Sioux Valley State Bank v. Honnold

| Iowa | May 20, 1892

Robenson, C. J.

In January, 1889, certain land was leased to the defendants J. O. and H. C. Honnold. As a part of the rental for the leased premises, they made a promissory note for the sum of five hundred dollars, payable on the first day of March, 1890. The plaintiff is the owner of that note, and commenced this action soon after it became due. A writ of attachment for the enforcement of the landlord’s lien was issued, and levied upon certain horses, harness, wagon, farming-implements, and stock which were owned by H. 0-Honnold, who was entitled to hold them as exempt from-execution, for the reason that when the lease was made- and when the writ was levied he was a resident of this state, a farmer, and the head of a family. The lease-was in writing, and contains the following provision:

4‘And it is further underátood and agreed by and between these parties that any breach of this contract, and any damage that the first party may sustain by reason of the second party failing to perform this contract, such as failing to do plowing, failing to harvest, stack and thresh grain at proper time, and to deliver-first party’s share according to this contract, and any other failure and damage resulting from such breach,, shall be the same as rent due, and the first party shall have a lien for such damage on all crops growing or grown on said land, and on any and all property of the-second party taken upon or used on said premises during the continuance of this lease, whether the same be exempt from execution or not, under the statutes of' Iowa.”

The plaintiff claims a lien upon the property in controversy by virtue of this provision. The inter-venors claim a prior lien thereon by virtue of two chattel mortgages which were executed by H. C. Honnold,— one of which was given in September, 1889, and the other in November of the same year. The lease was not recorded, and the intervenors had no knowledge of its provisions when the mortgages were taken. The-question we are required to determine is whether an agreement between the landlord and tenant, which is. designed to extend the landlord’s lien to personal property which is exempt from execution, is effectual as against a subsequent mortgagee without notice. The-landlord’s lien is purely statutory, and is conferred by section 2017 of the Code,' as follows: “A landlord shall have a lien for his rent upon all crops grown upon the demised premises, and upon any other personal property of the tenant, which has been nsed on the premises during the term, and not exempt from execution.” * * * ?

The statute gives the landlord no lien upon property which is exempt from execution. Abraham v. Davenport, 73 Iowa, 111" court="Iowa" date_filed="1887-10-24" href="https://app.midpage.ai/document/abraham-v-davenport-7103037?utm_source=webapp" opinion_id="7103037">73 Iowa, 111. A provision in the lease which creates a lien on such property is in'its nature and effect a mortgage, and will be governed by the law applicable to instruments of that character, so far as applicable. The provision under consideration cannot be regarded as a mere waiver of the right to claim the exemption. It does not purport to be a waiver, and, if it were so intended, would be invalid. In Curtis v. O’Brien, 20 Iowa, 376" court="Iowa" date_filed="1866-06-09" href="https://app.midpage.ai/document/curtis-v-obrien-7093489?utm_source=webapp" opinion_id="7093489">20 Iowa, 376, it was held that a waiver of the exemption laws contained in. a promissory note was ineffectual because against public policy, although the maker of the note might have given a valid mortgage on his exempt property, to secure the .payment of the •debt. The same doctrine was announced in Kneetle v. Newcomb, 22 N.Y. 249" court="NY" date_filed="1860-09-05" href="https://app.midpage.ai/document/kneettle-v--newcomb-3587126?utm_source=webapp" opinion_id="3587126">22 N. Y. 249. But the well-settled rules of ■construction require that where a contract is susceptible of two interpretations, by one of which it would be held valid, and by the other void, that one must be adopted which would make it valid. Therefore, if the intent of the parties were doubtful, we would be required to hold that the provision in question was not a mere waiver, but was intended to be in the nature of a mortgage. The language used, however, clearly indicates that such was the effect intended by the parties. In Fejavary v. Broesch, 52 Iowa, 88" court="Iowa" date_filed="1879-10-22" href="https://app.midpage.ai/document/fejavary-v-broesch-7098541?utm_source=webapp" opinion_id="7098541">52 Iowa, 88, a provision similar to that under consideration was held not to be a waiver of the exemption, and not technically a mortgage, but it was said that it created a lien or equitable charge, the validity of which, well as the right of a party to execute it, as must depend upon the same principle as a mortgage. It was further said there is no essential difference between such an instrument and a mortgage, unless it be in the mode of enforcement. In our opinion, the provision under consideration was a mortgage of personal property, within the meaning of section 1923 of the Code, and should have been recorded to be valid against existing creditors or subsequent purchasers without notice. Jones on Chattel Mortgages, sec. 13. It is said that such a holding is in conflict with the doctrine of Richardson v. Petersen, 58 Iowa, 724" court="Iowa" date_filed="1882-06-13" href="https://app.midpage.ai/document/richardson-bros-v-petersen-7100028?utm_source=webapp" opinion_id="7100028">58 Iowa, 724. That case was decided upon an agreed statement of facts, from which it appears that the tenant had disposed of a team, which he had used on the leased premises, and the facts stated justify the inference that it was exempt when disposed of; but the court held that the landlord had a lien on the team which was not divested by the trade of the tenants, although made to a third party without notice. A careful examination of that case will show that the question of. exemption was not considered by this court, and we may conclude that it was not presented in argument, or that the team was not exempt when the landlord's lien attached. The stipulation showed that the tenant was the head of a family “when he parted with the team," but how long he had held that relation is not shown. No stipulation in regard to exempt property appears to have been involved. On the contrary it was assumed that the statutory lien had attached, the court saying: “The horses in question, being used upon the demised premises, are subject to the plaintiff’s [landlord’s] . lien, unless released therefrom by the sale to intervenor. The lien given by the statute is a charge upon the property. of the tenant specified, to secure the rent due under the lease;’’ also, “the horses in controversy were used upon the demised premises, and thus became subject to the lien." The question determined by the court was stated as follows: “We are required to determine whether the landlord’s lien, held by the plaintiffs, was divested by the sale of the horses to the intervenor.” But, as we have seen, the statute gave no lien upon exempt property; therefore the decision has no application to such property, but only to that to which the statutory lien has attached. The judgment of the district court is beyebsed.