Andrew v. Rivers

• Decision Date: 15 January 1929
• Docket Number: 39559
• Citation: 223 N.W. 102,207 Iowa 343
• Parties: L. A. ANDREW, State Superintendent of Banking, Appellee, v. RICHARD RIVERS et al., Appellees; J. H. VAN VLIET, Trustee, Appellant
• Court: Iowa Supreme Court

223 N.W. 102

207 Iowa 343

L. A. ANDREW, State Superintendent of Banking, Appellee, v. RICHARD RIVERS et al., Appellees;

J. H. VAN VLIET, Trustee, Appellant

No. 39559

Supreme Court of Iowa, Des Moines

January 15, 1929

Appeal from Jasper District Court.--H. F. WAGNER, Judge.

Suit in equity, to recover on promissory note, to foreclose real estate and chattel mortgages given to secure it, and to hold purchasers of stock of goods as receivers under the Bulk Sales Law. Decree for plaintiff. Defendant Van Vliet appeals.

Affirmed.

H. E De Reus and Dick C. Van Zante, for appellant.

Korf & Korf, for L. A. Andrew, receiver, appellee.

No appearance for the other appellees.

MORLING J. ALBERT, C. J., and STEVENS, FAVILLE, and DE GRAFF, JJ concur. WAGNER, J., not participating.

OPINION

MORLING, J.

The evidence ranges over an extensive field, and we need not refer to it further than as it is relevant to appellant Van Vliet's contentions that plaintiff should have brought his action within seven days after notice of the bulk sale under which Van Vliet got title, and that plaintiff's right to proceed under the Bulk Sales Law is "barred by limitation, acquiescence, waiver, laches, and estoppel."

Rivers owned a lot and building, in which he kept a stock of merchandise and fixtures. He was owing Burton & Company State Bank $ 8,500. On November 21, 1923, Rivers gave the bank (or its receiver) a note, due March 1, 1926, for this indebtedness, $ 8,500 and a mortgage on the lot, to secure its payment. On May 4, 1925, he gave a note for $ 8,500, due May 14, 1926 (we infer from the arguments, "collateral" for the same debt), and to secure it, gave a chattel mortgage on the fixtures. $ 300 was paid on the principal, reducing it to $ 8,200. The bank went into the hands of the superintendent of banking, as receiver,--when, does not appear. C. A. Porter was the examiner in charge. H. C. Korf was the attorney for the receiver. On January 8, 1926, Rivers and Kaldenberg made a written agreement, whereby Rivers agreed to convey to Kaldenberg the store building, fixtures, and stock, and Kaldenberg agreed to convey to Rivers his equity in a tract of land, and pay Rivers $ 3,500 in cash "upon Rivers' completion of payment of the wholesale bills" then "outstanding against the stock." Deeds were to be made on the payment of the wholesale bills, and on payment of the $ 3,500. The agreement recited that "possession of the premises and stock of goods has been given to" Kaldenberg. The agreement recited the mortgages on the lot, building, and fixtures for $ 8,200, and required Kaldenberg to pay them, together with interest from January 9, 1926. At the time this agreement was made, Kaldenberg was owing Van Vliet a pre-existing debt of $ 1,600 (not due), and, in order to get payment of this debt out of the property which Kaldenberg was to get in the trade, Van Vliet advanced Kaldenberg the further sum of $ 3,000, with which to make the payment to Rivers and enable Rivers to pay his indebtedness to wholesalers. Rivers furnished a list of such debts. Van Vliet advanced the money to pay them, and they were paid accordingly. On January 11, 1926, Rivers gave to Kaldenberg a bill of sale of the stock and fixtures. The same date, Kaldenberg gave to Van Vliet, as security, a bill of sale of the same property. On January 13, 1926, Rivers, in advance of its maturity, paid to Porter the interest to January 9, 1926, on the $ 8,200. On February 2, 1926, Kaldenberg resold the stock to Boat, and Van Vliet made a bill of sale of it to Boat. As a part of this transaction, Boat gave his check for $ 3,500 for the money which he was to pay for the stock. On February 3, 1926, Porter notified Boat that plaintiff was a creditor of Kaldenberg's, and was holding a lien on the stock until the indebtedness of Kaldenberg to plaintiff should be paid. Boat thereupon stopped payment on his $ 3,500 check. Boat seems to be satisfied with the protection he has obtained from stopping payment of his check and from the decree in the lower court, and his interests, are not involved in this appeal. We therefore give the sale to him no further attention.

