, 2. MUNICIPAL uneven, and irregular ice thereon, which ice was CORPORA allowed to remain upon said walk in said TIONS: condition up to and including the 20th day of torts: January, 1927, and for several days prior instruc thereto; that said ice was allowed to remain on tions: said sidewalk for several days prior to the 20th of undue claim day of January, 1927, and was caused by
submission water flowing onto said sidewalk from the
of issues. adjacent alley during the alternate thawing andfreezing weather prior to said date, thus rendering said walkdangerous for travel; that the water from the roof of thebuilding abutting on said walk is conducted by a gutter on theeave of the building known as 45 West Fifth Street to the cornerof the alley at the westerly end of said building and depositedin said alley in large quantities and allowed to flow over saidsidewalk, thus causing an accumulation of ice at the point whereplaintiff received his injuries."
The foregoing recitals were set forth briefly in Instruction No. 1. The complaint is that the court thereby submitted to the jury an improper issue, in that it submitted the question of the method by which, and the source from which, the water came upon the sidewalk, to be frozen there. The defendant concedes that evidence of this kind is always proper as bearing on the question of notice to the city. But the complaint here is that the court submitted it as an independent act of negligence of the city, and as a cause of action against it. The court did no more in Instruction No. 1 than to state the issues as they were made by the pleadings. There was no attack upon the petition. The court did not in fact in any instruction submit such question to the jury as an independent act of negligence. Whether, under the evidence in this record, it would have been proper to do so, we need not determine. By Instructions Nos. 13 and 22 the court expressly confined the plaintiff's proof of negligence as a ground of recovery to the fact that those rough, rounded conditions of the ice were caused, if any, by artificial means.
In Hofacre v. City of Monticello, 128 Iowa 239, we said:
"If the ice was produced by artificial causes, such as the discharge of water from an eave trough directly upon a sidewalk, *Page 1217
thus producing a special accumulation of ice at a particular place, which was or became rounded and uneven or otherwise dangerous to pedestrians, and the city had notice thereof, or should have had such notice, and a reasonable time within which to remove it before the accident occurred, and failed to do so, it would be liable for injuries resulting from such a defect."
The instructions of the court were consistent with the foregoing. There was no error.
III. The defendant presented to the court a requested instruction which embodied the view for which the defendant now contends in argument. What we have said in the foregoing is determinative also of this assignment of error, and we need not repeat the discussion. We have studied the extensive and careful brief of the defendant, and are constrained to say that none of its assignments are well taken.
The judgment below is — Affirmed.
MORLING, C.J., and FAVILLE, KINDIG, and GRIMM, JJ., concur.
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This was originally commenced as an action at law, to recover on an insurance policy, for loss by fire of machinery and fixtures constituting a locker and cold storage system. By amendment plaintiff asked reformation of the policy, and the cause was transferred to equity and tried as an equitable action.
In March 1937, Frank Mickalek, of Toledo, Iowa, entered into a contract with the plaintiff, the Midwest Metal Stamping Company, for machinery, lockers, and installation of a locker system to be constructed in Mickalek's Market in Toledo. The contract provided for the purchase of equipment, with a down payment of $1,500, which initial payment Mickalek paid by building some insulated rooms. The balance of $3,254 was to be *Page 971
paid on a conditional sales contract. On March 26, 1937, this contract was executed by Mickalek and the Midwest Metal Stamping Company, describing the equipment, stating the price of $5,870 and the $1,500 payment to be made by building a chillroom as above stated, the balance of $4,370 to be paid in 36 equal successive installments. The contract provided that the title remained in the seller until the indebtedness was fully paid, and in case of default in payments, it further provided, first: "* * * all of the unpaid installments shall become immediately due and payable;" second, "* * * you and your assigns may without notice of demand and without legal process enter into any premises where said chattel may be and take possession thereof and make such disposition as may be deemed by you or your assigns desirable and all payments made shall be retained as liquidated damages for the use of said chattel and not as a penalty, or said chattel may be sold with or without notice at public or private sale at which you or your assigns may purchase and the proceeds thereof less expense of retaking * * * attorney's fees credited upon the amount paid." There was a further provision that Mickalek should insure such chattel against loss by fire, in favor of the seller. About May 18, 1937, Mickalek told the local agent of defendant, W.O. Beck, that he wanted to take out insurance on the locker plant. He testifies that he told the agent at the time that he was buying the plant under a conditional sales contract which required him to take out insurance for the protection of the seller. Beck did not deny that Mickalek told him that he was so buying the plant. A special agent, one Belden, was sent for, who came and inspected the plant, and who also was informed of the manner in which the plant was being purchased. Belden did not testify and was not a witness at the time of trial. Thereafter Mickalek and Beck made out an application for $7,000 insurance on "furniture and fixtures, food lockers complete." The policy was issued, insuring Mickalek for five years.
Mickalek failed to make any further payments and replevin suit was brought by plaintiff against him. In this replevin action a consent judgment was entered, the judgment stating among other things that it was "without prejudice to any claims of any kind or character *Page 972
that any of the parties hereto may have against any of the other parties, except such right of possession." At the time of entry of judgment it was agreed by all parties that no action would be taken by plaintiff as to the removal of the property for a period of 30 days, in order to give time to Mickalek to attempt to refinance the contract. Nothing further was done as to the replevin proceedings and Mickalek remained in possession of and used the plant until the fire occurred on April 6, 1938.
The fire was destructive and the value of the plant after the fire was estimated to be only about $1,230. Shortly after the fire, on April 12, 1938, plaintiff wrote defendant relative to the insurance, notifying the insurance company of the conditional sales contract and the amount due thereon and demanding payment, and on May 12, 1938, plaintiff, by its attorneys, again wrote defendant, enclosing notice and proof of loss, certain affidavits, and the claims of Mickalek and the plaintiff. The notice stated that plaintiff was the owner of the conditional sales contract covering all of the insured property, the amount due, and that the defendant company had issued the policy after the disclosure to it of the existence of the contract and claim. The company failed to pay the loss, and Mickalek and the Midwest Stamping Company, as coplaintiffs, brought this action on the policy, asking joint judgment for $5,771, to which answer was filed by the defendant. Thereafter, in December 1938, without notice to or consent by plaintiff herein, the defendant paid to Mickalek $2,240.26, by check, which stated that it was in payment of fire loss of April 6, 1938, with the number of the policy. Mickalek executed a release to the company, which stated that the case had been settled and compromised and was dismissed with prejudice. No part of this money was turned over to the plaintiff, but it was all appropriated by Mickalek, who was insolvent.
On trial to the court on the facts as above stated, the court found that at the time of the issuance of the policy the defendant was fully advised of the fact that Mickalek was purchasing all of the property under a conditional sales contract, that said property was not paid for, and that the contract required Mickalek to procure insurance for the protection of his vendor. The court found further that there was due and owing from *Page 973
Mickalek under the contract $4,230.14, that the plaintiff was the owner of the contract, and the property described therein was insured under the policy of insurance in suit. The court further found that by the payment to Mickalek the defendant company ratified and confirmed the validity of said policy of insurance and waived any of the defenses thereto asserted by it in this cause, that none of the defenses asserted by defendant had been sustained, and that Mickalek was insolvent. Judgment was entered in favor of the plaintiff against the defendant in the sum of $3,246.40, being the amount, with interest, due it on its contract with Mickalek.
[1] Without undertaking to set out all the pleadings and the various amendments and substitutions, we refer briefly to defendant's division No. 7 of its answer, to which demurrer was sustained, and upon which ruling of the court defendant alleges error. In this division of its answer defendant refers to the replevin action brought by plaintiff, in which plaintiff had pleaded failure of Mickalek to comply with the clause of the contract in which he agreed to insure the chattel against loss by fire in favor of the plaintiff, and that plaintiff had pleaded in such replevin action that Mickalek had failed to comply with the provisions of the contract and it asked immediate possession of the chattel. Defendant in such division No. 7 claims that, by making such allegation and obtaining relief in the replevin action, the plaintiff had abandoned any claim or right to claim the insurance, had waived such right to the insurance taken out by Mickalek, and was estopped thereby from claiming or proving that the insurance taken out by Mickalek covered plaintiff's interest in the property. We cannot agree with defendant that the court erred in this respect. The action of the plaintiff in the replevin action does not appear to us to be an intentional relinquishment of a known right, nor was anyone who was entitled to rely on plaintiff's actions or statements misled so as to amount to an estoppel, nor was there any change of position by any interested person in consequence of the replevin action. The rights acquired by plaintiff in the judgment in the replevin action were no greater than were granted by the contract, but such rights were merely confirmed by the judgment, since the contract authorized the company at any time to take possession of the *Page 974
property. But, as the facts show, Mickalek still retained possession of the property and so retained it until the time of the loss by fire. Assuming that defendant, in division No. 7 of its answer, had properly pleaded waiver or abandonment, we do not think the facts sufficient to show any waiver by the plaintiff by a confirmation of its rights under the contract, in view of the fact that the position of the parties did not change as a result of the decree.
Defendant next claims that the court erred, for the reason, it asserts, that the evidence established the defense pleaded in division No. 4 of the answer. Defendant asserts that plaintiff, by bringing the action in replevin and obtaining the judgment and decree of possession, elected to adopt and pursue the first option given by the contract in case of default by taking away Mickalek's right of possession, and that, by so taking the right of possession from Mickalek, he ceased to have any right in the property, and that neither one nor both of the plaintiffs could recover on account of damage by fire. Defendant argues that Mickalek's duty to carry insurance was at an end, and that he was under no further obligation to perform his contract with plaintiff.
Defendant cites a number of cases as to the conclusiveness of judgments, but we do not think that under the facts of the case this is a valid defense. As stated, the decree, as well as the contract, authorized the plaintiff to take possession of the property, but as a matter of fact plaintiff did not do so. The lien of the plaintiff was not lost by taking judgment in the replevin action. Code section 9985, subdivision 2. The replevin action and judgment therein did not relieve Mickalek from the payment of the purchase price. Plaintiff still retained the notes and there is nothing in the evidence to indicate any rescission of the contract. See Central Iowa Motors Co. v. Clancy, 206 Iowa 1090, 221 N.W. 774, and cases cited; In re Assignment of Wise,121 Iowa 359, 96 N.W. 872; Miller Kizer v. Des Moines C.R. Co.,196 Iowa 1033, 1037, 195 N.W. 600, 601, and cases cited therein. In the Miller case the claim was made that by exercising the right to regain the property covered by the conditional sales contract the vendee had lost all its rights. This claim, however, was denied by the supreme court, which states: *Page 975
"We do not deem it necessary to determine what might have been the rights of appellee if the vendor of the motor bus had fully re-established title in himself under the conditional sale contract before the commencement of this action, and had, under the conditional sale, deprived appellee of all rights thereto. It appears from the testimony of the vendor that the notes given for the purchase price were still retained by the vendor, under claim of ownership thereof, and that the vendor was unwilling to return the notes to the vendee and call the transaction closed. * * * the vendor also made the statement * * * `I took this automobile back under my bill of sale.'"
The same state of facts exists here, except that the possession still remained in the vendee, and, so far as the record shows, the situation of the parties was the same prior to the replevin action as afterwards. See Murray v. McDonald, 203 Iowa 418, 422, 212 N.W. 711, 712, 56 A.L.R. 233, in which the court cites Continental Guaranty Corp. v. Peoples Bus Line, 31 Del. (W.W. Harr.) 595, 117 A. 275, as holding, "* * * under the Conditional Sales Act, a seller who retakes the goods by replevin process does not thereby elect a remedy inconsistent with an action to recover the balance of the purchase price * * *."
See, also, cited by plaintiff, Collins v. Iowa Mfrs. Ins. Co.,184 Iowa 747, 169 N.W. 199. We must conclude that division No. 4 of defendant's answer is not a defense under the facts of this case.
And we must come to the same conclusion as to defendant's claim under division No. 5 of its answer, in which it pleaded that the replevin action, by depriving Mickalek of the right of possession, resulted in a change in the interest and title of Mickalek contrary to the provisions of the policy, and that the trial and judgment in the replevin action resulted in depriving Mickalek of the right of possession. We have already referred to the fact that Mickalek was not actually deprived of possession, and that the plaintiff acquired no rights which it did not already have under the terms of its contract. In the situation in which the parties were placed after the consent decree in the replevin case, each had an insurable interest, as they had at the time of the execution of the contract. 26 C.J. 31, section 13; 29 Am. Jur. 306, section 345. We do not think that the defendant, under the *Page 976
facts, and with knowledge of the rights of Mickalek at the time the policy was issued, is authorized to avoid the policy. In Schaeffer v. Anchor M.F. Ins. Co., 113 Iowa 652, 85 N.W. 985, under circumstances where the person who was required and directed to take out insurance took out the same in his own name, the court held that, if the company, with full knowledge of the facts, chose to issue the policy in the agent's name, it could not escape liability. In the present case the evidence indicates that Mickalek informed defendant's agents of the extent of his interest. See, also, Carey v. Home Ins. Co., 97 Iowa 619, 66 N.W. 920; Bartlett v. Iowa State Ins. Co., 77 Iowa 86, 41 N.W. 579; Johnson v. Farmers Co., 126 Iowa 565, 102 N.W. 502. The Johnson case lays down the rule that, on an issue of fraudulent representation as to title in procuring insurance, proof of a contract of purchase of the insured property, wherein the assured agreed that the title should remain in the seller until the property was fully paid for, did not of itself negative an absolute sale or show a breach of the warranty of sole ownership. This seems to be the rule in Iowa, although not the universal rule. See 60 A.L.R. 70, with cases cited therein. We think the rule applies not only to the original contract of insurance but also to the alleged change of possession by reason of the replevin action, that both parties had an insurable interest, that, with knowledge of the rights of the plaintiff and of Mickalek on the part of two of defendant's agents, the property was insured in the name of the holder of the equitable title, and that defendant, in view of all the circumstances, cannot now complain.
[2] In addition to the foregoing, plaintiff pleads that the defendant, by its action in paying to Mickalek part of the amount due under the policy and with full knowledge of the situation as it then existed, has waived any irregularities, if such there were, in the title or manner of ownership of the parties to the property involved herein. Plaintiff's claim in this respect is that any condition in a policy of fire insurance, including the condition that the policy shall be void if there occurs a change in the interest, title, right, possession, and use of the insured property, is waived if the insurer, after receiving knowledge of the alleged breaches, in any manner recognizes *Page 977
the validity of the policy or makes any settlements or adjustments thereunder. There is no question that the settlement with Mickalek was made after full knowledge of the situation had been brought home to the defendant. Suit had already been brought on the policy and notice had been served, and the defendant had been apprised of the situation. The check to Mickalek was stated to be in settlement of the loss under the policy. We think this defense applies both to the policy as originally issued and after the alleged change of ownership by reason of the replevin action. See Hollis v. State Ins. Co., 65 Iowa 454, 456, 21 N.W. 774, 775, and cases cited therein. Plaintiff also cites Viele v. Germania Ins. Co., 26 Iowa 9, 96 Am. Dec. 83; Siltz v. Hawkeye Ins. Co.,71 Iowa 710, 29 N.W. 605; King v. Council Bluffs Ins. Co.,72 Iowa 310, 33 N.W. 690; Young Co. v. Hartford Fire Ins. Co.,45 Iowa 377, 24 Am. Rep. 784; Boetcher v. Hawkeye Ins. Co., 47 Iowa 253; Tero Petroff Co. v. Equity F. Ins. Co., 183 Iowa 906, 167 N.W. 660; Terry v. American Ins. Co., 202 Iowa 1291, 211 N.W. 716, and cases cited therein; Swearingen v. Hartford Ins. Co.,52 S.C. 309, 29 S.E. 722; Westchester Fire Ins. Co. v. McAdoo (Tenn.), 57 S.W. 409; Gardner v. Continental Ins. Co., 125 Ky. 464, 101 S.W. 908, 31 Ky. L. Rep. 89; Modlin v. Atlantic Fire Ins. Co., 151 N.C. 35, 65 S.E. 605. The doctrine announced in these cases supports the plaintiff's claim of waiver, and the facts in this case so indicate.
Further claim is made as to excessiveness of the amount allowed by the court. Under the evidence and the facts of the case this claim is without merit. There was practically a complete loss. The machinery insured was adapted only to the room in which it was placed. The allowance made by the court was supported by the evidence.
On the whole case our conclusion must be that the decree of the district court should be affirmed. — Affirmed.
MITCHELL, STIGER, BLISS, OLIVER, MILLER, and SAGER, JJ., concur. *Page 978
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This is the second appeal of this case to this court. The opinion on the first appeal is reported in 201 Iowa 107. The facts of the case are set forth at length in said opinion, and it is unnecessary that we repeat them in detail at this time. Appellant Mary E. Webb owned certain property in the city of Keokuk. She executed a warranty deed of the property to one Herst, in pursuance of a contract with Herst for the exchange of land. Deed to appellant's property was placed in the hands of one Evans, to be by him turned over to one Brace. Subsequently, without authority of Webb, this deed was recorded. Herst never carried out the contract upon his part with Webb, but shortly after the recording of the deed referred *Page 1390
to, Herst and wife conveyed the property to the appellee, Tutt. Thereafter, this appellant commenced an action against Herst, to set aside the deed to him and to quiet title to the premises. In this action Tutt intervened. Her petition of intervention was stricken, on motion, and no appeal from said ruling was had. Upon trial of the case of Webb v. Herst, the deed executed by Webb to Herst was canceled and set aside, and title to the property was quieted in Webb. This action was originally instituted by Tutt, to quiet title in her to the said described real estate against any claim of Webb's. The lower court denied the relief granted, and, upon appeal to this court, the action of the trial court was reversed. Tutt v. Smith, supra. The opinion was filed June 25, 1925; procedendo was issued January 19, 1926; and thereupon, on January 21, 1926, Tutt filed a motion in the district court for a decree in accordance with the opinion of this court, quieting title in Tutt. Webb appeared in said action, and asked leave of court to introduce further evidence, which request was denied; and on January 26, 1926, a decree quieting title in the appellee, Tutt, was entered of record in the trial court. On January 29, 1926, Webb filed a petition for a new trial, alleging that said petition was filed in accordance with Section 12255 of the Code of 1924. The petition for a new trial is very extensive, setting out a complete recital of the various transactions between the parties, including evidential matters, and sets out in extenso
evidence that was taken in the case of Webb v. Herst. The gist of the petition for a new trial is that the appellant contends therein that certain evidence was not presented upon the original trial of the cause, through oversight and inadvertence of counsel; that, if a new trial is granted, appellant can establish the fact that the deed to the property in question was placed with one Brace, as in escrow, under condition that it should not be delivered until the due performance of the provisions of the contract between appellant and Herst; that neither Evans nor Brace was her agent or representative; that said deed was obtained from escrow without authority; that its execution was obtained by trickery and fraud; and that said deed was never delivered.
Conceding, without deciding, that, in this action, under Section 12255 of the Code a new trial may be granted on other grounds than those required to obtain a new trial in other *Page 1391
actions, we think that, upon the record, the trial court did not abuse the discretion vested in it, in refusing to grant a new trial in the instant case. There is no showing or claim that the evidence which appellant now alleges is available to her if a new trial is granted, was not available to her at all times. In fact, the record satisfactorily shows that it was so available. There has been no casualty or misfortune or surprise. In its last analysis, the position of the appellant is simply that, through inadvertence and oversight, she did not prove all that was available to her to prove upon the former trial of the case. Granting that, under certain circumstances, the trial court, in the exercise of a sound discretion, may grant a new trial in an equitable action after the procedendo has issued from this court, it is a right seldom exercised, and the discretion of the trial court will not be interfered with by this court unless it appears to have been abused. Where it appears that the evidence sought to be introduced upon the new trial was available at all times to the party applying for such new trial, it cannot be made the basis of ground for a new trial after appeal and the issuance of a procedendo. Chicago, M. St. P.R. Co. v. Hemenway, 134 Iowa 523; State ex rel. Owens v. Consolidated Ind. Sch. Dist.,190 Iowa 385. In any event, it is at least very doubtful if the proffered evidence could have changed the result, in view of our pronouncement of the law of the case. We are persuaded that the trial court did not abuse its discretion in overruling appellant's motion for a new trial. The order appealed from must be, and it is, in all respects — Affirmed.
EVANS, C.J., and STEVENS and VERMILION, JJ., concur.
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[1] The street railway company is the owner and occupant of a double track across the Walnut street bridge in the city of Des Moines. This bridge was repaved, and an assessment of $1,910.52 was lodged against the street car company. The street car company insists that this assessment is not in accordance with the law. The statute with reference thereto will be hereinafter set out.
The city insists that, notwithstanding the sections of the statute relied on by the street car company, this assessment is in strict accord with the provisions of the ordinances of the city of Des Moines. The question, therefore, is which of these contentions is correct.
The franchise ordinance of the street railway company, known as Ordinance No. 3147 of the Revised Ordinances of the City of Des Moines, passed under date of October 24, 1921, and which franchise ordinance was accepted by the street car company, among other things provide:
"Section 2596. Whenever the city shall grade, pave, gravel, or macadamize any street, and so long as the statutes of the stateof Iowa do not authorize any other or different method therefor,
the company under the conditions in this ordinance contained, shall grade, gravel, pave, or macadamize that portion of said *Page 57
street between the rails of its tracks, and one foot outside thereof, and whenever the city shall repave, regravel, or remacadamize any street and so long as the statutes of the stateof Iowa do not authorize any other or different method therefor,
the company, under the conditions in this ordinance contained, * * * shall repave, regravel, or remacadamize that portion of said street between the rails of the tracks and one foot outside thereof, and shall at all times keep the pavement, gravel, or macadam between the rails of the tracks and one foot outside of each outer rail of its tracks in good repair, and all such paving, graveling, macadamizing, or repaving, regraveling, or remacadamizing done by the company shall be at its own expense * * *."
Section 2597 reads as follows:
"The authority in this ordinance granted shall extend to and authorize the use of bridges and viaducts across the Des Moines River at Walnut street, Locust street, Grand Avenue, * * *. The company shall at its own expense pave, floor, keep in repair, and free from snow, so much of the floor and pavement of each bridge and viaduct crossed by its tracks as is included in the space three and one-half feet each way from a center line between the rails of the tracks, and all such construction and work is to be done and performed under the same rules and requirements as are herein provided for like or similar construction and work to be done and performed upon the streets of the city."
If the city's contention is right, it must be found in the parts of its ordinances above quoted.
It is the contention of the street car company that the aforesaid ordinances have nothing whatever to do with this assessment because of the provisions of section 6051-c1 of the Code of 1931. This section of the Code was adopted by the Forty-third general Assembly (Chapter 182), and went into operation by publication on the 24th day of April, 1929, and reads, so far as is material, as follows:
"Section 1. Street railway companies operating upon the streets, avenues and public places of cities and towns, including cities under special charter, shall provide a suitable foundation for the track of a width equal to their ties, but in no case less than the width comprised between lines lying one foot outside *Page 58
of each rail of the track, and shall be assessed for the construction of reconstruction of paving between the rails of their track or tracks, and for one foot outside of each rail thereof, in the amount that the cost of such pavement per yard of area exceeds the cost per yard of the remainder of the paving upon such street. In the making of assessments for paving upon streets, avenues, or public places of cities and towns, including cities acting under special charter, along or upon which a street railway track or tracks are located, in the event that the track or tracks also are to be paved or repaved; the engineer shall make an estimate of the cost of building such improvement, and he shall, also, make an estimate of the cost of building such an improvement upon said street, avenue or public place as it would be in the event that the street car tracks did not there exist; and the street railway company shall be charged with the difference in said estimates of cost and shall pay the same as other special assessments are paid.
