Loomis v. Stewart

• Decision Date: 06 October 1888
• Citation: 75 Iowa 387,39 N.W. 660
• Parties: LOOMIS ET AL. v. STEWART ET AL.
• Court: Iowa Supreme Court

75 Iowa 387

39 N.W. 660

LOOMIS ET AL.

v.STEWART ET AL.

Supreme Court of Iowa.

October 6, 1888.

Appeal from district court, Delaware county; JOHN J. NEY, Judge.

Plaintiff brought an action at law, on a money demand, against defendant Stewart, and sued out a writ of attachment, under which certain personal property was seized. Griffin intervened, claiming the property under a deed of assignment executed by Stewart before the attachment was levied. Plaintiff answered the intervenor's petition, alleging that the assignment was void for the reasons (1) that, at the time of its execution and as part of the same transaction, Stewart executed a conveyance of certain real estate owned by him, and not exempt from execution, to the Delaware County Bank, a creditor, in payment of the debt he was owing it, thereby giving to it a preference over the other creditors; and (2) that it did not convey to the assignee all of the property then owned by the assignor, and not exempt from execution. The issue was tried to a jury, and there was a verdict and judgment for intervenor. Plaintiffs appealed.Bronson, Carr & Leroy, W. H. Norris, and Blair & Dunham, for appellants.

Yoran & Arnold, J. B. Satterlee, and E. P. Seeds, for appellees.

REED, J., ( after stating the facts as above.)

There was no substantial conflict in the evidence. The deed of assignment under which the intervenor claims purports to convey to him all of the personal property, rights, and credits belonging to the assignor, and not exempt from execution; and it empowers him to sell and convert the same into money, and pay the same to the creditors of the assignor in proportion to the amount of their several claims. The instrument was executed on the 12th of October, 1887, and was delivered to the assignee on the same day, and he accepted the trust. About one hour before the instrument was executed, Stewart and his wife executed to the Delaware County Bank a conveyance of a 40-acre tract of land, it being the only real estate exempt from execution which he then owned. He was indebted to the bank to the amount of $600, for which it held his notes. Some time before the transaction in question, the cashier of the bank saw him, and urged him to pay the indebtedness, but he stated that he was not able to pay the amount at that time. During the conversation, however, he stated that he owned 40 acres of land, which was incumbered by a mortgage for $600, and he offered to convey the same to the bank, subject to the mortgage, in payment of the debt, and in answer to that offer the cashier stated that the bank would accept the conveyance. Stewart saw the cashier again on the 11th of October, and inquired whether he should make the conveyance to the bank or to one of its officers, and was directed to make it to the bank. He was in failing circumstances at the time, and his creditors were pressing him for payment. When he executed the conveyance, he gave it to the attorney who prepared the deed of assignment, and requested him to deliver it to the bank, which he did about four hours after the delivery of the deed of assignment and the acceptance of the trust of the assignee. The attorney had no authority from the bank to receive or accept the deed for it, but in making the delivery he acted under the direction of Stewart. The assignee, however, was informed of the execution of the deed, and the object for which it was given, before he accepted the trust.

1. It was contended (1) that the naked promise of Stewart to convey the land to the bank, and the agreement of the cashier to accept it in satisfaction of the debt, did not create an enforceable equity in the property in favor of the bank; and (2) that the deed to the bank could not operate to divest Stewart of the property until its delivery, and delivery was not accomplished until the attorney surrendered it to the bank. And it was argued that, as Stewart continued to be the owner of the property when he executed the deed of assignment, and did not include it in that conveyance, the assignment is void. For the purposes of the case it will be admitted that Stewart was the owner of the land when he executed the assignment; that the bank had no equity in it; and that the deed of assignment conveyed his personal property only to the assignee. It follows, then, that the assignment was of but a portion of his property. But the right of a debtor, in the absence of statutory restrictions, to make a partial assignment for the benefit of creditors...