Cook v. Gilchrist

48 N.W. 84, 82 Iowa 277

• Court: Supreme Court of Iowa
• Decided: February 9, 1891
• Status: Published

Opinion

KobiNSON, J.

From the year 1878 until March, 1888, B. T. Frederick and John M. Gilchrist were associated together as partners under the name oí B. T. Frederick & Co. The firm carried on a foundry and machine shop in Marshalltown. Frederick owned three-fourths of the business, and the property with which it was carried on, and Gilchrist owned the remainder. The title to an undivided three-fourths of the real estate used in the business was vested in Frederick, and the title to the remainder was vested in Gilchrist. On the tenth day of October, 1881, Gilchrist made to plaintiff a mortgage bond for the sum of three thousand dollars, which was signed by Frederick as surety. To secure its payment Gilchrist and wife executed to the plaintiff a mortgage on his share of the partnership property, including his interest in the real estate used by the firm. Of the money procured by means of the bond and mortgage, two thousand dollars were paid to Frederick on account of a debt due him from Gilchrist for the purchase price of his interest in the property used by the firm. On the tenth day of October, 1884, the bond being due and unpaid, Gilchrist and Frederick, for the purpose of extending the loan, made a new bond to the plaintiff, and the old one was surrendered. In March, 1888, Frederick concluded a sale to the defendant, A. E. Shorthill, of all his interest in the property and business of B. T. Frederick & Co., including his title to the real estate used by it. In November, 1888, Gilchrist sold and conveyed to Shorthill his interest in the business of the firm, and in the property used by it. This action is brought to recover the amount due on the second bond, and to foreclose the mortgage given to secure the indebtedness represented by the first bond, and for an attorney’s fee.

The appellant Shorthill claims that, at the time of his purchase from Frederick, Gilchrist had overdrawn his share of the assets of the firm, and was owing on that account more than three thousand dollars; that by virtue of the assignment from Frederick the appellant became entitled to recover that amount from Gilchrist, and that he acquired that right without knowledge or notice of the claims of the plaintiff; that he is entitled to a lien upon Gilchrist’s share of the property of the firm, as it existed in March, 1888, and thereafter until it was sold to Shorthill; that all the property which the plaintiff claims is included in her mortgage is partnership property, and, therefore, that his lien is paramount to the lien of the mortgage. The district court found that Frederick did not sell to Shorthill the claim upon which he demands relief, and rendered judgment in favor of the plaintiff for thirty-five hundred and six dollars and seventy-five cents, an attorney’s fee of seventy-five dollars and costs, and decreed the foreclosure of the mortgage as to the real property therein described, and as to an undivided one-fourth of all stock, assets and material of the firm of B. T. Frederick & Co., as they existed on the fifteenth day of February, 1888.

I. A commission was issued on the application of the plaintiff to take the deposition of Frederick and his 1. Evidence: depositions: notiee. wife in San Diego, California. But five u ' days notice of the suing out of the com-, . . ° mission was given to the defendants, and they did not appear in response to the notice, nor file cross-interrogatories. The depositions were taken as directed by the commission, and returned to the clerk of the district court. The defendant filed a motion to suppress the deposition, which was overruled, and that ruling is presented for review. Reasonable notice of the suing out of a commission to take depositions must be given to the adverse party. Code, sec. 3727. Such notice “is at least when served on the attorney ten days, and when served on the party within the county five days.” Code, sec. 3730. The notice in this .case was served on the defendants'in the county of Marshall. The appellants contend that “the county” referred to ' in the statute is the county within which the depositions are to be taken, and cite Kennedy v. Rosier, 71 Iowa, 671, as supporting that claim. That was a case where depositions were taken on notice only, and not on commission. It is tke practice in suck cases for parties in interest to attend tke examination of witnesses personally or by attorney, and it is tkeir rigkt so to do. But wken depositions are taken on commission, witk interrogatories attacked, neitker party can attend in person, nor by attorney, unless tke adverse party is present or is represented. Code, sec. 8738. It is not tke intent of tke statute to allow tke person on wkom tke notice is served in suck cases time in wkiclr to reack tke place wkere tke depositions are to be taken, before tke commission issues, nor is it designed to allow time for bim to communicate witk tke witness before filing kis cross-interrogatories. If ke is surprised by tke testimony given, ke may kave tke rigkt to a continuance, but ke is entitled only to tke time given by tke statute for filing kis cross-interrogatories. Tkat, in our opinion, wken notice of suing out tke commission is served on a party' witkin tke county from wkick tke commission is to issue, is five days.

