First National Bank v. Ten Napel
| Decision Date | 24 October 1924 |
| Docket Number | 36059 |
| Citation | 200 N.W. 405,198 Iowa 816 |
| Parties | FIRST NATIONAL BANK OF SIOUX CENTER, Appellee, v. EVERT TEN NAPEL et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Sioux District Court.--WILLIAM HUTCHINSON, Judge.
ACTION to foreclose a mortgage upon the homestead of defendants. From a decree for plaintiff, defendants appeal.
Affirmed.
Hatley & Van de Steeg, for appellants.
Anthony Te Paske, for appellee.
It is admitted that the property covered bye the appellee's mortgage is the homestead of the appellants. The mortgage was given to secure the existing indebtedness of the husband, the notes described in the mortgage being signed by the husband and a son only, and being of earlier date than the mortgage or in renewal of earlier like notes.
The defense presented is that the wife could not read or understand the English language, and that her signature to the mortgage was procured by fraud on the part of her husband and the president of the bank; and that, being upon the homestead, if invalid as to her, it was also invalid as against the husband.
It is no doubt true, as claimed by appellants, that, when Mrs. Ten Napel executed the mortgage on the homestead, --assuming it to be valid,--she simply pledged her interest in the property as additional security to the bank on the notes of her husband and son; and that, since the bank parted with nothing, and she derived no benefit from the transaction, and there was no consideration moving to her, she was in the attitude of a mere surety, and entitled to the protection of a surety. Lingenfelter Bros. v. Bowman, 156 Iowa 649, 137 N.W. 946. Furthermore, if the officers of the bank procured her husband to obtain her signature to the mortgage by fraud,--that is, if they connived or arranged with him to secure her signature by deceit or artifice, and by fraudulently preventing her from learning the character of the instrument she was signing, and her signature was in fact so obtained,--it could not be claimed that she could not successfully defend against the mortgage. And if they knew, at the time they accepted the mortgage, that her signature had been so procured, although they were not originally parties to any fraudulent plan, the defense would be available to her. Bank of Monroe v. Anderson Bros. M. & R. Co., 65 Iowa 692, 22 N.W. 929; Barnes v. Century Sav. Bank, 149 Iowa 367, 128 N.W. 541.
There is no testimony that would warrant a finding that the officers of the bank were parties with the husband to a fraudulent scheme to procure the wife's signature to the mortgage by artifice or fraud. The husband did not testify that he told them of any purpose on his part to deceive his wife. He said: "I thought we [meaning himself and Mouw, the president] could do it." But there is nothing to show that the thought was expressed, or that Mouw was made aware of it, or tacitly or expressly assented to it. Both Mouw and Boeyink, who was also connected with the bank, and had something to do with the transaction, testified that they had no knowledge of any fraudulent purpose on his part, and that they had no knowledge that the wife claimed to have been deceived until sometime after the mortgage was received, when efforts were made to collect the debt. The latter testified that Ten Napel told him that his wife was now ready to sign the mortgage. There was no respect in which the bank failed to perform any duty or obligation it owed to Mrs. Ten Napel in her capacity as surety.
There is a contention as to where the burden of proof rests. It is insisted by appellant that, by reason of the relationship of the parties, the burden is upon the bank to establish that the mortgage was obtained honestly, fairly, and without trickery or fraud. The authorities cited in support of the claim announce the familiar rule that, where a fiduciary or confidential relation is shown to exist between the parties to a transaction, the burden is upon the one claiming a benefit therefrom to establish entire fairness on his part, and freedom of the other from undue influence; but they do not sustain the attempted application of the doctrine to the present facts. No confidential relations existed between the bank and Mrs. Ten Napel; nor do the facts warrant the conclusion that the husband was the agent of the bank. The officers of the bank were pressing for security for the notes. The husband was willing to give the mortgage in question, and suggested that the instrument be prepared, and he would take it to get his wife to sign it. It is true, the mortgage was for the benefit of the bank; but the husband was willing to give it, and undertook to procure the wife's signature, to carry out his purpose to give the mortgage. There is nothing in the mere relationship of the plaintiff and defendants to raise any presumption of a domination by one over the other, or to cast on the plaintiff the burden of proving that the wife had a full understanding of the instrument she was executing.
It is well settled that mere illiteracy or inability to read is not, in the absence of fraud, a ground for avoiding a contract signed in ignorance of its contents. Blossi v. Chicago & N.W. R. Co., 144 Iowa 697, 123 N.W. 360; Zaharyas v. Chicago, R. I. & P. R. Co., 164 Iowa 71, 145 N.W. 294; Erickson v. Knights of Maccabees, 71 Colo. 9 (203 P. 674); Morstad v. Atchison, T. & S. F. R. Co., 23 N.M. 663 (170 P. 886); Burns v. Spiker, 109 Kan. 22 (202 P. 370); Mackintosh v. Cioppa, 245 Mass. 152 (139 N.E. 445); Shulman v. Moser, 284 Ill. 134 (119 N.E. 936). The fact of illiteracy has, however, an important bearing on the question of the existence of fraud in procuring the signature; and where fraud or deception are shown, it has been held incumbent on the party relying on the contract to show that it was executed with a full understanding of its terms and effect. 13 Corpus Juris 373; Spelts & Klosterman v. Ward, 2 Neb. Unoff. 177, 96 N.W. 56; Burns v. Spiker, supra. It is said in the case last cited:
"We conceive the true rule to be, however, that it is only where some fact is established tending to show the practice of deception that the necessity arises of producing affirmative evidence in support of the good faith of the transaction."
It appears from the husband's own testimony, and without dispute, that he intended to procure his wife to sign the mortgage in ignorance of what it was. He testified that Mr Mouw, the president of the appellee bank, had asked for...
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First Nat. Bank of Sioux Ctr. v. Napel
... ... I then took it with me, and three or four days afterwards I said to her, I have to go to the farm; just sign this paper a minute. And I said at the same time I would like to bring that to the bank. She signed it, and I went to the First National Bank and handed it to Mr. Mouw. I did not explain to my wife what the paper was, either before or after she signed it, and she was ignorant of its contents.The wife testified, through an interpreter, that she could not speak, understand, or read English; that she signed the mortgage, and that it ... ...