Federal Intermediate Credit Bank v. Maryland Cas. Co.
| Decision Date | 29 March 1935 |
| Docket Number | No. 30153.,30153. |
| Parties | FEDERAL INTERMEDIATE CREDIT BANK OF ST. PAUL v. MARYLAND CASUALTY CO. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Chippewa County; G. E. Qvale, Judge.
Action by the Federal Intermediate Credit Bank of St. Paul against the Maryland Casualty Company. From an order overruling its demurrer to the complaint on the ground that it failed to state a cause of action, defendant appeals.
Reversed.
Orr, Stark, Kidder & Freeman, of St. Paul, for appellant.
Fosnes & Rolloff and Oscar S. Wilson, all of Montevideo, for respondent.
The action is on a bond conditioned for the faithful performance of all the duties enjoined by law upon the register of deeds of Murray county, Minn. Defendant's demurrer to the complaint on the ground that it failed to state a cause of action was overruled; the court certifying that the question presented was important and doubtful. Defendant appealed from that order.
The complaint alleges substantially as follows: On March 10, 1931, Farmers' Agricultural Credit Association (hereinafter referred to as association) held a chattel mortgage upon all of the personal property of one John O'Connell, a resident of Murray county, except 80 shoats, as security for an indebtedness of $1,797.50. The indebtedness was then past due. One J. J. Kearns had a chattel mortgage on the 80 shoats as security for the payment of $1,100, which mortgage had been duly filed and record made thereof. On or about the above date O'Connell applied to the association for an extension of his indebtedness. Before such extension would be granted, the association required satisfaction of the Kearns mortgage, so that it would have a first mortgage on 15 of the shoats. For the purpose of ascertaining that the Kearns mortgage had been so satisfied of record, the association requested L. C. Christenson, register of deeds of Murray county, to furnish it with "an abstract of all mortgages filed and of record in his office against the said John O'Connell which had not been released or satisfied." Pursuant to that request, Christenson, on March 13, furnished an abstract purporting to give a list of all mortgages then on file in his office against O'Connell, which had not been released or satisfied. The Kearns mortgage was not included in the abstract, so that it did not disclose or give any information that Kearns' mortgage was still a valid and subsisting mortgage on the property therein described. Relying on the abstract, the association accepted a renewal mortgage from O'Connell on 15 shoats and increase thereof, as well as on other personal property. Before the renewal note and mortgage became due, it was duly assigned to plaintiff herein. The mortgage held by Kearns upon the 80 shoats was in fact unsatisfied and constituted a valid first lien on the 15 shoats, and they were thereafter sold and the proceeds applied on the indebtedness of O'Connell to Kearns. The reasonable value thereof was $479. The property covered by plaintiff's mortgage was sold for the sum of $806.04, and that sum was applied on the indebtedness of O'Connell to it, leaving a balance of $479. On December 23, 1933, plaintiff obtained a judgment against Christenson for $576.31 (including interest and costs).
The complaint alleges that both O'Connell and Christenson were and are insolvent. The bond was made a part of the complaint, and provided: "If the said principal (Christenson) shall faithfully and impartially perform all and singular the duties enjoined upon him by law without fraud, deceit, or oppression and pay over without delay to the officer entitled by law thereto all moneys which shall come into his hands by virtue thereof, then this obligation shall be...
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