Hoffman v. Wilhelm

• Decision Date: 07 April 1886
• Citation: 68 Iowa 510,27 N.W. 483
• Parties: HOFFMAN v. WILHELM AND OTHERS.
• Court: Iowa Supreme Court

68 Iowa 510

27 N.W. 483

HOFFMAN

v.WILHELM AND OTHERS.

Supreme Court of Iowa.

Filed April 7, 1886.

Appeal from Jackson circuit court.

This is an action in equity, by which the plaintiff seeks to set aside and cancel the release and satisfaction of a chattel mortgage, upon the ground that the release was procured from him by means of certain alleged fraudulent representations made by the defendant Wilhelm, the maker of the mortgage, and others. There was a demurrer to the petition, which was sustained, and plaintiff appeals.Chas. M. Dunbar, for appellant.

G. L. Johnson, Ellis & McCoy, D. A. Fletcher, and W. C. Gregory, for appellees.

ROTHROCK, J.

It appears from the averments of the petition, and certain amendments thereto, that in the year 1884 the defendant H. R. Wilhelm embarked in the grocery business. He applied to the plaintiff for a loan of money to assist in the enterprise. A loan of $800 was made in pursuance of the request, for which Wilhelm executed to plaintiff his promissory note. Afterwards other sums of money were loaned to Wilhelm by plaintiff, and plaintiff became surety for Wilhelm to others until the total amount of money loaned and liabilities incurred amounted to some $2,400. In November, 1884, Wilhelm executed to plaintiff his promissory note for $900, and a mortgage on certain real estate to secure the same, and at the same time executed to plaintiff a chattel mortgage to secure the note. In December, 1884, the defendant Wilhelm and his counsel called on the plaintiff, and requested him to cancel his real-estate mortgage, and accept, as security for his entire indebtedness, a chattel mortgage upon the stock of goods in the store of Wilhelm, representing to plaintiff that the stock of goods was worth $4,500. The change was accordingly made. On the same day, and after the chattel mortgage was filed for record, it was canceled, and another one executed and filed for record on the twenty-third day of December, 1884, and on the same day the plaintiff took possession of the stock of goods by virtue of his chattel mortgage. Thereupon, and on the same day, certain creditors of Wilhelm caused writs of attachment to be levied on the goods. On the next day the plaintiff's attorney informed the plaintiff that certain creditors of Wilhelm were threatening to obtain writs of attachment from the federal court; that the stock would be attached, taken to Dubuque, causing great loss and expense, and, as the stock was worth at least $4,500, there would be sufficient to satisfy plaintiff's claim even if the attachments which had been levied should be held to be a prior lien; and that, in order to prevent the levy of writs from the federal court, it would be better for plaintiff to take out a writ of attachment, and cancel the mortgage. The chattel mortgage included all goods on hand, and all goods that might thereafter be purchased and added to the stock during the life of the mortgage. The charge of fraud, as shown by the petition, is as follows: “To which suggestion and representation, namely, to cancel said mortgage, your petitioner objected, for the reason that he had no personal knowledge of the amount or value of said goods, and he was fearful that there was not $4,500 worth of goods in said stock, and that said stock would not pay his claim or lien; that said conversation occurred in the office of said Thomas, and the defendants, H. R. Wilhelm and E. B. Wilhelm were present, and said H. R. Wilhelm then stated that there was not less than $4,500 worth of stock on hand; that he knew that fact of his own personal knowledge; that he could prove it to be true by the bills on hand, and that the stock would invoice that amount; and he also asserted that there could be no possible doubt of the fact, as stated, that the actual value of the stock was $4,500. And at the same time said H. R. Wilhelm called upon his brother, E. B. Wilhelm, to state the value of said stock, and said E. B. Wilhelm then stated to your petitioner, in the presence of said H. R. Wilhelm and said Thomas, that there was stock on hand at that date to the amount and value of $4,500; that he knew this fact from his own personal knowledge of the stock and its value; that there could be no doubt of this fact, and it would be sufficient to pay the claim of your petitioner in full. And your petitioner avers that he was ignorant as to the value of...