Mutual Surety Co. v. Bailey

3 N.W.2d 627, 231 Iowa 1236

• Court: Supreme Court of Iowa
• Decided: May 12, 1942
• Docket: No. 45902.
• Status: Published

Opinions

Mitchell, J.—

While the facts in this case are somewhat complicated, most of them have been stipulated. Ray Roberts, who was the owner of a 1939 Chevrolet %-ton pickup truck, sold same to Elbert Ansberry of Guthrie county, Iowa, and on January 8, 1940, Ansberry gave his promissory note, secured by a chattel mortgage on said truck, to H. I. Steltzer, doing business as the Steltzer Finance Company, said note being in the amount of $520. The chattel mortgage was filed of record with the county recorder of Guthrie county on the 10th day of January 1940. The truck had been registered in the name of Ray Roberts and the certificate of registration was never changed. Sometime prior to March 11, 1940, Ansberry sold the pickup truck and delivered possession of it to the Fleck Auto Exchange of Des Moines, Iowa, and about that same date the Fleck Auto Exchange sold and delivered possession of the pickup truck to Joe Bordenaro of Des Moines, Iowa, under a conditional sale contract which was assigned to the Chase Investment Company by the Fleck Auto Exchange on or about the 14th day of March 1940. On March 20, 1940, H.l. Steltzer, doing business as the Steltzer Finance Company, filed his petition for foreclosure of his chattel mortgage and asked for the issuance of a writ of specific attachment. This suit was instituted against Elbert Ans-berry alone. On March 20, 1940, the district court of Dallas county, Iowa, where the suit was instituted, ordered that a specific attachment issue against the truck; a writ of specific attachment issued to the sheriff of Polk county, Iowa, and a levy was made on the truck by the said sheriff thereunder, the car being found in the possession of Joe Bordenaro at Des Moines, Iowa, who, on March 26, 1940, filed a sworn notice of ownership with the sheriff of Polk county and furnished a delivery bond signed by the Mutual Surety Company of Iowa, which is the plaintiff in this cause of action.

Upon the filing of the delivery bond by Bordenaro with the sheriff of Polk county, possession of the pickup truck which is in controversy in this case was restored to Joe Bordenaro by the sheriff of Polk county. Shortly after the truck was restored to Joe Bordenaro it again became possessed by the Fleck Auto Exchange of Des Moines, Iowa; the exact manner in which the Fleck Auto Exchange secured this truck the record does not clearly show. On the 28th day of August 1940, Percy Bailey purchased from the Fleck Auto Exchange in Des Moines, the truck in controversy for the sum of $317.73 and by trading in an old Model A pickup which the evidence shows ivas worth approximately $50. Fleck hired a man to drive it to Webster City, where it was delivered to Bailey. The car was not licensed at the time it was delivered and Fleck told Bailey that he would get the license and send it to him. Bailey had no knoivledge that there was any mortgage against the said truck or that anyone else claimed any interest in same. Fleck failed to get the license for Bailey, and in a week or 10 days he wrote to Fleck, who replied that the license and transfer would be sent to him immediately. He never did receive the license and transfer. He went to Des Moines, where Bailey for the first time found out about the two mortgages against the truck and that there was a suit pending to foreclose the lien in Dallas county. Steltzer, after the truck was released by the sheriff of Polk county upon the filing by Bordenaro of the delivery bond signed by the Mutual Surety Company, amended his petition in Dallas county by joining Ray Roberts, Joe Borde-naro, and the Chase Investment Company as parties-defendant, and on the issues joined the case of Steltzer v. Ansberry proceeded to trial before the Honorable Judge Cooper, resulting in a decree under date of September 26,1940, in favor of H. I. Stelt- zer, doing business as the Steltzer Finance Company, rendering judgment against Elbert Ansberry in the amount of $520 plus expenses and costs. The decree in the Steltzer case ordered the defendant Joe Bordenaro to restore possession of said truck to the sheriff of Polk county in as good condition as it was when the action was commenced, and it further provided that upon the return of the said motor vehicle to the sheriff of Polk county by the defendant Joe Bordenaro, in ease said motor vehicle was returned, then the plaintiff would be entitled to a special execution for the sale of same in order to satisfy said judgment rendered against the defendant Elbert Ansberry.

Bordenaro did not deliver the car to the sheriff of Polk county within 20 days following the date of the decree and the Mutual Surety Company of Iowa, plaintiff in the present action and the surety on the delivery bond executed by Bordenaro, paid to Steltzer the amount of $520, plus all costs and attorney fees, which was the exact amount which was due Steltzer from Ans-berry under the judgment and decree of court entered in the case of Steltzer v. Ansberry. The Mutual Surety Company took what is referred to as an assignment of the Steltzer decree. It is the claim of the Mutual Surety Company that it made demand on Percy Bailey for the delivery of the truck, and, the truck not being delivered, it commenced this action in replevin against Bailey for the possession of the truck. The case was tried to the court, the parties having waived a jury, and at the conclusion of the plaintiff’s case and again at the conclusion of the defendant’s evidence, the defendant made a motion for a directed verdict. The latter motion for directed verdict was sustained and the plaintiff has appealed to this court.

