Alter v. Bank of Stockham

• Decision Date: 22 December 1897
• Citation: 53 Neb. 223,73 N.W. 667
• Parties: ALTER ET AL. v. BANK OF STOCKHAM ET AL.
• Court: Nebraska Supreme Court

53 Neb. 223

73 N.W. 667

ALTER ET AL.

v.BANK OF STOCKHAM ET AL.

Supreme Court of Nebraska.

Dec. 22, 1897.

Syllabus by the Court.

1. Evidence examined, and held not to support the finding of the jury that plaintiffs in error had falsely weighed certain cattle sold one of the defendants in error.

2. Fraud is not to be presumed. It must be proved.

3. If, from the entire evidence on the subject, good faith or an honest mistake may be as rationally and reasonably inferred as fraud, then the law leans to the side of innocence.

4. Direct evidence is not essential to establish fraud. It may be inferred from circumstances. But such inference must not be guesswork or conjecture, but the rational and logical deduction from the circumstances proved.

5. A district court, while sitting as a court of equity, is clothed with the inherent power to submit to a jury any question of fact in the case.

6. To maintain a civil action under our Code, it is not essential that the action be denominated either an action at law or in equity, nor that it be given any particular name. If the litigant pleads the facts, and they constitute a cause of action or defense, the courts are bound to award the relief due.

7. Evidence examined, and held, that the district court erred in dismissing the action of the plaintiffs in error.

8. Where a mortgagor of chattels converts the same into cash, at their full value, and deposits the money with his agent, who has notice of the mortgage lien, an action will lie, at the suit of the mortgagee, against such agent, for the proceeds of such property; and the fact that the mortgagee did not pursue and seize the mortgaged property does not, of itself, afford such agent a defense to such action.

On rehearing. Reversed.

For former opinion, see 71 N. W. 715.

Norval, J., and Irvine and Ryan, CC., dissenting.

RAGAN, C.

This is a rehearing of Alter v. Bank (Neb.) 71 N. W. 715. In their petition in the district court, Alter & Glover alleged the sale by them on the 26th of September, 1889, of 309 head of cattle, to one Wiens, at an agreed price of $8,500; that, as an evidence of said indebtedness, Wiens executed to Alter & Glover his note for said sum of money, drawing interest at the rate of 10 per cent. from date, and due on the 1st of April, 1890, and secured the payment of the same by a chattel mortgage upon all said cattle; that said chattel mortgage was duly filed in the office of the county clerk of Hamilton county soon after its execution (that being the county in which Wiens lived and kept said cattle); that there was due and unpaid on said note $1,606.65, with interest at 10 per cent. per annum from the 21st of May, 1890; that Wiens, subsequent to the purchase of said cattle, executed to said bank two chattel mortgages covering the same cattle; that said mortgages were taken by the Bank of Stockham subject to Alter & Glover's mortgage; that on January 8, 1890, the bank took possession of 41 head of said mortgaged cattle, shipped them to Martin Bros., commission merchants in South Omaha, Neb., and caused them to be there sold on the open market, and the net proceeds of said sale ($1,330) to be deposited to its credit in a bank there; that on the 8th of March, 1890, the Bank of Stockham took possession of 127 head of the cattle, on which Alter & Glover held a mortgage, shipped them to South Omaha, Neb., to said Martin Bros., and caused the cattle to be there sold in the open market, and the proceeds of said sale, amounting to $4,907.55, to be deposited to the credit of the Bank of Stockham in the Union Stock Yards Bank of South Omaha, and the said Bank of Stockham converted to its own use the said proceeds, of $4,907.55, except the sum of $2,000 of said proceeds, which it then and there remitted, or caused to be remitted, to Alter & Glover, to apply on the Wiens note; that the shipments and sales of the Wiens cattle made by the Bank of Stockham on the 8th of January and the 9th of March, 1890, were made without the knowledge or consent of plaintiffs; that they had demanded of the Bank of Stockham a return of said cattle, or a delivery of the proceeds of their sale, or so much thereof as would satisfy their mortgage debt against Wiens; that the Bank of Stockham had refused to deliver the cattle, or pay over the proceeds, or any portion of them, but had and retained said proceeds, and had converted them to their own use; that since the sale of the cattle the plaintiffs had been unable to discover their whereabouts, and unable to pursue them and subject them to the payment of their mortgage debt; that the Bank of Stockham, at the time it received and converted the proceeds of the cattle sold in January and March, 1890, to its own use, did so with the intent to defraud the plaintiffs out of their lien on said cattle, and took the proceeds of said sale, and retained them, with full knowledge of plaintiffs' lien on the cattle. The petition then alleged the insolvency of Wiens, and prayed that an account might be taken of the amount due them on the Wiens note and mortgage, that the priorities of liens of the plaintiffs and the Bank of Stockham should be determined by the court, that the amount found due the plaintiffs from Wiens might be adjudged a first lien upon the mortgaged property, and that the Bank of Stockham might be decreed to hold the proceeds of the sale of the cattle in trust for the use and benefit of the plaintiffs, and decreed to pay the same over to the plaintiffs. The answer of the Bank of Stockham, so far as material here, was a general denial of the averments of Alter & Glover's petition, coupled with the averment that Alter & Glover, from the proceeds of the sale of a part of the mortgaged cattle shipped and sold by them in May, 1890, had realized more than sufficient to pay the amount of their mortgage debt. Wiens intervened in the action, and filed an answer in the nature of a cross petition, in which he alleged that he purchased the 309 head of cattle from Alter & Glover, and gave his note for $8,500 for the purchase price; that Alter weighed these cattle, announcing the weights to be 364,330 pounds, or an average of 1,179 pounds per head; that he (Wiens) relied on the honesty of Alter in weighing the cattle, and that the latter falsely and fraudulently weighed them; that their total weight did not exceed 287,080 pounds, or an average of 929 pounds each; that the actual value of the cattle, had they been correctly weighed, was $6,688.38; and that the note was given for $1,811.62 too much. The answer then alleged that what was justly due on the note had been paid, and the debt overpaid $454.85, for which sum Wiens asked a judgment against Alter & Glover. The trial resulted in the district court pronouncing two judgments: (1) That there was due to Alter & Glover from Wiens, on his note, $828.91,--about one-half of what Alter & Glover claimed was due upon it; and this judgment was based upon the finding of the jury that Alter & Glover falsely weighed the cattle at the time they sold them to Wiens. (2) The second judgment pronounced by the court was one dismissing the plaintiffs' action against the Bank of Stockham. It is to reverse both these judgments that Alter & Glover have prosecuted here a petition in error.

