Bond v. O'Donnell

• Decision Date: 03 April 1928
• Docket Number: 38237
• Citation: 218 N.W. 898,205 Iowa 902
• Parties: EMELOUS BOND et al., Appellees, v. SIMON O'DONNELL et al., Appellees; F. L. SHARON et al., Appellants
• Court: Iowa Supreme Court

218 N.W. 898

205 Iowa 902

EMELOUS BOND et al., Appellees, v. SIMON O'DONNELL et al., Appellees;

F. L. SHARON et al., Appellants

No. 38237

Supreme Court of Iowa, Des Moines

April 3, 1928

Appeal from Buchanan District Court.--E. B. STILES, Judge.

Action to recover deficiency remaining on a promissory note after foreclosure of a real estate mortgage and the sale of the security thereunder. Judgment was rendered against the defendants, except McGuire, as to whom the cause was continued, but only F. L. and G. F. Sharon appeal.

Affirmed.

Arbuckle & Arbuckle and Frank Maher, for appellants.

Edwards Longley, Ransier & Harris, for appellees.

KINDIG J. STEVENS, C. J., and EVANS, DE GRAFF, ALBERT, MORLING, and WAGNER, JJ., concur.

OPINION

KINDIG, J.

Full recital of the facts alone can reveal the pivotal points involved. Historically, the events are:

Appellee Emelous Bond in 1919 owned 243 acres of land in Buchanan County, and during that year sold the same to Messrs. Fouts and McGill, bankers, of Independence. The consideration named was $ 40,000, of which $ 1,000 was paid at the time, and the balance accrued as follows: $ 9,000 March 1, 1920, at which date the deed. duly executed by appellee, was to be delivered to Fouts and McGill, in return for their note of $ 30,000, payable to appellee on a future day, and secured by a real estate mortgage on the premises.

Next in the order of occurrences was the resale of the farm by Sheehan, Rosier, and O'Brien to Simon O'Donnell, September 5, 1919, for $ 48,300, payable as follows: $ 1,500 in cash at the time; $ 8,500, March 1, 1920; $ 30,000 by the execution and delivery of a note in that amount, secured with a mortgage on the acreage; and $ 8,300 through a note secured by a second mortgage thereon. This last named contract was partially assigned September 12, 1919, in the succeeding language:

"Seneca, Ill., Sept. 12, 1919.

"For value received I hereby sell, assign and transfer and set over to J. J. McGuire, F. L. Sharon and G. F. Sharon an undivided one-half (1/2) interest in and to a certain real estate contract dated Sept. 5th, 1919 from J. F. Sheehan, et al. for 241 1/2 acres in Buchanan County, Iowa.

"Simon O'Donnell."

J. J. McGuire was the president of a Buffalo Center bank, while Frank L. Sharon was the cashier thereof. They, together with Gerald F. Sharon, were associated in the purchase and sale of farm lands. These men owned five farms in Lynn County alone. Title (for convenience and other purposes, best known to them) was held generally in the name of Joseph Matson, while the Buchanan County property in question was finally taken and held in the name of Simon O'Donnell.

Some of the further facts preceding the ultimate consummation of this transaction before March 1, 1920, were: During the month of July, 1919, McGuire was in conversation with one P. J. Sheehan, brother of J. F. or Jack Sheehan, concerning the "Bond farm" (the land in question). Then, on August 1st, McGuire wrote P. J. Sheehan (J. F.'s brother) a letter regarding the "farm," including these sentences:

"I don't know just what day we will be down, as Frank [F. L. Sharon] is on a deal and when he gets through, we will go down, and I want to look at the 320 acres near Jack's place, and also the farm joining Jack's, which you said was owned by a doctor, who would sell for the same price as he gave for it. I would prefer to keep the sale quiet on the 243 acres, as those fellows will think a new boom is on, and may get a little stiff on the price, and if we can buy 2 or 3 farms near there, and if they don't sell, we can depend on O'Donnell to look after them for us. We will look over Dubuque Co. while there. I know the 320 acres is rented, and if the man is a good farmer, we likely can take the land subject to lease. If we don't find the other two farms suitable, we will go to Wisconsin and look around. You can draw on me at Buffalo Center for the payment on Jack's place, and we will see about the tire deal when we get down there."

McGuire, on the 31st of August, again wrote to P. J. Sheehan:

"I want you to make the best deal you can on that farm--that is, get me that $ 500 commission if you can or part of it, and the terms $ 1,500 cash and $ 8,500 Mch. 1st, and the second mortgage to run 5 years if possible, if that is too long make it 3 years, and the contract made to Simon O'Donnell of Seneca, Ill. who will move on the place. You can draw on me at Buffalo Center for the $ 1,500 and let me know by wire if that is satisfactory, and we will make the contract when I get down there, or Frank [Sharon] may go to look at some land in Dubuque Co., so he can stop on the way and make the contract while there."

