Reichenbach v. City Trust & Savings Bank

• Decision Date: 03 April 1928
• Docket Number: 38875
• Citation: 218 N.W. 903,205 Iowa 1009
• Parties: F. A. REICHENBACH, Appellee, v. CITY TRUST & SAVINGS BANK, Appellant
• Court: Iowa Supreme Court

218 N.W. 903

205 Iowa 1009

F. A. REICHENBACH, Appellee, v. CITY TRUST & SAVINGS BANK, Appellant

No. 38875

Supreme Court of Iowa, Des Moines

April 3, 1928

Appeal from Boone District Court.--G. D. THOMPSON, Judge.

Action at law for alleged misappropriation of funds. Trial to a jury. Verdict and judgment for plaintiff. Defendant appeals.

Affirmed.

Dyer Jordan & Dyer, for appellant.

T. J Mahoney, for appellee.

OPINION

WAGNER, J.

Prior to March 31, 1923, the plaintiff was indebted to the defendant bank in the principal sum of $ 32,000, secured by two mortgages upon 200 acres of real estate. Being unable to pay the interest which had accrued, on the aforesaid date he executed unto said defendant his promissory note for $ 1,820, due February 1, 1924, and a third mortgage on said real estate, securing the same. After said $ 1,820 note became due, the defendant began action against the plaintiff on said note, and asked for the foreclosure of the mortgage securing the same. In said foreclosure suit, a stipulation was entered into between the parties to the effect that said cause should be continued until the January, 1925, term of the district court, and that no judgment should be taken against Reichenbach prior to that time.

On March 22, 1924, another installment of interest became due, and the plaintiff executed unto the defendant bank his promissory note for $ 2,000, due January 1, 1925, and secured the same by a chattel mortgage upon stock, machinery, straw, and grain. On May 28, 1924, to secure the same $ 2,000 note, the plaintiff executed unto the defendant bank a chattel mortgage upon the crops to be raised on the aforesaid real estate during said year. About August 1, 1924, the plaintiff purchased at Omaha 104 head of hogs, the defendant bank loaning him the purchase money of $ 1,220, for which amount the plaintiff executed his promissory note, due November 1, 1924, and secured the same by chattel mortgage upon 130 hogs, being the 104 purchased at Omaha, and the remainder being hogs not included in the first two chattel mortgages hereinbefore mentioned. In November, 1924, the plaintiff obtained the consent of the defendant bank to ship some of the mortgaged hogs and dispose of them on the Chicago market. Eighty-one hogs were included in said shipment, and all except about a half dozen were of the hogs purchased at Omaha. The hogs were shipped in the name of the defendant bank. It is alleged by plaintiff in his petition, and testified to by him, in substance, that, immediately after making said shipment, he advised the defendant bank, through its cashier, of the shipment in its name, presenting the bank with a duplicate of the bill of lading, and directed the bank that, upon receiving the remittance from the sale of said hogs, in so far as the same would extend, it should apply said proceeds to the satisfaction of the aforesaid chattel mortgages. The defendant bank received from the sale of said hogs the sum of $ 1,587.47.

The third real estate mortgage, hereinbefore referred to, contained the following provision:

"If the taxes assessed on the above described real estate shall remain unpaid after the same are due and payable, then the whole indebtedness shall become due and the party of the second part, or its assigns, may proceed by foreclosure, or in any other lawful mode to make the amount of said note, together with all interest and costs and all taxes and assessments accrued on said real estate."

The defendant bank applied $ 576.24 of the proceeds of the sale of said hogs upon taxes and special assessments levied upon the 200 acres of land, the same being due in the year 1924.

Plaintiff alleges in his petition, in substance, that the defendant bank violated his instructions as to the application of the proceeds of the sale of said hogs, and applied the portion aforesaid in payment of the taxes and special assessment against the land, and that he made demand upon the defendant bank to credit upon the chattel mortgage notes the amount so paid by it, but the defendant refused to do so.

The defendant answered by general denial, admits the payment of $ 576.24 upon taxes, alleges the right, under the aforesaid provision of the mortgage, to so apply the same, and pleads waiver.

At the close of the evidence, each party moved for a directed verdict, and both motions were overruled. The jury returned a verdict for the plaintiff, and judgment was entered thereon. From this action by the trial court the defendant has appealed.

In its assignment of errors as...