Kolb v. Kolb

• Decision Date: 22 March 1947
• Docket Number: 7007.
• Citation: 26 N.W.2d 484,75 N.D. 181
• Parties: KOLB v. KOLB.
• Court: North Dakota Supreme Court

26 N.W.2d 484

75 N.D. 181

KOLB v. KOLB.

No. 7007.

Supreme Court of North Dakota

March 22, 1947

Syllabus by the Court.

1. Question of whether an assignment of a contract for deed absolute on its face, was in fact given as security for the payment of a debt depends upon the intent of the parties and a court of equity will examine all the circumstances of the transaction in order to determine that intent.

2. The burden is on the party who asserts that an assignment of a contract for deed absolute on its face was given as security to prove that fact by clear and convincing evidence.

3. Upon a trial de novo on appeal to this court, the findings of fact of the trial court are entitled to appreciable weight.

4. Evidence is held to establish that an assignment of a contract for deed was in fact intended as security for the payment of a debt.

Rittgers & Hjellum, of Jamestown, for plaintiff and respondent.

J A. Coffey, of Jamestown, for defendant and appellant.

BURKE, Judge.

The question in this case is whether an assignment of a contract for deed executed and delivered by the plaintiff, Dan Kolb, to his father, the defendant Karl Kolb, was executed as an outright assignment or to secure the payment of a debt.

Following a 'talk' with his father in the fall of 1941, Dan Kolb made a written offer to the Federal Land Bank to purchase a half section of land in Stutsman County, known as the Dolliver farm. At the time of making his offer, he paid down two hundred dollars which was furnished to him at his father's instance from money belonging to the father. The terms of the offer required, in the event of its acceptance the payment of an additional four hundred dollars as a condition for the issuance of a contract for deed. The offer was accepted and a proposed contract for deed was forwarded to Dan Kolb for execution. He signed the contract on November 15, 1941, but did not at that time pay the required four hundred dollars. On December 8, 1941, the father borrowed three hundred dollars from a bank at Medina and paid the four hundred dollars ostensibly at least, on behalf of his son, to the agent of the Federal Land Bank. Thereafter, on December 18, 1941, the son executed and delivered to his father the assignment which is at issue in this law suit. The assignment is unequivocal in its terms. It purports to transfer without qualification from son to father the contract for deed to the Dolliver farm. At the time of the execution of this assignment the executed contract for deed had not been delivered to the son. In fact, by coincidence, it was signed by the authorized officers of the Federal Land Bank on December 18, 1941. In February or March, 1942, Dan Kolb and his wife moved to the Dolliver farm. Although Dan was thirty-four years old at the time and had been married for three years, he had never lived anywhere but on the father's farm. Both Dan and his wife had worked for the father. They received no wages, but had their board and room. They also farmed a small tract of land in the neighborhood. On March 11, 1942, the executed contract for deed was forwarded by the Federal Land Bank to Dan Kolb.

Dan Kolb farmed the land in 1942. The crop was small due to hail damage. The father helped with harvesting and threshing and the entire crop was taken and sold by Dan. On November 25, 1942, Dan paid the 1941 taxes upon one quarter section. On December 9, 1942, he made a payment of $194.79 upon the contract with the Federal Land Bank. On December 14, 1942, he paid the insurance premium upon a policy insuring the farm buildings against loss by fire or windstorm.

Dan also farmed the land in 1943. Again the father helped with the harvesting and threshing and again Dan took the crop. On November 22, 1943, he paid the 1942 taxes upon the entire tract and the balance due upon the 1941 taxes. On December 14, 1943, he paid another year's premium upon his fire and windstorm insurance.

In the meantime, however, the father presented Dan's assignment of his contract for deed and the contract itself to the agents of the Federal Land Bank, together with his check for the entire balance due on the contract. These were forwarded to the land Bank together with the letter of the agent dated November 22, 1943, requesting that a deed to the property be issued to the father, Karl Kolb. The deed was executed upon December 2, 1943, and recorded upon December 7, 1943.

