Brooks v. Jones

114 Iowa 385

• Court: Supreme Court of Iowa
• Decided: April 13, 1900
• Status: Published

Opinions

Given, J.

2 I. The transactions involved are numerous and complicated, the evidence is voluminous, and the record, though abstracted with care, is large. We will not discuss the evidence in detail, but state our conclusions on the issues involved, with brief reference to the more important and controlling facts as shown by the pleadings and evidence. The mortgage under consideration secured two notes, one of which was paid, and the other put into judgment with other notes in May, 1880, in an action at law. In October, 1888, plaintiff and defendant J. B. Jones made a settlement whereby plaintiff received on account of this judgment $50 in cash and. 79 $50 notes of Jones, and entered on the record of the judgment, “Bull satisfaction of the judgment, interest, and costs.” Nine of said $50 notes 'were paid, and plaintiff recovered judgment against defendant J. B. Jones on the balance for $3,993.52. Plaintiff’s claim is that said mortgage was never canceled or satisfied, and that he is entitled to have it foreclosed as-to so much of this last judgment as is based upon the note for $1,263.52 - secured by the mortgage. Defendant J. B. Jones claims that it was agreed at the time of the settlement, in 1888, that all liens, including said mortgage, which plaintiff held against him, were to be canceled, as a part of the terms of settlement, and that the satisfaction of the judgment that included the mortgage note operated as a cancellation of the mortgage. It is evident that at the time of this settlement, in 1888, Mr. Jones was embarrassed in his business; that said judgment was a cloud upon his credit, which he was anxious to. remove; and that Mr. Brooks was so kindly and liberally disposed to aid him that he enterer satisfaction of the judgment for $5,378.18, interests and costs in consideration of the $50 cash and the $50 notes, without interest aggregating only $1,000. Mr. Brooks denies that the mortgage was mentioned in their settlement, or that it was ever agreed that it should be canceled or released, while Mr. Jones says that it was agreed “that Mr. Brooks would cancel every evidence of indebtedness in connection with the whole transaction.” Unless the satisfaction of the judgment operated as a satisfaction of the mortgage, it remained as much a cloud upon Mr. Jones’- credit as if the judgment had remained unsatisfied. In view of tbe evident purpose of the parties, and of all the facts attending the transaction, we think it fairly appears that it was understood that the mortgage was to be regarded as canceled. The fact that the mortgage debt was blended with others in the first judgment, in the discount allowed in taking the $50 notes, and in the last judgment, so as to render it difficult, if not impossible, to say how much of the last judgment is for the mortgage debt, confirms us in the conclusion that it was agreed that the mortgage should be regarded as canceled. If it were intended that it should remain as security, it seems probable that the debt for which it was to stand would have been separately evidenced. We are satisfied that the parties acted upon the supposition that Hie satisfaction of the judgment operated as a-satisfaction of the mortgage, and hence a satisfaction of the mortgage on the record was not insisted upon or made. Mr. Jones did allow property to go to tax sale, so as to clear the title of this mortgage, and it is insisted that this shows that there was not an agreement that the mortgage should be canceled. Surely his conduct in this respect does tend to so show, but it is explained by the fact that the mortgage stood open upon the record, a menace .to Jones’ credit, and possibly because Jones had come to doubt whether the satisfaction of the judgment operated as a satisfaction of the mortgage. It is insisted that this agreement, if made, was in parol, and therefore void. It was in parol, but the plaintiff holds, and is now seeking to enforce in this action, the consideration which he received for that agreement, and therefore should not be heard to claim that the agreement is void because parol. Concluding, as we do, that the mortgage should be held as satisfied under the agreement, we -do not consider the question whether the satisfaction of the judgment operated as a satisfaction of the mortgage. It follows from what we have said that the first count of plaintiff’s petition was property dismissed.

3 II. Both parties admit that on August 4, 1876, J. R.' Jones turned over to the plaintiff notes and claims aggregating $1,590.04, to be applied on the indebtedness of Mr. Jones: Mr. Jones contends that this credit was to be ap-’ plied upon the notes secured by the mortgage; that by oVét-sight and mistake it was omitted to give him such ci'edit" on said notes, or otherwise, — wherefore he insists that said mortgage note for $1,263:52 has been fully paid. The plaintiff claims that this credit was to be, and was, applied in payment of two certain other notes of Mr. Jones; and we think it fairly appears it-was so agreed,' and that they were so applied. It would certainly be strange that a credit for so large a sum should be overlooked for so many years, especially in view of what followed. If Mr. Jones had thus paid that mortgage note, he ' would' surely have insisted upon the cancellation of the mortgage. He would not have allowed judgment to be taken against him on the mortgage note, nor have given his notes in satisfaction of that judgment, and permitted judgment to be taken on these notes, without asserting and insisting upon this credit, if it was to b.e given as claimed by him. We do not think that Mr. Jones has shown himself entitled to any relief on account of the transaction, and we have no doubt that he is indebted to plaintiff in the full sum of the two judgments rendered on the $50 notes. Having reached this conclusion, we need not determine whether the fact of judgment having been rendered on this note estops Mr. Jones from now asserting this claim.