On February 18, 1926, Porter notified Kaldenberg that the $ 8,200, with interest, would be due on March 1st, and demanded payment accordingly. On March 5, 1926, this action was commenced.

Appellant Van Vliet assigns error as follows:

"1. The plaintiff failed to commence a proceeding within seven days after notice of the sale, and thereafter is entitled to no relief under the Bulk Sales Law.

"2. The plaintiff failed to commence an action until almost six weeks after notice of the sale, and is now barred by limitation, acquiescence, waiver, laches, and estoppel.

"3. The lien of the appellant J. H. Van Vliet, trustee, under his chattel mortgage is superior to the rights of the plaintiff under the Bulk Sales Law."

Appellant thus summarizes his argument:

"(1) That, due to plaintiff's failure to proceed within seven days after notice of the Rivers-Kaldenberg sale, he is entitled to no relief as a creditor of Richard Rivers', under the Bulk Sales Law, but is left to his ordinary remedies.

"(2) That, due to plaintiff's failure to proceed until almost six weeks after notice of the Rivers-Kaldenberg sale, he is now barred by limitation, acquiescence, waiver, laches, and estoppel to receive relief under the Bulk Sales Law, as a creditor of Richard Rivers', and is left to his ordinary legal remedies.

"(3) That, as between the plaintiff and the appellant, the rights of the appellant under his chattel mortgage are superior to the rights of the plaintiff, (a) for the above reasons, when plaintiff attempts proceedings under the Bulk Sales Law, as a creditor of Richard Rivers, (b) due to the equities between the parties plaintiff and appellant when plaintiff attempts to proceed under the Bulk Sales Law, either as a creditor of Richard Rivers or John Kaldenberg."

The evidence relating to the claim of estoppel, acquiescence, waiver, and laches may be sufficiently outlined as follows: William Terpstra testifies that he represented Kaldenberg in the deal with Rivers; that he asked Porter "whether the bank had any mortgage on the stock of goods, and he said they did not; and the same night, I came down to Kellogg and wanted the fixtures released. You [H. C. Korf] told me you would take $ 2,500 and release the fixtures. I think Mr. Porter also told me he wouldn't stand for the stock of goods' being moved out of the building. * * * When I said to Rivers, or to Kaldenberg, that the stock of goods was clear, I was simply communicating to him the fact that Mr. Porter had told me the bank had no mortgage on the stock. * * * that is what I meant by telling them that the stock of goods was clear." Terpstra says that Porter told him that he "had a mortgage on this building, and he told me, 'Yes,' he had a mortgage on the building of $ 8,500 and $ 300 paid; and I wanted to know if he had a lien on the stock, and he said, 'no,' the stock was clear." Kaldenberg says that he never talked to Porter or to Korf about the stock of goods in connection with the Rivers deal, but that the contract was prepared in Korf's office, and he thinks with Korf's assistance. He says:

"I signed a contract that indicated he owed the bank $ 8,200 that wasn't due. The way I understood it was, all that he owed that was due was $ 3,500. * * * Q. Well, you understood that, because the bank had a mortgage, that the bank had no claim under the Bulk Sales Law,--is that it? * * * A. Yes, sir. I said 'yes' a while ago on this account: because Terpstra, my agent, had said that the receiver said this stock was clear. * * * I assumed this debt to the bank, the $ 8,200 in my contract. I thought he would have money or means to pay it."

Van Vliet testifies:

"We had the understanding through Mr. Kaldenberg that this money was to be applied to the wholesale bills,--the wholesale bills that were outstanding at that time. * * * All the time, I knew there was $ 8,200 of indebtedness that Rivers owed. I did not know there wasn't any provisions made under the bulk sales to take care of that. I did not even know there was a Bulk Sales Law. * * * I called Mr. Porter,--that wasn't till after somebody had stopped payment on his check. I don't remember the words he used, but the effect of it was, Mr. Porter told me that they had a claim on this stock of goods. Mr. Boat told me the reason why he stopped payment was because Porter was claiming that the bank had a claim on that stock of goods under the Bulk Sales Law."

Porter testifies that Terpstra called on him several times, trying to get a discount, and asking if the stock was clear.

"I told him we had no mortgage, but were holding it under the Bulk Sales Law. I told him that every time he asked me, and he asked me probably a dozen times."

He says that, as soon as the deal was completed, he told Mr. Korf to bring this action, but "the delay was because you [Korf] were busy, and did not have an opportunity to bring this action." Porter had previous knowledge that Rivers was trying to dispose of the stock. He knew that Kaldenberg was one of the prospective purchasers. Porter however, was away when the trade was made. He found Kaldenberg in possession of the stock about the...