Union Bank of Wilton v. Creamery Package Manufacturing Co.

74 N.W. 921, 105 Iowa 136

• Court: Supreme Court of Iowa
• Decided: April 8, 1898
• Status: Published

Opinion

Robinson, J.

— In January, 1894, one S. G. Kelly procured of defendant a milk separator under-an agreement which provided that it should be held by Kelly as “collateral security in trust and for the benefit of and subject to the order of the Creamery Package Manufacturing Company” until he had paid in full all his obligations to the company. The agreement was not acknowledged or recorded. In June, 1894, Kelley gave to the plaintiff a mortgage upon the separator and other property, to secure the payment of a debt of two thousand five hundred dollars. The mortgage was dated the twentieth and acknowledged on the twenty-eighth day of the month. On the third day of the next month the plaintiff took possession of the separator, and it was afterwards taken by the defendant This action was brought to recover the separator from the defendant, and the right of possession is claimed by the plaintiff under the chattel mortgage. The defendant claims the property by virtue of its former ownership and its agreement with Kelly, and alleges that there is a balance due to it from Kelly of eight hundred and nine dollars and sixty-three cents. It alleges further that when the mortgage was given Kelly advised the plaintiff fully of the defendant’s interest in the property; that it was not his, and should not be included in the mortgage; that he did not intend to include it in the mortgage, and did not know, when that .was executed, that it included the separator; and that the mortgage is fraudulent. The district court found specially that when the mortgage was delivered to the plaintiff it did not have any notice of the agreement under which the defendant claims; that the mortgage was given to secure an amount then due the plaintiff, and that it is. entitled to the immediate possession of the separator. Judgment was rendered according to the findings. This cause was before us on a former submission, and an opinion was filed, but a re-hearing was ordered, and the cause is' again submitted for our consideration. The agreement and mortgage in controversy were involved in the case of Creamery Package Mfg. Co. v. Union Bank of Wilton, 100 Iowa, 370.

1 I. The acknowledgment of the mortgage was taken by the cashier of the plaintiff, and it is claimed that the acknowledgment was invalid for that reason, and that the record of the mortgage did not impart constructive notice of the rights of the plaintiff. Whether the cashier had such an interest in the mortgage as to be disqualified to take the acknowledgment we need not determine. The acknowledgment was not essential to the validity of the mortgage, but it was as effectual as between the parties to it, and as against all persons having notice of it, as though it hai been duly acknowledged. The defendant’s interest in the mortgaged property has not been acquired since the mortgage was given, but depends upon the agreement with Kelly. That was a conditi onal sale of the separator, the possession of which passed to Kelly, and the reservation of the title and. interest for which the agreement provided was not valid as against any creditor or purchaser of Kelly without notice. Code 1873, section 1922. Therefore, if the mortgage was not duly acknowledged, that fact is immaterial to any right the defendant can maintain as against the plaintiff. The appellant insists that a valid and sufficient record of the mortgage or other notice thereof was necessary to protect the interest transferred by the mortgage as against the defendant; but that claim is not sound, for the reason that, as already stated, the defendant has not acquired any interest in the separator since the mortgage was given.

2 II. ' The plaintiff’s right of recovery depends upon the strength of its own title, and it is insisted that the mortgage was give to secure an antecedent debt, and for that reason cannot prevail against the title of the defendant. The case of Myer v. Car Co., 102 U. S. 1, is referred to in support of that claim, but that case involved the effect of a mortgage upon property acquired after it was executed, and not the effect of a mortgage given to secure an antecedent debt, and is not applicable to the question now before us. The plaintiff, when the mortgage was given, granted to Kelly an extension of time on the debt secured, and the plaintiff thus became entitled to the protection afforded by. Code 1873, section 1922.

3 III. There was a conflict in the evidence respecting the intent of Kelly to mortgage the separator and the knowledge which the plaintiff then had of the interest in it which the defendant claims, but the evidence which tended to show that Kelly knew when he executed the mortgage that it included the separator, and that he did not speak of the defendant’s interest, and that the plaintiff did not have any knowledge of it until after the mortgage was given, and that the mortgage was not fraudulent, was ample to sustain the findings and judgment of the district court. The reformation of the mortgage is not ashed, and, had it been, the evidence would not have justified it. We conclude that no reason for disturbing the judgment of the district court is shown, and it is affirmed.