Manton v. J. F. Seiberling & Co.

• Decision Date: 04 February 1899
• Citation: 78 N.W. 194,107 Iowa 534
• Court: Iowa Supreme Court
• Parties: MANTON v. J. F. SEIBERLING & CO. ET AL.

107 Iowa 534

78 N.W. 194

MANTON

v.J. F. SEIBERLING & CO. ET AL.

Supreme Court of Iowa.

Feb. 4, 1899.

Appeal from district court, Polk county; W. F. Conrad, Judge.

Suit in equity to foreclose a mortgage. Decree for plaintiff, and defendants appeal. Affirmed.C. W. Johnston and Phillips & Brennan, for appellants.

Bowen & Brockett, for appellee.

DEEMER, J.

On February 5, 1896, J. F. Seiberling & Co., a corporation organized under the laws of the state of Ohio, and having its principal place of business at Akron, in that state, executed its two notes, one to H. B. Manton, and the other to Mrs. Harriet Manton, due five years after date, and payable at the office of the corporation. To secure said notes, the corporation at said time executed a mortgage upon some of its property in the city of Des Moines, Iowa. Mrs. Manton assigned her note to H. B. Manton, and this suit is upon the two notes, and to foreclose the mortgage securing the same. The corporation made an assignment for the benefit of its creditors on March 24, 1896, and WilliamH. Carter, the assignee, was made a party to this suit.

The assignee claims, in answer, that, at the time of the execution of the notes and mortgage, the corporation was insolvent, and that these instruments were made and given to carry out an original plan to follow them in the shortest practical time with an assignment for the benefit of creditors, and that all these matters constituted but one continuous transaction, and are therefore void, under the laws of the state of Ohio, as well as under the statutes of this state. The statute of the state of Ohio relied upon is as follows: “All assignments in trust to a trustee or trustees, made in contemplation of insolvency, with the intent to prefer one or more creditors, shall inure to the equal benefit of all creditors in proportion to the amount of their respective claims, and the trusts arising under the same shall be administered in conformity with the provisions of this chapter.” Rev. St. § 6343. It will be observed that this statute refers to assignments in trust, and not to notes or other evidences of indebtedness. The corporation unquestionably had power to execute the notes in suit; and it is the mortgage executed to secure the notes that the statute refers to, if it refers to any of the instruments declared upon. We are of opinion, however, that this statute does not apply, for the reason that the real estate which is covered by the mortgage is situated in this state, and the validity of the security must be determined by the lex loci rei sitæ. This is familiar doctrine, and we need only cite the following cases in its support: Goddard v. Sawyer, 9 Allen, 78;Swank v. Hufnagle (Ind. Sup.) 12 N. E. 303, 13 N. E. 105;Doyle v. McGuire, 38 Iowa, 410;Loving v. Pairs, 10 Iowa, 282; 1 Jones, Mortg. § 823. In this state an insolvent corporation may secure its creditors, and may prefer one over another, provided, of course, that it does not do so by an instrument or instruments of general assignment, or which are construed to be assignments for the benefit of creditors, and therefore void by reason of preferences. Warfield v. Canning Co., 72 Iowa, 666, 34 N. W. 467;Rollins v. Carriage Co., 80 Iowa, 380, 45 N. W. 1037;Garrett v. Plow Co., 70 Iowa, 697, 29 N. W. 395.

The payees of the...