Roberson v. Reiter
| Decision Date | 08 November 1893 |
| Docket Number | 4936 |
| Citation | 56 N.W. 877,38 Neb. 198 |
| Parties | J. L. ROBERSON v. JOHN P. REITER |
| Court | Nebraska Supreme Court |
ERROR from the district court of Red Willow county. Tried below before COCHRAN J.
REVERSED AND REMANDED.
J. L Roberson and H. J. Whitmore, for plaintiff in error:
The note and mortgage are admitted, and also default in the payment thereof. The plaintiff is therefore entitled to the possession of the property, unless the defendant can establish payment or satisfaction of the mortgage in some way. (Case Threshing Machine Co. v. Campbell, 14 Ore., 460; Jones, Chattel Mortgages, sec. 706, and cases cited; Holland v. Griffith, 13 Neb. 473; Lathrop v Cheney, 29 Neb. 456.)
The court erred in not rendering an alternative judgment. (Lee v. Hastings, 13 Neb. 511; Hooker v Hammill, 7 Neb. 236; Frey v. Drahos, 7 Neb. 201.)
W. S. Morlan, and W. R. Starr, contra:
The irregularity in the form of the judgment was not called to the attention of the trial court. No motion was made to correct the same. In this case, if there was error, it was error without prejudice. (Armstrong v. Lynch, 29 Neb. 91.)
The facts are stated in the opinion.
This was an action of replevin by J. L. Roberson against John P Reiter to recover the possession of certain personal property. From a verdict and judgment in favor of defendant, plaintiff prosecutes error.
Plaintiff claims the right to the possession of the property by virtue of a chattel mortgage given by the defendant to one Henry Schneider, and by the latter assigned to the plaintiff. It appears from the record that on December 19, 1888, defendant, being the owner of the property in dispute, executed a chattel mortgage thereon to Henry Schneider, to secure the payment of a promissory note calling for $ 500, payable September 1, 1889. The execution of the note and mortgage is admitted. The defendant, however, insists that he never delivered them, or authorized their delivery, to the payee and mortgagee, but the same were placed in the hands of one George H. Grubb, to be held by him as escrow; and that subsequently, without the knowledge or consent of the defendant, the note and mortgage were turned over by Grubb to Schneider, without the terms and conditions upon which they were held having been complied with. This is disputed by the plaintiff. After the maturity of the note, it, with the mortgage securing the same, was assigned to the plaintiff, without the delivery of either the note or mortgage, for the consideration of $ 100. Defendant refusing to surrender the mortgaged property, this action was instituted to recover the possession thereof.
Plaintiff contends that the verdict should have been in his favor, and that the trial court erred in not so directing the jury. We are unable to adopt this view of the case. It is undisputed that one Henry Schneider was the owner of an undivided one-half interest in a brewery, situated near the town of Indianola, which was incumbered by mortgage to the amount of $ 1,500. He entered into a contract for the sale of his interest in the brewery, and the personal property contained therein, to the defendant, and the note and chattel mortgage involved in this suit were executed to secure the payment of the purchase price, and the same were deposited in escrow with George H. Grubb, an attorney of Indianola, to be delivered to Schneider on the performance by the latter of certain conditions as specified in such contract. There is a direct conflict in the testimony as to the terms under which the note and mortgage were held by Mr. Grubb, and whether the same were delivered to Schneider by the custodian in violation of the stipulations of the agreement.
The defendant testified unequivocally that the agreement between all the parties was that the note and mortgage were to be placed in the possession of Mr. Grubb, to be held until Mr. Schneider should procure a release of the incumbrance upon the brewery, and that likewise the latter execute to defendant a warranty deed covering the brewery property, which conveyance was to be left with Mr. Grubb, who was to retain all the papers until both parties were satisfied that the conditions of the sale had been complied with, when the deed was to be delivered to the defendant, and the note and chattel mortgage to Mr. Schneider; that shortly after the execution and delivery of the note and mortgage to Mr. Grubb, the latter, on the execution and delivery to him of said deed, unknown to defendant, surrendered the note and mortgage to Mr. Schneider, without the fulfillment by him of the said stipulations of the contract. That the incumbrance upon the brewery has never been paid or released of record, is conceded.
The defendant is fully corroborated as to the terms of the sale by the testimony of one Charles H. Oman, who was called by the parties to witness the verbal agreement. The evidence of the defendant and Oman is disputed by the testimony of Henry Schneider, who denies under oath that he agreed to lift the mortgage on the brewery, but testifies that Reiter, as a part of the consideration, assumed and agreed to pay the same. This evidence is weakened by the deed executed by him, the same containing full covenants of warranty, without any mention therein that the grantee assumed the payment of the mortgage on the property, as it doubtless would have stipulated if such had been the understanding of the parties. The jury were the judges of the weight to be given to the conflicting testimony, and after a careful perusal of the evidence contained in the bill of exceptions, we are satisfied that they were justified in finding that the contract was as testified by the defendant and his witnesses, and that the note and chattel mortgage were delivered to Schneider by the custodian without authority and in violation of the conditions of the contract. They, therefore, have no validity.
The rule is that where a mortgage is signed and deposited in escrow with a third person to be delivered to the mortgagee on the performance by the latter of certain conditions, the delivery by the custodian to the mortgagee, without the knowledge or consent of the mortgagor, and without the fulfillment of the conditions precedent by the mortgagee, will not have the effect to confer any interest in the mortgaged property upon the latter or his assignee with notice. The proposition is too well sustained by the adjudicated cases to require the citation of authorities to sustain it.
Plaintiff lays considerable stress upon the fact that the defendant wrote Schneider in the latter part of July, 1889, that he would pay $ 250 on the note on August 1, and the balance when due, requesting that the latter send the note to the bank or some person in Indianola that he might see the credit indorsed thereon when the payment was made. This letter unexplained, would be held to be a recognition by the defendant of Schneider's possession of the note as valid, but in view of other testimony in the record it should not be so regarded. The defendant explains why the letter was sent. ...
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