Tidgwell v. Bouma

• Court: Iowa Supreme Court
• Writing for the Court: GAYNOR, J.
• Citation: Tidgwell v. Bouma, 176 Iowa 47, 157 N.W. 200 (Iowa 1916)
• Decision Date: 10 April 1916
• Docket Number: 29923
• Parties: D. H. TIDGWELL, Appellant, v. NETTIE M. BOUMA et al., Appellees

157 N.W. 200

176 Iowa 47

D. H. TIDGWELL, Appellant, v. NETTIE M. BOUMA et al., Appellees

No. 29923

Supreme Court of Iowa, Des Moines

April 10, 1916

Appeal from Howard District Court.--W. J. SPRINGER, Judge.

ACTION in equity to cancel a deed on the ground of fraud. Decree for the defendants in the court below. Plaintiff appeals.

Affirmed.

J. M Whitaker, for appellant.

John E Cross, for appellees.

GAYNOR J. DEEMER, LADD and SALINGER, JJ., concur.

OPINION

GAYNOR, J.

This is an action in equity brought by the plaintiff to set aside and cancel a certain deed executed and delivered by him to one of the defendants, Nettie M. Bouma. The ground of the action is fraud alleged to have been committed by the defendant B. T. Bouma, husband of the other defendant. The land involved is 160 acres in Howard County, in this state.

The petition alleges that the defendant B. T. Bouma and one Herman Rietveld, prior to March 18, 1907, confederated and conspired together for the purpose of cheating and defrauding this plaintiff; that, at the time of the conspiracy, Rietveld was a banker residing in the city of Pella, Iowa, and reputed by the general public to be worth $ 75,000 or more, but in fact, at the time, was wholly insolvent; that this fact was well known to the defendant Bouma; that Bouma was a real estate agent; that Bouma and Rietveld conspired and agreed together that Rietveld, without any consideration therefor, would execute and deliver to said defendant his promissory notes; that Bouma should trade, sell or negotiate the same for money or other property, and that they would divide the proceeds received therefrom between them; that, to effectuate this fraudulent purpose, and in pursuance thereof, Rietveld executed and delivered to the defendant his promissory note for $ 4,000, and executed to him a mortgage on 160 acres of land in Nebraska, ostensibly to secure the same; that, at the time of the execution of the mortgage, Rietveld had the record title to the land; that, at the same time, and for the same purpose, Rietveld executed and delivered to the defendant Bouma his note for $ 2,500, ostensibly secured by a mortgage on 120 acres of land in Madison County, Arkansas; also a promissory note for $ 2,000, ostensibly secured by a mortgage on 120 acres of land also in Madison County; that the lands described in said mortgages and pledged to secure said notes were practically worthless, and were not worth more than $ 2 an acre, which facts were well known both to Bouma and Rietveld, at the time of the execution of the said notes and mortgages; that, about the time mentioned, the plaintiff Tidgwell was the owner of 160 acres of land situated in Howard County, this state; that the defendant Bouma represented that the land described in said mortgages was well improved, with good fences and buildings, and was productive, that the title to the land was perfect in the mortgagor, and the maker of the notes solvent, whereas, as a matter of fact, the land was practically worthless, and the title of the mortgagor imperfect, and the mortgagor insolvent, and the notes and mortgages were practically worthless; that, in the month of March, 1907, the plaintiff traded his land in Howard County for the said notes and mortgages. At the time of the execution of the deed by this plaintiff to the defendant for said notes and mortgages, the maker of the notes, Rietveld, was insolvent and financially worthless, and still is insolvent and worthless; that all the statements as to the value and conditions of the mortgage securities were absolutely false at the time that they were made; that the securities were worthless, and are still worthless.

Plaintiff further alleges that, subsequent to said exchange of properties, plaintiff put said notes in judgment against said Rietveld in Marion County, Iowa; that said notes are now in possession of the clerk of said court, by reason of which fact plaintiff is unable to tender them back, but plaintiff offers to assign to the defendants the judgment obtained upon said notes, and to return all the mortgages and other evidence received by him in said exchange. Plaintiff says that he was entirely ignorant of the facts herein recited, at the time that he made the exchange, and did not discover their falsity until a short time before the commencement of this action; that the name "Nettie M. Bouma" was inserted in the deed at the time that it was made, at the request of the other defendant, her husband, and without any consideration passing therefor. Wherefore, the plaintiff prays that the deed be canceled and set aside; that the title to the Howard County land be quieted in him, and that he have judgment for the fair rental value of the property during the time that it has been in the possession of the defendants.

