Hartwig v. Iles

The plaintiff, owning a store building in the city of Davenport, leased the same to one George A. Ellman for one year from November 15, 1902, at the agreed rental of $33 per month. The lease was in writing and provided that no extension or alteration thereof should be of any force unless reduced -to writing and signed by the parties. It also gave to the lessee “the privilege of renting said premises for the further term of two years ” upon written notice of such election not later than September 15, 1903. On the date last named, Ellman wrote the plaintiff expressing his desire or purpose to retain the property for the additional period of two years, but it does not appear that plaintiff ever made any response to the notice, and no new lease or extension of the old lease was ever effected, save as the same may be implied from the matters above stated, and from the fact that Ellman remained in possession and on or about November 15, .1903, paid to the plain'tiff rent for the month expiring December 15, 1903. On November 28, 1903, Ellman who had a small stock of groceries in the rented building gave a bill of sale thereof to the defendant, John L. Iles, for the security or payment of certain debts due to several creditors. The making of this bill of sale appears to have been brought about as follows: Ellman who was doing a small and apparently unprofitable business negotiated a sale of his stock to one Horblett. He was at tbis time indebted to lies in a small amount and tbe claim together with other similar small demands was in tbe bands of Petersberger for collection. Learning of tbe proposed sale to Horblett or of some other circumstance indicating tbe necessity of prompt action to secure payment of these claims, lies and Petersberger went to Ellman who executed and delivered tbe bill of sale to lies as trustee to secure said claims amounting in all to $258.68. After receiving tbe bill of sale lies concluded to and did take possession of tbe stock for tbe period of about one day, but did not remove it,'when on being paid said sum of $258.68 by Horblett he surrendered tbe possession of tbe stock, and tbe sale from Ellman to Horblett was then consummated. Tbe latter then removed tbe goods to bis own place of business in Rock Island, 111., and Ilorblett’s check for tbe sum above mentioned was delivered to Petersberger who proceeded to disr tribute tbe fund to tbe several claimants represented by the trustee. At tbis stage of tbe proceedings and before tbe distribution was entirely completed, tbis action was begun in equity making lies and Petersberger alone defendants. Tbe petition sets up tbe lease to Ellman and alleges an extension thereof for a period of two years, alleges a sale or conversion of tbe stock of goods by tbe defendants, claims a lien upon tbe proceeds of such sale in tbe bands of tbe defendants, and asked that they be enjoined from disposing of tbe property or proceeds of its sale until said claim for rent is satisfied. No personal judgment was demanded against tbe defendants or either of them. Tbe defendants answered in denial. All rent accrued and to accrue to tbe plaintiff up to December 15, 1903, had been fully paid before the transaction now in question. A trial was bad to tbe. court upon tbe aforesaid issues developing tbe facts substantially as above stated.

It also appears that on or about December 5, 1903, Ell-man surrendered possession of the building to plaintiff, and notified her that he would no longer occupy it. As a witness plaintiff also testified that after the surrender of the building she had been unable to procure a tenant, and that it stood idle and unused for a period of ten months. The trial was concluded and the evidence duly certified on January 14, 1905. On May 22, 1905, plaintiff was allowed to file an amendment to her petition alleging her inability to rent the property after its surrender to her for a period of ten months and demanding personal judgment against Iles for the amount of the rent for said period, $330, and against Petersberger for the amount yet undistributed of the fund remaining in his hands, $105.02. On the filing of this amendment which in effect converted the proceedings into an action at law for' the recovery of damages, defendants denied the amended petition, and demanded that the cause be set down for trial to a jury. The motion was overruled, and on June 28, 1905, a decree under date of January 14, 1905, was entered by which plaintiff was-granted a recovery against Iles in the sum of $330 and costs, and Petersberger was ordered to pay the sum remaining in his hands, $105.02, into court to be applied on said judgment. Prom said decree the defendants bring -this appeal.

1. amendment: change of issues: retrial. In -our judgment, the decree appealed from cannot be sustained. In the first place under the issues as finally settled, the action was clearly one at law, and defendants were entitled to the verdict of a jury upon the -facts. At the time of the trial to the court the plaintiff’s only demand was in rein to establish and enforce a landlord’s lien not against the goods of Ellman, but against the proceeds-of an alleged sale of said goods, and to enjoin the disposition of said proceeds by the defendants until that claim was satisfied. There is nowhere in the petition or first amendment thereto any suggestion of a demand for relief against either of the defendants, except that they be required to retain the possession of the alleged proceeds of the sale to answer any claim plaintiff might be able to establish thereto. Such claim was properly enough made in equity; but when after all the evidence had been taken and cause submitted upon this issue plaintiff was allowed to amend in such a manner as to entirely change the nature of the demand from one of equitable cognizance to an action at-law for damages, we think the demand for trial by ordinary proceedings should have been sustained. It cannot be presumed that on the trial upon the issues as originally joined the defendants offered their testimony or made their case in the same manner or to do the same extent and purpose as they would have done had they known or had reason to believe a claim for personal judgment for damages was to be submitted to the court. Under the circumstances of the case, the court might well have refused to permit such an amendment after a trial had been had and cause duly submitted, but if allowed to stand we are disposed to hold that it should have been on condition that the submission be set aside and a trial had by ordinary proceedings as demanded by the defendants.

2‘ TENANiTifen5: conversion. But a more vital objection to the decree appealed from is to be found in the merits of the case. In taking a hill of sale - or mortgage of the Ellman stock to secure the claim represented by them, liles and Petersberger committed no wrong against the plaintiff. It . , _ is true that 11 she had a landlord's lien on the goods they could not destroy its priority by taking the bill of sale; and if her claim of a lien was valid and they by enforcing the bill of sale had deprived her of her security they would be liable to her pro tanto in damages. But the sale of the goods to Horblett was not made by defendants or either of them. The most that'can be said of their connection with that transaction is that having obtained a lien on the goods by the bill of sale as they had the legal right to do, they refused to permit Ellman to complete the sale to Horblett until their claim was satisfied. No title in fact or in form passed from them to Horblett. They left the goods where they found them in plaintiff’s building. In removing them Horblett was not acting in their behalf nor by or under any authority or claim of ‘authority derived from defendants, and we find nothing in the record on which they may be properly held liable in damage. Had no bill of sale been made, but defendants, being present when the sale from Ellman to Horblett was consummated, had demanded and received a part of the proceeds in payment of their claims no one would contend that they thereby incurred personal liability to the plaintiff and as we view the facts the legal relations of the parties are not different than they would be under the circumstances suggested.

3' Extent of. As to the order requiring the surrender of the money in the hands of Petersberger it is a well-established proposition that a lien upon personal property does not ordinarily follow or attach to the proceeds of its sale or conversion. Waters v. Bank, 65 Iowa, 234; Nordby v. Clough, 19 Iowa, 428; Harlan v. Ash, 84 Iowa, 42; Jones v. Stevens (Miss.) (12 South. 446( 12 South.); In re Reis Fed. Cas. No. 11,648.

We do not attempt to pass upon the question whether plaintiff’s claim of an extension of the lease to Ellman is sustained by the record. It will be noted that the provision in the contract does not in terms at least, grant the right of an extension of the old lease, but simply that he shall “ have .the privilege of renting” the premises for the additional period. It would seem to he at least questionable whether the mere announcement of his desire to retain the building without any further negotiation or agreement between the parties would serve to fix his status as a tenant for the next two years, but in view of our conclusion upon other matters raised by the appeal we need not dwell upon the point here suggested.

Eor the reasons stated the decree appealed. from is reversed, and cause remanded for further proceeding in harmony with this opinion. Reversed.