Sykes v. Waring
| Decision Date | 18 June 1940 |
| Docket Number | 45271. |
| Parties | SYKES v. WARING et al. (EHLERS, Intervenor). |
| Court | Iowa Supreme Court |
Appeal from District Court, Woodbury County; Miles W. Newby, Judge.
Plaintiff commenced this proceeding to foreclose her real estate mortgage which contained a valid chattel mortgage on rents. The chattel mortgage was not indexed in the chattel mortgage index book. Intervenor claimed his rights to the rents under an assignment of a lease to the property were superior to plaintiff's chattel mortgage lien. The trial court found for plaintiff and dismissed the petition of intervention. Intervenor appealed.
Affirmed.
Whicher & Whicher, of Sioux City, and William A. Ehlers, pro se, of Omaha, Neb., for intervenor and appellant.
Underhill & Underhill, of Onawa, for appellee.
In 1935 J. P. Thompson executed and delivered to plaintiff a real estate mortgage in which the granting clause is as follows: " sell and convey * * * the following described real estate in Woodbury County, Iowa, described as follows to-wit: (real estate described) and also all the rents, issues, uses, profits and income therefrom, and all the crops at any time raised thereon from the date of this assignment until the terms of this agreement are complied with and fulfilled."
The granting clause constituted a valid chattel mortgage on the rents. Bankers Life Company v. Garlock, Iowa, 291 N.W. 536; Equitable Life Insurance Company v. Brown, 220 Iowa 585, 262 N.W. 124.
Goldie Hughes, of Onawa, Iowa, inherited the real estate from her father, J. P. Thompson. On March 1, 1939, she leased the property from March 1, 1939 to March 1, 1940 to Gilbert Wirth. In January, 1939 Mrs. Hughes, through her real estate agent, G. A. Mellinger, of Omaha, Nebraska, entered into a contract with Mark Mattison (whom plaintiff claims is a fictitious person) for the exchange of her 360 acres in Iowa for a ranch in Nebraska containing 960 acres. The contract provided that Mrs. Hughes was to pay the owner of the ranch the sum of $1,500 in addition to conveying the 360 acres. The contract was to be performed when Mary M. Crooker obtained title to the Nebraska ranch through foreclosure proceedings on her first mortgage. Robert B. Waring of Geneva, Nebraska, was, according to plaintiff's testimony, attorney for Mrs. Crooker and Mattison.
After making several unsuccessful efforts to secure the money Mrs. Hughes was obligated to pay under the contract, Mellinger obtained a loan of $1,500 from intervenor, W. A. Ehlers, in March, 1939 through the following arrangement: Mellinger had Mrs. Hughes and her husband execute a note secured by a mortgage on the Nebraska land payable to Mattison which instruments were held by Mellinger until Mrs. Crooker obtained title through the foreclosure proceedings. As additional security for the loan, Waring agreed to give intervenor one-fourth of the proceeds of a resale of the Iowa land by Mellinger. In March the exchange of the lands was completed in the office of Mr. Waring. Mrs. Hughes received deeds to the Nebraska land from the receiver in the foreclosure suit and Mrs. Crooker. Mellinger, representing Mrs. Hughes, delivered to Waring a deed to the Iowa land from Hughes to Mattison and at the same time produced a deed from Mattison to Waring which he delivered to Waring. At the same time Mellinger delivered the note and mortgage on the Nebraska land, purporting to be endorsed in blank by Mattison, to intervenor. Thereupon intervenor delivered his check for $1,500 to Mellinger who endorsed it to the receiver in the foreclosure proceedings. The check was paid. The record does not disclose why Mellinger made Mattison a party to the contract and grantee in the deed instead of Mrs. Crooker who executed and delivered her deed to the Nebraska land to Mrs. Hughes and, so far as shown by the record, received no consideration for her deed. The contract is not before us and the only knowledge we have of its contents is from fragmentary references to it in the evidence. According to intervenor's testimony, Waring, as owner of the real estate, demanded, when the deeds were exchanged, the lease from Mr. Hughes, who stated he did not have it with him.
When it became apparent that Mellinger could not resell the Iowa land and pay intervenor one-fourth of the proceeds of the sale because of the impending foreclosure of plaintiff's mortgage, intervenor demanded of Waring additional security for his loan of $1,500 to Mrs. Hughes. He and Waring then went to the home of Mrs. Hughes in Onawa in July, 1939, and Waring, as owner of the real estate, demanded and secured from her an assignment of the lease and then reassigned it to intervenor as security for the loan.
Plaintiff brought this suit to foreclose her real estate mortgage and for the appointment of a receiver. Mr. Ehlers, intervenor, alleged in his petition that Mrs. Hughes had leased the premises to Gilbert Wirth from March 1, 1939 to March 1, 1940; that Mrs. Hughes sold the land and assigned the lease to Waring; that Waring assigned and sold the lease to intervenor for a valuable consideration and asked that his rights to the land under the lease be declared superior to plaintiff's rights under her chattel mortgage.
Plaintiff in answer to the petition of intervention alleged that Mr. Waring procured the lease from Mrs. Hughes by fraud and without consideration; that he had actual and constructive notice of the chattel mortgage; that the assignment of the lease from Waring to intervenor was without consideration and made with the fraudulent purpose of defeating plaintiff's rights under her mortgage; that intervenor had actual and constructive knowledge of plaintiff's lien.
In an amendment to her answer plaintiff alleged that Mark Mattison, grantee in the deed given by Mrs. Hughes, was a fictitious person and that the conveyance was of no force or effect and void; that the alleged deed from Mattison to Waring was void and that neither Waring nor intervenor had any rights under the lease; that the deed from Mrs. Hughes to Mattison was pursuant to a conspiracy between Mellinger, Merten, the notary public who took the acknowledgment to the deed and assignment of the mortgage, intervenor, and Waring; that Mrs. Hughes intended to enter into a contract with Mattison and did not know that he was a fictitious person; that Waring procured the assignment of the lease from her under his statement that he was the owner of the property.
We are inclined to the view that Mattison was a fictitious person. Mr. and Mrs. Hughes testified that Mellinger and Waring stated that they represented Mattison and that they would not have signed the deed if they had known that no such person existed.
Ehlers, intervenor, who lived in Omaha testified Mellinger told him Mattison was a real estate broker living in Omaha; and that he had never seen or heard of him.
Mr. Underhill, of counsel for plaintiff, testified that Mellinger told him Mattison lived in Geneva, Nebraska; that after the petition of intervention was filed he had a conversation with Mellinger in Omaha. Mr. Underhill testified for plaintiff:
A witness for plaintiff testified that she had been a resident of Geneva, Nebraska, a town of 1800 inhabitants, for the past 47 years and stated: ...
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