189 Iowa 149 | Iowa | 1920
On April 30, 1919, intervener, by.amendment to his petition of intervention, alleged that the said deeds conveying Lots 8, 9, and 10 to him were, in fact, mortgages, executed to secure the payment of a note of $5,000, executed by de
Plaintiffs, for answer to defendant’s petition of intervention, denied' the execution of the deeds from Pelser and Atwood to intervener, and averred that the deeds conveying the lots to Pelser were procured by fraud; that the deeds to intervener were executed without consideration, with notice of the fraud perpetrated upon plaintiff by defendants in the original transaction; and that the lien of the deeds was junior to vendors’ lien. Intervener, for reply, denied the allegations of plaintiffs’ answer to the petition of intervention, and pleaded a' waiver by plaintiffs of their alleged vendors’ lien.
The court found that the deeds to intervener are, in fact, mortgages given to secure the payment of $5,000 and interest; that same were executed prior to the levy of the attachment; and that the lien thereof is superior and prior to the judgment and attachment liens of plaintiffs; and that they were not entitled to a vendors’ lien. As indicated, plaintiffs do not allege or claim fraud in the conveyance of the lots to Lord, bui only that same was executed without consideration. No evidence was offered by either party as to the consideration for the $5,000 note, but intervener testified that the deeds were executed solely for the purpose of securing the payment thereof.
Counsel for appellants contends: (1) That the conveyance of the lots to Pelser was procured by fraud; that the burden rested upon intervener to prove" that the note and deeds, which will hereafter be referred to as mortgages, were executed for a valuable consideration, without notice, actual or constructive, of such fraud; (2) that plaintiffs had a vendors’ lien on said lots, which was prior and senior to the lien of said mortgages. We ivill dispose of the foregoing propositions in the order stated. The grounds alleged in plaintiffs’ petition for an attachment weret nonresidence of defendants, and that the debt sued on is due for property
In Robertson v. United States Livestock Co., 164 Iowa 230, plaintiff, in his petition, prayed the rescission and cancellation of a deed conveying certain lots in DeSoto, Iowa, to defendant, upon the ground that same was procured by fraud. Prior to the commencement of said suit, the defendant executed a note to J. S. Smith and C. M. Thompson, officers and members of said corporation, who transferred the same to the Live Stock National Bank of Omaha, Nebraska, which intervened in said action, alleging that it
The decision of the Supreme Court of Nebraska in Southwick v. Reynolds, 99 Neb. 393 (156 N. W. 775), does not aid plaintiffs. Plaintiff in that case was the assignee of an unrecorded contract for the purchase of real estate, on which the assignor had, prior to the assignment of said contract, executed a mortgage to the Great Western Commission Company, which mortgage was duly recorded. The defendants, assignors of the contract, defaulted, and judgment was entered against them. The commission company, however, filed a cross-petition, setting up its note and mortgage, and asked that the lien thereof be established as prior and senior to plaintiff’s unrecorded lien. The court held that the burden was upon cross-petitioner to prove that its mortgage was executed for a valid consideration, without notice, actual or constructive, of the prior unrecorded contract, and that the usual presumption under the negotiable instrument law that the note was executed for a valuable consideration did not obtain. Apparently, the situation of the parties in the above case and in the case at bar is reversed. The l.ien of the intervener herein is admittedly, in point of time, prior'to the attachment lien of plaintiffs. In other words, in the cited case, cross-petitioner was seeking to have the lien of a recorded mortgage; whereas, in the case at bar, plaintiffs are asking to have their attach
The lien of plaintiffs’ attachment covered only the interest of Pelser in the property levied upon, and would be subject to a prior unrecorded mortgage. Hamm Brewing Co. v. Flagstad, 182 Iowa 826. The mortgages in controversy were, however, executed and recorded prior to the levy of the attachment. Every negotiable instrument is deemed prima facie to have been executed for a valuable consideration (Section 3060-a24, Supplement to Code 1913) ; and the burden clearly rested upon plaintiff, in seeking to have an attachment lien declared senior to the lien of a prior recorded mortgage, to prove that same was obtained without consideration. We find nothing in the record tending in any way to indicate that the $5,000 note and the instruments executed to secure the same were without consideration ; indeed, no evidence was offered upon this point.