"Separate bids shall be taken in case of single track upon that portion of the street between the rails and one foot outside of each rail and in case of double track upon the entire portion of the street included between lines parallel to and one foot outside of the outer rail of each track. The street railway company shall be permitted to bid upon this portion of the pavement and, if the lowest bidder thereupon shall be awarded the contract therefor. One-third of the remaining cost of the improvement for the area between the rails of the tracks of the street railway company and one foot outside thereof shall be assessed against the street railway company, one-third thereof shall be assessed against the abutting property and the owner thereof, and one-third thereof shall be paid for by the city either out of the improvement fund or general fund of the city."
It will be noticed that the right to use the streets in the city of Des Moines for street car purposes is provided for in the first of the above-quoted sections from the ordinances, and that the right to use the bridges is included in the succeeding section. It will also be noticed that the original pavement of the parts occupied by the street railway on both streets and bridges is provided for in the aforesaid two sections. It will also be noticed that, in the second section with reference to bridges, there is no provision whatever as to repavement, and it would naturally *Page 59
follow that the right to charge the street car company for repavement must arise from the consideration of these two sections of the ordinances considered together. The first section above quoted provided as to how this improvement is to be paid for by the company, so long as the statutes of the state do notchange the method of payment therefor. We think that this provision must carry over from the first section of the ordinance above quoted into the second section, as the first section is the only section that provides for repavement and there is no provision in the second section with reference to providing for repavement. We therefore reach the conclusion that in the franchise ordinance above quoted the provision as to the cost and expense of repavement shall govern, unless the same is superseded by the aforesaid section 6051-c1.
At this point in the discussion we are confronted with a situation that requires an interpretation of the aforesaid section 6051-c1. The opening sentence of said section is: "Street railway companies operating upon the streets, avenues and public places of cities and towns * * *." The question is whether or not the phrases above set out are broad enough to cover bridges. In other words, does the term "streets" or "public places" include bridges? If they do, then the contention of the street car company is correct; if they do not, then the contention of the city is right.
[2] Whether or not the term "street" includes a bridge, under our decisions, is somewhat in doubt. See Sachs, Adm'r v. City of Sioux City, 109 Iowa 224, 80 N.W. 336, and City of Cedar Rapids v. Cedar Rapids M.C. Ry. Co., 108 Iowa 406, 79 N.W. 125. But, passing this question without making a definite pronouncement on it, we turn to the other term used in the statute, to wit, "public place." In other words, the question narrows itself down to a question of whether a bridge, such as the one in controversy herein, is a "public place" within the meaning of the statute. The term "public place" is relative, and depends for its meaning largely on the context in which it is used. Generally stated, it is the converse of a private place. A public bridge is a bridge across a creek, river, or other natural body of water, etc., erected for the accommodation of the public, and the term "bridge" covers the idea of a passageway by which travelers are enabled to pass over streams or other impediments to a free passage, and therefore a building inaccessible at either *Page 60
end is not, in law, regarded as a bridge. Elliot on Roads and Streets (2d Ed.) vol. 1, p. 36. When this term "public place" is used in the setting in which it is here used, we think it is intended to include bridges; else, if it were not so intended, this statute would not authorize assessments against street car companies for such bridges. Many definitions of the term "public place" are referred to in 48 C.J. p. 1215; and, as applied to streets and highways, see 6 Words and Phrases, page 5809; also, the definition of the same phrase in the Second, Third, and Fourth series, Words and Phrases. It would seem, therefore, that, as this phrase is used in the section of the Code quoted, it is and was intended to cover bridges. This being true, this section of the statute is all-inclusive and provides a specific method for this assessment against the street car company, and, under the very terms of the ordinance, the statute supersedes the ordinance, and the assessment properly made against the street car company must be governed by the statute and not the ordinance. The city seeks to advantage itself by reason of the provisions of section 6577 of the Code of 1931. The trouble with the argument on this proposition is that the method marked out originally in that enactment provided that the assessment was to be made as provided in sections 6052, 6053, 6054, 6057, and 6058; but the aforesaid acts of the Forty-third General Assembly especially provided for the repeal of sections 6057 and 6058, and hence left the last-named section without any basis whatever for calculation or method of assessment.
[3] It is apparent on the face af the enactment (Forty-third General Assembly) that the intent of the legislature was to cover the whole subject of assessment against street railways and lay down a basic rule for the government of the same; and, whether or not the provisions of the ordinance in relation to these matters are defeated by its own terms, yet we conclude that the purpose of the legislature was to definitely settle and fix, by statutory enactment, the method of assessments against street railways. It follows, therefore, that the assessment against this street railway should have been made under the terms of the Acts of the Forty-third General Assembly, section 1, now appearing in the Code as section 6051-c1. Under the record as shown in the case, and applying the last-named section of the Code as controlling the situation before us, it necessarily follows that the contention of the street car company is right, and that, *Page 61
instead of an assessment of $1,910.52 against the company, the assessment should have been one-third thereof, or $636.84. — Reversed.
MITCHELL, PARSONS, DONEGAN, HAMILTON, RICHARDS, and POWERS, JJ., concur.
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The trial court, being of the opinion that the question involved was of sufficient importance to have the same presented and determined by this court, authorized an appeal to be taken. Apparently, the question involved has never been determined by this court. *Page 690
Briefly, the facts are these: On May 8, 1930, the defendant signed an application with the plaintiff insurance company covering growing crops in the sum of $2,100 for a term of five years. On the 22d day of September, 1930, the board of directors of said association levied an assessment on all policies in force in the sum of one and nine-tenths percent, amounting to $39.90 against defendant, H.J. Remien. Although demand for payment of this assessment was made, the defendant failed and refused to pay the same. Thereafter, the policy was canceled by the plaintiff for failure to pay said assessment. A penalty of $4.27 was added, under the bylaws, to the amount of said assessment due, making the total amount due $44.17, which, with interest added, amounted to $67.20.
This action was commenced on August 16, 1939, more than five years and less than ten years from the date of the assessment. In the application signed by the defendant, which is made a part of the policy, is the following:
"I agree to pay all just assessments, and be governed by the Articles of Incorporation and By-Laws of the Association * * *"
The petition alleges the execution of said application; the issuance of the policy pursuant thereto, effective May 8, 1930, and, by reference, incorporates the original application in the petition; that the policy was in full force and effect for the period for which the assessment was made; the amount of the assessment due by the defendant; the giving of notice thereof and the giving of the second and third notices by virtue of which, under the bylaws, penalties were added; that the claim is still the property of the plaintiff and prays for judgment in the sum of $44.17 with interest at six percent per annum from the first day of December, 1930, and for costs.
By way of answer, the defendant denied liability for the reasons that (1) any assessment claimed by the plaintiff is barred by the statute of limitations, more than five years from the levying of said assessment having elapsed, and (2), under the assessment plan of insurance, the amount of assessment to be levied is indefinite and unascertainable until the meeting of the board of directors each year and no fixed amount is known or can be predetermined, and the assessment part of the policy is separate *Page 691
and divisible from the policy of insurance and, after the amount of assessment is determined by the board of directors, said assessment is due and payable within a five-year period and cannot be enforced in event the statute of limitations is interposed as a defense.
At the close of the evidence, defendant moved for a directed verdict for the reason that the purported levy was made in September of 1930 and, under the bylaws, the assessment could not be made, under the statutes of the state of Iowa, until the January of the succeeding year; that, under the testimony, the policy became unenforceable on December 15, 1930, and that the purported assessment has since become merely an open account; that more than five years have elapsed since the date of said assessment and the commencement of said action and the claim is now barred by the statute of limitations, and for the further reason that more than a reasonable time has elapsed since the due date of said assessment and the commencement of said action; that, under the mutual type of insurance, the insurance policy and the assessment are separate and divisible and constitute two types of transactions; that the policy, therefore, is a written contract and that the assessment is merely a charge account and that the same is now barred by the statute of limitations.
The issue thus presented was whether the obligation constituting the basis of plaintiff's suit was in writing and the ten-year limitation statute applicable or whether on open account and the five-year limitation statute applicable.
The trial court, in his findings and judgment, held that the action was based on a written contract and not barred for ten years; that the liability of the defendant "is on account of his written agreement when he signed the application for the policy of Insurance that was issued to him by plaintiff in which he agreed to pay all just assessments on the policy, and the policy of Insurance that was issued by the plaintiff pursuant to said application. The application and policy constitute a written contract between the plaintiff and defendant. The cancellation of the policy that was issued to him by the plaintiff on December 15, 1930, cancelled it in so far as any future insurance was concerned, and also as to any future assessments thereon, but it did not cancel the defendant's liability for the assessment for the time *Page 692
the policy was in force, and did not change the liability of the defendant from his written promise to pay to that of an open account. The policy is still in force in so far as to permit the plaintiff to collect all unpaid assessments thereon that were made before it was cancelled."; that the defendant's plea of the statute of limitations was not good, and judgment was entered for the amount prayed for in the petition.
Apparently, for the purpose of having the question determined by the court of highest resort in this state, this appeal was authorized and taken.
While the appellant contends the trial court was wrong, he frankly admits that he has been unable to find any authority to sustain him in his contention. On the other hand, there is authority sustaining the trial court. In Nelson v. Insurance Assn., 127 Iowa 603, 103 N.W. 966, this court held that a member of a mutual insurance association was not liable for assessments levied after cancellation of the policy, but expressly held that the cancellation did not relieve such member from the payment of assessments already levied. The defendant's liability existed by virtue of the contract which was in writing between himself and the insurance company. This contract is evidenced by the application and policy. Wardle v. Hudson, 96 Mich. 432, 55 N.W. 992. In Lorberg v. Jaynes [Mo. App. (NOR)], 298 S.W. 1059, the Missouri court had for consideration the identical question involved in the instant case. In the Missouri case, at page 1061 of 298 S.W., the cause of action was based on the following written statement:
"`* * * to pay the company his pro rata portion of such losses as the company was called upon to pay, * * * and that he would pay promptly such assessment as was made upon him by the company, * * * as long as his policy or contract was in force.'"
In discussing the case, the court said, at page 1061 of 298 S.W.:
"As we read the above, we cannot conceive how the language therein employed could be construed otherwise than as alleging clearly and concisely that the promise of defendant to pay was given in the written contract itself, thus rendering the 5-year *Page 693
statute inapplicable and bringing the case within the terms of the 10-year statute. Nor may the import of the statement be questioned in this respect, because there was no specification therein of the exact amount agreed to be paid by defendant from time to time. To satisfy the statute, the promise to pay must be in writing, but it is immaterial that the sum to be paid may be contingent or conditional, and subsequently to be ascertained. Carr v. Thompson, 67 Mo. 472; State ex rel. Enterprise Mill Co. v. Brown, 208 Mo. 613, 106 S.W. 630; Howe v. Mittelberg, 96 Mo. App. 490, 70 S.W. 396; Miner Frees v. Howard, 93 Mo. App. 569, 67 S.W. 692 * * *
"We see no escape from the conclusion, therefore, that inasmuch as it appeared from the face of plaintiff's statement of his cause of action that his right to recover was based upon an instrument in writing containing a promise for the payment of money, the 5-year statute was wholly inapplicable, in consequence of which this action was not barred by limitation of time."
Another case involving facts analogous to those in the instant case is Fidelity Cas. Co. v. Callaghan (Tex. Civ. App.)104 S.W. 1073. See also (as supporting in principle): Equitable Mut. Fire Ins. Corp. v. Murray, 131 Ky. 740, 115 S.W. 816; Stadtler v. Southern Surety (Tex. Civ. App.) 253 S.W. 681.
We see no escape from the logic underlying the holdings of the courts of these sister states which support the decision of the able trial court and the case is, therefore, accordingly, affirmed. — Affirmed.
STIGER, SAGER, MILLER, HALE, MITCHELL, BLISS, and OLIVER, JJ., concur. *Page 694
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Luther L. Almquist was employed by the Shenandoah Nurseries, Incorporated, a defendant and appellant, on the 3d day of May, 1932. He had been thus employed by the nursery company since the preceding March. His employment required that he and other workmen pull "up and shake out" barberry bushes. The barberry bushes were thus pulled up and shaken out by the use of a tree plow which loosened the roots, and then by the men, who would break the dirt apart from the bushes with a spade or stick. Some of the men would shake the bushes and pound them with a stick. Two or more bushes sometimes would be bunched together with a clump of dirt "weighing all the way from a few pounds to 250 pounds." When the bushes thus clung together and were supported by a clump of dirt, the workmen pulled them apart by hand or pried them apart with a spade. If the bushes were especially large or securely entwined, it required a hard pull to separate them.
Almquist, while working on May 3, 1932, at about 10 o'clock a.m., sank to the ground or "keeled over," put his hand in the region of his abdomen, and said: "I am sick." Then he started to an automobile and again sank to the ground. Finally Almquist was assisted into the automobile and driven to his home, where first aid was administered. Thereafter Almquist was taken to the hospital in Shenandoah, where he was operated on by Dr. A.O. Wirsig. The *Page 727
doctor diagnosed Almquist's ailment as that caused by a perforated ulcer. An anesthetic was administered to Almquist and an incision made in "a mid-line" across the region of his stomach and bowels. After opening the abdomen, the doctor examined Almquist's bowels and found them to be normal. It was disclosed, however, by the operation that the anterior part of the stomach was perforated. This perforation was near the outlet. There was only one perforation. Upon further examination the doctor discovered that the perforation was through the center of an old ulcer in the stomach. The ulcer, an inch in diameter, was surrounded by scarred tissue. Because of the perforation, the contents of the stomach had almost completely emptied into the abdominal cavity. After finding that condition, the doctor closed the perforation and sponged out the stomach. Almquist remained at the hospital until May 31st, when he was removed to his home. Subsequently, on June 8th, Almquist returned to the hospital, and remained there until he died on June 17th. His death was caused by "an empyema" due to "pus forming after a complication of perforation" of an ulcer.
The United States Fidelity Guaranty Company, a defendant and appellant, insured the liability of the appellant Shenandoah Nurseries, Incorporated, under the Iowa Workmen's Compensation Act. Following Almquist's death, his widow, Amanda G. Almquist, the claimant-appellee, asked compensation for the aforesaid injury and death from the Shenandoah Nurseries, Incorporated. Such compensation was refused, and, as said in the preliminary statement, an action was instituted therefor and first tried before the Honorable Ralph Young; deputy industrial commissioner, sitting as the sole arbiter. He denied the compensation. A petition for review was then filed by the claimant with the industrial commissioner, who, regardless of the facts revealed by the record, decided that Almquist's injury and death did not "arise out of and in the course of his employment." Concerning this the industrial commissioner stated:
"The record utterly fails to show or to indicate that at the time of this collapse (when Almquist sank to the ground while working) there was anything in the nature of accident or incident out of the ordinary * * * There was nothing in the way of a slip, a fall or unusual strain as proximate cause."
An appeal was taken from that ruling to the district court, *Page 728
where the decision of the industrial commissioner was reversed, and compensation allowed. From the judgment allowing compensation, the appellants appeal.
I. In order for the claimant to obtain compensation for the employee's death, it was necessary for her to prove, by a preponderance of the evidence, that the death was caused by a "personal injury" (see section 1421, 1931 Code) "arising out of and in the course of the employment." See section 1377, 1931 Code. "The burden is upon the plaintiff (claimant) to establish by a preponderance of the evidence that the injury which he claims caused the disability arose out of and in the course of his employment." Smith v. Soldiers Sailors Memorial Hospital,210 Iowa 691, 231 N.W. 490. To the same effect, see Enfield v. Certain-Teed Products Co., 211 Iowa 1004, 233 N.W. 141. This does not mean, however, that such proof must satisfy beyond a reasonable doubt. Jones v. Eppley Hotels Co., 208 Iowa 1281, 227 N.W. 153; Flint v. Eldon, 191 Iowa 845, 183 N.W. 344.
[1] It is said by the appellants that the evidence relating to the employee's injury and death is insufficient, or at least in conflict, and therefore the finding of the industrial commissioner cannot be disturbed. If the evidence upon the point in question is in conflict, then, of course, the finding of the industrial commissioner is binding on this court. Enfield v. Certain-Teed Products Co., supra; Jones v. Eppley Hotels Co., supra; Belcher v. Des Moines Electric Light Co., 208 Iowa 262, 225 N.W. 404; Arne v. Western Silo Co., 214 Iowa 512, 242 N.W. 539; Bushing v. Iowa Railway Light Co., 208 Iowa 1010, 226 N.W. 719; Hinrichs v. Davenport Locomotive Works, 203 Iowa 1395, 214 N.W. 585; Kraft v. West Hotel Co., 193 Iowa 1288, 188 N.W. 870, 31 A.L.R. 1245.
But, on the other hand, the courts may interfere with the findings of the industrial commissioner under the circumstances authorized by section 1453 of the 1931 Code. According to that section:
"Any order or decision of the industrial commissioner may be modified, reversed, or set aside on one or more of the following grounds and on no other; * * * 3. If the facts found by the commissioner do not support the order or decree. 4. If there is not sufficient competent evidence in the record to warrant the making of the order or decision." *Page 729
So, if, as contemplated by the statute just quoted, the evidence does not sustain the conclusion reached by the industrial commissioner, then the courts may set aside, modify, or reverse his ruling. Arthur v. Marble Rock Consolidated School District, 209 Iowa 280, 228 N.W. 70, 66 A.L.R. 718; Mallinger v. Webster City Oil Co., 211 Iowa 847, 234 N.W. 254; Petersen v. Corno Mills Co., 216 Iowa 894, 249 N.W. 408; Tunnicliff v. Bettendorf, 204 Iowa 168, 214 N.W. 516. To illustrate, we said in the Tunnicliff case, reading on page 170:
"There is no merit in appellant's contention that the findings of fact of the industrial commissioner are conclusive. As we have said, there was no conflict in the evidence; and if the facts found by the commissioner do not support the order made by him, or if there is not sufficient competent evidence to support the finding, the order based thereon may be reviewed and set aside by the court. * * * It is only where there is a conflict in theevidence that the findings of fact of the commissioner areconclusive." (Italics supplied.)
Of course, by the statement in the Tunnicliff case, supra, which we have italicized, this court did not mean to express the idea that the district court could interfere with the findings of the industrial commissioner where the facts are one-sided, but all in favor of his ruling. See Enfield v. Certain-Teed Products Co., supra.
When the industrial commissioner's finding, however, is not supported by the evidence, and when, on the other hand, the evidence is without conflict and all of it is against the conclusion reached by him, then the courts may interfere and modify, set aside, or reverse his ruling, as shown by the cases above indicated.
[2] II. As suggested in his findings, the industrial commissioner disallowed compensation because he concluded that the claimant had not met her burden of proving that the injury to the employee was caused by "an accident or incident out of the ordinary." By that statement of the industrial commissioner, it is apparent that he was laboring under the impression that the claimant could not receive the compensation unless she proved that the injury to the employee rose out of an accident or unusual incident.
A review of the Iowa Workmen's Compensation Act will reveal that the statute does not make an accident or an unusual incident the basis for the allowing of compensation. Under section 1421 of *Page 730
the 1931 Code, certain definitions are set forth for the interpretation of the act. They are, so far as material here:
"In this and chapters 71 and 72, unless the context otherwise requires, the following definitions of terms shall prevail: * * * 5. The words `injury' or `personal injury' shall be construed as follows: a. They shall include death resulting from personal injury. b. They shall not include injury caused by the wilful act of a third person directed against an employee for reasons personal to such employee, or because of his employment. c. They shall not include a disease unless it shall result from the injury."
Subdivision b of section 1421, just quoted, is not involved in the present controversy. Therefore the underlying problem presented is whether the death of the employee resulted from a "personal injury" as contemplated by the Iowa Workmen's Compensation Act. Certain diseases and injuries, as already indicated, are excluded from the act. For instance, an intentionally self-inflicted injury is not included. See section 1376 of the 1931 Code. If intoxication of the employee is the proximate cause of his injury, he cannot recover compensation under the act. By this enumeration of exclusions of injuries, we have not intended to be all-inclusive. Our purpose here only is to give illustrations to assist in defining what, in fact, is included within the term "personal injury" under the act.
As a matter of convenience, we will divide, as has been suggested, the industrial commissioner's findings into those relating to the absence of evidence of accident and those relating to the absence of evidence of a special or an unusual incident. The first phase of this classification will be considered in this division, and the other phase thereof will be reviewed in another division.
Does the act require that the personal injury shall grow out of an accident? It is argued by the appellants that this is true; while, on the other hand, it is contended by the claimant that an accident in no event is essential. In the statutory definition of personal injury, the word "accident" is not included. There is only one prerequisite in the statute at this point and that is that there be a personal injury. An injury, according to Webster's New International Dictionary, means: "Damage or hurt done to or suffered by a person or thing." Of course, "injury" is "a generic term, which, in ordinary modern usage, is of very broad designation, having numerous and comprehensive popular meanings, as well as having *Page 731
a legal import." See 32 Corpus Juris, pp. 514 and 515. Speaking generally, a personal injury "is an injury to the person of an individual; * * * in a restrictive sense, the equivalent of bodily injury." 32 Corpus Juris, p. 520.
When arriving at a definition of "personal injury" under the Iowa Compensation Act, of course, it is essential to keep in mind the history and the purpose of the act. At this point it is necessary to have in mind the exclusions made by the legislature. While a personal injury does not include an occupational disease under the Workmen's Compensation Act, yet an injury to the health may be a personal injury. Dille v. Plainview Coal Co., 217 Iowa 827, 250 N.W. 607; and for a case on the general subject outside of the Workmen's Compensation Act, see Gay v. Hocking Coal Co.,184 Iowa 949, 169 N.W. 360. Likewise a personal injury includes a disease resulting from an injury. See subdivision c, par. 5 of section 1421 of the 1931 Code. Manifestly the personal injury contemplated by the statute does not include metabolism. A metabolism, according to Webster's New International Dictionary, means "the sum of the processes concerned in the building up of protoplasm and its destruction incidental to the manifestation of vital phenomena; the chemical changes proceeding continually in living cells; metabolism may be constructive or destructive." The result of changes in the human body incident to the general processes of nature do not amount to a personal injury. This must follow, even though such natural change may come about because the life has been devoted to labor and hard work. Such result of those natural changes does not constitute a personal injury even though the same brings about impairment of health or the total or partial incapacity of the functions of the human body. Industrial Commission of Ohio v. Franken, 126 Ohio St. 299, 185 N.E. 199, local citation 200.
It was said by the Massachusetts Supreme Court in Madden's case, 222 Mass. 487, 111 N.E. 379, reading on page 383, L.R.A. 1916D 1000:
"A disease which under any rational work is likely to progress so as finally to disable the employee, does not become a `personal injury' under the act (Massachusetts Workmen's Compensation Act) merely because it reaches the point of disablement while work for a subscriber is being pursued. It is only when there is a direct causal connection between the exertion of the employment and the *Page 732
injury that an award of compensation can be made. The substantial question is whether the diseased condition was the cause, or whether the employment was a proximate contributing cause."
