Avoca State Bank v. Merchants Mutual Bonding Co.

UHLENHOPP, Justice.

This appeal involves the issue of a bank’s right to recover damages from a warehouseman’s surety on account of issuance of invalid warehouse receipts by the warehouseman. Other cases involving this bond are True v. Merchants Mut. Bonding Co., 251 N.W.2d 543 (Iowa), and Michael v. Merchants Mut. Bonding Co., 251 N.W.2d 531 (Iowa).

In 1971, Claude W. Myler entered into the grain business at Avoca, Iowa. He leased an elevator facility. He had very little capital and financed his operation by borrowing from plaintiff Avoca State Bank, ordinarily posting warehouse receipts or…