Marshall v. Otto

• Decision Date: 11 December 1893
• Docket Number: 572.
• Citation: 59 F. 249
• Parties: MARSHALL et al. v. OTTO et al.
• Court: U.S. District Court — District of Nevada

59 F. 249

MARSHALL et al. v. OTTO et al.

No. 572.

United States Circuit Court, D. Nevada.

December 11, 1893

Statement by HAWLEY, District Judge:

On December 29, 1890, M. E. Spooner made, executed, and delivered to the Bullion & Exchange Bank, in Ormsby county Nev., a chattel mortgage of 200 head of horses, more or less branded (symbol) on the left shoulder, including 3 thoroughbred stallions and the increase of the stock; also 600 head of cattle, more or less, branded SP on the right hip, with all the increase thereof, situated in Ash Valley Lassen county, Cal.,--to secure the payment of a certain promissory note for $20,000, given for amount of Spooner's overdraft accounts at the bank, payable on or before three years after date, with interest payable monthly thereon at the rate of 9 per cent. per annum. No possession of the property was taken at the time of the execution of the mortgage. This mortgage was recorded in the county recorder's office of Lassen county on January 9, 1891. On the same day of the execution of the chattel mortgage, M. E. Spooner made, executed, and delivered to the Bullion & Exchange Bank a deed or certain real estate situate in Lassen county, Cal., designated as the Spooner Ranch,' containing 1,360 acres, more or less. This deed was intended as a mortgage to further secure the payment of the same note, debt, and account as set forth in the chattel mortgage, and was recorded in the recorder's office of Lassen county at the same time. On the 12th of August, 1892, M. E. Spooner was indebted to the bank in the sum of $11,055.39, and desired further advances to be made to him, which the bank refused to make unless better security was given. Several days were spent in negotiations between the parties, which finally resulted in the execution of a written agreement on the 12th of August, which was signed by the bank and M. E. Spooner, and attached to the chattel mortgage. This agreement reads as follows: 'We, the undersigned parties to the annexed instrument, hereby agree and designate James Marshall, Esq., as a pledge holder, to take possession of the personal property described in said instrument, and hold the same as a pledge to secure the payment of the note and debt set out therein, and we hereby authorize and instruct said James Marshall to take immediate possession of said personal property, (cattle and horses,) and hold the same for such purpose as is provided in the laws of California.' Section 2988 of the Civil Code of California provides that 'the lien of a pledge is dependent on possession and no pledge is valid until the property pledged is delivered to the pledgee, or to a pledge-holder as hereinafter prescribed.' Section 2993 provides that 'a pledgor and pledgee may agree upon a third person with whom to deposit the property pledged, who, if he accepts the deposit, is called a pledge-holder.'

On the 19th of August, 1892, James Marshall, the pledge holder, took possession of 160 head of horses, 2 stallions, and 60 colts, of the value of $2,400, and 326 head of cattle and 100 calves, of the value of $3,912, making a total of $6,312; said property being upon the Spooner ranch, or range, in Ash Valley, Lassen county, branded with the Spooner brands, being the property included and described in the chattel mortgage given by M. E. Spooner to the bank. On the 24th of August, 1892, after the pledge holder had taken possession of the personal property, and when he was in the possession thereof under the terms of the agreement appointing him a pledge holder, M. E. Spooner made, executed, and delivered to his wife, Clara Spooner, a bill of sale of said personal property. On the same day M. E. Spooner made, executed, acknowledged, and delivered to his wife a deed of the Spooner ranch, which was thereafter recorded in the recorder's office of Lassen county. At the time of the execution of the bill of sale and the deed, and for some time prior thereto, Mrs. Clara Spooner had knowledge of her husband's indebtedness to the bank, of the execution of the deed of the Spooner ranch, and of the chattel mortgage executed by her husband and delivered to the bank, and of the appointment of the pledge holder, and of the fact that the pledge holder was then in the possession of the personal property. At that time, however, she claimed that the pledge holder was not in the possession of the personal property, and thereafter, in various ways, endeavored to get rid of the pledge holder, and to obtain the possession of all of said personal property, and asserted her right of possession thereto. On the 7th of September, 1892, Mrs. Clara Spooner made an inventory of her separate property, which included the personal property then in the possession of the pledge holder, and duly recorded the same in the recorder's office of Lassen county.

