Price v. Rea

• Decision Date: 09 October 1894
• Parties: THOMPSON PRICE v. E. A. REA, Appellant
• Court: Iowa Supreme Court

60 N.W. 208

92 Iowa 12

THOMPSON PRICE v. E. A. REA, Appellant

Supreme Court of Iowa, Des Moines

October 9, 1894

Appeal from Decatur District Court.--HON. H. M. TOWNER, Judge.

THIS is a suit in equity by which the plaintiff demands the cancellation of certain promissory notes and mortgages executed by the plaintiff to the defendant. There was a hearing on the merits, and a decree for the plaintiff. Defendant appeals.--Affirmed.

Decree AFFIRMED.

Harvey & Parrish for appellant.

M. F Stookey and N. P. Bullock for appellee.

OPINION

ROTHROCK, J.

It appears from the records in the case that J. I. Walker was the owner of five hundred and thirty acres of improved land in Decatur county. Walker was largely in debt, and his property was incumbered by mortgage and judgment liens. The plaintiff was a surety for Walker on certain notes which had been put in judgment as against Walker. The defendant purchased all of said real estate, and took a conveyance thereof from Walker. The controversy between the plaintiff and the defendant is whether the defendant should be required to pay off the liens on the land as part of the purchase money agreed to be paid. It appears that the defendant did pay off the judgment debts for which plaintiff was surety, and took an assignment thereof, and afterward induced the plaintiff to execute the notes and mortgages in suit. It is claimed by plaintiff that they were procured by fraud, and that they are without consideration, because the defendant was bound to pay the judgment debts as part of the consideration for the land. The learned judge who heard and determined the case filed an opinion upon the facts and the law. We have carefully examined all the evidence, and considered the questions of law involved, and we concur with the court below, both as to fact and law, and adopt its opinion. It is as follows:

"The plaintiff brings this action in equity for the cancellation of certain promissory notes made by the defendant to plaintiff, September 23, 1890, amounting to one thousand twenty-four dollars and twelve cents, secured by mortgages on real and personal property belonging to defendant. For ground of action, plaintiff alleges the notes were without consideration, and procured by defendant's fraud. It is clearly shown by the evidence, and not disputed in the case that one J. I. Walker was largely indebted or insolvent; that he had a large amount of real and personal property heavily incumbered with mortgages and judgments; that his creditors were the Bank of Weldon and H. J. Close, who held notes signed by Walker, and on which plaintiff was security; that these notes were reduced to judgment as to J. I. Walker, and became a lien upon his realty; that there were prior liens, mortgages, and judgments, estimated variously at from seven thousand to nine thousand dollars, against said land; that defendant had a claim against said Walker for an unpaid balance on sale of a threshing machine. Such being the situation, defendant procured from said Walker a transfer of his property; the consideration being, as plaintiff alleges the assumption of all mortgages and judgment liens, and, as defendant claims, the cancellation of part of Walker's debt to Rea. Defendant then purchased the Bank of Weldon and H. J. Close claims, taking an assignment of the notes and judgments. He then went to plaintiff, and secured the notes and mortgages which are the subject of this action, in settlement of the Bank of Weldon and H. J. Close claims, on which plaintiff was security. The plaintiff claims that defendant Rea agreed to pay Walker's debts, and that was the consideration of the transfer. I do not think the evidence sustains that contention. The weight of the testimony is certainly against the plaintiff on that issue. The plaintiff also claims that Rea and Walker entered into a conspiracy to defraud the creditors of Walker, by which part should be paid, and others not paid. I do not find evidence to sustain that issue. There is not sufficient evidence to justify the court in holding the transfer an assignment with preferences, and the prayer for an accounting is denied. Plaintiff claims that the defendant procured the notes and mortgages in issue by false and untrue statements of facts, and deliberate and intentional fraud. I do not think the evidence sustains that claim."

"The main contention of plaintiff, and that on which he must rely for relief, is the want of consideration for the notes and mortgages, for the reason that the assignment of judgments to defendant amounted to payment, and a release, as to plaintiff, from all obligations thereunder. In order to determine that question, it will be of advantage to ascertain as nearly as possible just what the facts are as to the important and determinative events: First, the transfer of land and property from Walker to Rea: The defendant alleges in his answer that, for the purpose of securing defendant, said Walker mortgaged his personal property, and deeded his land, subject to the mortgages and liens thereon, in payment of what he owed defendant. To that extent, at least, we may say there is no dispute. Second, the assignments of the judgment to defendant: As to these the defendant says, in evidence 'I paid cash for the Bank of Weldon claims, and took assignments to me. I paid that (the Close) judgment in full, and took an assignment. I did not know what my legal rights would be under the assignments.' Third, the securing notes and mortgages in suit from plaintiff: Defendant, in his answer, says he told plaintiff, if he would secure defendant, he would extend the time of payment, and take steps to prevent foreclosure against the land of said Walker. Rea says, in evidence, he told Price he had bought some notes and judgments against him, and that the land would not pay out. As to all these facts there can be no question, and under these circumstances the plaintiff executed and delivered to defendant the notes and mortgages in question, and the parties entered into a written agreement, known in evidence as 'Ex. 18,' by which the defendant agrees, in consideration of the execution and delivery of the notes and mortgages in question, if he sells the land he received from Walker for more than twelve thousand, one hundred and fifty dollars net, he will allow any surplus to apply on payment of the notes and mortgages so taken. It is the opinion of the court that under these...