II. The only reference in any of the pleadings filed on behalf of plaintiffs to a vendors’ lien is in their answer to the petition of intervention, and is as follows:
2- purchaser” ven^or’s^iien “And the intervener, if he has any claim, same is junior and inferior to plaintiffs’ lien as ven(J°r- Wherefore, plaintiffs ask, in addition to the prayer in their original petition,, that plaintiffs’ lien as vendor be established in and to said described lots, and that, whatever interest the intervener may have therein, that the same be held junior and inferior to plaintiffs’ lien thereon.”
The pleading from which the above extract is taken was filed March 15, 1919, 11 days before judgment was entered in the main case. No claim to a vendors’ lien was asserted in plaintiffs’ original petition against the defendants, and,
Intervener, in his reply to plaintiffs’ answer to the petition of intervention, alleged that they have waived their right, if any they ever had, to a vendors’ lien, and contends in argument that they have blended the purchase price of the land in the main action with other considerations, so that the precise amount thereof cannot be ascertained, and that they are not, therefore, entitled to a vendors’ lien. Section 2924 of the Code, providing for a vendors’ lien, is as follows:
“No vendor’s lien for unpaid purchase money shall be enforced in any court of this state after a conveyance by the vendee, unless such lien is reserved by conveyance, mortgage or other instrument duly acknowledgéd and recorded, or unless such conveyance by the vendee is made after suit by the vendor, his executor or assigns to enforce such lien. But nothing herein shall be construed to deprive a vendor of any remedy now existing against conveyance procured through the fraud or collusion of the vendees therein, or persons purchasing of such vendees with notice of such fraud or lien.”
As early as Allen v. Loring, 34 Iowa 499, this court held that a vendor’s lien is not based upon contract, is not an equitable mortgage or resulting trust, but a mere equity. In that case, the court said:
“We need not discuss the question whether the assignees of an obligation given for real estate have the same right to enforce a vendor’s lien as the payee and vendor himself has; because, in our view of the case, if Clemens, himself,' was seeking to enforce his vendor’s lien, as against an attaching creditor without notice of it, his right must be denied. And this, upon the doctrine as stated by this court in the case of Porter v. City of Dubuque, 20 Iowa 440. It is there said that the lien of a vendor is not based upon contract; nor is it an equitable mortgage or resulting trust, but a mere equity. It is but a naked equity, raised and administered by courts, and which will be enforced or denied,*156 even between the parties, where no counter equity arises, as the particular case may seem to demand. But it is never allowed to override or take priority of equities or rights of third persons, which have attached in ignorance of such vendor’s equity. It is not, in this respect, like a mortgage, or any other lien created by express contract," or even by statute.”
Substantially the samé language was used by the court in Spindler v. Iowa & O. S. L. R. Co., 178 Iowa 348. In the last-cited case, the court held that:
“A,waiver of a vendor’s lien may be found from any conduct on the part of the vendor which shows that he did not rely upon the lien, or has abandoned it; and this may result from a failure to assert the same within a reasonable time.”
The mere commencement of an action for damages, aided by attachment, would not, however, operate as a waiver of the right to enforce a vendor’s lien. Patterson v. Linder, 14 Iowa 414; Stein v. McAuley, 147 Iowa 630. As already stated, the lots in question were conveyed to the defendant Pelser by the Cedar Rapids Floral Company and Bain Bros. Manufacturing Company, and not by the plaintiffs herein. Whether this fact alone, as plaintiffs were the owners of all the stock of the said corporations, would prevent them from asserting a vendor’s lien, we need not determine; but it is significant that plaintiffs permitted judgment to be entered in the main action with knowledge of plaintiffs’ claim, without asserting therein, as against the defendants, some claim to a vendor’s lien, or taking some steps to establish and enforce the same.
It is alleged in plaintiffs’ petition that the lots in question were worth in the neighborhood of $18,000, and that the judgment against defendants is in amount almost double, the value of the lots. Plaintiffs brought their suit for damages, aided by attachment, about two years after the transactions complained of were consummated. Judgment was not entered for several months thereafter, and yet plaintiffs have taken no' steps to enforce a vendor’s lien
Other questions discussed by counsel bear, either directly or indirect^, upon the propositions already considered, and do not merit separate consideration. It follows that the judgment of the court below is right, and must be— Affirmed.