[3] A personal injury, contemplated by the Workmen's Compensation Law, obviously means an injury to the body, the impairment of health, or a disease, not excluded by the act, which comes about, not through the natural building up and tearing down of the human body, but because of a traumatic or other hurt or damage to the health or body of an employee. See Madden's case, supra; In re Hurle, 217 Mass. 223, 104 N.E. 336, L.R.A. 1916A 279, Ann. Cas. 1915C 919; Dille v. Plainview Coal Co., supra; Hanson v. Dickinson, 188 Iowa 728, 176 N.W. 823; Farrow v. What Cheer Clay Products Co., 198 Iowa 922, 200 N.W. 625; Belcher v. Des Moines Electric Light Co., 208 Iowa 262, 225 N.W. 404. The injury to the human body here contemplated must be something, whether an accident or not, that acts extraneously to the natural processes of nature, and thereby impairs the health, overcomes, injures, interrupts, or destroys some function of the body, or otherwise damages or injures a part or all of the body. This is the personal injury contemplated by section 1421 of the 1931 Code, and if the employee's death in the case at bar resulted from such personal injury, then the claimant is entitled to compensation. Of course, such personal injury must be the result of the employment "and flow from it as the inducing proximate cause." Madden's case, supra; Smith v. Soldiers
Sailors Memorial Hospital, supra; Enfield v. Certain-Teed Products Co., supra.
But such personal injury need not arise out of an accident. Madden's case, supra; Hughes v. Cudahy Packing Co., 192 Iowa 947, 185 N.W. 614; Farrow v. What Cheer Clay Products Co., supra; Hanson v. Dickinson, supra; Dille v. Plainview Coal Co., supra. When discussing this question in Hanson v. Dickinson, supra, we said, reading on page 733:
"The Workmen's Compensation Act dispenses with the necessity of any showing of negligence, contributory negligence and the like, and adopts as the standard or condition that the injury must have been personal and have arisen `out of and in the course of the employee's employment.' * * * It is urged, however, that, under the definition `personal injuries' in paragraph g in section 2477-m16, Code Supp. 1913 (now section 1421 of the 1931 Code), a *Page 733
pre-existing disease ought not to be considered, even though `lighted up' or accelerated by the injury. The paragraph reads: `They (personal injuries) shall not include a disease (occupational disease), except as it shall result from the injury.' In the English act, as well as those of most of the states, the remedy provided is for `personal injury by accident,' and this is held to exclude diseases other than those in consequence of the injury. Manifestly the term `personal injuries' is of much broader significance than `personal injury by accident.' It comprehends a great number of injuries, many of which will be found enumerated in Hurle's case, 217 Mass. 223, Ann. Cas. 1915C, 919, and in Madden's case, 222 Mass. 487, 489, 111 N.E. 379." (Italics supplied.)
It is enlightening to read excerpts from Madden's case, supra, at this place in further explanation of the fact that not all compensation acts require that the personal injuries arise from an accident. There it is said on page 380 of 111 N.E.:
"The standard established in this respect by our (Massachusetts) Workmen's Compensation Act as the ground for compensation is simply the receiving of `personal injury arising out of and in the course of the employment. This standard is materially different from that of the English act and of the acts of some of the states of this nation. That standard is `personal injury by accident.' * * * The difference between the phraseology of our act (the Massachusetts act) and the English act in this respect cannot be regarded as immaterial or casual."
Continuing, the Massachusetts court said, on page 381 of 111 N.E.:
"In any event, decisions made as to workmen's compensation acts which base compensation upon `personal injury by accident' instead of upon `personal injury' well may be and may be expected to be divergent from our own and compensation be denied under them which would be awarded under ours. * * * Actions forpersonal injury arising from disease contracted in the course ofemployment and without physical impact are not uncommon where theother elements exist to establish liability." (Italics supplied.)
In the Iowa act, as in the Massachusetts act, the prerequisite for compensation is that the injury be a personal injury, as distinguished from a personal injury caused by accident. Because of the *Page 734
difference between the phraseology of the Iowa act and the language of the acts in many states of the Union, it is obvious that what the courts may have said there is not controlling here. Regardless of that, we are committed in Iowa to the proposition that the personal injury contemplated by the act need not be one caused by an accident. Hanson v. Dickinson, supra; Hughes v. Cudahy Packing Co., supra; Dille v. Plainview Coal Co., supra.
Therefore, the commissioner erred in holding that before the claimant could recover she must prove that the employee's death resulted from a personal injury arising out of an accident. Notwithstanding the fact that the personal injury did not grow out of an accident, this would not bar the right of the claimant to recover compensation, provided the employee's death resulted from a personal injury as herein defined and contemplated by section 1421 of the 1931 Code.
III. It is next necessary to determine whether the commissioner committed an error of law in finding that the claimant could not recover compensation for the employee's death unless she proved that the personal injury was caused by a special incident or an unusual occurrence.
Her husband, the employee, with one exception was the oldest man on the job. The work was exceedingly heavy because it required much lifting, pulling, and prying. Immediately after the accident, the employee stated to the doctor that he was injured in pulling. This statement was clearly part of the res gestae. Farrow v. What Cheer Clay Products Co., supra. An argument is made by the appellants upon the theory that the record lacks proof that the employee at the time in question was performing this heavy work. But a careful reading of the entire record reveals without contradiction that he was doing heavy work at the time he sank to the ground. As a matter of fact, there is no substantial evidence to the contrary even when considering the inferences to be drawn from evidence. Because the work was so heavy, the men who did it were called "the bull gang". Such heavy work caused a straining of the stomach of the man who performed it.
Dr. Wirsig, who attended the employee, testified that the strain incident to the work was the proximate and only cause of the perforation of the stomach. It was said by the doctor that there would have been no perforation had it not been for the strain of the work. Likewise the doctor testified that the ulcer itself would not have *Page 735
perforated naturally, but that the perforation necessarily came from the work. While some statements were injected into the record concerning the fact that the employee had used intoxicating liquors Sunday or Saturday night before his injury, yet the doctor emphatically testified that the drinking of liquor, if it were done, did, and could, not cause the perforation of the ulcered stomach. There is no evidence to the contrary.
Manifestly, therefore, the straining in doing the work caused the personal injury to the employee. That being true, it was not necessary for the claimant to prove any other special incident or any other unusual occurrence. Dille v. Plainview Coal Co., supra; Buncle v. Sioux City Stock Yards Co., 192 Iowa 555, 185 N.W. 139; Zappala v. Industrial Insurance Commission, 82 Wn. 314, 144 P. 54, L.R.A. 1916A 295; Southern Casualty Co. v. Flores (Tex. Civ. App.) 294 S.W. 932; Central Surety Insurance Corporation v. Industrial Commission of Colorado, 84 Colo. 481, 271 P. 617. See, also, Johnson v. La Bolt Oil Co. (S.D.) 252 N.W. 869. As said by the Court of Civil Appeals of Texas, in Southern Casualty Co. v. Flores, supra, reading on pages 933, 934:
"If in doing his work the employee, in a usual or unusualmanner, lifts an object, or stoops, or takes a step, or makes any movement of his limbs or body, and such exertion unexpectedly and unintentionally results in an injurious strain upon his nerves, muscles, heart, or any other organ, so as to incapacitate him for work, the event or result is an injury as contemplated in the act, and entitles him in the case of mere disability, or his heirs or representatives, in the case of his death, to compensation." (Italics supplied.)
To the same effect, it is said by the Washington Supreme Court, in Zappala v. Industrial Insurance Commission, supra, reading on page 55 of 144 P.:
"To hold with the Commission that if a machine breaks, any resulting injury to a workman is within the act, but if the man breaks, any resulting injury is not within the act, is too refined to come within the policy of the act as announced by the legislature in its adoption and the language of the court in its interpretation."
Confusion at times may have arisen because the distinction has not always been recognized between a statute providing for *Page 736
compensation for an injury caused by accident and a statute allowing compensation for a personal injury with or without the accident.
The right of the claimant to recover in the case at bar under the Iowa act is not based upon a special incident, or an unusual occurrence. On the other hand, her right to recover is based upon her proof that the injury received by the employee is a personal injury (as defined in division I of this opinion) arising out of and in the course of the employee's employment, and her proof that such injury was the proximate cause of the employee's perforated stomach and his resulting death. See cases above cited. The entire matter is a question of proof at this point. If the claimant proves that the employee's death was caused by a personal injury arising out of and in the course of the employment, she need not show any other special incident or unusual occurrence. A special incident or unusual occurrence is not material except to prove the personal injury. So, if the personal injury is proven by other evidence, then the special incident or unusual occurrence becomes immaterial. Possibly there are many cases under different records where the employee may not have proved that he received a personal injury in his work without showing some special incident, but even in those instances the necessity of showing the special incident would be to prove personal injury and not to lay the foundation otherwise for compensation.
[4] In the case at bar the personal injury was proven when it was shown by the record that the perforation of the employee's stomach did not result from the natural processes of nature, but occurred only because of the heavy work, and that such perforation arose out of and in the course of the employee's employment. Even though the employee's stomach may have been weakened by the ulcer, that alone does not prevent the recovery of compensation. Perhaps the ulcer made the employee's stomach easier to perforate; but that does not mean that the injury which he received is not a personal injury under the statute. Hanson v. Dickinson, supra; Farrow v. What Cheer Clay Products Co., supra; Fraze v. McClelland Co., 200 Iowa 944, 205 N.W. 737. It has been decided that the perforation of a diseased intestine by slight pressure such as would be harmless to a healthy person is a personal injury. Madden's case, supra.
Nowhere in the record is there any dispute on the material facts. Consequently the appellee, without controversy, proved that there *Page 737
was a personal injury which caused the employee's death, and that the same arose out of and in the course of the employee's employment. Hence, the commissioner erred as a matter of law in finding that she was not entitled to compensation, and the district court properly reversed him. See section 1453 of the 1931 Code.
[5] IV. But it is contended by the appellants that the district court erred in assessing the compensation. It fixed the compensation at the rate of $13.50 per week for a period of three hundred weeks. That is the amount of the weekly wage that was earned by the employee. According to the appellants, the weekly compensation should be only 60 per cent of the average weekly earnings.
Section 1390 of the 1931 Code provides, so far as here material, that the "* * * compensation shall be upon the basis of sixty per cent per week of the average weekly earnings. * * *" Following section 1390 is section 1392 of the same Code. This latter section, according to its context, must necessarily be read with, and it is modified by, section 1390, above mentioned. Section 1392 reads:
"When death results from the injury, the employer shall pay the dependents who were wholly dependent on the earnings of the employee for support at the time of his injury, the weeklycompensation for a period of three hundred weeks from the date of his injury."
The question then arises as to what is meant by "weekly compensation" in section 1392. Some light is thrown upon this inquiry by the provisions of section 1390, before mentioned. In section 1390 reference is made to the word "compensation" and to the words "average weekly earnings." It is apparent that the word "compensation," as used in section 1390, is not the same as the words "average weekly earnings" used therein. Clearly the words "average weekly earnings" mean the wages or salary which the employee was earning; while "compensation" means, so far as the case at bar is concerned, 60 per cent thereof. So, when section 1392 uses the word "compensation," it refers back to the word "compensation," as distinguished from the words "average weekly earnings," used in section 1390. If the legislature did not mean compensation as thus interpreted in section 1392, it would have used the words "weekly wage." Consequently the district court erred in fixing the compensation at $13.50 a week. The compensation should have been 60 *Page 738
per cent thereof. To this extent, the judgment of the district court is modified.
[6] V. Finally, it is claimed by the appellants that the district court erred in allowing Dr. Wirsig $318 for medical services rendered the employee. Such allowance on the part of the district court was error, the appellants argue, because there was no request for such medical services, as required by section 1387 of the 1931 Code. That section, so far as material, provides:
"In addition to other compensation hereinafter provided for, at the time of the injury and thereafter during the disability, but not exceeding four weeks of incapacity, the employer, if sorequested by the employee, or anyone for him, or if so ordered bythe court or industrial commissioner, shall furnish reasonable surgical, medical, and hospital services, and supplies therefor. * * *"
In reply to this contention of the appellants, it is said by the claimant that "no doubt in the stress and excitement produced by his injury (the employee's) the decedent and his family did neglect to make any formal demand upon the insurer (or the employer) for medical services, and also probably neglected to study the statute relating to such procedure." There is no claim by the claimant that the industrial commissioner, or the court, was asked to or did order such medical services. Consequently, it is apparent that the statute has not been complied with.
This is a special proceeding and the medical services are to be paid for by the employer and his insurer only under the terms of the statute. If the terms of the statute relating to such payment have not been met, then, of course, the courts cannot order the payment. So, to the extent that these medical services were allowed, the judgment of the district court is further modified.
Attention has now been given to all material questions before us.
Wherefore, except as hereinabove modified, the judgment of the district court is affirmed. — Affirmed.
CLAUSSEN, C.J., and EVANS, ALBERT, ANDERSON, KINTZINGER, MITCHELL, and DONEGAN, JJ., concur. *Page 739
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This is a controversy between the receivers of two insolvent banks over the right to the possession of $5,000 worth of government bonds now in the hands of the clerk of the lower court under a stipulation, pending the result of this action. Appellant concedes that claimant is entitled to preference for the entire claim filed, but contends that appellee is not entitled to a lien against the government bonds.
D.T. Eels was appointed receiver of the Simmons Co. Bank on December 15, 1930. He resigned on September 12, 1931, and J.H. Lewis, the present receiver, was appointed as his successor. When the first receiver was appointed, the district court, making the appointment, also made an order designating the Iowa State Bank of Osceola as the sole depository of the receivership funds of the Simmons Co. Bank. The order of such appointment required the Iowa State Bank to deposit government bonds with the Central National Bank Trust Company of Des Moines as security for the repayment of the receivership funds deposited in its bank, and that said securities be sufficient to cover the entire amount of funds deposited. On December 16, 1930, the Iowa State Bank by resolution, duly adopted by its board of directors, accepted the office of depository with all the obligations incurred thereby, and authorized and directed its cashier to carry out the obligations imposed upon it by the order of court designating it as depository, and authorized and directed its cashier to comply therewith.
On the appointment of J.H. Lewis as receiver on September 12, 1931, the district court ordered that all the authority and power of the first receiver entered on the 15th day of December, 1930, be continued in full force, and be vested in the new receiver, with the same authority, power, and privileges given to the first receiver; and the new receiver was ordered and directed to deposit all receivership *Page 1172
funds in the Iowa State Bank, which was again designated as depository; the court orders of December 15, 1930, requiring the Iowa State Bank to deposit sufficient securities with the Central National Bank Trust Company of Des Moines to cover all receivership funds deposited were ratified, confirmed and continued in full force and effect.
The court order of September 12, 1931, bore the following written indorsement thereon:
"The above and foregoing order as to the depository for the funds of said receivership is hereby accepted and approved this September 12, 1931.
"Iowa State Bank.
"[Seal] O.B. Monroe, Cashier."
The cashier testified that he "was authorized by the Board ofDirectors of the Iowa State Bank to do that at that time. It was done while the Board of the Iowa State Bank was present in a meeting at the bank. At that Board meeting on September 12, 1931,
the resignation of Mr. Eels and the appointment of Mr. Lewis were talked over and it was decided to continue as depository, and I signed up Exhibit `M' (being the endorsement referred to) in accordance with the order of the board."
The pledging of the bonds as security for the Simmons Bank receivership funds was approved by the state superintendent of banking on the 18th of December, 1930.
Although the Iowa State Bank, in compliance with the court order, had deposited with the Central National Bank Trust Company of Des Moines a certain amount of securities, as required, they did not cover about $8,000 of the receivership funds deposited.
Prior to closing of the Iowa State Bank, the receiver of the Simmons Co. Bank made repeated demands on the Iowa State Bank to deposit sufficient government bonds with the Central National Bank Trust Company of Des Moines, Iowa, to cover the receivership funds as required by the order of court designating it as depository of such funds. Pursuant to said requests, and to carry out the obligations imposed upon it by the court order, and its acceptance thereof, the Iowa State Bank on August 5, 1932, made a written assignment to J.H. Lewis, receiver of the Simmons Bank, of $5,000 worth of government bonds, then in the possession of the clerk of the United States District Court. Although said bonds were *Page 1173
in the hands of the clerk of the federal court to secure certain bankruptcy funds, it appeared they would not be necessary for such security; but, as they could not be immediately withdrawn, they were assigned with the agreement that they be deposited with the Central National Bank Trust Company of Des Moines, in conformity with the court orders referred to, as soon as they were released. Before such bonds were released, the Iowa State Bank itself was placed in the hands of the appellant, as receiver; and he now claims to be entitled to the bonds in question for the benefit of the creditors of the Iowa State Bank. It then appeared that the United States clerk had no further lien against said bonds. Thereupon it was stipulated that the bonds be placed in the hands of the clerk of the Iowa District Court, pending the final outcome of these proceedings.
The appellant concedes and contends that the receiver of Simmons Co. Bank is only entitled to a preference against some $3,900 cash in the hands of the Iowa State Bank at the time it closed its doors; but that he is entitled to no preference or lien against the $5,000 of government bonds in question.
There is no question but that the assignment of the bonds in question was made by the Iowa State Bank to comply with the court orders designating it as depository.
Appellant claims that the assignment was unauthorized, was made in violation of section 9222-c2 of the Code, and is null and void. This section provides that:
"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 suchcashier or other officer or employee pursuant to a resolution bythe board of directors, a written record of which proceedingsshall first have been made." (Italics ours.)
Appellee contends that section 9222-c2 applies only to pledges made by the cashier, or some other officer or employee of the bank, and not to pledges made by its board of directors, and that an assignment made by the bank's board of directors is valid and authorized by section 9297 and section 9222-c3 of the Code. Section 9297 provides inter alia: *Page 1174
"State or Savings Banks may contract indebtedness or liability for the following purposes: * * * (2) for deposits, (3) to paydepositors, and * * * (5) for other corporate purposes, and theDirectors of said * * * state or savings banks shall have theright to pledge as security for said indebtedness or liabilitysuch assets of said bank or trust company as may be necessary."
(Italics ours.)
Section 9222-c3 provides that:
"State and savings banks * * * when authorized by the superintendent of banks may pledge a portion of their assets tosecure public funds and such other funds as may be authorized bythe superintendent of banking." (Italics ours.)
The superintendent of banking did authorize the pledging of the bonds in question, to secure the funds deposited by the receiver of the Simmons Co. Bank. All of the foregoing statutes were enacted by the legislature in 1929. Section 9222-c2 clearly limits the pledging of assets, by the cashier or some otherofficer or employee of the bank, and must be authorized annually by a resolution of the "Board of Directors".
Appellee contends that, if the pledge of assets, or agreement therefor, is made by the bank itself, through its board of directors, the statute does not apply. As this statute carries with it a severe penalty for its violation, it must be strictly construed. It is contended that any action taken by the board of directors is the direct action of the corporation itself. Not because they are agents, officers, or employees of the company, but because they represent and are the corporation itself. American Soda Fountain Co. v. Stolzenbach, 75 N.J. Law 721,68 A. 1078, 16 L.R.A. (N.S.) 703, 127 Am. St. Rep. 822.
The acceptance of the conditions imposed upon the depository under the order of court, designating it as depository, constitutes an agreement upon its part to deposit the securities necessary to cover the receivership funds deposited in the Iowa State Bank. The cashier was not only authorized by the resolution of December 16, 1930, to assign securities at various times, but he was also specifically directed to do so as it became necessary to carry out the obligations of the bank. The act of pledging these securities or authorizing them to be pledged was the act of the board of directors of the bank. The cashier was simply directed to carry out what the bank had agreed *Page 1175
to do. Section 9297 and section 9222-c3 fully authorized and justified the directors of the bank to pledge as security for the deposit such assets of the bank as might become necessary.
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.
If the bonds in question were assigned by the board of directors to secure the receivership funds of the Simmons
Company Bank, deposited in the Iowa State Bank, then the receiver of the Simmons Co. Bank would be entitled to have the proceeds thereof applied on the payment of its deposits in the Iowa State Bank without an annual authorization therefor.
Likewise, if it was necessary to show that a written record, of the action of the board of directors, authorizing the hypothecation, was made within a year prior thereto, the assignment would also be valid, if such a record was kept.
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 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, *Page 1176
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. A resolution is something less formal than an ordinance, and need not necessarily be in writing. It has even been held that a yea and nay vote is not required to secure its adoption. Sawyer v. Lorenzen Weise,149 Iowa 87, 127 N.W. 1091, 1093, Ann. Cas. 1912C, 940. In that case we said:
"A `resolution' is something less formal than an `ordinance', and, generally speaking, is a mere expression of the opinion or mind of the council concerning some matter of administration coming within its official cognizance (Railroad Co. v. Chicago,174 Ill. 439, 51 N.E. 596), and no set form of words is essential if the requirement which calls for such expression is met. * * * A resolution does not require a record of the yea and nay vote of the council, and a less formal record of its passage may be sustained than would be required to show the adoption of an ordinance. The record in the instant case is sufficient to show without reasonable doubt that the town council intended by its action to express its consent to the defendant's proposal to establish the saloon in question, and the manner of such expression is not so informal as to render it nugatory. Cooper v. Nelson, 38 Iowa 440."
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 informal action may he 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 *Page 1177
that effect, as a resolution does not necessarily have to be in writing. Such action was taken within a year prior to making of the assignment in question.
Section 9222-c2 requires that a written record of such proceedings shall first have been made. It appears without conflict that a written record of such action of the board was made by the written indorsement appearing upon the court order of September 12, 1931, as follows:
"The above and foregoing order as to the depository for the funds of said receivership is hereby accepted and approved this September 12, 1931.
"[Signed] Iowa State Bank.
"[Seal] O.B. Monroe, Cashier."
It therefore appears that, although appellant's contention that an annual authorization by the board of directors might be required, and that written record thereof shall first have been made, the evidence shows that such requirements have been met.
In the instant case the evidence shows without dispute that the assignment of the bonds in question was made on August 5, 1932, as a pledge, by the bank itself through its board of directors. The cashier of the Iowa State Bank testified that the assignment of such bonds on the 5th of August, 1932, was under the authority, direction, and request of the board of directors. He also testified that the board of directors on September 12, 1931, agreed to at all times deposit sufficient bonds to secure the receivership funds. The evidence also shows that "he never did anything about these matters, that he didn't take it up with theBoard and have their full sanction and approval."
The evidence clearly shows that the board of directors of the Iowa State Bank fully agreed to pledge sufficient bonds to cover all receivership funds of the Simmons Co. Bank deposited in the Iowa State Bank under order of court. As these deposits were made, it became the duty of the Iowa State Bank under its agreement as depository to deposit sufficient securities to cover them. It would be inequitable and grossly unjust now to permit the receiver of the Iowa State Bank to claim these bonds under the record presented in this case.
The evidence conclusively shows that the board of directors of the Iowa State Bank agreed by resolution adopted on the 16th *Page 1178
day of December, 1930, to secure all deposits made by the receiver of the Simmons Co. Bank in the Iowa State Bank, and that the agreement made under this resolution was again adopted and ratified on September 12, 1931. All deposits made in the Iowa State Bank were therefore made on the expressed condition that the Iowa State Bank would deposit with the Central National Bank Trust Company of Des Moines sufficient bonds to cover all of such deposits. The evidence also shows without conflict that the assignment of the bonds in controversy was made by and under the express authority of the bank itself, with the full sanction and approval of its board of directors. They were actually assigned as security for the receivership funds.
Under the record we are satisfied that the assignment of the bonds in question was made at the request and under the direction of the board of directors, and, as such, was the act of the bank itself. Under the circumstances shown by the record in this case, we believe the judgment of the lower court in holding the assignment valid was correct. It must be held in this case that the bonds in question were deposited by the Iowa State Bank in accordance with its agreement.
The judgment of the lower court is therefore affirmed.
ALBERT, C.J., and STEVENS, ANDERSON, and MITCHELL, JJ., concur.
