Nissen v. Sabin

• Decision Date: 08 February 1927
• Docket Number: 37507
• Citation: 212 N.W. 125,202 Iowa 1362
• Parties: FRANK C. NISSEN, Appellant, v. E. M. SABIN et al., Appellees
• Court: Iowa Supreme Court

212 N.W. 125

202 Iowa 1362

FRANK C. NISSEN, Appellant, v. E. M. SABIN et al., Appellees

No. 37507

Supreme Court of Iowa, Des Moines

February 8, 1927

Appeal from Linn District Court.--ATHERTON B. CLARK, Judge.

In an action to foreclose a real estate mortgage, plaintiff asked judgment against the mortgagor's grantee on an assumption clause in the deed to him. The decree denied such relief, and the plaintiff appeals.

Affirmed.

Barnes Chamberlain, Hanzlik & Thompson, for appellant.

Johnson Donnelly & Lynch, for appellee.

VERMILION J. EVANS, C. J., and STEVENS and FAVILLE, JJ., concur.

OPINION

VERMILION, J.

The defendants E. M. and Jennie E. Sabin executed the mortgage in question to the appellant, to secure their notes in the sum of $ 13,000. Thereafter, E. M. Sabin entered into a written contract with E. W. Dennstedt for the sale of the mortgaged premises to the latter, who, in the contract, assumed payment of the mortgage. The conveyance of the land in pursuance of this contract was made by the Sabins to the appellee A. L. Dennstedt by warranty deed, in which the grantee assumed and agreed to pay the mortgage. The appellee subsequently conveyed the land to the defendant Curley by a deed in which the grantee also assumed payment of the mortgage. Judgment for the amount due under the mortgage was asked against the mortgagors and against the appellee and Curley on the assumption clauses in the respective conveyances to them. The relief prayed was denied as against the appellee, and it is from this judgment that the plaintiff appeals.

The appellee claimed, and, subject to objection, introduced parol evidence to show, that the Dennstedt Land Company, a corporation, was the real purchaser of the land from Sabin; that the contract therefor was made in the name of E. W. Dennstedt, and the deed taken in the name of appellee as a mere matter of convenience; that the latter had no interest in the land and received no consideration for the agreement in the deed to assume and pay the mortgage; that the corporation contracted to sell the land to Curley, and he executed a conveyance thereof in pursuance of such contract; and that he received no part of the consideration therefor. There is no contradiction of this testimony. The only question upon which the testimony is in conflict is as to whether Sabin had knowledge that the corporation was the real purchaser of the land. The controversy is over the competency of the evidence and its sufficiency to relieve appellee from liability on the assumption clause in the deed to him. It should be observed that the Sabins, the grantors in the conveyance to appellee, make no claim under the assumption clause therein. The only party seeking to enforce any liability as against the appellee is the mortgagee, who was not a party to the agreement.

It is a well settled doctrine, frequently applied to such contracts as the one in question, that the rule that the terms of a written contract cannot be altered or contradicted by parol evidence cannot be invoked either by or against a stranger to the contract; that it has "no application in controversies between a party to the instrument on the one hand and a stranger to it on the other; for the stranger, not having assented to the contract, is not bound by it, and is therefore at liberty, when his rights are concerned, to show that the written instrument does not express the full or true character of the transaction. And where the stranger to the instrument is thus free to vary or contradict it by parol evidence, his adversary, although a party to it, must be equally free to do so." Aultman E. & T. Co. v. Greenlee, 134 Iowa 368, 111 N.W. 1007. See, also, DeGoey v. Van Wyk, 97 Iowa 491; Logan v. Miller, 106 Iowa 511, 76 N.W. 1005; Clark v. Shannon & Mott Co., 117 Iowa 645, 91 N.W. 923; Livingston v. Stevens, 122 Iowa 62, 94 N.W. 925; Peters v. Goodrich, 192 Iowa 790, 185 N.W. 903; Shult v. Doyle, 200 Iowa 1, 201 N.W. 787. In In re Assessment of Shields Bros., 134 Iowa 559, 111 N.W. 963, we said:

"As against a stranger to the contract, a party thereto may assert that the agreement was other or different--in any respect and to any extent--than that which the writing imports."

In Shult v. Doyle, supra, we said, speaking of the relation of the mortgagee to a contract whereby the purchaser of the land from the mortgagor assumed and agreed to pay the mortgage:

"As to the plaintiff herein, his rights are subordinate to the real agreement entered into, as between the defendants. His rights are purely legal. They do not arise out of any equity. They spring alone from the express agreement of the parties, made in his behalf as a third person. Peters v. Goodrich, 192 Iowa 790, 185 N.W. 903. The cause of action thus created in his favor is a bit of legal grace; it cost him nothing; it simply fell upon him, without effort or knowledge on his part. He is entitled to it, such as it is. He has no ground of appeal to equity, either to expand it or to prevent its shrinkage."

Appellant relies upon Beeson v. Green, 103 Iowa 406, 72 N.W 555. Language is to be found in that case that seems to support appellant's contention that, in such a situation, the rule excluding parol evidence to vary or contradict a written contract is applicable. No consideration appears to have been given in that case to the fact that the question arose between the assignee of the mortgagee, a...