Union Bank & Trust Co. of Stanwood v. Willey

• Decision Date: 12 November 1946
• Docket Number: 46928.
• Citation: 24 N.W.2d 796,237 Iowa 1250
• Court: Iowa Supreme Court
• Parties: UNION BANK & TRUST CO. OF STANWOOD v. WILLEY, Sheriff (MURPHY TRANSP. CO., Intervener).

24 N.W.2d 796

237 Iowa 1250

UNION BANK & TRUST CO. OF STANWOOD v. WILLEY, Sheriff (MURPHY TRANSP. CO., Intervener).

No. 46928.

Supreme Court of Iowa

November 12, 1946

[Copyrighted Material Omitted]

Leming & Hobson, of Hampton, for appellants.

France and France, of Tipton, for appellee.

BLISS Justice.

In its petition plaintiff prayed judgment for the possession of a Ford truck, and as grounds therefor alleged that: It was a banking corporation at Stanwood, Iowa, and the owner of a chattel note and mortgage executed May 7, 1945, by Mary and Charles Starkey for $500, covering said truck and specifically describing it, which mortgage was recorded in the office of the county recorder of Cedar County, Iowa, on May 9, 1945; default had been made in the payment of installments on said note, and by its terms the whole amount thereof was due, and plaintiff was entitled to the immediate possession of the truck; demand for its possession had been refused by the defendant, sheriff of Cedar County, who had levied upon and held said truck by virtue of a conditional sales contract owned by the Murphy Transportation Company.

The defendant filed answer alleging that he had no interest in the truck or the controversy, other than, as sheriff, at the request of the Murphy Transportation Company intervenor, he had taken possession of the truck by and under the conditional sales contract, but had immediately released the truck to the plaintiff upon the service of the original notice on him.

The intervenor, in its petition of intervention, alleged that: It was a corporation with its principal place of business at Hampton, Iowa; on September 16, 1944, B. C. Young, then a resident of Hampton, in Franklin County, as purchaser or vendee, executed a conditional sales contract covering the used truck, involved herein, and other trucks, and delivered said contract to D. D. Alderdyce of Hampton; the contract was filed in the office of the recorder of Franklin County, on September 20, 1944; Young also executed a promissory note to Alderdyce, who sold the note and the contract to the Central National Bank and Trust Co. of Des Moines; later Alderdyce was required to take up the paper, and thereafter sold it to the intervenor, under whose direction the defendant-sheriff took possession of the truck on August 20, 1945. Intervenor also alleged that it had no knowledge of plaintiff's mortgage and therefore denied the allegations respecting it and alleged prior and superior right to the truck under its contract.

In answer to the petition of intervention, plaintiff denied that Young was a resident of Franklin County on September 16, 1944, and denied that the conditional sales contract was executed or filed or entitled to be filed, or that Alderdyce was the owner or holder of a valid conditional sales contract, and denied that the defendant, or the intervenor, was entitled to the possession of the truck. For further answer to the petition of intervention the plaintiff alleged that Alderdyce never owned or possessed the truck, but Young was the owner and operated it out of the town of Bennet in Cedar County, and sold it to Mary and Charles Starkey, who mortgaged it to plaintiff, as alleged in its petition, and that such interest as the intervenor claimed was junior and inferior to plaintiff's right under the mortgage.

Trial was begun on October 29, 1945. Haesemeyer, the president of plaintiff, identified its chattel mortgage and testified that: He handled the mortgage transaction for it; he was acquainted with the Starkeys; B. C. Young was living at Tipton, in Cedar County, at the time, although he had never met him before; Young, who was selling the truck to the Starkeys, told him it was clear. He also testified to the execution of the chattel note and mortgage as alleged in the petition and that it was wholly unpaid, and that at no time prior to the execution of the note and mortgage was it ever called to his attention that there was any encumbrance or claim against the truck, until the sheriff took possession of it under the contract of the Murphy Transportation Company. On cross-examination he testified that he had checked the records of Cedar County only. The page of the chattel mortgage index book No. 17 of Cedar County together with the chattel note and mortgage were introduced in evidence without objection. Without offering any other evidence, the plaintiff rested.

