Smith v. Clark

• Decision Date: 21 January 1897
• Parties: SMITH v. CLARK, SHERIFF.
• Court: Iowa Supreme Court

100 Iowa 605

69 N.W. 1011

SMITH

v.CLARK, SHERIFF.

Supreme Court of Iowa.

Jan. 21, 1897.

Appeal from district court, Cerro Gordo county; John C. Sherwin, Judge.

Action in equity to establish a lien on personal property. There was a hearing on the merits, and a decree which was in part in favor of each party, and both appeal, the defendant being the appellant. Modified.Blythe, Markley & Smith, for appellant.

Richard Wilber, for appellee.

ROBINSON, J.

On the 5th day of October, 1892, John Bush made to the First National Bank of Mason City, Iowa, his promissory note for the sum of $1,000, payable 60 days after its date. On the 26th day of the same month, Bush executed to the plaintiff an obligation, in the sum of $3,500, which was to be void on condition that Bush should pay the First National Bank of Mason City all notes, overdrafts, and indebtedness of every kind which he should be owing the bank at any time, and should also pay the plaintiff all debts and obligations which the obligor might owe to him; and all this was to be performed within one year from the date of the obligation. To secure the performance of that undertaking, Bush gave to the plaintiff a chattel mortgage on a stock of machinery, machine supplies, buggies, wagons, harrows, and other agricultural implements, office fixtures, and furniture, and “also all book accounts, and all accounts due or hereafter to become due.” The mortgage provided that the mortgaged property should remain in the possession of Bush until default in the performance of conditions the mortgage was designed to secure, unless the mortgagee should deem himself unsafe. The mortgage was recorded in a chattel mortgage record book of the county. On the 1st day of November, 1892, Bush gave to the bank a note for the sum of $1,400, due 30 days after its date. On the 11th day of October, 1894, nearly $2,000 were due on three notes, and both had then been transferred to, and were owned by, the plaintiff. After the chattel mortgage was given as stated, Bush sold portions of the mortgaged property and received in payment eight promissory notes, made payable to himself. Those notes were placed in a safe in the office of Bush, and were thus in his possession on the date last specified. At that time two executions issued on judgments rendered against Bush were placed in the hands of the defendant, as sheriff, for service, and he served them on the same day, by levying upon a quantity of agricultural implements and other articles, including property described in his return as “one Hall's safe and contents, being notes and money and books, seven set of oscillating bobsleds.” On the next day the defendant released all the property he had levied upon, excepting the safe, the notes and money contained therein, and the bobsleds, and at a later time he released the safe. The plaintiff claims that the eight notes to which we have referred were taken under an agreement between the plaintiff and Bush that they were to be held in trust in lieu of the mortgaged property for which they were given, that the bobsleds were covered by the mortgage, and that the defendant knew these facts when the levies were made. The plaintiff asks that he be decreed to have an equity in and lien upon the eight notes and the bobsleds superior to the rights of the defendant under the executions, that the defendant be required to surrender the property, and that it be applied in the satisfaction of the debts due the plaintiff. The defendant admits the taking of the property as stated, but denies that he had any knowledge of the alleged rights of the plaintiff thereto when the levies were made, and avers that the plaintiff, by permitting Bush to deal with the mortgaged property as his own, and permitting him to use it for the payment of his debts to others, has waived his alleged right thereto. The district court found that the notes were held by Bush in trust for the plaintiff, and adjudged him to be entitled to recover them or their proceeds, and established a lien thereon in his favor superior to the levies under the execution, and provided means of enforcing it. From that portion of the decree the defendant appeals. The court also found and adjudged that the record of the mortgage did not impart constructive notice to the defendant, that the executions were levied by him upon the bobsleds without notice of the mortgage, and that he was entitled to...