Emery v. Leighton

Ladd, J. 1. Appeal and error: abstracts: sufficiency: presumption. I. Counsel for appellee challenge the sufficiency of the record, in that the abstract is not certified by the attorneys of appellant; and does not refer to the bill of exception, nor recite the preservation of the evidence. .None of these -were essential to the review of rulings complained of. The printed abstract is presumed (to contain the record. Section 4118 of the Code.- In the absence of denial, correction, or statements therein to the contrary, the abstract is presumed to contain such evidence and other matters of record with sufficient completeness to enable the court to pass upon the questions presented. McGillivary Bros. v. Case, 107 Iowa 17. This necessarily includes the presumption that the steps necessary to make the evidence of record have been taken. Kirchnnan v. Standard Coal Co., 112 Iowa 668. See Hensley v. Davidson Bros., 143 Iowa 742, and other decisions too numerous for citation, declaring that such an abstract is presumed to contain everything essential to the determination of all points raised in argument on appeal. 2. Appeal and error: exceptions: bills of exception: preparation. II. The appellee, however, “denies that the evidence upon hearing of intervenor’s objections was preserved of record; admits the court signed a bill of exceptions filed May 26, 1917, reciting certain reports and orders were introduced in evidence and that certain oral concessions were — 1371 — made, etc.; but avers the documents were not at the time identified as exhibits, and no .reporter was present, and evidence, if any, in the way of concessions or otherwise was not preserved.” Appellant did not undertake to preserve the record and the exceptions to the court’s rulings, as might have been done, under Section 3675 of the Code. Instead, he resorted to that prescribed in Code Section 3749, directing the manner of taking an exception, and providing that: “It may be embodied in a bill of exceptions to be filed within'thirty days after the final determination of the case, or within a reasonable time thereafter, to be fixed by the court, not to exceed ninety days therefrom.” Here, exception was taken to the ruling of the court on the intervenor’s objections to the report of the assignee and the court’s order, as previously entered. This is made clear in the bill of exceptions, as well as in the record on which the ruling ivas based. A bill of exceptions has been variously defined. See 5 Cyc. 706. It is a written statement, settled and signed by the trial judge, of what the ruling was, the facts in view of which it was made, and the protest of counsel,' according to People v. Torres, 38 Cal. 141. In St. Croix Lumber Co. v. Pennington, 2 Dak. 467 (11 N. W. 497), a like definition is to be found. See also Sacket & Shelton v. McCord, 23 Ala. 851, and Galvin v. State ex rel. Crouch, 56 Ind. 51. The purpose of the bill is to put the points decided upon the record in such a way as to bring them before the appellate tribunal for review. Now defendant denies that the evidence upon the hearing was preserved of record, but the court certified that its ruling was made upon the evidence referred to therein. The preservation in the bill of exceptions ivas sufficient. Again, defendant says that documents were not identified as exhibits. This was unnecessary, if sufficiently iden — 1372 — tified otherwise. A reporter is not essential to the organization of the court, and that one may not have been present did not prevent the preservation of the record such as it was. It is further asserted that “evidence, if any, in the way of concessions or otherwise, was not preserved.” But in this appellee is mistaken; for several concessions are recited in the bill of exceptions. That the abstract is correct and sufficient is not questioned. See Howerton v. Augustine, 145 Iowa 246. ■Many/ if not most, of the early cases were submitted to this court on bills of exceptions signed by the trial judge, without the advantage of a record made by a stenographer, or a transcript of such record. As the trial progressed, bills of exception, exemplifying particular rulings and exceptions taken thereto, were presented to the trial judge, and by him signed; and on the record so made up, the cause was brought to this court for review. Though this method has been superseded to such an extent by the mode prescribed by Section 3675 of the Code that the former method is seldom resorted to, it is quite as effectual in making up the record for review in this court. In re Tobey’s Estate, 112 Iowa 581. The cases cited by appellee are not in point; for in each, the record in some respect was not preserved, either as required by Section 3675 or Section 3749 of the Code. See Dolan v. Smnmons, 147 Iowa 466, and State v. Owens, 109 Iowa 143. Notwithstanding the denial, the bill of exceptions sufficiently preserved the record for