First National Bank of Onida v. Riggle

• Decision Date: 24 October 1922
• Docket Number: 34690
• Citation: 190 N.W. 143,195 Iowa 189
• Parties: FIRST NATIONAL BANK OF ONIDA, Appellee, v. WILL RIGGLE, Appellee; FIRST STATE BANK OF HARROLD, Intervener, Appellant
• Court: Iowa Supreme Court

190 N.W. 143

195 Iowa 189

FIRST NATIONAL BANK OF ONIDA, Appellee, v. WILL RIGGLE, Appellee;

FIRST STATE BANK OF HARROLD, Intervener, Appellant

No. 34690

Supreme Court of Iowa, Des Moines

October 24, 1922

REHEARING DENIED FEBRUARY 13, 1923.

Appeal from Woodbury District Court.--MILES W. NEWBY, Judge.

ACTION in attachment, wherein plaintiff asked judgment against the principal defendant, on notes executed by him to plaintiff's predecessor. Under the attachment, Rice Bros were garnisheed on the theory that the money in the hands of the garnishee was the property of Riggle, the principal defendant, and that the garnishee was indebted to him. The funds in the hands of the garnishee are the proceeds of cattle shipped by the mortgagor, Riggle, from South Dakota to Rice Bros., commission merchants at Sioux City, Iowa. Appellant had a chattel mortgage on the cattle, or most of them, which was a first mortgage, and duly executed and recorded in South Dakota. The plaintiff also claims to have a mortgage on some of the cattle, executed about a month subsequent to appellant's mortgage. This mortgage was not relied upon by plaintiff in the original petition, but is set up in its answer to appellant's petition of intervention. As to this matter, appellant contends that plaintiff waived its mortgage lien, if it had any, by bringing the attachment suit; and further, that the rights of plaintiff as an attaching creditor are no different or greater than the rights of the mortgagor, Riggle. Whether plaintiff did so waive its lien is not very material in this case, since appellant does not seriously contend that it is entitled to the proceeds of the cattle upon which plaintiff claims to have had a mortgage. Appellee states, in argument, that it is not relying upon its mortgage. Appellee contends that appellant waived its mortgage lien, because, as it claims appellant consented that the mortgagor might ship and sell the cattle, and waived its right to the proceeds. This is the main point in the case. Appellant denies that it so consented, and shows that the mortgagor, Riggle, never had possession or control of the funds in controversy, and seeks to impress a trust thereon in the hands of the garnishee. Other issues and propositions relied upon will be referred to in the opinion.

The contest is between the two banks. Judgment was rendered against the principal defendant for the amount of the note and he has not appealed. As between the banks, the trial court held that plaintiff was entitled to the entire fund remaining in the hands of the garnishee, after deducting the expenses of the shipment, a small amount paid by Rice Bros. to Riggle, by direction of plaintiff, and the proceeds of a few of the cattle in the shipment which, in another action from which no appeal was taken, the court held belonged to persons other than the defendant. The intervener appeals.--Reversed in part.

Reversed.

Burgess, Gill, Sammis & Boylan, for appellant.

E. E. Wagner and D. J. O'Keefe, for appellees.

PRESTON, J. STEVENS, C. J., WEAVER and DE GRAFF, JJ., concur.

OPINION

PRESTON, J.

