Koon v. Tramel

• Decision Date: 08 March 1887
• Citation: 32 N.W. 243,71 Iowa 132
• Parties: KOON v. TRAMEL ET AL
• Court: Iowa Supreme Court

32 N.W. 243

71 Iowa 132

KOON v. TRAMEL ET AL

Supreme Court of Iowa, Des Moines

March 8, 1887

Appeal from Jasper District Court.

THIS is an action in equity, and involves the question as to the priority of two mortgages upon certain real estate, the plaintiff being the owner of one mortgage, and the defendant the First National Bank of Newton, being the owner of the other. The court below held the plaintiff's mortgage to be the first lien on the land, and the defendants appeal.

REVERSED.

Winslow & Varnum, for appellants.

S. C Cook, for appellee.

OPINION

ROTHROCK, J.

I.

At some time previous to April 1, 1884, the plaintiff was the owner of an eighty acre farm, and the defendant Tramel was the owner of a farm of fifty acres, and they agreed to exchange farms. It does not appear that the agreement was reduced to writing; and the terms of the trade or exchange are not very clearly shown by the evidence. The fifty acre farm was incumbered by a mortgage to one Smith, which mortgage Tramel was to discharge and pay. The eighty acre farm was mortgaged to the school fund for $ 150, and Tramel was also to pay this mortgage. The evidence is very indefinite as to whether this was all that was to be paid by Tramel as the difference between the agreed value of the farms. The plaintiff testified on the trial that Tramel was to pay him $ 350 in cash by May 1, 1884. This testimony is not contradicted by any witness, unless it be in what we regard as loose and random statements by some of the witnesses, that the difference between the two farms was the two mortgages which were to be paid by Tramel, and amounting to $ 500. Both parties were to retain possession of their respective farms during the farming season of 1884. Counsel for appellants make a claim in argument that Koon leased the fifty acre farm of Tramel for that year, and that Tramel failed to plow and grub part of the land, and that the damages for this failure to perform the contract of lease forms part of the consideration for plaintiff's mortgage. This claim, however, is not supported by any evidence.

On the first day of April, 1884, Koon, the plaintiff, conveyed the eighty acre farm to Tramel by a deed, with covenants of general warranty, excepting the school fund mortgage for $ 150; and on the same day Tramel conveyed the fifty acre farm to Koon. There was a mistake made in the last named deed, and a corrected deed was made on the second day of May, 1884. The deed from the plaintiff to Tramel was filed for record on the eleventh day of April, 1884. Some time before this, Tramel had borrowed $ 1,000 from the defendant bank, for which he gave his note, with personal security. He forged the names of the sureties to the note. Both parties to this controversy claim that Tramel was insolvent, and the record shows that he was largely in debt, and, besides being a felon, he was utterly worthless. When the bank ascertained that the names of the sureties to the note were forged, its officers set themselves about securing the debt. They discovered that the eighty acre farm had been conveyed to Tramel, and they went to his house, some fifteen miles from Newton, and took a mortgage on the land to secure the bank debt. This mortgage was taken on the morning of May 2, 1884, and filed for record at 10 o'clock and 10 minutes A. M. of that day. Afterwards, and on the same day, the plaintiff took a mortgage on the same land to secure $ 650. This mortgage was filed for record at 4 o'clock and 47 minutes P. M. of the same day.

It will be observed that, so far as the execution and recording of the mortgage is material to the rights of the parties, the bank mortgage is superior in point of time. The plaintiff claims, however, that his mortgage is the superior lien, because it was given to secure part of the purchase money for the land, and that he was at the time both mortgages were executed, and is now, in possession of the mortgaged premises. The defendant bank filed an answer and cross-bill, in which it was claimed that its mortgage was superior, and that plaintiff had notice of defendant's mortgage before plaintiff's mortgage was executed. The plaintiff replied by reiterating the superiority of his mortgage, and by averring specially that his mortgage was made for part of the purchase money, in pursuance of an agreement with Tramel that he would make such a mortgage.

The first question presented by counsel for appellant is one of pleading. It is urged that all of the evidence introduced by plaintiff, tending to show the priority of his mortgage, was inadmissible, because the issues between the parties did not entitle the plaintiff to introduce the evidence. The evidence objected to tended to prove that the plaintiff was in possession of the land; that it was agreed between him and Tramel that the latter was to mortgage the land to the plaintiff to secure his unpaid obligations in the way of purchase money, and that the bank, by its president, had actual notice that the plaintiff was to have a mortgage from Tramel. As to all these questions, excepting that of actual notice to the president of the bank, the evidence was clearly admissible under the pleadings; and all this evidence was objected to when it was offered. It will be seen by the above statement of the pleadings that the possession, the agreement of Tramel to make a mortgage, and that the mortgage was for purchase money, were all specially pleaded. The fact that the president of the bank had actual notice of plaintiff's claim when the...