The amount involved in this case is not large, but many interesting and difficult legal questions are raised. We do not find it necessary to pass upon all of them. The Mutual Surety Company commenced this action in replevin to secure possession of the truck. Before the appellant is entitled to recover in re-plevin, it must prove that it was entitled to the immediate possession of the truck. The only rights that it possesses it secured under the assignment of the decree and judgment in the case of Steltzer v. Ansberry et al. In the ease of Steltzer v. Ansberry, the plaintiff did not seek to foreclose the chattel mortgage which it held on the truck. For reasons not appearing in the record, it commenced an action in which it sought judgment against Ansberry and also prayed for a specific attachment against the property described in the chattel mortgage, or the conditional sale contract, marked Exhibit B, which was attached to the petition. The pickup truck was attached and was released upon the delivery bond signed by this appellant. The decree in the Stelt-zer ease does not foreclose the chattel mortgage but first enters judgment against Ansberry for the amount of the note and costs, then holds that the claim or lien under the chattel mortgage is superior to the rights of any of the defendants. We quote the remainder of the decree:

“It Is Further Ordered, Adjudged and Decreed that the plaintiff is entitled to the immediate possession of said motor vehicle and was entitled to the possession thereof at the time of the issuance of the Writ of Specific Attachment in said cause of action.

“It Is Further Ordered, Adjudged and Decreed that the fendant J oe Bordenaro be and he is hereby ordered and directed to return to the Sheriff of Polk County, Iowa, the motor vehicle described hereinabove, as in as good condition as it was when this action was commenced, and to pay the costs of this action in the sum of $43.15, and attorney fees for plaintiff’s attorney, in the sum of $35.40, and judgment is hereby rendered against the Defendant Joe Bordenaro, for all of said amounts.

“It Is Further Ordered, Adjudged and Decreed that upon the return of said motor vehicle to the Sheriff of Polk County, Iowa, by the defendant J oe Bordenaro, in case said motor vehicle is returned, then this plaintiff shall be entitled to special execution for the sale of same, in order to satisfy judgment herein rendered against the Defendant Elbert Ansberry.”

It is true that the court says in this decree that “the plaintiff is entitled to the immediate possession of said motor vehicle and was entitled to the possession thereof at the time of the issuance of the Writ of Specific Attachment * * *. ”

Of course, there is no question but that the plaintiff in the Steltzer suit was entitled to the possession of the ear at the time the writ of specific attachment was issued, but we are of the opinion that the statement that the plaintiff in that case was entitled to the immediate possession of said motor vehicle must be taken into consideration with what the court held in the next two paragraphs of the decree. In the next two paragraphs the court specifically ordered that the car was to be returned by Joe Bordenaro to the sheriff of Polk county, Iowa, and that upon the return of said motor vehicle to the sheriff of Polk county, Iowa, a special execution was to be issued for the sale of same to satisfy the judgment rendered. Certainly, under this decree the only right that the assignee of the Steltzer judgment had, to wit, the appellant in this case, was to a special execution for the sale of the pickup truck in order to satisfy the judgment assigned to it. It is the contention of the appellant that, in addition to the rights it had under the decree in the Steltzer case which ivas assigned to it, the chattel mortgage still remained, and under the lien of the chattel mortgage the appellant was entitled to the possession of the truck.

It must be kept in mind that in this case not only did the appellant’s assignor sue out a specific attachment but he secured a judgment and decree foreclosing the specific attachment and not the chattel mortgage. The rights that Steltzer was claiming were under the specific attachment and not under the chattel mortgage. Appellant calls our attention to the case of Stein v. McAuley, 147 Iowa 630, 634, 125 N. W. 336, 337, 27 L. R. A., N. S., 692, 140 Am. St. Rep. 332, but the facts in that case and the case at bar are entirely different. In the Stein case the attachment was dismissed. It was never reduced 1o judgment, while in the case at bar judgment and decree was taken under the attachment. Judge Deemer in the cited case said, we quote:

“We do not think there was a waiver of the mortgage lieii, especially in view' of the fact that the attachment w'as dismissed and never ivent to trial. Had there been a sale of the property under execution growing out of the attachment proceedings, w'e would have a very different proposition.”

In the case at bar, the attachment was not released, but instead, judgment and decree was taken in the attachment suit. The parties saw fit to make no claim under the chattel mortgage but relied entirely upon the lien of the specific attachment. They foreclosed the specific attachment and secured a judgment and decree. By proceeding to foreclose the lien of the specific attachment, they waived all rights that they had under the chattel mortgage lien, for certainly a party who has two liens upon the same property and proceeds to and does foreclose one of the liens cannot afterward say, 11 We still retain the other lien which we claimed no rights under at the time the judgment and decree was entered. ’ ’ Steltzer waived whatever rights he had under the chattel mortgage and relied entirely upon the specific attachment and the bond which he had as security for the return of the truck.

The appellant, as the assignee of the Steltzer judgment, has only the rights that Steltzer had. The appellant also calls our attention to the case of First Nat. Bk. v. Johnson, 68 Neb. 641, 644, 94 N. W. 837, 838. The opinion was by Roscoe Pound, then acting as one of the commissioners for the Nebraska Supreme Court and subsequently Dean of the Harvard Law School. An examination of that opinion shows, however, that the attachment was released and not foreclosed and all that the Supreme Court of Nebraska holds is, we quote:

“We are therefore of opinion that a mortgagee of chattels does not waive or lose his lien by causing an attachment to be levied upon the mortgaged property. ’ ’

We have no fault to find with the quoted statement, but it does not apply to the case at bar because the facts are different. Here we have not only the levying of an attachment but the foreclosing of a chattel mortgage. We can come to no other conclusion than that by proceeding to secure a judgment and decree under the specific attachment the rights under the chattel mortgage were waived, and that, as the appellant secured only the rights by assignment of the judgment and decree in the Steltzer case it had no right to the immediate possession of the truck, and, not being entitled to the immediate possession, it could not maintain the replevin action which it brought. The lower court was right in so holding, and it necessarily follows that the judgment and decree must be, and it is, affirmed. — Affirmed.

Saber and Oliver, JJ., concur. Bliss, O. J., and Hale and Garfield, JJ., specially concur. Miller, J., dissents.