Simmons Hardware Co. v. Brokaw

| Neb. | Jul 15, 1878

Maxwell, Ch. J.

On the twenty-fifth day of August, 1874, Jacob T. Lansing and wife executed and delivered to the plaintiff in error a mortgage upon lot eight, in block twenty-six, in the town of Hastings, to secure the payment of the sum of $1,216.95, which mortgage was filed for record at eleven o’clock a.m. of said day. On the same day Lansing and wife executed and delivered to Paren England a mortgage on the same premises, to secure the payment of a promissory note for the sum of $350, which mortgage was filed for record at ten o’clock a.m. of the day upon which it was executed.

On the twenty-ninth day of April, 1875, England assigned his note and mortgage to the defendant in error.

On the second day of December, 1875, the defendant in error commenced an action at law on the note, and attached a sufficient amount of personal property to satisfy his claim. This property so attached, was after-wards taken by one J. T. Holmes by a writ of replevin, and on the trial of the cause, the right of property and right of possession of said property were found to be in said Holmes. Judgment was rendered on the note in question in favor of the defendant in error, but no part of the same has been paid.

In May, 1876, the plaintiff in error commenced an action to foreclose the mortgage first above referred to in the district court of Adams county, .and Lansing and wife and Brokaw were made defendants. The plaintiff in its petition alleges that “said defendant, Jacob T. Lansing, is insolvent and not able to pay the difference between the value of said mortgaged property and the debt secured by the same.” This allegation is not denied in the answer. On the trial of the cause a decree was rendered in favor of the defendant for the amount of his note and mortgage, and also that his lien was prior to that of the. plaintiff. The plaintiff brings the cause to this court by petition in error.

Section 851 of the code provides that: “If it appear that any judgment has been obtained in a suit at law for the money demanded by such petition, or any part thereof, no proceeding shall be had in such case, unless to an execution against the property of the defendant in said judgment, the sheriff or other proper officer shall have returned that the .execution is unsatisfied in whole or in part, and that the defendant has no property whereof to satisfy such execution except the mortgaged premises.”

In Gregory v. Hartley, 6 Neb., 362, this court say: “ If an action has been commenced on the note, the petition must show either that the action has not proceeded to judgment; or, if a judgment has been obtained, then, that an execution against the property of the defendant (other than the mortgaged premises) has been returned unsatisfied in whole or in part, and the plaintiff’s remedy is exhausted.” We adhere to the decision in that case as a correct exposition of the law. In the case at bar, however, the contest is entirely between lien-holders. The prior mortgagee files a petition to foreclose its mortgage, making the senior mortgagee a defendant, and alleging that the maker of the notes is insolvent, and that the senior mortgagee has obtained a judgment at law on his note, and upon that ground alone seeks to divest him of his lien.

In Rudolf v. McDonald, 6 Neb., 166, this court say: “ The grounds upon which subsequent attaching creditors may interfere as against a former, even before judgment, are very few indeed.” The same rule applies in this case. The statute was made for the protection of the debtor. If it had been alleged in the petition, and proved on the trial, that the defendant in error had a lien by virtue of his judgment on another fund for the same debt, on which the junior mortgagee had no claim, the defendant in error would be required to exhaust such fund before proceeding to subject the mortgaged property to the payment of his claim; but nothing of the kind is claimed. The failure of the defendant in error to issue an execution on his judgment did not divest him of his lien, and the plaintiff in error, in its petition, by alleging the insolvency of the debtor, shows that nothing could have been collected even if an execution had been issued. The judgment of the district court is clearly right and must be affirmed.

Judgment affirmed.