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On the afternoon of April 13, 1935, plaintiff entered the lobby of a substation of the Des Moines post office on Grand Avenue, and proceeded to the stamp window to purchase stamps. This window was immediately adjacent to a doorway leading from the lobby to the rear part of the post office. After purchasing stamps she turned around to go to a money order window. In turning she stumbled against a mail sack standing as high as her waist against the adjacent doorway, and fell onto the floor, as a result of which she claims to have received serious and painful injuries, permanently impairing the use of her legs. The case was submitted to a jury and a verdict of $150 was returned in her favor. The plaintiff, feeling the verdict inadequate, filed a motion for a new trial, which was overruled, and she appeals.
Plaintiff contends that the court erred (1) in failing to include in its instructions the damage resulting from the permanent injury and future impairment of the use of her legs; and (2) in failing to grant a new trial because of the inadequacy of the verdict.
Appellee contends that even though it be conceded that the *Page 1330
instructions were erroneous as claimed, and even though the amount allowed for the injuries received was inadequate, the errors were not prejudicial because under the facts plaintiff was not entitled to a verdict in any amount, and that defendant's motion for a directed verdict should have been sustained upon the ground that plaintiff failed to establish by a preponderance of the evidence that the injury and damage alleged were in any manner caused by any employee of the defendant.
[1] It is the settled rule of law in this state that if plaintiff has failed to establish the material allegations of her petition by a preponderance of the evidence, or if the trial court should have sustained defendant's motion for a directed verdict for such reason, then subsequent errors upon other grounds are not prejudicial. Alline v. City of LeMars, 71 Iowa 654, 33 N.W. 160; Blair Town Lot Land Co. v. Hillis, 76 Iowa 246, 41 N.W. 6; Spencer v. Taggart, 162 Iowa 564, 144 N.W. 299; Brown v. Hunt et al., 163 Iowa 637, 145 N.W. 310; Mulroney Mfg. Co. v. Weeks, 185 Iowa 714, 171 N.W. 36; Conway Bros. v. Iowa H.M. Ins. Assn., 190 Iowa 1369, 181 N.W. 768; Dye Produce Co. v. Davis, 202 Iowa 1008, 209 N.W. 744; Foley v. Mathias, 211 Iowa 160, 233 N.W. 106.
In Blair Town Lot Land Co. v. Hillis, 76 Iowa 246, loc. cit. 249, 41 N.W. 6, 8, this court said:
"This instruction was not correct * * *. But * * * that part of the charge * * * was without prejudice to the plaintiff. We say this because in our opinion the jury upon the undisputed facts could have found no other verdict than that they did find."
In Mulroney v. Weeks, 185 Iowa 714, loc. cit. 717, 171 N.W. 36, 37, this court said, speaking through Justice Evans:
"We think it clear, therefore, that the plaintiff was entitled to a directed verdict, though it did not ask for one. Having obtained its verdict from the jury, it may defend the same on the same grounds upon which it might have demanded a directed verdict. The fact that it was entitled to a directed verdict renders errors to other issues nonprejudicial."
In Conway Bros. v. Iowa H.M. Ins. Assn., 190 Iowa 1369, loc. cit. 1373, 181 N.W. 768, 770, this court said: *Page 1331
"The trial court could have correctly sustained plaintiff's motion for a directed verdict, on the evidence and issues made. This being true, subsequent errors in the record, if any, are not prejudicial and reversible."
In Dye Produce Co. v. Davis, 202 Iowa 1008, loc. cit. 1017, 209 N.W. 744, 748, this court said:
"While there was error in placing upon plaintiff a greater burden of proof than it was required * * * to carry, this will not entitle it to a reversal if, upon the record made, it must be said that it was not, in any event, entitled to a verdict. If, upon the evidence, a verdict for the plaintiff could not be sustained, plaintiff could not be prejudiced by a verdict against it rendered under an erroneous instruction."
In Foley v. Mathias, 211 Iowa 160, loc. cit. 163, 233 N.W. 106, 107, this court said:
"Many errors are alleged upon this appeal * * * but it is the established rule in this state that, where a plaintiff is entitled to a directed verdict, though he did not ask for it, errors as to other issues are without prejudice.* * * As was said by this court in Brown v. Hunt et al., 163 Iowa 637, 641, 145 N.W. 310, 312, `* * * this court will not reverse a judgment because of errors in charging a jury, where, on the whole record, a different judgment or verdict could not have been sustained, is well settled.'"
If, therefore, under the facts in this case, plaintiff was not entitled to any verdict, then defendant's motion for a directed verdict should have been sustained. In such event, any errors in the court's instructions were not prejudicial. In order to determine whether or not the directed verdict for defendant should have been sustained, a brief consideration of the evidence is necessary.
Plaintiff claims that her injuries were caused by the negligence of defendant's employee in placing a mail sack against the doorway immediately adjacent to the window at which she was purchasing stamps. The burden was upon her to establish by a preponderance of the evidence that this sack was negligently placed in that position by one of defendant's employees. The only evidence tending to sustain her contention is that she received the injuries complained of between three and four o'clock *Page 1332
in the afternoon on the day in question, and that one of defendant's employees left a mail sack in front of the door referred to on the same afternoon. The evidence shows without dispute, however, that defendant's employee was in the post office and left his mail sack against the doorway in question atabout five o'clock on the afternoon of the same day. The evidence shows without dispute that it was the ordinary custom and practice of many patrons of this substation to place parcels and mail sacks in front of the door in question, and that many sacks and large parcels were placed against this doorway by its patrons prior to and after the time plaintiff was injured. The fact that plaintiff was injured by falling over a mail sack at the time in question would not in and of itself make the defendant liable therefor.
Plaintiff must further show by a preponderance of the evidence that the sack in question was placed there by one of defendant's employees. The undisputed testimony shows that plaintiff was in the post office buying stamps between three and four o'clock in the afternoon of the day she fell. She testified that there was no mail sack in front of this door when she passed it immediately before she arrived at the stamp window adjacent to the door in question. If there was no mail sack there at that time, it must have been placed there by someone immediately after she reached that window. She was there only long enough to purchase her stamps and turn around.
The undisputed evidence also shows that defendant's employee did not place any mail sack against the doorway, and did not reach the post office until about five o'clock, and that when he did so, there was no one at the stamp window. He also testified that after leaving his mail sack at the door, he returned to his truck on the street and brought in two other packages which he placed in a mail chute, and that no one was near the sack at that time.
There is no testimony in the record in any manner showing that the mail sack left by defendant's employee was the same mail sack over which plaintiff stumbled. Nor is there any testimony in any other manner identifying the sack over which plaintiff stumbled, as being the one left there by defendant's employee. Nor is there any testimony showing that no other mail sack was left at the doorway in question that afternoon. As the testimony shows that mail sacks and other large parcels were frequently left at the door in question by various patrons of the *Page 1333
post office, it cannot be said that there is any direct evidence showing that the sack over which plaintiff fell was left there by defendant's employee. It may well have been left there by some other patron of the post office.
[2] The evidence in this case is purely circumstantial, and it is the universal rule of law that there can be no recovery upon circumstantial evidence alone unless the circumstances are so clear that they are inconsistent with any other theory than that of defendant's liability. Where plaintiff's right of recovery depends upon conclusions to be drawn from circumstantial evidence, the evidence must be inconsistent with any other theory than that establishing the defendant's liability. Asbach v. C., B. Q. Ry. Co., 74 Iowa 248, 37 N.W. 182; Daugherty v. C., M.
St. P.R. Co., 87 Iowa 276, 54 N.W. 219; Kennedy v. C. N.W.R. Co., 90 Iowa 754, 57 N.W. 862; Kling v. C., M. St. P.R. Co.,115 Iowa 133, 88 N.W. 355; Bryce v. C., M. St. P.R. Co.,129 Iowa 342, 105 N.W. 497; Gibson v. Iowa Cent. R. Co., 136 Iowa 415, 113 N.W. 927; Ohlson v. Sac County Fire Ins. Assn., 191 Iowa 479, 182 N.W. 879; Hemminger v. City of Des Moines, 199 Iowa 1302, 203 N.W. 822; Tracy v. Liberty Oil Co., 208 Iowa 882, 226 N.W. 178; Stickling v. C., R.I. P.R. Co., 212 Iowa 149, 232 N.W. 677.
In Asbach v. C., B. Q. Ry. Co., 74 Iowa 248, loc. cit. 250, 37 N.W. 182, 183, this court said:
"A theory cannot be said to be established by circumstantial evidence, even in a civil action, unless the facts relied upon are of such a nature, and are so related to each other, that it is the only conclusion that can fairly or reasonably be drawn from them. It is not sufficient that they be consistent, merely, with that theory, for that may be true, and yet they may have no tendency to prove the theory. This is the well settled rule, and it is manifest that under it plaintiff's theory is not established."
The evidence in this case is not such that it is inconsistent with a theory that the sack over which plaintiff stumbled was not placed there by some other patron of the post office. It is, therefore, our conclusion that the circumstantial evidence in this case is not such that it is inconsistent with any other theory than that of defendant's liability.
We are, therefore, constrained to hold that plaintiff was not entitled to any verdict under the evidence offered, and that *Page 1334
defendant's motion for a directed verdict should have been sustained. It necessarily follows that she could not have been prejudiced by the erroneous instructions complained of.
As the judgment of the lower court was not appealed from, it must stand, and the same is hereby affirmed. — Affirmed.
RICHARDS, C.J., and ANDERSON, DONEGAN, PARSONS, HAMILTON, STIGER, and SAGER, JJ., concur.
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Only one question is presented for determination, and that is whether or not this cause should have been submitted to the jury. In order to arrive at a solution for the problem, a careful consideration of the facts is first necessary.
Historically they are the following: James R. Shipley, in the year 1922, secured a contract with the Iowa state highway commission and the board of supervisors of Guthrie County to grade a part of the main road between Guthrie Center and Panora. This thoroughfare is known as the Panora Speedway. That contractor retained the west portion of this work for himself, but relet the east section thereof to Bennethum, another contractor. It was on the latter division that James Murphy, the decedent, through an electric shock, met his death, between 9 and 10 o'clock in the forenoon of October 13, 1923.
Murphy was a laborer, approximately 36 years of age. He possessed a vigorous mind and robust constitution. His duties at the time consisted of hauling dirt for the undertaking, by the use of three horses hitched to a dump wagon. Prior to the fatal accident, this man had been employed by Shipley for duty on the west end. However, that task was completed, and Shipley loaned some of his men, including Murphy, to Bennethum, for service on the east segment of the improvement, where the casualty occurred.
Many years before October 13, 1923, the appellee Iowa Electric Company had obtained a franchise to, and in accordance therewith did, install and maintain an electric transmission line across Guthrie County along the "Panora Speedway." Such "high line" was constructed by setting poles 30 feet long, at a distance of 150 feet apart. Each pole was placed 5 1/2 feet in the ground. Attached to the top of the individual pole was a wishbone cross-arm, composed of galvanized iron, with one electric *Page 569
wire fastened to each of its three points. Connection of the wire to the "points" was made by insulators of 45,000 volts resistance, while the electric line, on October 13, 1923, actually carried a current of 33,000 volts. Furthermore, there was, as a part of this electric line, a static wire, carrying no current of electricity, which was secured to the top of the poles by means of wooden upright pieces. During all the time Murphy and the other men were engaged in their employment in the building of this grade, there were, as is required by law, signs attached to the poles, informing the public of the electric voltage carried.
The appellees telephone companies, or one of them, before the grading work was begun, had erected along the same highway a system of poles about half the size and half the height of those used by the appellee Iowa Electric Company. Appellant's intestate, at the time he was killed, was driving his team and wagon from the east and west "Panora Speedway" northward under the "electric high line" onto farm premises, for the purpose of furnishing the landowner ingress and egress consistent with the new grade. Either with or without an express agreement so to do, the telephone companies temporarily placed their wires at intervals on some of the "electric high-line poles." For some reason (perhaps because of the grading operations), the telephone wires became loose or slack, and shortly before Murphy's death, a representative of the telephone companies drove a nail or spike into the "high-line pole" near the location of the accident, and hung a telephone wire thereon.
A dispute appears between the appellant, on the one hand, and the appellees, on the other, concerning the height of the "high line" at the time and place Murphy was killed. Appellee Iowa Electric Company claims that its wires were at least 10 feet higher than the top of the newly graded main roadbed (the nearest outer edge of which roadbed was 12 feet from the high-line poles), and that they were 16 or 17 feet above the approach upon which Murphy was working; while appellant contends that the lowest electric wire of the Iowa Electric Company, appellee, was not more than 10 or 12 feet above the surface of the fill, and that the "spike" holding the telephone wire was from 14 inches to 2 feet beneath the lowest high-tension wire.
On the morning of October 13th aforesaid, Murphy, while engaged in driving his team, encountered the telephone wire, *Page 570
which had become loosened from the "spike" on the pole, previously described, and was swinging about four feet from the ground. So one Frenchy, a foreman of the grading gang, first tried to replace the wire on the hook by throwing it from the grade, but failed, the distance being too great. Therefore he stopped Murphy, who was approaching with his team and loaded wagon, and then the foreman raised the telephone wire, in order that the team thus driven could pass thereunder, with suggestions that the wagon should be halted immediately beneath. These directions were obeyed by Murphy. Whereupon the foreman instructed this driver to stand upon the wagon, reach up, and place the telephone wire back over the "spike." Accordingly, Murphy endeavored so to do, but found the height too great to be thus reached. Being unable to accomplish the required disposal of the wire in that manner and way, Murphy then devised a scheme of his own, and in carrying it out, he stepped from the front part of the wagon over the seat onto the dirt in the back, then took the telephone wire in his hands, and gave it a swing, in order to loop it over the "spike" on the pole to the west of him. When thus in motion, the telephone wire went up rainbow shape, and came in contact with the "high-line" wire, causing Murphy's electrocution.
Consequently, appellant predicates her action for this death upon appellee's negligence. She alleges that the wires should have been more completely insulated and guarded, and that the entire "high line" should have been raised in conformity with the grade; and she further asserts that the telephone wires should in no event have been placed on the "high-line" poles. Material to these charges are the further assertion and evidence in support thereof to the effect that inspectors of the "high line" were over the premises, saw the conditions, and thereby imparted notice to their company.
As a defense, appellees plead: First, their own freedom from negligence; second, contributory negligence of plaintiff's intestate; and third, the original negligence of the plaintiff's intestate, which became the proximate cause of the unfortunate death.
Those were the material issues submitted to the trial court at the time it directed a verdict against the appellant and in *Page 571
favor of the appellees. Should there be a reversal? We think not.
I. Because of Section 8323 in the 1924 Code, a presumption of the Iowa Electric Company's negligence existed in appellant's favor; yet, so far as the other appellees are concerned, the burden of proving passive, as well as active, negligence still remained upon her. Nevertheless she argues that, under the record presented in the case at bar, there is present sufficient evidence requiring that the entire cause affecting all the appellees be submitted to the jury for its finding and determination.
Reliance by appellant is made upon the following authorities:Bach v. Iowa Cent. R. Co., 112 Iowa 241; Sikes v. Sheldon,58 Iowa 744; Marquette v. Chicago N.W.R. Co., 33 Iowa 562;Whitsett v. Chicago, R.I. P.R. Co., 67 Iowa 150; Tobey v.Burlington, C.R. N.R. Co., 94 Iowa 256; Barnhart v. Chicago, M. St. P.R. Co., 97 Iowa 654; Swegle v. Chicago, B. Q.R. Co.,196 Iowa 413; Carlson v. Meusberger, 200 Iowa 65; Walters v. IowaElec. Co., 203 Iowa 471; Fidelity Cas. Co. v. Cedar ValleyElec. Co., 187 Iowa 1014; Cawley v. Peoples Gas Elec. Co.,193 Iowa 536; Toney v. Interstate Power Co., 180 Iowa 1362; Crawfordv. Standard Tel. Co., 139 Iowa 331; and other cases.
Assumption, for the purposes of this cause, is made by us that appellees' negligence was the proximate cause of Murphy's death, and this we do without expressly deciding the proposition.
II. Remaining, then, before us for solution is the difficult task of concluding whether or not appellant's intestate came to his death because of his own contributory negligence. Before discussing the evidence relating to this phase of the litigation, it is important to review and give due force and effect to the controlling legal principles.
III. The presence or absence of contributory negligence, generally speaking, is peculiarly a question for the jury, rather than the court, to detect and settle. Lamb v. Wagner Mfg. Co.,155 Iowa 400; Toney v. Interstate Power Co., 180 Iowa 1362;Phelan v. Foutz, 200 Iowa 267.
IV. Moreover, it is to be remembered that there are some instances where it is the province of the court, and not the jury, to judge whether or not the contributory negligence is such as to bar a recovery. *Page 572
V. Often it has been stated that each case must rest upon its own facts in this regard. Barboe v. Sioux City Service Co.,205 Iowa 1074, and other similar authorities.
VI. If there is a conflict in the evidence as to what the person accused of contributory negligence did or did not do, the question is then one for the jury.
Likewise, even though it is known what was done by that individual in this regard, yet if his conduct is such that there may fairly be different opinions with respect to it, and one man honestly and reasonably says it was in accord with ordinary prudence, while another, just as sincerely, and with equal reason, contends it was not, then there is a jury question. Moorev. Chicago, St. P. K.C.R. Co., 102 Iowa 595; McLeod v. Chicago N.W.R. Co., 104 Iowa 139; Stoker v. Tri-City R. Co., 182 Iowa 1090; McSpadden v. Axmear, 191 Iowa 547; Eaton v. Elman, 192 Iowa 719; Waring v. Dubuque Elec. Co., 192 Iowa 508; Devaney v. Omaha C.B. St. R. Co., 184 Iowa 1084; Wolf v. Reeves, 195 Iowa 610;Zellmer v. Hines, 196 Iowa 428.
VII. Consistent, however, with the above and foregoing doctrine, and in no way in conflict therewith, is the additional theory that, "where the facts are clear and undisputed," and the existence and effect of the plaintiff's contributory negligence sufficiently "apparent to every fair-minded and reasonable man, so but one conclusion may be fairly drawn therefrom," then the trial court may and should direct a verdict in the defendant's favor because thereof. McSpadden v. Axmear, supra; Barboe v.Sioux City Service Co., supra; Leonard v. City of Des Moines,190 Iowa 1011; Roberts v. Hennessey, 191 Iowa 86; Waring v. DubuqueElec. Co., 192 Iowa 508; Towberman v. Des Moines City R. Co.,202 Iowa 1299; Brown v. Rockwell City Canning Co., 132 Iowa 631;Rietveld v. Wabash R. Co., 129 Iowa 249. See, also, MonongahelaWest Penn Public Service Co. v. McNutt, 13 Fed. (2d Series) 846;Barnett v. Des Moines Elec. Co., 10 Fed. (2d Series) 111; Geroskiv. Allegheny County L. Co., 247 Pa. St. 304 (93 A. 338); Aljoev. Penn Cent. L. P. Co., 281 Pa. St. 368 (126 A. 759); Hokev. Edison L. P. Co., 284 Pa. St. 112 (130 A. 309); Druse v.Pacific P. L. Co., 86 Wn. 519 (150 P. 1182).
VIII. With these legal principles thus recognized, the *Page 573
further progress in this discussion is to be made by giving proper significance and due prominence to each.
No dispute exists in the record concerning what was done or not done by Murphy, the decedent, immediately prior to and at the time of his death. Hence, there is nothing to be submitted to the jury, so far as that matter is concerned.
IX. Necessarily, then, there is left only one point that could possibly require the consideration of the jury here, and that is whether or not fair-minded and reasonable men would differ with respect to the imprudence of Murphy's act in throwing the wire as he did, under the circumstances.
X. Appellant seriously insists that there can be and is such difference of opinion among reasonable men in reference thereto as to require a reversal of the trial court's action in directing the verdict. This is true, she says, under the authorities ofToney v. Interstate Power Co., supra; Graves v. Interstate PowerCo., 189 Iowa 227; Travers v. City of Emmetsburg, 190 Iowa 717;Cawley v. Peoples Gas Elec. Co., 193 Iowa 536; Dillon v.Allegheny County L. Co., 179 Pa. St. 482 (36 A. 164); Beman v.Iowa Elec. Co., 205 Iowa 730.
A careful analysis of those pronouncements will clearly reveal that they do not apply to the facts presented in this record.Toney v. Interstate Power Co., supra, involves a situation where an employee of the telephone company had climbed upon a pole near an electric "high line," to take up the slack in the telephone wire. Attempting to do this, he cut the wire, and, in order to draw it together, used an instrument described as a "come-along," consisting of a block and tackle, with clamps at either end. One wire slipped from the man's hand while his back was turned to the high-tension line, and in the recoil, went over the high electric wire, and then came down to the ground; so that, when this employee reached the ground from the pole where he was working, he found the telephone wire in the grass, and, without knowing that it had come in contact with the highly charged wire, he grabbed hold of it, and was injured. We there said his contributory negligence was a question for the jury, as to whether or not he should have discovered the loop over the other wire even though his back was turned at the time the contact was made.
Graves v. Interstate Power Co. embraces these facts: "The *Page 574
said transmission line was constructed in front of the residence of George Gramlich," where there were cottonwood trees.
"Defendant's poles, which are 110 feet apart, are set so that at least one wire extends a few inches over the fence and across the Gramlich premises. * * * The wires were not covered with any insulating substance whatever, and carried a current of 13,200 volts. On or about the 17th day of October, 1913, a son of George Gramlich's, a few months past 15 years of age, climbed one of the trees through which the high-tension wires passed, and in some way came in contact therewith and was killed. The tree was on the Gramlich premises, about 18 inches from the fence * * *."
Contributory negligence was one defense. Due to the child's immature years and his lack of knowledge that he would meet any danger in climbing the tree, it was sufficient, we there said, to justify the court in letting the jury pass on the question.
Travers v. City of Emmetsburg, supra, related to an injury on a defective street. Contained in that opinion is the following:
"Again, it is an established rule in this state that, when a city permits a defective street or walk to remain open and unbarricaded, mere knowledge of its general unsafe condition is not, in itself, sufficient to establish contributory negligence on the part of one who has the right to use such street or walk."
Cawley v. Peoples Gas Elec. Co., supra, involves the location of electric wires in such a way as to come in contact with a telephone wire on which a lineman was working.
"There was no showing in the record that Cawley knew that the current in appellant's wires had been changed from a voltage of 110 to one of 2,300. The evidence shows that a voltage of 110 is comparatively harmless, but that a voltage of 2,300 is dangerous. The evidence also tends to show that the method employed by Cawley to repair the broken wire was the ordinary and usual one employed for said purpose."
Dillon v. Allegheny County L. Co., supra, presents a set of facts where a policeman, performing his duty, sought to move a broken electrically charged wire with his "mace." It was there said he was not guilty of contributory negligence, because *Page 575
the emergency required that he take unusual steps for the safety and protection of the public.
Beman v. Iowa Elec. Co., supra, embodies these circumstances: Fred Miller, plaintiff's intestate, was a member of a bridge crew, engaged in driving false piling with a hoisting machine and derrick, near a creek over which was extended a high-power electric line. Continuing the discussion in that case, we further said:
"In operating the derrick in question, the boom revolved from one position to another, and there is evidence that, when the top end of the boom was the farthest to the east that it could go, it was 18 inches from the nearest electric wire; and it is the claim of the appellee [administrator] that it was impossible for the end of the boom or any part of the derrick to strike or come in contact with any of the transmission wires. The derrick and boom had been operated in this position for a period of three days before Miller was killed. The boom had been tested, to see how close it would come to the electric wire; and the evidence discloses that none of the men of the bridge crew knew, at the time, that an electric current would escape or jump from an electric wire. The foreman on the job did not realize that there was any danger or any hazard in operating the derrick and boom in the position and in the manner in which it was being operated at the time Miller was electrocuted. Miller and the other workmen were told and directed where to work, and there was a compliance with these orders."
