White v. Gutshall
| Decision Date | 17 November 1931 |
| Docket Number | 40823 |
| Parties | FRANCES R. WHITE, Appellee, v. F. E. GUTSHALL et al., Appellees; CENTRAL NATIONAL BANK & TRUST COMPANY et al., Appellants. CENTRAL NATIONAL BANK & TRUST COMPANY et al., Appellants, v. MILDRED GUTSHALL et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Polk District Court.--W. G. BONNER, Judge.
This is an action to foreclose a mortgage and involves the question of priority between notes secured by the same mortgage. The notes held by the plaintiff, Frances R. White, were decreed by the court to be a prior lien on the real property. The trustees of the D. G. Edmundson estate appeal.
Affirmed.
George Harnagel, for Frances R. White, appellee.
Wm. M Wilcoxen, for Security Loan & Investment Company, appellee.
Parrish Cohen, Guthrie & Watters, for Central National Bank & Trust Co., James Parker, and David Whitson, Trustees of the D. G Edmundson Estate, Interveners, appellants.
ALBERT, J. FAVILLE, C. J., STEVENS, DE GRAFF, and WAGNER, JJ., concur.
On and prior to the 21st day of July, 1925, Mildred and F. E. Gutshall were the owners of certain real estate situated in the city of Des Moines, and on that day they executed and delivered to the Security Loan & Investment Company nine promissory notes for $ 100 each. These notes bore various maturity dates commencing with August 1, 1926, the last of said notes bearing due date February 1, 1930. In addition thereto were two promissory notes, one for $ 300 and the other for $ 2,500.00, each due August 1, 1930. To secure the payment of these notes, the Gutshalls executed and delivered to the Security Loan & Investment Company a certain mortgage of even date with said notes covering the property above referred to, which mortgage was duly recorded on July 24, 1925.
The first $ 100 note of the series has been paid, and is, therefore, not involved in this action.
On the 15th day of August, 1925, Frances R. White, plaintiff, purchased from the Security Loan & Investment Company the last two notes of the series, to wit, the $ 300 and the $ 2,500.00 note, and on that date a written assignment was made to her of said notes by the Security Loan & Investment Company, and on the same date the said Investment Company duly assigned and delivered to Frances R. White the mortgage above referred to.
On August 20, 1925, the Security Loan & Investment Company, in writing, assigned all of the $ 100 notes to the D. G. Edmundson estate without recourse, and as collateral security. It appears that the Security Loan & Investment Company was indebted to the Edmundson estate, and that indebtedness was secured by collateral, and certain parts of the collateral held by the D. G. Edmundson estate were taken down and these notes substituted therefor. At the time of this latter transaction, W. H. Barnard, J. H. Fowler and James Parker were trustees of the Edmundson estate. These three men were respectively at the same time president, vice-president, and secretary, of the Security Loan & Investment Company and were such officers during all of the time in controversy herein. Later these three men were succeeded as trustees by the Central National Bank & Trust Company, James Parker and David Whitson, and later the Security Loan & Investment Company was declared insolvent and Wm. M. Wilcoxen was appointed receiver therefor.
On February 21, 1929, the plaintiff, Frances R. White, filed her petition in equity to foreclose said mortgage securing her two said notes, making F. E. Gutshall and wife, Polk County, Iowa, and T. L. Van, defendants. The trustees of the Edmundson estate thereupon filed a petition of intervention in which they alleged the ownership of the nine $ 100 notes, alleging the priority of due date, and that all claims of plaintiff and defendant were junior and inferior to the rights of the interveners, and asking that the mortgage be foreclosed; and therein they made Gutshall and wife, Frances R. White, T. L. Van and Wm. M. Wilcoxen, receiver of the Security Loan & Investment Company, defendants.
On March 7, 1929, the trustees of the Edmundson estate independently filed a petition asking foreclosure of the mortgage, and that the rights of all other parties be decreed junior and inferior to the rights of said trustees. Several answers and cross-petitions were filed by the various parties, replies were also filed, and the pleadings cover some 34 pages of the abstract. Sufficient, however, has been set out to show the issues between the parties. The decree in the lower court held that the rights of Frances R. White were superior to the rights of the trustees of the Edmundson estate and entered a decree accordingly; hence this appeal.
Simply stated, Frances R. White held two promissory notes, the maturity date of both being August 1, 1930. These notes were assigned to her, together with the mortgage accompanying the same, on the 14th day of August, 1925. The trustees of the Edmundson estate held eight notes, each of which bore a prior maturity date to either of these held by Frances R. White; but these eight notes were transferred by assignment to the Edmundson estate on the 20th day of August, 1925, or six days after the White notes were transferred to her. None of the assignments of notes or mortgage was made of record. The controlling question in the case therefore is whether the rights acquired by Frances R. White, under the assignment of these notes and mortgage, are superior or inferior to the rights of the trustees of the Edmundson estate.
It is settled law in this state that where a mortgage is given to secure a series of notes, which notes become due at different dates, and the notes are disposed of to different parties, those holding the earlier maturity date have priority in the absence of an agreement otherwise. Whitney v. Eichner, 204 Iowa 1178, 216 N.W. 625, where the authorities are collated.
The plaintiff introduced evidence, which is undisputed, that when she purchased these notes from the Security Loan & Investment Co. there was an oral agreement that although her notes bore later maturity dates, she should have a first lien on the property as against the nine $ 100 notes. That such agreement is binding as between the parties see Squire Co. v. Hedges, 200 Iowa 877, 205 N.W. 525; 41 C. J. 507, sec. 442; and is binding on an assignee. Ibid. Such agreement between mortgagee and assignee is valid. 41 C. J. 508.
But the evidence on this proposition was objected to on the ground that it was an attempt, by parol, to vary, change or contradict the terms of a written contract, and this gives rise to the first question before us.
No one will dispute the proposition that if this oral contract did exist and the trustees of the Edmundson estate, at the time they took the nine promissory notes, knew of the existence of such agreement, the agreement would be binding and effective as against them, and would give the plaintiff, Frances R White, a superior right. Therefore the plaintiff to effectuate...
To continue reading
Request your trial