Oswego Starch Factory v. Lendrum

Thompson & Reeves ordered goods from Oswego Starch Factory (Oswego) (plaintiff). Thompson & Reeves knew that it was insolvent and could not pay for the goods, but it concealed that from Oswego. Oswego shipped the goods to Thompson & Reeves. Subsequently, a county sheriff named Lendrum (defendant) executed writs of attachment on Thompson & Reeves’ property, including the goods received from Oswego. Oswego brought a replevin action against Lendrum in Iowa state court. As required by Iowa law, Oswego’s complaint alleged that both Oswego and Lendrum claimed to have title to the goods and the right to possess the goods. Oswego further alleged that Lendrum was holding the property under a claim based on Thompson & Reeves’ ownership of the goods. However, Oswego asserted that Oswego had decided to rescind the sale contract with Thompson & Reeves once Oswego learned about Thompson & Reeves’ fraud (i.e., after Lendrum had executed the writ of attachment). Oswego thus sought to recover the goods. Lendrum filed a demurrer to Oswego’s complaint. Lendrum admitted Oswego’s basic allegations but asserted, among other things, that Oswego could not recover because (1) Oswego had never demanded the goods from Lendrum or Thompson & Reeves, (2) Oswego never gave notice of its election to rescind the sale contract before bringing the lawsuit, and (3) Oswego could not rescind the sale contract after Lendrum executed the writ of attachment. The trial court entered judgment for Lendrum, and Oswego appealed.