Grand Island Banking Company v. Costello
| Citation | 63 N.W. 376,45 Neb. 119 |
| Decision Date | 21 May 1895 |
| Docket Number | 6179 |
| Parties | GRAND ISLAND BANKING COMPANY, APPELLANT, v. JAMES A. COSTELLO ET AL., APPELLEES |
| Court | Supreme Court of Nebraska |
APPEAL from the district court of Hall county. Heard below before HARRISON, J.
REVERSED AND REMANDED.
Abbott & Caldwell, for appellant:
The decree canceling appellant's mortgage should be set aside. The only lien on the mortgaged property superior to that of appellant is the claim for city and county taxes. The mortgage is not invalid on the ground that the security is excessive.
After the appellant was garnished the property was in the custody of the law and not subject to execution or attachment. (Northfield Knife Co. v. Shapleigh, 24 Neb. 635; Ryan v. Parris, 48 Kan. 765.)
The following cases were cited as to priority of liens: Chicago Lumber Co. v. Fisher, 18 Neb. 334; People v. Bristol, 35 Mich. 28.
M. B. Reese, also for appellant:
The decisions that guided the court below in finding that appellant's mortgage was void have recently been overruled. (Jones v. Loree, 37 Neb. 816; Kilpatrick v. McPheely, 37 Neb. 800; Farwell v. Wright, 38 Neb. 445; Kavanaugh v. Oberfelder, 37 Neb. 647; Costello v. Chamberlain, 36 Neb. 45; Whitney v. Levon, 34 Neb. 443; Sherwin v. Gaghagen, 39 Neb. 238.)
Charles G. Ryan, for Hall county and other appellees:
The lien for taxes is superior to all others. (Binkert v. Wabash R. Co., 98 Ill. 205; Ream v. Stone, 102 Ill. 359; Kirkwood v. Magill, 6 Kan. 540.)
The levies that were made, subject to appellant's mortgage, with consent of the mortgagee, were valid.
Charles B. Keller, for Wood, Brown & Co.:
The security taken by the appellant is excessive and the mortgage is therefore void. (Thompson v. Richardson Drug Co., 33 Neb. 714; Brown v. Work, 30 Neb. 800; Russell v. Lau, 30 Neb. 209; Bonns v. Carter, 20 Neb. 566; Morse v. Steinrod, 29 Neb. 108; White v. Cotzhausen, 129 U.S. 343.)
The failure to register the mortgage made it fraudulent as to creditors. (Simon v. Openheimer, 20 F. 555; Goll v. Miller, 54 N.W. [Ia.], 443; Steele v. Coon, 27 Neb. 586; Pond v. Skidmore, 40 Conn. 213; Standard Paper Co. v. Guenther, 67 Wis. 101; Sanger v. Freie Press Co., 41 N.W. [Wis.], 436; Crippen v. Jacobson, 56 Mich. 386; Feary v. Cummings, 41 Mich. 383; Dyer v. Thornstead, 29 N.W. [Minn.], 345.)
The creditors who levied subject to the mortgage are estopped from disputing its validity. (Simon v. Openheimer, 20 F. 555; Russell v. Dudley, 3 Met. [Mass.], 147; Tolbert v. Horton, 31 Minn. 518; Howard v. Chase, 104 Mass. 249; Tuite v. Stevens, 98 Mass. 305.)
As to what is necessary to constitute a levy see Johnson v. Walker, 23 Neb. 744; Knap v. Sprague, 9 Mass. 258; Townsend v. Corning, 40 Ohio St. 335; Haggerty v. Wilber, 16 Johns. [N. Y.], 287; Lowry v. Coulter, 9 Pa. 349; Logsdon v. Spivey, 54 Ill. 104; Dresser v. Ainsworth, 9 Barb. [N. Y.], 619; Newman v. Hook, 37 Mo. 207; Duncan's Appeal, 37 Pa. 500; Standard Oil Co. v. Bretz, 98 Ind. 231; Westervelt v. Pinckney, 14 Wend. [N. Y.], 123; Bryan v. Bridge, 6 Tex. 141; Allen v. McCalla, 25 Iowa 464; Lane v. Jackson, 5 Mass. 163; Learned v. Vandenburgh, 7 How Pr. [N. Y.], 379; Dworak v. More, 25 Neb. 739.
As to priority of liens the following cases were cited: Loring v. Melendy, 11 O., 355; Neal v. Foster, 36 F. 29; Smith v. Lind, 29 Ill. 30.
Walter J. Lamb, for W. S. Peck & Co.:
A creditor may attack the title of the garnishee to property or effects of the debtor whenever the garnishee holds the same under a transfer fraudulent as to creditors.
The possession of property by the mortgagee under a mortgage of chattels after default, and the right he has over the goods, are utterly inconsistent with the possession of such goods at the same time by the sheriff under execution. (McConnell v. Denham, 34 N.W. [Ia.], 298; Chicago Lumber Co. v. Fisher, 18 Neb. 334; Townsend v. Corning, 40 Ohio St. 335; Rickards v. Cunningham, 10 Neb. 417; Chittenden v. Rougers, 42 Ill. 105; Sparks v. Compton, 70 Ind. 393.)