Apparently, the electric current, in opposition to Miller's expectation and anticipation of its habit and action, leaped or jumped from the wire to the boom, and thereby killed him.
XI. Quite different, and, in truth, easily distinguishable, are the facts in those cases just reviewed, from the actions of Murphy in the cause at bar. Confronting the appellant's intestate was no unusual emergency, requiring the relaxation of the ordinary rules of prudent and reasonable conduct. According to the record, he knew of the existence of the "high line" and its voltage of electricity, and he also was cognizant of the fact that, if the telephone wire in his hand came in contact with the electric wire, harm would come to him. Confusion or mistake on Murphy's part does not enter the hypothesis, nor does *Page 576
any mysterious or not generally known habit of electricity come into the problem. There, too, is entirely absent a situation where the electric spark leaped from one wire to the other through space in a manner or way unexpected or unknown to him. More than this, we are not confronted with a situation where, while his back was turned, or at any other time unknown to him, there was an entanglement of the wires, to his surprise. Very different, too, is this case from one where, because of the very duties of the occupation and the required method of procedure therein, certain dangers are encountered. Dissimilarity appears also between this case and the decisions involving a pedestrian, traveling over a sidewalk known generally to be dangerous, but, in the exercise of proper caution, believed to be safely passable.
Perhaps it was not negligent for the decedent to attempt to place the telephone wire over the "spike" on the electric pole. Manifestly, however, he was guilty of contributory negligence in the method he adopted to accomplish this feat. These "high-line" poles were approximately 150 feet apart. The pole bearing the "spike" was a little to one side of Murphy's wagon, and the wire was sagging to such a degree as to hang within at least 4 feet from the ground. According to the testimony, this "spike" was not more than 2 feet below the electric wires. Of necessity, then, a swing of the telephone wire, produced by Murphy, must have been a sufficient cause for it to take a rainbow shape of such angle that inevitably, when going over the "spike," it would come in contact with the electric wire. Otherwise the telephone wire could not have been placed upon its support through the manner selected. The angle required to complete the loop was itself a condemnation of Murphy's scheme. Any adult, sane man could see and would know this. How, then, could any jury say this was prudent, and the exercise of such care as reasonable men would take? Plainly, it was not, and minds of honest and reasonable men cannot disagree concerning the negligence of Murphy's act, in view of these conditions.
Possibly there might arise situations under which the conduct of plaintiff's intestate would not amount to contributory negligence; but this is not one of them, and we confine our holdings here to the facts of this particular case. As to whether *Page 577
or not Murphy was either a trespasser or a bare licensee, we find it unnecessary to decide.
Wherefore, the judgment of the district court must be, and hereby is, affirmed. — Affirmed.
EVANS, FAVILLE, De GRAFF, ALBERT, MORLING, and WAGNER, JJ., concur.
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ACCEPTED
02-15-00183-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
6/19/2015 8:57:32 AM
360-535647-13 FILED
DEBRA SPISAK
TARRANT COUNTY CLERK
6/5/2015 5:10:29 PM
THOMAS A. WILDER
NO. 360-535647-13 DISTRICT CLERK
IN THE MATTER OF § IN THE DISTRICT COURT
FILED IN
THE MARRIAGE OF § 2nd COURT OF APPEALS
§ FORT WORTH, TEXAS
FREDERIKC WILLIS DOBBINS § 6/19/2015 8:57:32 AM
AND § 360th DEBRA SPISAK
JUDICIAL DISTRICT
CASSANDRA LYNN DOBBINS § Clerk
§
AND IN THE INTEREST OF §
MONIKA N. DOBBINS, CHILD § TARRANT COUNTY, TEXAS
NOTICE OF APPEAL
This Notice of Appeal is filed by Frederikc Willis Dobbins, Respondent, a party to this
proceeding who seeks to alter the trial court's judgment or other appealable order.
1. The trial court, cause number, and style of this case are as shown in the caption
above.
2. The judgment or order appealed from was signed on May 14th, 2015.
3. The deadline for filing Notice of Appeal is June 15th, 2015.
4. Frederikc Willis Dobbins desires to appeal from all portions of the judgment.
5. This appeal is being taken to the Second Court of Appeals.
6. This notice is being filed by Frederikc Willis Dobbins.
Respectfully submitted,
Duong Law Firm
P.O. Box 816341
Dallas, TX 75381
Tel: (214) 390-0999
Fax: (214) 390-0998
Hanh@DuongLaw.net
Notice of Appeal - Page 1 of 2
360-535647-13
By:
Hanh H. Duong
State Bar No. 24012565
Attorney for Frederikc Willis Dobbins
Certificate of Service
I certify that a true copy of this Notice of Appeal was served in accordance with rule 9.5
of the Texas Rules of Appellate Procedure on each party or that party's lead counsel as follows:
Party: Cassandra Lynn Preston fka Cassandra Lynn Dobbins
Lead attorney: Doug W. Wright
Address of service: 4747 S. Hulen St. S. 100
Method of service: by e-service to dwright@galyen.com
Date of service: June 5th, 2015
A copy of this notice is being filed with the appellate clerk in accordance with rule
25.1(e) of the Texas Rules of Appellate Procedure.
Hanh H. Duong
Attorney for Respondent/Appellant
Notice of Appeal - Page 2 of 2
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The last will and testament of Elizabeth S. Pierson and also a codicil thereto were admitted to probate on the 29th day of April, 1926. The will was executed February 7, 1924, and the codicil on February 4, 1925. By the terms of the original will, the plaintiff was bequeathed the sum of $10. All the residue of the estate was bequeathed in one-eighth parts to the other sons and daughters of the testatrix and to the grandchildren, being children of two deceased sons. The codicil in terms confirms the original will, but provides that, if any one of the children or grandchildren should be indebted to her at the time of her death, such indebtedness, or notes owed, shall be distributed to them as a part of their share of the estate. The will names Milton Pierson as executor, without bond, and provides that, in the event that he is unable, for any reason, to act as such executor, her son, James Pierson, shall act as such executor, without bond. Milton Pierson qualified, and is now acting as executor of said estate. All of the legatees of the testatrix are parties to this suit. In what the plaintiff denominated "Amended and Substituted Petition," she alleges that the said Elizabeth S. Pierson executed said purported last will and testament and said purported codicil of said last will and testament by virtue of fraud, duress, and undue influence, and that, by reason of such fraud, duress, and undue influence, said instruments are not the last will and testament of Elizabeth S. Pierson. She prays therein that said instruments be set aside, and the probate thereof be set aside, canceled, and held for naught.
In an amendment to the "Amended and Substituted Petition," the plaintiff alleges that one Milton Pierson, the executor named in the last will and testament of Elizabeth S. Pierson, deceased, and one of the legatees therein, made false statements to the said Elizabeth Pierson in relation to the said Mary Worth, knowing that said statements were false, and knowing the *Page 355
Elizabeth Pierson would rely on the same, and that said Elizabeth Pierson relied upon said false statements made in relation to the character of said Mary Worth by the said Milton Pierson, and by reason thereof, destroyed a last will and testament in which the said Mary Worth was a legatee with a substantial interest in said estate, and made a new will and testament wherein the share of the said Milton Pierson was increased, and he was named as executor, and the share of the said Mary Worth was decreased to only $10; that the said will was the result of the fraudulent and deceitful conduct on the part of the said Milton Pierson in misrepresenting facts to his mother, Elizabeth Pierson, in relation to his sister, Mary Worth; and that, except for such false and fraudulent statements, the said Mary Worth would have inherited equally with her brothers and sisters.
The substance of defendant's answer is a general denial, except as to certain admissions therein made.
The plaintiff offered to prove by herself a conversation between her and her mother. Proper objection was 1. WITNESSES: made to the offer, as calling for a personal competency: transaction or communication between the transaction witness and the deceased, which objection was with sustained. This action was clearly correct, as deceased: to have allowed the witness to answer would have will been in clear violation of the provisions of contestant. Section 11257 of the Code of 1924.
We will first visualize the facts as shown by the record. The testatrix was 94 years of age at the time of her death, to wit, April 11, 1926. The original will was executed, as aforesaid, on February 7, 1924, and the codicil, February 4, 1925. The plaintiff, Mary Worth, was the oldest daughter 2. WILLS: of the testatrix, and at the time of the trial, validity: was just past 74 years of age. For approximately fraud not five years prior to January 18, 1924, the constituting testatrix had made her home with the plaintiff undue and her husband. After the latter date, she influence. apparently made her home with her son Milton Pierson, until September 10, 1925, when she went to the home of her daughter, Sophrona Smith, at Mankato, Kansas, and remained there until the time of her death, April 11, 1926. The testatrix left the Worth home on the 18th day of January, 1924, and about two weeks later, her son Milton, with a taxicab driver, came to the Worth home for her goods, and the testatrix then *Page 356
said she was going to move to Milt's. It appears that there was not good feeling between the son Milton Pierson and his sister, Mary Worth. At the time of their leaving, the plaintiff made the statement that, if mother got sick, she wanted to hear, and her brother replied that he would not let her know anything if she (the mother) died. This conversation occurred in the presence of the mother.
It appears that plaintiff's husband, Tom Worth, in a general way, looked after her financial affairs during the time that the testatrix made her home with the Worths. During this period of time, he looked after the men who rented her place, drew her checks, etc. The banking business was done at a bank in Lewis, which the witness Kunze testifies was his bank. The record fails to reveal the name of said bank, which closed January 26, 1924. Sometime during that month, Milton Pierson and his mother went to the bank and demanded the papers belonging to the testatrix. The box containing certificates of deposit, a lease, and duplicate deposit tickets, notes, a sealed envelope, purporting to contain a will, Liberty bonds, and various other papers, was delivered to them. Sometime in May of 1924, Mr. Bryant and Mr. Pierson again went to the bank, at which time additional bonds in the amount of $250 or $300 were delivered. These bonds had not at any time been in Mrs. Pierson's box, but had been left at the bank for safe-keeping. The bank's receipt had been issued for them. It appears that these bonds had also been in another banking institution, the Oakland Savings Bank. Kunze testified that these bonds "were covered receipts from our bank; that, at the time when Milt and his mother were there, they didn't ask for the bonds, and didn't present any receipt."
It thus appears that the bank was closed, and that the testatrix and Milton Pierson did have some difficulty in locating and getting possession of all of the bonds that belonged to her.
There was introduced in evidence a letter written by Milton Pierson, dated January 27, 1924, directed to Mr. H.C. Smith and family, in which he makes inquiry as to how much money his mother had on time deposit in the bank "when you folks came back with her, as Tom [the plaintiff's husband] said you figured it up he would not tell said he had never figured it but you had so she wants to know and so do I and write as soon as you get this for they have got her business in a bad shape and I want to *Page 357
know so we can get things fixed out straight for her." This letter was produced by a sister of the plaintiff's, Sophrona Smith, who resides at Mankato, Kansas. This witness also testifies that she heard a conversation between Tom and Mary Worth and Elizabeth Pierson, in which conversation she took no part, and in which the parties discussed the reason why Elizabeth Pierson took the handling of her business away from Tom and Mary Worth. This conversation occurred in October, 1925. She testifies:
"I don't just remember this conversation, but he asked the question if she [Mrs. Pierson] thought he got away with any of her money. After hesitating a moment, she said she didn't know, only what Milt said."
Said witness also produced a letter written by Milton Pierson to his mother, under date of October 25, 1925, in which he says:
"I reckon old Flitterlip had lots to say I heard if she had stayed another week she would have killed you."
The letter is signed "M.P. Pierson, or old frozen rump." It is shown that, in referring to "Flitterlip" in the letter, he meant his sister, the plaintiff. Not much significance can be given to his use of the word "Flitterlip," as it is shown by the record that that was the plaintiff's nickname, by which she was recognized by other members of the family, as well as other people. It will be observed that Milton Pierson also had a nickname, by which he described himself in his signature to the aforesaid letter.
Tom Worth, the husband of the plaintiff, testified:
"At that time [time not designated], I heard Mrs. Elizabeth S. Pierson talking to my wife, when I was not taking any part in the conversation. She said Milt told her she was so much money short. I don't remember of anything else being said: I got so mad thinking I was accused of taking the money."
Another witness, Mrs. Mauk, testified that she lived the second house from the Milton Pierson home from the latter part of November, 1924, until April, 1925; that she had been present *Page 358
in the Pierson home when Milton made remarks about the Worths in the presence of Elizabeth Pierson.
"He said he didn't like them. He accused the Worths of cheating his mother, not dealing right with his mother in money matters. He said his mother didn't have all of the money that was supposed to come to her; said Mr. and Mrs. Worth were taking her money and keeping it back. I don't know how many times I heard him make this statement, but it was several times. I heard him say that the Worths could not come onto his place to see his mother. He said this in the presence of his mother, also. He said that Mrs. Worth made his mother sleep upstairs, and that she was not able to go up and down stairs. He said that the Worths were keeping back some of Mrs. Pierson's money; that they couldn't account for it. Mrs. Pierson was present when they said this, also."
Another witness, Enfield, testified that, about the time that Mrs. Pierson came to Milt's home, Milt told him that his mother was short two or three hundred dollars on a Liberty bond; that he didn't know where it was; but that she was short that much.
Witness Putnam testified that he remembers the incident when Elizabeth Pierson came down to Griswold to live with Milt, in 1924; that he had a conversation with Milt about that time, "and I believe he claimed to me that some of the money of Mrs. Elizabeth Pierson had been misappropriated from the bank through the Worths, that he had no account of."
The plaintiff testified that she never stole, took or got away with a penny of her mother's money.
The defendant Milton Pierson, being called as a witness by the plaintiff, testified:
"No, it is not a fact that, along in January or February of 1924, I believed that my sister Mary Worth or her husband had gotten away with a part of my mother's estate. I didn't believe it up to 1925, or at the time the codicil was drawn."
He further testified that he was present at Lewis at the time that his mother got her papers; that the will was turned over to her at that time.
The foregoing is substantially all of the testimony. If the admissibility of all of the same be assumed, but not decided, has *Page 359
the plaintiff, on the issues joined, made out a case for the jury? The court sustained defendants' motion for a directed verdict. The plaintiff, in her motion for a new trial, alleged that the court erred in sustaining said motion, and now assigns the ruling of the court thereon as error.
Upon the subject of undue influence, this court has made the following pronouncement:
"Influence, to be undue, within the meaning of the law, must be such as to substitute that will of the person exercising the influence for that of the testator, thereby making the writing express, not the purpose and intent of the 3. WILLS: testator, but that of the person exercising the validity: undue influence. It must be equivalent to moral undue coercion, must operate at the very time the will influence. is made, and must dominate and control the making of it. Henderson v. Jackson, 138 Iowa 326; Parker v.Lambertz, 128 Iowa 496; Perkins v. Perkins, 116 Iowa 253; In reWill of Richardson, 199 Iowa 1320. The person charged with the exercise of undue influence need not be personally present.Brackey v. Brackey, 151 Iowa 99; In re Will of Busick, 191 Iowa 524. Undue influence is not established by proof of opportunity to exercise it. Importunity, request, and persuasion that do not go to the point of controlling the will of the testator are not enough, nor is it established by proof of opportunity and disposition so to do. Zinkula v. Zinkula, 171 Iowa 287;Sutherland State Bank v. Furgason, 192 Iowa 1295; In re Estate ofTownsend, 128 Iowa 621. It is apparent, therefore, under these rules, that opportunity and disposition, plus persuasion and importunity, are not sufficient to take the question of undue influence to the jury. Contestants must go further than this, and show not only the existence of the facts, but that said undue influence existed, and controlled the maker of the instrument in the disposition he made of his property, substituting the will of the person exercising the influence for the will of the person making the writing." In re Estate of Mott, 200 Iowa 948.
In many of our recent cases, we have made, in substance, the same pronouncement. See Wolfe v. Shroyer, 206 Iowa 1021; Wackmanv. Wiegold, 202 Iowa 1391; In re Estate of Cooper, 200 Iowa 1180. *Page 360
We do not understand that it is the appellant's contention that the case should have been submitted to the jury on the ground of undue influence. It is manifest that, within the rules announced in the foregoing cases, the evidence in the instant case is insufficient to constitute undue influence.
Appellant suggests her contention in the first paragraph of her argument, to wit:
"This case does not involve the ordinary case of undue influence, but rather is a case in which the plaintiff claims that the will should be set aside on the ground of fraud. It is true that `fraud and `undue influence' is often spoken when `undue influence' alone is meant, but there usually is some fraud present in a pure case of `undue influence.' However, `fraud' or `undue influence' are two separate grounds for the setting aside of a will. In a case of `undue influence,' the will of another is substituted for the will of the testator; while in the case of fraud, the testator acts voluntarily, but his act is induced or influenced by the fraud of another."
It is thus apparent that it is her contention that the jury might find from the evidence that the will was induced by fraudulent representations made by Milton Pierson to the testatrix, and that the jury should be allowed to find that, if it was so induced, the will should be set aside, although the evidence fails to show undue influence, within the rules announced in the foregoing authorities.
We find it unnecessary to determine whether a will induced by fraudulent representations may be set aside because of the fraud, although the evidence is insufficient to constitute undue influence.
In the instant case, the witnesses to the will were not used as witnesses at the trial. There is no showing as to who was present when the will was drawn, nor what transpired at that time. There is no evidence that Milton Pierson ever said or did anything toward getting his mother to make the will in controversy. The testimony of Mrs. Mauk relative to representations made by him to his mother shows that they were made subsequent to the date of the execution of the original will. The record fails to reveal that any of the representations now relied upon by the *Page 361
appellant were made by Milton Pierson to his mother at or prior to the time of the execution of the will.
The codicil, in terms, confirms the original will. There is no evidence as to what provision was made for the appellant in the former will. For aught that is shown by the record, the appellant fared no better in the former will.
It is not necessary that we determine whether all of the elements of actionable fraud would be required to be shown, to constitute fraud in such a case, conceding, arguendo, that a will induced by fraudulent representations may be set aside although the evidence is insufficient to constitute undue influence. It is sufficient to say that the record in this case fails to establish fraud. Therefore, if it be assumed, without being decided, that a will induced by fraudulent representations may be thereby invalidated although the evidence is insufficient to constitute undue influence, the appellant has failed in the requisite proof. The action of the trial court in directing a verdict for the appellees and in overruling appellant's motion for a new trial was correct, and the same is hereby affirmed. — Affirmed.
All the justices concur.
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Intervener-appellant's claim for an attorney's lien is based upon the following facts:
On the 24th day of April, 1926, the Adrian State Bank, of Adrian, Minnesota, appellee, was the owner of a $3,000 judgment in the district court of Franklin County, Iowa, against August H. Eichmeier. The judgment had existed for many 1. ATTORNEY AND years. During at least part of that time, CLIENT: including April 24, 1926, the judgment debtor, lien: August H. Eichmeier, was the owner of an fatally undivided interest in and to certain real estate delayed in Franklin County. Accordingly, on that date notice. the Adrian State Bank caused a writ of execution to be issued by the clerk of the district court and levied by the sheriff upon the equity of August H. Eichmeier in said real estate. At the time of the issuance and levy of the execution, there was pending in the district court of Franklin County a case entitled Baurer v. Fred Eichmeier et al., in which the execution debtor, August H. Eichmeier, was a party defendant. Apparently the purpose of that proceeding was to partition the real estate. However, a sheriff's sale was duly held under the execution, and as a result thereof, the interest of August H. Eichmeier was sold to the Adrian State Bank. But after the issuance of the above-named execution, and before the sheriff's sale thereunder, appellant, as attorney for August H. Eichmeier, on the 28th day of June, 1926, commenced an action in the district court, to enjoin the sheriff from selling the realty. Nevertheless, no temporary injunction was issued in connection therewith, and the execution sale was duly held, as above indicated.
Pending the period of redemption, August H. Eichmeier entered into negotiations for a settlement with the Adrian State Bank, and on the 4th day of October, 1926, an adjustment was finally made, under which the bank obtained the real estate, and *Page 1310
Eichmeier received $700 in cash. To complete this transaction, Eichmeier executed and delivered to the bank a special warranty deed, conveying the land to it. And Eichmeier also filed an answer in the partition suit of Baurer v. Eichmeier et al.,
supra, disclaiming any interest in the realty, because he had conveyed his rights therein to the bank. Furthermore, Eichmeier and the bank entered into a stipulation disposing of the injunction suit, whereby it was dismissed. All this Eichmeier did without the knowledge of his attorney, the appellant herein. So, in order to secure attorney fees in the sum of $1,200, alleged to have been earned in the injunction and partition suits aforesaid, appellant filed notice, on October 25, 1926, of an attorney's lien, in the office of the Franklin County district court clerk. In addition to the notice given said clerk, appellant, on the following day, caused service of the written notification to be made also upon Irvin B. Bleeker, referee in the partition proceedings, and T.E. Diamond, attorney for the Adrian State Bank. Thereafter, on the 31st day of January, 1927, the appellant filed in the partition proceedings his petition of intervention, seeking to foreclose his attorney's lien upon the real estate which formerly belonged to Eichmeier, but was afterwards, as before stated, conveyed by him to Adrian State Bank. That issue was tried, and the district court dismissed the petition of intervention.
I. Manifestly, the controlling fact in this controversy is that the settlement previously made between August Eichmeier and the Adrian State Bank was consummated on the 4th day of October, 1926, while the first notice of the attorney's lien in dispute was not served until the 25th day of the same month. An interval of 21 days intervened. Clearly, then, the adjustment was completed before appellant attempted to bring his lien into existence.
Section 10924 of the 1924 Code provides:
"An attorney has a lien for a general balance of compensation upon: * * * 3. Money due his client in the hands of the adverse party, or attorney of such party, in an action or proceeding in which the attorney claiming the lien was employed, from the time of giving notice in writing to such adverse party, or attorney of such party, if the money is in the possession or under the control of such attorney, which notice shall state the amount claimed, and, in general terms, for what services. 4. *Page 1311
After judgment in any court of record, such notice may be given, and the lien made effective against the judgment debtor, by entering the same in the judgment or combination docket opposite the entry of the judgment."
Due to the fact that this lien is statutory, the necessary prerequisites and conditions precedent thereto must be fully, timely, and completely met. Hurst v. Sheets Trussell, 21 Iowa 501; Ward Lamb v. Sherbondy, 96 Iowa 477; Phillips v. Germon,43 Iowa 101; Gibson v. Chicago, M. St. P.R. Co., 122 Iowa 565;Jennings v. Bacon, 84 Iowa 403. It is said in Ward Lamb v.Sherbondy, supra:
"The notice for which the statute provides is effectual to create an attorney's lien only from the time it is served or given, and operates to create a lien on money in the hands of the person who receives it, subject to prior rights thereto. * * * The statute is not extended by the provisions of the common law, but is in lieu of them, and fixes the rights of the parties in interest. * * * It is insisted that the attorneys in question were entitled to an equitable lien for the services which they rendered their client, which should be enforced against the intervener. We do not think this claim is well founded. The statute provides for the only liens to which an attorney is entitled, and, to obtain them, the requirements of the statute must be observed."