4 III. Plaintiff’s further causes of action are in the na-. ture of creditors’ bills against Plora A. -Jones and Wilfried P. Jones, to subject certain real estate standing in their' names, respectively, to the payment of his judgments. Plaintiff’s claim is that these properties were purchased and paid for by J. R. Jones, and that the title was placed in the name of said defendants (his wife and son) for the purpose of placing the same beyond the reach of the creditors of J. R. Jones. We first inquire as to tbe property standing in tbe name of Mrs. Jones, namely, lots 3 and 4 in block YO, and lot 6 in block 22, original town plat of Algona, Iowa. Said lot 6 was conveyed to Mrs. Jones by Asa C. Call, for the recited sum of $900, on June 8, 18YY, and the deed filed for record March 23, 188Y. Said lot 3 was conveyed to her by William Millis, for the recited consideration of $200, May 10, 18Y3, and the deed filed for record August 25, 18Y3. Said lot 4 was conveyed to her by John A. Millis, for the recited consideration of $1,000, April 23, 18Y3, and said deed filed for record August 25, 18Y3. The claim of the plaintiff that these lots were paid for by the defendan' J. B. Jones seems to be well sustained. There is some pretense that Mrs. Jones had some money that went into these lots, but that claim is not well' founded. It will be observed that the deeds to Mrs. Jones for said lots 3 and 4 have been on record since August, 18Y3, and the deed to her for said lot 6 since March, 188Y. So far as appears, Mrs. Jones has been in the occupancy of these lots ever since the conveyances of them to her. The court below sustained the defendants’ plea of the bar of the statute of limitations as to this cause of action, and dismissed plaintiff’s as to said lots. This holding must be sustained, as more than 20 years elapsed between the recording of the deeds to lots 3 and 4, block Y0, and the commencement of the action nearly 8 years between the recording of the deed to lot 6 and the commencement of this, action. By the recording of these deeds, the plaintiff had record notice of Mrs. Jones’ title, and there is no allegation that the fraud alleged was not discovered until 5 years from the commencement of this action. We may add that no reason appears why, at the time these deeds were made to Mrs. Jones, Mr. Jones might not have then rightfully given the property to her, without intending any fraud upon his creditors.

5 IV. W© now inquire as to the property claimed by W. P. Jones, namely, lot 5 in block 22, and lots 3 and 4 in block 51, original plat of Algona. The mortgage to the Farmers’ National Bank was upon said lot 5. It appears that said lot went to tax sale, and that a treasurer’s certificate was issued to George C. Call on the third day of November, 1893, and the defendant W. P. Jones acquired this tax title, and thereafter received a further conveyance of said lot from the defendant J. R. Jones, and later conveyed the west one-third of said lot 5 to the defendant E. J. Gilmore, who, we find, was an innocent bona fide purchaser for value. We cannot doubt under the evidence even of J. R. Jones himself, that he purposely permitted this lot 5 to go to tax sale for the purpose of removing the cloud of the plaintiff’s mortgage on his title, and that the purchase by Call, the transfer of the tax title to W. P. Jones and the subsequent conveyance by J. R. Jones to him, were for the purpose of placing this lot beyond the reach of the creditors of J. R. Jones. W. P. Jones was a young man, with no other income than his limited earnings, and fails to show satisfactorily that he was able to, and did in good faith, buy the lots that he is now claiming. As to lots 3 and 4 in block 51, it does not. appear that J. R. Jones ever had title thereto, and we do not understand the plaintiff as now claiming a right to subject said lots to his judgments. The lower court found in favor of W. P. Jones as to all three of these lots, and decreed accordingly, but we think the decree should be modified so far as to subject the east two-thirds of said lot 5 to the payment of the plaintiff’s judgment. Mr. Gilmore, having purchased the other third in good faith and for its value, is entitled to the protection afforded him in the decree.

6 Y. On January 2, 1894, Mrs. Jones and her husband executed a mortgage on said lot 6, block 22, and on lots 5 and 6, block 42, in Algona, to J. W. Dickinson, to secure a note of $5,000, subject to a mortgage of $1,000 to one S. C. Spear. The plaintiff contends that this moitgage is “a sham and a fraud, and does not represent any real indebtedness, and that the same was made for the purpose of placing the defendant’s property beyond the reach of-his creditors.” The plaintiff has entirely failed to sustain this charge. It is true that Mr. Dickinson is a relative of the defendants, but this alone is not sufficient reason for adjudging the mortgage to be fruadulent. It appears that Mr. Dickinson was a man of means, and disposed to aid his relatives, Mr. and Mrs. Jones. It appears, without contradiction, that this note and mortgage were given in consideration of prior loans of money, and of an additional loan of $1,000 made at the time of their execution. The decree of the lower court sustaining this mortgage is correct. It follows from what we have said that the decree of the lower court is affirmed in all particulars, except as to the east two-thirds of lot 5 in block 22, which we hold should be subject to the payment of the plaintiff’s judgments; appellant to pay three-fourths, and appellees J. B. Jones and W. P. Jones one-fourth, of the costs. — Modified and affirmed.

Wednesday, May 29, 1901.