All creditors who levied their attachments and executions subject to the bank mortgage recognized its validity, and until it was attacked by third parties were conclusively estopped from denying the validity of the mortgage, and so they are postponed to the levy by garnishment of W. S. Peck & Co. (Kellogg v. Secord, 3 N.W. [Mich.], 868; Nelson v. Ferris, 30 Mich. 499.)
When creditors pursue different remedies each is entitled to the precedence in law given under the remedy selected by him. (
Fowler, Smith & Musgrave, for John V. Farwell & Co.:
The creditors who failed to attach or garnish are not in a position to assail the mortgage. After garnishment the property was in custodia legis. The creditors who attempted to levy execution, in violation of the rights of the mortgagee and those who attached and garnished, acquired no lien on the property. (Healey v. Butler, 66 Wis. 9; Luckland v. Garsch, 56 Mo. 267; Henry v. Murphy, 54 Ala. 246; Coble v. Nonemaker, 78 Pa. 501; Shaver Wagon & Carriage Co. v. Halsted, 43 N.W. [Ia.], 623; Johnson v. Hersey, 73 Me. 291; Morris v. House, 32 Tex. 492; Brainard v. Van Kuran, 22 Iowa 261; Sperry v. Gallaher, 77 Iowa 107; Strohm v. Hayes, 70 Ill. 41; First Nat. Bank of Stevens' Point v. Knowles, 67 Wis. 373; Cornish v. Russell, 32 Neb. 297.)
Those who garnished have a valid lien. (Northfield Knife Co. v. Shapleigh, 24 Neb. 635.)
The equity in mortgaged chattels in possession of the mortgagee can only be reached by garnishment. (Peckinbaugh v. Quillin, 12 Neb. 586; Brunham v. Doolittle, 14 Neb. 214; Chicago Lumber Co. v. Fisher, 18 Neb. 338.)
W. H. Thompson, for Cushing, Olmstead & Snow and others, as to the effect of appellant's failure to file its mortgage, cited: Hildreth v. Sands, 2 Johns. Ch. [N. Y.], 35; Hughes v. Cory, 20 Iowa 399; Blannerhassett v. Sherman, 105 U.S. 100; Walton v. First Nat. Bank, 22 P. [Col.], 440; Steele v. Coon, 27 Neb. 597; McQuade v. Rosecrans, 36 O.S., 442; Russell v. Winne, 37 N.Y. 593.
W. H. Platt, for Tootle, Hosea & Co.
Hall, McCulloch & English, for Steppacher, Arnold & Co.
R. R. Horth and J. H. Woolley, for other appellees.
OPINION
The opinion contains a statement of the case.
This action was brought on February 11, 1891, in the district court of Hall county by the Grand Island Banking Company against James A. Costello, sheriff of said county, and the firms of Wood, Brown & Co. and Steppacher, Arnold & Co., to restrain the levy of an execution issued on a judgment rendered in favor of each of the firms named against Charles A. Wiebe. The property consisting of a stock of dry goods, carpets, clothing, etc., was in the possession of the Grand Island Banking Company by its agent, J. W. Thompson under a chattel mortgage previously made by Wiebe, the owner thereof, to said banking company. Prior to the attempted levies many suits had been begun against Wiebe, aided by attachments, under which the banking company had been garnished. There also had been commenced proceedings in aid of execution against Wiebe. By consent of the banking company there were alleged levies of executions in favor of various judgment creditors of Wiebe, made subject to the above chattel mortgage by J. W. Thompson aforesaid, claiming in making such levies to be acting in the capacity of deputy sheriff. The statements of appellant as to the number description, and amounts of the processes which issued against Wiebe are not questioned, and therefore these descriptions will be accepted as correct for the purposes of this general statement, rather than to resort to an actual count, comparison, and computation for the purposes of accurate verification. The mortgage was made on February 4, possession thereunder was taken the next day, and before another day the mortgagee was garnished on claims to the amount of $ 2,412.61, followed the next day by garnishments to the amount of $ 4,063.38. There issued from the county court sixty-six executions for the collection of different sums, amounting in the aggregate to $ 23,312.60. From the district court two attachments and garnishments issued for $ 10,673.44. There issued from the county court three attachments and garnishments amounting to $ 517.66, and four garnishments in aid of executions to the amount of $ 3,863.55. The firm of Wood, Brown & Co. and the firm of Steppacher, Arnold & Co. on the 10th of February, 1891, notwithstanding existing garnishments of the mortgagee and the claims of existing levies expressly subject to the mortgage, required an actual levy by seizure of certain mortgaged property to be made by the sheriff, which brought on this litigation. Subsequently every other creditor of Wiebe seems to have been made a party defendant, and thenceforward there were united efforts, under pleadings in the nature of cross-petitions, to set aside the mortgage above...
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