Rollins v. Shaver Wagon & Carriage Co.

• Decision Date: 31 May 1890
• Citation: 80 Iowa 380,45 N.W. 1037
• Court: Iowa Supreme Court
• Parties: ROLLINS v. SHAVER WAGON & CARRIAGE CO. ET AL.

80 Iowa 380

45 N.W. 1037

ROLLINS

v.SHAVER WAGON & CARRIAGE CO. ET AL.

Supreme Court of Iowa.

May 31, 1890.

Appeal from district court, Polk county; JOSIAH GIVEN, Judge.

Action in equity to foreclose a trust-deed.The material facts are stated in the opinion.Wishard & Baily, for appellantsM. W. Bibbins, C. L. Pritchard, Coombs & Co., Davis, Reyburn & Co., and T. T. Haydock Carriage Co.

Mitchell & Dudley and Bosquet & Earle, for appellant the Western Mining & Investment Co.

Phillips & Harrison, for appelleeHenry M. Rollins, trustee.

E. J. Goode, for appellee the Valley National Bank.

Cummins & Wright, for appelleesKelley, Mans & Co., Tuthill Spring Co., and George Pattee.

ROBINSON, J.

The Shaver Wagon & Carriage Company is a corporation duly organized, which commenced its corporate existence on the 9th day of February, 1886.The articles of incorporation provide that it shall have the following powers, viz.: “To make contracts; to acquire by deed, lease, assignment, or otherwise, any property, both real and personal; and to transfer the same at its pleasure; to mortgage or incumber any of its property; to sue and be sued by its corporate name, and in like manner do all other acts and exercise all other powers necessary to be done or performed in and about the conducting or carrying on the business for which such incorporation was organized as fully, in every respect, as private individuals might or could do under the laws of the state.”The business of the company was managed by a board of five drectors, a majority of whom constituted a quorum.On the 12th day of February, 1886, a certificate for 100 shares of stock, of $100 each, was issued to J. T. James.The stock so issued was paid for by the transfer to the wagon and carriage company of bonds of the American Coal Company to the amount of $10,000.On the 15th day of the same month the certificate of stock issued to J. T. James was canceled, and in lieu thereof one for the same number of shares was issued to his wife, O. M. James.On the 24th day of January, 1887, the board of directors of the wagon and carriage company accepted a proposition of Mrs. James to transfer to her the bonds of the coal company in exchange for the stock issued to her as aforesaid, and the exchange was effected accordingly.In August, 1888, defendant Bibbins became a stockholder of the wagon and carriage company, loaned it $3,000 in money, and entered its service as an employe.In the next month he became a member of its board of directors.In October, 1888, the company was financially embarrassed; and, to recover the money he had loaned it, and which was then due, Bibbins, on the 16th day of that month, commenced an action against the company, aided by attachment.During the following night the trust-deed in suit was executed to secure debts owing to the Valley National Bank of Des Moines, O. M. James, Kelley, Maus & Co., Tuthill Spring Company, J. W. Mills, W. T. Shaver,and George Pattee.It conveyed nearly all the property of the wagon and carriage company.On the next day several creditors commenced actions against the company, which were aided by attachments.The writs were levied upon certain real estate of the company situate in Des Moines.On the 23d day of October, 1888, the plaintiff, as trustee, commenced this action to foreclose the deed of trust, and made partiesdefendant the wagon and carriage company, and the attaching creditors.O. M. James assigned the notes made to her, and secured by the trust-deed, to the Western Mining & Investment Company, and gave notice thereof on the 7th day of November, 1888.On the 11th day of January, 1889, J. W. Mills filed notice of the assignment of the notes made to him, and secured by the trust-deed, to Des Moines Savings Bank.The assignees of Mrs. James and of Mills, and the other creditors who were secured by the trust-deed, excepting the Valley National Bank, appeared in the action and filed petitions of intervention.Haydock Bros. also intervened, claiming an interest in the real estate conveyed by the trust-deed by virtue of a judgment, a transcript of which was filed in the office of the clerk of the district court of Polk county on the 29th day of October, 1888.John H. Queal & Co. were creditors of the wagon and carriage company, and had commenced their action, aided by attachment, and caused their writ to be served on the 16th day of October, 1888.The trust-deed specially provides that the claims of the Valley National Bank shall be preferred and paid in full before payment shall be made on the other claims secured by the trust-deed.The petition demands the foreclosure of the trust-deed, and asks the appointment of the plaintiff as receiver, with power to continue the business of the wagon and carriage company so far as it may be necessary and practicable to complete and dispose of the goods in the process of manufacture.From the subsequent pleadings and the decree, we infer that the appointment was made as asked.

