Judges, apparently, at least in Iowa.
In 1977, horse owner Pamela Morgan purchased a tract of land in Fremont County, Iowa. She obtained a mortgage from Tri-Valley Bank and later entered into a separate security agreement with the institution using her horses as collateral for her debts with the bank. She refinanced the farm and renegotiated the security agreement in 2003, and then obtained a second mortgage from a third party and a third mortgage from Tri-Valley.
Morgan subsequently defaulted on the mortgage from Tri-Valley and a foreclosure sale of the property was conducted in July 2007. Days before the sheriff’s sale, Morgan moved her horses to the property of a neighbor, Kim Becker, who lived on property adjacent to Morgan’s farm. The sale of Morgan’s farm did not generate enough money to satisfy all the liens on the property, leaving a deficiency of nearly $8,000. Tri-Valley decided to try and collect the difference.
So far, this is a familiar scenario in today’s economy.
There was a question about whether Morgan received written notice from the bank about the planned collection efforts. There was no dispute that Tri-Valley "repossessed" Morgan’s horses by entering Becker’s property and removing 15 horses. Eleven of the horses were owned by Morgan; four were owned by Becker, who had no financial obligations to Tri-Valley. Bank officials transported the horses to a secret location.
Understandably panicked by the disappearance of their horses, Morgan and Becker attempted to locate the animals. They were unsuccessful. They attempted to negotiate with the bank for payment of the deficiency and return of the horses, but the bank insisted on a release of liability for the alleged trespass onto Becker’s property and removal of the horses. Tri-Valley officials eventually returned the horses to Morgan and Becker without the release of liability.
In December 2007 Morgan and Becker filed a lawsuit against the bank, claiming conversion (the civil equivalent of theft), extortion, intention infliction of emotional distress, and trespass. At trial, Morgan testified that she was "frantic" when she learned about the disappearance of the horses. She said that the horses were not physically injured, but that the animals were very nervous and "spooky" for months after the incident. Becker offered similar testimony about her horses.
The jury awarded damages in several categories, including $2,500 to Morgan and $1,100 to Becker for injuries to the horses.
The bank appealed the decision. Tri-Valley argued, in part, that there were no physical injuries to the horses and that under Iowa law animals cannot suffer emotional damages. The Court of Appeals of Iowa agreed.
" ‘A horse is a horse, of course, or course,’ " the Court explained, citing the theme song from Mr. Ed, a situation comedy about a talking horse that was popular during the 1960s, "which is why a horse cannot recover damages for emotional distress. Under Iowa law, the ‘damage resulting from an injury to an animal is the difference in value before and after the injury.’ " The Court concluded that without evidence of some physical injury or evidence that the horses’ value had diminished due to the emotional distress they suffered, an award of damages was not allowed.
CBS broadcast Mr. Ed for five seasons, from 1961 through 1966. The talking palomino now lives on in syndication and as an unlikely authority for legal decisions in Iowa.