104 Iowa 403 | Iowa | 1898
The single question before us is: Where a claim for which collaterals are held as security is filed, in an assignment proceeding, and where the claim is afterwards partly paid from the collaterals, is the claim, because of the payment, to be reduced to that extent, for the purpose of a final distribution of the
Appellant cites-and quotes extensively from People v. E. Remington & Sons, 121 N. Y. 328 (24 N. E. Rep. 793). It was a case of the state- .against an insolvent bank for its dissolution, and a creditor bank, holding collaterals as security, presented and ©ought to prove up its claim for the full amount; and the question was made if the bank should not deduct from its claim what had already been realized on the -securities and the value
We 'have noticed these cases to show the different views entertained by courts as to the equitable considerations that control in such cases, .and that there is no general rule of jurisprudence to be violated by our conclusion. It may be conceded that other courts have announced different views and conclusions on the same subject. We may say that if the estate of the insolvent, in the hands of the assignee, is to be treated as a security for .all the creditors, as some of the cases treat it,— and it is appellant’s theory also, — we see no way to escape the application, of the general rule that where a creditor has security on two funds, and another creditor has it on but one of them, equity will require the first creditor to first exhaust his. security not pledged to the other, so that both creditors may be protected. Treating the estate as property pledged by the law for the payment of all the creditors pro rata, it seems to ns the relation of the appellant to the other creditors is exactly that of the one with security on two funds, on one of which the other creditors have security. In fact, it seems to us 'the rule has express, recognition in this state, in Wurtz v. Hart, 13 Iowa, 515. It is thought by