submission to this court of the rulings complained of. 3. Landlord and tenant : rent: lien: priorities : assignee for benefit of creditors. III. Under the assignment by Jones & Bicard of their property for the benefit of creditors to Emery as assignee, the latter succeeded to the rights of his assignors; or, as aptly stated by the authorities with reference thereto, he merely stepped into' the shoes of his assignors, and took such property subject to all existing — 1373 — liens. Meyer v. Evans, 66 Iowa 179; Davenport P. Co. v. Lamp, 80 Iowa 722; Wackerbarth v. School Dist., 157 Iowa 614; Des Moines Bridge & Iron Works v. Plane, 163 Iowa 18, 22; Gluck Co. v. Therme, 154 Iowa 201. If, then, the lien of the landlord was valid against Jones & Ricard, it was equally valid and binding as to the assignee for a term commencing January 12, 1916, and terminating September 20, 1920. On this lease, rent to the amount of $132.50 had accrued, which was unpaid. The' rental was $125 per month; so that, for the ensuing six months, it would amount to $750. Under Section 2992 of the Code, this much, at least, was a lien on the personal property made use of in the leased building; for, besides creating the lien, that section provides that, in event such property be sold '“by an assignee under a general assignment for benefit of creditors, the lien of the landlord shall not be enforceable against said stock or portion thereof, except for rent due for the term already expired,, and for rent to be paid for the use of demised premises for a period not exceeding six months after date of sale.” The assignee took over the property, then, subject to the lien of the landlord for at least $882.50. On the day of the assignment, he applied to the court for an order permitting him “to borrow sufficient money to conservatively operate said business a month,” on the ground that there was “not sufficient cash to pay help ‘ and buy the supplies necessary for operating the business. Some net revenue may be. derived, and the restaurant would sell better as a going concern.” The court authorized the assignee to “continue the business for a period not exceeding 30 days, and to that end may employ help and purchase supplies and incur an indebtedness of not exceeding $200, to be paid as a preferred claim.” Subsequently, two orders were entered, one permitting him to continue the business 7 days, and the other, 30 days, “under the former order.” The business was continued 63 days, — 1374 — during which time the assignee paid out $1,845.16 and took in $1.921.34, and besides, incurred an indebtedness for supplies of $1,029.07, and for help, $140, without paying a cent for- the use of the building in which he was experimentally conducting the business! This was a loss of approximately $1,245.52, to say nothing of about $262 in rent, in doing about $2,000 worth of business! Why, in conducting such an experiment, claims for furnishing supplies should be preferred over the claim for the use of the building, is not apparent. The court seems to have thought that the landlord had in some way estopped himself from asserting his lien; for the final order recites: 4. Assignments : FOR BENEFIT OF CREDITORS : administration of assigned estate: continuing business; landlord and tenant. “That, by not exercising his right to assert landlord’s lien, and by not objecting to said orders, and by his appearance in writing, filed December 20, 1916, to application of the assignee for rule o.n him to show cause why the assignee should not be permitted to sell the personal property, the landlord is now estopped to assert priority of his lien over costs of the estate, duly proven labor claims, reimbursement to said E. H. Emery for $183.71, moneys advanced by himself as assignee, under order of court, and the indebtedness incurred by the assignee in the sum of, to wit, $1,029.07, for the employment of necessary help and supplies in conducting the business under the orders of court.” The trouble with all this is that the landlord, A. C. Leighton, had the right to rely on his lien, and might not prevent, by objecting, the continuance of business in the building. He did not consent thereto, and there is no showing that he was aware that the assignee was operating the restaurant at a loss, especially of so large an amount. Nor was there any better basis for an estoppel in the proceedings of December 20, 1916. Leighton appeared in response to citation, and, consenting to the sale, insisted that — 1375 — “the proceeds of all such property so sold, the court should require the assignee to hold and apply the same to the payment of said rent due and to become due for such period as the court may fix.” 5. landlord and tenant : rent: lien: enforceflfof creditors As we understand the record, the landlord had not filed a claim against the estate, but, up to this time, had relied on his statutory lien as security for payment. The assignee