II. Tke certificate of tke notary wko took tke depositions states tkat tkey were taken before kim, and 2 _._;pres. pprsons^cei-tificate. reduced to writing in. kis presence, by “ Delia Lewis.” It is not skown tkat ske was nof¡ tke agent or attorney of tke plaintiff, and tke appellant contends tkat tke depositions skould kave been suppressed for that reason. But it is not skown tkat ske was suck agent, or attorney, and under tke rule announced in Turner v. Hardin, 80 Iowa, 691, tke objection made is not well founded.

III. The property upon wkick tke mortgage of the plaintiff was given is described as follows: “.Tke s. Mortgage: description: ■validity. undivided one-fourtk (1-4) of lots, number one) two and three (1, 2 and 3), in block number twenty-five (25), in the- original town of Marshall, now known, witk its additions, as the city of Marshalltown, including tke undivided one-fourtk (1-4) of all buildings and machinery therein, and all fixtures, and tke undivided one-fourtk of all stock, assets and material of tke firm of B. T. Frederick & Co., being the said John M. Gilchrist’s interest in the property oí said firm, or that may hereafter be acquired.” It is also described as situate in the county of Marshall, in the state of Iowa.

The appellants claim that the description, so far as it relates to personal property, is void for uncertainty. We do not think the claim is well founded. A person reading it, and seeking to know what it included, would be apprised in the beginning that the property was in Marshall county, and that it formed a part of the assets of the firm of B. T. Frederick & Co. It is not suggested that there was more than one firm bearing that name in that county. .By making inquiries which the description naturally suggests, he would learn that the firm named was doing business on the real property described in the mortgage, There would be no more difficulty in ascertaining what property the mortgage was designed to include than there would had the place of business of the firm been described. The articles constituting the ££ stock, assets and material” of the firm were not specified, it n true, but we do not think that was necessary. From the description given it was capable of identification. Rhutasel v. Stephens, 68 Iowa, 627; Wells v. Wilcox, 68 Iowa, 708; McGarry v. McDonnell, post, p. 732. The word ££ or,” in the last phrase of the description, was evidently designed to have the force of ££ and,” and may be so read. Eisfeld v. Kenworth, 50 Iowa, 389 ; Dumont v. United States, 98 U. S. 142. The description is sufficient, as between the parties to the instrument, and as to all parties having notice of it.

TV. The property conveyed by Frederick to Short-hill-was described in the instrument of conveyance as 4‘ turn? construe-10 ‘ follows: ££The undivided three-fourths of lots 1, 2 and 3, in block 25, in the town of Marshall, as per recorded plat, being the property known as the ‘Foundry;’ also the undivided three-fourths of all the machinery, patterns, tools and chattel and personal property in and on said premises, of every name and nature, including the book-accounts and promissory notes pertaining to or growing out of said ‘Foundry,’ or tlie foundry business heretofore, of B. T. Frederick & Co.” It is said that Frederick did not intend to convey to Shorthill his interest in the amount Gilchrist owed for sums he had drawn from the firm in excess of what he was entitled to receive. Frede_ick and his wife testify that it was not the intent to assign that claim, but that it was expressly reserved.. Their testimony is contradicted by Shorthill. When the sale was made to Shorthill the books of the firm showed a balance due to it from Frederick of twenty-eight thousand,. three hundred and eighty-five dollars and sixteen cents, and from Gilchrist of thirteen thousand, six hundred and thirty-five dollars and twenty-six cents. Shorthill and Gilchrist divided the amount of the two balances by four, and agreed that the difference between the quotient and the balance due from Gilchrist represented the amount he owed Shorthill as the assignee of Frederick. That difference is thirty-one hundred and thirty dollars and sixteen cents, and it is for that sum- that Shorthill claims a lien on the mortgaged property senior to that of the plaintiff. When Frederick made the assignment to Shorthill, there had been no settlement of the partnership matters. The books of the firm showed nominal assets in the form of credits to the partners. The value of those credits, as assets, could be determined only by a settlement of the partnership business. Hence, when Frederick conveyed to Shorthill the “ undivided three-fourths of all * * * the book accounts and promissory notes pertaining to or growing out of” the firm business, he in fact conveyed any claims which might be found due him from his partner on final settlement of their business. That such was the intent of Frederick is shown, not only by the very comprehensive language used in the instrument of conveyance, but also by a letter he wrote after the sale had been agreed upon, but before it was completed. The letter was written to his agent at Marshall-town, and contains a reference to the sale, as follows: “Well, Glick, All. [meaning Shorthill] has done me up, and I have sold him the shop, ground, stock, books and the whole business.” That statement is not consistent with the claim he now makes in regard to a reservation. We conclude from an examination of the entire record, that the balance found to be due from Gilchrist was included in the assignment to Shorthill.

