Des Moines Nat. Bank v. Council Bluffs Savings Bank

150 F. 301, 80 C.C.A. 189, 1906 U.S. App. LEXIS 4546
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 16, 1906
DocketNo. 2,267
StatusPublished
Cited by1 cases

This text of 150 F. 301 (Des Moines Nat. Bank v. Council Bluffs Savings Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Des Moines Nat. Bank v. Council Bluffs Savings Bank, 150 F. 301, 80 C.C.A. 189, 1906 U.S. App. LEXIS 4546 (8th Cir. 1906).

Opinion

ADAMS, Circuit Judge.

In the bankruptcy proceedings of Edward. Riddle, pending in the District Court for the Southern District of Iowa, divers claims were asserted against a fund of $7,000 resulting from the sale by the receiver in charge of the estate of 125 head of steers belonging to the bankrupt. The' Des Moines National Bank claimed $4,000 of the fund by reason of its ownership of a note secured by a chattel mortgage on the cattle for that amount executed by the Green Cattle Company on October 24, 1903. The Council Bluffs Savings Bank claimed $4,800 of the fund by reason of its ownership of a note secured by another chattel mortgage on the cattle for that amount executed by the bankrupt on January 2, 1904. Abner Graves claimed $600 of the fund by reason of an asserted landlord’s lien for rent due from the bankrupt for use of the farm on which the cattle had been kept. The main controversy presented by this appeal is between the national bank and the savings bank, and concerns the validity and priority of the mortgage held by the former. The fund in dispute was realized from the sale of 125 head of three and four year old de-horned steers. The mortgage of the savings bank accurately described them, both in respect to age, marks, and location at the time it was executed ; and the legal title of the steers was on that day in the bankrupt, who executed the mortgage, so that as between the trustee of the bankrupt’s estate and the savings bank the right of the latter to $4,800 with accrued interest out of the fund in question is undoubted. Whether that right existed as against the national bank depends upon whether the mortgage held by the latter, and.which, was executed by the Green Cattle Company, gave it a prior lien.

• Counsel for the savings bank contend that the first-mentioned mortgage was (1) void for uncertainty of description; and (2), if it was equitably valid betwéen the, parties, its record was ineffective as against [303]*303a subsequent bona fide mortgagee to impart constructive - notice of any prior lien upon the particular cattle conveyed by the latter mortgage. There is no dispute that the Green Cattle Company at the time it executed the first mortgage was the owner of the cattle that were subsequently conveyed by Riddle in his mortgage to the savings bank. But the cattle company was at that time the owner of many other cattle then mingled with them. It owned both three and four year old steers; but how many of either age does not appear. They were then on the ranch of the cattle company in the state of Colorado. At that time the cattle company had what is called .a “private feeding arrangement,” unknown to the public, with Riddle, the bankrupt, who resided at Dow City, Crawford county, Iowa. • That was, in substance, that the company should furnish the cattle and feed, and Riddle should take charge, feed, and care for them as his own until they should be prepared for market, and then that they should be sold, and the proceeds, after refunding to the cattle company the value of the cattle at the time Riddle took them and the feed consumed by them, should be equally divided between the company and Riddle., The cattle were to be treated as sold to Riddle, who was to give his note secured by mortgage to the company for their value when received, by him. This note was to represent the purchase price. In this condition of things, while the cattle were on the ranch in Colorado, the company on October 24-, 1903, executed its negotiable note for $4,000, payable to the order of H. S. Green, its manager, and secured the payment thereof by a mortgage which described the cattle conveyed as follows:

“The following goods and chattels owned by and in the possession of said Green Cattle Co. in section 21, township 82, range 40, in Crawford county, Iowa, 125 head of throe year old steers, all branded with J4 on right side and to be kept on lull feed on above described farm.”

The note was indorsed and before its maturity sold, and, with the mortgage, delivered by Green to the national bank.

Rater, in November, 1903, the cattle company shipped from its ranch in Colorado, the cattle, the sale of which produced the fund in controversy. The manager,'H. S. Green, instructed the man in charge of the cattle “to send the dehorned cattle to Dow City; he had sold them to Ed Riddle.” They were shipped accordingly and arrived at Dow City on November 11, 1903, and were taken from the railroad company by Riddle to what is known as the “Graves farm,” in sections 21 and 22, township 82, range 40, Crawford county, Iowa, where they were kept by him until January 2, 1904, when they were weighed and taken to Riddle's feed lot on his farm in section 16, township 82, range 40, and there put and kept on full feed by Riddle until April 13, 1904, when they were shipped to Chicago and sold as the property of the bankrupt. At the time of weighing them and taking them to the Graves farm. Riddle, pursuant to the so-called feeding arrangement, executed his negotiable note for $4,800, payable to the order of H. S. Green, to represent the purchase price and secured the payment of the note by a mortgage on property described as follows:

“125 bead of three and four year old dehorned steers, all branded on the right side with the reverse four and kept on full feed on section 16, township 82, range 40.”

[304]*304This last-mentioned note was, in the usual course of business, before its maturity indorsed and sold', and, with the mortgage, delivered to the savings bank for full value, and without any notice on its part of any prior claim to the security of the mortgage, except the notice constructively given to. it by the record of (the mortgage securing the national bank’s note. Was that sufficient? It is the settled rule in Iowá, as elsewhere, and one with which all persons dealing in chattel mortgages in that state are presumed to be familiar, “that all of the description should be considered in determining whether or not a third person, aided by the inquiries which the instrument itself suggets, would be enabled to identify the property” (Ivins v. Hines, 45 Iowa, 73; Packers’ National Bank v. Railroad Co., 114 Iowa, 621, 623, 87 N. W. 653), and that a misdescription frequently is of controlling importance (Adams v. Bank, 53 Iowa, 491, 5 N. W. 619).

In the light of these well-known rules, the description in the first mortgage must be considered. The Green Cattle Company, the mortgagor, had at the date of its first mortgage no cattle whatever in its possession on section 21. Therefore the description in the first mortgage locating them there was false, and an inquiry would have so shown. It had then in Colorado a bunch of three and four year old steers, 125 of which were afterwards shipped to Iowa and through Riddle placed on section 21 as his pi'operty. The description, therefore, of 125 three year old steers, even if the subsequent location of them by Riddle on section 21 could make in favor of the national bank, was incorrect. The bunch, finally placed on section 21, being three and four year old steers, might, all but one at least, have been four year old steers. The bunch finally placed on section 21 was composed altogether of dehorned steers, a distinguishing descriptive mark and one which any one having them for sale would doubtless employ. The first mortgage did not mention this mark at all. The cattle company at the date of the first mortgage owned “many other cattle then mingled with these” (the ones sold for the Riddle estate) “which more nearly filled the description in their” (first) “mortgage.” This last-quoted part is a portion of the facts found in this case.

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Bluebook (online)
150 F. 301, 80 C.C.A. 189, 1906 U.S. App. LEXIS 4546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/des-moines-nat-bank-v-council-bluffs-savings-bank-ca8-1906.