87 Iowa 426 | Iowa | 1893
The plaintiffs are composed of nine partnerships and corporations who had sold goods to Miller, and each one of their claims had been reduced to judgment by separate proceedings. They filed pleadings contro-Yerting “the answers of the garnishees, and the parties entered into a stipulation, which, as appears from the appellant’s abstract, was as follows: ‘The stipulation shows that the plaintiffs and the defendants agreed that an action in equity be commenced by the plaintiffs to settle the matters in controversy, arising in the several cases of the plaintiffs against G. W. Miller, and these defendants as garnishees, upon the pleadings, controverting the answers given by said garnishees in said garnishment proceedings, and that said proceedings be continued until the termination of this suit.” In pursuance of' this stipulation, this action was commenced. All the wholesale merchant creditors united as plaintiffs, and set forth in the petition the grounds upon which they claimed that they were entitled to priority over the defendant Nicodemus.
We will now proceed to state the grounds upon which the plaintiffs contend that they are equitably entitled to priority. It appears that the defendant Nicodemus is a resident of the state of Maryland. He is the owner of the Clay County Bank, at Spencer, in this state, and said bank has been managed and its business, conducted, by one H. N. Smith, cashier.
It is claimed by the plaintiffs that it was understood and agreed between the bank and Miller that-these mortgages should not be recorded. It is conceded by the bank that there was such an arrangement as to. the mortgages taken prior to the one which was dated March 20, 1890. It is strenuously contended by Smith,, the manager of the bank, that the omission to record said mortgage was the result of oversight, and was not in pursuance of any ■ arrangement or understanding-with Miller. We think the evidence fairly shows that
There are several grounds upon which it is claimed, by counsel for the defendants that the rule above announced should not be applied to this case. The-principal contention turns upon the alleged fact that the taking of the bill of sale on the sixteenth day of June was an entirely hew transaction; that the debt to Nicodemus was an honest obligation; and that, being a bona fide creditor, he had a right to secure his claim, even if it resulted in the bankruptcy of Miller. This is true if the bill of sale was the only act of Nicodemus which prevented the plaintiffs from securing their claims. But the bill of sale could not purge the several mortgages of their fraudulent character. The mischief was done by withholding the mortgages from record. It is fair to presume that, if the mortgages had been placed on record, the plaintiffs would not have been creditors of Miller. It is true, as claimed by the-appellants, that a mortgage withheld from record is valid between the parties, and there may be creditors-who can not complain of the failure of another creditor to record a mortgage. We are cited to the case of Letts-Fletcher & Co. v. McMasters, 83 Iowa, 449. It is claimed that, under the rule in that case, the taking of the bill of sale, being an independent transaction, and no, claim being made by Nicodemus under the mortgages, the relation of the parties is the same as though the' mortgage had not been given. The cited case is not authority upon such a state of facts as this record, presents. There wras no evidence in that case that the-mortgage was withheld from record by an agreement-to do so, and that the creditors, seeking to overthrow the mortgage, gave credit to the debtor while the-unrecorded mortgage was held by the mortgagee. And Standard Paper Co. v. Guenther, supra, is cited as being; different in its facts.
“Chicago, February 14, 1889.
“Dear Sir: — We would thank you to inform us hereon what you know concerning the integrity,, financial standing, responsibility, and general reputation for promptness of G-. W. Miller, and the same will be held strictly confidential.
“Tours, truly,
“Keith Brothers & Go.”
“He claims stock $22,000; indebtedness $11,500 to $12,000. We believe he has been prompt in meeting*434 bis bills for goods purchased, but complains now of slow collections, owing to a failure of crops last season.
“Yours,
“H. N. Smith,
“February 15, 1889. Cashier.”
While it was the right of Smith to decline to answer this letter, yet, as he did answer it, why did he not frankly say that the indebtedness of Miller was in the form of a mortgage upon his stock of gqods to the bank of which he was cashier. It would be a most violent presumption to hold that, if he had done so, Keith Bros. & Co. would have extended credit to Miller.
The appellants filed a motion to tax the costs of the abstract of the appellees, and of the transcript made necessary thereby, to the appellees, on the ground that both were unnecessary, and this motion is submitted with the case. The abstract filed by the appellants contained one hundred and thirty-five pages. It is a fair presentation of the evidence, and in fact is much more voluminous than necessary. At the close of the introduction of the plaintiffs’ evidence, the defendants filed a written paper, styled “ Exceptions to
The decree of the district court is afstrmed.