Necessarily, then, appellant cannot succeed because he did not serve that essential notice before the transfer of the property to the Adrian State Bank. By reaching this conclusion we do not decide that, in any event, an attorney can have a lien upon real estate in litigation. See, however, McCormick McCormick v.Dumbarton Realty Co., 156 Iowa 692; Keehn v. Keehn, 115 Iowa 467.
II. Claim is asserted by appellant that his demands in this regard were defeated through the fraud and collusion of the Adrian State Bank and Eichmeier. Basis for this allegation is said to exist because a settlement was entered into by those parties without appellant's knowledge.
There was a good-faith dispute at and before the time that harmonious arrangement was negotiated and consummated. Such misunderstanding arose over the question as to whether or not, by previous transactions, the $3,000 judgment was satisfied. *Page 1312
A result of the compromise was a final disposal of those disagreements. Legal consideration for the settlement existed. Nowhere is there any intimation that the adjustment was made with the intent of preventing appellant from obtaining his fees. Proof is lacking that the Adrian State Bank knew the appellant had not been paid for the legal services rendered. (We do not mean to suggest or decide that such knowledge is material, but merely refer to it, for the purpose of disclosing the condition of the record.) While the partition and injunction actions were pending, there was nothing to hinder appellant from serving notice of his lien at any time he desired. No indication is made that the Adrian State Bank in any way persuaded him not to do this. Fraud and deceit do not appear, so far as the Adrian State Bank is concerned, and those vitiating factors did not enter into the contract of settlement, nor did they defeat appellant's lien. Collusion between the Adrian State Bank and Eichmeier being absent, the compact of compromise entered into by them was valid, and through it appellant lost his right to establish a lien upon the property, because notice was not given before the conveyance thereof. Apt language to substantiate the doctrine just announced is found in Casar v. Sargeant, 7 Iowa 317, to this effect:
"Before such notice [of an attorney's lien], in the absence of collusion between the parties, it is entirely competent for them to settle, without reference to the claim of the attorney for his fees."
Likewise, in Cowen v. Boone, 48 Iowa 350, the following consistent phraseology appears:
"Unless the prescribed notice has been given, the parties could settle and adjust the judgment or matter in controversy, without reference to the claim of the attorney for his fees."
III. Even though what has been said is true so far as the land is concerned, appellant contends that it does not defeat his right to establish the lien upon the $700 paid 2. ATTORNEY AND his former client, Eichmeier, by the Adrian CLIENT: State Bank, under the contract through which the lien: burden partition and injunction suits were settled. of proof. With this idea we are *Page 1313
constrained to disagree. Lack of notice prevents such redress in this instance, the same as it did in the one previously discussed. Payment of the said $700 was provided for in the stipulation of settlement in this way:
"This instrument is to certify that the Adrian State Bank * * * hereby agrees to and will pay to August Eichmeier * * * the sum of $700 immediately after the bank has become satisfied from the proper records, or otherwise, that the [land] is unincumbered, unhypothecated, and clear of any and all liens * * *."
As before stated, a deed was executed and delivered by Eichmeier to the Adrian State Bank October 4, 1926, and thereafter it was duly recorded, on the 6th day of the same month. Moreover, the answer of Eichmeier, disclaiming any further interest in the premises, also was apparently filed at or near the same time. Circumstantial evidence, then, would indicate that the $700 was paid at or before the time of that recording and filing. Otherwise, Eichmeier would not have reported to the court that he no longer had any interest in the subject of the partition suit.
The burden of proving this fact, however, was upon appellant, rather than the Adrian State Bank or the referee in partition. To put the thought in another way, it was essential that the appellant show such conditions as would bring into operation the machinery of Section 10924, supra. By "conditions" here is meant that there was "money due his [appellant's] client," Eichmeier, "in the hands of the adverse party," the Adrian State Bank, after appellant had given it "notice in writing." This is the statutory requirement.
Hence, appellant has not produced any evidence to the effect that the notice of his attorney's lien was served before the $700 was paid, nor does it anywhere appear that the Adrian State Bank at any time had possession of this money after it received appellant's notice. Therefore, appellant cannot recover now.
Other matters are argued, but because of the above and foregoing discussion, it is not necessary to dwell further upon them. *Page 1314
Wherefore, the judgment and decree of the district court should be, and hereby is, affirmed. — Affirmed.
STEVENS, C.J., and FAVILLE, ALBERT, and WAGNER, JJ., concur.
EVANS, J., not participating.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433438/
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The State Bank of Swea City, Iowa, was engaged in the banking business at Swea City, and had operated for several years prior to November 26, 1926, on which date, pursuant to a resolution of its board of directors, the bank temporarily closed its doors. This was done in order to work out a plan whereby its creditors and depositors could rehabilitate the bank and make good its impaired capital.
It appears that, on the 2d day of December, 1926, it was voted by the board of directors to place the bank in the hands of the state banking department for liquidation. It also appears that the depositors of the bank, prior to the meeting of December 2d, formed a depositors' committee, whose function it was to take steps to place the bank in such financial condition *Page 1155
that it could again open its doors and avoid receivership proceedings. A stipulation was filed at the time of the instant trial, wherein it is recited, inter alia, that, subsequent to December 2, 1926, and prior to December 22, 1926, the depositors of said bank, for the purpose of preventing the final closing of the bank, proceeded with a volunteer organization among the depositors, for the purpose of devising ways and means by which said bank would be reopened and reorganized as a going concern; that, as a result of said voluntary organization, the depositors appointed a committee from among the depositors; and that said committee went to Algona, and met with a portion of the directors of said bank, to wit, Sullivan, McMahon, and Linnan; that, after the meeting, another committee from the depositors' organization was appointed, for the purpose of visiting Des Moines, to interview the superintendent of banking, to induce him to permit the reorganization and reopening of the temporarily closed bank; that the position taken by the superintendent of banking in this matter is shown, substantially, by a written memorandum on that date, addressed to the State Bank of Swea City, wherein it is recited that the depositors were particularly interested in a plan of reorganization of the bank, and that other depositors, including themselves, are of the opinion that 50 per cent of the deposits subject to waiver can be obtained, and that a waiver of time may be obtained on the other 50 per cent of the deposits that are subject to waiver, and that, with these deposits waived in the amount of 50 per cent, and approximately a 100 per cent assessment on the stock, to be paid voluntarily, which will include the resale of 94 shares of stock at par, there would be sufficient to give them an operating reserve, and make it a solvent bank. It is further recited in said memorandum, as a matter of history, that the bank closed on November 26, 1926, simultaneously with other banks in and around Algona, and was unable to open at the time the other banks opened, because of lack of reserve. The stipulation further recites that it was agreed that these depositors should have until December 20, 1926, to work out plans for a reorganization of the bank, and that these plans were to include the waiving by depositors of 50 per cent of their deposits (which would be supported only by certain rejected assets, under a trust agreement), it being understood that public accounts and other unwaivable assets *Page 1156
are not included, and that the other 50 per cent of the deposits not waived as to amount were to be waived as to maturity, extending the time of payment to such time as should be agreed upon between the bank and the depositors, and that the 100 per cent assessment on the stock which was to be paid voluntarily should be in cash, as it formed the only apparent source of reserve; that it was also understood that the future management of this bank, if reorganized, should be approved by the banking department.
It is apparent that the banking department did co-operate with the depositors' committee, and did outline a plan whereby the bank would be saved from having its doors permanently closed. A subsequent meeting was held by the depositors in Swea City, December 10, 1927, and an organization was effected among the depositors to carry out the plan of reorganization. At this time, 107 shares of the capital stock of the bank were surrendered by the owners (not financially able to meet an assessment), for the purpose of resale by the depositors' committee, and the depositors proceeded to take steps to sell this stock. Joseph M. Dye, one of the defendant stockholders herein, was appointed chairman of the depositors' committee, and all money received from the sale of the stock was deposited with Dye, and was to remain in his custody until the stock-selling campaign was consummated. The owners of the balance of the stock, approximately $15,000 in amount, voluntarily paid a 100 per cent assessment, which funds, together with the proceeds of the sale of the stock made through the depositors' committee, were eventually turned over to the bank.
The committee did succeed in obtaining waivers to approximately 50 per cent of all the deposits, and also secured waivers as to the maturity of the remaining 50 per cent, other than public funds and other non-waivable deposits. When all these matters were accomplished, and the managing officers were selected and installed, in accordance with the requirements of the state banking department, the directors of the bank, on December 22, 1926, voted to reopen the bank, and it continued to do business as a going concern until October 20, 1927, when the bank was closed by the action of its board of directors, and the superintendent of banking, under statutory authority, took charge of said bank, as its receiver. Such are the primary facts *Page 1157
constituting the history of the life struggle of the State Bank of Swea City until the crepe was placed on its door, indicating its official death.
On December 9, 1927, the petition in the instant case was filed by the plaintiff receiver, to collect the 100 per cent statutory liability as against the stockholders of record on the books of the insolvent bank, under the provisions of Section 9251, Code, 1927. It is apparent from the record that the only compulsory assessment against the defendant stockholders is the assessment involved in this case. What was done by the depositors' committee in attempting to work out the salvation of the State Bank of Swea City, and whatever was accomplished by this committee, must be viewed on the part of both the committee and the payers of money as voluntary. It was done to restore the impaired capital of this bank, in order that it might lawfully conduct further banking operations. The statute governing impaired capital and the statute governing the 100 per cent liability of stockholders are in different categories, have a different purpose, and contemplate a different scheme of things. See Andrew v. FarmersTr. Sav. Bank, 204 Iowa 243; Andrew v. Commercial State Bank,206 Iowa 1070. These answering defendants purchased the stock in question from the soliciting committees appointed by the depositors. This stock was paid for in full by the purchasers, and certificates of stock were issued to them. Their respective contracts of purchase were fully executed, and consequently, these purchasers became full-fledged stockholders of the bank. The purpose of the depositors and their committees is plain. By the reorganization which they eventually effectuated, they hoped to save the bank from liquidation, not only protecting themselves, as depositors, but providing for the saving of the bank, for the business interests of that community. The record discloses no fraud, either actual or constructive. No attempt at rescission was made by these answering defendants, prior to the taking possession of the bank by the receiver. It is a well settled rule that a person, upon the acquisition of capital stock, incurs such obligations as the law imposes by virtue of his contractual relationship. The obligation in the instant case is that the stockholders pay for the benefit of the creditors of the bank an amount sufficient to pay the debts of the corporation which the assets of the bank will not pay, up *Page 1158
to an amount equal to the amount of the stock held by each stockholder. There was ample consideration for the stock-purchase contracts which were the basis for the issuance of stock. They were all acting in concert of action with other parties to restore the impaired capital of the bank. $15,000 worth of stock paid a 100 per cent assessment, or $15,000 in cash went into the funds of the bank on reliance upon the purchase of stock by these answering defendants; and, as between these stock purchasers, it must be said that there was mutuality in the respective stock purchases, as all understood the plan to save the bank. It may also be observed that, through the consummation of the plan, the bank did open its temporarily closed doors, with the approval of the banking department, and thereafter received deposits, and continued in the ordinary course of banking business for about eleven months. These matters were all known to the answering defendants; and, as stated, no effort was taken to rescind, and no tender back of the certificates of stock was made to the party from whom same were purchased, or to the bank. In fact, nothing was done until the bank was placed in the hands of a receiver, and the instant petition was filed. In the light of the record facts, the plea of waiver and estoppel by the receiver in his reply to the answer of these resisting stockholders must be viewed as a good and sufficient plea. The facts and the law applicable thereto classify these answering defendants as stockholders, with the statutory liability thereunto pertaining.
The trial court correctly ruled the case, and the decree entered must be, and is, — Affirmed.
STEVENS, FAVILLE, ALBERT, and WAGNER, JJ., concur.
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01-03-2023
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07-05-2016
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https://www.courtlistener.com/api/rest/v3/opinions/3433442/
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Preliminary to a consideration of the various questions involved in this appeal, we believe it will be helpful to briefly set forth some of the salient facts and events leading up to the bringing of the action herein.
Sadie A. Carter, at times spoken of as Mrs. Morgan Carter, died on August 27, 1941, at Des Moines, Iowa, at the home of her *Page 547
nephew, L.K. Meredith, defendant herein. Her husband, Morgan Carter, a resident of Jasper County, Iowa, died in 1935. She was childless. She and her husband had lived in Jasper county for many years, the more recent being in the town of Monroe in that county. She was a resident of that county at her death, and her estate was there opened and is still pending.
She made a will on November 10, 1939, and a codicil on March 25, 1941, both being drawn by Luther M. Carr, an attorney of Newton, Iowa. Mr. Carr had previously advised her on various legal matters. The will and codicil were probated on October 5, 1941, and J.A. Dibel, of Monroe, Iowa, a long-time friend of Mrs. Carter and her husband, was appointed executor. He is the plaintiff in this action and Mr. Carr is his attorney as such executor. At the time she lived in Monroe and at her death Mrs. Carter owned a 122-acre farm near that place. At the time she made her will she owned a dwelling, her homestead, in Monroe. At her death she had money in two of the Newton banks and in one bank in Monroe. Under the will the farm was given to an elder sister, Emma Meredith, mother of L.K. Meredith, for life, and the remainder to L.K. Meredith and a brother. They were also given personal belongings and household furniture. All other property, including cash in the banks and the homestead in Monroe, was given to two nieces and two nephews, all nonresidents, share and share alike.
Emma Meredith died in January 1941. Mrs. Carter had lived with her about a year prior to her death. Following the death of Emma, Mrs. Carter lived with L.K. Meredith until about June 1, 1941, when she returned to her old home at Monroe, boarding and living there with old friends. On August 7, 1941, she suffered a stroke of apoplexy and the defendant and his wife took her to their home in Des Moines, where she remained until her death three weeks later.
In December 1939 the homestead in Monroe was sold and settlement was made in January following. The proceeds, together with a small additional amount, were taken by Mrs. Carter to Des Moines and were there deposited in her savings account in the Bankers Trust Company of Des Moines, and on May 21, 1941, there was in that account the sum of $2,539.56. *Page 548
Following the death of Mrs. Carter, plaintiff sought to learn the whereabouts or disposition of this sum, and upon inquiry he learned that such amount, with the exception of $5, had been withdrawn from the bank on May 21, 1941, by L.K. Meredith upon withdrawal slips signed by Mrs. Carter. Plaintiff, in company with L.K. Meredith, went to Newton the following day to make arrangements for the funeral, and while there, and in the presence of Attorney Carr, Meredith said he was afraid that they would find the $2,500 missing from the Des Moines bank. He expressed ignorance as to its whereabouts. Shortly thereafter, and on several occasions, plaintiff and his attorney contacted defendant to make inquiry as to what had become of the funds withdrawn. On one occasion, Mrs. Meredith was present. They expressed ignorance as to its whereabouts, and Dr. Meredith suggested the names of four or five persons who might have gotten it from Mrs. Carter. Being unable to get any satisfactory explanation from Meredith, plaintiff brought this action. Following this and on December 23, 1941, plaintiff brought this action in equity for discovery and accounting under the statute and alleged that this money had been deposited in the bank in the name of Sadie A. Carter and that L.K. Meredith had secured possession of it and refused to pay it over to the executor, prayed that there be an accounting and that defendant be required to pay over to the executor the sum of $2,534.56, and prayed for judgment for said amount against the defendant, and for costs and general equitable relief.
On February 24, 1942, the defendant filed what, in effect, was a general denial of the claims made by plaintiff, but admitted that Sadie A. Carter had died on August 27, 1941, and that certain exhibits attached to the pleadings bore the true signature of Mrs. Sadie A. Carter. He prayed that the petition of plaintiff be dismissed. The cause was tried in equity in May 1942, and on June 2, 1942, the lower court dismissed the petition of plaintiff on its merits and taxed the costs equally. The plaintiff has appealed.
In brief, appellant alleges that L.K. Meredith, a nephew of Mrs. Carter's, induced her to dispose of her home in Monroe and move to Des Moines; that he arranged for, directed, and managed *Page 549
the deposit of the proceeds of the sale of the property in the Bankers Trust Company and that later and without her knowledge, by means of withdrawal slips signed by her in blank, he withdrew from her account in said bank a sum in excess of $2,500, and that at the time the suit was brought he had possession of it and refused to turn it over to the executor of the estate as property belonging thereto.
Appellant makes the claim that, by reason of the situation and the relationship of the parties and the dealings between Mrs. Carter and L.K. Meredith, a confidential relationship arose and existed between appellee and Mrs. Carter and that by reason thereof the appellee obtained possession of the funds on deposit in the bank.
We will first take up and consider the claim of appellant that there existed a confidential relationship between Mrs. Carter and L.K. Meredith. We think that a fair consideration of the evidence, together with legitimate inferences arising therefrom, sustains this claim. We think that appellant has established such claim. Before reviewing the facts which we feel point to that conclusion it will be well to call attention to some of the legal principles involved.
[1] Confidential relationship is a very broad term and is not at all confined to any specific association of the parties to it. In law it has been defined or described as any relation existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other party. In its broadest connotation, the phrase embraces those multiform positions in life wherein one comes to rely on and trust another in his important affairs.
[2] A confidential relationship arises whenever a continuous trust is reposed by one person in the skill and integrity of another, and so it has been said that all the variety of relations in which dominion may be exercised by one person fall within the general term "confidential relation." 15 C.J.S. 822. Pomeroy's Equity Jurisprudence, 3d Ed., section 956, gives the above as being the true principle. In the discussion the author cites the holding of Turner, L.J., in Rhodes v. Bate, [1866] L.R. 1 Ch. 252, 257, as follows: *Page 550
"* * * I take it to be a well-established principle of this Court, that persons standing in a confidential relation towards others cannot entitle themselves to hold benefits which those others may have conferred upon them, unless they can show to the satisfaction of the Court that the persons by whom the benefits have been conferred had competent and independent advice in conferring them."
In Billage v. Southee, 9 Hare 534, 540, it was said:
"The jurisdiction is founded on the principle of correcting abuses of confidence, and I shall have no hesitation in saying it ought to be applied, whatever may be the nature of the confidence reposed, or the relation of the parties between whom it has subsisted. I take the principle to be one of universal application * * *."
Following the above citation the author states that it is the rule that in all instances where two parties in a confidential relation consciously and intentionally deal and negotiate with each other, each knowingly taking part in a transaction, and there results from their dealing some conveyance, contract, or gift, the principle literally and directly applies. The transaction is not necessarily voidable; it may be valid, but a presumption of its invalidity arises which can be overcome only, if at all, by clear evidence of good faith, or full knowledge, and of independent consent and action.
For a full and comprehensive discussion of this principle, see the case of Curtis v. Armagast, 158 Iowa 507, 138 N.W. 873. The holding of the court therein as to the application of the rules as to confidential relations has been adhered to by a continuous line of decisions of this court. In the late case of Sinco v. Kirkwood, 228 Iowa 1020, 1030, 291 N.W. 873, 878, Justice Hale, speaking on that subject, used the following language:
"It is true that in an action to set aside a deed, under ordinary conditions, the burden is upon the plaintiff, exceptwhere confidential or fiduciary relations are established, in which case it is incumbent upon the person claiming under the *Page 551
deed to establish the bona fides of the transaction." (Italics supplied.)
In support of this principle, see Johnson v. Johnson, 196 Iowa 343,191 N.W. 353; Merritt v. Easterly, 226 Iowa 514,284 N.W. 397. In the last-cited case, Justice Bliss made a thorough review of the holdings on the subject, pointing out therein the distinction between the terms "fiduciary relationship" and "confidential relationship."
[3] It was the holding in the cited case, based upon authority, that a confidential relationship arises where one person gains the confidence of another and purports to act and advise with the other's interest in mind.
[4] The force of the holding is that where one person stands in a confidential relationship to another he will not be permitted to retain advantages of a transaction with the other person when they may reasonably be the result of confidence reposed, unless he shows that the other party acted with freedom, intelligence, and full knowledge of the facts, and had an opportunity to secure competent and impartial advice from some person other than the donee. In passing upon such transactions, courts of equity will scrutinize with jealous vigilance, and in the end will require the dominating party to a confidential relationship to conduct himself in his dealings with the other with the utmost good faith. It was likewise held that the donor was entitled to have independent advice. "Independent advice" in this connection means the showing that the donor had the benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him correctly as to its legal effect but who was furthermore so disassociated from the interests of the donee as to be in a position to advise the donor impartially and confidentially as to the consequences to himself and of his proposed benefaction. Post v. Hagan, 71 N.J. Eq. 234,65 A. 1026, 124 Am. St. Rep. 997.
[5] With these principles in mind, let us examine the record. While so doing we should not lose sight of the fact that it was something like nine months following the death of Mrs. Carter that the appellee first urged in court that the money *Page 552
received from Mrs. Carter was in the nature of a gift. Prior to that time he and his wife had consistently expressed ignorance of its disposition following its withdrawal from the bank by L.K. Meredith.
For many years Mrs. Carter had lived in Monroe, Iowa, where she owned a home. She was then past eighty-five years of age, was crippled physically and was in failing health. This made it difficult for her to get about by herself. Appellee, her nephew, was fifty-one years of age. The evidence shows that he gained her confidence and purported to advise with her with her interests in mind. He advised with her and urged her to sell the homestead in Monroe and to come and live in Des Moines. He suggested to appellant, an old friend of hers, that he urge her to sell the property and make the move. She sold the house, obtained the proceeds thereof, and came to Des Moines and lived for a time with her sister, mother of appellee. She brought with her the proceeds of the sale of the house and, at the suggestion of appellee, deposited them in a bank in Des Moines where appellee did business. Prior to that time she had never done business at any Des Moines bank and did her banking business with other banks. She then had deposits in Newton and Monroe banks. Meredith arranged for the depository and also a safe-deposit box therein, and the record shows that he had full access to it at all times and on several occasions availed himself of such privilege. He had charge of all of her business at that bank, making all the deposits and withdrawals. Mrs. Carter was never in the Des Moines bank.
When her sister died in January 1941, Mrs. Carter at once went to the Meredith home and lived there until about Decoration Day. She was not satisfied and expressed a desire to return to her old home at Monroe and buy herself a home in order to be with her old friends and neighbors. Appellee did not want her to buy a home and urged her not to do so, and suggested to appellant that he (appellant) urge her not to do so. When Mrs. Carter wanted to go back to Monroe about the middle of May, appellee urged her to stay until Decoration Day, when he planned to drive to Ottumwa and would take her to Monroe. (The money was withdrawn from the Des Moines bank on May *Page 553
21st.) Mrs. Carter had the utmost confidence in appellee and he testified that she had implicit faith in him. Throughout this period appellee was Mrs. Carter's physician. He had also been physician for her deceased husband.
With this record we have no hesitation in holding that during this period there existed a confidential relationship between Mrs. Carter and L.K. Meredith, appellee herein.
Such relationship being shown to exist, the burden was upon the appellee to show the good faith and fair dealing of the whole transaction. The record herein shows that he has not sustained that burden.
He claims that the money withdrawn from the bank was given to his wife, Mrs. L.K. Meredith. To establish this claim he relies upon the testimony of his wife in addition to that which he gives. He makes no showing that Mrs. Carter had the opportunity or advantage of independent and impartial advice in her dealings. Whatever she did was upon his advice and suggestion. From the time Mrs. Carter entered the Meredith home in January 1941, until she left on Decoration Day, she was there all the time. She was with Meredith and his wife at all times. When she went anywhere, they took her.
