Nordby v. Clough

Granger, J. The cause was tried to the court without the intervention of a jury, and there appears to be no dispute as to the facts. The acceptance on which plaintiff relies for his recovery is recognized by both parties as a conditional one, and we do not think it necessary to refer to authorities cited as to the effect of an unconditional acceptance. We think the acceptance should be construed by the court standing as near as may be in the situation of the parties when it was made, and so as to conform it to their understanding. The literal language of the acceptance would only require them to apply money in their “hands” after the payment of their claim. But such a construction would not meet the intent of the parties, even if such an [431] expression was held to mean in their immediate custody. In ascertaining the understanding of the parties, it is proper to consider the facts as to, and the situation of, the fuqd, as known to the parties at the time of aeceijtance; for the payment is to be made from a particular fund, and the acceptance is conditional. County of Des Moines v. Hinkley, 62 Iowa, 637. The source whence the fund came, and its location, was at the time known to the parties. We think the parties then understood, and that such is the legal import of the acceptance, that the defendants were to apply the excess of the fund in payment of the order in so far as they could legally direct or control it; that it was not the understanding that they assumed a personal obligation, unless such obligation should arise from their wrongful act. There was sufficient of the fund after the payment of defendants’ mortgage to pay plaintiff, and the reason plaintiff was not paid was because it was used to pay Smith. There is testimony tending to show, and there appears to be no conflict (but, if there is, the fact must fee regarded as established on appeal in a law case, if necessary to sustain the judgment below), that the /suit of Smith against Andrews, in which the bank was garnished, was dismissed with the understanding that Smith should be paid from the fund next after defendants’ mortgage. It is true plaintiff was not a party to this understanding; but let us inquire if he was prejudiced by this course, or, in other words, if the fund would have been available for the payment of his claim if the agreement to withdraw the suit had not been made. Plaintiff’s only claim to the fund was by virtue of the acceptance on which he sues. Defendants had no legal control over’ the fund in the Dunlap Bank. Their mortgage lien on the cattle did not extend to the proceeds of the sale. Waters v. Bank, 65 Iowa, 234. As against an attaching creditor, they could not control the fund for the payment of their own mortgage. It must then be regarded as a fact in the case that Smith, by virtue of his attachment lien, stood as a preferred creditor, and, without the consent of defendants, could have [432] reduced the fund to the extent of his claim; and thus, after the payment of defendants’ mortgage, there would have been no more for plaintiff than he has received. The mere fact, then, that defendants and Andrews agreed with Smith to withdraw his suit, and receive his money, did not prejudice the plaintiff. We are led to believe that appellant’s contention, is based largely on the belief that the defendant firm, by virtue of its chattel mortgage, had the right to control the funds in the bank, because, in argument, when speaking of the direction of defendant to the bank to remit what was due it and hold the balance till Smith and Nordby shouid settle the matter of feed between them, it is said: “This direction shows unmistakably that they were controlling this fund as they had a right to do, under their chattel mortgage, as against all persons except Andrews’ equity in the fund.” A reference to the case of Waters v. Bank, supra, will show that the defendant, by virtue of its chattel mortgage, did not have such right, but, on the contrary, until the lien of Smith attached, Andrews-alone had the> right of control. It must be that the court below found that Andrews had never transferred this right of control to the defendant; and from the > record there seems to be no purpose to give defendant any greater right than it possessed by virtue of its mortgage. As to such right, there may have been a mistaken view; but that fact would not change the light of Smith to secure his claim, nor would it impose additional burdens on the defendant because of its conditional acceptance. The judgment appears to be right, and it is Affirmed.