Thimmig v. Segel, 12429.

• Decision Date: 14 September 1931
• Docket Number: 12429.
• Citation: 89 Colo. 385,3 P.2d 303
• Parties: THIMMIG et al. v. SEGEL.
• Court: Colorado Supreme Court

3 P.2d 303

89 Colo. 385

THIMMIG et al. v. SEGEL.

No. 12429.

Supreme Court of Colorado

September 14, 1931

In Department.

Error to District Court, Larimer County; Claude C. Coffin, Judge.

Action by M. Segel against A. W. Thimmig and others. To review a judgment for plaintiff, defendants bring error.

Affirmed.

Waldo Riffenburg, of Ft. Collins, for plaintiffs in error.

Neil F Graham, of Ft. Collins, for defendant in error.

BUTLER J.

On July 9, 1928, Pauline Steving executed and delivered to M. Segel her two promissory notes. One, for $1,250, was payable on or Before November 20, 1928; the other, for $750, was payable on or Before January 1, 1929. The notes provided for the payment of interest and, in case of default, for attorney's fees. To secure the payment of the notes, she gave to Segel a chattel mortgage covering twenty acres of sugar beets. The mortgage was recorded on July 9, 1928. The beets were sold to the Great Western Sugar Company. The proceeds amounted to $1,827.61. A. W. Thimmig and L. G. Graham, who had obtained judgments against Mrs. Steving on November 5, 1928, Before a justice of the peace, caused garnishment papers to be served upon the sugar company, thereby causing the sugar company to retain the proceeds. Thereafter, of February 5, 1929, Segel commenced this suit to foreclose the chattel mortgage, making Thimmig and Graham parties in order to have their rights to the proceeds adjudged to be inferior to his rights. The sugar company, also made a defendant, disclaimed all interest in the proceeds, and offered to dispose of the same in such manner as the court might direct. F. E. McGuire was made a defendant in order to have a determination of a claim asserted by him against Segel.

I. We will consider first the relative rights of Segel and the two judgment creditors.

The court rendered judgment in favor of Segel and against Pauline Steving for $1,773.26, and decreed that the judgment, to the extent of $1,336.63, should constitute a first lien upon the proceeds of the sale of the sugar beets covered by the chattel mortgage. This, says counsel for Thimmig and Graham, was error.

1. It is contended that the chattel mortgage did not comply with the following provision of chapter 72, p. 193, Session Laws of 1923, concerning chattel mortgages: 'Chattel mortgages may be given for the purpose of securing the payment of money to be advanced to the mortgagor by the mortgagee after the execution of such mortgage but such chattel mortgage must state a specific sum as the ultimate amount to be advanced thereunder and secured thereby, and the date prior to which said advance shall be completed, and the date on which the last installment or portion of the indebtedness thereby secured shall mature and no such chattel mortgage shall be security for any advance made to the mortgagor after the date specified in said mortgage for the completion of said advance.'

The mortgage contained no mention of the fact that it was intended, in part, to secure the payment of money to be thereafter advanced; and it is contended that for that reason the mortgage was wholly void. We do not think that such result follows. The mortgage recited that it was given to secure the payment of $2,000, evidenced by two promissory notes. The notes were described. The date, the amount, the terms, and the date of maturity of each note was given; the date of the maturity of the second note being January 1 1929. The statute was not intended to invalidate such a mortgage.

The court found that the notes and chattel mortgage were given pursuant to an agreement whereby Segel 'was to finance Mrs. Steving and her husband during the season of 1928, * * * not in excess of $2,000' that the mortgage secured the payment...