The parties waived a jury, and the cause was tried to the court. There were 58 head of cattle in the shipment, but it appears that some of these belonged to Riggle's neighbors, and some did not belong to him; so that 8 head, and the proceeds thereof, were eliminated from this case by the decision in the other case. The trial court found that, after making all deductions, the garnishee had in its possession the sum of $ 2,205.37 belonging to defendant, Riggle, and directed that the garnishee pay to the sheriff the said sum, to be applied by him on plaintiff's judgment against Riggle for that amount, and in addition thereto, the amount of plaintiff's costs. After deducting the proceeds of the 8 cattle just referred to, there remained 50 head in the shipment, the proceeds of which are in issue in this case. Of these 50, some were steers, some cows, and some young cattle, heifers. Thirty-six of the steers and cows were branded with the [SEE SYMBOL IN ORIGINAL SOURCE] brand. This is called the hat brand, in the record. Fourteen of the cattle were branded with an "R" brand. Counsel disagree somewhat, in argument, as to whether there were 12 or 14 so branded; but there is very little, if any, dispute as to this, and we find that there were 14. Appellant's chattel mortgages described the cattle branded with the hat brand, while plaintiff's mortgage described the cattle with an "R" brand. Appellee contends that, conceding that appellant had a valid mortgage on the 36 cattle just referred to, still plaintiff was entitled to the proceeds of such cattle, as well as to the 14 not described in appellant's mortgage; while it is appellant's contention that the court should have held that appellant was entitled to the proceeds of the 36 cattle described in its mortgages. The cattle were shipped, received, and sold on October 29, 1920, and were shipped to Rice Bros., to be sold by them on the market in Sioux City, and they were so sold before the writ of attachment was issued. There was no levy on the cattle, and neither party is claiming the specific property, as against those who purchased the cattle from Rice Bros. The notice of garnishment was served on Rice Bros. November 2, 1920, and the proceeds held because of the garnishment. Plaintiff's mortgage is dated January 7, 1920, to secure a note of defendant's for $ 2,100. Appellant's two chattel mortgages, one for $ 7,500, upon which some payments had been made, and the other for $ 5,000, are both dated December 15, 1919. One is referred to as a second mortgage. They cover all the cattle shipped, except the 14 branded "R." Defendant Riggle was in possession of the cattle on his farm, described in the mortgage. As said, the mortgages were duly recorded, and appellee does not question that they would be valid everywhere. It is contended by appellant that appellee had actual notice of appellant's mortgage, as well as constructive notice, before the commencement of this action. There is evidence, though disputed, tending to so show. The appellee relies upon three propositions, to sustain the finding of the trial court: First, that appellant waived any lien it may have had, by the shipment and sale of the cattle by Riggle, with the knowledge and consent of appellant; and that the proceeds in the hands of Rice Bros. are subject to the attachment. A number of cases are cited on this proposition, which will be referred to later. Second, that all the cattle were weighed and sold together; and that there was such a mingling of funds that the court may not determine what amount of the proceeds of the shipment represented cattle claimed by appellant under its mortgages; and that, therefore, plaintiff is entitled to the entire proceeds. Third, that, this being a law action, the finding of the trial court on conflicting evidence is conclusive.

Referring briefly first to the last mentioned proposition, there may be some conflict as to minor matters, but as to the controlling facts, there is no substantial dispute. There is no dispute whatever, and no claim by appellee, that the mortgagor, Riggle, had the possession or control of the funds in controversy, or that they were paid to plaintiff by him. The court made no finding of fact as to some of the issues. We gather from the record that the court found for plaintiff on the ground that appellant had waived its lien. This being so, it was not necessary for the court to pass upon some of the other questions, and we do not understand that it did.

It is necessary to refer to some of the evidence briefly, as to the alleged consent of appellant. First, we are satisfied from the record that plaintiff gave its consent to Riggle to ship the cattle, in so far as it applies to the 14 covered by plaintiff's mortgage. As stated, that may not be very important now. The cattle were shipped in the name of Riggle. The sales account of Rice Bros. is in Riggle's name. It appears that, when the cattle were shipped, and before they were sold, and before the attachment, Riggle told Rice Bros. that appellant had a $ 5,000 mortgage on the cattle, and he directed that the proceeds be sent to the appellant. Riggle testifies that, when he directed that the proceeds of the entire shipment be sent to appellant, he expected to get the money from appellant to pay plaintiff for the 14 head of cattle on which plaintiff had the mortgage--"just had the money sent to one place, and pay up when I got there." The sales account, after deducting the expenses and $ 200 paid to Riggle at the direction of plaintiff before the attachment, charges Riggle with a draft for the balance in the hands of Rice Bros. We take it that the attachment was served before the draft was sent. Officers of appellant bank testify that appellant did not give its consent to the shipment by Riggle, and that the first they knew of it was after the shipment had been made, when they wired Rice Bros. to send the proceeds to it. Appellant offered to turn over to plaintiff the proceeds of the 14 head, when appellant learned that plaintiff claimed that some of the cattle in the shipment were included in plaintiff's mortgage. We do not understand plaintiff to claim that there is any direct evidence that appellant gave such consent, or consented that Riggle should ship the cattle in his own name and receive the proceeds. But the contention is that such consent should be inferred from the circumstances, and because of similar prior transactions and the course of business between Riggle and appellant. In the prior transactions, the proceeds of sales were sent to appellant. At any rate, as we have said, there is no evidence that appellant consented that Riggle should receive or...