Bihlmeier v. Budzine
| Decision Date | 17 November 1925 |
| Docket Number | 36691 |
| Citation | 205 N.W. 763,201 Iowa 398 |
| Parties | F. L. BIHLMEIER, Trustee, Appellee, v. HERMAN BUDZINE et al., Appellants |
| Court | Iowa Supreme Court |
REHEARING DENIED FEBRUARY 19, 1926.
Appeal from Muscatine District Court.--A. P. BARKER, Judge.
ACTION by F. L. Bihlmeier as trustee in bankruptcy against defendant Herman Budzine, to recover certain personal property as against Herman and Margaretha Budzine. From a finding of the court in favor of the plaintiff, the defendants appeal.
Reversed.
Bush & Bush, for appellants.
G Allbee and J. G. Kammerer, for appellee.
Appellee 's claim, at the time the case was submitted, was that there was a $ 7,000 note (referred to as the Savage note) and two mortgage bonds, one for $ 4,000 and one for $ 5,000, of the Titus Loan & Investment Company, to which he claimed the legal title as trustee in bankruptcy for Herman Budzine; that said property was transferred by Herman Budzine to Margaretha Budzine, his mother, without consideration, and for the purpose of hindering, delaying, and defrauding the appellee, the United States district court in and for the southern district of Iowa, and the creditors whom appellee represents; that all of said property was purchased and paid for with money belonging to Herman Budzine. He further alleges that Herman Budzine, with the knowledge and consent of his mother, operated the farm hereinafter referred to, in his own name; that he transacted all business in connection with the operation of said farm, and had bank accounts in his own name in the three named banks; and that the purchasers of the notes hereinafter described learned of the possession of the property by Herman Budzine, and on the strength of such possession and apparent ownership extended credit to him.
The appellants answered, the sum total of their answer, aside from a general denial, being a plea that the property in controversy was never the property of Herman Budzine, but is and was at all times the property of his mother, Margaretha Budzine. Appellee replies by pleading that the creditors of Budzine, whom this appellee represents, were induced to extend credit to him because of the large amount of money and property which he held in his own name, and that Margaretha Budzine, by the acts and conduct set out in her answer, is now estopped from claiming said property.
Under the issues thus made, the case was tried. The following facts are either conceded or satisfactorily proved in the case.
The husband of Margaretha Budzine died on the 16th of December, 1878, leaving surviving him two daughters and the appellant herein, Herman Budzine. At that time Nellie was one year of age, Anna four years of age, and Herman two years of age. Margaretha Budzine inherited from her father an undivided one-half interest in 40 acres of land, and later acquired from her brother the other undivided one half. This occurred about 1879. She lived and reared her family on this 40-acre tract until about 1898, when the children, being almost of age, solicited her to buy a 50-acre tract of land lying on the opposite side of the road from the aforesaid 40. She felt that she would not be able to pay for it, and there was an understanding between the three children and the mother that, if they would stay with her on the farm, assist in operating it, and contribute their labor and proceeds thereof to the farm, she would buy the 50-acre tract. The children were not to marry, but were to stay with her until the same was paid for and improved. In return, they were to have their food, clothing, and the necessities of life so long as they stayed with her. The land was bought, and eventually paid for some 15 years before the commencement of this action, and numerous improvements made thereon. After the land was paid for and the improvements made, the mother and her three children continued to live on said farm and carry it on in identically the same manner as it had been carried on in all the previous years. The title to the land was in the name of the mother. She had very little education, and it was difficult for her to read and write the English language. The children seem to have had very little schooling or education of any kind. Naturally, as the years passed by, Herman, being the only man, had charge of matters generally. He conducted the farm, sold the grain and stock, collected the money therefor, and paid the bills, taxes, expenses, repairs, etc. Some of the money was deposited in the bank in the name of the mother, and some in the name of Herman. From these different bank accounts at different times, family expenses, purchases for the farm, taxes, and other incidental matters were paid, Herman drawing the checks; and if the check was drawn against the account in the name of the mother, he signed the mother's name to such check. As the years went by, they accumulated some surplus.
A part of the personal property in controversy herein is a $ 7,000 note known as the Savage note. This indebtedness originally arose several years before the time in controversy, and was for a much smaller amount; but, from time to time, additional loans were made to such borrower, which resulted in the making of the $ 7,000 note, which was taken in the name of Herman Budzine. In 1921, this note was renewed, and the renewal note taken in the name of Margaretha Budzine. Herman Budzine says that this was done because she was asking that the property which she possessed be turned over to her.
All of what are known in the record as the Titus bonds were purchased on January 24, 1921, and placed in the name of Margaretha Budzine. The $ 5,000 bond was wholly paid for from funds on deposit in the bank in the name of Margaretha Budzine. The $ 4,000 bond was paid for with money on deposit in the First Trust & Savings Bank and the Hershey State Bank. In both instances, these deposits were in the name of Herman Budzine. As to the Savage notes, the record is not so clear as to which of the bank accounts was drawn upon to furnish the funds which were the basis of that loan, but it is clear that the money that went into that loan at the various times came from the products of Margaretha Budzine's farm.
On May 20, 1920, Herman Budzine decided to do a little speculating. He purchased some oil leases in the state of Kansas for the sum of $ 7,000. In payment therefor he executed three promissory notes for $ 2,000 each, and one for $ 1,000, to one Fye, by name. Shortly after this, the Fye notes were disposed of: one note was bought by one S. G. Stein another by R. C. Zoller, the third by F. C. Vetter, and the fourth by Fred Switzer. Herman Budzine told the salesman, at the time, that he had no money with which to pay for his purchase, and the agent told him, in substance, that he would sell the oil leases within 90 days at...
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