Shaw, McDermott Sparks v. Danbury , 227 Iowa 415 ( 1939 )

I find myself unable to agree with the majority and respectfully dissent.

It seems to me that this case is controlled by the recent opinion of this court in the case of Iowa-Des Moines National Bank and Trust Co. v. Dietz, 225 Iowa 566, 574, 281 N.W. 134,139, opinion by Justice Hamilton. I quote:

"While there are plausible arguments which have been ably presented by appellants in support of the proposition that the mortgage rule should be applied, we are inclined to agree with the trial court's conclusion. As long as the fund was solvent the order of payment of the ownership certificates provided for in the trust indenture was clear and explicit but when the fund became insolvent, a thing apparently not contemplated by the parties at the time, and the whole matter submitted to a court of equity, solution must be found by the application of equitable principles not inconsistent with the legal rights of the parties interested. There can be found in the trust indenture no language indicating an intent to create any preference as between holders of ownership certificates. All had a common interest in the trust fund in proportion to amount of ownership certificates held by each. The ownership certificates evidenced such interest or share in the common fund; their relation to this fund stands upon a common basis. Had the purpose intended been carried out none would have received more than his proportionate share in the entire fund. Their right to share in this common fund was thus intended to be equal, that is, without preference. Now that misfortune has overtaken the enterprise and the plan and purpose intended has been frustated through no fault of any of the parties interested, upon what principle of equity is the court justified in allowing a preference? They all paid the same full consideration. We fail to see any meritorious grounds for applying any other rule than that of equality which is equity; where the original intent and purpose was that all should share equally and all stand on equally meritorious grounds, it is but a logical carrying out of this equitable principle to apply the pro rata rule."

I would affirm the lower court.