On receipt of the last named communication, the said P. J. Sheehan, as agent, in compliance with those instructions, bought the place (Jack's) from Rosier, Sheehan, and O'Brien for and on behalf of O'Donnell, McGuire, and the two Sharons. In further obedience to directions, the same representative, P. J. Sheehan, as agent aforesaid, drew a draft on his principals for the $ 1,500 down payment, which was paid by them in proportion to their interests in the adventure. Hence, P. J. Sheehan, in his representative capacity, entered into a written contract with Rosier, Sheehan, and O'Brien, embodying the terms of purchase, as stated. That was signed by J. F. Sheehan, G. L. Rosier, and R. J. O'Brien, as vendors, for themselves, but was executed by the vendees in this manner:

"Simon O'Donnell,

"By P. J. Sheehan."

It appears that F. L. Sharon was away from home Friday, September 5th, and did not know that this transaction had been completed. So, on the following Monday, September 8th, he wrote to P. J. Sheehan, the agent aforesaid:

"Guess Joe [McGuire] told you to draw on us for the $ 1,500 payment on Jack's farm [the one in question] and wrote me to make a contract. I haven't enough dope on it to do so, but enclose a couple of our blanks and a sample form giving as much information as I can. You can make them and forward for our signature. Make two copies. I was to have gone down there last week to close it up but couldn't get away."

Inclosed in the same envelope was a sample form of contract to be used by the agent, indicating that the name of G. F. Sharon was to be used as purchaser. Parenthetically, it is to be noted that the agent had already closed the deal, naming Simon O'Donnell as purchaser. After this, on September 12th, it is to be remembered, O'Donnell assigned the interest above mentioned to J. J. McGuire, F. L. Sharon, and G. F. Sharon. Accordingly, on March 1, 1920, approximately six months after appellants, the Sharons, had acquired the assignment interests in the purchase contract, there was a meeting at Independence of the three sets of parties involved in the transaction, for the purpose of completing the final settlement. Present at this time were appellee Bond, and O'Brien, representing himself, Jack Sheehan, and Rosier, and in addition thereto was O'Donnell, acting for himself, McGuire, and the appellants, Sharons. Moreover, P. J. Sheehan was there, in behalf of the last named principals, appellee asserts; but appellants claim he did not represent them, it being their contention he was the agent of O'Brien, Rosier, and J. F. Sheehan.

However, it is consistent with the record to say that, on all former occasions, P. J. Sheehan was authorized to and did act for McGuire, O'Donnell, and the Sharons, and the result of his accomplishments on the event in question was approved and ratified by appellants later. Bond, one of the appellees, "had heard," but did not personally know, of the equities acquired by McGuire, O'Donnell, and the Sharons. Therefore, he was ready to make and deliver the "deed" to Fouts and McGill, in accordance with the original agreement; but O'Donnell and the agent, P. J. Sheehan, requested that the "deed" be made to O'Donnell and the Sharons, for private reasons, not wishing to be known in the transaction; and after some argument, this was done. Objection to so doing was first made by Bond, because he considered Fouts and McGill financially responsible, but did not know of the responsibility of O'Donnell. Being assured, however, by O'Donnell and P. J. Sheehan, the agent, that the Sharons and McGuire, all bankers, were in the transaction, and were financially responsible, appellees finally yielded. At this juncture, appellee Emelous Bond testified:

"I absolutely relied upon the statements of Mr. Sheehan that McGuire and the two Sharons were the real purchasers of the property, and were financially able to pay the entire purchase price. Q. And I ask you whether or not you did rely on what Mr. O'Donnell told you about the reasons for doing the business of that association in the name of O'Donnell, and upon what he said about their financial ability to pay. A. Most assuredly I relied upon that. Mr. O'Donnell was the only one of the purchasing party who was present. I was given to understand that they were as much a part of the purchasing parties, just as much as though they signed on the paper. I understood that Sharons and McGuire were purchasing the land, in company with O'Donnell."

Thereupon, appellees conveyed their land to O'Donnell, and received from him the note for $ 30,000, secured by a mortgage on the real estate. Fouts and McGill were released from their obligation to accommodate appellants and their associates.

Upon the witness stand, F. L. Sharon said:

"I knew at the time that O'Donnell obtained title to the land, and when the contract for the title was made, the price that O'Donnell was to give. I knew at that time that O'Donnell actually executed the mortgage he did execute and paid the money that he paid, and received a deed...