68 Neb. 641 | Neb. | 1903
One Anderson, whose trustee in bankruptcy is plaintiff in this case, executed a chattel.mortgage to the cashier of che First National Bank of Holdrege, the defendant herein, on June 23, 1900, whereby he mortgaged “76 head of fat. •steers now in my feed lots, mostly reds, average weight about 1,500 pounds, branded 6 on side.” This mortgage was given to secure a note made in renewal of prior indebtedness and for an additional loan of money. Shortly thereafter Anderson, who was hopelessly insolvent, disappeared. The officers of the bank, becoming aware of his absence, went to look at the cattle, and were unable to find any which entirely answered the description. Thereupon they sued out. an attachment, which was levied upon sixty-eight- fat steers, the property now in controversy. On November 8, following, Anderson’s creditors filed a petition to have him adjudged a bankrupt, and an adjudication to that effect followed on February 16, 1901. The bank, after obtaining possession of the cattle levied upon, proceeded to ship them for sale, and applied the proceeds upon its note. The attachment suit was dismissed on December 20, 1900,, presumably by reason of the pendency of proceedings in bankruptcy.
A verdict for the plaintiff was directed in the trial court upon the ground that the defendant had lost whatever lien it might have had upon the cattle under its mortgage by causing an attachment to be levied upon them. There is a long line of cases holding that a mortgagee waives or loses his lien by attaching the mortgaged property. Evans v. Warren, 122 Mass. 303; Whitney v. Farrar, 51 Me. 418; Libby v. Cushman, 29 Me. 429; Haynes v. Sanborn, 45 N. H. 429; Dyckman v. Sevatson, 39 Minn. 132, 39 N. W. 73; Cox v. Harris, 64 Ark. 213, 41 S. W. 426; Dix v. Smith, 9 Okla. 124, 60 Bac. 303. On the other hand, there is equally
“The liens respectively created by mortgage and by attachment on the same property are essentially different, and can not coexist.”
The subsequent cases followed this decision without much independent examination of the subject, and in Cox v. Harris, supra, and Dix v. Smith, supra, the latest decisions supporting this view, no reference is made to the subsequent cases taking a contrary position, but the rule, as announced in Evans v. Warren, is treated as settled. The first to question the universal applicability of the doctrine of Evans v. Warren was Mr. Jones, in his work on Chattel. Mortgages. Jones, Chattel Mortgages, sec. 565. He suggested that where the statute made a chattel mortgage a mere lien upon the property without creating any title, it was probable that an attachment of the mortgaged property would not amount to a waiver of the lien, but would be regarded merely as a cumulative remedy. This view was adopted in Byram v. Stout, supra, where the question was re-examined somewhat thoroughly. In Barchard v. Kohn the ground was gone over once more, and Byram v. Stout was followed. To our minds, the reasoning of these cases is much more satisfactory, and more in accordance with the law in this state as to the nature of a chattel mortgage. Mortgaged chattels in this state are undoubtedly liable to execution or attachment, subject to the mortgage. There is no reason why the mortgagee himself may not proceed
It is contended, however, that the cattle seized and sold by the bank are not the cattle covered by its mortgage. There is no controversy as to the cattle seized and sold. They are described in the petition and admitted in the answer to be those upon which the attachment was levied, described in the return of the sheriff as “68 head of fat steers, 4 black and 64 red and white spotted, of various brands.” This is obviously.a different description in some important particulars from that contained in the mortgage, and the question arises whether the bank can justify under the mortgage in view of this discrepancy. If there was merely a defect or error of description so that the mortgage created a lien on these specific cattle as between the parties, and they were afterward identified by the parties as being the cattle actually mortgaged at the time the instrument was executed, the bank is entitled to judgment; if, on the other hand, these cattle are not the cattle which were mortgaged, or if the mortgage did not create a lien upon them when executed, but they were afterward agreed upon as the subject of the lien, and a lien upon
A chattel mortgage which would be invalid as against creditors and purchasers in good faith for defective description of the property mortgaged may be good as between mortgagor and mortgagee where the property in fact mortgaged is identified. Leighton v. Stuart, 19 Neb. 546. In the case at bar the bank seized certain cattle, which it now asserts were the cattle actually mortgaged, and it offered to prove that Anderson afterwards acquiesced in the sale of these cattle under the mortgage, and treated them as such. If this was nothing more than an identification of cattle which had always been subject to the mortgage, we think such evidence admissible, and that on proof of this fact the bank would have sustained its defense. Such a case differs, however, from one where no specific chattels are mortgaged but there is an attempt to mortgage a certain number out of a mass without separating or identifying them. No lien upon any specific chattels is created in a case of the latter sort until they are separated or identified, and it is agreed that the mortgage shall apply to them. Price v. McComas, 21 Neb. 195; Jones, Chattel Mortgages, secs. 56, 60. If the cattle seized and sold were, as there is much in .the evidence to suggest, merely part of a larger number of cattle in the feed lots of the mortgagor at the time the instrument was executed, and were not at that time in any way separated or identified, but afterwards and within four months of bankruptcy, and while the mortgagor was insolvent, they were separated or identified through the seizure made by the bank, and the mortgagor acquiesced in such separation
It is suggested that at the time the bank sold the cattle an attachment suit urns pending, so that it had no right to foreclose by sale, and that the sale had was not authorized by the mortgage, in that it was private, and out of the state. But it appears that the value of ihe cattle was less than the amount due upon the note secured by the mortgage, and hence, even if the bank were liable for conversion by reason of improper foreclosure sale, so long as it -would be liable only for the difference between the
We therefore recommend that the judgment be reversed, and the cause remanded for a new trial.
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is reversed, and the cause is remanded for a new trial.
Reversed and remanded.