First Nat. Bank of Grundy Ctr. v. Snyder

• Decision Date: 30 January 1890
• Citation: 79 Iowa 191,44 N.W. 356
• Parties: FIRST NAT. BANK OF GRUNDY CENTER v. SNYDER ET AL.
• Court: Iowa Supreme Court

79 Iowa 191

44 N.W. 356

FIRST NAT. BANK OF GRUNDY CENTER

v.SNYDER ET AL.

Supreme Court of Iowa.

Jan. 30, 1890.

Appeal from district court, Grundy county; C. F. COUCH, Judge.

Action in equity asking certain foreclosures, and for other relief. The case was submitted upon the issues joined in plantiff's substituted and supplemental petitions, and the answers of the defendants thereto, and decree entered in favor of the plaintiffs, from which the defendants Snyder Bros., H. P. Snyder, J. M. Snyder, and A. N. Woods, assignee of Snyder Bros., appeal. It appears without controversy that Snyder Bros., a partnership doing business as hardware merchants, and J. M. Snyder, individually, were indebted to the plaintiff bank in the sum of about $5,000, evidenced by notes and an account for which plaintiff was insisting on security, and to secure which they requested a mortgage on Snyder Bros'. stock of goods, which they declined to give because of the effect it would have upon their credit. J. M. Snyder, who transacted the business under consideration on behalf of his firm, being the owner of the premises upon which their business was carried on, and of certain other lots, on the 21st day of April, 1886, executed his two warranty deeds therefor to the plaintiff; his wife, Anna C., joining therein. The consideration named in the deed for the store-house property is $2,000, and in the other, $700. On the same day, and as a part of the same transaction, the plaintiff executed to J. M. Snyder its two bonds, in one of which it agreed to convey to him said store-house property upon payment of $2,000 on or before April 21, 1891, with 10 per cent. interest, payable annually, according to the tenor of his certain promissory note; he to keep the property insured in $2,000 for the benefit of plaintiff, and pay all taxes; non-payment of any of the sums within 20 days after due to entitle plaintiff to declare the contract at an end. By the other bond the plaintiff agreed to convey to J. M. Snyder the other lots deeded to it, upon the payment of $700 on or before April 21, 1891, with 10 per cent. interest, payable annually, according to the tenor of his promissory note, Snyder to pay all taxes, and a failure to pay any of the sums for 20 days to entitle plaintiff to declare the contract at an end. At the same time J. M. Snyder executed to plaintiff the two promissory notes of Snyder Bros.,--one for $2,000 and one for $700,--due “on or before five years after date,” with 10 per cent. interest, payable annually; and the plaintiff gave to him a receipt against a note for $2,000, and surrendered to him a note for $400, and applied the balance on interest and by credit on deposit account. On the same day, and as a part of the same transaction, a “duplicate lease and agreement” was executed by the plaintiff and Snyder Bros., whereby the plaintiff leased to John M. Snyder and H. P. Snyder said store-house property for five years from that date, at the yearly rent of $600, payable monthly, in advance; Snyders to keep the building insured for $2,000 for the benefit of the bank; a failure to do which should work a forfeiture of the lease. It is further agreed therein by Snyder that plaintiffs hould have a lien upon all fixtures, stocks, or merchandise kept or used on the premises, for rents due or to become due, whether exempt from execution or not; and that, in case of failure on their part to keep all the covenants, the plaintiff might, at its option, declare the lease void. The actual rental value of the store-house property was $25 to $30 per month. Snyder Bros. remained in possession until December 10, 1886, when they made a general assignment for the benefit of their creditors, since which their assignee has had control and possession, and received the rents. Snyder Bros. failed to pay the taxes assessed against the store-house and personal property, and to keep the same insured, whereupon plaintiff, to preserve its security, paid the taxes and took out insurance.

On December 22, 1886, Snyder Bros. executed a chattel mortgage to the Iowa Barb & Steel Wire Company on their stock of goods, to secure the payment of $990.82. The personal property was sold under stipulation by the assignee, the proceeds to be held to abide the orders of the court. The decree entered June 7, 1888, against Snyder Bros. and J. M. Snyder and H. P. Snyder is: (1) Judgment in favor of plaintiff for $2,492.43, with interest at 10 per cent. on $2,455.66, and 6 per cent. on $36.77, from date, with foreclosure of the title-bond on the store-house property. (2) Judgment in favor of plaintiff for $866.53, with interest at 10 per cent. on $855.97, and at 6 per cent. on $10.56 thereof, from date, with foreclosure of the other title-bond, and barring defendants, and all claiming under them, from all rights except the right to redeem. (3) Judgment in favor of the plaintiff, for $2,757.28, with interest at 10 per cent. on $2,616.17, and at 6 per cent. on $142.15, thereof, from date, and declaring the same a lien upon the personal property described in the lease, and ordering the application of the proceeds of the sale thereof to the payment of said judgment. (4) Judgment in favor of the Iowa Barb & Steel Wire Company for $1,107.01, with interest at 8 per cent., and declaring the same a second lien on said personal property.Rea & Hayes, for appellants.

Boies, Husted & Boies, for appellee.

GIVEN, J.

1. Appellants' contention is that said several instruments were executed as parts of one transaction, and must therefore be construed together; that thus construed they show that the consideration for the deeds and bonds was the extension of time on the $2,700 indebtedness, and as security therefor, thus constituting an equitable mortgage; and that the consideration for the lease was the extension of time for the balance of the indebtedness due to plaintiff, and as security therefor. Appellants also contend that, as a part of the same transaction, it was orally agreed between the parties that such were the considerations and purposes of said instruments. Appellee contends that the...