Steinke v. Yetzer

• Decision Date: 22 May 1899
• Parties: STEINKE ET AL. v. YETZER ET AL.
• Court: Iowa Supreme Court

108 Iowa 512

79 N.W. 286

STEINKE ET AL.

v.YETZER ET AL.

Supreme Court of Iowa.

May 22, 1899.

Appeal from district court, Cass county; N. W. Macy, Judge.

This case as we have it, is a consolidation of a number of actions, which were separately brought, but united, and tried together in the district court. We shall state the facts as briefly as possible, out of which the controversy arose, so that the issues presented may be fully understood. The Cass County Bank was an incorporation engaged, as its name would indicate, in the banking business. J. C. Yetzer was its president, Isaac Dickerson vice president, and A. W. Dickerson, cashier. On August 7, 1893, the bank was insolvent, though its condition was not known outside of its officers and directors. The financial panic then prevailing aroused fears on the part of depositors, and, to restore confidence, and prevent a speedy collapse of the institution, Yetzer on that day, his wife joining, made a deed to the bank of some 1,500 acres of land and 3 town lots in Atlantic. This deed recited that it was made “for the purpose of securing all the depositors of the grantee, the Cass County Bank, and to be used for the purpose of paying all debts of the said Cass County Bank.” Through Yetzer the public was informed of this conveyance. On November 17, 1893, the Cass County Bank, needing money to pay its debts and conduct its business, quitclaimed in three several instruments this real estate to Yetzer, who mortgaged part of it to the Security Loan & Trust Company to secure a loan of $10,000, a part to E. Huchendorf to secure a loan of $6,000, and still another portion to Mrs. A. B. Crombie for $2,000. Two of these deeds were executed in the name of the bank by J. C. Yetzer, president, and A. W. Dickerson, cashier, and the other, covering the land mortgaged to Huchendorf, by the vice president and cashier. All of this money was received and used by the Cass County Bank. Thereafter Yetzer and wife deeded the land back to the bank, subject to these mortgages. In December, 1893, the bank failed, and was placed in the hands of a receiver. Some time later the Cass County Bank was removed as trustee under the Yetzer deed by proper order of court, and the plaintiff Steinke appointed in its stead. The plaintiffs were depositors in the bank at the time of its failure, and they bring this action, asking that the real estate so conveyed by Yetzer be sold, and the proceeds applied ratably in payment of their debts. The Security Loan & Trust Company, E. Huchendorf, and F. H. Crombie, executor of the estate of A. C. Crombie, deceased, set up their respective mortgages as first liens on the property included therein, and by cross bills seek to foreclose the same. W. H. and W. J. Applegate were also made defendants in the action by Steinke, and by answer and cross bill they set up the fact that they are each judgment creditors of Yetzer; the judgment in favor of W. H. Applegate being rendered in November, 1894, and that in favor of W. J. Applegate in May, 1897. They claim a prior right in said real estate, to the extent of their liens, as against all parties. Some further facts will be stated in the course of the opinion. The district court established the mortgages, respectively, as first liens on the real estate in each described, and, subject thereto, confirmed the title of Steinke as trustee in all the land, and authorized him to sell the same for the benefit of depositors and creditors of the bank. Plaintiffs and W. H. and W. J. Applegate appeal. Affirmed.J. B. Rockafellow and Willard & Willard, for Steinke and others.

Curtis, Follett & Curtis, for W. H. and W. J. Applegate.

Phelps & Temple and Carroll Wright, for Security Loan & Trust Co.

John W. Scott, for F. H. Crombie and E. Huchendorf.

WATERMAN, J.

The main controversy pertains to the meaning to be given the trust clause in the deed from Yetzer and wife to the bank. It is insisted on the part of plaintiffs that no power of sale was given the bank, and that, even if such could be implied, it would not include the power to mortgage. The expressed object of the conveyance was “for the purpose of securing all of the depositors of the Cass County Bank, and to be wholly and fully used for the purpose of paying all the debts of the said Cass County Bank.” When all of the circumstances are considered, the relation and situation of the parties, and that Yetzer made known to the public the fact of this conveyance, it seems impossible to resist the conclusion that he intended to vest in the trustee the power to execute the trust. No particular form of words is necessary to create a power to sell. Such power exists whenever it is apparent that it is necessary to carry out the purpose of the grantor. Perry, Trusts, § 766; Beach, Trusts, § 467. And we may say that a power to mortgage is sometimes implied in a power to sell. Waterman v. Baldwin, 68 Iowa, 255, 26 N. W. 435;Pike v. Same, 68 Iowa, 263, 26 N. W. 441;Loebenthal v. Raleigh, 36 N. J. Eq. 169. But, in our opinion, the right expressly given in this case “to wholly and fully use” this property for the purpose mentioned is an expressed gift of the power to sell or mortgage, as the trustee might see fit. The trust here was coupled with an interest. Yetzer was a large debtor to the bank. The bank needed all of its resources at its immediate command to enable it to continue business. These considerations must be borne in mind when we attempt to construe what the grantors understood and intended the bank should do in the way of using this property. To say that it could only hold it subject to the claims of creditors is to deprive the word “use” of all significance whatever. See Waterman v. Baldwin, supra, in which the power included in the right “to dispose” of property is considered. It is said that the use made was but partial, and that, in any event, the bank must, if it used the property at all, do so “wholly and fully.” This is making these words a term of limitation. They should, in our opinion, be given just the opposite meaning. They are intended to take away...