
    Urban S. Baxter, Appellee, v. W. G. Baxter et al., Appellees; Howard Deal et al., Appellants.
    ACTIONS: -Form — Waiver. A defendant who,, in, an equitable action 1 for injunction, prays for equitable relief may not, after trial, question the jurisdiction of the court on the ground that plaintiff’s action ought to have been at law, — to wit, replevin.
    
      CHATTEL MORTGAGES-: • Recording — Withholding from Récord — Ef2: feet. Creditors who seek-'to. avoid a chattel mortgage because it has . been,withheld from, record, must show- that such withholding was for the purpose of- enabling the debtor to obtain credit. (See Book of Anno., .yol.’ I, Sec. 10Ó15, Anno. 158 et seq.)
    
    
      ■ Headnote 1:.. ,21.0. -J.-.p. 171, , Headnote .2:; 11,.a J. p. 514. ■
    
      Appeal from Ida. District Pourt.^ — J. A. Henderson, Judge. ,
    January 10, 1928.
    Action to restrain, defendant Howard Deal, from. interfering with receiver’s-possession of personal -property held for the purpose of foreclosing a mortgage against said- Howard Deal. Intervention .by Majestic Manufacturing Company, Harper, McIntyre Company,, Hibbard, _Spencer, Bartlett. & -Company, and Lawrence- Brothers was made, to obtain priority of claim on the proceeds. Fi’om a ruling, granting the injunction and denying the preference appeal was-taken.
    
    Afirmed,.
    
      Clark Clark, and Snell Bros., for Howard Deal, Majestic Manufacturing Company, and Harper,. McIntyre Company, appellants, • . ,.....-
    
      C. S. MacOniber¡ for Hibbard, Spencer, Bartlett & Company,-appellant. ! ' ■' - ■■’ ' :
    
      .Johnston & White, for Lawrence Bros., appellant.,
    
      M.-'M: White, for appellees.
   Per Curiam.

A prerequisite for. an. understanding of the questions involved is a statement of the facts íeading up to and forming the issues.

For many-years, Baxter Brothers & Company, a copartnership, operated a private banking institution at Ida Grove. On the .19th day'of Janúary, 1925,-that'concern was-declared insolvent, and a receiver appointed by the -'district court of Ida County. Appellee I. N. Shearer was named and qualified as such receiver. Before this time, .however, on thé’17th day of December, 1923, a certain business establishment consisting of Howard Deal, appellant herein, and Melvin Bright, customers , of said financial organization,to. secure. a- loan therefrom amounting /to'- '$7,000, gave thereto-a -chattel mortgage covering a-. Stock af implements and-, hardware - contained in a-retail store, -which contract o'f incumbrance was’ not recorded, until the 17th day-of .January, 1925:- ■ -

Next in order of events were the sale and transfer: of-the interest of said Bright to:-the appellant'Deal-,’subject to the indebtedness. ; Then,-March 13, 1925;'ah attempt'was made, by ■ appellant-Deal, to sell a-.one-half interest, in said-personal property to Paul A.;Karo, Jr., subject-to compliance with-the Bulk Sales Law. Rescission was made by Karo, because -he: - feared future trouble :from creditors. -The receiver, on-June 18,: 1925, made application, to the district court 'for authority • to foreclose : the mortgage through public or' private' sale, by taking possession -of-said--personalty, with 'the'-understanding.-that he cancel, and.' redeliver the said .note to appellant - Deal when the sale of said chattels was accomplished, regardless of the price obtained.. Judicial order was-entered accordingly: on-that day, and possession was taken . by the: receiver ■ théreunder. Appellant Deal-delivered the door keys to:-the'receiver. Pending the location of-a: purchaser-.for this stock-as part of the process of “foreclosure,” the. receiver employed appellant Deal as -temporary custodian thereof, at a salary of $25--per week-; and-for a time, Karo was givén a similar position. . - : .- . ■ " '•

... Meanwhile, on-September 30, 1925, the‘receiver commenced moving the goods and fixtures to another-location,-when appellant Deal intermeddled,, and- attempted to dispossess’this court official;. whereupon permission was sought ’ -from • the district court to bring suit in equity for a temporary and' permanent in- . junction restraining appellant Deal from interfering with such “possession,” and ¡the relief was granted'on October-1st of- that year. Consequently,- ■ the next day,-petition for-the injunctions .was duly filed, and appellant' Deal appeared in the cause,: filing his answer, praying, .among-other things, for “ possession”'and general equitable relief.- Interveners -then-tilled -their ■“petitions.” Evidence, was .introduced-, and-trial-had, culminating-in a.defeat for appellants.-.--. ■ :-

I. Objection is urged against the jurisdiction of the trial .court, on the theory, that the main action' should have been at lawtn replevin, rather- than in equity. Under-the-facts and circumstances here involved, we cannot sustain appellants’ contention in this regard. They appeared, filed their separate pleadings, and went to trial, with the prayer for- “equitable relief,” without moving to transfer the cause. Section 10949 of the Code of 1924 provides: - - - •

“An error as to the kind of-proceeding's adopted in the action is waived by a failure to move for its correction at the time and in the manner prescribed in this chapter; and, all errors in the decisions of the -court are waived unless' excepted to at the time * * ' .-■

II. Moreover, this was not a contest on the-part of the receiver to obtain “possession” of the “property,” but rather, it was an effort by him to prevent appellant Deal from' molesting him in that already had. No other conclusion can result from a fair reading of the record. Some conflict in the testimony may appear; but the greater weight thereof, as well as other surrounding facts and circumstances, preponderates in favor of the receiver’s claim; and even the disputed statements relate rather to what would amount to- -purported concessions of the receiver made out of court, without previous authority or subsequent confirmation. Such indicated compromises, even: if fully established, could not be binding. In Sherman v. Linderson, 204 Iowa 532, we said:

■“* * * the receiver being an-officer of the court, he had no power to malee a compromise and settlement of this character, without either having an order of the court, in the first instance, to make such settlement, or the approval of the court of the settlement, after so made.”

Therefore, the receiver had a right to continue the “foreclosure” and retain “.possession” for this purpose, in accordance with the authority granted in the “mortgage” itself.

III. Special redress is sought by interveners on the theory that the “mortgage” in question was held from record by Baxter Brothers & Company for the purpose of defrauding creditors, and that the sale items upon which their respective claims are based were contracted without knowledge of this particular lien. ' ■ ;

If such withholding was under an arrangement to enable the obtaining of credit by the debtor, those who became creditors in ignorance thereof may avoid the transaction. Snouffer v. Kinley, 96 Iowa 102. On the other hand, mere „ ... , , , , , « . failure to record will not amount to fraud against subsequent “creditors.” In re Assignment of Lemert v. McKibben, 91 Iowa 345; In re Assignment of Bloomfield Woolen Mills, 101 Iowa 181; Groetzinger & Co. v. Wyman, 105 Iowa 574. See, also, Palo Sav. Bank v. Cameron, 184 Iowa 183.

So, in the case at bar, the instrument was not kept from the “record” because of any prior agreement, but rather for other reasons, foreign to the acquirement of “credit.” True, there is a conflict in the “record” about this, but, after full and careful consideration,: we agree with the district court that the scales balance in favor of appellees. .

The judgment of the district court should be, and hereby is, affirmed. — Affirmed.  