Mains v. Des Moines National Bank

85 N.W. 758, 113 Iowa 395

• Court: Supreme Court of Iowa
• Decided: April 11, 1901
• Status: Published

Opinion

Waterman, J.

The petition, with its various amendments, makes a very voluminous document. In its recital of facts many matters are set out -which led up to the transaction complained of, and yet which are not essential to a determination of the issues presented hy the demurrer. We shall venture to abridge the statement of facts.

1 Henry Mains and his son and co-plaintiff, John P. Mains, each was at one time the owner of a large farm in Guthrie county, and of considerable personal property. The latter was heavily indebted, his father and the defendant being among his creditors. In order to raise money to pay these debts, John P. conveyed his land to his father, and the latter (omitting some intervening transactions of no moment on this hearing) made a mortgage to the defendant, covering both his own land and that which had been so conveyed to him by his son. Certain chattel mortgages seem also to have been made to defendant by both Henry and John P. Mains. A foreclosure proceeding was begun on all these mortgages. In this action a receiver was .appointed for the property, and on the twenty-first day,of June, 1898, judgment was rendered in said action against both father and son for $19,955.46, with interest and costs, and a decree was entered foreclosing the mortgages. The receiver was appointed, and the decree rendered on a written stipulation of consent, signed by plaintiffs, and also by their attorneys. This decree is the subject of the present attack.

2 I. First, it is claimed the consent of plaintiffs to the appointment of the receiver was procured by duress; and, next, that they are not indebted in any manner to defendant, and consented to the judgment and decree against them only because of a promise on the part of defend; ant that a full statement of account between plaintiffs and said defendant should be made, and that credit should be given upon said judgment of all sums which such accounting showed ought to have been credited upon the notes on which the judgment was founded; and it is charged no accounting was-made and no credit given, although some six months have elapsed since the rendition of the judgment. There was a demurrer to this petition, which set forth nine grounds. We may say here that the petition was amended twice, and as' so changed by the second amendment was again demurred to; but, as the amendment is immaterial for present purposes, we shall give it no further attention. The sec- ■ ond demurrer. ivas a reproduction of the first, the grounds of which we how summarise: (1) The facts and circumstances shown do net constitute fraud or unavoidable casualty and misfortune. (2) • The fraud claimed was in part antecedent to the judgment, and did not- inhere in it. (3) • The rendition of-the judgment upon -the • stipulation was-a mere irregularity. (1) The fraud complained of occurred in part after the rendition of the judgment, in that defendant merely failed to give promised credits on the judgment. (5) The petition shows the judgment was the result of-a written contract and stipulation signed by all the parties hereto, which cannot be varied by oral testimony. (6) It appears from such stipulation attached to the petition that certain concessions were made to plaintiffs at the time it was signed and certain property on which the defendant was asserting its lien was turned over-to them in consideration of their signing said agreement, and plaintiffs have made no effort to restore defendant to its original position. (7) Parol evidence could not be received to vary the terms -of such agreement. (8) Plaintiffs’ amended petition shows that defendant was to-account only if' the figures for so doing were available, and there is no allegation that they were so available. (9) All alleged' oral agreements relied upon to show fraud were prior to, and merged in, the written contract.

We shall not have occasion to consider any other than the first and third o-f these grounds.

3 Before taking up tlie issues presented by the demurrer,, it may be well to state that this action is brought under section 1091 of-the Code, whiéh specifies sis different grounds-for vacating a judgment. It is sufficient we think, withoursetting them out, for us to say that, under the facts stated in tlie petition, but two of these grounds are applicable, viz.. fraud, and perhaps irregularity, in obtaining the-judgment. Something is claimed by plaintiffs because of unavoidable casualty and misfortune, which is one ground of relief under this section. But, as they consented to the rendition of this judgment, it is manifest that their position on this matter is not tenable. If they are to escape the consequence of their own acts, it must be on iho ground of fraud or irregularity. So, we shall consider the-first ground of demurrer at length on the issue of fraud only.

4 II. We come now to the specific questions presented for review. First, it is averred that plaintiff’s consent to-the appointment of a receiver was procured through duress,, which consisted in threats made by the bank officers to John. P. Mains of prosecuting him criminally for the sale of some-of the mortgaged chattels without the consent of the mortgagee. It is recited by plaintiffs that such a sale had been. made, but it is said that Mains intended to pay over the proceeds to the bank. Without going further into-detail in this matter, it is enough to say there is no allegation that such threats were ever communicated to Henry-Mains, who was the sole owner of the real estate. It does-not appear that he was in any manner influenced by them when he signed the stipulation. It is true the receiver took, possession of some personalty belonging to John P. Mains, but how much in value, or what kind, save in a most general' way, does not appear. It is shown, however, by the decree-in the foreclosure action, that the receiver was directed to sell all personalty at once, and if he has done this, and., nothing to the contrary appears, defendant’s lien should not. now be wholly destroyed by discharging such receiver, and .turning the proceeds over to the debtors.

There was a separate allegation in the petition of wrong- ■ doing in obtaining the appointment of the receiver, and a .specific prayer for his discharge. Bor this reason, we have • considered this matter as a distinct issue.

