Meyer v. Evans

• Citation: 23 N.W. 386,66 Iowa 179
• Parties: MEYER v. EVANS ET AL
• Decision Date: 24 April 1885
• Court: United States State Supreme Court of Iowa

23 N.W. 386

66 Iowa 179

MEYER v. EVANS ET AL

Supreme Court of Iowa, Davenport

April 24, 1885

Appeal from Marshall District Court.

ON the twenty-sixth day of March, 1883, J. S. Jones made an assignment of his property to Timothy Brown, Esq., for the benefit of his creditors. Before making the assignment Jones was in business as a merchant, and the only property received by the assignee was the stock of merchandise which Jones had on hand, and the fixtures in the store-rooms occupied by him while in the business. On the twenty-third day of March preceding the assignment, Jones executed to defendant, J. E Evans, a chattel mortgage covering said stock of merchandise and fixtures, to secure three promissory notes, amounting in the aggregate to $ 3,385.25. After the assignment Evans filed his claim for the amount of said notes, also claiming a lien on the property in the hands of the assignee, by virtue of said mortgage, superior to the claim of the other creditors of Jones, except King Bros. & Co., who, he admitted, had a chattel mortgage on the property superior to the one under which he claimed. Plaintiff thereupon filed his petition in the district court, in which he alleged that he was the owner of claims against Jones, amounting in the aggregate to $ 1,401.40, which had been filed with the assignee; also that the mortgage to Evans was executed without consideration that Jones was not indebted to Evans in any amount whatever and that the mortgage was made for the purpose of appropriating the property to Evans' use for Jones' benefit, and of hindering and delaying the creditors of Jones in the collection of their debts; also alleging that the several debts which constitute plaintiff's claim were contracted after the date when the indebtedness secured to Evans by the chattel mortgage purports to have been contracted, and that the parties who extended credit therefor to Jones were induced to do so by the representation of Evans that Jones was then solvent and not indebted more than $ 800 and that Evans is now estopped from asserting the priority of his mortgage. The prayer of the petition is that Evans' mortgage be canceled, and that he be denied participation in the distribution of the assets in the hands of the assignee. In his answer defendant Evans denied all allegations of the petition, except that of the execution of the mortgage and the filing of his claim. The judgment of the district court grants to plaintiff the relief demanded in the petition. Defendant Evans appeals.

REVERSED.

J. L. Carney, for appellant.

J. H. Bradley, for appellee.

OPINION

REED, J.

I.

At the first term after plaintiff's petition was filed, defendant appeared and filed a motion for security for costs, which was supported by his own affidavit, stating that he had a good defense to plaintiff's claim, and that plaintiff was a nonresident of this state. This motion was overruled, and the ruling thereon is assigned as error. The petition is in form a petition in equity, and the proceeding seems to have been regarded by the parties and the court as an action in equity. The court made an order that the parties take their evidence by deposition, and the evidence was so taken, and the cause was tried in the manner prescribed by statute for the trial of equitable causes. It was, however, properly the proceeding prescribed by section 2121 of the Code for the trial of exceptions by a party in interest to a claim or demand filed against the estate of an insolvent, and we are of the opinion that the plaintiff, in that character of proceedings, cannot be required to give security for costs. The statute under which a non-resident plaintiff may be required to give security for costs (chapter 15, tit. 17, Code) has relation to the ordinary forms of action, and has no application to a proceeding of this character, which is merely incidental to the main proceeding for the settlement of the estate of the insolvent, and the distribution of its assets.

II. The first ground of exception against said chattel mortgage is that it is without consideration. Plaintiff claims that Jones was not indebted to defendant in any amount whatever, and that the mortgage was given solely for the purpose of covering the property from Jones' creditors. The evidence, we think, does not establish this claim. Jones established himself in business in Marshalltown a few months before the mortgage was given, and defendant was in his employ as a clerk or salesman. They had resided in the same county in Kansas, and were acquaintances, and they went to Marshalltown at about the same time. Jones went there for the purpose of establishing himself in business, and it was understood between him and defendant, before they went there, that the latter would enter Jones' employment when the business should be opened.

Two of the notes which are secured by the chattel mortgage bear dates within a few days of the time when the store was opened. The aggregate amount of these notes is $ 3,210.25 and defendant's claim is that they were given for money loaned by him to Jones. The third note bears date on the day before the mortgage was given. It is for $ 275, and was given, as defendant claims, for money due him from Jones for his services in the business. Defendant's salary was $ 75 per month, and plaintiff contends that the claim that he loaned to his employer the amount evidenced by the first two notes is incredible, and that it is not reasonable to suppose that a mere clerk, working on a salary which was barely sufficient to afford him a support, should have that amount of money to loan. Both Jones and defendant swear, however, that defendant had the amount, and that he loaned it to Jones at the dates when the notes were given, and they are not contradicted by any direct testimony. Witnesses who were acquainted with defendant while he lived in Kansas swear, it is true, that he was not understood to be a man of means, and that he did not, to their knowledge, have any such amount of money. But defendant swears that he drew more than $ 2,400 from two banks in Kansas a short time before he went to Marshalltown. Also that he received $ 2,000 from a party at St. Paul,...