Dorr v. Alford

• Decision Date: 09 May 1900
• Citation: 82 N.W. 789,111 Iowa 278
• Parties: J. M. DORR, Appellant, v. LORE ALFORD
• Court: Iowa Supreme Court

82 N.W. 789

111 Iowa 278

J. M. DORR, Appellant, v. LORE ALFORD

Supreme Court of Iowa, Des Moines

May 9, 1900

Appeal from Polk District Court.--HON. C. P. HOLMES, Judge.

THIS action was originally commenced at law to recover a money judgment upon certain contracts. On motion of the defendant the case was transferred to and tried as in equity, over plaintiff's objections, which objections he now waives and the case is therefore before us for consideration as in equity, on the appeal of the plaintiff from a judgment dismissing his petition.

Reversed.

Dudley Coffin & Byers and Thos. F. Stevenson.

Lore Alford and Bowen & Brockett for appellee.

OPINION

GIVEN, J.

I.

The record before us is quite voluminous and may only be noticed in a general way. The issues and facts are in most respects the same as in Dorr v. Cory, 108 Iowa 725, 78 N.W 682, decided after the holding in this case in the court below. On January 14, 1890, the plaintiff, being the owner thereof, conveyed to J. H. Snooke, as trustee for the West End Syndicate, a co-partnership composed of A. W. C. Weeks, R. G. Scott, and J. N. Neiman, for the consideration of forty-eight thousand forty-four dollars and sixteen cents, a certain thirty-seven blocks, containing eight hundred and thirty-nine lots, in the plat of the West End, an addition to the city of Des Moines. Mr. Snooke, as such trustee, executed to Mr. Dorr eight hundred and thirty-nine promissory notes, aggregating forty-seven thousand seven hundred and thirty-six dollars and eighty-four cents, being the balance of the purchase price, and a mortgage on said real estate to secure the same. The West End Syndicate entered into a number of contracts with Mr. Cory and others as shown in the case of Cory, which contracts in most respects are the same as those thereafter entered into with this defendant, and upon which this action is brought. On July 2, 1890, said partnership became incorporated under the same name, to-wit, the West End Syndicate, and all the property of the partnership was transferred to it. On March 3, 1891, said corporation and this defendant entered into ten contracts, in writing, by each of which the corporation agreed "to hold in trust, sell, collect, and pay over to the party of the second part the proceeds from the sale of the one-hundred and fiftieth of the following described real estate," describing the real estate conveyed by Mr. Dorr. In consideration of this, the defendant agreed to pay upon each contract one thousand dollars in four equal annual installments, less the amount credited on the contracts, with eight per cent. interest, "and also their pro rata share of any amount due or to become due for surveying, platting, and grading of said subdivision when called for by the board of directors." It is provided in said contracts that the corporation shall have a lien on each share for the unpaid purchase price; that the care, management, and disposition of the property shall be in the board of directors; that the corporation shall hold the land in trust for all parties interested; have power to make contracts, deeds, leases, and mortgages on behalf of its beneficiaries, to take mortgages on sale of lots, and on payment to release or assign such mortgages; "provided, however, that all such deeds, leases, contracts, and conveyances shall first be ordered by its board of directors." It is further provided that: "All money hereafter derived from the sale of lands and lots, or from material sold from said premises, or from rentals received, shall, after payment of taxes, interest, incumbrances, and expenses, be ratably divided among the parties in interest. It is also understood and agreed that there is an incumbrance of forty-seven thousand seven hundred and thirty-six dollars and eighty-four cents upon said land, to be payable on or before six years from Jan. 14, 1890, and which is distributed upon the lots and subdivision, and payable out of the proceeds of sales and rents." The contracts with Mr. Cory and others, being with the co-partnership, were worded accordingly; but the difference in the language is not such as to render their effect different from that of the contracts with the defendant. In the Cory contracts, money derived from sale of lots, material, or rents was first to be applied to the payment of taxes, interest, incumbrances, and expenses," while in this it is to "taxes and expenses." In those contracts, after the word "subdivision" in the paragraph last quoted, are the words, "and payable out of the proceeds of sales like this." We may say here that we do not think the differences in the language between these and the Cory contracts are such as to vary their meaning or effect. The corporation having failed to pay the principal and interest due to Mr. Dorr on the mortgage debt, a further contract, in writing, was entered into by Mr. Dorr, of the first part, and the corporation, of the second part, in substance, as follows: The corporation placed in the hands of Mr. Dorr, as collateral security to said mortgage indebtedness, said contracts with the defendant Alford and a number of like contracts with other persons, "with all the balance due second party on said contracts, amounting to about $ 33,000." Said contracts contain the following: "It is agreed by first party that second party shall have charge of the collection on said collaterals at their own expense, and shall pay them in, on the order of first party, to a Des Moines bank named by first party, which shall receipt for the same, less any tax paid, from said fund on said mortgaged property. Said payments or collections, when made, to apply on the tax assessed against lots in said West End addition, interest and principal on said abovementioned mortgage; all funds to be applied at any and all times to the payment and release of any particular lot or lots that second party may elect to have released. When the entire amount of incumbrance on all the lots shall in this way or otherwise have been released, then said mortgage shall be released in full, and said contract surrendered to second party. Said collateral shall at no time be separated from said notes or become security for debts of first party. And, in consideration of said collateral being so placed and turned over to first party, he agrees for himself, his heirs and assigns, not to bring any suit on account of the nonpayment of any interest due on the above-mentioned mortgage of $ 47,737 until the date on which said mortgage becomes due, to-wit, January 14, 1896." The defendant, Alford, is entitled to certain credits on said contracts, and the plaintiff, Dorr, as holder of said contracts as collaterals, brings this action thereon to recover the balance due, the corporation having failed and refused to so do. It appears that Mr. Weeks held ten contracts the same as those held by Mr. Cory and others; that an effort was made to induce the defendant to take...