Tenold v. Klimesh

141 N.W. 1046, 160 Iowa 410
CourtSupreme Court of Iowa
DecidedJune 7, 1913
StatusPublished
Cited by5 cases

This text of 141 N.W. 1046 (Tenold v. Klimesh) 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
Tenold v. Klimesh, 141 N.W. 1046, 160 Iowa 410 (iowa 1913).

Opinion

Withrow, J.

I. In April, 1904, one Novak, by warranty deed conveyed the real estate in controvery to tbe defendant John L. Klimesh. On the same day said Klimesh executed and delivered to his mother an instrument conveying to her the use of said property during her lifetime, this latter instrument never having been recorded.

October 16, 1904, one Frank J. Klimesh, holder of the legal title to a saloon property in Spillville, for an expressed consideration of $1,000, conveyed it to John I. Klimesh. The property had previously been owned by John L. Klimesh, father of John I. Klimesh. He had been indebted to Frank J. Klimesh, and the conveyance by deed of Johñ L. Klimesh had been by way of security for such indebtedness. Upon the conveyance to John I. Klimesh, a mortgage was given to the grantor for $1,400, claimed to represent indebtedness of the father for $400 and of the son John I. for $1,000; the conveyance having been made upon the direction of John L. Klimesh, and, as claimed, with the understanding that his son would, by proper instrument, make secure to John L., his wife, and their daughters the interest now claimed by them in the property in dispute. The saloon property is shown to exceed in value the amount of the mortgage on it. On the following day defendant John I. Klimesh executed a conveyance of the property conveyed to him by Novak to his father, to his mother, Rosina, and to his sisters, Helen and Rosina, granting to the father and mother a life estate, and to his sisters the right to use the premises during their minority. This instrument was filed for record on the day following its execution.

The evidence quite satisfactorily establishes that the consideration for the original conveyance from Novak to John I. Klimesh, $750, was paid by John Klimesh, grandfather of [412]*412John I., for the purpose of providing a home for the wife and family of his son, the father of John I. Klimesh, and that the instrument executed by John I. in favor of his mother was upon the direction of the grandfather and to effectuate his purpose. After the conveyance of the property to John I. Klimesh, he purchased materials from the plaintiff which were used in the construction of a dwelling house on the premises, such purchases covering a period from August 27, 1904, to January 20, 1905. A part of the materials, it will be noted, was furnished before the conveyance to the father, mother, and sisters of John I.- Klimesh was recorded, which was October 18, 1904, and the remainder afterwards. After the materials had been furnished, the plaintiff demanded o£ John I. Klimesh a settlement of the account; and he, being unable to pay the same, gave to the plaintiff his note for the amount due, on which his grandfather, John Klimesh, was surety. This note was held by appellant, and for a time left in a bank for collection and was not paid. Afterwards John Klimesh, • the grandfather, died, and upon investigation the plaintiff ascertained that he left no estate. Thereupon he demanded of John I. Klimesh that the indebtedness be secured, and two notes were given by Klimesh and his wife, covering the indebtedness, which amounted to $974.50. To secure such indebtedness a mortgage was executed by the makers of the notes upon the real estate in controversy, purporting to create a lien upon the full title to the property. This transaction occurred April 27, 1909. Payment not having been made when due, plaintiff (appellant) commenced proceedings upon the indebtedness and to foreclose the mortgage, making John L. Klimesh, Rosina Klimesh, and their daughters also defendants, averring that the conveyance to them was fraudulent as against. him, and praying that their interests in the property be held subordinate to the claim under his mortgage. The trial court rendered judgment in favor of appellant against John I. Klimesh and wife for the amount of the indebtedness, and declared the judgment to be a lien upon the mortgaged premises, subject to the rights of [413]*413John It. and Eosina Klimesh, and of their daughters, Helen Klimesh and Louisa Klimesh, which were decreed to be as expressed in the deed of October 17, 1904, and holding such interests to be unaffected by the mortgage. It is from this finding and decree, denying a lien against the interest of the last named defendants, that the plaintiff appeals.

1. Frudulent. conveyances:knowledge of grantee. II. A study of the record fuEy warrants the conclusion that in .his dealings with the appellant John I. Klimesh did not show the good faith which fair dealing requires. While ^ does not expressly appear that appellant s°ld material upon the strength of Klimesh’s apparent ownership of the property upon which the improvement was made, it is a fair inference that he did so in part, at least; and a failure by Klimesh to disclose the conveyance of the life interests was a legal fraud, if appellant in fact relied upon his title in selling the material. But that alone is not enough. To constitute a fraud in the transaction of the original conveyance to the mother, which was not recorded, and as to the later conveyance to her husband, herself and their daughter, it must be shown that they had knowledge of such fraudulent purpose, or of facts which would put them on inquiry. Fifield v. Gaston, 12 Iowa, 218; Witham v. Blood, 124 Iowa, 703; Atkinson v. McNider, 130 Iowa, 281.

The record quite satisfactorily shows that the purpose of the grandfather was to provide a home for the wife of his son, and for her daughters. The subsequent conveyance of the saloon property is important here as a circumstance, and perhaps as showing a part of the consideration moving to John I. Klimesh to make the second conveyance at a time when improvements were under way for which he was liable and for debts assumed by him. The evidence is undisputed that towards the improvements made upon the premises the mother contributed about $300. It also appears that neither she nor the others who were beneficiaries under the deed from her son had knowledge of any fraudulent purpose on his part, if there was such, and, in the absence of actual or construct[414]*414ive knowledge the charge of fraud cannot be sustained as against them. There is in the record a failure to show actual knowledge by said defendants of the purpose which was fraudulent as to the appellant. Nor can we find in the record that proof of circumstances from which knowledge of fraud may be presumed as against them as leads us to that satisfactory conclusion required in such eases that they should be held as parties to it.

2. Same: mortgages: foreclosure: prior conveyance attack by mortgage. III. Our conclusion as to this question, and as to appellant’s rights, is strengthened by other facts. As noted before, the appellant did not place legal reliance upon John I. Klimesh’s ownership of the property, but ae- . , ^ ’ cepted m settlement a note signed by Klix ° v mes^- an<f grandfather, which was given after the deed in question was filed for record. With such presumed knowledge, for four years or more he took no steps to attack the instrument, but' on the contrary the mortgage in suit was taken. While purporting to cover the entire title, it affected only the -interest which John I. Klimesh had in the premises, and this the appellant was bound to know; relying as he does, upon the mortgage as security for his indebtedness. See, in principle, Smith v. Moore, 112 Iowa, 60; Hewitt v. Rankin, 41 Iowa, 35, 42.

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Bluebook (online)
141 N.W. 1046, 160 Iowa 410, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tenold-v-klimesh-iowa-1913.