192 Iowa 790 | Iowa | 1921
One Lingren was the owner of certain lands in Oteo County, Nebraska. On February 6, 1906, Lingren and his wife executed and delivered to appellant their certain promissory note for $4,000, due March 1, 1911, and secured the said note by a mortgage upon the said land. The mortgage was duly recorded, soon after its execution. Thereafter, the said real estate passed by a series of mesne conveyances to one Stahl. The latter conveyed the premises to the appellee by warranty deed, which deed contained the following clause, “Subject, however, to the mortgage indebtedness upon said land, of which the principal sum is $5,640.41,” and the further provision that said real estate was “free from incumbrance, except as above stated,
This suit is to recover the amount due on said mortgage from appellee, the grantee in said deed, undfer the assumption clause therein. It appears that Stahl was a resident of Huron, South Dakota; and in the summer of 1913, he left his home to spend the winter in California. Before so doing, however, he listed the said land in Oteo County, Nebraska, with one Christensen, a land agent, for sale. In order to enable Christensen to effectuate a sale of the premises, Stahl executed a warranty deed to the said Nebraska property, and placed the same in the hands of Christensen. The consideration in said deed was left blank, as was also the name of the grantee. This deed is the one in controversy in this action, and was executed July 26, 1913.
After Stahl had gone to California, the agent, Christensen, undertook to find a buyer for said property, and discovered the appellee, Goodrich, whom he interested as a prospective purchaser in the Nebraska land. At that time, the appellee was the owner of a quarter section of land in South Dakota, upon which there was an outstanding mortgage of $5,000. As the result of the negotiations between appellee and Christensen, the parties finally agreed to an exchange of equities in the said lands. To adjust matters satisfactorily, it was necessary for Stahl to give a note of $3,000, secured by a second mortgage upon the South Dakota land, which he was to receive from the appellee. Christensen and the appellee went to an office, and had a contract drawn. This contract was in the usual form of land contracts for the exchange of land; and, by its terms,’ Stahl agreed to convey to appellee the land in Oteo County, Nebraska/“subject to mortgage incumbrance aggregating $5,640,” in consideration of which the appellee agreed to convey to Stahl certain lands in Hand County, South Dakota, “subject to a mortgage of $5,000.” The contract provided that each party was to convey by warranty deed.
After the contract was signed by the appellee, it was forwarded to Stahl in California, who executed' and. returned the same. When the time arrived for consummation of the transaction, Stahl’s agent, Christensen, took the deed which Stahl had left with him, as before stated, and inserted therein as a
As before stated, it is the contention of the appellee that the assumption clause in the said deed from Stahl to him was not inserted therein in pursuance of the contract between the parties, and that the same was without consideration. It fairly appears from the evidence that the contract for the exchange of properties between Stahl and the appellee was a contract for the exchange of equities. The properties were not equal in value, nor were the incumbrances thereon; but Stahl placed an additional incumbrance upon the South Dakota land which he received from the appellee, and took it subject to the existing mortgage thereon. The appellee, in turn, by the terms of the contract, took the Nebraska land subject to the outstanding in-cumbrance thereon, which is the mortgage in controversy. The written contract executed by the parties at the time clearly and expressly provides for an exchange of properties, and that the said properties were to be exchanged subject to the respective incumbrances. As stated, the deed that was delivered to the appellee had been executed by Stahl before his departure for California, and had been left with Christensen in anticipation of a sale of the property. Neither Stahl nor his agent, Christensen, had the appellee in mind as a prospective purchaser, at the time of the execution of this deed. It was simply left with Christensen as a matter of convenience, to facilitate the consummation of a sale of the property if Christensen found a buyer during Stahl’s absence.
It is contended by the appellee that the said deed did not express the true contract between the parties in regard to the outstanding incumbrances, and that there was no consideration for the assumption of the mortgage in question. We think the
In Livingston v. Stevens, 122 Iowa 62, we said:
“It is contended that evidence of negotiations and agreements had between plaintiffs and Tucker, before the making of the mortgage on September 19th, was incompetent and immaterial, because all such were merged in the mortgage, and parol evidence of such prior arrangements is incompetent. If the action were between the parties to the mortgage, this objection would, no doubt, be good. But the rule excluding parol proof where there is a written contract or agreement does not apply to actions between a party to the contract and a stranger. Manifestly, such stranger is not to be concluded thereby. He had no part in the making of the contract, and third parties cannot bind him by an instrument to which he is not a party. This is fundamental doctrine, although frequently overlooked by courts and counsel, and in its support we need only cite Evans v. Wells, 22 Wend. 345 ; Fuller v. Acker, 1 Hill 473; Greenleaf, Evidence, Section 279; Lee v. Adsit, 37 N. Y. 78; Furbush v. Goodwin, 25 N. H. 446; Bradner on Evidence, Section 27, page 335, and eases cited.”
