Carr v. Brawley

• Decision Date: 18 July 1912
• Docket Number: Case Number: 2031
• Citation: 1912 OK 490,125 P. 1131,34 Okla. 500
• Parties: CARR v. BRAWLEY.
• Court: Oklahoma Supreme Court

1912 OK 490

125 P. 1131

34 Okla. 500

CARR v. BRAWLEY.

Case Number: 2031

Supreme Court of Oklahoma

Decided: July 18, 1912

Syllabus

¶0 GARNISHMENT--Property Subject--Mortgaged Personalty--Waiver of Mortgage--Consent to Sale. When the mortgagee of certain cotton gave the mortgagor authority to sell the cotton and deposit the proceeds in a bank in the name of the mortgagor's bonds-men in a suit, and the same was done, the lien of the mortgage was discharged, and the funds, prior to reaching the mortgagee, were subject to garnishment at the instance of a creditor of the mortgagor.

Geo. B. Rittenhouse and F. A. Rittenhouse, for plaintiff in error.

W. L. Johnson, for defendant in error.

BREWER, C.

¶1 Brawley was plaintiff below and Carr was defendant. The defendant in error, E. J. Brawley, as plaintiff below, sued plaintiff in error, E. W. Carr, as defendant below, for the alleged conversion of a sum of money, alleged to have been the proceeds of a crop of cotton raised by a man named Wallace, and on which plaintiff held a mortgage. It seems that Wallace raised some cotton. He gave two mortgages on it. Cart became the owner of the first mortgage by assignment. Brawley owned the second mortgage. Carr sued Wallace in replevin for the cotton under the first mortgage. Wallace defended and needed bondsmen, so as to retain the cotton and finish gathering it. Brawley agreed for Wallace to sell the cotton and deposit the proceeds in a bank in the name of Ward and Davidson, the bondsmen of Wallace in the replevin suit, to the end that they be held harmless. This was done. Carr prevailed in the replevin suit, and sufficient of the funds in the bank were used to pay Carr's judgment. But it seems Wallace was also indebted to Carr on another matter, a promissory note, in no wise connected with the mortgages. Carr sued Wallace on this note, obtained judgment, and garnished the bank, Ward, and Davidson, impounding the balance of the fund derived from the sale of the cotton crop. Issue was joined on the answers of the garnishees and resulted in an order on the bank to pay $ 55.68 of the fund into the justice court to apply on Carr's judgment against Wallace. This sum was so paid into court by the bank, where it remained at the time this suit was brought, and at the time of the trial. Brawley was not a party to these proceedings. Under this situation, and while the money was in court, Brawley brought this action in conversion against the justice, the constable, and Carr, the plaintiff. The court sustained a demurrer as to the two officers, but overruled it as to Carr. The case was tried to a jury, who found for Brawley and against Carr in the sum of $ 92.67, which appears to have been the total balance of the cotton funds in the bank. It is contended here, first, that there was no demand; second, that Brawley, in consenting that Wallace sell the mortgaged cotton and put the proceeds in the bank, lost the lien under the mortgage, and that the funds were subject to garnishment at the suit of Carr as a creditor. We shall not discuss the question of demand, as our views on the second proposition render the same unnecessary. The second proposition, we think, requires a reversal of the case. The mortgagee gave authority to the mortgagor to sell the cotton and make use of the proceeds, at least temporarily, for his own purposes. He used a portion of the proceeds in discharging a judgment against himself. The remainder was deposited as a general deposit in the bank in the name of Ward and Davidson. Had the mortgagee required them to be deposited in her name, after being so deposited, she would have been safe. This course was not pursued. That there was a waiver of the lien of the mortgage as a result of the mortgagee's consent to the sale is elementary. Mortgage Security Co. v. Elevator Co., 6 N.D. 407, 71 N.W. 130; Drexel v. Murphy, 59 Neb. 210, 80 N.W. 813; Frick Co. v. Milling Co., 51 Kan. 370, 32 P. 1103; Partridge v. M. D. Elevator Co., 75 Minn. 496, 78 N.W. 85; Cobbey on Chattel Mortgages, sec. 636; Jones on Chattel Mortgages (5th Ed.) sec. 465; Hammon on Chattel Mortgages, p. 142. The lien of the mortgage does not follow the proceeds of a sale of the mortgaged property, where the mortgagee...