Rogers v. Heads Iron Foundry

• Court: Nebraska Supreme Court
• Writing for the Court: NORVAL
• Citation: Rogers v. Heads Iron Foundry, 51 Neb. 39, 70 N.W. 527 (Neb. 1897)
• Decision Date: 17 March 1897
• Parties: ROGERS v. HEADS IRON FOUNDRY ET AL.

51 Neb. 39

70 N.W. 527

ROGERS

v.HEADS IRON FOUNDRY ET AL.

Supreme Court of Nebraska.

March 17, 1897.

Syllabus by the Court.

A chattel mortgage delivered by the mortgagor unconditionally to an unauthorized third person, by whom, under the directions of the mortgagor, it was filed for record, and subsequently accepted by the mortgagee, takes effect, as between the mortgagor and mortgagee, from the time of the first delivery, but not so as to persons who have acquired title to, an interest in, or a lien upon, the property, before the actual acceptance by the mortgagee.

Error to district court, Dodge county; Marshall, Judge.

Submission of controversy between James H. Rogers and the Heads Iron Foundry and others. From the judgment, James Rogers brings error. Reversed.Munger & Courtright, for plaintiff in error.

Frick & Dolezal, for defendants in error.

NORVAL, J.

This proceeding was instituted in the court below to determine the priority of liens of certain chattel mortgages executed in the firm name of Nesbit & Rogers. The controversy was submitted, and determined by the court adversely to the plaintiff, upon a written stipulation of facts. He prosecutes error.

The facts, so far as they are necessary to an understanding of the question involved, are briefly these: On and prior to the 6th day of February, 1894, Fred L. Nesbit and William E. Rogers were engaged in the mercantile business in the city of Fremont, under the name and style of Nesbit & Rogers; that on said date, said firm being insolvent and unable to pay its debts, it was mutually agreed between the partners to discontinue said business, and to turn over the firm assets to its creditors, and each partner for the firm, but without the knowledge of his co-partner, undertook to secure such creditors as he thought best to prefer; that, on said 6th day of February, the said Fred L. Nesbit, in the name of the firm, executed chattel mortgages to the Heads Iron Foundry, Great Western Stove Company, and estate of P. D. Beckwith, for the several amounts then actually due and payable to them, upon the merchandise owned by said Nesbit & Rogers, and delivered the said chattel mortgages to J. E. Frick for the use and benefit of the said mortgagees, respectively, and the said Nesbit intended to, and thereby did, part with all right, dominion, and control over or with reference to every one of said mortgages, and requested said Frick to file the same for record, who immediately deposited the same in the office of the county clerk of Dodge county at not later than 3:33 p. m. of said day, and paid the clerk the legal fees for filing and indexing the same; that said Frick, at the time said mortgages were delivered to him for the use of said mortgagees, did not have authority from said creditors to receive said mortgages, but assumed to act for them generally as an attorney for the purpose of protecting their claims against Nesbit & Rogers, and had no authority to represent the mortgagees until the receipt from them of the telegrams hereafter mentioned; that, at 5:04 p. m. of said 6th day of February, the said Frick caused to be sent to each of said several mortgagees, all of whom were nonresidents of the state, a telegram apprising each of the failure of Nesbit & Rogers, and what had been done, and an answer thereto was received by said Frick early the next morning from each of said mortgagees, assenting to and ratifying his action in the premises; that, on the said 6th day of February, the said William E. Rogers, in the name of and acting for said firm of Nesbit & Rogers, made and delivered to the plaintiff, James H. Rogers, a chattel mortgage to secure the payment of a bona fide indebtedness due him from said firm, covering the same stock and merchandise included in the said mortgages heretofore mentioned; that plaintiff filed his said mortgage in the office of the county clerk of Dodge county at 4 o'clock p. m. of the said 6th day of February; that, immediately thereafter, plaintiff, by his attorney, W. J. Courtright, took possession of the mortgaged chattels under and by virtue of his said mortgage, and closed the store of said firm; that plaintiff subsequently ascertained for the first time the existence of the other mortgages upon the property; that, at 5:30 p. m. of said day, said J. E. Frick, for and on behalf of the said Heads Iron Foundry, Great Western Stove Company, and estate of P. D. Beckwith, demanded of the said Courtright the possession of the goods mortgaged to them, which demand was at first refused, but subsequently, at about 7 o'clock p. m., was complied with, by said Courtright turning over the possession of the goods in controversy to said Frick, who has ever since and now holds the same under and by virtue of said mortgages; that said plaintiff and his attorney, W. J. Courtright, at the time the possession of the property was delivered to said Frick, each acted in the full belief that said Frick was at the time of the filing of the mortgages to the Heads Iron Foundry, Great Western Stove Company, and estate of P. D. Beckwith, respectively, the duly-authorized attorney for each and all of them; and that the mortgages to said mortgagees had been actually delivered to, and accepted by, their duly-constituted representative; and that the several mortgagees, prior to the giving of the several mortgages mentioned, at various times demanded payment of their claims from Nesbit & Rogers, and were anxious and desirous of obtaining the money owing to them by said firm.

