63 Iowa 543 | Iowa | 1884
Hamilton, the mortgagor, was a merchant doing business at Knoxville, Marion county. One of the mortgages under which plaintiffs claim was executed on the fourth, and the other on the fifth, of July, 1882. They were given to secure different debts, and each covers all the goods and merchandise then in the store, or which should thereafter be added to the stock. The one first executed also covers all notes and book accounts then in the store, and the other covers all notes, book accounts and other evidences of indebtedness which may thereafter accrue in favor of Hamilton, arising out of the business; and they each provide that, in case of default made in the payment of the debt secured, or in case the mortgagor shall attempt to dispose of or remove the property, or any portion of it, from the county, or whenever the mortgagees shall elect so to do, they may take possession of the mortgaged’ property.
There was evidence tending to prove that when the mort
Defendant asked the court to instruct the jury as follows:
1. That, if the mortgagor was left in possession of the property, with the privilege of continuing the business of buying and selling as before the mortgages were made, and there was no provision for the application of the entire proceeds of the sale of the property to the payment of the' debts secured by the mortgages, but the mortgagor had the privilege of appropriating a portion of such proceeds to his own use, the mortgages were fraudulent in law, and void, as to the creditors of Hamilton.
2. That, if an aiTangement was made between the parties to the mortgages, that the mortgagor was to have full possession and control of the property, with the privilege of applying any portion of it to any other use than the discharge of the debts secured by the mortgages, they were fraudulent in law, and void as to creditors.
3. That, if Hamilton was insolvent when he gave the mortgages, and they covered all the property which, he had invested in the business, and the debts secured by the mortgages were small compared with the value of the property covered by them, and there was an agreement between him and plaintiff that he should remain in possession and carry on the business for an indefinite period of time, these were proper circumstances to be considered by the jury in determining whether the mortgages were given with intent to defraud the other creditors of Hamilton.
It is held in Hughes v. Cory, 20 Iowa, 399, and in Clark v. Hyman, 55 Id., 14, that, under the statutes of this state, where there is no actual intent to defraud, a chattel mortgage is not rendered fraudulent per se by the agreement of. the parties that the mortgagor may retain possession of the property, and dispose of it in the ordinary course of trade, without any agreement that the proceeds shall be applied to the payment of tl¡e debt secured by the mortgage. Appellant does not deny that this is now the settled nile in this state, and we are not asked to reconsider it; but the claim is that this case is distinguished from the cases cited, and taken out of the rule, by the facts of the agreement that the mortgagor might appropriate a part of the proceeds of the mortgaged property for his own support and that of his family, and of his insolvency at the time.
But we are not able to see that the agreement with reference to the support of the mortgagor and his family out of the proceeds of the property at all distinguishes the case from either Hughes v. Cory or Clark v. Hyman. In the former case, the agreement was that the mortgagor should sell the
Other questions are discussed by counsel, but, as they may not arise on a retrial of the case, we deem it unnecessary to determine them. For the error in refusing to submit the case to the jury, the-judgment of the circuit court is reversed, and the cause remanded for a new trial.
Eeversed.