Heessel v. Creston National Bank

218 N.W. 298, 205 Iowa 508
CourtSupreme Court of Iowa
DecidedMarch 6, 1928
StatusPublished
Cited by3 cases

This text of 218 N.W. 298 (Heessel v. Creston National Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heessel v. Creston National Bank, 218 N.W. 298, 205 Iowa 508 (iowa 1928).

Opinion

KiNdig, J.

Appellee, the plaintiff in the district court, owned a judgment amounting to $376.10 against F. E. Weaver and wife j and on April 14, 1925, general execution issued thereon> resulting in a levy by the sheriff on an international truck belonging to Weaver. Before this time, Mr. and Mrs. Weaver executed and delivered their promissory note, July 15, 1924, to appellant, payable in the sum of $635. To secure that negotiable instrument, the Weavers made a chattel mortgage, covering the truck above named. Record of this contract of security was duly filed in the recorder’s office May 10, 1925. So, after the seizure of the motor vehicle by the officer under the writ, appellant caused to be served upon the “sheriff” notice of its qualified ownership of said chattel, and demand for the release thereof. Consequently, appellee furnished a bond in the penal sum of $1,000, to indemnify the last named county official against loss, and he retained the personalty.

Afterwards, on April 30th, appellee filed in the same cause “verified proof of his preferred labor claim,” alleging, among other things, that $100 of said “judgment” was due him as wages for services performed for Weaver within the last 90 days next preceding the “seizure” of the incumbered “truck.” Finally, on'May 9th, appellee filed in the court below a verified petition in equity, embracing all the facts herein previously re *510 cited, ending with a prayer for the establishment of the “labor claim,” prior and superior to appellant’s rights under its “chattel mortgage.” Responding to this, appellant filed its answer and cross-petition, contending the seniority of its “lien” and denying the existence of the essential prerequisites for the redress under the “labor claim,” because the “truck” was not “seized on any process of court or by the action of any creditor, nor placed in the hands of a trustee, receiver, or assignee, ’ ’ and finally demanding damages for the alleged conversion.

This contest resulted in favor of appellee, and he was allowed preferences as asked, for $100. Hence, “execution sale” was had, whereat appellee purchased the subject of the controversy for $100 and costs.

To correct alleged error, the appeal was taken.

I. Parenthetically, it is noted that Section 11717 of the Code of 1924 permits the predominance of a “labor claim” over and above the rights of a recorded or unrecorded chattel mortgage when the specifications and conditions of the legislation have been met. Reynolds v. Black, 91 Iowa 1; Goodenow v. Foster, 108 Iowa 508; Soodhalter v. Reliance Coal Co., 203 Iowa 688. See, also, Section 11721, 1924 Code.

II. The phraseology of that particular enactment is:

“11717. When the property of any company, corporation, firm, or person shall be seized upon by any process of any court, or placed in the hands of a receiver, trustee, or assignee, or their property shall be seized by the action of creditors, for the purpose of paying or securing the payment of the debts of such company, corporation, firm, or person, the debts owing to employees for labor performed within the ninety days next preceding the seizure or transfer of such property, to an amount not exceeding one hundred dollars to each person, shall be a preferred debt and paid in full, or if there is not sufficient realized from such property to pay the same in full, then, after the payment of costs, ratably out of the fund remaining.”

Involved in this litigation is the. attempted “seizure” of Weaver’s property by an execution, for the purpose of paying the obligations due a “laborer.” Application is thereby made by Weaver’s employee for compensation earned through the performance of labor “within the 90 days next preceding the seizure.” That much is admitted by appellant; but it insists *511 there is no “seizure,” as contemplated by tbe lawmakers, and for precedent on this point relies upon Majestic Co. v. Davis, Co., 170 Iowa 5. Distinguishment is immediately apparent between the suggested authority and the case at bar. In the Majestic Go. ease, the property was released directly by the sheriff for failure to furnish an indemnity bond after notice of ownership. In other words, there was no property remaining in the possession of that levying officer; for, in the cited case, surrender of the chattels was made before the “labor claims” were asserted. No relinquishment was made in the controversy before us, and the “bond” was tendered, thus enabling the sheriff to retain the custody.

III. Definition of “seizure,” as employed in' the Code paragraph above quoted, includes the taking under execution. Lambert v. Powers, 36 Iowa 18, furnishes the following general statement:

“Execution is process authorizing the seizure and appropriation of the property of a defendant for the satisfaction of a judgment against him.”

Likewise, in Reynolds v. Black, supra, this emphatic declaration concerning the specific relation was used:

“An officer seizes the assets of the debtor on an execution or attachment * * * .”

IV. “Execution” here was supported by a valid “judgment,” and appellee, being the owner thereof, was authorized thereby to cause the “issuance of the writ.” Armed with that document, the sheriff was fully justified in making a levy thereunder. There is presented for decision, therefore, the proposition as to whether or not such “levy” constitutes “seizure,” under the statutory provision in question. Preliminary to the specific discussion, attention is directed to the fact that this sequestration was at the instance of the servant against his master, — not through the action of any other creditor. Had it not been for this movement on the part of the employee, the employer’s chattels would not have been disturbed, but rather, they would have continued in the unmolested possession of the owner, to be utilized for the production of funds to pay the claim for wages.

Primarily, the object of the lawmakers’ enactment was to protect the man who toils (because he has small means, and is *512 disinclined to institute adversary proceedings against his chief, tbe source of bis income), against tbe advantages that might otherwise be gained by other creditors, through tbe methods and ways named therein. Such thought permeates all previous judicial consideration of this subject. Reynolds v. Black, supra, contains the following apt language:

“It is well known that, in cases of such failure [suspension of business by seizure], employees, because of the smallness of the amount usually due to them as wages, and their confidence in their employer, are the last to demand security or to proceed against him by legal processes. It is a matter of common observation that in such cases other creditors usually consume the assets, to the exclusion of the employees, whose dues, though small, are of great importance to them. The evident purpose of this statute is the better protection of the wage-working class of creditors. * # *

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Bluebook (online)
218 N.W. 298, 205 Iowa 508, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heessel-v-creston-national-bank-iowa-1928.