Floberg v. Peterson
| Decision Date | 05 April 1932 |
| Docket Number | No. 40958.,40958. |
| Citation | 214 Iowa 1364,242 N.W. 13 |
| Parties | FLOBERG v. PETERSON ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Page County; H. J. Mantz, Judge.
This was a proceeding brought by the plaintiff to reform a note and mortgage and quiet title against the defendants in and to certain Page county real estate. The district court reformed the note and mortgage as plaintiff prayed, and quieted the title to said real estate in him subject to the payment of an interest balance due on the note and mortgage. From the judgment and decree thus entered, the defendant C. E. T. Peterson appeals.
Affirmed.
See, also, Peterson v. Floberg, 242 N. W. 18.Lester L. Orsborn, of Red Oak, and Addison G. Kistle, of Council Bluffs, for appellant.
Ferguson & Ferguson, of Shenandoah, and Clifford Powell, of Red Oak, for appellee.
August Floberg came from Sweden to America, and by pursuing a course of hard labor and economy was finally enabled to buy a quarter section of land in Page county. This is the land involved in the present controversy.
Mr. Floberg was married twice. As the fruit of the first marriage, two children were born. They are Mrs. Alice Floberg Lantz and the plaintiff appellee, Henry Floberg. The first wife died when the appellee was six and his sister Alice two years of age. Later the father, August Floberg, married the second time. On the second occasion he was married to Emma C. Floberg, whose estate is involved in the present proceeding. After the second marriage, August Floberg and his new wife, together with the two children from the first wife, went onto the farm above named, whereon they built a new home. Emma C. Floberg, the second wife, loaned her husband $3,000 for the purpose of constructing the necessary buildings. That money, however, was later repaid to Emma C. Floberg by her husband, August Floberg. Prosperity smiled upon August Floberg, and when he died in 1916 he owned, not only the land, but also a large amount of personal property.
In his will, August Floberg conveyed all his property, both real and personal, to his surviving wife, Emma C. Floberg, for the purpose of taking care of herself and the two children until the appellee reached the age of twenty-five years, at which time the estate was to be divided between the widow and the two children in accordance with the law of distribution. According to the record, August Floberg when he died left to his wife and children the land above named with the necessary machinery, stock, and grains kept thereon, and in addition thereto he bequeathed to them approximately $22,000 in notes and securities.
At first Emma C. Floberg, the widow, and the two children remained upon the farm and carried on the work. Thus the matters rested until 1922, when the two children purchased the widow's interest in the land. This purchase was made upon the theory that the value of the widow's one-third interest approximated $15,500. Accordingly appellee and his sister executed to the widow their note for $15,500 secured by a mortgage on the land. Such purchase of the widow's interest in the land seems to have included her portion of the stock, machinery, grains, etc. No division, however, was made of the $22,000 in notes and securities.
Following the purchase of the widow's interest, appellee and his sister moved onto the farm and conducted the business until 1924, when, in the manner and way hereinafter explained, the appellee purchased his sister's interest in the land. Upon appellee's marriage, it became apparent to him and his sister that the happiness of each would be conserved if they lived in separate homes. During the father's lifetime, he explained to the second wife, Emma C. Floberg, his desire that the appellee should some day have the farm. That apparently was in harmony with an old country custom. The second wife was very much impressed with this thought, and after her husband's death it became her purpose to bring about her late husband's wish. So, when appellee and his sister talked of separating, the widow commenced to promote her late husband's plan. She advised appellee to buy his sister's interest in the farm, but appellee refused. His objection to the purchase was that he could not afford to do so, and the land was not worth the price demanded. Manifestly it was appellee's plan to buy eighty acres of land in another farm in order that he might finance the proposition. However, the widow continued to insist and asked the aid of neighbors in her endeavor to persuade appellee to buy his sister's interest in the home farm. Finally, the widow is said to have informed appellee that she would finance the purchase of the sister's interest on the basis of $23,000. This sum the sister was willing to accept.
