Gillilan v. Kendall

• Decision Date: 02 May 1889
• Citation: 26 Neb. 82,42 N.W. 281
• Parties: GILLILAN v. KENDALL ET AL.
• Court: Nebraska Supreme Court

26 Neb. 82

42 N.W. 281

GILLILAN

v.KENDALL ET AL.

Supreme Court of Nebraska.

May 2, 1889.

Syllabus by the Court.

1. A chattel mortgage upon growing grain is not constructive notice to third parties of a mortgage on the same grain thereafter lawfully placed in crib or bin, and a dealer in grain who, in good faith, in open market, purchases such grain from the mortgagor, and receives it at his warehouse, will take it free from the lien of the mortgage.

2. The mortgagor of chattels, until foreclosure, possesses a beneficial interest in the property mortgaged, and will convey a good title by a sale of such property to one who purchases in the open market in good faith, and without notice actual or constructive of the mortgage.

3. One A. executed a chattel mortgage upon 75 acres of growing corn to B. This corn apparently was gathered by the mortgagor with the knowledge or consent of the mortgagee, and placed in cribs or piles on the farm, and a portion afterwards sold in open market by the latter. In an action by the mortgagee against the purchaser to recover the value of the corn, held, that a mortgage upon a growing crop is not notice to third parties of a mortgage upon corn husked and placed in cribs or piles.

Error to district court, Lancaster county; CHAPMAN, Judge.Sawyer & Snell, for plaintiff in error.

C. E. Magoon and C. O. Whedon, for defendants in error.

MAXWELL, J.

This is an action by the plaintiff against the defendants to recover for certain growing corn, mortgaged by one Ashton to him, and a portion of which was gathered and sold to the defendants. On the trial the plaintiff recovered for the amount due Ashton upon the corn so sold. The plaintiff contends that he is entitled to recover for all the corn sold by Ashton to the defendants, although they had already paid Ashton therefor. The facts are substantially as follows: One Ashton gave two chattel mortgages to the plaintiff in error to secure payment of three of his promissory notes,--one in the sum of $61.30, another in the sum of $225.00, and the third in the sum of $44.50,--which chattel mortgages covered the crop of corn which was growing upon the lands owned by the plaintiff, viz., the W. 1/2 of section 30, township 11, range 5, in Lancaster county. These chattel mortgages were duly filed for record in the office of the county clerk on the 3d day of July, 1885, and the 7th day of September, 1885, respectively. During the months of November and December, in the year 1885, the said Ashton gathered and sold, without the knowledge or consent of Mr. Gillilan, a portion of the matured crop of this corn to the defendants, Kendall & Smith, who purchased the same in open market at their elevator in Malcolm, through their agent, John Carpenter. Kendall & Smith are grain buyers at Malcolm, and it was admitted at the trial that they had no knowledge of Mr. Gillilan's lien upon the corn so purchased by them, except such constructive notice as the filing of the chattel mortgage gave them. The plaintiff introduced the notes in question, and the chattel mortgages securing the same, with proof that they were duly filed, and also testimony tending to show that the defendants had purchased from Ashton about 985 bushels of corn, and that such corn was worth, in the market at Malcolm, at the time stated, from 19 to 21 cents per bushel. There is no testimony tending to show the entire quantity of corn produced by Ashton on the land of the plaintiff in section 30, nor what portion of the crop, if any, Ashton was to deliver to the plaintiff for rent. For aught that appears, the amount of corn still remaining on the farm is sufficient to satisfy the mortgages in question. The court instructed the jury as follows: “A party taking a chattel mortgage upon growing corn, in order to preserve his lien as against innocent purchasers, is bound to see that when the corn is gathered such notice is given to the public of his lien by keeping the same separate and unmixed with other corn as will prevent innocent parties from purchasing such corn; and in this case, if the jury believe from the evidence that the plaintiff, after the execution of the mortgages offered in evidence by him, did nothing more than to file his mortgages in the office of the county clerk, and allowed the corn to become mixed with other corn, and if the jury...