Opinion of the Court. The fact that goods were spirited away from the store on Sunday night would undoubtedly assume a serious importance were it shown to have been done directly or indirectly for the benefit of Schwartz; but the goods seem to have been taken away in a sleigh by some of the clerks, who took this method of paying themselves for the amounts due them for wages, aggregating $282.77. It appears that they took no more than sufficient to reimburse themselves, and that they were charged upon the books with the goods taken at cost price. Although, of course, the proceeding was irregular, there is no evidence to connect either Schwartz or the mortgagees with it, and the clerks did no more for themselves than Schwartz would have been at liberty to do for them if he had been present, viz., to prefer them to the amount of the wages severally due them. The case, then, reduces itself to the simple question whether the mortgages were given for bona fide existing debts to the amount expressed upon their faces, and this involves an inquiry into the consideration of each mortgage separately. 3. So far as regards the mortgage to John H. Hellman, which covered only the stock at Fort Madison and the book accounts, both the master to whom the case was referred and the court, agreed in holding it to be valid. In this connection the master found Schwartz to be indebted to Hellman, his wife's father, as evidenced by his notes, for money borrowed, amounting with interest to $22,180.37; that Hellman before leav ing Galena had prepared memoranda of these notes, which amounted upon their face to $20,380.98, together with another note for $1000, payable to his son John V. Hellman, in consideration of money loaned to Schwartz. This note had been assigned by the payee to his wife Wenona, but, being afraid that Schwartz was in a bad way financially, it was agreed between the father and son that the former should purchase the note, which was then in his safe; that Wenona should endorse it; that the father should be charged with it on his books, and the son, who was then owing the father to that amount or more, should be credited therewith. But the entry upon the books was not made until after John H. Hellman returned from Fort Madison, and was then entered as of December 29. Opinion of the Court. As the note really belonged to John H. Hellman, and was transferred to him before he left Galena, though the entry had not yet been made, there can be no just criticism upon his including it in his mortgage. Even if the purchase had not been made, there is nothing improbable in John V. Hellman's desiring that his wife's note should be secured, and if he suspected, as he doubtless did, that Schwartz was likely to fail, he would naturally put the note in his father's hands to be secured with the much larger amount due his father; and if the latter caused it in good faith to be included in his mortgage, supposing it to be lawful to do so, the mortgage would not thereby be invalidated. 4. The mortgage to the German-American Bank, which covered not only the stock at Fort Madison, but that at Chariton, and the book accounts at both places, was given on its face to secure two notes of $5000 and $500 made to the bank, as well as a note for $1500 made to H. Cattermole, president of the bank, and assigned to the bank, together with a note of $1000 to Pauline Schwartz, also assigned to the bank, these notes aggregating $8000. This mortgage was found by the master to be fraudulent, as against the general creditors, by reason of the inclusion of the Cattermole and Schwartz notes. So far as concerns the Cattermole note, the finding is that McConn, the cashier of the bank, who acted for it at the Sunday evening meeting at Schwartz's house, demanded not only security for the bank, but for Cattermole himself. As Cattermole was not present, no transfer of the note could have then been made by him, and there is no pretence that it was then transferred. The note was not produced at the time, and McConn knew that there was no entry upon the books of the bank to show that the bank owned the note. It appears that the bank afterwards became the owner of the note by giving therefor its own note in exchange, although it is not certain when this took place, since the books of the bank show no entry whatever of the transaction, either to charge the bank with the liability or to credit it with the Cattermole note as an asset. But putting a construction upon this transaction most favorable to the plaintiffs, it only appears that the bank did not actually own Opinion of the Court. the note at the time the mortgage was given. The Cattermole note had been given by Schwartz for money loaned, and had been in possession of the bank for two and a half months before the failure. The money had been loaned to Schwartz under a promise by him to give a real estate mortgage, and McConn, who was a cousin of Cattermole, upon the failure of Schwartz to give the mortgage, had agreed to take the note off of his hands. The mortgage of $1000 to Pauline Schwartz was sold and delivered by John H. Schwartz to McConn for about two-thirds its face value and interest. It seems that the money represented by this note had been sent, in 1879, in the form of a draft, by Hellman to his daughter Pauline, who was the wife of John H. Schwartz, as a Christmas present. Schwartz ap pears to have used the money himself, and given his note therefor, dated December 27, 1879. When the mortgage was given, he turned it over to the bank for its face value upon his wife's request that he should realize upon it for her. No entry was