Brauch v. Freking

258 N.W. 892, 219 Iowa 556
CourtSupreme Court of Iowa
DecidedFebruary 12, 1935
DocketNos. 42502, 42503.
StatusPublished
Cited by5 cases

This text of 258 N.W. 892 (Brauch v. Freking) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brauch v. Freking, 258 N.W. 892, 219 Iowa 556 (iowa 1935).

Opinion

Hamilton, J.

On March 1, 1929, H. H. Freking and wife, Mary E. Freking, signed a promissory note in the sum of $3,800. payable to Frank P. Brauch, and to secure the payment of said note on the same date executed a mortgage upon their homestead property in the city of LeMars, Iowa, described as follows:

“Lot Five (5), in Block Seventy-nine (79) Fifth addition to the city of LeMars, Plymouth county, Iowa.”

That this property was the homestead of mortgagors is conceded by the parties and also established by the evidence. This mortgage was not filed for record until September 22, 1931. The money was borrowed from, and all negotiations in reference thereto were had with, Anna A. Brauch, sister of appellees; she being a notary public and transacting all the business. At the request of Anna A. Brauch, the note and mortgage were made out in the name of her brother, Frank P. Brauch, which was consented to by the borrowers; the reason given for this being that she as notary public could not take the acknowledgment of the mortgage in which she was named as mortgagee. This note and mortgage are the basis *558 of the suit brought by appellee Frank P. Brauch, -being designated in the record as equity cause No. 15818.

On February 28, 1931, H. H. Freking and wife, Mary E. Freking, signed a promissory note for $25,000, payable to Henry P. Brauch, and on the 5th day of March, 1931, signed and acknowledged a mortgage to secure the same on two hundred forty acres of land owned by H. H. Freking and described as follows:

“The Northeast quarter (NE14) and North half (N^) of the Southeast quarter (SEI4) of Section Fourteen (14), Township Ninety-two (92), North, Range Forty-five (45) West of the 5th P. M., in Plymouth County, Iowa.”

This mortgage bears date of February 28, 1931, but was not signed and acknowledged until March 5, 1931, and it was on this later date, according to the record, that the note and mortgage were delivered and $10,000 of the consideration paid. The balance of $15,000 represented a pre-existing indebtedness. This mortgage was acknowledged before a Mr. Conway, a notary public, but the papers were drawn up by Anna Brauch; the mortgage was not filed for record until September 25, 1931. This $25,000 note and mortgage are the basis of the suit brought by appellee Henry P. Brauch, and which suit is designated in the record as equity cause No. 15819.

The claim of appellant August Kilker arose out of the following transactions: About the year 1920, Anna Kilker, through her husband, William Kilker, loaned to Henry H. Freking (sometimes referred to in the record as H. H. Freking and Henry Freking) $2,000 on his personal note, and in 1923 a second loan was made of $2,000 additional, and at that time a new note for the full amount of $4,000 was taken. The note was payable to Anna Kilker. It was due one year after date, but was allowed to run on until the spring of 1931. In the month of January, 1931, Anna Kilker died, and shortly thereafter William Kilker, desiring to settle his wife’s estate, asked Mr. Freking to pay his note, and, when told by Mr. Freking that he did not have the money and would have to borrow it, William Kilker suggested to Mr. Freking that he might borrow the money from his brother, August Kilker, one of the defendants and the appellant in this case, and it appears that William Kilker also spoke to his brother, August Kilker, about making a loan to *559 Mr. Freking, so that Mr. Freking would be able to pay the indebtedness due the estate of Anna Kilker.

August Kilker testified: “Will Kilker said that Freking wanted to borrow it.” It appears that Mr. Freking rode down town with Will Kilker to see his brother, August, in reference to this loan, and they had some talk on the street. August Kilker inquired of Mr. Freking about his financial condition, and August testified that Freking told him that “he was always a little in debt”, and there was a little debt on one 80, but the other place was clear. He did not ask Freking how much he was behind or whom he owed, nor did he demand of him a property statement of any kind, and there is no evidence in the record that he ever made any inquiry of any one concerning the financial standing of Mr. Freking, except to have the record in the recorder’s office examined to ascertain whether there were any other liens against this property, and, finding none, he made the loan of $4,000. August Kilker, together with Arthur Kilker, son of William Kilker, acting for his father, went to the home of Mr. and Mrs. Freking to consummate the loan. There August turned over to Arthur the $4,000 in settlement of the note which was due the estate of Anna Kilker, and Arthur delivered to Freking the old note, and Freking and his wife executed and delivered to August a note in the sum of $4,000. This was on the second day of March, 1931, three days before the execution of the $25,000 note and mortgage given to Henry P. Brauch upon the two hundred forty-acre farm.

It should be stated that, before the completion of the negotiations for the loan of $4,000 by August Kilker to Mr. Freking, Mr. Freking attempted to borrow the money of Anna A. Brauch. She informed him that she did not have the money, and, when Freking told her that he could probably get the money from August Kilker, she said to him that he “should get it from him”. In addition to the indebtedness hereinbefore referred to, Mr. Freking was indebted to Anna Brauch on another personal note in the sum of $1,300. About September, 1931, for some reason not clearly disclosed by the record, August Kilker asked for security on his $4,000 note. Freking said he was willing to give him a second mortgage on the two hundred forty-acre farm. It appears that this was the first information that August Kilker had that there was a mortgage on the two hundred forty acres. Freking talked over with Anna Brauch this matter of giving a second mortgage to August Kilker, and *560 Anna, having an unsecured note of $1,300, was not willing that Freking should give August Kilker a second mortgage, but demanded one to secure her $1,300 note, and there commenced a race between these two creditors, which resulted in the litigation now before this court. Freking did not give either of them a second mortgage.

Anna Brauch sued on her $1,300 note, and, before she could get judgment, August Kilker, through his attorneys, rushed in and obtained a confession of judgment upon his $4,000 note from H. H. Freking and Mary E. Freking, bearing date of February 26, 1932, and filed the same for record, and judgment was entered thereon, arid this judgment is the basis of the cause of action set out in the cross-pelition of August Kilker, his claim being that the lien of his judgment is superior to the mortgage lien of appellees, alleging in his cross-petition the facts which he claims constitute an equitable estoppel against the appellees; alleging that said mortgages of appellees were withheld from the record by Anna A. Brauch at the request of the defendant H. H.

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258 N.W. 892, 219 Iowa 556, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brauch-v-freking-iowa-1935.