Bolte v. Schenk

• Decision Date: 16 November 1926
• Docket Number: No. 37341.,37341.
• Parties: BOLTE ET AL. v. SCHENK.
• Court: Iowa Supreme Court

205 Iowa 834

210 N.W. 797

BOLTE ET AL.

v.SCHENK.

No. 37341.

Supreme Court of Iowa.

Nov. 16, 1926.

Appeal from District Court, Jackson County; A. P. Barker, Judge.

Suit in equity to recover the purchase price of land sold, and to establish a lien therefor upon the real estate. The defense is that the land had been fully paid for by the delivery of the purchase price to the agents of the plaintiffs. This affirmative defense is fully denied by the plaintiffs. There was a decree for the plaintiffs, and the defendant appeals. Affirmed.Kintzinger & Stuart, of Dubuque, for appellant.

W. L. Keck, of Maquoketa, E. L. Miller, of Clinton, and J. P. Degnan, of Bellevue, for appellees.

EVANS, J.

The controversy herein is between two innocent parties, one of whom must suffer a loss as a depositor in an insolvent bank. A contract of sale of a farm was entered into between plaintiffs as vendors and the defendant as vendee on October 14, 1921. The purchase price agreed on was $22,500, to be paid in cash on March 1, 1922, upon conveyance of a good title by the vendors at the same time. Of this purchase price $1,000 was paid in November, 1921. The unpaid balance, therefore, was the sum of $21,500. The vendors were the widow and heirs of ______ Bolte, recently deceased, who owned the farm in question at the time of his decease. The contract of sale was signed by all the plaintiffs, except Frederick, who was at that time an incompetent. In order to accomplish the conveyance of the interest of Frederick, guardianship proceedings had to be instituted, and authority to make this sale had to be obtained. Because of this necessity of guardianship proceedings, the vendors were not ready to convey title on March 1, 1922. The defendant, however, took no advantage of the default of the vendors in that respect, and both parties elected to treat the contract as in force and effect. The vendee went into actual possession of the farm on March 1, 1922, and so continued ever after. Deeds of conveyance were delivered on October 3, 1922. In the meantime, and on March 2, 1922, the defendant deposited $21,500 in the Kelso Bank, and took the following receipt therefor:

“F. H. Schwirtz, Lawyer, Bellevue, Iowa.

Receipt.

This is to certify that there has been this day deposited in the Bank of J. Kelso, Bellevue, Iowa, the sum of twenty-one thousand five hundred ($21,500.00) by John N. Schenk, to be paid to Adaline Bolte, Albert Bolte, Annie Schroeder, Ella Bolte, and Adaline Bolte, guardian of Frederick Bolte, upon proper completion of papers necessary to title of farm, which is purchased by John N. Schenk.

Dated this 2d day of March, A. D. 1922.

[Signed] Jos. Kelso, Jr., Cashier.”

The foregoing receipt was indorsed and turned over to Mrs. Bolte on October 3, 1922. At the same time she signed a receipt for the purchase price as represented by such certificate of deposit. The Kelso Bank closed its doors on October 12, 1922. It had been insolvent for a long time, and was undoubtedly insolvent at the time the deposit was made. It did not treat the deposit as a trust fund, nor did it protect it in any manner, but dissipated it wholly. The question in the case is whose money was thus dissipated and lost by the Kelso Bank.

In his written opinion, filed in the case, the trial court recited the following as undisputed facts:

“On the 14th day of October, 1921, the plaintiffs, Adaline Bolte, Albert Bolte, Annie Schroeder, Ella Bolte, and Frederick Bolte, were the owners of the real estate in controversy, they being the widow and children, sole heirs at law, of one Christian Bolte, deceased. Adaline Bolte and Albert Bolte, acting for themselves, and assuming to do so upon behalf of the other plaintiffs, entered into an oral agreement whereby they sold to the defendant, John N. Schenk, said real estate, a condition of such sale being that he was to pay them, on the 1st day of March, 1922, the sum of $22,500 in cash, at which time they were to deliver good and sufficient conveyances for the land and possession thereof; said Albert Bolte at the time occupying it.

This oral agreement was finally reached at the home of Adaline Bolte in Bellevue, and Mr. J. C. Campbell, an attorney of that city, was called in to reduce it to writing. This he did, and the contract was signed by her and Albert Bolte; Mr. Campbell taking it to have it also signed by the other parties interested, except Frederick Bolte. They all signed shortly thereafter.

In gathering data for the execution of the contract, Mr. Campbell learned that Frederick Bolte was a person of unsound mind, and advised Mrs. Bolte and Albert that it would be necessary to have a guardian appointed for him before his interest could be sold or conveyed, and Mrs. Bolte engaged him to secure her appointment as guardian and the execution of the proper papers. This he set about doing. On January 10, 1922, said Adaline Bolte was commissioned by this court as guardian of the personal property of said Frederick Bolte. This seems to have been as far as Mr. Campbell proceeded, and he died on the 23d day of that same month. On the 1st day of March, 1922, the defendant, John N. Schenk, took possession of said real estate, and Albert Bolte removed therefrom. Plaintiffs not being in position to give good title to the land, the defendant did not pay the $22,500 due on that day, though, for some reason which is not made very clear by the evidence, on November 26, 1921, $1,000 thereof was paid to Mrs. Bolte.

Subsequent to the death of Mr. Campbell, Mr. Joseph Kelso, Jr., cashier of the Bank of Kelso of Bellevue, Iowa, procured from the daughter of Mr. Campbell the papers he had relating to this farm, and the guardianship of Frederick, and employed F. H. Schwirtz, another lawyer of Bellevue, to complete the authority of the guardian to sell, and the sale and deed. This employment was apparently with the knowledge and consent of Adaline Bolte. The Boltes objected to the defendant retaining possession of the land without payment, and he did not feel willing to make payment until he secured a good title. On the 2d day of March a meeting was held in Mr. Schwirtz's office, at which meeting none of the Boltes were present, but Mr. Schwirtz, assuming to represent them, agreed with defendant and his father, who was aiding him in securing the money, and the $21,500 should be deposited in the Bank of Kelso, whereupon the money was taken to that bank, and the following receipt, which had been prepared by F. H. Schwirtz in his office, issued, in duplicate, the money being deposited in the Bank of Kelso by the defendant: [Above set forth.]

One copy of this was delivered to defendant's father, Wm. Schenk, the other being retained by Mr. Kelso. On the same day the bank issued a certificate of deposit in the usual form to Mrs. C. Bolte, stating that Mrs. C. Bolte has deposited in this bank $21,500, payable to the order of herself. This certificate was never delivered to her, but was retained by the bank. Matters remained in this situation until October 3, 1922, when, the guardian's deed being complete and ready for delivery, and some other minor defects in the title having been cured, the deed of all the plaintiffs, except Frederick, and the deed of Adaline Bolte as his guardian, were delivered to Wm. Schenk, defendant's father, and the receipt was by him delivered to Mrs. Bolte; she at the same time gave to defendant her receipt as follows:

‘F. H. Schwirtz, Lawyer, Bellevue, Iowa.

10/3/22.

This is to certify that I have delivered deeds to John N. Schenk, and that I have received the balance of the purchase price due me on farm in Pete des Mortes township, said balance being on deposit in the Bank of J. Kelso.

[Signed] Adaline Bolte.'

Eight days after the exchange of these papers, to wit, October 11, 1922, the bank failed, and none of plaintiffs have ever received any part of said balance of $21,500 due...