Defendant and intervenor offered the testimony of Alderdyce. He testified that: He lived in Hampton on September 16, 1944, at which place also lived B. C. Young, who had been in his employ for two years; on the date, stated above, he sold Young the truck in question with five other trucks for a consideration of $3,508.50, and Young executed and acknowledged a conditional sales contract on said date, in his presence in the First National Bank of Hampton, which contract the witness filed in the Franklin County recorder's office on September 20, 1944, and received the recorder's receipt of said filing. This receipt was received in evidence. He also testified that the amount owing on the truck was about $622; that he did not own the note, as he had sold it and the contract and equipment to the Murphy Transportation Company on January 1, 1945, and that so far as he knew this Company was the owner of the unpaid balance; that he had purchased the truck from Walter Popp between Sept. 10 and Sept. 15, 1944, and transferred it to B. C. Young in Cedar County. He identified Exhibit 'A' as a duplicate carbon copy of the original conditional sales contract between him and Young, marked duplicate for filing, and testified that he retained title to the truck as provided in the contract. Plaintiff objected to the offer in evidence of Exhibit 'A' 'because it was not executed or signed by the vendor or seller, Alderdyce; that it did not comply with Section 10016 of the Code; that it was invalid and immaterial for any purpose; that it was not notice to a subsequent purchaser; that there was no proper showing that B. C. Young was a resident of Franklin County, Iowa on the date of the filing of the instrument; that the same was not subject to filing and did not constitute notice either actual or constructive of any claim or lien against the truck in question.'

Exhibit 'C' was then identified by the witness, Alderdyce. Exhibit 'A' is not set out in the printed record. The following appears in the printed Record: 'It was stated by counsel at that time (the time of its offer) that Exhibit 'C' was the duplicate original of the copy which was filed in the office of the Recorder of Deeds of Franklin County; that it was signed by both parties while the one that was recorded was signed by the purchaser only.'

A photostatic copy of Exhibit 'C' appears as page 19 of the printed 'Record.' It is a printed form. In the printed body it is expressly stated that the instrument will be assigned to the Central National Bank and Trust Company of Des Moines, and further stated that the purchaser acknowledges notice of this intended sale to the Des Moines bank and will thereafter deal directly with it. Immediately following these printed paragraphs is the blank line for the signature of the purchaser. The signature of B. C. Young appears there on this Exhibit. Immediately below is a printed sale, assignment, etc., of the contract to the said Des Moines bank. Then follows a blank line, designated 'Signature of Dealer,' on which is the name 'D. D. Alderdyce.' But this paragraph above the signature of Alderdyce is something more than an assignment. It is also an acceptance of the contract or offer of Young, for the first line thereof is as follows: 'The within contract is hereby accepted and for valuable consideration the receipt whereof is hereby acknowledged, the undersigned hereby sells, assigns, transfers, and sets over to' said bank, 'the within contract * * *.' (Italics ours.)

It was the expressed thought of the trial court that Alderdyce had not executed this copy, Exhibit 'C,' as vendor, as required by Section 10016, Code 1939, but only as assignor. We do not pass upon this conclusion of the court because it is not necessary to the determination of this appeal. Exhibit 'A,' it appears from the record, was the copy of the conditional sale contract which was filed in Franklin County. It was executed and acknowledged by B. C. Young, the vendee or purchaser, but was not executed by Alderdyce. Not being executed by him, it could not, and did not, bear his acknowledgment.

Section 10016, Code 1939, section 556.4, Code 1946, provides:

'Conditional sales. No sale, contract, or lease, wherein the transfer of title or ownership of personal property is made to depend upon any condition, shall be valid against any creditor or purchaser of the vendee or lessee in actual possession obtained in pursuance thereof, without notice, unless the same be in writing, executed by the vendor and vendee, * * * acknowledged by the vendor or vendee, * * *, any such instrument or a true copy thereof is duly recorded by, or filed and deposited with, the recorder of deeds of the county where the vendee or lessee resides if he be a resident of this state at the time of the execution of the instrument; * * *.' (Italics ours.)

Exhibit 'C' bore the signatures of both Alderdyce, the vendor, and of Young, the vendee, but neither one acknowledged the execution of the instrument. It was neither filed nor recorded. Although Alderdyce testified that he sold Exhibit 'C' to the intervener, the record discloses no assignment thereof to it, either on the contract or detached from it. Neither is there anything in the record showing that any such assignment was ever recorded in Franklin County, or elsewhere. The record on the offer of Exhibit 'C' is as...