Y. Shorthill denies that the mortgage to plaintiff is of any validity, and denies that he had any knowl‘ renewal note: edge of it when he purchased of Frederick. The cancellation and surrender of the first mortgage bond, in the absence of an agreement to that effect, would not discharge the mortgage, but it continued in force as security for the second bond, given as it was, for the purpose of extending the loan. Swan v. Yaple, 35 Iowa, 248; Thorpe v. Durbon, 45 Iowa, 192 ; Heively v. Matteson, 54 Iowa, 505; Fetes v. O'Laughlin, 62 Iowa, 532. The preponderance of the evidence is to the effect that it was the intention and agreement of the parties that the mortgage should stand as security for the new bond.

YI. The mortgage was not recorded in the chattel mortgage records. But it is shown that Shorthill knew 6_. bona eiiaseiT nonce. of its existence when he purchased the .interest of Frederick. He admits that he bad heard of it at that time, and by letter and conversation he has shown that he considered the interest he acquired in the property in controversy subject to the mortgage. The conveyance from Gilchrist to him provided that it was “subject to a mortgage of three thousand dollars to Mary Cook, which J. M. Gilchrist agrees to pay.” Frederick consented to the mortgage when it was given, and agreed that it should be continued as security for the bond in suit. That he had a right to do so, is beyond question. What he did had the effect to make the mortgage paramount to any claim or right he may have had to subject the property upon which it was given to the payment of the debts of Gilchrist to the firm, or to him on firm account. Shorthill acquired no rights from Frederick which he did not possess. As he states, he simply stepped into Frederick’s shoes, and lie is entitled to no relief against the plaintiff which Frederick conld not have obtained.

VII. The appellants complain of the allowance of an attorney’s fee of seventy-five dollars. The bond and 7. attorney bvemeamberT(jf firm. mortgage provide for the payment of a reasonable attorney’s fee in case of suit, The attorneys who commenced the action were Binford & Snelling. An affidavit of the junior member of the firm was filed, which states, in effect, that neither the firm nor either member thereof had made any agreement with plaintiff, nor with anyone else for a division of the attorney’s fees in the case, and that the fees had not been paid. We do not think it was necessary for both members of the firm to make the affidavit required by statute. In the absence of a showing to the contrary, each will be assumed to know what the agreements of the firm are. The affidavit does not recite that there is no agreement, “express or implied,” but the language used necessarily included all agreements, and is sufficient.

; VIII. No evidence as to what is a reasonable fee jwas submitted, but none was required. The amount due on the bond was ascertained, and the ( "asió wiwt is eai attorney’s fee authorized maybe fixed by the court without other proof of what is reasonable than that contained in the record. Acts, 18th Gen. Assem., ch. 185. The cases • of Bank v. Krance, 50 Iowa, 235, and McIntyre v. Cagley, 37 Iowa, 676, did not arise under the statute cited.

IX. The decree directed the foreclosure of the-mortgage as to the personal property owned by the firm 6. Mortgage: foreclosure: decree. of B. T. Frederick & Co., on the fifteenth day of February, 1888. The appellants complain that there was no reason for fixing that date, and that the decree was not sufficiently specific as to the property included within its provisions. The date named seems to have been selected for the reason that the negotiations between Frederick and pu nr tin'll seem to have been commenced at about that time. But whether it is the exact date of the purchase of Shorthill is immaterial. If the decree applies to property which he did not purchase, or if he purchased property which the decree does not affect, he is not injured. The decree described the property substantially in the terms of the mortgage, and is sufficient.

X. We have considered the controlling questions in the case. While our finding as to what passed by the sale from Frederick to Shorthill is not the same as that of the district court, yet in finding that the lien of the plaintiff is paramount to the interest acquired of Short-hill in the mortgaged property we reach the same result.

‘The decree of the district court is aeeirmed.