Mutual Surety Co. v. Bailey

I concur in the result reached in the majority opinion. I do not agree with the holding therein that the plaintiff is entitled to seize and sell the truck upon special execution issued on the Steltzer judgment assigned to plaintiff.

In his petition Steltzer alleged that Ansberry had disposed of the truck, and that he felt insecure, and that unless the truck was specially attached he would lose its security; and that he was entitled to its immediate possession, in order that he might sell it to pay the amount due, as provided in the mortgage. He prayed judgment against Ansberry for the amount due, and that he be authorized to sell the truck to satisfy the judgment.

Plaintiff amended his petition, at a time not shown, by alleging the claimed interest of Ray Roberts, who owned the truck prior to January 8, 1940, and in whose name the truck was registered, and Bordenaro, and Chase Investment Company. He prayed that their rights be adjudged inferior to his.

Fleck, in a manner and at a time not shown, again became possessed of the truck, and on August 28, 1940, Bailey, the defendant in the action before us, without any knowledge of the Steltzer mortgage or foreclosure, purchased the truck from Fleck and paid value therefor.

On September 26, 1940, Judge Cooper rendered judgment against Ansberry on the note in the sum of $520, decreed the lien of the mortgage prior and superior to the rights of all of the defendants, decreed that Steltzer was entitled to the possession of the truck and was entitled to it when the writ of attachment was issued, ordered Bordenaro, under the terms of his delivery bond, to deliver the truck to the sheriff, and decreed that when this was done the plaintiff was entitled to a special execution for its sale to satisfy the judgment. The decree did not confirm the attachment.

Bordenaro did not deliver the truck and no special execution was ever issued.

Fleck had promised to send Bailey the registration card for the truck but had never done so. He came from his home in Webster City to Des Moines on October 17, 1940, and learned for the first time of the Steltzer mortgage and of the action in Dallas county. He learned of the two mortgages from Roberts. He talked with one of the men in Steltzer's office who told him that Steltzer was looking to the bonding company, and that Bailey had nothing to worry about, and that he (Steltzer) did not want the truck. The next afternoon, October 18, 1940, Blake Willis, the attorney for Steltzer in the Dallas county suit and one of the attorneys for the plaintiff in the action before us, telephoned to Bailey and told him that there was going to be a hearing at Adel in the Steltzer suit the next day, and asked Bailey to be present. Bailey called his attorney from Webster City and the next day, October 19, 1940, they attended the hearing but took no part therein. Chase Investment Company was asking for a new trial. At the hearing Bailey talked with Willis and Steltzer in the presence of both of them. Bailey testified: "They said we were all right on the truck; that they didn't want the truck as they looked forward to the bonding company to make it right with them." Steltzer testified that there was something said of that kind — that he might have said he depended on the bond — that he did not remember now any conversation as to the truck; that he probably did say he would rather have the money than the truck. He later testified definitely that: "I wanted the money and never did want a truck." All of this talk was before Steltzer assigned the judgment to the Mutual Surety Company.

Lundy, the president of the Mutual Surety Company, testified that his company learned, after the Steltzer judgment and before it paid the judgment and received the assignment thereof, that Bailey had possession of this truck. It paid the exact amount due on the judgment and took an assignment of it, without attempting to ascertain what rights Bailey had or claimed to have. On December 10, 1940, Mr. Willis, the attorney for the Mutual Surety Company, wrote to Bailey. The record does not disclose what the communication was. A week before, on December 3, 1940, Steltzer executed to it an assignment of "all my right, title and interest in and to the judgment and decree * * * against the defendant, Elbert Ansberry, and the defendant Joe Bordenaro, reserving unto the said Mutual Surety Company of Iowa, all rights of recovery of any type or nature which I may have under and by virtue of said Decree and the lien established thereunto to" the truck.

The decree found that the lien of the plaintiff's chattel mortgage was superior to the rights of the defendants therein, but this is not an adjudication of Bailey's rights in and to the truck, because he was not a defendant. Furthermore, the important matter is not what rights Steltzer had when the judgment was rendered on September 26, 1940, but what his rights were on December 3, 1940. Bailey was making an effort to find out what his rights were on October 17, 18, and 19, 1940. He saw Roberts, Chase, Steltzer, and Steltzer's lawyer, and tried to see Fleck. He sent for his lawyer. Steltzer's lawyer invited him to Adel. Steltzer's office man, on the 17th, told him that he was all right, that they did not want the truck, and that they were looking to the bond. Steltzer and his lawyer told him the same thing on the 19th. Having this promise and assurance, he made no move in the litigation. If he had any thought of trying to settle with Fleck or Chase, he naturally made no attempt to. What Steltzer said to Bailey was the equivalent of, "I release any and all liens I have on your truck." Certainly if Bailey had thereafter made a bona fide sale of the truck such sale would have been free from any lien under the judgment. Steltzer would have been estopped to assert otherwise. Bailey did not make any such sale. While I believe that under the record here Steltzer would be estopped from asserting any lien or claim upon the truck, Bailey need not rest his rights on an estoppel. Steltzer had the right, if he wished, to waive any lien he may have had against the truck, with respect to Bailey. He could release any lien he had on the truck in favor of Bailey. Such waiver or release required no consideration. Neither do they require the support of prejudice as against Bailey. Steltzer could have executed a written release with all of the customary formalities and have given it to Bailey. Nobody could dispute his right to do so. It would have been a binding release. What he in fact did was just as effective. As said in Livingston v. Stevens, 122 Iowa 62,68, 94 N.W. 925, neither waiver of lien nor estoppel requires written evidence nor need be supported by consideration. The principle has often been repeated by this court.

It may be conceded that the Mutual Surety Company became entitled by assignment and subrogation to whatever rights Steltzer had under the judgment, subject, of course, to any limitation, reduction, or impairment thereof by reason of his waiver or release to Bailey. The fact that such waiver or release of any lien in favor of Bailey may have impaired the appellant's rights of subrogation, and might have furnished a defense to any liability under the bond to Steltzer, cannot avail the appellant now. It had notice of Bailey's possession of the truck. It knew he claimed some rights to it. Its attorney knew that Steltzer had told Bailey, in effect, to go hence with the truck, that he did not want it, that he was depending on the bond; but with this knowledge, and in spite of it, it paid Steltzer.

The appellant's rights under the assignment as a purchaser or under its rights of subrogation as a surety can rise no higher nor be more inclusive than those of Steltzer.

For the reasons stated, Steltzer could not have replevied the truck in this action, and, therefore, the appellant cannot.

It is my judgment, therefore, that the Mutual Surety Company of Iowa has no rights as against the truck and cannot recover it by writ of replevin, special execution, or other process.

HALE and GARFIELD, JJ., join in this special concurrence.