Krebs v. Lauser

Sherwin, J. ^ 1. Deed as security: ex-parol evidence. The appellant, James D. Patterson, was a son-in-law of the deceased, Krebs, and a farmer who, for many years prior to 1893, was a tenant on several different farms in the neighborhood where his # ° father-in-law resided. In 1893, he was living ag a tenant of Mrs.' Mary Stewart on the land in controversy. In September of that year, Krebs suggested to Patterson that he-ascertain whether the land was for sale, and, if so, the price asked for it. This Patterson did, and on the 27th of the month Mrs. Stewart conveyed the land toKrebs by warranty deed, he at the time making a cash payment thereon and executing and delivering to Mrs. Stewart his individual notes for the balance of the purchase price. At the same time, and as a part of the same transaction, Patterson executed and delivered to Krebs three notes aggregating the exact amount that had been paid for the land. The appellant contends that he was the purchaser of the land, that he borrowed the money therefor of Krebs, and that the deed to Krebs was a mortgage securing his notes. Patterson’s lease from Mrs. Stewart expired in the spring of 1894, and he continued in possession of the land thereunder until the expiration thereof, when he took a written lease, from Krebs for one year, agreeing therein to [243] pay as rent for the land the sum of $226.25 per year. The lease also contained this provision: “ It is hereby expressly agreed . . . that the second party is to have the privilege of buying the farm provided he can make the payments as they become due. The rents above specified being for the interest on the purchase money of the farm; and it is further agreed that, should the second party wish to make any improvements on the farm, said improvements are to be at his own expense unless otherwise agreed between the parties hereto. Said' second party further agrees to pay all taxes levied upon said premises during said lease.” Patterson has remained in possession of the land ever since, as we understand the record. The notes given by him to Krebs were retained by the latter until some time in 1895 when Patterson claims they were surrendered to him by Krebs. At any rate, they have been in Patterson’s possession since that time. Mary Patterson, the wife of the appellant, died in 1898 leaving, surviving her, eight children, who are named as defendants herein, and to whom the land in question was awarded by the trial court. Frederich Krebs died testate in 1904. By the terms of his will, he makes specific bequests of all’of the real estate owned by him or in his name of record, some eight hundred and twenty-five acres, except the farm in controversy containing one hundred and seventy-five acres which was conveyed to him after he made his will, and a small tract of timber land. After the land was conveyed to Krebs, and after he had leased it to the appellant, the latter made substantial improvements thereon from time to time until the death of Krebs. The land assessed to Krebs and he paid the taxes thereon notwithstanding the requirement of the lease that the appellant pay them. Appellant kept the buildings thereon insured, and, at the beginning of each year under the lease, he gave Krebs his notes for the rent or interest for that year. As we view this case, the question of controlling importance is whether Krebs in fact loaned the appellant the [244] money necesary to buy this farm and took tbe conveyance in his own name as security for sucb loan If be did, it is clearly competent to prove tbe transaction by parol testimony, for it -is a well-settled rule that a deed absolute on its face may be shown to be a mortgage. Bigler v. Jack, 114 Iowa, 667; Rogers v. Davis, 91 Iowa, 730; Conlee v. Heying, 94 Iowa, 734. But, if Krebs paid bis own money for tbe land and took tbe title thereto under some kind of an agreement that be was to bold it for tbe use and benefit of tbe appellant and later convey it to him, sucb an agreement would create an express trust which must be executed in tbe same manner as deeds, and hence cannot be proven by parol. Code, section 2918; Dunn v. Zwilling, 94 Iowa, 234; Hain v. Robinson, 72 Iowa, 735; Thorp v. Bradley, 75 Iowa, 53. g Same-evidence. A deed absolute on its face will not be declared a mortgage, except upon proof that is clear and satisfactory. Robertson v. Moline M. Stoddard Co., 106 Iowa, 414; Langer v. Meservey, 80 Iowa, 158. We have examined and considered tbe evidence in this case with great care,' and reach tbe conclusion that the proof relied upon by tbe appellant falls far short of the requirement of our cases. Tbe absolute conveyance and the written lease are physical facts in tbe case furnishing strong and convincing proof that no loan was in fact made to tbe appellant before tbe deed was executed and delivered to Krebs, and that tbe real agreement between them amounted to no more than a conditional sale of tbe property by Krebs to tbe appellant. It is,true, tbe appellánt gave Kreb notes for the same amount be had paid for tbe land,-but that is not really inconsistent with tbe theory of a conditional sale, when, in connection therewith, we consider tbe stipulation in tbe lease that appellant was to have tbe privilege of buying tbe farm provided he made tbe payments as they became due; tbe payments therein, referred to evidently being represented by bis notes. If the appellant had in fact borrowed tbe purchase price of tbe'farm from Krebs [245] and executed his notes therefor, the farm would have been his although the title stood in Krebs, and the provision of the lease which is set out herein and to which we have just referred, would mean nothing. The only evidence tending to controvert this conclusion consists of declarations alleged to have been made by Krebs when he took title to the land and on a few occasions thereafter. But these are more than offset by the appellant’s own declarations and acts during the years intervening between the purchase of the land and the time of the trial.' The judgment is right and it is affirmed.