167 Iowa 634 | Iowa | 1914
The issues in this case are the same as those raised in Shuetz, Trustee, v. Moline Plow Co., 166 Iowa, 523, except that two additional defenses were interposed, and these only are argued on the present appeal. In October, 1910, Alvin Ogburn was indebted to the Interstate Harvester Company on open account, $2,718.35. Thereafter it sold him a traction engine, husker, and shredder for $1,525, taking one note of $525 and two notes of $500 each. All these notes were secured by a chattel mortgage on the outfit, and the last two
E. Peru, la., 1 — 26—11.
Anchor -Eire Insurance Co.
Standard Fire Insurance Co.
Farmers’ Insurance Co.
Gentlemen: Please pay to .the International H. Co. of A. $2,718.35 and charge to me on insurance to be pd. on my loss, and this will be your receipt for same.
Yours resply, Alvin Ogburn.
This was deposited with the adjusting agent of the several insurance companies. At that time Sproul claimed not to have been aware of Ogburn’s insolvency, but admitted having learned thereof shortly thereafter. By his consent and that of Ogburn, this order was turned over to J. D. Wallingford, who accepted $5,000 from the insurance companies in payment of the loss, and March 3, 1911, thereafter, a meeting of part of the mercantile creditors was had at Wallingford’s office, at which it was arranged to distribute the above amount to such creditors, paying pro rata on their respective claims. This was done; defendant receiving $2,793.01 on the total indebtedness of Ogburn to it of $4,270.35. The payments made in pursuance of that arrangement to two of these creditors were held in the case cited to constitute voidable performances, and it is not questioned but that decision should be followed, were it not for the above order and the chattel mortgage securing the notes. The theory of the defendant is that, though it agreed to reduce its claim on open account and notes in the division of the fund in the hands of Wallingford, it did not release the security afforded by the order and chattel mortgage, and, as these were given more than four months
This conclusion may be conceded if it shall be found that the order and mortgage continued in force. The contention of plaintiff is that these were waived, and that defendant is now estopped from asserting such securities. Prior to the negotiations leading up to and at the meeting of March 3d, the defendant was fully aware of the insolvency of Ogburn, and that bankruptcy proceedings would be instituted, unless the assets of his estate could be distributed in pursuance of an amicable arrangement among his creditors. Were Ogburn adjudged a bankrupt, the order and mortgage likely would be set aside as constituting illegal preferences, and this accounts for the activity of its agent Sproul in bringing about that meeting. The object, by the arrangement then made, was to avoid the expense and litigation incident to bankruptcy proceedings which was recognized by all as the alternative. Undoubtedly the defendant was inclined to let go of as little as possible, and, in consenting to the delivery of the order to Wallingford, insisted on him holding it to protect any interest his company may have had therein, and Wallingford kept it, as he testified, ‘ ‘ awaiting subsequent developments and to see what the interests of the parties were and whether-or not a settlement could be made. ’ ’ Later on he testified that, had there been no settlement, he would have turned the money over to a trustee in bankruptcy, as it was the understanding at the meeting of March 3d that in such event bankruptcy proceedings would follow. This was confirmed by Sproul, who related that the order was not mentioned at the meeting of the creditors; that he merely proposed to scale his claims down so as to share the fund pro rata with other mercantile creditors, but did not release the security afforded by the order, and proposed to discharge the surety from the two notes, but retained the chattel security. If this were true, Wallingford certainly knew nothing of it, for in his letter of March 16, 1911, the
This evidence fully warranted the trial court in concluding that no reservations were made by the defendant, and that, in the face of bankruptcy proceedings, it was ready to waive all claim to any security it had and share the spoils with other creditors. Of course, in doing so, the defendant reduced its claim as every other creditor did, but this was done without any reference to the order or mortgage. There was no hint that it was claiming the amount received under or by virtue of either, and there was no better ground for so claiming, save receiving it, than for asserting a like claim to other of the insurance money paid to other creditors. Such a claim is an afterthought suggested by the exigencies of the present ease. That Sproul was proceeding on the theory that the order and mortgage could not be enforced clearly appears from the testimony of Wallingford:
Q. The situation was just this, was it not, that you wanted to get the insurance money to distribute among all the mercantile creditors, and Sproul wanted to get the full amount of the order Exhibit 13 and still retain certain securities for the indebtedness on open account 1 A. I think that was a correct statement of the situation until a certain time when Mr. Sproul
A change of position by one, in reliance upon the conduct of another, so that a reversal of such conduct would work prejudice to the former,'is essential to estoppel in pais, but not to waiver, and one is just as effectual as a defense as the other.
Of course the choice of one of two inconsistent positions is a waiver of the other. Smith v. Burns, etc., Co., 132 Wis. 177 (111 N. W. 1123). But the intent may be shown in some other way, as by conduct or oral or written expressions.
A waiver takes place where a man dispenses with the performance of something which he had a right to exact. A man may do that not only by saying he dispenses with it (that he excuses the performance), or he may do it as effectually by conduct which naturally and justly leads the other party to believe that he dispenses with it. (2 Herm. on Estoppel, section 825.)
In Thompson v. Corner, 4 Cal. Unrep. 606 (36 Pac. 434), where interest on a note was payable monthly in advance, and, if not paid when due, the principal was to bear a higher rate, acceptance of interest computed at the former rate from time to time during two years was held to waive the latter rate of interest. Here the defendant had the right to assert its claim under th.e order, and, having .full knowledge thereof and of the infirmities of such claim, it chose to enter into the arrangement with other mercantile creditors and accept the dividend paid thereunder, and in so doing, without reservation, it waived all right, if any it had, under and by virtue of the order. Having so waived performance of the order, it is not in a position now to demand that it be given effect. As laid down in the work from which we have quoted:
No one who waives or dispenses with the performance of a contract can rely upon the failure to perform it, either as a defense or cause of action, for no one can complain of a default which he had caused or sanctioned. (2 Herm. on Estop, section 1020.)
We are of opinion that the court rightly held that the order was entirely waived, as to the portion of the insurance
Moreover, the defendant is estopped from claiming under the chattel mortgage. But for the arrangement of March 3d, defendant could have asserted no claim to the insurance money, save as a creditor of Ogbum in bankruptcy proceedings, which otherwise would have been instituted. By entering into that arrangement, it procured the payment therefrom of nearly 64 per cent, of its indebtedness secured by the mortgage. Having obtained this advantage through the adjustment of that date, it may not retain it and at the same time insist upon the enforcement of the mortgage lien. To permit it so to do would prejudice the creditors or the trustee representing them to the extent of the value of the property covered thereby, which, but for such adjustment, must have been distributed among the creditors through the bankruptcy court. This being so, the defendant is estopped from setting up any claim under its mortgage. Notwithstanding this, the company thereafter foreclosed the mortgage and appropriated the property covered thereby to its own use, contrary to the understanding that creditors, other than mercantile, were to have all property, other than the insurance money, out of which to satisfy their claims. But its right to seize this property is not now in issue. The payment of the dividend amounted to a preference such as adjudged in the decision previously rendered. — Affirmed.