Van Horn v. Smith

• Decision Date: 16 June 1882
• Citation: 12 N.W. 789,59 Iowa 142
• Parties: VAN HORN v. SMITH, SHERIFF, ET AL
• Court: Iowa Supreme Court

12 N.W. 789

59 Iowa 142

VAN HORN v. SMITH, SHERIFF, ET AL

Supreme Court of Iowa, Des Moines

June 16, 1882

Appeal from Marshall Circuit Court.

IN the first count of her petition the plaintiff alleges that the defendants wrongfully seized and converted to their own use a stock of goods of which the plaintiff was the owner, whereby she was damaged in the sum of $ 10,000.

In the second count of her petition the plaintiff alleges that the defendants took possession of certain premises of which she was the owner and occupied them for six months, and that the rental thereof was reasonably worth $ 300. The cause was tried to a jury which returned answers to special interrogatories, and a general verdict for the defendant. The motion for a new trial was overruled as to the first count.

Upon the second count, by consent of defendant, judgment was rendered in favor of plaintiff for one hundred and twenty-five dollars and ten dollars costs. The plaintiff appeals. The material facts are stated in the opinion.

AFFIRMED.

Henderson Carney and W. A. Tewksbury, for the appellant.

Boies & Couch and Nichols & Burnham, for the appellee.

OPINION

DAY, J.

On the 21st day of April, 1876, W. B. Van Horn was in the drug business in the city of Vinton, Iowa. He owed debts, secured by mortgages upon all his real estate, which was encumbered to about the full extent of its value, amounting to about $ 11,700. The defendant, S. H. Watson, was the holder of this debt to the extent of $ 2,640 and interest, for which he held a third mortgage upon the real estate referred to. W. B. Van Horn also owed unsecured debts amounting to about $ 7,000, of which $ 440 was owing to defendant Watson. On the 21st day of April, 1876, W. B. Van Horn, for the expressed consideration of $ 7,000 executed to his wife, the plaintiff, an assignment of his entire stock of goods, wares and merchandise, whether in store or in transit, all books of account, and his personal property not exempt from execution.

The plaintiff at that time had no property other than the store room in which the goods were kept, valued at about $ 3,500. She paid no cash consideration, and was fully aware of her husband's financial condition.

She claims that at the time of the assignment, and in consideration thereof, she agreed unconditionally to pay all her husband's unsecured debts. The jury, however, found specially, that the only agreement made by the plaintiff in consideration of the transfer to her, is contained in a chattel mortgage which she executed the next day, and this finding is abundantly supported by the evidence. This chattel mortgage embraces all the property included in the assignment to the plaintiff, and purports to be executed to certain persons named in the schedules "A", "B" and "C".

Schedule "A" embraces thirty creditors, representing debts amounting to $ 4,545.94. Schedule "B" embraces only the defendant Watson, representing a debt of $ 440. Schedule "C" embraces other creditors, representing debts amounting to $ 2,159.76.

In the chattel mortgage the plaintiff agrees to pay: First to the creditors named in schedule "A" twenty-five per cent of their claims, on the first day of June, 1876, and a like per cent on the first day of each succeeding month. Second: To the creditors named in schedule "B" on the first day of the month after, fifty per cent of the debts named in schedule "A" shall be paid, ten per cent, and a like per cent on the first day of each succeeding month, with interest at ten per cent. Third: To the creditors named in schedule "C" on the first day of the month, after the debts referred to in schedule "B" shall be paid, ten per cent, and a like per cent on the first day of each succeeding month, with interest at seven per cent. The creditors named in schedule "C" are all relatives of the plaintiff, the bulk of the debts being held by her father and sister. On the 14th day of March, 1877, she executed a mortgage upon her real estate, before referred to, to secure these creditors.

The chattel mortgage contains the following provision: "This transfer and assignment is upon the further express condition and agreement, to-wit: That the creditors named in schedule "A" shall have the prior and paramount interest in, and lien upon, said property, until fifty per cent of their respective claims, hereby secured, are paid. Then they and the creditors in schedule "B" shall stand on an equality as to the said property, but their interest in and lien upon it shall be paramount to the creditors named in schedule "C". That the possession of all property herein described shall continue with the grantor until she is in default in some of the payments promised by her for forty days, and even then the owner of the payment so in default for said time shall be entitled hereunder only to the possession of so much of said property as is necessary to pay said payments so in default for said time * * * * . Any creditor accepting or taking any benefit arising out of this instrument or the agreement between grantor and W. B. Van Horn, agrees that he will not enforce or attempt to enforce payment of the indebtedness of said W. B. Van Horn, until the same becomes due under the promise of the grantor to pay the same."

This chattel mortgage was left in the possession of the plaintiff's legal adviser but was not recorded for some time. The defendant, Watson, never assented to, nor in any way recognized or accepted the provisions of this chattel mortgage.

On April 28, 1876, S. H. Watson served notice of action, and on May 3d filed petition claiming of W. B. Van Horn the several sums due from him. On May 18th Watson amended his petition alleging that Van Horn had disposed of his property with intent to defraud his creditors, and asking an attachment which was duly issued, and, on the same day levied upon the stock of goods embraced in the assignment to the plaintiff. Afterward, pursuant to...