Lingenfelter Bros. v. Bowman

• Decision Date: 16 October 1912
• Citation: 137 N.W. 946,156 Iowa 649
• Parties: LINGENFELTER BROS. ET AL. v. BOWMAN ET AL. BOWMAN ET AL. v. LINGENFELTER BROS. ET AL.
• Court: Iowa Supreme Court

156 Iowa 649

137 N.W. 946

LINGENFELTER BROS. ET AL.

v.BOWMAN ET AL.

BOWMAN ET AL.

v.LINGENFELTER BROS. ET AL.

Supreme Court of Iowa.

Oct. 16, 1912.

Appeal from District Court, Clarke County; Thomas L. Maxwell, Judge.

The facts are stated in the opinion. Affirmed.H. R. Vasey, of Collins, and Blake & Blake, of Des Moines, for appellants.

O. M. Slaymaker, of Osceola, and V. R. McGinnis, of Leon, for appellees.

SHERWIN, J.

George W. Bowman and Sarah A. Bowman are husband and wife, who were living at the time of the transactions involved herein in Clarke county. George W. Bowman became interested in a stock of goods in Indianola, upon which he gave a chattel mortgage for $5,700 to one Cottingham. He afterwards traded this stock of goods to Lingenfelter Bros., of Collins, Iowa, for a business property located there, which will be hereinafter designated as the “Collins property.” It was the agreement that the stock of merchandise should be delivered to Lingenfelter Bros. free of incumbrance, and, to effect such agreement, the Lingenfelter Bros. borrowed $5,700 of the Capital City State Bank of Des Moines, giving their note therefor, and the money so borrowed was used to pay off the Cottingham claim against the stock of goods. George W. Bowman then gave Lingenfelter Bros. his notes and a mortgage on the Collins property that he had received for the stock of merchandise for $6,400; this amount including the $5,700 paid by Lingenfelter Bros. to Cottingham, and, in addition thereto, $700 on account of sales that had been made from the stock while Bowman was in possession therof. Sarah A. Bowman signed those notes as surety for her husband at the request of the Lingenfelters. Some time after these notes were given and before their maturity, Bowman was informed that they were held by the Capital City State Bank of Des Moines, and in January, 1906, one of the Lingenfelters called on the Bowmans at their home in Osceola, and represented to them that the bank wanted more security for the notes, and asked that the Bowmans give a mortgage on their homestead as such additional security. The Bowmans finally executed and delivered to Lingenfelter such a mortgage, upon the representations and under the conditions which we shall hereinafter more fully notice. After this Bowman conveyed the Collins property to one Fowler, who took it subject to the mortgage thereon to the Lingenfelters, and still later the Bowmans, fearing that they would lose their homestead, began an action in equity in Clarke county for the cancellation of the mortgage thereon. This suit was dismissed without a trial and upon a stipulation, which will receive further attention as we proceed. Thereafter the Lingenfelter Bros. and the Capital City State Bank, as plaintiffs, foreclosed the mortgage on the Collins property, taking a judgment on the notes for the amount due thereon. In due time this property was sold under the foreclosure, and was bid in by the Lingenfelter Bros. for $4,000. No redemption from said sale was made by Fowler, and Lingenfelter Bros. acquired title thereto by sheriff's deed, and now have the property. After this foreclosure and sale thereunder, the Lingenfelters began an action in Clarke county for the foreclosure of the mortgage on the Bowman homestead. This action was defended on the ground that the mortgage thereon was procured by fraud, and at about the same time the Bowmans brought an action in equity for the cancellation of the stipulation of settlement in the case of the Bowmans against the Lingenfelters and the Capital City State Bank, to which we have heretofore referred, on the ground that it was procured by fraud and misrepresentation. These two later cases were consolidated and tried as one, and there was a decree adjudging that the mortgage on the homestead of the Bowmans was procured by fraud and canceling the same, and further adjudging that the stipulation of settlement in the case of the Bowmans against the Lingenfelters and the Capital City State Bank be canceled. The Lingenfelters appeal. The Capital City State Bank had been eliminated from the litigation by voluntary dismissal before judgment. Sarah A. Bowman was not a party to any of the transactions culminating in the execution of the notes to the Lingenfelter Bros., and she was a surety only on said notes.

[1] When she executed the mortgage on the homestead in Osceola, she simply pledged her interest therein as additional security to the bank for the notes that her husband had given to Lingenfelter Bros. and which they had deposited with the bank as collateral security for their loan. Mrs. Bowman was therefore a surety merely, and she is entitled to the protection of a surety, because she derived no advantage from any of the transactions.

[2] Where a creditor is about to accept security from a surety, it is his legal duty to “inform the...