197 Iowa 1384 | Iowa | 1924
The plaintiff’s suit is essentially one to foreclose a *real-estate mortgage which had been previously released, and to establish personal liability upon a note secured by such mortgage, which note had been previously surrendered. It is averred that the surrender and release of note and mortgage had been obtained by fraudulent representations, and that plaintiff disaffirms the same. He prays that his previous rights be re-established in equity, because of fraud, and that he have personal judgment upon his note, and foreclosure of the mortgage. He also avers an equitable lien for the amount of his debt, and asks the foreclosure of the same.
The notes and mortgages involved herein arose out of the following sequence of events. In February, 1919, plaintiff, Gjerde, sold his farm by executory contract to Swingen, which contract was to be performed on March 1, 1920. Swingen sold
I. On the issue of fact, the record abundantly discloses that the appellees were in some manner greatly deceived as to the financial responsibility of Fuchs. He had, in fact, no financial responsibility whatever. No reason is apparent in the record why they .should have accepted his notes in lieu of those of Thelander if they had known his financial standing. He was wholly unknown to both of them. They acted solely upon information received from other sources. The substance of their testimony is that one Hilstrom, acting as agent on behalf of Thelander, called upon them for the purpose of having a substitution made of the note 'of Fuchs for those of Thelander; that, in order to induce, such substitution, he represented that he knew Fuchs and his financial standing, and that he was a man of large financial means, and of much greater financial responsibility than that of Thelander. Hilstrom, as a witness, denied making these representations. His denial, however, had much qualification and some inconsistency, and, on the whole, does not impress us as persuasive. The clear weight of the evidence is that Hilstrom did make representations that were knowingly false, and that they were effective to induce the appellees to surrender the Thelander notes and mortgages and to accept
II. It is the contention of appellant, however, that the appellees failed to repudiate, in that the method adopted by them failed to effect a rescission of the contract of novation. This contention is predicated largely upon the fact that the appellees never in any formal sense tendered to Fuchs the return of his obligation. It is doubtless a sufficient answer to this contention to say that they did tender the Fuchs obligations to the appellant. As will be seen presently, this was equity as to him. The appellees received these obligations, not from Fuchs, but from the appel
It further appears that Fuchs is a resident of Minnesota, and personal jurisdiction could not be had over him in this state. Original notices were personally served upon him in Minnesota by both appellees. Thereafter, he was defaulted for want of appearance. After such default, an identical amendment was filed by both appellees, whereby they purported to bring into court the Fuchs obligations and to tender them there to whoever was entitled to them. The contention of appellant is that such amendments were ineffective as to Fuchs, because no notice was served upon him, as required by statute, and that, therefore, the appellees must stand upon their original pleadings. Let this proposition be conceded; yet we see in it little avail for the appellant. The original petition and cross-petition and the original notice thereof served upon Fuchs were quite sufficient to give the court full jurisdiction in rem over the property and over all issues tendered in petition and cross-petition. The alleged fraud and the disaffirmance because thereof were averred in such petitions, and the re-establishment of the surrendered obligations of Thelander was prayed for as equitable relief. General equitable relief was also prayed. We see nothing wanting in the scope of the jurisdiction conferred upon the trial court. The later amendment was not essential to the jurisdiction of the court to enter the very relief provided by the decree. Fuchs is not here complaining of error in the
It may be added that there is nothing in the decree which would preclude Thelander hereafter from enforcing in equity, as against Fuchs, all the terms of the mortgage, subject only to the prior rights of the appellees.
Thfe foregoing presents the principal points relied on by the appellant. • We see no ground for disturbing the decree entered by the trial court. Our foregoing conclusion renders it.unnecessary that we consider appellees’ motion to dismiss the appeal, which was submitted with the case. The decree of the trial court is affirmed. — Affirmed.