Van Hoesen v. Teachout , 88 Iowa 458 ( 1893 )

Kinne, J.

I. The facts touching this controversy are as follows: In 1883 defendant Teaehout was interested in the Des Moines Ice Company. P. E. Yan Hoesen, the husband of the plaintiff, had been consulting with Teaehout with reference to investing one thousand, five hundred dollars. On Teaehout’s recommendation, P. E. Yan Hoesen agreed to take stock in the ice company to the amount of one thousand, five hundred dollars. He paid this money in, as it was needed for use in the business. The stock was not issued until March 25, 1885. Meantime P. E. Yan Hoesen expressed a desire to own a one-third interest in the company, and induced Teaehout to indorse his note for three thousand, five hundred dollars, to enable him to purchase the additional stock. P. E. Yan Hoesen received the three thousand, five hundred dollars, which, with the money he had already paid in, entitled him to one hundred shares of stock in the company. It w'as agreed that Teaehout should take and hold the Yan Hoesen stock as collateral to protect him as against his indorsement of the three thousand, five hundred dollar note with Yan Hoesen. The stock was not issued for about a year after the money on the three thousand, five hundred dollar note was obtained. Yan Hoesen was entitled to one hundred shares of stock. When the stock was issued, P. E. Yan Hoesen wanted one share issued in his own name and ninety-nine shares issued in his wife’s, the plaintiff, for special reasons not disclosed by him. It was so issued. Teachout supposed that he was to receive the entire one hundred shares as collateral as aforesaid, and testifies that such was the arrangement. The stock was handed to him in an envelope. He retained the envelope, with its inclosures, until August, 1885.

Yan Hoesen sold his interest in the ice company in 1885 to Jones & Towne, at which time Yan Hoesen called upon Teachout for the stock. The latter handed him the envelope unopened, under an agreement that Yan Hoesen would bring back to Teachout the col-laterals or the proceeds of the trade, that he might still hold them as a protection against liability for his indorsement aforesaid. It is not disputed that Teachout would not have turned over the collaterals to Yan Hoesen in the absence of the agreement to return them or their proceeds, or to give him a lien on property received from them. Yan Hoesen, after completing his trade with Jones & Towne, returned to Teachout the envelope, with inclosures, which the latter put away without examining, believing that it contained either the same securities or their proceeds, according to agreement. Afterwards Yan Hoesen called for the envelope, stating that he had a trade on hand with one Wishard, and promised he would return the collaterals or their proceeds to Teachout. Relying on his promise, Teachout gave him the envelope with its inclosures. Yan Hoesen thus obtained possession of the collaterals, and never returned them or their proceeds to Teachout.

It seems that Yan Hoesen aold to Jones & Towne the entire one hundred shares of stock, which was paid for by the conveyance to plaintiff of the real estate in controversy in this suit. Jones & Towne also executed their seven notes for five hundred dollars each to P. E. Yan Hoesen. It is by virtue of the title obtained in this trade by a conveyance made to the plaintiff that she claims the real estate in question as her property, free from the indebtedness of Teachout. Teachout was compelled to and did pay the three thousand, five hundred dollar note, with interest. He then brought suit against P. E. Yan Hoesen, obtained a judgment, and caused an execution to issue, which was levied upon the real estate conveyed by Jones & Towne to plaintiff in consideration of the one hundred shares of stock. The plaintiff then brought this action to enjoin the sale of the real estate levied upon. The court below found that the real estate was in fact the property of P. E. Yan Hoesen; that the plaintiff was entitled to no relief, and dismissed her bill. It appears that P. E. Yan Hoesen had no other property than the money he put into this stock.

II.. The only question we are called upon to deter-' mine is: was the real estate levied upon, and the title to which was in plaintiff, in fact the property of P. E. Yan Hoesen, and hence subject to the execution of Teach-out. It is not our custom to enter into an extended discussion of the evidence in equity eases. We can only state in a general way our conclusions, and the reasons on which they rest. It may be conceded that the plaintiff by introducing her deeds in evidence established a prima facie case. To our minds, there is nothing to show that the funds put into the ice company’s stock by P. E. Yan Hoesen were ever the property of the plaintiff. Clearly the three thousand, five hundred dollars which was borrowed by the husband on the strength of Teachout’s indorsement was not hers. Nothing appears in this record which would justify the appellant’s contention that the money paid in by P. E. Yan Hoesen, outside of the three thousand, five hundred dollars, belonged to the plaintiff.' It clearly appears that the husband treated it as his own, and that no claim thereto was ever made to it by the plaintiff until she instituted this suit claiming the property which was the proceeds of stock purchased with all the money.

We do not consider the fact that nearly all the stock was issued in the plaintiff’s name as of controlling importance. Under the circumstances surrounding the issuance of the stock,- it can not be said that the mere fact that it was issued in the plaintiff’s name showed that she had ever furnished any of the money that was paid for the stock. It does not appear that the plaintiff was the party negotiated with in making the trade with Jones & Towne. It appears also that P. E. Van Hoesen and Jones & Towne entered into a written contract touching the deal which resulted in the purchase of the Van Hoesen stock. We think it sufficiently appears that P. E. Van Hoesen had no property other than this stock, and the property obtained for it by the plaintiff.

It is said that Teachout ought not to recover, as he surrendered collateral which was ample to indemnify him for his liability as indorser. We think he never surrendered it, but it was obtained from him by reason of the representations of P. E. Van Hoesen that he would return it or its proceeds, which he never did.

It was claimed that Teachout was entitled to hold only sixty-four shares of the stock as security in any event. True there was a paper signed by plaintiff pledging sixty-four shares to Teachout, to secure him as indorser; but it appears that Teachout did not know of the existence of that paper. He had never examined the contents of the envelope which he supposed contained the collaterals, and, in view of his testimony that the arrangment was that he was to have the entire one hundred, shares as collateral, we conclude that such was the agreement. Neither the plaintiff nor her husband testified. We may fairly presume that what Teachout says about it is true, else they would have testified to the contrary. Now, it occurs to us it would be most inequitable and unjust to hold that because the plaintiff’s husband practiced a fraud on Teachout, whereby he secured the collaterals, and then traded them to Jones & Towne in part for the land in controversy, the plaintiff should hold the same free from the claims of Teachout. Plaintiff never parted with anything of value as a consideration for the stock, or any of it, so far as appears from the record. For some reason, known only to her husband and herself, the stock was issued in her name. It was bought with the husband’s money, and there is no reason why it or the property purchased with it should not be charged with the indebtedness due to Teachout from the husband.

We have not deemed it necessary to discuss the legal propositions stated by counsel. The controversy depends largely upon the facts, and. we think they are against the plaintiff. The judgment of the district court is affirmed.