Coen v. Scott County Sav. Bank
| Decision Date | 06 March 1928 |
| Docket Number | 38616 |
| Citation | 218 N.W. 325,205 Iowa 483 |
| Parties | COEN & CONWAY, Appellant, v. SCOTT COUNTY SAVINGS BANK et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Scott District Court.--W. W. SCOTT, Judge.
Suit in equity, to establish liability and to recover judgment against the respective defendants upon different grounds. At the close of the plaintiff's evidence, the defendants moved the court to dismiss the petition because plaintiff had failed to establish any cause of action against any of the defendants. This motion was sustained. Plaintiff appeals.
Affirmed.
John C Higgins, for appellant.
J. C Hall, for DeLacy and Walsh Realty Company, appellees.
Albert W. Hamann, for Scott County Savings Bank, appellee.
M. F Donegan, for Angelos Dellis, appellee.
The plaintiff is a firm of building contractors, which, under contract with Licometros, erected certain improvements upon realty owned by the defendant Scott County Savings Bank, and leased by it to DeLacy, and subleased by DeLacy to Licometros. The latter is one of several associates, who were interested in the sublease, and who need not otherwise be named herein. Licometros is an insolvent, and nothing is claimed against him herein. His personal liability to the plaintiff, however, is unquestioned. The plaintiff claims from DeLacy upon certain covenants contained in the lease from the defendant bank to DeLacy, as lessee. It claims that such covenants were a promise made for the benefit of third parties, and as such, it claims the benefit thereof. It claims to recover from the bank, as owner of the property, which, as such, had obtained the full benefit of the improvements, whereby it was enriched, and thereby rendered liable to the plaintiff, as a matter of law. It claims from the Walsh Realty Company as an assignee of DeLacy, in that this defendant purchased from DeLacy his leasehold interest and assumed all the obligations of DeLacy under his lease from the bank.
It appears that the defendant bank was the owner of certain valuable real estate situated in the city of Davenport, which was occupied by certain old and undesirable buildings. These were not conducive to rental values. DeLacy was a real estate operator in the same city. On April 9, 1919, a contract of lease and option to buy was entered into between him and the bank, whereby DeLacy leased the property from the bank for a period of five years, at a stipulated cash rental, with the further proviso that DeLacy should, on or before November 1, 1923, expend not less than $ 6,000 in improvements upon such realty, which should become a part of the real estate, and should not be removable at the expiration of the lease. In that connection, DeLacy covenanted in the lease to protect the bank against mechanic's liens, and to produce vouchers to the bank for all expenditures incurred thereby. It was further provided in said lease that DeLacy should, during the time of the lease, hold an option to buy the realty at the price of $ 90,000; that, if he should exercise such option, before incurring such expenditures for improvements, he should thereby be released from further obligation to make such expenditure. His obligation as a lessee should cease when he became purchaser of the title.
On April 17, 1919, DeLacy subleased the property to Licometros and associates, under a lease which bound them to make certain improvements at their own expense, and to pay a certain cash rental. This lease was acceded to by the bank, as a part performance by DeLacy of his leasehold obligations. Thereupon, Licometros et al. entered into a contract with the plaintiff for the erection of the improvements which they had undertaken. The making of these improvements involved a tearing down of the existing buildings. The work of tearing down began on or about May 12, 1919. On or about such date, the bank and DeLacy, as parties of the first part, and the plaintiff, as party of the second part, mutually executed a writing, whereby they mutually disclaimed any future liability of either the bank or DeLacy to the plaintiff, and whereby it was agreed by the plaintiff that it would look to Licometros et al. alone. The plaintiff performed its contract, and became entitled to receive the sum of $ 4,742. In settlement, the plaintiff accepted from Licometros et al. the sum of $ 2,042 in money, and their promissory note for $ 2,700, which note was later reduced by payment to the sum of $ 2,000. While it held this note, and about three years after its date, Licometros and his associates became bankrupt. Thereupon, the plaintiff turned to these defendants. It filed its petition in two counts,--the first declaring upon a mechanic's lien, and asking foreclosure thereon. Because of the running of the statute of limitations, it has not pressed such count, and it is not before us. In its second count, it has sought to establish personal liability, and this is the count that is presented to our consideration.
I. We will first consider the case against DeLacy. The case was submitted upon the evidence of the plaintiff alone. It is necessarily so submitted here. This results from the sustaining of the defendants' motion to dismiss. It is argued for appellant that, in such a case, we must accept the testimony of the plaintiff in the most favorable light which can be given to it. If the case were at law, and on trial before a jury, this contention would be correct. As applied to an equity case, it is not correct. Even in a law case, on trial before the court, we have held that we will consider such a case upon appeal on its whole merits, and will affirm a ruling by the district court sustaining a motion to dismiss if, upon the whole record, the court would have been justified in reaching the same result upon the full merits. Griffith v. Arnold & Rasmussen, 204 Iowa 1216, 216 N.W. 728. The practice in the district court of presenting a motion to dismiss plaintiff's case at the close of his evidence is not to be commended in an equity case, and should be deemed perilous procedure. In obtaining a favorable ruling in such a case, the defendant closes the door upon himself against the introduction of further evidence. If we should disagree, on appeal, with the ruling of the district court on the motion, our finding would have to be final, and the defendant might find himself defeated for want of producing the evidence that might have saved him. The appellant is entitled to whatever advantage might inure to it by the operation of this rule, and it has devoted earnest argument to that end. Even so, we are required to try the case de novo here, and on its merits as they appear from the actual record before us. Brewster v. Brewster, 194 Iowa 803, 188 N.W. 672; Dolan v. Newberry, 200 Iowa 511, 202 N.W. 545; Matthews v. Quaintance, 204 Iowa 520, 215 N.W. 707. Some complaint is made by appellant that the appellees erroneously purported to sustain their own affirmative defense by improper cross-examination of plaintiff's witness, and that such cross-examination should now be rejected by us, as out of place. This contention cannot be sustained. We cannot deal here with the question of the order of introduction of evidence, or whether the appellees put in their evidence below out of order, or whether they put it in the form of cross-examination, when they ought to have made the witness their own. Such matters will be considered on the weight and credibility of the evidence, for what they may be worth, but the decree below is not to be reversed on any such ground. One of these complaints made by the appellant is that the appellees were permitted to introduce in evidence the contract of May 12, 1919, by cross-examination of one of the plaintiff partners, who admitted its execution. If our procedure were otherwise than as stated, the appellant would have no possible grievance at this point. The contract of May 12, 1919, was pleaded by DeLacy in his answer, and a copy thereof set forth therein. Its execution was admitted by the plaintiff in its reply, with the qualification only that it was void for want of consideration. In view of such state of the pleadings, it was unnecessary for the defendants to put the contract in evidence. Neither its execution nor its content was in issue. Such contract was as follows:
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