Tolerton & Stetson Co. v. First Nat. Bank of Wayne

• Citation: 63 Neb. 674,88 N.W. 865
• Court: Supreme Court of Nebraska
• Decision Date: 22 January 1902
• Parties: TOLERTON & STETSON CO. v. FIRST NAT. BANK OF WAYNE.

63 Neb. 674

88 N.W. 865

TOLERTON & STETSON CO.

v.FIRST NAT. BANK OF WAYNE.

Supreme Court of Nebraska.

Jan. 22, 1902.

Syllabus by the Court.

1. Where several successive mortgages have been given to secure the same indebtedness, and only the last one has been recorded several months after the making of the note, and credit meanwhile has been extended to the mortgagor, in a contest between the mortgagee and the creditor evidence is admissible as to all the transactions of the parties to the mortgage with regard to that indebtedness.

2. Where a mortgage has been taken upon a running stock of goods, expressly describing them as “goods now in stock,” a mortgagee who has seized the stock by replevin from mortgagor should be required to account to the latter's garnishing creditor for all goods actually seized, and which were not in the stock when mortgaged.

Commissioners' opinion. Department No. 1. Error to district court, Wayne county; Robinson, Judge.

Action by the Tolerton & Stetson Company against the First National Bank of Wayne. Judgment for defendant, and plaintiff brings error. Reversed.A. A. Welch and J. A. Berry, for plaintiff in error.

Frank M. Northrop, for defendant in error.

HASTINGS, C.

Action against defendant, as garnishee, charging the defendant with holding possession by a fraudulent mortgage of a stock of goods of the judgment debtor, W. B. Hughes. Plaintiff recovered a judgment against Hughes of $611.06 in the district court of Wayne county. At the commencement of the action, August 4, 1897, it had procured a judgment, and garnished the defendant bank. The bank answered that it was in possession of the stock of merchandise belonging to Hughes, but held it by virtue of a chattel mortgage dated July 19, 1897, and filed for record July 29, 1897. The bank objected to answering questions relative to whether or not this mortgage was a renewal of the previous unrecorded mortgages held by it, and why it had failed to record promptly its mortgage of July 19th. The petition alleges that a large portion of the goods held by the defendant were not in fact owned or in the possession of Hughes when the mortgage was made, but were purchased by him subsequently to its making, and are in no way included in it, and that the mortgage was given to secure a note executed and dated October 1, 1896, by said Hughes in favor of defendant. It is also alleged that October 1, 1896, a similar mortgage was given upon all his stock by Hughes to defendant under an agreement that it should not be recorded unless Hughes should fall into financial embarrassments, but was to be kept off of the records in order to preserve Hughes' commercial credit; that the mortgage was renewed from time to time at intervals of about 60 days, until the giving of the one of July 19, 1897; that plaintiff had no knowledge of the several chattel mortgages; that it supposed the stock was unincumbered, and was so induced to extend credit to Hughes, and during the time from October 1, 1896, until July 29, 1897, did sell and deliver to Hughes all of the goods on which its judgment of $611.06 was rendered; that no such credit would have been given had the mortgages been recorded. The issuance and return of an execution, and that Hughes was insolvent, is not denied. The value of the stock of goods is alleged at $1,300. The refusal to answer with reference to the preceding mortgages is denied by defendant and the value of the stock of goods. The statement that a large quantity of goods was purchased after the execution of the last mortgage, and not covered by it, is denied. The making of the several mortgages, and their withholding from the record, and the statement that if they had been recorded credit would not have been extended to Hughes, are also denied. The issues of fact seem to be simply as to the value of the goods; the making of the mortgage of October 1, 1896, and the various renewals under which possession was taken; the agreement not to record, and the fraudulent intention. The court instructed the jury that if they found there was an agreement between Hughes and the bank to withhold the mortgage of July 19th from the records, unless some difficulty should befall Hughes, and it was withheld in pursuance of that agreement, they should find for plaintiff. The court also instructed that mere delay in filing without intent to defraud would not avoid the mortgage. The court instructed that if new merchandise of the same general character was added to and mingled with the...