Lee v. Marion Savings Bank

• Decision Date: 05 April 1899
• Citation: 78 N.W. 692,108 Iowa 716
• Parties: SARAH E. LEE, Administratrix of the Estate of Thomas Lee, Deceased, v. MARION SAVINGS BANK and JAY J. SMYTH, Appellants
• Court: Iowa Supreme Court

78 N.W. 692

108 Iowa 716

SARAH E. LEE, Administratrix of the Estate of Thomas Lee, Deceased, v. MARION SAVINGS BANK and JAY J. SMYTH, Appellants

Supreme Court of Iowa, Des Moines

April 5, 1899

Appeal from Linn District Court.--HON. G. W. BURNHAM, Judge.

ACTION in equity to cancel a certain mortgage on real estate, and the promissory note secured thereby, executed by deceased to the defendant bank, and for an accounting by the defendants for all money received by them on behalf of the deceased, and for judgment for the amount found due. Issues were joined, as will hereafter appear, and, on a hearing had, decree was rendered in favor of the plaintiff as prayed, and judgment against "the defendants" for one thousand two hundred dollars, with interest at six per cent. per annum on one thousand dollars from June 1, 1893, and on two hundred dollars from July 1, 1893, and for costs. The defendants separately appeal. Reversed as to Defendant Smyth.

MODIFIED AND AFFIRMED.

Jamison & Smyth for appellants.

M. P Smith & Son and D. E. Voris for appellee.

OPINION

GIVEN, J.

I.

Thomas Lee, an unmarried man, resided for a number of years with his mother, Sarah F. Lee, in Marion, Iowa, prior to his death which occurred on February 27, 1893. For some ten years prior to his death, Thomas Lee was extensively engaged in buying dressing, and shipping poultry to the New York and Chicago markets, and continued in that business up to the time of his death. Mr. Lee's means were limited; he having no property other than the house and lot covered by the mortgage in question, where he and his mother resided, and the buildings and sheds on leased grounds, in which he carried on his business, together with the portable coops and other appliances used in handling poultry. It does not appear that deceased had any considerable sum of money, except that embraced in his account with the First National Bank, and that involved in this controversy. His business for the two years preceding his death was quite extensive, and was largely, if not entirely, carried on with borrowed money. During these years the defendant bank and the First National Bank, though separate corporations, were doing business in the same place in Marion; the officers of the First National Bank being stockholders and officers of the defendant bank, and the defendant Smyth being president of both banks for most of the time under consideration. Thomas Lee transacted his banking business through the First National Bank, checking on that bank to pay for poultry purchased, and expenses of the business, and drawing drafts in its favor against shipments made. From the latter part of the winter of 1891 the bills of lading were either assigned to Jay J. Smyth, or the shipments made in his name, for the use of the First National Bank, and the proceeds credited to Thomas Lee on his account. On the third day of May, 1892, Thomas Lee executed to the defendant bank his mortgage on said house and lot to secure his promissory note of that date to the defendant bank for two thousand dollars, payable six months after date, with interest at seven per cent. per annum. On the same day he executed a chattel mortgage to the defendant bank, to secure payment of the same note, on said buildings, sheds, poultry boxes, and shipping coops on said leased premises. No money was paid to Mr. Lee, but the amount (two thousand dollars) was placed to his credit by the First National Bank. On the same day Mr. Lee drew his check on the First National Bank for two thousand dollars, and received therefor a certificate of deposit for that amount, payable to William G. Thompson "on return of this certificate properly indorsed. * * * This deposit not subject to check." This certificate was delivered to William G. Thompson, but whether Jay J. Smyth was present, or had knowledge of the fact, is in dispute; also, the purpose for which it was delivered. Mr. Thompson retained the certificate until January 16, 1893, when, at the instance of Mr. Lee, and in his presence, he delivered it, indorsed, to Jay J. Smyth. On that day Thomas Lee executed another promissory note to the defendant bank for three thousand five hundred dollars, due ten days after date, with eight per cent. interest; and this certificate of deposit was attached thereto, to be held as collateral security. Soon after the death of her son, the plaintiff, Sarah F. Lee, was appointed to administer upon his estate, on her own application, wherein she made oath "that the deceased left personal property, as she is informed, amounting only in value to the sum of less than two hundred dollars." On the fourth day of March, 1893, she filed an inventory showing the personal property to consist of the slaughtering house and fixtures, "subject to a mortgage of $ 2,000 given to one Jay J. Smyth, of Marion, Iowa." Claims aggregating about seven thousand dollars, including one for six thousand dollars to plaintiff, Sarah F. Lee, for money borrowed in July, 1890, were presented and allowed. On the thirtieth day of June, 1893, plaintiff filed her petition in probate, asking an order to sell the chattel property covered by said mortgage, to apply on the note secured thereby. An order was made, and after an appraisement the property was sold to one Wheeler for one thousand two hundred dollars, one thousand dollars of which was paid to the defendant bank June 30th, and the remaining two hundred dollars July 1, 1893, and credited on said two thousand dollars note. There is a controversy as to whether this application for appointment, inventory, and petition was framed at the dictation of Mr. Smyth.

II. We first consider the case as presented on the appeal of defendant Jay J. Smyth. The only claim made against him in the petition was in the eleventh paragraph thereof, and as to this the plaintiff dismissed. Therefore there was no action pending against Mr. Smyth. But through inadvertence the judgment was rendered against "the defendants," instead of the defendant bank. The judgment as to the defendant Smyth is reversed, and judgment will be entered dismissing as to him.

III. The contention being solely between the plaintiff and the defendant, the Marion Savings Bank, we are not called upon to make an accounting with Jay J. Smyth or the First National Bank, and therefore much of the evidence taken...