In Aultman Eng. Thr. Co. v. Greenlee, 134 Iowa 368, we said:
In re Assessment of Shields Bros., 134 Iowa 559, we said:
“A contract rests in the intention of the parties thereto. It is true by general rule that, where the contract has been committed to writing, the nature and extent of the undertakings must be ascertained by an inspection of such writing. Oral evidence is not allowable to work a change or variance in the terms, conditions, etc., as fairly expressed by the writing. But this rule is enforced, only where a controversy arises between the parties to the contract or their privies. As against a stranger to the contract, a party thereto may assert that the agreement was other or different, in any respect and to any extent, than that which the writing imports. Livingston v. Stevens, 122 Iowa 62; Logan v. Miller, 106 Iowa 511; Roberts v. Bank, 8 N. D. 474 (79 N. W. 997) ; 11 Am. & Eng. Ency. 548, note; Page on Contracts, Section 1196 et seq.”
See, also, Clark v. Shannon, 117 Iowa 645; Blumer v. Schmidt, 164 Iowa 682; Moore v. St. Paul F. & M. Ins. Co., 176 Iowa 549; De Goey v. Van Wyk, 97 Iowa 491.
The case of Logan v. Miller, 106 Iowa 511, is strikingly similar to the case at bar. This was an action to recover upon the assumption clause in a mortgage. The petition in said case
“The rule excluding such parol evidence applies only to those who are parties to the instrument, the effect of which may be sought to be changed. It cannot affect third persons who, were it otherwise, might thereby be precluded from establishing the truth as to matters with regard to which they had nothing to do. * * * Inasmuch as the defendant was not a party to the mortgage, there was no error in permitting him to show that, in fact, there was a consideration other than that stated therein.”
We said, in Logan v. Miller, 106 Iowa 511, 516:
“The instrument the consideration of which is sought to be proven to have been different from that recited is the deed to the defendant. The plaintiff, Logan, is not a party to that instrument; and therefore, under the rule just quoted, the true consideration may, as between him and the defendant, be shown. The question whether the true consideration might be shown as between parties to the instrument was not involved in that case, nor is it in this. Therefore we are not called upon to affirm what is said’in that opinion argumentatively on that subject. We think the terms of the written contract, as set up in the answer, relate to the consideration, and that the defendant may be al
See, also, Fuller, Williams & Co. v. Lamar, 53 Iowa 477.
The instant case, we think, comes within our previous holdings, and the appellee was entitled to prove the true consideration for the deed in question and the actual contract between the parties thereto in respect to the assumption of the mortgage; and we are satisfied that the evidence clearly, convincingly, and satisfactorily establishes that the contract between the parties did not provide for or anticipate the assumption of the mortgage in question by appellee, and that there was, in fact, no consideration between said parties for the assumption of said mortgage.
It is contended by appellant that the acceptance of the deed by appellee with the assumption clause therein precludes the appellee from now seeking to avoid the recitals in the deed. The evidence shows that the deed in question contained two recitals in regard to the mortgage. In the fore part of the deed, the property is conveyed subject to the mortgage. A later provision in the deed contains the assumption clause. Appellee’s testimony is to the effect that he did not know that the deed contained the assumption clause until considerable time after the same had been delivered and recorded. No estoppel is pleaded by the appellant. In any event, we do not think the appellee is estopped to prove the true contract between him and his grantor and the true consideration for the execution of the deed. He has never recognized the mortgage indebtedness in any manner, has never paid any interest thereon, nor otherwise estopped himself to assert the defenses now interposed. In Bull v. Titsworth, 29 N. J. Eq. 73, it is said in the syllabus:
“A mortgagee can derive no advantage from a covenant of assumption in a deed, if the covenant be invalid between the parties to the deed, — e. g\, where there was no agreement for assumption, and though the deed contained the covenant, and was delivered, the covenant escaped the notice of the grantee, it being inserted in an unusual place in the deed.”
There is conflict in the evidence in regard to the oral ne
The decree entered by the trial court appears to us to find ample support in the record, and it therefore must be and is— Affirmed.