On May 21, 1941, Mrs. Carter had on deposit in her savings account in the Bankers Trust Company of Des Moines $2,539.56, practically all of which represented the proceeds of the sale of the homestead at Monroe. This fact was well known to appellee. He had made the deposit and had access to her account and safety box. There is evidence in the record that appellee knew the terms of the will of Mrs. Carter before May 21, 1941. A copy of her will was found among her papers after her death. Before Mrs. Carter sold her home in Monroe appellee stated to appellant that he, appellee, and his brother were to get the farm in Jasper county and that the other relatives were to get the personal property, including the Monroe homestead.
Appellant, in trying to locate the missing funds, had the bank records examined, and the records of May 21, 1941, showed that on that date L.K. Meredith had made two withdrawals from the savings account of Mrs. Carter. The bank paid these out on certain withdrawal slips bearing the signature of Mrs. *Page 554
Carter. The other writing thereon was in the handwriting of L.K. Meredith. One withdrawal was for $2,500 and was paid in $100 bills. The other was in the amount of $34.56. When appellant advised appellee about the bank records, the appellee stated that he had withdrawn the money at the request of Mrs. Carter and had turned it over to her and he expressed ignorance as to what had become of it.
The record shows that there was evidence to the effect that, upon the request of L.K. Meredith, Mrs. Carter signed withdrawal slips in blank. Meredith denied such evidence but we are of the opinion that at least some of such withdrawal slips were so handled.
It is rather significant that the first time the appellee made the claim that he had withdrawn the money from the bank at the request of Mrs. Carter and that she had given it to Mrs. Meredith was after the trial of the case had started and after the bank statements of Meredith and his wife had been produced in court. Prior to that time neither of them had made the claim that the money withdrawn had been given by Mrs. Carter to Mrs. Meredith and that the latter had given it to appellee to be deposited in their various accounts as appellee saw fit.
The bank records of May 21st reveal some rather peculiar circumstances connected with the withdrawals and deposits. They show that on May 21, 1941, appellee withdrew $2,500 in $100 bills on one withdrawal slip from one teller, $34.56 on another withdrawal slip from another teller, and on the same visit deposited $100 in currency in his own account, doing business with another teller. He states that he made but one visit to the bank that day.
Appellee claims that he took the withdrawn money home and gave it to Mrs. Carter, and that later this was given by Mrs. Carter to his wife, and that on May 29th his wife gave it to him to deposit. His claim that this money was given to his wife bears close scrutiny. The wife testified that she turned over the $2,500 in currency to appellee on May 29th. Decoration Day, the day following, Meredith and his wife drove to Ottumwa. Instead of depositing this $2,500 in currency on that day, as an honest and prudent person would have done, appellee *Page 555
deposited $300 in cash in his account and $600 in cash in the account of his wife, the total of the two deposits being $405 and $610 respectively. On June 3d appellee claims to have deposited another $1,000 in cash in his account (the total deposit being $1,027) and to have deposited the remaining $400 in his wife's account on June 3d (the total amount of the deposit being $405). According to the testimony of appellee, $2,300 of the $2,500 given to him in cash was deposited in four different amounts in two different accounts and on two different dates. We find no adequate explanation of such unusual conduct. Mrs. Meredith, as a witness, stated, "I don't know why he divided the amounts in the different accounts the way he did." Asked why he used two withdrawal slips on May 21st, appellee testified, "I haven't been able to remember why I used two withdrawal slips on the same day, May 21, except she may have requested it, I don't know."
Then we have the admitted fact that Meredith did not tell the executor and his attorney the truth when he claimed he had no knowledge of where the money had gone. Dibel testified, and appellee practically admits, after a lot of equivocation, that appellee gave Dibel and his attorney the names of several people who might have gotten the money from the old lady.
Considerable light is thrown upon the character of the appellee by the fact that three days after the estate of Mrs. Carter was opened at Newton he went there in person and filed a claim for $701, for caring for Mrs. Carter during the last twenty days of her life and for medical services during that period and for the services of his wife for looking after her during the same period, each making a charge of $5 per day. Also included therein was a claim for services rendered Mrs. Carter's deceased husband some five years before. When asked why he had not sooner collected this claim, appellee stated that he had an oral agreement with Mrs. Carter that the claim for his services for her husband were not to be paid until her death. As a sidelight on the claim which Meredith and his wife made for the care and keep of Mrs. Carter during the last weeks of her life, the explanation given by Mrs. Meredith is interesting:
"We decided to take the money because there was no one *Page 556
else to take care of Aunt Sade and we were going to have to do it anyway and because it would please her for us to have the money."
Appellee testified, "she was giving the money to Mrs. Meredith inasmuch as she was going to take care of her and have the work to do."
There is nothing in the record to show or indicate that after May 21st Mrs. Carter had any idea or notion that the money had been withdrawn from the Des Moines bank. The record shows that Mrs. Carter told Dibel on July 17th that she had her money in the Des Moines bank with which she could buy a home. A letter written to a relative by Mrs. Carter on June 27, 1941, indicates, inferentially at least, that she had not knowingly disposed of her money in the Des Moines bank. We think that such evidence is competent as showing her state of mind or belief.
The evidence shows that Mrs. Carter was a woman of frugal habits, had been an industrious person, was scrupulously honest, and was not in the habit of going into debt.
The bank records show that L.K. Meredith got the money from the bank and the form in which it was obtained. He took it away with him and testified that he took it home with him. Mrs. Meredith testified that he brought it home and gave it to Mrs. Carter. Objection was made to her competency under section 11257, commonly referred to as the "dead man" statute. We think that the objection was good, and that she was incompetent to testify as to the transaction. We think that the record affirmatively shows that she took part in the transaction. It seems to us that what happened to this money from the time L.K. Meredith drew it from the bank until it was later redeposited, on staggered dates and in different accounts, may be treated as one continuous transaction. We do not think that it can be chopped up in parcels so as to make the participants therein competent to testify. L.K. Meredith testified he got the money from the bank. The bank records show that he did so. According to Mrs. Meredith, he brought it home and in her presence gave it to Mrs. Carter, and she claims that she took no part in the transaction. She testified: *Page 557
"It was just about dinner time. He said `Here is your money, Aunt Sadie.' We kind of laughed about it between ourselves because it was an enormous amount of money, and we didn't know what she was going to do with it at that time. We said nothing to her about what to do with her money."
Certainly, the statement of L.K. Meredith that he gave the money to Mrs. Carter was from an incompetent witness. Under the statute we think that Mrs. Meredith was likewise incompetent. Mrs. Meredith also testified that the following day, when she and Mrs. Carter were alone, the latter gave her the money. Shortly thereafter, when Meredith, his wife, and Mrs. Carter were present, Meredith was advised by the others that a gift had been made of the money to Mrs. Meredith. He claims to have taken no part, but we think the record, inferentially at least, shows otherwise. Both Meredith and his wife testified that it was then and there agreed that the matter of the gift was to remain a secret between the Merediths and Mrs. Carter. This pledge of secrecy is given by Meredith as the reason for their failure to advise the appellant and his attorney as to the disposition when they were seeking to locate it following the death of Mrs. Carter. To give credit to this explanation imposes quite a strain upon the credulity of one standing disinterested.
The whole pattern of the evidence given by the Merediths impresses us as showing a rather studied effort to obviate the objection to their competency in the transaction.
Laying aside the question of the competency of L.K. Meredith or of his wife to testify as to the circumstances and incidents in connection with the alleged gift, we have before us the question of their credibility and how much weight is to be given to their testimony. The fact that some of their testimony stands undisputed and uncontradicted does not require a court of equity to accept it as a verity. This is especially true where there is much in the record tending to impeach and contradict them and their testimony. When the appellant, in pursuance of an official duty, was seeking to locate the missing funds and made proper inquiry of them, we think that it became their duty to speak the truth, and their failure to do so, coupled with false and misleading suggestions and information that other *Page 558
persons may have gotten it from Mrs. Carter, cannot fail to weaken and discredit them as witnesses.
Confronted with this record, a finding in favor of the appellee works a manifest injustice and is not in keeping with fair dealing and equity. The record impresses us as showing a studied attempt and purpose on the part of appellee and his wife to secure possession of the money withdrawn from the bank on May 21, 1941. Knowing the disposition which Mrs. Carter had made in her will of the homestead and her cash on hand, appellee induced Mrs. Carter to change the form of the property from a home into money and to get it in a place where he could secure possession of it. That he had this in view and sought to cover up his tracks in so doing is best shown by the manner of the withdrawal and its redeposit sometime thereafter. If his intentions were fair and candid, why delay in the redeposit of such a large sum of currency and then deposit same in different accounts and on different dates? Their attempted explanation of the transaction does not ring true or smack of sincerity. Their conduct does not harmonize with their words.
This is a court of equity and the case is triable de novo. It is hardly necessary to say that equity looks behind the form and seeks the substance, and we here find a fertile field for the application of that most wholesome principle. We take the whole record and consider it with the view of arriving at a conclusion which will be just and equitable. The lower court must have based its finding largely upon the evidence of appellee and his wife. Our conclusion is that their testimony, bristling with contradictions, inconsistencies, absurdities, false and untrue statements, showing unusual actions and avaricious leanings, cannot and should not be made the basis of a finding whereby other worthy recipients are denied what is justly theirs. To permit appellee and his wife to retain the money withdrawn and to secure the payment of the claim means that the old-time friend and neighbor, J.A. Dibel, would not receive pay for the services which the record shows that he generously rendered for Mrs. Carter, for the payment of which she showed such concern. This was shown by the codicil which she made to her will.
We hold that the record shows a confidential relationship *Page 559
existed between Mrs. Carter and L.K. Meredith at the time the latter secured the money from the bank. We further hold that L.K. Meredith has not met the burden cast upon him to show the bona fides of the transaction of the alleged gift to his wife. Having so failed, he cannot prevail herein.
Our conclusion is that the lower court erred in finding in favor of the appellee and in dismissing the petition of the executor. Its decree is reversed and the cause remanded with directions that L.K. Meredith be ordered to account to the executor of the Sadie A. Carter estate for the sum of $2,534.56 and that the executor have judgment for said amount against the said L.K. Meredith, together with all costs. — Reversed and remanded with instructions.
GARFIELD, C.J., and MULRONEY, BLISS, and HALE, JJ., concur.
SMITH, J., dissents.
MILLER, OLIVER, and WENNERSTRUM, JJ., take no part.
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Affirming.
The parties to this appeal are husband and wife. In August, 1923, appellant, S.C. Booth, filed suit against his wife, Mattie L. Booth, appellee herein, for absolute divorce on the grounds of twelve (12) months' abandonment, averring that on or about the 1st day of June, 1922, she abandoned him and drove him from her home and has not since lived or cohabited with him. They were married on Thanksgiving day in 1920. He was about seventy years of age and she about fifty years of age. They had both been married before. He had very little property, and it of little value. She owned a good farm and had other property. After their marriage he went to live at her house. He says that a short time before their separation *Page 586
in June, 1923, she assaulted and beat him with a bucket and with ears of corn, causing his head and face to bleed, and inflicted upon him ugly and painful wounds; that she then ordered him to leave the place and never return; that he was afraid to remain, and obeying her orders he left and she had never allowed him to return.
The wife filed an answer and counterclaim in which she traversed the material averments of the petition and affirmatively pleaded cruel and inhuman treatment, concluding with a prayer for divorce from appellant. After taking proof she withdrew her counterclaim and also her depositions and the case was submitted. The court dismissed the husband's petition, and he prosecutes this appeal.
As he averred abandonment for one year as grounds for divorce it was incumbent upon him to prove it. The evidence given by his witnesses tended to prove that he was required to leave the home of his wife in June, 1923, and had never been allowed to return up to the time of the bringing of the action in August, 1924, something more than one year. On the contrary, the evidence for the wife established that she and her husband were reconciled in September after their separation in June, and that he returned to her home and lived with her, or at least in the house where she dwelled, from September until December, when they again separated, and he left. From the date of their last separation until the bringing of the action was much less than one year. The chancellor undoubtedly concluded from the evidence that appellant had not established his cause of action. The court must have accepted as true the evidence offered by the wife upon the question of when the separation occurred. If it were true, as testified to by some of the witnesses, that appellant and appellee lived together until December, 1923, then the abandonment had not continued for as much as one year and the appellant was not entitled to divorce on the grounds of abandonment. The chancellor was better able to judge the credibility of the witnesses than are we. He accepted the testimony showing the parties had not been living apart for as much as one year, and having done so, dismissed the petition.
We find no reason for disturbing this judgment; it is, therefore, affirmed. *Page 587
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TORECEIVERS: Management of property — borrowing under order of
1, 3 court — expense of administration — priority. Money borrowed by a receiver, under authority of an order of court, must be repaid as an expense of administration, and the lender is entitled to a preference over other creditors.
RECEIVERS: New mortgage and loan as benefit to receivership. A 2 receiver, being granted authority to pay off an old mortgage, who executes new notes and a mortgage therefor, and after selling the property and collecting a substantial part payment which the receivership retains upon default of the buyer, is precluded from claiming that the receivership was in no way benefited by the new mortgage as a new loan.
RECEIVERS: Courts' obligations — diligence in paying required.
3 Courts and their officers, e.g., receivers, should be especially diligent in *Page 587
meeting the obligations of their receivership contracts, however unfortunate they may turn out.
MORTGAGES: Foreclosure — mortgagee suing receiver — decree
4 fixing lien on other assets in different court. Court may authorize a mortgagee's foreclosure action against the receiver in a county where the property is located, tho different from county where receivership is pending and such court, after hearing the foreclosure proceeding, has the right, where such relief is proper, not only to foreclose but to impose a lien for a deficiency judgment on the other receivership assets in the other court.
This is a suit in equity brought in Chickasaw County by the holders of certain notes, aggregating $5,700, against A.E. Freier, receiver of the Brown-Fallgatter Company, and Paul C. Cagley, praying for the foreclosure of a mortgage securing the payment of the said written instruments, and that the deficiency judgment, if any, be made a lien against the assets of the receivership.
The receiver filed answer, denying that he was liable for any deficiency judgment, and further contended that the trial court had no right, power, authority or jurisdiction to render any judgment against him other than to enter judgment on the notes and foreclosure of the mortgage.
The lower court found for the plaintiffs, rendered its decree foreclosing the mortgage, with judgment on the notes, ordered *Page 588
a special execution to issue for the sale of the property, and adjudged any deficiency to be a first lien against the assets of the receivership pending in Black Hawk County.
The receiver, being dissatisfied, has appealed.
The evidence in the case is largely documentary and the material facts are not in dispute.
Under proper proceedings in the district court in and for Black Hawk County, A.E. Freier was duly appointed as receiver of the Brown-Fallgatter Company, Incorporated, which for some years prior had been engaged in the milling business, operating plants in Black Hawk and Chickasaw Counties. He posted the requisite bond, duly qualified as receiver, and assumed the duties of his office. At and prior to the appointment of the receiver a loan on the Chickasaw milling plant had been negotiated by the then owner thereof, in the sum of $10,000, to evidence which bonds were executed, secured by a trust deed on said mill. At the time the property came into the hands of the receiver there was still due on the indebtedness the sum of $6,500. The appellees in this case, who were the heirs of Charles Klages, deceased, held $5,700 of said indebtedness. In July of 1931 these bonds were due, and the appellant-receiver filed an application in the district court of Black Hawk County, wherein he set out that at the time he was appointed receiver, to wit, in August of 1930, the mill located at Old Chickasaw, in Chickasaw County, was encumbered by a trust deed, securing bonds in the amount of $10,000, and that there remained unpaid the sum of $6,500 on these bonds; that they were due; that $5,700 of the indebtedness was owned by the appellees; that he believed it to be to the best interests of the receivership that the indebtedness be paid and that he be directed and empowered to pay same by executing new notes, secured by a mortgage on the property, in the amount of $5,700. On July 28, 1931, upon this application, the district court of Black Hawk County ordered that the receiver pay such indebtedness by making a new loan in the amount of $5,700, secured by a mortgage on the mill in Chickasaw County, and that he execute four notes in the amount of $1,425 each, drawing interest at the rate of seven per cent. The receiver did this; he executed to the appellees four notes, each in the amount of $1,425, and duly signed by A.E. Freier as receiver of the Brown-Fallgatter Company, Inc. To secure these notes he executed a mortgage by himself as receiver, which *Page 589
mortgage was duly recorded in Chickasaw County. On October 14, 1932, the receiver was authorized and empowered to sell the Old Chickasaw mill property to Paul C. Cagley, under a contract for deed, wherein the purchase price was $9,500, which was paid by the assumption of the mortgage in the amount of $5,700, the balance to be paid in cash on certain dates. The property was sold to Cagley, who paid to the receiver during the period of time the contract was in force approximately the sum of $2,800, which amount the receiver has retained. Difficulties arose in the operation of the mill and Cagley was unable to carry out the balance of the contract and defaulted thereon. On December 12, 1935, there having been default in the payment due the appellees, they filed written application in the Black Hawk County court, asking leave to sue the receiver in Chickasaw County for the amount due them on the four notes from the receivership, and to foreclose the mortgage securing the notes. On December 12, 1935, Judge A.B. Lovejoy, one of the presiding judges of Black Hawk County, made an order in said receivership proceedings, granting appellees leave to sue the receiver upon the notes and to foreclose the mortgage. Pursuant to said order of court the appellees filed petition in this cause, in equity, in Chickasaw County.
I. It is the contention of the appellant that the debt sued upon is not his obligation, but was rather the extension of the old mortgage, which was a lien against the property at the time the receiver was appointed and qualified, whereas the appellees contend that the notes and mortgage sued upon are the obligation of the appellant to repay money borrowed by him, as receiver, with the approval of the court.
There does not seem to be much disagreement in the authorities in regard to the question with which we are here confronted.
[1] In 53 C.J., section 205, Receivers, we find the rule announced as follows:
"Borrowings and Advances. — The court may authorize the receiver, from time to time, to borrow money when necessary for the preservation of the property and the proper administration of the estate, and persons who lend or advance money to a receiver, under the authority of the court, in order to enable him to accomplish the purpose of his appointment, should be *Page 590
reimbursed by him out of the funds of the estate. But while courts will be zealous to protect the rights of parties who may have furnished money for the preservation of the trust property, equal care will be observed that the property is not wasted by the receiver's improvident acts. So, before procuring or accepting any loan, the receiver should apply for and obtain authorization so to do, since he has no such power in the absence of special authority conferred upon him, and a loan procured without authority is not binding upon the court or the trust property; and the court will not sanction the borrowing of large sums without previous authorization, even though the money has been applied to pay expenses of the receivership. An order permitting the receiver to borrow money, which has not been carried out, will be annulled if the necessity for it disappears."
In 23 R.C.L., Receivers, section 77, we read:
"Borrowing or Loaning Money; Executing Notes. A receiver has no right to borrow or loan money, unless specially authorized by the court, and if he loans money and loses it, he must stand the loss, unless the circumstances are peculiar. So although a receiver may have no right to borrow money, yet if he uses money borrowed by him to discharge a valid lien on the property committed to his charge, and acts in good faith in making the payment, it has been held that he is entitled to credit therefor as against the insolvent debtors who have received the benefit of the payment. A receiver authorized to buy material has no implied power to execute notes in payment therefor, and he is individually liable thereon, though both parties intend to bind the maker as receiver and not individually. Nor can such notes be reformed so as to speak the true intent of the parties, since a receiver has no responsible principal."
In the case of Wabash, St. Louis Pacific Railway Company v. Central Trust Company, C.C., 22 F. 269, at page 271, that court said:
"And in this conclusion permit me to say generally in reference to receiver's obligations, I think the court should be very slow in authorizing or directing its receivers to enter into obligations; none should be created which the necessities of the case do not absolutely require. It is not the function of the *Page 591
court to go into the business of railroading or manufacturing, and have property on its hands, continued there indefinitely. Whenever, from the circumstances of the case, it is found necessary to take possession of property, it should preserve it and manage it so far as is necessary to keep it intact and free from loss or injury; and if need be, in order so that it may issue receiver's certificates, or direct the receivers to issue other obligations. Whenever it does so I think it is the imperative duty of the court to see that these obligations, thus authorized or directed, are held sacred to the very letter and spirit; that there should not be anything for outside litigation, but that the court, having authorized or directed these obligations and contracts to be entered into, should see to it that they are sacredly performed; and though afterwards it may seem that these obligations were unfortunately created, or without sufficient consideration, still there is no duty more sacred upon the court than to see that these obligations are kept."
In the case of Farmers Loan Trust Company v. Burlington
Southwestern Railway Company, C.C., 32 F. 805, at page 808, Justice Brewer, speaking for that court, said:
"The court should be chary of promise, but eager of performance; careful not to burden property in its possession with obligations, and equally careful to see that every obligation is discharged before that possession is finally surrendered. It owes performance, and should assume all its burdens, and not turn the holder of its contracts off with simply the assurance that he has a valid lien which he may foreclose."
We find that the Circuit Court of Appeals, in the case of Colorado Wool Marketing Assn. v. Monaghan, 10 Cir., 1933,66 F.2d 313, has this to say, at page 315:
"The first duty of a court having possession of property is to preserve it for the litigants. The courts, state and federal, which had possession of these sheep, would have been grossly derelict in their duty if either had permitted the sheep to starve or to stray beyond recall. Jerome v. McCarter,94 U.S. 734, 738, 24 L. Ed. 136; Union Trust Co. v. Illinois Midland Co.,117 U.S. 434, 454, 6 S. Ct. 809, 29 L. Ed. 963; Illinois Steel Co. v. Ramsey, C.C.A. 8, 176 F. 853, 864. In Wallace v. Loomis,97 U.S. 146, 162, 24 L. Ed. 895, the court, speaking *Page 592
of the authority conferred upon receivers to borrow money to preserve property in their possession, said: `It is a part of that jurisdiction, always exercised by the court, by which it is its duty to protect and preserve the trust funds in its hands.' Necessary expenses incurred in the preservation of property while in the custody of the court should be paid before the court passes over the property or its proceeds to those adjudged to be entitled thereto. Feldman v. American Palestine Line, Inc., D.C., 15 F.2d 94, opinion by Judge Thatcher, lately solicitor general; Brictson Mfg. Co. v. Close, C.C.A. 8, 25 F.2d 794; Von Boston v. United Rys. Co. of St. Louis, C.C.A. 8, 8 F.2d 826, certiorari denied 271 U.S. 665, 46 S. Ct. 475, 70 L. Ed. 1140; Union Trust Savings Bank v. Southern Traction Co., C.C.A. 7, 283 F. 50, certiorari denied 260 U.S. 744, 43 S. Ct. 166, 67 L. Ed. 492; International Trust Co. v. United Coal Co., 27 Colo. 246,60 P. 621, 83 Am. St. Rep. 59; Hanna v. State Trust Co., C.C.A. 8, 70 F. 2, 30 L.R.A. 201; Clark on Receivers, sec. 637.
"The case of Hanna v. State Trust Company has been frequently followed in other circuits. There Judge Caldwell laid down the general rule that a court of equity may not, over the objection of lienholders, subordinate a lien to the expenses of operating a private business in receivership; but in so doing he stated that expenses of administration, realization and preservation are not within the rule, adopting for that purpose the following language of the court in Raht v. Attrill, 106 N.Y. 423,13 N.E. 282, 285, 60 Am. Rep. 456:
"`The act of the court in taking charge of property through a receiver is attended with certain necessary expenses of its care and custody; and it has become the settled rule that expenses of realization, and also certain expenses which are called expenses of preservation, may be incurred under the order of the court on the credit of the property; and it follows from necessity, in order to the effectual administration of the trust assumed by the court, that these expenses should be paid out of the income, or, when necessary, out of the corpus, of the property, before distribution, or before the court passes over the property to those adjudged to be entitled.'"
