Clark v. Hyman

• Decision Date: 07 December 1880
• Citation: 55 Iowa 14,7 N.W. 386
• Parties: CLARK AND OTHERS v. HYMAN AND OTHERS.
• Court: Iowa Supreme Court

55 Iowa 14

7 N.W. 386

CLARK AND OTHERS

v.HYMAN AND OTHERS.

Supreme Court of Iowa.

Filed December 7, 1880.

Appeal from Polk circuit court.

On the fourteenth day of November, 1878, the defendant Ike Hyman executed to his brother Joseph Hyman a chattel mortgage upon all his stock of hats, caps, furs, gloves, robes, umbrellas, jewelry, and gents' furnishing goods and fixtures in his two store-rooms, situated at Nos. 402 and 411 Walnut street, Des Moines. On the twenty-ninth day of November, 1878, the defendant Ike Hyman executed to Goldman & Hyman a chattel mortgage upon the same property. On the twenty-ninth day of November, 1878, but after the execution of the mortgage last aforesaid, Eddy, Harvey & Co. and Sweet, Dempster & Co. brought their respective suits in the United States circuit court against the said Ike Hyman for merchandise sold him in September, 1878, and caused writs of attachment to be levied upon said stocks of goods. On the same day the officer serving said writs of attachment, upon demand of Joseph Hyman, surrendered the goods to him as mortgagee, and garnished Joseph Hyman and Goldman & Hyman. After the notices of garnishment were served, but on the same day, the plaintiffs sued out their writ of attachment in the Polk circuit court against the property of Ike Hyman, which was served by garnishing Joseph Hyman and Goldman & Hyman.

Whilst these proceedings were pending, on the ninth day of December, 1878, the plaintiffs commenced this action to declare the mortgages fraudulent, and for the appointment of a receiver of the mortgaged property. On the eleventh day of December, 1878, a receiver was appointed. On the same day George W. Gifford & Co. filed a petition of intervention, claiming of the defendant Ike Hyman $381; asking an attachment, and praying that they may be declared to have a lien upon any funds in the hands of the receiver which may remain after the payment of the existing liens. On the eighteenth of December, 1878, the receiver sold the stock of goods to Goldman & Hyman for $5,850, and took from them a bond for payment. On the fourteenth day of May, 1879, Eddy, Harvey & Co. recovered judgment against Ike Hyman for $691, and on the same day Sweet, Dempster & Co. recovered judgment for $640.20. On the twenty-eighth day of August, 1879, the plaintiffs recovered judgment against Ike Hyman in their attachment proceedings for $1,411.92. On the fourth day of October, 1879, Eddy, Harvey & Co. and Sweet, Dempster & Co. filed petitions of intervention in this action. The court found that when the receiver took possession of the said stock there was rent due from Ike Hyman to the amount of $225, which was a first lien on said fund; that the mortgage to Joseph Hyman is a valid security to the amount of $3,547.67, and is a second lien upon the fund; that the mortgage to Goldman & Hyman is a valid security to the extent of $1,000, and is a third lien upon the fund; that Goldman & Hyman are entitled to $75 as attorney's fees, and $69 expended in taking possession of the property and advertising for sale; that after the payment of the above amounts the intervenors and plaintiffs have liens upon said fund in the following amounts and order:

+-------------------------------+
                ¦Eddy, Harvey & Co.    ¦$641 00 ¦
                +----------------------+--------¦
                ¦Sweet, Dempster & Co. ¦640 20  ¦
                +----------------------+--------¦
                ¦Clark Bros.           ¦1,411 22¦
                +----------------------+--------¦
                ¦George Gifford & Co.  ¦381 00  ¦
                +-------------------------------+
                

It was therefore ordered that Goldman & Hyman pay to the receiver $532.98, the balance due upon their purchase of the property, and that the remainder in the hands of the receiver, after paying the expenses of the suit, be paid to the intervenors, Eddy, Harvey & Co. The intervenors appeal.A. B. & J. C. Cummins, for appellants.

Wright, Gatch & Wright and Nacy & Sweeney, for defendants.

DAY, J.

1. As to the mortgage to Goldman & Hyman: This mortgage is dated November 29, 1878, and is for the expressed consideration of $1.000, and is conditioned as follows: “That if the said Ike Hyman shall save the said Goldman & Hyman harmless as guarantors for him, and save them from loss by reason of their said guaranty heretofore made on his account, then these presents to be void, otherwise in full force.”

