Opinion ID: 1246677
Heading Depth: 1
Heading Rank: 2

Heading: C.F. Sales' claims against Olin. We first take up C.F. Sales' claims against Olin. These claims are incidental to C.F. Sales' role as stakeholder.

Text: A. When Olin asserted its claim to the urea on October 23, 1979, C.F. Sales was loading the fertilizer into railroad cars for shipment by Pan Am to Royster. Because of Olin's claim, which conflicted with the ownership claims of Amfert, Pan Am, and Royster, C.F. Sales stopped loading the cars, returned the undelivered urea to the warehouse, initiated this interpleader action, and asked the district court for an order to store and preserve the urea. The urea remained in C.F. Sales' warehouse until it was sold by agreement of the parties on September 24, 1980. As part of the interpleader, C.F. Sales sought to recover its storage costs and expenses subsequent to October 23 from the losing interpleaded party. C.F. Sales did not itself claim ownership of the urea, but it had the urea on its hands. It dismissed its claim for prior storage. The general rule is that such a stakeholder is entitled to its costs. Such costs may be allowed ... against some of the claimants or parties made defendants to the bill. 48 C.J.S. Interpleader § 54 (1981). See also 45 Am.Jur.2d Interpleader § 41 (1969). Our rules state: Costs may be taxed against the unsuccessful claimant in favor of ... the party initiating the interpleader. Iowa R.Civ.P. 40. We do not think that the term costs should be given a narrow interpretation of court costs only. The burden to a stakeholder in possession of a commodity may be greater from maintenance of the commodityfor the benefit of the defendantsthan from court costs. The question, therefore, relates to who should reimburse C.F. Sales for its expense. The trial court placed the burden on Olin. In assessing the storage costs to Olin the trial court correctly found that Olin wrongfully reclaimed the urea on October 23. This was nearly two months after the purchaser, IMC (or T.H.E.), had received the urea on August 29, 1979, at the warehouse space leased by IMC from C.F. Sales. At that time Olin lost all right to reclaim the urea. Iowa Code § 554.2705(2)(a) (1979) (As against such [insolvent] buyer the seller may stop delivery until receipt of the goods by the buyer.); McFetridge, Burchard & Co. v. Piper, 40 Iowa 627, 628 (1875) (If, after their arrival, [goods] are stored in a warehouse by the carrier as agent of the consignee, the vendor's right of stoppage is by that fact terminated.). See also Interlake, Inc. v. Kansas Power & Light, Co., 79 Ill.App.3d 679, 684, 34 Ill.Dec. 954, 958, 398 N.E.2d 945, 949 (1979) (seller's stop delivery right can be exercised until receipt of the goods by the buyer, including receipt by the buyer's designated representative, the subpurchaser, when shipment is made direct to him and the buyer himself never receives the goods). Under the facts of this case, Olin's right to stop delivery also terminated when C.F. Sales by its acts acknowledged to Amfert, Pan Am, and Royster that it was holding the urea for them. C.F. Sales acknowledged the sale to the subsequent purchasers by accepting the release numbers that were presented, by shipping 108 tons of goods to Royster, and by beginning to load the remainder of the urea into cars for shipment. Iowa Code § 554.2705(2)(b) (As against such [insolvent] buyer the seller may stop delivery until acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer.). See also Interlake, 79 Ill. App.3d at 684, 34 Ill.Dec. at 959, 398 N.E.2d at 950 (adhering to the instructions of the subpurchaser and holding the goods for more than two months pursuant to those instructions was further evidence of acknowledgement by the bailee that it held the goods for the subpurchasers). See generally 3 Williston on Sales § 24-6 (1974) (stoppage in transitu exists in the seller until that time that the goods have been personally delivered to the buyer or to some designated person whose obligation to the buyer is the single duty of taking, carrying, and delivering the goods to the buyer.). The trial court was thus correct in assessing storage charges against Olin from October 23, 1979, until the urea was sold. B. C.F. Sales claims, however, that the trial court erred in refusing to award it attorneys' fees stemming solely from its role as stakeholder. We have not previously decided this issue, although a federal district court in Iowa has predicted we would probably follow the majority rule and allow such recovery. Community School District of Eldora v. Employers Mutual Casualty Co., 194 F.Supp. 733, 741 (N.D.Iowa 1961). The subject is not covered by statute in this state. The majority rule is as follows: [A] party who is faced with conflicting claims to funds or property in his possession, or has reasonable doubt as to the party entitled thereto, who stands indifferent between the claimants and claims no interest in the funds or property, and who in good faith interpleads the various claimants, is entitled to an allowance for attorney fees. Annot., 48 A.L.R.2d 190, 193 (1956). See also 45 Am.Jur.2d Interpleader § 42 (1969); 48 C.J.S. Interpleader § 55 (1981). The reason for such an exception to the general rule on attorneys' fees is that a disinterested stakeholder should not be burdened with the expense of an interpleader that has benefited others; the expense is more reasonably placed on the unsuccessful claimant to the interpleaded fund or property. The question, then, is whether C.F. Sales stood indifferent to the claimants. At one time C.F. Sales sought to attach the urea to recover past-due storage fees, and it also originally included a claim in the interpleader action for those charges. But it abandoned the attempt to attach the urea prior to Olin's ownership claim on October 23, and it later dismissed the claim for storage fees in the interpleader action. Thereafter it sought only to recover storage charges subsequent to initiating the interpleader. We do not regard that claim as making C.F. Sales interested. We hold that C.F. Sales is entitled to judgment against Olin for its attorneys' fees and expenses attributable to the interpleader, and overturn that part of the trial court's judgment.