We also quote from appellant's brief (at page 11):
"Where money is actually advanced to the receiver, on *Page 593
application to the court for authority to borrow money, it becomes an expense of administration, and must be paid to the lender as a preference."
Thus we find that the appellant concedes if this record shows upon application to the court the receiver was authorized to borrow this money, it must be paid out of the expenses of administration and that the lender is entitled to a preference.
We turn to the record to ascertain the facts.
[2] First, we find that the appellant, as receiver, filed an application, asking for permission to pay the indebtedness secured by the old trust deed, to execute a new mortgage on the property, and to make and execute notes on behalf of the receivership. The court upon that application entered an order, from which we quote the material parts:
"It is ordered that the Receiver pay off such indebtedness; and make new loan in the sum of Five Thousand Seven Hundred Dollars ($5,700.00) secured by mortgage on the land and appurtenances at Old Chickasaw, Chickasaw County, Iowa, mortgage to be payable in five years from its date, securing four notes, in the sum of Fourteen Hundred Twenty-five Dollars ($1,425.00) each, at 7% per annum, payable semi-annually; continue the abstract to date; pay the accrued interest on the old loan, and such other expenses in connection therewith as may be necessary, all as prayed in said application."
It should be noted the court specifically provided in the order that it was a new loan in the sum of $5,700 that was being made, to be secured by a new mortgage. The appellant as receiver did execute new notes, signed by A.E. Freier, receiver of the Brown-Fallgatter Company, Inc. These were delivered to appellees in this case, and the old instruments which they held were surrendered and cancelled. Shortly after making this new loan the appellant sold the property for $9,500, under contract, upon which there was paid into the receivership approximately the amount of $2,800, which sum is still in his hands as receiver. He took the cash he received for the equity saved by the execution of the new notes and mortgage and it is now a part of the assets of the receivership. These facts preclude appellant from claiming that the receivership was in no way benefited by the new loan made by the appellees. In addition, by the making of *Page 594
the new loan the right of the appellees to foreclose and collect upon the old obligations which they held and owned, was terminated.
[3, 4] Clearly, under such a record we can come to no other conclusion than that the appellees under order of court loaned their money to the receiver, and that this indebtedness became an expense of administration which must be paid ahead of general claimants. The fact that it may now seem that this obligation was an unfortunate contract on the part of the receiver, affords him no excuse for seeking to avoid payment. Courts and officers of courts should be especially diligent in meeting the obligations of their contracts.
[5] II. Appellant claims that the Chickasaw County court had no right, power, authority or jurisdiction to order and determine the status of the liability of the receiver for the deficiency judgment.
With this we cannot agree. Before this action was commenced the appellees filed an application in the district court of Black Hawk County, asking for permission and authority to sue the receiver upon the notes and to foreclose the mortgage securing the same.
In the case of Manker v. Phoenix Loan Association, 124 Iowa 341,100 N.W. 38, this court said at pages 343, 344,100 N.W., at page 38:
"In Allen v. The Iowa Central Railroad of Iowa, 42 Iowa 683, we held that the failure to obtain leave to sue in such cases was not a bar to the jurisdiction of the court of law, `and no defense to an otherwise legal action on trial.' To the same effect are Kinney v. Crocker, 18 Wis. 74; Paige v. Smith,99 Mass. 395; Hills v. Parker, 111 Mass. 508, 15 Am. Rep. 63; Tobias v. Tobias, 51 Ohio St. 519, 38 N.E. 317; 23 Am. Eng. Enc. 1125, and notes.
"But if this were not the established rule in this state, it is clear that when a receiver has appeared and defended, and, as in this case, has invoked the affirmative judgment of the court, he cannot, after an adverse decision, question the jurisdiction to which he has voluntarily submitted or himself invoked. Sterritt v. Robinson, 17 Iowa 61; Cooley v. Smith, 17 Iowa 99; Elkhart Car Works v. Ellis, 113 Ind. 215, 15 N.E. 249; Mulcahey v. Strauss,151 Ill. 70, 37 N.E. 702. Moreover, *Page 595
when the receivers voluntarily appeared and submitted to the jurisdiction of the court, it will be presumed that they were authorized to defend, and such presumption will obtain until the contrary is affirmatively shown. The presumption is that a general receiver has authority to sue, and, when the receivers in these cases filed petitions asking the foreclosure of the mortgages given to the association, it was an invitation to the court to settle all differences between themselves, as receivers, and the plaintiffs, growing out of the transactions connected therewith."
In the case at bar permission was secured from the court in which the receivership was pending, to wit, from the Black Hawk County court. That court had a perfect right to enter the order for the debt was contracted by the receiver under order of court, for the benefit of the receivership. The receiver himself appeared in the Chickasaw County court. The Black Hawk County court, being the court in which the receivership was pending, having given authority to commence the suit in Chickasaw County, the latter mentioned court had the right to determine the questions involved.
In view of this opinion, the motion of appellees to dismiss this appeal is overruled.
Other errors are urged, all of which have been given consideration.
It necessarily follows that this case must be, and it is hereby affirmed. — Affirmed.
SAGER, C.J., and ANDERSON, KINTZINGER, DONEGAN, STIGER, and MILLER, JJ., concur.
RICHARDS, J., dissents.
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Subsequent to the execution of the mortgage in suit to appellant by George E. and Edith R. McSpadden, they conveyed one half of the mortgaged premises, which comprised a farm of 180 acres, by definite description, to the defendant Loyal McSpadden. Thereafter, the said grantee purchased material of *Page 98
the Fullerton Lumber Company, cross-petitioner and appellee herein, for the purpose of erecting a dwelling house upon his premises. At the time of the commencement of this action, there was a balance due cross-petitioner on the account for material of $698.65, together with interest. As already indicated, the controversy is limited to the issues joined on the cross-petition, in which the establishment of the mechanics' lien as prior to the lien of the mortgage is prayed, together with special execution, and for the sale of the building separate from the real estate, with the right of removal.
Both the relative status of the respective liens and the remedy for their enforcement are fixed by statute. Section 10289, Code, 1927, which relates to priority, provides that:
"Mechanics' liens, including those for additions, repairs, and betterments, shall attach to the building for which the material or labor was furnished or done, in preference to any prior lien, incumbrance, or mortgage upon the land upon which such building was erected or situated."
Section 10290 of the Code of 1927 provides the remedy where the foreclosure of a mechanics' lien is sought, and where an issue of priority is involved, which, so far as material to the present controversy, is as follows:
"* * * 1. If such material was furnished or labor performed in the construction of an original and independent building commenced after the attaching or execution of such prior lien, incumbrance, or mortgage, the court may, in its discretion, order such building to be sold separately under execution, and the purchaser may remove the same in such reasonable time as the court may fix. If the court shall find that such building should not be sold separately, it shall take an account of and ascertain the separate values of the land, and the building, and order the whole sold, and distribute the proceeds of such sale so as to secure to the prior lien, incumbrance, or mortgage priority upon the land, and to the mechanic's lien priority upon the building. * * *"
Of course; the order of priority fixed by the statute must, unless otherwise provided thereby, prevail in the enforcement of the remedy. It is clear, under the provisions of the foregoing *Page 99
statute, that, if material is furnished for and used in the erection of a new and independent building which may be severed from the realty and removed without substantial injury or damage to either, the court may, in its discretion, order the same to be sold separately, under special execution, with permission to the purchaser to remove the same. Luce Co. v. Curtis, 77 Iowa 347;Leach v. Minick, 106 Iowa 437; Tower v. Moore, 104 Iowa 345;Royal Lbr. Co. v. Hoelzner, 199 Iowa 24. The law being thus well established, practically the question presented for decision in this case is, in the first instance, largely one of fact. The nature and character of the building in question is well described in the stipulation of the parties as follows:
"It is conceded that the dwelling house referred to above and involved in this controversy is 22 feet by 34 feet, with a ten-foot eave; that the basement has a cement floor, and the walls of the basement are common hollow tile from the bottom of the basement to the grade line, and that from the grade line to the floor of the house itself, the blocks are vitrified hollow tile; that the chimney is a brick chimney extending from the floor of the basement up through the house to the roof; that the house has a porch on the front, underneath which are two piers, constructed from vitrified hollow tile, set on a cement base; that there is a pipeless furnace installed in said house; that the walls of said basement are laid up with mortar joints; that there are five rooms in the house, and another room which appears to be designed for a bath room or closet, but there are no bath-room fixtures, however, in said house, or any piping for bath-room fixtures or for any other water system in the house."
Shortly after the building was erected upon the premises, Loyal McSpadden was, on a voluntary petition, adjudged a bankrupt. The building was isolated and separated from all other buildings, except a small outbuilding, of little value. The excavation for the basement was about 2 1/2 feet in depth, the elevation above the surface being made by the use of the dirt taken from the excavation and the height of the foundation above the same.
The weight of the testimony clearly discloses that the building in question may be removed without substantial damage thereto or to the premises. The tile, when removed, will retain *Page 100
about 75 per cent of their original value. The cement floor in the basement will, of course, be a total loss. Cross-petitioner's witnesses testified that the chimney could be cut off at the floor and fastened in place so that it would not be damaged in the removal of the building. The testimony also shows that the porch may be so protected that the removal of the building will not work material injury thereto. The house was vacant at the time of the trial, and had been for several months prior thereto. The trial court found that the building could be removed, and the decree made full provision for the sale and removal thereof. In addition, the court required cross-petitioner to restore the premises to their former condition, and to execute a bond in the penal sum of $1,000 to better secure compliance with this part of the decree.
Our attention is directed by appellant to Crawford-Fayram Lbr.Co. v. Mann, 203 Iowa 748, in which the court reversed the decree of the lower court granting relief to the materialmen and permitting the removal of the building. This case is clearly distinguishable from the case at bar. In the first place, the mortgage in the Mann case was given for the express purpose of procuring funds with which to erect the building therein involved. In the next place, the building was permanent in character, and was improved with plumbing and other fixtures, which made the removal practically impossible without serious injury to it and to the premises on which it was situated. Likewise, Green v. Saxton, 196 Iowa 1086, and Taber Lbr. Co. v.Converse, 197 Iowa 1287, relied upon by the appellant, are clearly distinguishable from the present case. No evidence as to the market value of the mortgaged premises was offered by either party. Appellant did offer the testimony of an alleged expert, who testified that the removal of the building would impair the value of the land from $2,500 to $3,000. This testimony can be given little or no weight, as the issue must, in the first instance, be determined in harmony with the physical facts.
The finding and decree of the trial court, it seems to us, is clearly right, and in harmony with the statutes cited. The discretion to be exercised by the court in such cases in determining whether permission should or should not be given for the sale and removal of the building, must be exercised in the light of the statute and the facts and circumstances shown in the evidence. *Page 101
This conclusion makes unnecessary consideration of counsel's contention as to the proper construction to be given Section 10290 as it now appears in the Code. On this question we express no opinion. It follows that the decree must be, and it is, —Affirmed.
MORLING, C.J., and De GRAFF, ALBERT, and WAGNER, JJ., concur.
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The collision in question occurred near midnight in May, 1927, on an intersection of Commercial Street and West Eleventh Street. These streets have diagonal courses, with intersection at right angles. West Eleventh Street extends from the northeast to the southwest, and Commercial Street from southeast to northwest. The plaintiff was driving northwesterly on Commercial Street, and Parkin was driving southwesterly on West Eleventh Street. The collision occurred at the extreme corner of the intersection, on its westerly side, as indicated by the position of the cars when they came to a stop. This would be on the right side of West Eleventh Street, looking southwesterly, and on the left side of Commercial Street, looking northwesterly. It is the contention of the plaintiff, however, that the collision occurred on the right side of Commercial Street, looking northwesterly, and that his car was pushed to the left side of the street by the car of the defendant.
The immediate circumstances of the accident, as described by the plaintiff, were: He approached the intersection from the southeast, and saw a car approaching the intersection from the northeast. He therefore brought his car to a stop, at a distance of four feet within the intersection. After the on-coming car had passed the intersection, he started his car, and proceeded cautiously across the intersection, when his hind wheels were struck by the defendant's car, near the northwesterly line of the intersection. When he started to cross the intersection, he looked northeasterly along West Eleventh Street for other cars, but saw none. He did not see the defendant's car at all until after his car was struck. He was severely injured, as a result of the collision.
The plaintiff's petition set forth ten specifications of alleged negligence, which may be summarized as follows: (1) Failure to operate the automobile in a careful and prudent manner and at a careful rate of speed; (2) the operation of the car at an excessive and dangerous rate of speed; (3) the operation of the car at a speed in violation of an ordinance; (4) failure to reduce the rate of speed to a proper rate when approaching the intersection; (5) *Page 1148
failure to have the automobile under control when approaching the intersection; (6) failure to sound the horn in approaching the intersection; (7) failure to display two or more lights properly lighted on the forward part; (8) failure to keep a proper lookout for others on the intersection; (9) failure to stop the automobile when the driver thereof saw, or ought to have seen, the plaintiff's car in the intersection; (10) failure to stop the car after discovery of plaintiff's peril.
The answer was, in effect, a general denial.
The plaintiff's own testimony may be accepted as giving his version of the circumstances of the accident. This has already been briefly stated. The complaints of appellant, as presented here, relate largely to the instructions of the court. One ruling of the court on admission of testimony is complained of, and we shall give that our first attention.
I. The plaintiff's alleged injury comprised a perforation of the right temple by a bolt. One of his physicians, Rountree, was examined as a witness. He purported to describe the injury as he had observed it. A radiograph thereof had been 1. EVIDENCE: taken, and was exhibited to the jury. By opinion interrogation and answer, the witness purported evidence: to explain or interpret to the jury the subjects of significance of the various features of the expert radiograph. This examination was properly testimony: objected to by the defendant, on the ground that radiograph: it was not proper expert testimony, and that the oral picture itself was the best evidence of what it explanation. showed. This objection was overruled, and the ruling is complained of. The appellant relies for authority upon the following of our cases: Elzig v. Bales, 135 Iowa 208; Lang v.Marshalltown L., P. R. Co., 185 Iowa 940; Daniels v. Iowa City,191 Iowa 811. In the Elzig case we held that a photograph was itself the best evidence of what appeared thereon. In the Lang
case we applied the same rule to a skiagraph of the plaintiff's spine, which graph was offered in evidence to show a curvature thereof. We may assume, from what appears in the opinion in that case, that, on the question of curvature, the skiagraph performed the same function as a photograph would have done. It either indicated a curvature or it did not. In the Daniels case we opened, rather than closed, the door to expert evidence offered for the purpose of interpretation of a radiograph, though we did hold that the *Page 1149
ruling of the district court in withholding such evidence was without prejudice. We said in that case:
"Whatever criticism may be directed against the rule announced in the foregoing cases, the record shows that this expert was permitted to testify as to what X-ray photographs show, how they are taken, how things are indicated thereon, and his physical examination of the plaintiff. We appreciate that too strict an application of the best evidence rule as applied to X-ray photographs, is not desirable; but it may not be said, under the instant record, that any prejudice resulted in sustaining the objections to the questions propounded. It is proper for an expert to explain an X-ray photograph in such particulars as are not understood by a layman. See State v. Matheson, 142 Iowa 414. What the jury could see and understand about the matter is not the subject of expert testimony, and this we understand to be the effect of our prior decisions. A radiograph may be used for purposes of demonstration by an expert as though he had the object itself before the jury for explanation. Sheldon v. Wright,80 Vt. 298. That the bone can be distinguished from the flesh in an X-ray photograph, and that the bone would make a heavier shade than the muscle, is proper expert testimony. Such scientific facts would not be known by the average layman. Missouri K. T.R. Co. v. Coker (Tex.Civ.App.), 143 S.W. 218."
In the case at bar, we do not have the exhibit before us. We may, however, properly take judicial notice of what is well known to the profession. That is that a radiograph of internal conditions does not necessarily or ordinarily interpret itself to the mere observation of a nonexpert. These graphs carry various lights and shadows, the significance of which is known to the expert, and is not known to the nonexpert. The purpose of the radiograph in this case was to show the fact, as well as the location, of a perforation of the temple. Under the diagnosis of the physician, there was a "hole" in the temple. This "hole," as such, was indicated to the expert by certain characteristics of light and shadow. It was not observable as a "hole" to the ordinary sight of the nonexpert. The purport of the expert testimony at this point was to explain the significance of the lights and shadows of the picture. We think such explanation was essential to a proper understanding of the significance of the picture. In such a case, an expert interpretation of the significance of the various features *Page 1150
of the radiograph should be deemed admissible. Where a radiograph is offered to serve the mere function of a photograph, then it is subject to the same rule as would apply to a photograph. This was somewhat the situation in the Lang case, the question there being whether a straight line or a curved one was presented by the skiagraph. We hold, therefore, that the evidence was proper in this case. See also, State v. Matheson, 142 Iowa 414, wherein such evidence was held proper.
II. The defendant requested the court to give the following instruction:
"You are instructed that drivers of motor vehicles upon the streets of the city have the right to presume 2. AUTOMO- that other persons also driving upon the streets BILES: of the city will not violate the law, but will injuries observe the rules of the road, as prescribed by from law; and in this connection you are told that a operation: person approaching an intersection, observing yielding due care on his own part, has the right to right of assume that a person approaching from his left way: will observe the rule of law, and yield the
justifiable right of way to him."
assumption.
The court refused such instruction, but gave the following Instructions 5 and 6:
"5. You are instructed that the highway is a means of public travel; that the drivers of automobiles are charged with the knowledge of the use of the highway for such travel, and are required to use reasonable and ordinary prudence and care in the use of such highway. In the use of the highway, the driver of an automobile is not called upon to anticipate negligence upon the part of the driver of another automobile while using such public highway.
"6. You are instructed that it is the law of this state that, where two vehicles are approaching an intersection of any public street or highway, so that their paths will intersect, if there is danger of a collision, the vehicle approaching the other from the right shall have the right of way.
"You are further instructed that the right of precedence at a crossing occasioned by such statute has no proper application except where the vehicles on the intersecting streets are approaching the crossing so nearly at the same time, and at such rate of speed, that, if both proceed without regard to the other, *Page 1151
a collision or interference between them is reasonably to be apprehended. In such case it is the right of the one having the precedence to continue his course, and it is the duty of the other to yield the right of way; but, if the traveler not having such right or precedence gets to the crossing and finds no one approaching upon the other street within such distance as reasonably to indicate danger or interference or collision, he is under no obligation to stop or wait, but may proceed, and use such crossing as a matter of right."
The appellant complains of the refusal to give the requested instruction. The appellee answers that Instructions 5 and 6, given by the court, as above set forth, were a fair equivalent of the requested instruction. This is manifestly so.
III. One of the grounds of negligence submitted by the court to the jury was whether the defendant failed to carry lights. The appellant contends that there was no evidence in support of this charge of negligence. The evidence relied upon 3. AUTOMOBILES: by the appellee in support of the instruction is injuries that of the plaintiff himself, as a witness, who from testified that, as he entered the intersection, operation: he looked northeasterly along Eleventh Street, alleged and saw no approaching automobile or automobile absence of lights. He testified, rather argumentatively, lights: that the defendant's automobile had no lights in inferential operation. This was an inference which he drew evidence to from the alleged fact that he looked for lights support and saw none. The complaint is not that he submission. testified to his own inference, but that his testimony became entirely nugatory because of such inference. His testimony at this point is quite unsatisfactory, and we have given it much consideration, both as to its admissibility and its legitimate effect. We are constrained to the final conclusion that the testimony of the plaintiff, such as it was at this point, would warrant the inference by the jury that the lights of the defendant were not in operation. It would likewise warrant the jury in refusing such inference therefrom. It is forbidden to us to pass upon the weight of the testimony.
IV. The appellant complains of the refusal of the court to give Requested Instruction No. 3. This was as follows:
"If you find from the evidence that the plaintiff stopped his car at, or very close to, the intersection, at a point where he *Page 1152
could see to his right a distance of several hundred feet along Eleventh Street in the direction from which the 4. AUTOMOBILES: defendant's car was coming, you must then injuries conclude, either that he did not look, or that from he did in fact see the defendant's car operation: approaching; and in either case, if he proceeded contributory forward in the line of the on-coming car, and negligence: was struck, he would be guilty of contributory instructions negligence, and cannot recover in this case." compelling jury to draw certain inference.
The point raised by the appellant in this requested instruction inheres in the question considered in our foregoing Division III. The general proposition contended for by appellant, that it was the duty of the plaintiff to see what was plainly visible to him, if he looked, is to be conceded. This principle is applied in cases where no qualification of visibility is involved. In this case, the accident happened, not in the daytime, but in the night. The plaintiff testified that he looked northeasterly along Eleventh Street and could see the lights upon the bridge, 475 feet away. The very existence of these distant lights could have added some confusion to the visibility of intervening lights. It could, therefore, be true that the defendant's lights might have been burning and that the plaintiff saw the bridge lights 475 feet away and yet failed to distinguish between the lights of the defendant and the lights upon the bridge. The jury returned a special finding that the plaintiff was not negligent in failing to discover the defendant's approach to the intersection. It is further to be noted that the defendant's contention at this point is itself argumentative. The argument is that, if plaintiff failed to see the light, it must be true that he did not look. The counter argument of the plaintiff is that, inasmuch as he did look, and saw no light, therefore it must be true that the defendant carried no light. In either case, the inference was one for the jury, and not one to be drawn either by the witness, as a matter of fact, or by the court as a matter of law. There was no error in the refusal of the court to give this requested instruction.
V. The defendant moved for an instructed verdict, on the ground that the evidence was insufficient to sustain a verdict for the plaintiff. The court overruled the motion, and error is assigned on the ruling.
We think the ruling must necessarily be sustained, if we are *Page 1153
correct in our foregoing conclusions. According to the plaintiff's testimony, he came to a full stop, after proceeding to a distance of four feet upon the intersection. He did this to await the passing of a car just preceding the 5. AUTOMOBILES defendant's car, and coming from the same injuries direction. He thereafter started his car, and from had proceeded well into the intersection when he operation: was struck by the defendant. The defendant's car negligence was traveling on the right-hand side of Eleventh at Street, and struck the rear wheel of the intersec- plaintiff's car. This would indicate that the tion: jury plaintiff had entered the intersection clearly question. advance of the defendant. The evidence of the plaintiff is to the effect that the impact from the defendant's car carried him across Commercial Street to the northwesterly corner of the intersection, over the curb and onto the terrace. The car of the defendant came to a stop with its front wheels upon the terrace. The car of the defendant was a seven-passenger Cadillac, and was much the heavier of the two cars. If the evidence of the plaintiff is to be accepted as true, concerning the immediate circumstances of the impact, the driver of the defendant's car came under a duty of discovery and lookout. The intersection was already occupied, before the defendant's car entered upon it. The jury could find, from the evidence of the defendant's driver, that, upon his discovery of the presence of the plaintiff's car in front of him, he did not at first apply his brakes as efficiently as he could have done, but temporized, in the apparent expectation that the plaintiff's car would move forward out of his way. It appears that the plaintiff had shifted from first to second gear, and was still traveling in second gear at the moment of the impact. If he had been going a little faster, it was quite possible that he would have escaped the impact entirely. All these matters are in the field of fact, and were necessarily for the consideration of the jury.
We reach the conclusion that no reversible error appears in the record. The judgment is, accordingly, — Affirmed.
FAVILLE, C.J., and MORLING, KINDIG, and GRIMM, JJ., concur. *Page 1154
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01-03-2023
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07-05-2016
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