107 Iowa 196 | Iowa | 1899
Appellants are judgment creditors of A. S. Garretson, and are in such position as that they may question the conveyances which are attacked, provided they have established the fraud pleaded by them. It appears from the evidence that Garretson was one of the principal promoters of what was known as the “Railroad Syndicate.” lie was also vice-president and director of a corporation known as the “Union Loan & Trust Company.” His brother-inlaw, E. R. Smith, was secretary and treasurer of this last-named corporation. The so-called “Railroad Syndicate” failed April 25, 1893, and in its fall took down the Union Loan & Trust Company. At the time of the failure of the trust company, Garretson was indebted to it more than fifty-five thousand dollars, and the trust company owed Hubbard & Gere, a co-partnership, fifty-five thousand dollars. Gere, of the firm of Hubbard & Gere> was not a member of the syndicate, although he was more or less immediately associated with Garretson in some of his numerous business ventures. He was an incorporator and one of the stockholders in the Union Loan & Trust Company. Garretson, being advised of the financial difficulties of both these corporations, called on Smith, the secretary and treasurer of the trust company, for a list of the local creditors of that institution. This was furnished him on April 22, 1893, and it disclosed four or five local creditors, among them Hubbard & Gere. Garretson thereupon made an arrangement with Smith by which he was to convey the land in controversy (one thousand eight hundred acres) to Hubbard & Gere in payment of their claim against the trust company; and Smith was to credit the
Appellants say in argument that they do not question the validity and priority of this mortgage, but admit its validity and priority in all respects. They further say that, as the Hixon mortgage left no equity in the land, their only recourse is a personal judgment against Hubbard & Gere for the amount of money they received upon the land from the Hixon estate. Their claim is that Hubbard & Gere hold this money' in trust, and they base it upon the following propositions: First, that Smith had no authority to consent to or approve of the conveyance from Garretson to Gere; second, that the conveyance was made when the Hnion .Trust Company and Garretson were both insolvent, and created an illegal preference in favor of Hubbard & Gere; third, that
Three committees were provided:’ (1) An auditing committee; (2) a finance committee; and (3) a committee on applications for loans. The first of these was to “audit and allow bills for the current expenses of the company, to which committee all such bills shall be referred.” The finance committee was to determine “what, and the extent of, the temporary investment of the funds of the company to be made from time to time aside from loans on real estate;” and the committee on applications for loans was to “investigate and decide upon the sufficiency of the security offered.” The secretary had power to cancel mortgages by indorsing on margin of records payments thereof, or by issuing satisfaction pieces. It will be noticed that the auditing committee had nothing to do with any claims save those for current expenses, the finance committee had power to set aside funds of the company for making other loans.than those on real estate,..and the committee on applications simply decided upon the sufficiency of the security offered. Power to pay indebtedness or to accept money or property in satisfaction of indebtedness due to the corporation was not lodged in any of these committees. It was vested then either with the board of directors, or with the officers of the company; and, as the powers conferred upon these officers are not specifically defined, we must look at the law to determine the general powers of such officers.
Now, while the general rule no doubt is that a secretary is not ordinarily the fiscal agent of a corporation, and is not employed to bind it in transactions of a financial character, yet the business of the corporation and the nature of his office may be'' such as that he may perform many and important acts for. his corporation. The business of the loan and trust company was such that larger powers were necessarily implied in its secretary than if it had been organized to carry on some ordinary mercantile pursuit. The duties of the secretary
There is a dispute in the evidence as to the time when the entries shoiving the transactions between Garretson, the trust company, and Hubbard & Gere were entered upon the books of the company; that is, as to whether they were entered before or after the assignment. We do-not regard this as a controlling factor, however, for the reason that our inquiry is as to what the transaction in fact was, rather than- the character of the evidence to- sustain it.
We have already referred to the fact that we do- not think the deed to Gere should be treated as a part of the general assignment for the benefit of creditors, and therefore void as to -creditors of the bank, and need only re-enforce that thought with the suggestion that the evidence clearly shows that Gere accepted the conveyance in good faith, and without knowledge that it was intended by the t-rust company as a part