Simon Casady & Co. v. German Sav. Bank of Des Moines

• Citation: 140 N.W. 401,159 Iowa 149
• Court: United States State Supreme Court of Iowa
• Decision Date: 17 March 1913
• Parties: SIMON CASADY & CO. v. GERMAN SAVINGS BANK OF DES MOINES.

159 Iowa 149

140 N.W. 401

SIMON CASADY & CO.

v.GERMAN SAVINGS BANK OF DES MOINES.

Supreme Court of Iowa.

March 17, 1913.

Appeal from District Court, Polk County; Lawrence De Graff, Judge.

Suit in equity to impress a trust or establish an equitable lien upon certain funds in the hands of defendant bank, derived from the sale of certain cattle belonging to one Hartzell, upon which it is claimed plaintiff had a chattel mortgage. The trial court dismissed plaintiff's petition, and plaintiff appeals. Affirmed.Henry & Henry, of Des Moines, for appellant.

Sullivan & Sullivan, of Des Moines, for appellee.

DEEMER, J.

Plaintiff is a copartnership and defendant a corporation, each doing a banking business, the former at the town of Cumming, in Warren county, and the latter in the city of Des Moines. One O. M. Hartzell was a farmer engaged in tilling the soil and raising stock in Madison county; his post office address and market town being Cumming. In the year 1907 he borrowed of plaintiff the sum of $2,000, and gave his note for that amount, maturing March 20, 1908. To secure this note, he executed and delivered to plaintiff, concurrently with the execution of the note, a chattel mortgage purporting to cover certain steers described as follows, to wit: “Forty head of three year old steers, weight about 1,200 lbs., color reds and roans. Worth about $60.00 per head. The same is now in my possession in section 14 and 15, Lee township, Madison county, Iowa.” This mortgage was duly acknowledged and filed for record with the county recorder of Madison county on December 24, 1907. On March 21, 1908, $53.33 in interest was paid upon the note, and on the same date $600 of the principal was paid. On February 12, 1908, Hartzell executed another note to the plaintiff in the sum of $2,452.66, due, according to its terms, 90 days after date, and to secure the same he on the same day executed another mortgage upon certain cattle, containing the following description: “Fifty head of three year old steers, weight 1,250 lbs., color mostly red. That the same is now in my possession in sections 14 and 15, in Lee township, county of Madison, state of Iowa.” This mortgage was duly acknowledged and filed for record in Madison county on February 13, 1908.

Prior to the execution of either of these mortgages, Hartzell executed to the defendant bank his note for the sum of $9,000, and to secure the same, executed a chattel mortgage which covered, among other things, “14 head of cattle,” described as “three years old, mostly red in color.” Hartzell was also indebted to Byers Bros. & Co., commission men of Chicago, to whom he made a mortgage upon 17 other head of steers and three calves, the amount of the indebtedness, which this mortgage was made to secure, being approximately $3,811.49. On April 13, 1908, Hartzell shipped all the cattle covered by these mortgages, amounting in all to 120 head, to the Chicago commission men, retaining some like 50 head upon his farm in Madison county. Hartzell arrived in Chicago with the cattle on April 15th, and there met one O'Donnell, representing the defendant bank, in the office of Byers Bros. O'Donnell inquired about the shipment of the cattle, and wanted to know how the market was, and how much money his bank was to get out of the sale. He was promised all he could spare.

Byers Bros. sold the cattle in the regular way to various packers, and received therefrom the sum of $7,542.06 net. They deducted from this the amount of their indebtedness, to wit, $3,811.49, paid Hartzell the sum of $25, and deposited the remainder, to wit, $3,705.57, to the credit of the defendant bank in the Drovers' National Bank of Chicago.

The Byers Bros. mortgage was upon 100 head of cattle, and was recorded in Madison county on January 23, 1907. It was given for the purchase price of the animals which were bought for Hartzell in the Kansas City market. The defendant used the amount of this credit in the Drovers' Bank for the payment of the indebtedness owed it by Hartzell, leaving something still due from him; and this action is brought by plaintiff to recover the amount so applied by defendant bank, and to establish a lien thereon, upon the theory that the plaintiff, in virtue of its chattel mortgage, had a lien upon the cattle or the proceeds thereof, and that said proceeds were impressed with a trust in its favor to the amount of the chattel mortgages upon the property. In support of this contention, it claims that both Byers Bros. and the defendant bank had knowledge, either actual or constructive, of its mortgages upon the cattle, and that the lien thereby created followed the fund arising from the sale of the animals so long as the money could be traced. On the other hand, defendant denies that it had any knowledge, either actual or constructive, of plaintiff's mortgages, and avers that the said mortgages were each void and of no effect because of insufficiency of the description of the property intended to be covered thereby. It therefore argues that although the mortgages were filed for record in the proper county, and were duly recorded, they gave no notice to the defendant of any lien in favor of plaintiff.

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