First National Bank of Holdrege, Nebraska v. Johnson

• Decision Date: 22 April 1903
• Docket Number: 12,816
• Citation: 94 N.W. 837,68 Neb. 641
• Parties: FIRST NATIONAL BANK OF HOLDREGE, NEBRASKA, v. JOHN A. JOHNSON, TRUSTEE IN BANKRUPTCY OF THE ESTATE OF NELS ANDERSON ET AL
• Court: Nebraska Supreme Court

94 N.W. 837

68 Neb. 641

FIRST NATIONAL BANK OF HOLDREGE, NEBRASKA, v. JOHN A. JOHNSON, TRUSTEE IN BANKRUPTCY OF THE ESTATE OF NELS ANDERSON ET AL

No. 12,816

Supreme Court of Nebraska

April 22, 1903

ERROR to the district court for Phelps county: ED L. ADAMS DISTRICT JUDGE. Reversed.

Reversed and remanded.

James I. Rhea, John. L. McPheeley, John M. Stewart and Thomas C Munger, for plaintiff in error.

Hector M. Sinclair and William P. Hall, contra.

POUND C. BARNES, C., concurs. OLDHAM, C., did not sit.

OPINION

POUND, C.

One Anderson, whose trustee in bankruptcy is plaintiff in this case, executed a chattel mortgage to the cashier of the 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 P. 303. On the other hand, there is equally good authority for the contrary view. Byram v. Stout, 127 Ind. 195, 26 N.E. 687; Barchard v. Kohn, 157 Ill. 579, 41 N.E. 902; Howard v. Parks, 1 Tex. Civ. App. 603, 21 S.W. 269. The leading cases on the respective sides of this question are Evans v. Warren, and Byram v. Stout. In Evans v. Warren, the ground of decision was, in substance, that under the laws of Massachusetts the equity of redemption of personal property was not subject to attachment, and hence, when the mortgaged property was attached, there must necessarily be a waiver of the mortgage lien. The court said:

"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 against the property by either of these writs, the same as any other person. If he has other debts which he wishes to enforce against the surplus, or if the security of the mortgage is limited to a portion of his claim, and he desires to enforce such claim for the deficiency against any surplus that may accrue, or if, as in the case at bar, he is in doubt whether the property which he finds in the possession of the mortgagor is the property mortgaged or some other property, and is desirous to protect his claim by prompt proceedings, we see no ground for thinking that he has done anything inconsistent with the claim of lien under his mortgage. It is not a case of asserting title in himself in one proceeding and title in the mortgagee in another. Both the mortgage and the attachment recognize a title in the mortgagee. We are therefore of opinion that a mortgagee of chattels does not waive or lose his lien by causing an attachment to be levied upon the mortgaged property.

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...