Hartman Steel Co. v. E. Hoag & Son

Given, J. -1 2 I. Appellants’ first complaint is of the ruling ef the court sustaining appellee’s motion to strike said second amendment to the answer. We think there was no error in the ruling. The averment of want of diligence on the part of plaintiff had already been sufficiently alleged, and, in so far as. it allege© ah offer 'by a third party of security to the plaintiff, it i's immaterial, for that the plaintiff was not bound to accept such offer. Defendants had no- right to rely upon the advice of plaintiff’s counsel as. to the legal sufficiency of the bill of sale, and such reliance upon Ms advice upon a question of law con stitute® no estoppel against the plaintiff. Cedar Rapids & M. R. Co. v. County of Sac, 46 Iowa, 243; District Tp. of Clap v. Independent Dist. of Buchanan, 63 Iowa, 188. Appellants’ counsel cite in tMs connection a number of authorities as to the extent to which a principal is bound by the acts of an agent, but this does not seem to us to have any bearing upon the questions presented by this motion to strike. 3 II. A further consideration of the case requires that we notice in a general way the facts developed on the trial. E. Hoag & Son assumed and paid an indebtedness of-Thompson and Farrell to one Percival, who was then engaged with Thompson and Farrell in the manufacture of barbed wire. Thompson and Farrell gave Hoag & Son their note for two — 275 — thousand five hundred dollars, secured by a chattel mortgage on their interest in the machines, tools, furniture, stock, etc., of the barbed-wire company, and Hoag & Son subsequently paid said debt of Thompson and Farrell. Afterwards, the barbed-wire company became incorporated under the name of the “Beat ’Em All Barbed-Wire Company,” and E. Hoag was elected president, and was acting in that capacity, when the company failed, and when said bill of sale was executed by Mm to the plaintiff. Hoag & Son ordered from plaintiff the wire charged for in the account sued upon, and the same was turned over to the barbed-wire company for its use. The barbed-wire company failed in the fall of 1888, and one N. B. Williams appeared as representing the plaintiff to effect a settlement of their claim against defendants, E. Hoag & Son, whereupon E. Hoag assigned to plaintiff, by separate writing, said chattel mortgage from Thompson and Farrell as collateral security for the claim sued upon, plaintiff, by said Williams, givingto E. H-oag & Son a written agreement to apply the proceeds of said mortgage to defendants’ indebtedness, less charges -and expenses necessary to protect the mortgage, and to pay any residue to Hoag & Son. On the next day, — September 22, 1888, — E. Hoag, as president of said corporation, in pursuance of an agreement with said Williams, executed to the plaintiff an unconditional bill of sale of the machines, tools, belting, shafting, and all other personal property of the corporation in its building in Cedar Falls, Iowa. On the eighteenth day of September, 1888, an execution in favor of A. S. Blair and against the said'barbed-wire company, E. Hoag, and A. A. Hoag, S. Thompson and W. E. Farrell, was placed in the hands of the sheriff, and on the twenty-second day of September, 1888, he levied the same upon the property of said corporation in its factory at Oedar Falls. Thereafter plaintiff, by its attorneys, notified said sheriff that it — 276 — claimed to. Tbe the qualified owner of said property by virtue of said assignment of said chattel mortgage thereon, and said bill of sale. A. S. Blair gave an indemnifying bond, whereupon the sheriff proceeded to sell said property under the execution, and sold the same to A. S'. Blair for over two-thirds of the appraised value thereof. — 4 — 5 III. Appellants complain of certain rulings in taking the testimony of A. S. Blair and of E. Hoag. Mr., Blair, having testified to a conversation with plaintiff’s counsel about said mortgage, stated that he had told 'them what he thought about it. On cross-examination he was asked to state what he told them, to which defendants objected, and the objection was overruled. What he ©aid was a part of the conversation, and the proper subject of inquiry, as it went to make intelligible the other parts thereof. Appellants complain that Mr. Hoag was not permitted to state what offer Mr. Blair had made to the plaintiff’s attorney in the way of security. We have seen that that part of the answer was properly stricken out; therefore the inquiry was immaterial. It i© further complained that Mr. Blair was permitted to testify, over defendants’ objection, that he never offered plaintiff any security. If this was error, it was without prejudice, for, as we have seen, it is entirely immaterial whether or not Mr. Blair had offered security as claimed. It is assigned' as error that the court excluded evidence offered to establish the fact that plaintiff’s claim was, from its inception, the debt of the barbed-wire company. There was no error in excluding this evidence under the pleadings, for, by the answer, the defendants admitted that it was their debt from its inception. Other-errors assigned on the taking of testimony are not of sufficient importance to require further notice. — 277 — — 6 — — 7 — — 278 — — 8 — — 276 — IY. At the close of the evidence, plaintiff moved to strike all evidence of negotiations between the — 277 — defendants and Williams, or any other person, claiming to represent the plaintiff, relative to said bill of sale, upon the following grounds: That there is no evidence of any authority upon the part of Williams or others to accept said bill of sale in liquidation of this debt, and that there is no evidence of authority from the barbed-wire company to Hoag to execute said bill of sale. Defendants contend that the plaintiff is estopped from denying the authority of Williams and of its attorneys, because of the giving of said notice of qualified ownership to¡ the sheriff. There is no evidence of other authority to either William’s or to plaintiff’s attorneys than simply to collect this claim, and it is not contended that such authority would authorize the taking of anything else than money in payment. See Harbach v. Colvin, 73 Iowa, 638. The claim of defendants is that the bill of sale was taken in payment of the debt, while the notice given by plaintiff’s attorneys only claimed it as security. The evidence fails to show that these attorneys had any other authority from the plaintiff than to collect; therefore they could not ratify the acceptance of the bill of sale as a pay. ment. Mechem, Agency, section 121. Again, there is an entire absence of evidence showing authority to E. Hoag, as president, to execute that bill of sale on the property of the corporation for the payment otf a debt owing by E. Hoag & Son, and, therefore, we think, plaintiff could not ratify that unauthorized act. Mechem, Agency, section 168. If the bill of sale is to be held effective only by reason of the ratification, it will be observed that that ratification was not until after the property had been levied upon under Mr. Blair’s execution. As already stated, there is no evidence of authority from the barbed-wire company to E. Hoag, to execute said bill of sale; therefore, — 278 — the second ground of the motion, was properly sustained. This evidence being stricken out, the court properly sustained plaintiff’s ■ motion for a verdict. The plaintiff’s claim was admitted by the answer, and defendants’ claim for damage was. not sustained by evidence, but, on the other hand, it is shown that the property described in the chattel mortgage was sold upon .a valid • judgment against the defendants, and ■applied in liquidation thereof. We do not discover any error prejudicial to the defendants in either of the respects complained of, and the judgment of the district courtis affirmed.