55 Iowa 14 | Iowa | 1880
— I. As to the mortgage to Goldman & Hyman. This mortgage is dated November 29, 1878, and is for the expressed consideration of one thousand dollars, and is conditioned as follows: “That if the said Ike Hyman shall save the said Goldman & Hyman harmless as guarantors for him, and save them from loss by reason of their said guarantee heretofore made on his account, then these presents to be void, otherwise in full force.”
The guaranty referred to in this mortgage is as follows: “Eor and in consideration of the sum of one dollar to us in hand paid, by Messx's. E. Eoi’sch & Co., the receipt of which is hereby acknowledged, we do hereby guarantee the prompt payxnent at maturity by Isaac Hyman, of Des Moines, Iowa, for all bills of merchandise which the said E. Eorsch & Co. may sell to the said Isaac Hyxnaix, at any time after the date hereof (not exceeding however, the amoixnt of one thousand dollars). This guarantee to continue in full force for the sum of one thousand dollars until countermanded in writing, and we undertake and agree that, in the event of the said Isaac Hyxxx.aix not paying any of the bills covered hereby at maturity, to pay same on demand, and withoxxt requiring said E. Eorsch & Co. to sue said Isaac Hyman for the same. In witness whereof we have hereunto set oxxr hand and seal, this 15th day of March, 1877.
“Goldman & Hyman.”
Mr. Goldman, a member of the firm of Goldman & Hyman, testified that he executed the guaranty while in the East and explained to his partner after he got back, and that since the
2. The guaranty is a continuing one. It provides: “ This guaranty to continue in full force, for the sum of one thousand dollars, until countermanded in writing.”
Appellants insist that Forsch & Co. simply intended to guard against a verbal revocation, and that this language sim
It is claimed that when Eorsch & Co. extended credit to Ike Hyman to the extent of $1,000, and he paid that sum, the guaranty at once became exhausted. But this construction does not give proper force to the language that the guaranty shall continue until countermanded in writing.
II. As to the mortgage to Joseph Hyman. This mortgage is for the expressed consideration of $3,500, is dated November 14, 1878, and contains the following provisions: “ Upon condition, however, that if the said Ike Hyman shall pay to the said Joseph Hyman, his heirs, assigns, etc., the sum of thirty-five hundred dollars, for and on account of advances made and money loaned by the party of the second part to him, the said Ike Hyman, together with interest at the rate of tén per cent per annum from the date of each several sum at divers times heretofore advanced by the said party on or before January 1, 1879. Upon condition, also, that the said party of the first part shall also pay unto the said party of the second part any additional sums that he may advance, together with a like rate of interest as last above stated. Then, on the payment as aforesaid, these pres-, ents to be void, otherwise in full force. And I, the said Ike Hyman, do hereby covenant and agree to and with the said Joseph Hyman, in case of default of payment of the above mentioned sums of money loaned and advanced, or the further sum or sums that may be advanced, or in case of my attempting to dispose of said stock of goods or fixtures other than in the usual course of retail trade, or in my attempting to remove from the said county of Polk the • aforesaid goods and chattels, or whenever the said mortgagee shall choose so to do, thou, in that case, it shall be lawful for the said mortgagee or his assigns, by himself or his agent, to take possession of said goods wherever found, the possession of these presents being his sufficient authority therefor, and to sell the same a.t public auction, or so much thereof as shall be
“ The rule stare deeisis is one of the most sacred in the law.” It is even of more “importance that a rule should be fixed add stable than that it should be strictly just.” If we should disregard the maxim of sta/re deeisis, “ like the ever returning but never ending labors of the fabled Sisyphus, we would, in each recurring case, have to enter upon its examination and decision as if all were new, without any aid from the experience of the past, or the benefit of any established principle or settled law. Each case, with its decision thus limited, as law, to itself alone, would in turn pass away and be forgotten, leaving behind it no record of principle estab
If it be true that the rapidly increasing commercial interests of the State require that a merchant desiring to secure his creditor upon his stock of goods shall surrender the goods and quit business, rather than that he shall be allowed to continue business in the usual way, the most cogent and controlling reasons require that such a rule of law shall be declared by the legislature, and not by this court.
