Randall v. Mullen
| Decision Date | 11 February 1969 |
| Docket Number | No. 53110,53110 |
| Citation | 164 N.W.2d 589 |
| Parties | John D. RANDALL and Katharine R. Randall, Appellants, v. Andrew J. MULLEN, Ruby Mullen, Associates Finance, Inc., and Manly State Bank, Appellees. |
| Court | Iowa Supreme Court |
Westfall, Laird, Burington, Bovard & Heiny, Mason City, and John R. Hughes, Cedar Rapids, for appellants.
Walter C. Schroeder, Mason City, for appellee, Associates Finance, Inc.
Ray E. Clough, Mason City, for appellee, Manly State Bank.
Andrew J. Mullen and Ruby P. Mullen, appellees, pro se.
When a busy lawyer enters a joint venture with and starts signing financial guarantees for an insolvent tenant he risks a tumble into a pitfull against which he would zealously guard a client. That is apparently what happened in the case before us. Plaintiff is caught in the middle of a borrowing transaction with no profit to himself and made more painful by high loan company interest rates. Unfortunately there is nothing we can do to extricate plaintiff from that predicament.
The case was tried to the court with many and varied issues. Only two remain on appeal. The trial court made detailed determination of each issue. Much of the record relates to issues not now before us.
Appellants state that this case was tried at law and our review is not de novo. This is not to appellants' advantage but we accept the statement. The trial court's findings of fact are binding on us if supported by substantial evidence. Rule 344(f), par. 1, Rules of Civil Procedure.
John D. Randall and Katharine R. Randall, his mother, are plaintiffs. The farm involved belonged to the mother. As Mr. Randall handled the transactions he will be referred to as plaintiff.
Defendants Andrew J. Mullen and Ruby Mullen were formerly tenants on plaintiff's farm.
Defendant Associates Finance, Inc. is a finance company and lienholder. Manly State Bank, a mortgagee, named as a defendant and originally a cross-appellant, is not involved in this appeal.
Plaintiff and defendants Andrew J. Mullen and Ruby Mullen were parties to a joint venture for the operation of a dairy farm. The joint venture continued from March 1, 1962 until the fall of 1964. By written instrument dated September 2, 1964, acknowledged by the Mullens on September 3, and by Mr. Randall on September 8, they executed a detailed 'Termination and Settlement Agreement'. Among other matters the agreement provided for a deposit by plaintiff of $500 in an escrow account to be surrendered to the Mullens upon their vacating the leased premises and delivering possession in good condition. The issue on appeal as to the Mullens is whether the leased premises were vacated in good condition, the right of plaintiff to damages, and the right of the Mullens to the $500 placed in escrow. This is the first issue before us.
In the beginning the Mullens were not free from debt. Mr. Randall arranged refinancing and guaranteed payment of substantial amounts. The joint venture operation purchased a mixer mill and silo unloader financed by assignment of the security instruments through Associates Finance. Mr. Mullen was the only person who ever signed the security instruments. Installment payments were made by the joint venture by checks signed by Mr. Randall. Associates Finance was never advised of a limitation on Mr. Mullen. The lease between plaintiff and the Mullens was not of record.
Mr. Randall also guaranteed payment of notes secured by chattel mortgage of the Mullens at Merchants National Bank. The Mullens also had obligations secured by mortgage at Manly State Bank.
On August 27, 1964 Associates Finance, at that time holder of the note with an unpaid balance and mortgage on the mixer mill and silo unloader and other property of Mullens, loaned Mullen more money. This was evidenced by a new note for the total indebtedness plus interest added on and secured by mortgage on his and the joint venture's chattel property. This mortgage was filed for record August 28, 1964. The manager of Associates testified that the loan was for feed for the cattle. Mr. Mullen testified that he told Associates it was for labor and medical expenses. Mr. Mullen used the money for his own purposes. None went into the joint venture.
The Termination and Settlement Agreement mentioned, supra, dated September 2, 1964 and acknowledged by Mr. Randall on September 8, 1964 conveyed all this personal property to plaintiffs herein and provided that the plaintiffs 'jointly and severally hereby assume and agree to pay all indebtedness, whether upon open accounts or evidenced by Promissory Notes and Mortgages which constitute a mortgage, lien or encumbrance upon or against the personal property hereby conveyed by First Parties, or either of them, to Second Parties, or either of them, or arising out of the farming operations pursuant to said Lease in such manner that such indebtedness would constitute an obligation of the joint venture pursuant to said Lease Agreement.' This quotation is from paragraph 3 of the agreement.
The trial court found Associates Finance entitled to judgment against plaintiffs in the sum of $2,165.86 and determined that the company has a valid lien against the personal property of the plaintiffs for said amount.
This is the second issue before us.
I. We first consider the appeal as to the Mullens. The only question is the existence of substantial evidence to support the trial court's findings. There was evidence nowhere contradicted that Mr. Mullen examined the Randall farm before signing a lease in 1961 for the period beginning March 1, 1962.
The lease provides in paragraph 8:
The Mullens operated the farm from March 1, 1962 until they left in September 1964. The evidence is uncontradicted that when Mullens left there was an accumulation of about 1500 loads of manure around the buildings and lots. This was hauled out by the next tenant and hired labor. Considerable expense was incurred. There was also evidence that the unsanitary conditions contributed to the spread of mastitis in the dairy herd. The herd was culled and a number of cows sold as 'canners'. The house was so littered that it took a man and two boys a day to clean it out and haul the junk to the dump.
As noted, supra, plaintiff had deposited $500 in escrow to be surrendered to the Mullens upon 'delivering possession in good condition.'
Plaintiff asked for damages because of the condition of the farm. Both plaintiff and defendants Andrew J. Mullen and Ruby Mullen claimed the $500 held in escrow. The trial court denied plaintiff's claims.
A finding or conclusion that the farm when possession was delivered was in good condition is wholly without support.
It is well established that the trier of the facts is not bound to accept testimony as true merely because it is not contradicted. Jordan v. Sinclair Refining Co., 257 Iowa 813, 822, 135 N.W.2d 120.
In 88 C.J.S. Trial section 210, page 466, this appears:
In Arnd v. Aylesworth, 145 Iowa 185, 191, 123 N.W. 1000, 1003, 29 L.R.A.N.S., 638, it is said:
In quoting from Anthony v. Mercantile Mut. Acc. Association, 162 Mass....
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Langford v. Kellar Excavating & Grading, Inc., 54767
...251 Iowa 198, 202, 100 N.W.2d 20, 23 (1959); Bodish v. Fischer, Inc., 257 Iowa 516, 524, 133 N.W.2d 867, 871 (1965) and Randall v. Mullen, 164 N.W.2d 589, 591 (Iowa 1969). Applying these rules to the case before us, we conclude the deputy industrial commissioner did in fact accept the testi......
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