1. Is the finding of the jury that Alter & Glover falsely weighed these cattle at the time they were sold by them to Wiens supported by sufficient evidence? Wiens, to sustain his contention that the cattle were falsely weighed, introduced evidence which showed, or tended to show, the following state of facts: He purchased the cattle from Alter & Glover on the 26th of September, 1889. At that time the cattle were at a railway station some miles from the city of Grand Island. The cattle were then driven to Grand Island, and there weighed on the scales in the stock yards of the Union Pacific Railway Company. Wiens and his son were both present at the scales while the cattle were being weighed, though Alter did the actual weighing; calling off the weights of each bunch to Wiens. Wiens, after receiving the cattle, on that day or the next, drove them to his farm, in Hamilton county, where he kept them in lots, or in a field, fed them an abundance of hay and corn, and furnished them plenty of water. In other words, he took proper care of the cattle, and properly fed them and watered them. On the 8th of January, 1890, 41 head of the cattle were shipped to South Omaha, and there sold, and these cattle there weighed 48,800 pounds at that time; on March 9, 1890, 127 head of the cattle were shipped to South Omaha, and sold, and there at that time weighed 153,100 pounds; and on the 21st of May, 1890, 126 head of the cattle were shipped to South Omaha, and there sold, and these cattle there, at that time, weighed 154,840 pounds. In other words, 309 head of the cattle purchased of Alter & Glover at the time of their purchase weighed 364,330 pounds, and 294 head of the same cattle, when sold, in January, March, and May, 1890, weighed only 356,740 pounds, or 7,590 pounds less than all the cattle weighed at the time they were purchased. That the scales on which the cattle were weighed in Omaha were of the Fairbanks manufacture, were in good order, and weighed correctly, and the party who weighed the cattle there weighed them honestly. Wiens also introduced the evidence of a number of farmers and cattle feeders, who testified, as experts, to the effect that they were acquainted with these cattle, and saw them at the time Wiens was feeding them, and that in their opinion the cattle had gained in weight after Wiens purchased them, and that taking into consideration the character of the cattle, the care taken of them by Wiens, and the feed which they had consumed, these cattle should have gained, and did probably gain, from the time they were purchased by Wiens until they were shipped, an average of 250 to 300 pounds per head. On behalf of Alter & Glover, the evidence tended to show...