The guaranty referred to in this mortgage is as follows:

“For and in consideration of the sum of one dollar to us in hand paid by Messrs. F. Forsch & Co., the receipt of which is hereby acknowledged, we do hereby guaranty the prompt payment, at maturity, by Isaac Hyman, of Des Moines, Iowa, for all bills of merchandise which the said F. Forsch & Co. may sell to the said Isaac Hyman at any time after the date hereof, (not exceeding, however, the amount of $1,000;) this guaranty to continue in full force for the sum of $1,000 until countermanded in writing; and we undertake and agree that in the event of the said Isaac Hyman not paying any of the bills covered hereby, at maturity, to pay same on demand, and without requiring said F. Forsch & Co. to sue said Isaac Hyman for the same. In witness whereof, we have hereunto set our hand and seal this fifteenth day of March, 1877.

GOLDMAN & HYMAN.”

Mr. Goldman, a member of the firm of Goldman & Hyman, testified that he executed the guaranty while in the east, and explained to his partner after he got back, and that since the commencement of this suit he executed a note in settlement of the guaranty, payable in four months, without interest. The evidence shows that, after the guaranty and before the purchase of the goods, for which Ike Hyman now owes F. Forsch & Co., he had purchased from them more than $1,000 worth of goods, for which he had paid; and that, when this mortgage was executed, he owed them eleven or twelve hundred dollars. The appellants claim that this mortgage is of no effect as against intervenors, for the reason that it was executed as indemnity for any liability that might exist by reason of the guaranty, and there was, in fact, no liability on the part of Goldman & Hyman upon said guaranty, because-- First, it was not executed by any one authorized to bind the firm of Goldman & Hyman upon such an obligation; second, it is not a continuing guaranty, and was exhausted before the mortgage was given.

First. It may be conceded that Goldman, merely as a member of the firm, had no authority to bind it by the guaranty in question. Still, it cannot be doubted that the firm might ratify and adopt his unauthorized act. It appears from the evidence that Goldman, upon his return from the east, informed his partner, Joseph Hyman, what he had done. Joseph Hyman is the brother of the defendant Ike Hyman, and had before that furnished him money to go into business, and at various times advanced him considerable sums. It does not appear that he expressed any dissatisfaction with his partner's act. Upon the contrary, as a member of the firm, he accepts a mortgage to secure the firm for any liabilities incurred by the guaranty. From this act a ratification of the contract of guaranty may well be inferred.

Second. The guaranty is a continuing one. It provides: “This guaranty to continue in full force, for the sum of $1,000, until countermanded in writing.” Appellants insist that Forsch & Co. simply intended to guard against a verbal revocation, and that this language simply determines the manner in which the guaranty may be revoked, and has no reference to its duration. It is claimed that when Forsch & Co. extended credit to Ike Hyman to the extent of $1,000, and he paid that sum, the guaranty at once became exhausted. But this construction does not give proper force to the language that the guaranty shall continue until countermanded in writing.

2. As to the mortgage to Joseph Hyman: This mortgage is for the express consideration of $3,500, is dated November 14, 1878, and contained the following provisions: “Upon condition, however, that if the said Ike Hyman shall pay to the said Joseph Hyman, his heirs, assigns, etc., the sum of $3,500, for and on account of advances made and money loaned by the party of the second part to him, the said Ike Hyman, together with interest at the rate of 10 per cent. per annum from the date of each several sum at divers times heretofore advanced by the said party, on or before January 1, 1879; upon condition, also, that the said party of the first part shall also pay unto the said party of the second part any additional sums that he may advance, together with a like rate of interest as last above stated,--then, on the payment as aforesaid, these presents to be void; otherwise, in full force. And I, the said Ike Hyman, do hereby covenant and agree to and with the said Joseph Hyman, in case of default of payment of the above-mentioned sums of money loaned and advanced, or the further sum or sums that may be advanced, or in case of my attempting to dispose of said stock of goods or fixtures other than in the usual course of retail trade, or in my attempting to remove from the said county of Polk the aforesaid goods and chattels, or whenever the said mortgagee shall choose so to do, then, in that case, it shall be lawful for the said mortgagee or his assigns, by himself or his agent, to take possession of said goods wherever found, the possession of these presents being his sufficient authority therefor, and to sell the same at public auction, or so much thereof as shall be necessary to pay the amount due or to become due, as the case may be, together with all costs pertaining to the taking, keeping, advertising and selling of said property, together with a reasonable attorney's fee, if the same be foreclosed, or placed in an attorney's hands for foreclosure and collection; the money remaining after paying said sums, if any, to be paid on demand to said party of the first part.”

First. It is claimed by the appellants that this mortgage is fraudulent in law or per se, because it...