•5 III. We have next to inquire as to the complaints •made of the judgment. Some facts alleged by plaintiffs in •this connection have no bearing on the issue as we view it. Bor instance, it is urged that Henry Mains was an old man, unable to write or read writing, and that his son, because >of a failure of eyesight, could not read; but whatever effect these matters might have, if we were investigating the state -of the accounts between the parties, they certainly have no bearing on the question of whether this judgment, taken ■with plaintiffs’ consent, on the strength of a promise of a ■future accounting and possible credit, should be set aside. Neither is it material that there were confidential relation» between plaintiffs and the president of the defendant bap]i, because, for the purpose of this inquiry, we must assume that the promise to account ivas made, and that plaintiffs relied thereon. We have, then, this state of facts, shown by the petition: Plaintiffs knowingly consented that judgment might be taken against them for the .amount claimed by the bank, and that a decree of foreclosure .should be entered on the mortgages in suit, relying upon a promise of the creditor to make an accounting thereafter, • and to credit on the judgment any amount which such accounting might show should have been credited on the notes. 'While, as we have said, this action is entitled in equity, it is in fact a proceeding at law for the vacation of the judgment on statutory grounds. Indeed, ' it is questionable 'whether equity could grant relief upon any save statutory grounds, although it might, upon a proper showing, ^entertain such application after the expiration of ■-the year within which, by the terms of section 4094, proceedings at law must be commenced. See Bowen v. Mill Co., 31 Iowa, 460; Lumpkin v. Snook, 63 Iowa, 515; McConkey v. Lamb, 11 Iowa, 636. Tbe judgment defendants,, as we bave said, consented to the rendition of tbis judgment for tbe amount that was entered. They were in no wise deceived as to tbe record that was made upi. To allow them now to set it aside, because tbe judgment creditor did not beep a promise made to do something after tbe rendition of the judgment, would be in the nature of trifling with tbe court, and would tend to destroy tbe security of judgments. It is averred in tbe petition that plaintiffs, before judgment, were fully aware of tbe defense they now urge, ■and bad retained an attorney to present it. In tbe face of all tbis they assented to tbe court’s action and as appears, did so with the approbation of their attorney. It is manifest •they were not deceived as • to any event which they' expected would transpire before judgment was rendered. Let us suppose' that a debtor’s assent to tbe rendition of tbe judgment is procured through .a promise by tbe creditor that be will not cause execution to issue until after a certain time has elapsed; would it be contended that, if execution was issued before the lapse of such time, tbe debtor could bave tbe judgment set aside? We take it not. Lumpkin ¶. Snook, supra, is a •case in principle somewhat like tbis. Plaintiffs there were mechanic’s lien holders, and defendant held a mortgage on tbe same property. Plaintiffs claimed their lien to be superior to tbe mortgage, so far as related to tbe improvements made by tbe materials they furnished. Defendant began foreclosure proceedings, making plaintiffs parties defendant, .and, to induce them not to appear and assert tbe priority of their lien, Snook promised to pay it in full. He obtained a decree, and, on bis refusal to pay as agreed, Lumpkin et al. institute proceedings to vacate tbe jurgment under section •3154, Code 1813, which was substantially tbe same as present section 4091. In passing upon the matter, Need, J., speaking for the court, said: “The act of tbe defendant of wbicb plaintiffs complain is that be, with intent to mislead them and to induce them not to appeal’ and assert the priority of tbeir lien.upon the premises over tbe lien wbicb he was seeking to establish by tbe action, agreed with them that be would pay them tbe full amount of tbeir claim; and they allege they relied on this agreement, and were induced by it to forbear making any defense in said action and to permit him to take bis judgment of foreclosure, but that be has not paid tbeir claim, and did not intend to pay it, when be made tbe agreement. This does not constitute such fraud in obtaining tbe judgment as entitled plaintiff to have it vacated. There was no concealment or misrepresentation as to any existing fact, but plaintiffs contracted with full knowledge of -every fact pertaining to tbe subject of tbe agreement. In consideration of defendant’s agreement to pay them tbe amount of tbeir claim, they agreed that they would not assert tbe priority of tbeir lien. Tbe effect of tbe agreement is that they waived tbeir lien, and accepted bis agreement to pay tbe amount of the debt in lieu of it, and in consideration of tbeir waiver be became legally liable for tbe amount of tbe debt. The question is not at all affected by tbe fact that be did no-t intend to perform tbe agreement when be entered into it.” See, also, McConkey v. Lamb, supra, where it was also held that an action would not lie under this section to set aside a judgment rendered b-y agreement. In tbe case at bar it clearly appears that tbe judgment defendants agreed to have tbe accounting after rendition of tbe judgment instead of before. If they have any remedy, it is not to undo what they volutarily did. It is upon tbe agreement, and must be in the nature of an action to secure a credit on tbe judgment as though for payments made, and in such an action tbe burden would, of course, be upon them.

Looking at the matter from another point of view will aid in making plain the reasons for onr conclusion. There is no evidence here, outside the mere lapse of time, that the bank did not intend, at the time of making the agreement, to fulfill its terms. It was entitled to a reasonable time in which to make such accounting. Defendants could not, therefore, have brought an action to vacate instantly upon the rendition of the judgment. If, then, after the judgment was rendered, there was any time when it was valid as against the defendants therein, it cannot be said there was fraud m obtaining it as contemplated in the statute under consideration.

6 IV. Another claim upon which a right to relief is predicated, and to which the third ground of demurrer applies, is “that there was no trial in the case to ascertain the amount due, and that said decree was entered by the court in pursuance of the stipulation.” If this means, and we think it can only mean, that no evidence was introduced to show the amount due other than the stipulation signed by the debtors consenting to judgment fox the amount prayed in the petition, we have only to say that no other evidence was needed to warrant the court’s action.

7 V. After the demurrer was sustained, and the judgment rendered in the present proceeding against plaintiff for costs, a motion was filed by them to correct the various rulings and vacate the judgment given on demurrer. This motion was stricken from the files. It is claimed by plaintiffs the motion was filed under section 4105, Code 1897. However this may be, the order of the court striking it, while irregular, — fox every motion should be considered on its merits, — amounted to no more than an order overruling it, and such an order, for the reasons already given, would have been proper. We see no cause for interfering with the judgment of the trial court, and it is therefore AEEIRMED.