took the property subject thereto; and surely, Leighton had done nothing up to that time to relieve the property of his lien. He might then have proceeded through petition of intervention in the assignment proceedings to enforce it against the property. So doing would not assail the validity of the assignment; and though the property, being in custodia legis, might not have been seized pending foreclosure, sale to satisfy the lien, either through the assignee or by the sheriff, might have been ordered. On the other hand, he might have filed his claim, and relied on the satisfaction thereof through ' the distribution of the proceeds of the assets by the assignee. Hamilton-Brown Shoe Co. v. Mercer, 84 Iowa 537; Garner v. Fry, 104 Iowa 515. As said in the last cited case: “The court has ample power to protect all liens and priorities by appropriate orders in the distribution of moneys derived from the sale of the assignor’s property, and it is optional with the mortgagee whether he will enforce his lien against the property or rely on the protection thus afforded.” Up to this time, Leighton had waived nothing by omitting to file any claim, and we see no reason why he might not, while insisting on his lien and its satisfaction out of the property, consent to the sale by the assignee. This was tantamount to allowing the lien to follow the fund derived by the sale of the property, and could have prejudiced no one. In re Assignment of Windhorst, 107 Iowa 58. This — 1376 — being so, there was no basis on which to rest a finding that Leighton was estopped to assert his claim and lien. Leigh-ton had filed no claim against the assignee, under Section 3075 of the Code. He was not claiming under the assignment, but asked payment of his lien, independent thereof. Though he consented to sale on December 20, 1916, it was with the assertion of his lien for an amount not controverted by the assignee; and the order of court was that the “proceeds be held by the assignee pending the further order of the court determining the rights of the landlord and all other persons thereto.” No argument is required to show, in such case, that the landlord’s lien followed the fund derived from the sale of the property. See In re Assignment of Windhorst, supra. Nothing then had happened to divest the intervening landlord of his prior lien for rent; and as his right to priority over all claims, save those for wages excepted in the prayer of his petition, had in no manner been divested, he should have been awarded payment of $862.50 at least, out of the fund derived from the sale of the property, after satisfaction of the labor claims. What we have said disposes of appellee’s suggestion that the landlord should have appealed from the orders for .continuing the business. We do not concur in appellee’s conclusion that the court erred in entering these. 6. Assignments FOR BENEFIT OF CREDITORS *. administration of assigned estate: orders of court. The error was that of the assignee in persisting in the operation of the restaurant when he must have known this was being done at such a loss as to render the continuance of the business inexpedient. The court did not require, but merely permitted, the continuance of the business; and the assignee not only was not bound to, but, in the proper discharge of his trust obligation, should not have continued the same longer than a person of ordinary prudence would have done under like circumstances. Moreover, the assignee should not have incurred an indebt — 1377 — edness to exceed $200; for, though the orders might have been construed otherwise, when considered in connection with the application they plainly meant that he might become indebted to that amount for necessary help and supplies. These were the essentials, as represented by him, to the operation of the restaurant. He was requested to incur an indebtedness for no other purpose. Doubtless this was thought sufficient, in view of receipts likely to be taken from the business; but in any event, he was not given authority to incur an indebtedness for any purpose to exceed the amount stated, for the “assignee shall be at all times subject to the order and supervision of the court or judge.” Section 3080, Code. 7. landlord and tenant: rent: lien: enforcement: property chargeable. Appellee' also suggests that the landlord may not insist upon payment from the fund so long as some property to which his lien attaches remains unsold. Why prefer one to the other, since his lien covers both ? Other creditors may resort to that of either not exhausted, out of which to satisfy their claims. There is nothing in the point. The order for the distribution of the fund in the hands of the assignee is reversed, in so far as the claim of Leighton against the assignee is concerned, and the same ordered first paid, after the discharge of the labor claims. — Reversed. Preston, C. J., Evans and Salinger, JJ., concur.