Richards v. Osceola Bank

• Decision Date: 08 May 1890
• Citation: 79 Iowa 707,45 N.W. 294
• Parties: RICHARDS, COUNTY TREASURER, v. OSCEOLA BANK ET AL.
• Court: Iowa Supreme Court

79 Iowa 707

45 N.W. 294

RICHARDS, COUNTY TREASURER,

v.OSCEOLA BANK ET AL.

Supreme Court of Iowa.

May 8, 1890.

Appeal from district court, Clarke county; J. W. HARVEY, Judge.

Action upon a bond given pursuant to Code, § 912, by the Osceola Bank, with C. W. and G. H. Cowles, sureties, to secure deposits in the bank made by the plaintiff as county treasurer. Findley, as receiver of the bank, intervened in the action. Judgment was rendered for plaintiff on the bond, and for the intervenor in the intervention proceedings. The defendants Cowles and Cowles and the plaintiff appeal.McDill & Sullivan, and M. L. Temple, for appellants Cowles and Cowles.

W. M. Wilson, for appellant Richards.

John Chaney, for appellee, Findley.

BECK, J.

1. The petition shows that the Osceola Bank, under Code, § 912, was selected by the supervisors of the county as a depository for county moneys and executed a bond, as required by the statute, with Cowles and Cowles, as sureties; that there is due from the bank on plaintiff's deposit account, $4,839.65, which it has failed to pay; and that in proceedings instituted upon the relation of the attorney general a receiver was appointed, who holds all the assets of the bank The bank made default, but the defendants Cowles and Cowles answered, admitting the excution of the bond, and, in effect, all the allegations of the petition. They allege that the fact of their relation to the case as sureties was well known to plaintiff from the beginning, and as such they are entitled to have all the property of the principal, the bank, which is solvent, first exhausted. They further allege that, before the proceedings were instituted resulting in the appointment of the receiver, the bank gave plaintiff further security, consisting of certain notes, stocks, and other securities, amounting to more than $9,000, a part of which plaintiff had collected, to the benefit of which they are entitled by the application of the avails of these securities upon the bond. The receiver filed his petition of intervention, alleging that he is entitled to the possession of the notes and securities given to plaintiff; that the transfer thereof was illegal and void, and plaintiff acquired thereby no interest therein; and he prays that the plaintiff be ordered to transfer the securities to him. The bank made default, and judgment thereon was entered; and judgment was also rendered against Cowles and Cowles upon the admissions made in their answer. The judgment contained an order in the following language: “This cause is continued as to the collateral notes mentioned, the answer of defendants, and the petition of intervention of B. F. Nex, receiver.” The court in the same judgment made this further order: “The plaintiff is ordered to turn over the collaterals to the clerk of this court for collection; and he, the clerk aforesaid, is hereby ordered to collect the same, to-wit, [describing each note by name of maker, date, amount, interest, and date of maturity; the total amount of notes being $9,551,] and to hold the proceeds thereof subject to the orders of this court hereafter to be made.” The defendants, in their answer, allege that the notes were transferred by the bank prior to the appointment of the receiver, and were not the property of the receiver when he took possession of the bank assets; that the referee held the notes until they were turned over to the clerk, and that officer has, since they have been in his hands, collected $2,000 thereon. It is further averred that an execution has been issued upon the judgment and levied upon lands of one of the defendants. Defendants ask that the proceeds of the notes be applied on the judgment, and that no execution thereon be enforced until the notes be collected and applied on the judgment. The original receiver resigned, and Findley was appointed in his place. The plaintiff answered the petition of the intervenor, alleging, among other things, that the notes were indorsed to plaintiff by the bank, and turned over in good faith. Other allegations of the answer need not be recited. By agreement the case was transferred to the equity docket, and tried as a chancery case. C. W. Cowles filed a separate answer and cross-bill alleging, after stating matters set up in the prior pleadings of the defendants, that the bank holds the title of certain real estate, and that the judgment in this case is a lien thereon, and praying that until the judgment be enforced against such real estate, and the notes held by the clerk be collected and applied on the judgment, it be not enforced against him.

The notes were delivered to the county treasurer as security for deposits made by the county in the bank by G. H. Cowles, the vice-president, who appears to have transacted the business of the bank. He executed the bond sued upon in the name of the bank, by himself, as vice-president. The notes were given as security to plaintiff upon his request and the request of the county attorney. The court, upon the issues between the intervenors, Findley, the receiver, and the plaintiffs and defendants, found that the bond in suit is “ample security to the county, and that the county treasurer had no right, authority, or power to take the promissory notes turned over as additional security,” and there was no consideration therefor, and the transfer was therefore illegal and void. The court further held that the judgment upon the bond is not a lien upon the real estate owned by the bank, for the reason that it was then in the hands of the receiver, and that defendants had no equities or right which require property of the bank to be exhausted before the judgment can be enforced against defendants' property.

2. It is first insisted by the intervenor and plaintiff that, as defendants did not appeal from the judgment upon the bond, and their appeal is from the judgment upon the proceedings of intervention, they cannot in this appeal insist that the orders and judgment in the proceedings of intervention are erroneous, for the reason...