On the 24th of September, 1892, the Bullion & Exchange Bank brought suit against M. E. Spooner in the superior court of Placer county, Cal., to recover the sum of $11,996.86, which it alleged was due from Spooner to the bank upon his checks, and upon open, overdraft accounts. A writ of attachment was obtained in said suit upon the affidavit of Trenmor Coffin, who was a director of, and one of the attorneys for, the bank, setting forth the fact that the indebtedness was due upon an express contract for the direct payment of money, and 'that the defendant is now, and was at the time said contract was made, a nonresident of the state of California.' On the same day--September 24, 1892--one R. Munro, as the administrator of the estate of J. M. Short, commenced suit in the same court against M. E. Spooner for $8,978.44, and caused a writ of attachment to be issued therein. These writs of attachment were taken by Mr. Coffin to Lassen county, Cal., and were there delivered to F. P. Cady, the sheriff of Lassen county, with written instructions to said sheriff from the attorneys in both of said suits to execute the same 'by taking into actual custody all personal property heretofore owned and claimed by said Spooner, and being in Lassen county, state of California, whether the same be claimed by third parties or not;' also, to levy the writs upon a portion of the Spooner ranch which, it is claimed, was inadvertently omitted from the description in the deed. These instructions were obeyed, and the property mentioned therein attached, and actual possession of the personal property taken by the sheriff, on the 28th day of September, 1892. On October 3, 1892, Mrs. Clara Spooner commenced an action against Sheriff Cady for the recovery of the personal property, alleging that the same was wrongfully taken from her possession, without her consent, and for damages.

On the 25th of October, 1892, the Bullion & Exchange Bank brought suit in the superior court of Lassen county against M. E. Spooner to foreclose the mortgage upon the Spooner ranch, and upon the personal property,--horses, cattle, hay, and grain,--for the sum of $12,146.50, the amount then alleged to be due and owing and unpaid upon the note and mortgage. Clara Spooner, wife of M. E. Spooner, _____ Munro, the administrator of the estate of _____ Short, and Anthine Presau, were made parties defendant, as each of them asserted and claimed an interest in the property. It was alleged in the complaint, among other things, that M. E. Spooner had fraudulently misrepresented the amount and value of the property; that in September, 1892, he had fraudulently conspired with his wife to defraud the bank; that his wife claimed to own all the property, and threatened to sell and dispose of the same, and to remove the horses and cattle away from the ranch and from Lassen county. Upon the filing of this complaint the court, without notice to defendants, upon motion of plaintiffs, made an order appointing F. D. Cady, the sheriff of Lassen county, receiver of the real estate and personal property, and said sheriff then took possession of said property as receiver. On November 15, 1892, after the defendants had answered, the court, upon motion of defendants, without notice to plaintiff, made an order removing and discharging the receiver, and authorized and directed him to deliver to the defendant Clara Spooner the possession of all the property, which order was obeyed by the receiver.

On the 18th of November, 1892, Otto & Healey, the defendants in this action, bought the personal property,--horses and cattle, hay and grain, and the farming implements,--on the Spooner ranch, from Mrs. Clara Spooner, for the sum of $9,700, and took possession thereof. They paid $4,000 in cash, and gave two duebills for the balance,--one for $2,700, due in January, 1893; the other for $3,000, due in April, 1893. The sum of $200 was thereafter paid on one of the duebills. Neither of the duebills has since been presented to them, and no payments have been requested or made thereon. Prior to the time of the purchase of the property, Otto & Healey had actual knowledge of the pending litigation, and were informed that the bank had a claim on the property which was unsettled. On the 6th of February, 1893, on motion of plaintiffs, the attorneys for defendants consenting thereto, and waiving their costs, the court in Placer county dismissed the attachment suit of Bank v. Spooner, and entered the following judgment: 'It is therefore ordered, adjudged, and decreed that the above action be, and the same is hereby, dismissed; each of the parties hereto paying his own costs.'

On March 21, 1893, the present suit was commenced in this court by James Marshall, the pledge holder, and the Bullion &amp Exchange Bank, as plaintiffs, against the defendants, Otto & Healey, for the possession of the personal property,--horses and cattle, hay and grain,--on the Spooner ranch, and for the value...