Erom an examination of the case of Hughes v. Cory it will appear that the fact that the mortgagor had agreed to account to Cory, the mortgagee, for thirty-three per cent of the proceeds of the sales was not regarded as a circumstance favorable to the validity of the transaction. Upon the contrary, the court proceeded to show that the transaction was valid, not lecause of but notwithstanclmg, the provision. On page 408 the court say: “ Nor do we see that the mortgage, in the sense prohibited by the law, reserves an interest in or secures a benefit to the mortgagor at the expense of his other creditors. If he had agreed to apply all the proceeds to the payment of Cory’s debt, or if Cory had taken an instrument letting him into the immediate possession, with a right to receive all the proceeds, the other creditors would have been in a worse condition than they were by the instrument as it was, and yet this would, under the decisions of this court,
If an agreement to apply thirty-tbree per cent of the proceeds of the sales to the satisfaction of the mortgage is more favorable to the other creditors than an agreement to so apply all the proceeds, it follows that the most favorable arrangement for the other creditors is when there is no agreement to so apply any of the proceeds of sales.
The decision in Hughes v. Cory is not only applicable, but it is applicable a fortiori to this case.
3. It is urged that the mortgage in question was in fact executed with the intent to hinder, delay and defraud the creditors of the mortgagor.
The evidence shows that Joseph Hyman furnished his brother Ike the principal part of the capital with which he commenced business in 1876. Erom time to time Joseph advanced to Ike various sums, taking his notes therefor, so that there was, at the time the mortgage in question was executed, an actual, bona fide indebtedness existing, exclusive of interest, amounting to $3,162.10, and, including interest, amounting to about $3,500.
Joseph insisted upon being secured. We cannot find from the evidence that he intended to hinder, delay or defraud other creditors, or that he had any other purpose than to obtain actual security for himself. He was much the largest creditor, and it cannot be regarded as a fraudulent circumstance that he desired security, notwithstanding the fact that he knew that Ike owed other debts. The fact of his relationship ought not to deprive him of the rewards of superior diligence so long as he sought only to protect himself and not to injure others. It is true the securing of his debt left the debtor without the means of paying his other creditors. But this always results when an insolvent debtor secures a part of his creditors. Yet it has never been held that this fact alone renders the transaction fraudulent if otherwise bona fide. The goods were left in the possession of the mortgagor, and
Upon a careful examination of the whole testimony we are unable to find that Joseph Hyman took this mortgage for the purpose of delaying,, hindering or defrauding the other creditors of Ike. The evidence, we think, shows that he took it for his own protection and security, and not for the injury of others.
The debt secured is described as follows: “ Hpon condition, however, that if the said Ike Hyman shall pay to the said Joseph Hyman, his heirs, assigns, etc., the said sum of $3,500, for and on account of advances made and money loaned by the party of the second part to him, the said Ike Hyman, together with interest at the rate of ten per cent per annum from the date of each several sum at divers times heretofore advanced by the said party, on or before January 1, 187 9, * ' * * * then these presents to be void.”
Appellants cite and rely upon Pettibone v. Griswold, 4 Conn., 158; Worth v. Belden, 13 Id., 376; Hart v. Chalker, 14 Id., 77; Sanford v. Wheeler, 13 Id., 165; Jewett v. Preston, 27 Me., 400; Fallett v. Heath, 15 Wis., 601, and Bramhall v. Flood, 41 Conn., 68. In Pettibone v. Griswold, the condition of the mortgage was to pay a note accu-. rately described, and “ all other notes the said grantee might
As to these the description was entirely indefinite, embracing all notes the grantee might in the future indorse or give for Griswold. As to these the mortgage was held inoperative. The difference between that case and the one at the bar is apparent at a glance.
In North v. Belden, the condition of the mortgage was simply for the payment of a note for $500, dated the 8th of March, 1836, and payable on demand. The note in fact secured by the mortgage was made and delivered to the plaintiff to secure him for indorsing or otherwise becoming responsible for Belden for a sum not exceeding $500, in pursuance of an agreement between them that the pffaintiff would assume such responsibility from time to time as should be requested by Belden. It was held that the mortgage was not valid as against the creditors of the mortgagor, because the real nature of the transaction did not appear upon the face of the record with reasonable certainty.
