Kallem v. Kallem

295 N.W. 826, 229 Iowa 985
CourtSupreme Court of Iowa
DecidedJanuary 14, 1941
DocketNo. 45323.
StatusPublished
Cited by3 cases

This text of 295 N.W. 826 (Kallem v. Kallem) 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
Kallem v. Kallem, 295 N.W. 826, 229 Iowa 985 (iowa 1941).

Opinion

*987 Bliss, J.

The tangled transactions involved in this litigation are sequences of the farm-land boom of 1919 and 1920. One phase of the litigation was passed upon by this court in the case of Lakin v. Clara Kallem Eittreim, Anna Kallem Carlson, and Edwin J. Kallem, 227 Iowa 882, 289 N. W. 433. This was equity cause No. 15280 in the court below. Decree therein was affirmed on the plaintiff’s appeal. Appellants, in the appeal now before us, insist that the judgment in the other cause demands a reversal in this cause. While the factual history is quite fully set out in our earlier opinion, some repetition is necessary for a clearer understanding of the issues here involved.

Thomas R. Kallem died intestate in 1912, the owner of 290 acres of farm land in Hamilton county, subject to a mortgage of $6,500. He was survived by his widow, Mary O. Kallem, and seven children, Randolph, Edwin, Alvin, Theodore, Ida, Anna and Clara. There was never any administration of the estate. All of the children lived at home when the father died, except Randolph, who had married and left home. The mother and the other children lived on the farm until 1917, when she and Clara moved to town. Alvin, Edwin and Theodore operated the farm until 1919, and Alvin and Edwin farmed it in 1919 and 1920. Throughout the record, the farm is referred to as of two parts. One of which is called the “home place,” containing 175 acres, made up of a 120-acre tract and a 55-acre tract. The other part of the farm had no buildings, and contained 115 acres, made up of a 40-acre tract, and a 75-acre tract. On June 25, 1915, the $6,500 mortgage placed by the father on the 120-acre tract of the “home place,” was increased to $9,500, and Randolph received the $3,000 increase.

In 1919, Edwin and Alvin bought the Bourne quarter section at a price of $290 an acre. They paid $10,000 in cash and contracted a mortgage encumbrance on the land. They borrowed $3,500 of the $10,000 down payment from Georgia Lakin, the wife of H. M. Lakin, appellee herein. Edwin and Alvin, and their mother, Mary O. Kallem, signed a note for the $3,500, the maturity of which is not shown by the record.

In September 1920, both parts of the Kallem estate farm were sold at public auction. The home place of 175 acres was bid *988 in by Edwin and Alvin, at a price of $490 an acre for the 55-acre tract, and $410 an acre for the 120-acre tract. The sale was for a March 1,1921, settlement, although no written contract of purchase appears to have been executed. Just what the down payment was to be, or was, is not definitely disclosed, but, the day following tlie sale, Edwin and Alvin went to the bank and executed their note therefor. Neither its amount nor its payee definitely appears. No cash was paid by them then, and the note was never paid. It was deposited in the Kallem estate bank box, and years afterward was destroyed by Edwin. No other written instruments were executed to evidence or consummate the sale, at the time thereof, or in the year following.

At the same public auction, the other part of the farm; the 115 acres, was sold to Anna and Theodore, at a price of $310 or $320 an acre, and the next day they resold to the Ringsteds at a $10 an acre rise in price, which profit Theodore appropriated. Deeds conveying the 40-acre tract to J. O. Ringsted, and the 75-acre tract to O. M. Ringsted, were executed by Mary O. Kallem and the children on April 21, 1921. The purchasers, respectively, placed mortgages of $3,000 and $7,000 on the tracts, and the $10,000 with $4,000 added were paid to the Kallem children — $2,000 each to six of them and $1,500 to Anna — the balance went for commission and sale expense. The mother received nothing. The land boom had broken. The Ringsteds became dissatisfied with the purchase, and through negotiations with Theodore and Randolph, the land, encumbered bythe $10,-000 mortgages, was conveyed back by deeds to Mary O. Kallem, without her knowledge at the time, which were filed for record April 24, 1922.

Edwin and Alvin had failed to- pay the interest on the mortgage encumbrance on the Bourne 160 acres which they had purchased, and the petition in a suit on about an $8,000 or $9,000 note and mortgage was filed against them on January 7, 1922, by the Bournes. The boys were fearful of a deficiency judgment which might become a lien on their land interest in the Kallem estate. Together with their brother- Randolph, they consulted a lawyer in September 1922, and a plan was evolved by which a deed was to be executed by Mary O. Kallem and the other five children, conveying the 175-acre home place to Edwin *989 and Alvin, who were to execute a mortgage back large enough to convince the Bournes that there would be no equity which might be subjected to any judgment they might obtain. In keeping with this plan, the mortgage was fixed at $38,200, with the mother, alone, named as mortgagee. It stated the maturity of the secured indebtedness to be October 1, 1927. No part of the principal sum or the interest thereon was ever paid. The consideration in the deed was recited as $56,500. There was .testimony that the execution of these papers was but a belated consummation of the auction sale. There was also testimony to the contrary. The boys Randolph and Edwin testified that the consideration of $56,500 had no basis in fact. The appellants argue that it was the auction price with the shares of the two boys deducted. But with the mother’s interest and the original mortgage encumbrance of $9,500 to be considered, it is difficult to reconcile the figure. The deed bears date of September 22, 1922, and was executed by all of the grantors during that month, and the deed and the mortgage were both recorded on October 2, 1922. Clara, Ida and Theodore said they had objected to signing the deed until assured by Randolph and Edwin that the consideration named in the deed of $56,000 or $56,500 would be secured by a mortgage. No such mortgage was ever executed, so far as the record shows.

In the fall of 1922, about September or October, the mother and the children had a reunion at the home of Theodore. Edwin and Randolph claim they were not present, but this is disputed. At this time, the mother was first informed that the 115 acres had been conveyed to her by the Ringsteds. There is testimony that she was then told that she might accept the same, subject to the $10,000 mortgage encumbrance as her share of the estate, and that the children were to take the 175 acres, or as some say the claimed $56,000 mortgage, as their part of the estate. There is testimony that such an arrangement was agreed upon, and while there is testimony to the contrary, the conduct of all of them thereafter gives strong support to such an arrangement.

Mary O. Kallem executed a partial release, bearing date of March 31, 1923, filed June 19, 1923, of the $38,200 mortgage, insofar as it covered the 55 acres of the home place, and *990 Edwin and Alvin executed a mortgage on the same land to the Crosley Investment Co., for $3,000, dated April 6, 1923, and recorded April 11, 1923. Of the money so raised, $2,000 was used by Edwin and Alvin to settle the Bourne suit, and $1,000 was taken by Randolph.

Edwin farmed all of the Kallem land from 1925 to 1929. He paid no cash rent, but the proceeds of half the crops went into the “Kallem Estate Account” in the bank.

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Bluebook (online)
295 N.W. 826, 229 Iowa 985, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kallem-v-kallem-iowa-1941.