Eckhardt v. Bankers' Trust Co.
Decision Date | 20 June 1933 |
Docket Number | 42042 |
Citation | 249 N.W. 244,218 Iowa 983 |
Parties | GUSTAV ECKHARDT et al., Appellees, v. BANKERS TRUST COMPANY, Appellant |
Court | Iowa Supreme Court |
SUPPLEMENTAL OPINION ON PETITION FOR REHEARING JANUARY 16 1934.
REHEARING DENIED NOVEMBER 22, 1934.
Appeal from Scott District Court.--WM. W. SCOTT, Judge.
This is an action to cancel a trust deed, the lien created thereby and to quiet plaintiffs' title in the real estate referred to in the trust deed. Plaintiffs reside in Scott county and the real estate is in Scott county; the defendant is a resident of Polk county, Iowa, and filed a motion for change of venue to the county of its residence. The motion was overruled, and defendant appeals.--Affirmed.
See also, 215 Iowa 1107, 246 N.W. 836.
Affirmed.
Gamble, Read & Howland, and Cook & Balluff, for appellant.
Chester J. Eller, for appellees.
The plaintiffs are husband and wife residing in Scott county, Iowa. In October, 1931, they executed a trust deed to the defendant conveying an interest in certain real estate in Scott county, Iowa. Plaintiffs allege that the trust deed was executed as security for $ 35,000 worth of notes and obligations executed by Mr. Eckhardt. The trust deed inter alia contains the following provision:
"All indebtedness of Grantors, or either of them now existing, renewals thereof, or indebtedness hereafter created, to the Bankers Trust Company, shall be and remain a first lien on said property and the income therefrom, until all such indebtedness, both principal and interest, has been paid in full."
The indebtedness referred to includes the notes and obligations referred to. Plaintiffs allege that all the notes and obligations, given to the defendant by plaintiffs, and secured by the trust deed, were obtained through fraudulent representations, made as an inducement for the execution of said obligations and trust deed, were untrue, and were made for the purpose of securing a lien upon plaintiffs' property. Plaintiffs ask that the trust deed and the notes and obligations secured thereby be canceled, and that the defendant be restrained from transferring said notes and obligations; that the lien, created by said trust deed upon the real estate described therein, be canceled, and that the title in and to said real estate be forever quieted in said plaintiffs as against the defendant.
The principal error relied on for reversal is the court's refusal to grant a change of venue to the county of defendant's residence. As supporting their contention, they refer to sections 11038, 11040, and 11049 of the Code. These statutes provide that an action against a resident in this state must be brought in the county of his residence. Section 11034, however, of the same chapter provides that:
"Actions for the recovery of real property, or of an estate therein, or for the determination of such right or interest, or for the partition of real property, must be brought in the county in which the subject of the action or some part thereof is situated."
In this deed all indebtedness of the plaintiffs to the defendant is expressly made a lien upon said real estate. It is apparent that a cloud upon plaintiffs' title to the real estate was created by the trust deed. Plaintiffs seek to remove the lien created by the trust deed, the determination of his rights in the real estate, and to quiet his title therein.
Where the intent of a trust agreement is to create a lien upon the real estate, the transaction amounts to a mortgage.
41 C. J. 293; 19 R. C. L. 273; Newman v. Samuels, 17 Iowa 528; Parry v. Reinertson, 208 Iowa 739, 224 N.W. 489, 63 A. L. R. 1051; In re Assignment of Snyder, 138 Iowa 553, 114 N.W. 615, 19 L. R. A. (N. S.) 206; Vigars v. Hewins, 184 Iowa 683, 169 N.W. 119.
The notes and other obligations are the foundation for the security represented by the trust agreement. If the notes and collateral given to the defendant by the plaintiffs are null and void, then the trust agreement conveying the land in Scott county is also of no validity, and, if so, the trust deed should be canceled, the lien removed, and plaintiffs' title quieted.
An action involving the determination of an interest in real estate is properly brought in the county where the real estate is situated. Code, section 11034; 40 Cyc. 67; Lee v. American Trust & Savings Bank, 209 Iowa 609, 228 N.W. 570; Johns v. Orcutt, 9 Iowa 350; Epperly v. Ferguson, 118 Iowa 47, 91 N.W. 816; Donaldson v. Smith, 122 Iowa 388, 98 N.W. 138; Bradford v. Smith, 123 Iowa 41, 98 N.W. 377; Long v. Investment Co., 135 Iowa 398, 112 N.W. 550; Wagner v. Glick, 177 Iowa 623, 159 N.W. 233.
An action to quiet title is an action for the determination of an interest in land, and is properly brought in the county in which the land is situated. McEvoy v. Cooper, 208 Iowa 649, 226 N.W. 13; Donaldson v. Smith, 122 Iowa 388, 98 N.W. 138.
In Bradford v. Smith, supra, we said: "The decree, when granted, affects title to land, and it is always advisable to have such decrees recorded in the county where the land is situated."
In Long v. Investment Co., supra, on page 401, we said:
"Suits to set aside deeds and declare the property that of another than the grantees therein are clearly within this statute, and therefore should be brought in the county where the real estate or some part of it is situated."
If this trust agreement or the obligations which it secures were obtained by or through fraudulent means, the plaintiff, under section 11034, is fully warranted in commencing an action in the county in which the land is situated.
Other branches of the motion are not argued, and therefore not considered.
The order of the lower court in refusing a change of venue was correct, and is therefore affirmed.
SUPPLEMENTAL OPINION ON PETITION FOR REHEARING.
Defendant, in a petition for rehearing, claims sufficient consideration was not given to the error assigned in overruling its motion to strike the allegations of the petition asking the cancellation of certain notes. It is claimed that such allegations state a separate and personal action, triable only in the county of defendant's residence.
The notes referred to, however, with all other indebtedness owing the defendant by plaintiffs, were secured by a trust deed. Plaintiffs' petition asks to cancel this trust deed and quiet their title in the real estate therein described, situated in Scott county, where the action was commenced.
It is true that, if this action was brought solely for the purpose of canceling the notes, it should have been brought in the county of the defendant's residence, and in such event a motion for a change of venue should have been granted. This action, however, is brought to cancel a trust deed and to quiet plaintiffs' title in the real estate in question. The trust deed makes the obligation on these notes a lien upon the real estate in question, and creates a cloud on plaintiffs' title therein. It would be impossible to have plaintiffs' title in the real estate quieted without cancelling the trust deed and removing the cloud therefrom.
This action is brought for the determination of plaintiffs' interest in real estate in Scott county, and to quiet their title therein. Defendant claims that the petition contains two causes of action, but made no motion to separate. The allegation to cancel the obligation on the notes is joined with the allegation to cancel the trust deed and quiet plaintiffs' title in the property. If the cloud on plaintiffs' title created by the trust deed includes plaintiffs' obligation on the notes, it is necessary for plaintiffs to secure a cancellation thereof to quiet their title. This is one of the elements necessary for a determination of plaintiffs' rights in the real estate.
As stated in the original opinion, the trust deed in question is equivalent to a mortgage. If the whole, or any part, of the consideration of the mortgage is invalid, a determination of that question is necessarily involved in an action to quiet plaintiffs' title in the property.
An action for the determination of a right or interest in real property must be brought in the county in which the subject of the action is situated. An action to quiet title to real estate is necessarily an action to determine an interest therein, and we have held that the venue of such an action is in the county in which the real estate is situated. McEvoy v. Cooper, 208 Iowa 649, 226 N.W. 13. In that case, page 654, we said:
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