Hallagan v. Dowell

• Decision Date: 12 February 1913
• Citation: 139 N.W. 883
• Parties: HALLAGAN ET AL. v. DOWELL.
• Court: Iowa Supreme Court

139 N.W. 883

HALLAGAN ET AL.

v.DOWELL.

Supreme Court of Iowa.

Feb. 12, 1913.

Appeal from District Court, Taylor County; H. K. Evans, Judge.

Action upon a foreign judgment. The defendant answered with a general denial and with the affirmative plea that, since the rendition of the judgment, he had been discharged in bankruptcy from all his liabilities, including this alleged judgment. The plaintiff in reply alleged that the judgment sued on was not dischargeable in bankruptcy for the reason that it was rendered (1) on a liability created by the defendant's fraud; and (2) by willful and malicious injury to the plaintiff's property. There was a trial to the court without a jury, and a judgment for the plaintiff. Defendant appeals. Affirmed.W. C. Van Houten, of Lenox, and Frank Wisdom, of Bedford, for appellant.

William M. Jackson, of Bedford, for appellees.

EVANS, J.

This action was begun by Patrick Hallagan, who died after the commencement of the suit, and his executors were substituted as plaintiffs. In the discussion of the case, it will be more convenient for us to refer to him as the plaintiff; he being also the plaintiff in the judgment sued upon. The judgment sued on was obtained in 1902 in the state of Indiana against the defendant herein. The defendant was at that time a resident of Indiana, but immediately removed therefrom to Iowa. It is made to appear that in May, 1903, at Creston, Iowa, the defendant obtained his discharge in bankruptcy, and this fact was pleaded as a defense to this action. In reply and avoidance of this defense, the plaintiff pleaded that the judgment sued on was not dischargeable under the bankruptcy statute, for the reasons already stated above. The Indiana suit was based, as against the defendant Dowell, upon an alleged fraudulent conversion of the proceeds of a wrongful sale of mortgaged cattle. To put the story briefly, the plaintiff Hallagan sold to one Tanner a large number of cattle, and took back mortgages for the purchase money. Tanner wrongfully shipped the cattle to different markets, without the knowledge or consent of Hallagan, and dissipated the proceeds by delivery to various persons. One shipment was made to Indianapolis, and the proceeds of the sale of such shipment, amounting to about $1,000, were paid to the defendant, Dowell, and applied upon an alleged indebtedness owing to him by Tanner. It was held by the trial court in the Indiana case that the proceeds of the sale of the mortgaged cattle were, as a matter of law, the property of the plaintiff. The issue submitted to the jury as to the defendant, Dowell, was whether he received such proceeds and applied the same on his claim against Tanner in good faith, and without knowledge of plaintiffs' ownership thereof, or whether he received same with such knowledge.

The following instruction, given by the Indiana court, will indicate the ground of liability of this defendant: “(6) I instruct you, gentlemen, that if you find from all the evidence that the mortgagor, George W. Tanner, sold certain cattle mortgaged to the plaintiff herein, and the proceeds thereof were received and applied by the defendant, S. A. Dowell, in good faith, without knowledge as to where the money came from, and without knowledge that the money was proceeds of sale of property mortgaged to plaintiff, in payment of certain antecedent indebtedness which the defendant George W. Tanner owed to the defendant S. A. Dowell, and without knowledge by, or assistance of, said Dowell of any fraud or wrong being committed by Tanner, or any one, upon plaintiff's rights, then it would be the duty of the plaintiff to pursue the property itself, and not the proceeds thereof in the hands of Dowell.” And again: “(9) * * * I instruct you further, however, if you find from all of the evidence that the said defendant, Dowell, without any knowledge of the * * * facts above stated in this instruction, and without any knowledge as to where the money came from, received in good faith money paid to him in payment of an antecedent debt due him from Tanner, then in such case Dowell would not be liable for the money so paid him in payment of his antecedent debt. The burden of proof is upon Dowell to show lack of knowledge, and the fact of such antecedent indebtedness to him, and his good faith in the matter.”

[1] The jury rendered a verdict against the defendant for $1,000, and judgment was entered thereon, and this is the judgment sued on. The judgment itself does not show the ground...