In January 1944, the father consulted a lawyer for the purpose of taking legal steps, if necessary, to collect rent from his son, Dan. An action was commenced for that purpose but before it was tried Dan brought this action praying that his contract assignment to his father be declared to be executed as security for the repayment of money his father had loaned him to make the original payments upon such contract. The father stood upon his record title but the trial court found in favor of Dan and judgment was entered granting the relief prayed for. Defendant appealed from the judgment and the case is here for a trial de novo.

As to the facts related so far in this opinion there is no dispute, but here the agreement ends. Dan testified that his father told him at the 'talk' in the fall of 1941 with respect to the Dolliver farm, 'he would borrow me the money to buy it with' and 'I said all right I will give you that money back next fall.' The father testified: 'I told my wife we buy this place and my wife said, buy it in Dan's name and I pay the payments and give him one-fourth share, and he said yes, I do this so you get the place.' To explain the fact that the purchase was made in Dan's name, he said, 'Well you know I had a quarter with the Federal Land Bank, and he says I can't buy this in my name, so I bought it in his name.' Just who the 'he' referred to in this testimony is, is not stated in the record. Presumably it was some unnamed agent of the Federal Land Bank. There is other testimony in the record to the effect that at that time the father was in default upon an indebtedness to the Federal Land Bank and under the bank's rules he was ineligible to purchase land upon contract.

The father testified that shortly after the original agreement with Dan, he heard that Dan had made a statement that he was 'going to fix the old man.' The evidence concerning this statement is rather involved. Dan's sister, Martha, testified that her brother, Ed, told her that Dan had made the statement and suggested that she tell her mother. She then told the mother and the mother told the father. Dan denied that he had made the statement and Ed denied that Dan had ever made such a statement to him or that he had ever told his sister that Dan had done so. No one testified as to what the expression 'fix the old man' imported. It strikes us as unusual that Ed who was living at home at the time would choose such a circuitous route to convey a message to his father. On whichever side the truth lies, however, it is clear that at some indefinite time after the original agreement, the father and especially the mother urged Dan to make the assignment of the contract. Concerning this report and its effect the father testified:

'Q. Did you talk with Dan about that? A. Yes.

'Q. You told him you heard that? A. Yes.

'Q. What did that have to do with you paying the $400.00 after that? A. I said I will never give you more money. * * *

'Q. At that time this talk was being had there about Dan's fixing the old man, and you said you wouldn't furnish any more money until he made an assignment? A. Yes.'

Dan testified as follows:

'Q. When did you have your talk about giving an assignment in the first place? A. He always wanted me to sign some papers for security, so he made some papers and I don't know that they made out.'

On cross-examination he testified:

'Q. Dan, I will ask you, if before this payment was made and after you had received this blue paper (a copy of his offer to purchase) that I have here marked Defendant's Exhibit A., if you didn't tell your brother Ed that now that you had this contract you were going to fix the old man? A. No.

'Q. And further that after they had demanded of you that you make this assignment--didn't your mother talk to you about that? A. Mother said I was supposed to make security when something happened. That is all.'

The father also testified that before he paid the four hundred dollars, a Mr. Wilson, an agent for the bank, had urged Dan to mortgage his property to make the payment. This testimony continues:

'The Court: You say that in the bank, Wilson tried to get a mortgage and he wouldn't do it? A. He wouldn't do it.

'The Court: Then he asked you for the money? A. And I said I wouldn't do it but----

'The Court: Just answer me. Then he asked if you would give the money. A. Yes.

'Q. Well now Karl, was that the first time you had arrived at an understanding with Dan--was that the first time you expected to advance the money? A. What do you mean?

'The court: Did you expect Dan to pay that money and mortgage his stock. A. Sure.

'The Court: You expected him to do that? A. Yes.

'The Court: That was the $400.00? A. Yes.'

In the main Dan's version of the transaction is corroborated by his wife, while the father's statements are supported by his wife and his daughter Martha. There are many contradictions and inconsistencies in Dan's testimony and in that of his father, mother and sister. The extent to which such inconsistencies should weigh against the credibility of the witnesses is difficult to determine. Their language at the home is German. Dan, his father and sister speak English but their familiarity with the language is limited. The mother speaks only German and testified through an interpreter. Dan can read a little but cannot write except...