Johnston v. First Nat. Bank of Otis

• Decision Date: 09 June 1941
• Docket Number: 14728.
• Citation: 108 Colo. 188,115 P.2d 56
• Parties: JOHNSTON, Sheriff, et al. v. FIRST NAT. BANK OF OTIS et al.
• Court: Colorado Supreme Court

115 P.2d 56

108 Colo. 188

JOHNSTON, Sheriff, et al. v. FIRST NAT. BANK OF OTIS et al.

No. 14728.

Supreme Court of Colorado, En Banc.

June 9, 1941

Rehearing Denied June 30, 1941.

Error to District Court, Morgan County; H. E. Munson, Judge.

Replevin action by the First National Bank of Otis, Colo., against Rufus A. Johnston, Sheriff of Morgan County, Colo., and another, wherein Rex O. Howlett was made a party and filed a counterclaim. To review a judgment for the plaintiff, the defendants bring error.

Judgment affirmed.

OTTO BOCK, J., dissenting.

Hodges, Vidal & Goree and Joseph G. Hodges, all of Denver, for plaintiffs in error.

Frank D. Allen, of Akron, C. H. Anderson, of Denver, and Leonard E Anderson, of Brush, for defendants in error.

YOUNG Justice.

An action in replevin was brought by the First National Bank of Otis, Colorado, a banking corporation, against Rufus A Johnston, sheriff of Morgan county, to recover possession of forty head, more or less, of red white-faced 1937 spring calves branded two bar seven on the left hip, which were held by the sheriff under levy of execution against C. V. Owens and E. H. Owens in favor of the First National Bank of Fort Morgan. Judgment was rendered in favor of plaintiff and defendant bank seeks a reversal thereof.

The Otis bank held two notes of one Rex O. Howlett in the aggregate amount of $1,758.80, secured by a chattel mortgage on seventy-four 1937 calves, and other property. At the time the mortgage was executed Howlett owned eighty-seven or eighty-eight 1937 calves similarly branded. The description as it appeared in the mortgage is as follows:

'1 Red White Faced Hereford Bull, age 3 years $100.

'4 1937 Red Calves $70.

'74 Red White Faced 1937 Spring Calves $1260.

'1 Holstein Cow 9 $25.

'16 Red and Roan Cows 2 to 8 $480.

'22 Red White Faced Cows 2 to 6 years old $800.

'Also any other cattle that I own and not described in the above.

'The above cattle are branded 2/7 on left hip, now located and to be kept on the S 1/2 of Section 20, Township 1 N, Range 50W, Washington County, Colorado.'

On Saturday, February 26, 1938, Howlett sold from his farm, located as in the mortgage described, eighty-seven head of red white-faced 1937 calves branded two bar seven on the left hip to C. V. Owens; gave him a bill of sale therefor and received from him a draft upon C. V. Owens and Sons Auction Sales Commission Company for the sum of $1,950, payable through the Fort Morgan bank. The account of the Owens company was overdrawn $3,000 at this bank and it otherwise was indebted to it in the sum of $9,712.79, upon which indebtedness the bank on February 17, 1938, had procured judgment, and on February 23, 1938, had sued out an execution and placed it in the hands of defendant Johnston, the sheriff of Morgan county, for levy. Howlett did not disclose to Owens that the calves were mortgaged. The Otis bank had no actual knowledge of the sale until Howlett brought in his draft, which it immediately forwarded for collection. It did not credit the amount of the draft on Howlett's notes and the draft on presentation by the Fort Morgan bank was dishonored by the drawee. It was returned to the Otis bank unpaid and never has been paid. At the end of the draft proper appeared the words, 'We request prompt deposit for collection.' Upon return of the draft, dishonored, the Otis bank instituted an action in replevin against the sheriff of Morgan county, who had levied on the cattle by virtue of the aforesaid execution.

The Otis bank set out in its complaint in replevin its mortgage, alleged its interest thereunder, and that the mortgage provided that if the property therein conveyed should be attached or claimed by another person that the mortgagee might immediately foreclose, take possession of the property, sell it, and apply the proceeds to the payment of its notes.

By stipulation of the parties the Fort Morgan bank was made a party defendant, and on petition of plaintiffs Howlett was made a party.

Howlett in his answer and counterclaim, among other things, alleged that he agreed to sell the cattle but that the sale was for cash and that it was never consummated by reason of the fact that, being for cash and the draft being dishonored, title to the cattle never passed. An issue was joined on this allegation by plaintiff's replication.

Defendants contended, also, that the mortgage was void because the description of the property...