In Sanford v. Wheeler, Stephen Wheeler, who was insolvent, owed his son George Wheeler a Iona, fide debt of $1,418.36. He was also indebted to several other creditors in various sums, amounting in all to $1,182.80, for which George Wheeler had become liable as surety for him. George had not p>aid these debts, and Stephen had not been discharged from them, but his estate was still responsible for them and they had been presented to the commissioners upjon his estate and allowed. Steprhen executed to George a mortgage to secure an unconditional note for $2,601.16, payable on demand. This note was made up of the Iona fide debt due from the mortgagor to the mortgagee, and the amount for which the latter had become surety. There was no actual fraud in the transaction. It
In Hart v. Chalker, the condition of the deed described the subject of the mortgage as a debt due from the mortgagor to the mortgagee by note dated 10th of May, 1831, payable on demand, but did not state the amount of the note. It was held not valid as against subsequent incumbrances.
In Bramhall v. Flood, the moi’tgage described the debt secured as a note of $1,000. No such ixote had ever beexx given, but the mortgagor was indebted for goods sold to the amount of $171.26, and the latter had agreed to furnish additional goods to the extent of $1,000, and the mortgagor made the mortgage as security for the whole. The mortgage was held void against a subsequent attaching creditor.
In Jewett v. Preston, the mox-tgage which was held invalid purpox’ted to have been made to secure two notes, one for $700, dated July 13, 1828, and one for $500, dated January 31, 1835. The evidence showed that the mortgagee never had such notes, but that he held three notes of the mortgagor, one for $800, one for $1,000, on which $500 had been paid, and one of $700, none of them bearing date as stated in the mortgage.
In Fallett v. Heath, it was held that where a chattel mortgage, through mistake, gives a totally false descx-iption of the note it was ixitended to secure, a seizure of the property by the mortgagee cannot be justified in an action at law without l’efoi'ming the instrument. It is evident that these cases all embrace a principle different from that involved in the case at bax’, though it must be conceded that in the earlier cases in the State of Connecticut principles were recognized in announcing the conclusions which would extend the doctrines of the decisions to other cases of quite different character.
In Jones on Mortgages, section 70, it said that the late case of Bramhall v. Flood, 41 Conn., 68, “ is an extreme case and not to be relied upon.”
In Hurd v. Robinson, 11 Ohio St., 232, (238), referring to the course of decision upon this subject in the State of Connecticut, the following language is employed: “ The question in a dozen or more cases has come before the Supreme Court of that State and has evidently produced a degree of painful uncertainty in mortgage securities.
“ This is shown by the case of Merrills v. Swift, 18 Conn., 257, in which the court was equally divided upon the question whether a mortgage to secure several 'notes, and a book debt to the amount of fifteen hundred dollars or thereabouts, was valid. This uncertainty must ever exist when the construction and effect of a written instrument, as conferring a right or title, are made to depend, not upon simple and elementary rules of law, easily capable of application, but upon a question of degree to be decided upon the character and nature of each particular transaction. It is not surprising, therefore, that the course of decisions should fluctuate, and that in the last decision in Connecticut we should meet with the remark with reference to certain deeds under examination, £ although our earlier decisions would hold them void for vagueness, our decisions for the last ten or fifteen years have gone further and established the law to be liberal enough to
In Hurd v. Robinson, 11 Ohio St., 232, a mortgage was held valid as to third persons in which the condition was as follows: “Provided always, and these presents are upon these conditions, that whereas the said Eobinson is indebted to said, bank for moneys loaned and for his liability on divers bills of exchange and promissory notes; no.w, if said Eobinson shall discharge his said several liabilities in six months from this date, then these presents shall become void, otherwise to remain in full force and virtue.”
In Michigan Insurance Company v. Brown, 11 Michigan, 266, a mortgage conditioned-for the payment of all sums now due or hereafter to become due, but without specifying any amount, was held valid. The same doctrine was announced in Machette v. Wanless, 1 Col., 225. See, also, Gill v. Pinny's Adm’s, 12 Ohio St., 38 (48); Webb v. Stone, 24 N. H., 282.
The description in the mortgage in the case at bar is not as indefinite as in some of the cases above referred to. It states the amount of the indebtedness secured within a few dollars of its actual amount, and underestimates instead of overstating it. . We feel no hesitancy in holding that the statement of the debt secured is sufficient.
Affirmed.