Hirsch v. Isreal

• Decision Date: 20 October 1898
• Citation: 106 Iowa 498,76 N.W. 811
• Parties: HIRSCH ET AL. v. ISREAL ET AL.
• Court: Iowa Supreme Court

106 Iowa 498

76 N.W. 811

HIRSCH ET AL.

v.ISREAL ET AL.

Supreme Court of Iowa.

Oct. 20, 1898.

Appeal from district court, Cass county; N. M. Macy, Judge.

Suit in equity by two judgment creditors of M. B. Isreal to subject certain personal property in his possession to the payment of their judgments, and for the appointment of a receiver. The other defendants aside from Isreal are mortgagees of the property. It is alleged in the petition that these mortgages are fraudulent; that Isreal is insolvent; and that he retains possession and control of the mortgaged property, the proceeds of which he is applying to his own use. The petition further recites that plaintiffs caused execution to issue upon their judgments, and to be levied upon the property, and that defendants thereupon served written notice upon the sheriff requiring him to release the same; that they thereupon caused an original notice and copy of the petition to be served upon M. B. Isreal, the party in possession of the property. Defendants filed a resistance to the application for a receiver, in which they denied the alleged fraud, and further stated that plaintiffs had no lien upon the property; that the property was not of sufficient value to pay all mortgages in full except by the most judicious management; that they will suffer irreparable injury if the goods are placed in the hands of a receiver; that plaintiffs have a plain, speedy, and adequate remedy at law; that Isreal was in possession of the goods as agent of the mortgagees, and was selling the same, and with the proceeds satisfying the mortgage indebtedness; that plaintiffs have no interest in the goods except as there may be a surplus over and above the mortgage indebtedness; and that there will be no surplus. Upon the issues thus tendered, the application was submitted to the court, resulting in an order appointing a receiver for the mortgaged property. Defendants appeal. Affirmed.Curtis, Follett & Curtis and J. B. Rockafellow, for appellants.

Phelps & Temple, for appellees.

DEEMER, C. J.

The first point made by appellants is that appellees have no lien upon the property, and are therefore not entitled to the appointment of a receiver. The proceeding was commenced for the purpose of canceling the mortgages, and subjecting the property to the payment of appellees' judgments. Such proceedings seem to be authorized by section 3150 and 3151 of the Code of 1873, and section 3152 of the same Code provides that a lien is created upon the property of judgment debtor, or his interest therein, in the hands of the defendant or under his control, which is sufficiently described in the petition, from the time of service of notice and copy of petition on the defendant holding or controlling such property. Appellants contend that these sections of the Code do not apply to a case where the defendant has possession of the property. We are inclined to think they do. See Ware v. Delahaye (Iowa) 64 N. W. 640. But, if they do not, then it is clear that plaintiffs had the right to bring a suit in equity, independent of the statute, for the purpose of subjecting the property to the payment of their judgments; and such suit would be a sufficient basis for the appointment of a receiver. Falkner v. Linehan, 88 Iowa, 641, 55 N. W. 503;O'Brien v. Stambach, 101 Iowa, 40, 69 N. W. 1133; Beach, Mod. Eq. Jur. §§ 883, 885, 887, 925; Wait, Fraud. Conv. §§ 61, 68, and cases cited in notes.

Again, it is insisted that plaintiffs had a plain, speedy, and adequate remedy at law, by levy and sale under execution. It has frequently been decided that a mortgagor of personal property has no such interest in it as that it may be seized and sold under execution. The 21st general assembly passed an act relating to levies upon mortgaged personal property which allows...