Schwartz v. Davis

• Decision Date: 05 February 1894
• Citation: 57 N.W. 849,90 Iowa 324
• Parties: SCHWARTZ v. DAVIS ET AL.
• Court: Iowa Supreme Court

90 Iowa 324

57 N.W. 849

SCHWARTZ

v.DAVIS ET AL.

Supreme Court of Iowa.

Feb. 5, 1894.

Appeal from district court, Des Moines county; James D. Smythe, Judge.

The following is a statement of facts as made by appellant: “On the 29th of December, 1884, Samuel C. Davis & Co. sued out of the district court of Lee county an attachment against John H. Schwartz, the plaintiff herein, on the sole ground that Schwartz was then about to dispose of his property with intent to defraud his creditors. Defendant Joseph A. Smith is surety on the attachment bond for $45,000, which was filed in that case. The attachment was levied, on the day it was issued, on a stock of merchandise belonging to Schwartz, alleged to be of the value of $130,000. J. H. Hellman and others served written notice on the sheriff of their claims to the attached property by virtue of certain chattel mortgages thereon. Davis & Co. immediately furnished an indemnifying bond, and the property was held under the levy. The attachment suit was, on the application of Davis & Co., removed to the United States circuit court for the eastern division of the southern district of Iowa, in which court Davis & Co. filed a petition in equity, alleging the levy of said writ on said stock of merchandise, the property of Schwartz; that the levy was then of full force; and that by reason thereof they were entitled to have a lien thereon, to secure their debt sued for in the attachment suit. It was also alleged that Schwartz had made certain mortgages to Hellman and others, aggregating $42,110.11, on the attached property for the purpose of hindering and defrauding creditors. The mortgagees and Schwartz were made defendants, and the prayer was that the mortgages be set aside; that the property be decreed to be the sole property of Schwartz, subject to their attachment; and that defendants be restrained from suing for the same. In that suit Davis & Co. subsequently filed an application for a receiver to take charge of and sell the attached property, on the ground that there was danger of deterioration in value, etc. On the 17th of January, 1885, the court, after hearing the evidence and arguments of counsel, appointed one Kiser receiver, and required him to cause the property to be appraised, and to sell and dispose of the same in such manner as he thought fit, at private sale, except that he should not sell at less than three-fourths of the appraised value; the net proceeds of sale to be deposited in court, to the credit of said equitable suit. The receiver being thus fully empowered by this order to sell the entire property, a pro forma order was entered by the same court five days later in the attachment suit, with the consent of Schwartz, that until further order Kiser should act as receiver in the attachment suit, making his reports, however, only in the equity case. The attached property was appraised at $80,169 net, and was sold by the receiver for $50,161 net. Schwartz and the mortgagees appeared and answered in the equitable suit, denying all allegations tending to show the invalidity of the mortgages. It was then stipulated that the attachment and equity suits, together with other attachment suits which had been subsequently brought against Schwartz, should be tried together. The causes were afterwards referred to P. T. Lomax, a master in chancery, for hearing, to report his findings of fact and conclusions of law for the information of the court. The master heard the causes, and on the 1st of January, 1890,--five years after the attachment was sued out,--filed a lengthy report of his findings and conclusions, to the effect that three of the chattel mortgages, although given to secure bona fide debts, were fraudulent as to creditors, and should be set aside. Exceptions to the report were filed, on the ground, among others, that the master should have found that the mortgagor and mortgagees acted in good faith, and that there was no evidence showing or tending to show any intention on the part of the mortgagor or mortgagees to hinder, delay, or defraud the creditors of Schwartz. This exception, with others, was sustained, and the court, on the 20th of June, 1890, adjudged all the mortgages to be valid, and that the debts secured thereby be first paid out of the proceeds of the sale of the attached property, which, being more than...