Webster City Grocery Co. v. Losey & Doty

108 Iowa 687 | Iowa | 1899

GRANGER, J. — I.

1 It will be remembered that, after the writ of attachment was in the hands of the sheriff, the Smith, Lichty & Hillman Company obtained an assignment of the Bearer Valley State Bank mortgage, and gave the same to the sheriff for foreclosure, and the sheriff took possession of the goods by virtue of the mortgage, and closed the store.. He then, by order of the Smith, Lichty & Hillman Company, levied the attachment on part of the stock of goods, and it appears that he set them in the front part of the store,, and on the same day notices were posted for the foreclosure of the mortgage, and a sale of the goods was subsequently made in pursuance of such notice; and no further steps-were taken under the attachment. Appellant claims that the assignment of the mortgage was obtained under the provisions of chapter 117, Acts Twenty-first General Assembly, which provides for attachment creditors to take possession-of mortgaged chattel property by paying or tendering to the holder of the mortgage the amount of the mortgage, debt; and it is said that, having taken the property under the provisions of that act, it was a payment of the mortgage debt, and the remedy left to the Smith, .Lichty & Hillman Company was to pursue the course. pre~ scribed by that act under its attachment. By this we understand appellant to mean that the proceedings under the mortgage to sell were void as the mortgage debt was paid. Reliance is placed on Cochrane v. Rich, 142 Mass. 15 (6 N. E. Rep. 781), and Baumgartner v. Vollmer, ^* Idaho,. — (49 Pac. Rep. 729). Before looking to the application of these cases, it will be well to state that the record here discloses, not a payment, but a purchase, of the mortgage, by the Smith, Lichty & Hillman Company. The indorsement shows that it was “sold, assigned, transferred, and set. over.” The statute in question makes no provision for. an assignment or purchase of a mortgage in such cases. It provides for paying or tendering payment. In the respect of which we' now speak, the statutes of Massachusetts and Idaho are the same. In the Massachusetts case the attaching creditor paid the mortgage under the provisions of the statute, and claimed an assignment of it, which the mortgagee refused, and the action was to compel it. The court held that he was not entitled to an assignment, as the mortgage was paid, holding that the purpose of the statute was a redemption by the attaching creditor. In the Idaho case the Tacts are more extended, but the following will be sufficient: The attaching creditor tendered payment of the mortgages under the statute, after levying his attachment, which payment was accepted. He then put his claim in judgment, took execution, levied upon the property, noticed the same for sale, and then postponed the proceeding to a particular date; and nothing further seems to have been done. Before the expiration of the time to which the proceeding was postponed, the plaintiff obtained copies of the mortgages, and delivered them to the sheriff, with directions to take possession of the property and sell the same. The mortgagor made demand for the delivery of the property, on the ground, among others, that the notes secured by the mortgages had been paid. The sheriff sold the property by virtue of the mortgages, and suit was brought by the mortgagor to recover its value. The court permitted a recovery, on the ground that, having adopted the proceeding by attachment, and having paid the mortgages, so as to entitle him to reimbursement from a sale of the attached property, he could not abandon that proceeding and adopt that of foreclosure. On rehearing, the court filed a supplement to the opinion, in which it adheres to its former conclusion, but makes prominent the fact that the mortgage debt was paid, and that it was not purchased. The court uses this language: “The facts clearly show that the appellant attached the personal property in question, and, in order to obtain possession thereof, paid the mortgage debt that existed against the property. He did not purchase the promissory nóte secured by said mortgage, but paid it under the provisions of section 3389, Rev. St., and thus satisfied said mortgage lien. He could not thereafter foreclose said mortgage. The debt was paid, the mortgage lien satisfied.” That case cites and quotes largely '"the Massachusetts case, and also cites 2 Cobbey Chattel Mortgages, section 718. We think this case is clearly distinguishable, from the fact that Smith, Lichty & Hillman Company did not pay off the mortgage debts, but purchased them, so that the firm stood in place of the assignor, as to the title. ■ We have no doubt that the firm, in purchasing the mortgages, did so to aid its attachment proceedings by owning the prior lien, so as to have the advantage of both; and why might it not do sol 2 We know of no law to prevent an attaching creditor from purchasing a prior mortgage lien on the property attached, and then to pay the mortgage debt, and leave to his attachment any surplus there may be. That is what was done in this case. There is some language in the original opinion in the Massachusetts case that, considered abstractly, seems to us of doubtful import. Limited to the facts of the case, as it should be, it is not doubtful, and is not against our conclusion. In appellant’s amendment to the petition is the following: “Par. 4. That the defendant Smith, Lichty & Hillman Company, in order to enable the sheriff to maintain his said attachment, procured an assignment of the said chattel mortgage from the Beaver Valley State Bank, which said transfer and assignment was made under the provisions of chapter 117, Acts Twenty-firgt General Assembly.” The answer admits this, with other aver-ments of the petition; and, because of it, appellant argues that there is a concession that the transfer of the mortgage was under the provisions of chapter 117, Acts Twenty-first General Assembly. The averment of the petition is, not that the mortgage was paid, but that it was 3 assigned; and it speaks of it' as a transfer. It seems quite clear that the’ admission was not of the fact of a payment, but an assignment or transfer of the debt. Other parts of the pleading strengthen this conclusion.

II. Appellant makes the claim that in selling the property the firm took into account the attachment, as well ■as the mortgage lien, and hence that the property could not legally be sold without appraisement. The difficulty is .with the facts, even if the legal proposition would be correct. The sale appears to have been alone for the payment of the mortgage debt, and none of the proceeds were applied on the attachment.

4 III. There is a complaint that the property was sold in bulk, instead of at retail, and for much less than it was actually worth, if its value is based on what it would be worth in a regular retail trade. The stock sold for about one-half of its value, as indicated by one inventory, and it is likely true that, even at a forced sale, more money might have been received for the goods by -a retail sale of them; but it is exceedingly doubtful if more money would have been realized for the creditors, because of the additional expense of closing out the stock in such a manner. It is sufficient to say that the • evidence by no means discloses a prejudice to creditors by the method of sale adopted.

Some other claims of appellant, based on unfair con•duct of the Smith, Lichty & Hillman Company, we need not consider, because the facts as claimed do not appear from the record. It claims a right to redeem because of conditions broken. We discover no conditions broken to authorize such relief. The judgment will stand awirmed.