Defendants for answer admit that Herman Rietveld was a banker in the town of Pella at the time of the happening of the matters complained of; that he had record title to the land described and the mortgages referred to; that he was generally reputed to be worth $ 75,000; that the plaintiff was the owner of the land in Howard County referred to; that about the 18th day of March, 1907, plaintiff conveyed said land to defendant Nettie M. Bouma by deed; that, in consideration for the conveyance, the defendant B. T. Bouma traded to him one promissory note for $ 4,000 by Rietveld to Bouma, and endorsed by Bouma without recourse to the plaintiff; that the note was secured by a mortgage on 160 acres of land in Holt County, Nebraska, then owned by Rietveld; also one promissory note for $ 2,500, executed by the same party to the same party, and endorsed to the plaintiff without recourse, this note secured by a mortgage on land in Madison County, Arkansas; also a note of $ 2,000, executed by the same party to the same party, and endorsed without recourse to the plaintiff, said note being secured by mortgage on land situated in Madison County, Arkansas. It is further admitted that the notes were by the plaintiff reduced to judgment in July, 1910. They deny all other allegations. As a defense, however, it is pleaded that, before accepting said notes, the plaintiff investigated for himself the character and value of the notes, and, after such investigation, relied wholly upon his own judgment and upon the information so received, in making the trade; that, on the 8th day of July, 1910, the plaintiff, with full knowledge of all the conditions now complained of, and with full knowledge of all the facts connected with the transaction in question, elected to treat the promissory notes as his own, and, without any notice to these defendants of the intention to repudiate the trade, he reduced said notes to judgment against Rietveld; that, after reducing the notes to judgment, in the fall of the year 1911, and before the commencement of this action, the plaintiff procured the said Rietveld to convey to him the land in Holt County, Nebraska, and agreed to and did accept said conveyance as a full and complete satisfaction and payment of the judgment rendered and security on the notes, thereby releasing and discharging this defendant, and thereby rendering it impossible for him to put the defendants in statu quo. Wherefore, the defendants say that, by reason of the facts aforesaid, the plaintiff has ratified and confirmed the trade in question, and has been guilty of laches in asserting his claim against the defendants, and is now estopped to demand the relief asked for. They pray that plaintiff's claim be dismissed and title quieted in defendants.

In April, 1912, since the commencement of this suit, the plaintiff sold and assigned to H. O. Michaels the judgment obtained by him against the said Rietveld upon the notes referred to in plaintiff's petition.

Upon the issues thus tendered, the evidence was introduced, and, at the conclusion of all the evidence, the court entered judgment for the defendants dismissing plaintiff's petition, and from this, plaintiff appeals.

The evidence in this case is conflicting. It is triable de novo here. We are not bound to accept the testimony of any witness as true, nor may we assume a fact established because a witness has been produced whose testimony tends to establish it. Our only duty is to account, if possible, for this conflict in the evidence; to reconcile it where it can be reconciled, and ultimately to ascertain out of it all what the truth is.

There is much in this record that reflects upon the character and integrity of some of the witnesses on whom the greatest reliance is placed to establish plaintiff's contention. The plaintiff alleges a conspiracy entered into between Bouma and Rietveld. A conspiracy consists in an alleged understanding and agreement entered into between them, by which Rietveld was to execute to Bouma certain notes, Bouma to sell or trade them for other property, and the proceeds so obtained, to be divided between them. It is conceded that Rietveld, at the time that these notes were executed, and for some time prior thereto, was generally reported to be a wealthy man, and responsible for his obligations. It is claimed that this was known to Bouma and Rietveld; that, in making these notes, they speculated upon this seeming solvency of Rietveld; that both parties at the time knew that he was insolvent, and that the notes were worthless. This conspiracy is testified to by Rietveld alone; denied by Bouma. Rietveld himself makes the shameful confession without shame, and says that he was wholly insolvent at the time that these notes were made; that both he and Bouma knew this fact; that the notes were made for the purpose of being palmed off on an unsuspecting public as of value, when, in fact, they had no value, and that he was to share in the profits...