It is claimed by appellee that the widow offered to permit him to have the sum of $23,000 for this purpose, providing he would pay her 5 per cent. interest thereon during her life, pay the taxes on the farm, and keep the place well improved. At the widow's death, under this scheme, the principal was not to be collectible. The plan was to provide an annuity for the widow during her life. Appellee yielded, and accepted the proposition. Accordingly, settlement was made. As before said, the $22,000 in moneys and credits had not been distributed. Each of the children, as well as the widow, had a one-third interest therein. Hence, the children transferred to the widow their two-thirds interest in the moneys and credits amounting to approximately $15,000, and raised the balance necessary to satisfy the $15,500 mortgage and note which they had given her for the purchase of her one-third interest in the land. Consequently, the appellee and his sister then owned the land free and clear of all incumbrances, and the widow had all the notes and securities amounting to approximately $22,000. In order, then, to finance the appellee in his purchase of his sister's one-half interest in the farm, the widow transferred to the sister the $22,000 in notes and mortgages, and apparently paid the balance of the consideration in cash. Under the plan, the sister, as part of the transaction, conveyed to her brother her one-half interest in the farm.
After the transaction was completed, then, the sister had the notes and securities, and appellee held the farm. Therefore, in order to satisfy the widow in accordance with the above-mentioned plan which she proposed to appellee, she was to receive from appellee interest at the rate of 5 per cent. per annum on $23,000 during her natural life, but, as before said, the principal was never to be paid. Appellee, in addition thereto, was bound to pay the taxes and keep up the improvements on the land. Some one advised that the widow's contract with appellee should be reduced to writing. A lawyer was suggested, but the parties concluded to go to a nearby banker who drew a note and a mortgage securing the same, covering the land in question. The note and mortgage were dated March 1, 1924, and both were signed by the appellee and his wife. Emma C. Floberg, the widow, is named as the payee of the note and the mortgagee in the security contract. This note is for the principal sum of $23,000, payable March 1, 1934, together with interest at the rate of 5 per cent. per annum, payable annually. Nothing, however, is said in either the note or mortgage that the principal is not to be paid. Following the transaction, the sister and her husband left the old home and went onto another farm in Cass county. Some time in 1925, the widow also left the home farm and purchased a house in Red Oak, where she thereafter lived until her death, in October, 1928. She left a will naming her brother, the defendant appellant, C. E. T. Peterson, as her sole beneficiary.
Upon qualifying as the executor, of the will, the appellant insisted that appellee pay the aforesaid $23,000 note. Appellee objected on the theory that the note and mortgage securing it were merely evidence of an oral annuity agreement, under which the late Emma C. Floberg was to receive 5 per cent. per annum on $23,000, according to the aforesaid oral agreement. Failing to reach a settlement, the present suit was commenced by appellee: First, to reform the note and mortgage to correspond with the said oral agreement; and, second, to quiet the title in himself to the foregoing real estate on the theory of the aforesaid oral contract with Emma C. Floberg. After a trial in the district court, that tribunal reformed the note and mortgage in accordance with the prayer of appellee's petition, and quieted the title in him to the real estate, subject to his paying to appellant, however, $675, being the unpaid interest on the aforesaid $23,000 from March 1, 1928 to October 14, 1928, the date of Emma C. Floberg's death. From the judgment and decree thus entered, the appellant appeals.
On this appeal, the appellant declares that appellee should not have been permitted to prove the alleged oral contract with Emma C. Floberg because the evidence offered violated the parol evidence rule. Likewise, it is said by appellant that appellee's own testimony violated, not only the parol evidence rule, but also the so-called Dead Man's Statute (Code 1931, § 11257). Our discussion of the case proceeds upon the theory that the testimony of the appellee is eliminated. That being true, was it proper for the appellee to prove by other witnesses his alleged oral contract with the late Emma C. Floberg? Such proof is admissible, appellee contends, upon either of two theories: First, to show that the $23,000 note and mortgage were conditionally delivered or delivered for a special and limited purpose; and, second, to show that through mistake the note and mortgage do not express the true intention of the parties. Pursuing his argument at this point, appellee declares that a conditional delivery of a promissory note or a delivery thereof for a specified and limited purpose may be shown by parol...
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