The district court, after a trial on the merits, found and decreed as follows (1) That the attachment of defendant Bolton for rent was paramount to the claim of the other parties to the action, and it was established as a first lien upon property in controversy.(2) That the lien of John H. Queal & Co. was senior to the rights of the creditors secured by the trust-deed.(3) That the Valley National Bank was a preferred creditor under the trust-deed, and entitled to have its claim paid from the trust property before payment therefrom to other creditors secured by the deed.(4)That Kelley, Maus & Co., Tuthill Spring Company, Des Moines Savings Bank, as assignee of Mills and George Pattee, were entitled to have their claims paid by the receiver after the claims of Bolton, Queal & Co. and the Valley National Bank were satisfied.The amount to which each one was entitled under the trust-deed was ascertained and fixed.(5) That J. D. Seeberger, Chicago Varnish Company, C. L. Pritchard, Davis, Reyburn & Co., Coombs & Co., Thomas McFarland, T. T. Haydock Carriage Company, and Haydock Bros. were entitled to the payment of their claim as attaching and judgment creditors after the payment of the creditors previously specified, and that, in case any sum remained in the hands of the receiver after paying all of such creditors, the sum found to be due Bibbins in a suit at law then pending should be paid him.(6) That the attachment of Bibbins was invalid as against the creditors of the company, and created no lien upon its property.(7) That the trust-deed was invalid as to O. M. James and her assignee, the Western Mining & Investment Company, and as to W. T. Shaver; and they were denied relief thereunder.

The defendantsBibbins, Pritchard, Coombs & Co., Davis, Reyburn & Co., and T. T. Haydock Carriage Company, and the intervenor the Western Mining & Investment Company, appeal.

1.Intervenors the Des Moines Savings Bank, Pattee, Shaver, Kelley, Maus & Co., Tuthill Spring Company, and Western Mining & Investment Company, separately attack the attachment of Bibbins in their petitions, in language substantially as follows: “The intervenor is informed and believes, and further alleges, that the writ of attachment issued from the district court of Polk county in the suit in which M. W. Bibbins is plaintiff, and the Shaver Wagon & Carriage Company is defendant, and levied upon a portion of the property described in and conveyed by said trust-deed, was wrongfully and maliciously sued out, and that the damages resulting therefrom should be distributed among the creditors holding valid claims under said mortgage or deed of trust; and this intervenor denies that any attaching creditor, party hereto, has any lien upon the said property paramount or prior to the lien of said mortgage or deed of trust.”The grounds upon which the writ in favor of Bibbins was issued are not shown, and whether they were true does not appear.The action of the court in denyng the validity of the attachment was undoubtedly based upon the theory that, under the facts of this case, Bibbins could not assert his claim to the prejudice of the other creditors of the company.The decree provides that it is to be without prejudice to the right of Bibbins to recover a judgment against the company for whatever sum may be due him in the suit then pending at law, and that it is to be without prejudice to the right of the company to recover for the alleged wrongful and malicious suing out of the writ.The question of the rightful suing out of the writ was not adjudicated, excepting as it affected creditors.We are therefore led to inquire whether there was anything in the relations of Bibbins to the company to make his...