The question arising upon the foregoing facts is whether the defendants or the plaintiff acquired the first or superior lien upon the mortgaged chattels. It is disclosed that the defendants' mortgages were given and placed upon record before the making, delivering, and filing for record of plaintiff's mortgage, from which the defendants claim the paramount lien; while, upon the other hand, the plaintiff confidently asserts that he has the superior lien upon the property, because it attached before there had been a legal delivery and acceptance of the defendants' mortgages. None of the mortgages were delivered to the defendants, or either of them, in person at or prior to the time of the depositing of the same with the registering officer, or to any one authorized by the mortgagees to represent them. The defendants were not aware that the mortgagors contemplated or were giving mortgages to their creditors. There can be no doubt that the delivery and acceptance of a mortgage are essential to its validity. Such an instrument. like a deed, becomes effective only from its delivery. The proposition is too plain to require the citation of authorities to sustain it. Delivery may be made to the mortgagee himself,or to some one authorized to receive it for him, or to a stranger for the use and benefit of the mortgagee, without the latter's authority, under certain circumstances, as where the mortgagee is under some legal disability, as in case of a minor or an insane person. Thus, in Brown v. Westerfield, 47 Neb. 399, 66 N. W. 439, a conveyance to a minor was upheld where the grantor delivered the deed to a stranger unconditionally for the grantee, and no control over the instrument was reserved in the grantor. Doubtless, the delivery of a mortgage to a stranger will suffice, if the mortgagee subsequently assents to or ratifies the act. In the case at bar there is no pretense that the defendants' mortgages were delivered to any one of the mortgagees, or to one authorized to act for them in accepting a delivery of the instruments, but they rely upon the delivery of the mortgages to Mr. Frick, his depositing of them in the recorder's office, and the subsequent acceptance of the instruments by the mortgagees. Defendants' attorneys insist, arguendo, that the presumption of law arising from these facts is that the mortgagees accepted the mortgages. This court has held that, where a deed beneficial to the grantee is voluntarily executed and placed upon record by the grantor, the acceptance of the grantee will be presumed. Bowman v. Griffith, 35 Neb. 361, 53 N. W. 140;Issitt v. Dewey, 47 Neb. 196, 66 N. W. 288. And, upon principle, the delivery of a mortgage by the mortgagor or by his direction, as in the case at bar, for record, is sufficient, in the absence of proof to the contrary, to justify a finding of its delivery by the mortgagor, and acceptance by the mortgagee. But the presumption of delivery and acceptance is not a conclusive one, but is prima facie alone. It may be shown, if such be the fact, that the mortgagee never accepted the instrument, but rejected the same when apprised of its existence. Jackson v. Phipps, 12 Johns. 418;Wilsey v. Dennis, 44 Barb. 354;Foster v. Scythe Co., 47 Barb. 505;Younge v. Guilbeau, 3 Wall. 636;Tuttle v. Turner, 28 Tex. 760. Possibly, upon the delivery of a mortgage to a stranger, for the use and benefit of the mortgagee, but without authority from him to receive it, the acceptance of the mortgage may be presumed where the mortgagor has parted entirely with all the control over the instrument. There are authorities which so hold, but even in such case the presumption of acceptance as of the date of the delivery to the third person may be rebutted. In the case in hand, the acceptance of the mortgages by the defendants, or rather their ratification of the action of Mr. Frick in receiving the instrument for and in their behalf, was not until after the plaintiff's mortgage was executed, delivered, filed for record, and he had taken possession of the property thereunder. The defendants insist that the acceptance of the mortgages by them related back to the time of the delivery to Mr. Frick. Such, unquestionably, is the rule as between the mortgagor and mortgagee, but it does not obtain where an innocent third party has, between the date of the delivery and the acceptance, acquired rights to the mortgaged chattels. The doctrine of relation cannot be...