Cadwell's Bank v. Crittenden
| Decision Date | 03 June 1885 |
| Citation | 23 N.W. 646,66 Iowa 237 |
| Parties | CADWELL'S BANK v. CRITTENDEN, GARNISHEE |
| Court | Iowa Supreme Court |
Appeal from Harrison District Court.
PLAINTIFF instituted an action against one J. P. Creager on a promissory note given by him. Judgment was rendered in said action in plaintiff's favor for $ 2,034.28. An attachment was sued out in the cause, and A. J. Crittenden was garnished thereon as a supposed debtor of the defendant. The garnishee answered that he had in his hands certain insurance policies and book accounts and bills receivable, which had been conveyed to him by Creager in satisfaction of certain indebtedness which Creager owed, and which had been assigned to him. Plaintiff filed a pleading controverting the answer of the garnishee, in which it is alleged that the transaction between Creager and the garnishee was in effect a general assignment by Creager of all of his property for the benefit of creditors, and was void under the statutes of this state because not made for the benefit of all of his creditors. Also that the conveyance under which the garnishee claimed the property in his hands was voluntary, and was executed for the purpose of hindering and delaying the creditors of Creager in the collection of their debts. The cause was tried to the court without the intervention of a jury, and the court found that the garnishee was entitled to hold the property mentioned in the conveyance, and to collect the same and apply the proceeds, after paying the costs of collecting in satisfaction of the debts of Creager, which had been assigned to garnishee, and it was ordered that the garnishee pay into the court any balance remaining in his hands after said costs and debts were paid and satisfied, the same to be applied upon the debts due plaintiff and certain other creditors of Creager, who had also garnished Crittenden. From the judgment plaintiff appeals.
AFFIRMED.
J. W Barnhart, for appellant.
Wright, Baldwin & Haldane and S. I. King, for appellee.
The evidence introduced on the trial in the district court establishes the following facts: For some time prior to the seventh of August, 1884, the defendant Creager had been engaged in business as a general merchant in the town of Logan. On the night of that day his store building and stock of goods were destroyed by fire. He was indebted at that time to Smith & Crittenden, J. M. Phillips, Peregoy & Moore, Stewart Bros. and Metcalf Bros., wholesale dealers at Council Bluffs, in different sums, amounting in the aggregate to $ 2,309.79. He was also indebted to James Yates, who had been in his employ as a salesman, in the sum of $ 278.31. He also owed plaintiffs the debt for which judgment was rendered in the main action, and was indebted in various amounts to other wholesale dealers.
On the day after the fire, the garnishee, who is a member of the firm of Smith & Crittenden, went to Logan, having with him a statement of account of his own firm, also the accounts of the other Council Bluffs houses, which had been assigned to him. The indebtedness of Creager to Smith & Crittenden was much greater than that to any of the other wholesale houses, and he had previously agreed that he would secure the indebtedness to them at any time when they might deem themselves insecure; and when Crittenden went to Logan he demanded security, not only for the debt due his own firm, but for those which had been assigned to him by the other Council Bluffs houses. Creager accordingly executed an instrument which in form is a bill of sale, by which he transferred and signed to Crittenden all books of accounts pertaining to his business at Logan, and certain policies of insurance which covered the stock of goods which was destroyed by the fire. Creager desired that the debt to Yates should be secured, and it was agreed between him and Crittenden that it should be paid out of the proceeds of the property. Yates also agreed to this arrangement, but he made no assignment of his claim to Crittenden. It was also agreed that if any balance remained, after paying the cost of collecting the accounts and policies, and satisfying the claims held by Crittenden and the amount due Yates, the same should be paid over by Crittenden to Creager, but this agreement was not expressed in the written instrument. The property covered by the instrument was all of the property subject to execution which Creager then owned. Crittenden paid nothing to the other firms for the assignment of their claims against Creager, and by his agreement with them he is bound to pay them only in case he succeeds in collecting the amounts.
I. The most important question arising upon the facts proven is whether the transaction in question amounts in law to a general assignment by Creager for the benefit of creditors, or whether it was merely a mortgage of the property covered by the...
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