made upon the books of the bank because, as McConn explained, "it was a small matter, and we thought it would be adjusted in a few days, and we did not want any more of John H. Schwartz's matters mixed up." The money to pay for the note was taken from an envelope in the bank by McConn. This was undoubtedly outside of the usual course of banking business and was open to some suspicion; but there is nothing to impeach the consideration for which the note is said to have been given, and nothing but the somewhat unusual nature of the transaction to contradict McConn's story with reference to this purchase by the bank. Of both these notes it may be said that whether they were actually owned by the bank or not, there is nothing to indicate that they were not just debts of John H. Schwartz. It would also seem that McConn's inclusion of these notes in the mortgage to the bank was made in good faith, supposing that he had the right to cover them by the same security he was taking in favor of the bank. While the fact that a mortgage is given for a larger amount than is due, is doubtless a suspicious circumstance, raising a presumption of fraud, and may, under certain circumstances, avoid the whole mortgage, (Wood Opinion of the Court. v. Scott, 55 Iowa, 114; Lombard v. Dows, 66 Iowa, 243; Taylor v. Wendling, 66 Iowa, 562; McNichols v. Rubleman, 13 Mo. App. 515; Holt v. Creamer, 34 N. J. Eq. (7 Stewart) 181; Ileintze v. Bentley, 34 N. J. Eq. (7 Stewart) 562; Mead v. Combs, 19 N. J. Eq. (4 C. E. Green) 112,) it will only have this effect when given wilfully, in connivance with the mortgagee, and with an actual design to impose upon and defraud the general creditors. In all such cases the question of good faith is one of fact, and a mere error of judgment will not be imputed as a fraud. The fact that the debt so included was a bona fide debt, and that the act of the mortgagee in so including it was subsequently affirmed by the creditors interested, will be strong evidence that no actual fraud was intended. Shirras v. Caig, 7 Cranch, 34; Lombard v. Dows, 66 Iowa, 243; Davenport v. Cummings, 15 Iowa, 219; Miller v. Lockwood, 32 N. Y. 293; Frost v. Warren, 42 N. Y. 204; Goff v. Rogers, 71 Indiana, 459, 461; Barkow v. Sanger, 47 Wisconsin, 500, 505; Van Patten v. Thompson, (Iowa,) 34 N. W. Rep. 763. 5. The mortgage to Catharine Schwartz was given to secure one note for $2296.35; another for $500; a note for $5000, payable to Katie Kraft, Schwartz's sister, upon which Catharine Schwartz was surety; a note for $318, payable to A. S. Gage & Co., upon which Catharine was surety, and which had been paid by her; and also the sum of $2382.97 due upon an open account for goods and merchandise, and cash advanced and owing by John H. Schwartz. This mortgage is assailed as fraudulent, upon the ground that the last item consisted of merchandise and cash advanced to John H. Schwartz from another store in Fort Madison, the business of which was solely conducted by Joseph C. Schwartz in the name of his mother, Catharine. It seems that when the business began she loaned to Joseph $8000, which composed the capital of the concern, which loan was secured by note. He bought and sold the goods, paying all the bills, and not accounting to her, save to pay the interest due upon the note, and took the profits to himself. It thus appears that the debt really belonged to Joseph C. Schwartz and not to Catharine, although the three Opinion of the Court. parties swore that it was due to her as the nominal proprietor of the store. It does, however, appear conclusively that Joseph was indebted to his mother in a sum largely in excess of the account; that the consideration of the account was goods bought, nominally, at least, of Catharine, and that she was responsible to the creditors of that establishment. As the accounts were kept in her name, she had the legal title to the account, and Joseph only an equity in them. But as, in any event, the debt was bona fide, and, under the circumstances, must be presumed to have been included in the mortgage with the consent of Joseph, the mortgage ought not to be held void on that account. It was a debt honestly owing by John H. Schwartz; was intended to be included in his mortgage, and he had as much right to secure his brother Joseph as his mother Catharine. His creditors were not placed in any worse position by reason of the fact that the security was not given directly to Joseph. The form in which the security should be given was really a question between the parties themselves, and did not in any way concern the plaintiffs. So, also, it is quite immaterial whether the Katie Kraft note was originally made to her, or to her husband Joseph, and by him endorsed to her. There is very little, if anything, to indicate that it did not represent a bona fide debt, or that Catharine Schwartz, the mortgagee, was not held for its payment. In addition to this, however, Mrs. Kraft, herself, filed an intervening petition, claiming the amount of the note and the benefit of the mortgage to Catharine Schwartz, and a separate decree was made in her favor. Upon the whole, we think the court below was correct in sustaining this mortgage. 6. The mortgage to Frank B. Kent covered the property both at Fort Madison and Chariton, and was given to secure the payment of a note for $2500, executed by Schwartz, March 1, 1884, and payable one year after date. His decree was for $3601.42. In this connection a motion was made by Kent to dismiss the appeal from the allowance of his claim, upon the ground that the requisite amount is not involved to give jurisdiction |