Union Stock Yards Nat. Bank v. Haskell

• Decision Date: 17 April 1902
• Citation: 2 Neb. [Unof.] 839,90 N.W. 233
• Parties: UNION STOCK YARDS NAT. BANK v. HASKELL ET AL.
• Court: Nebraska Supreme Court

2 Neb. [Unof.] 839

90 N.W. 233

UNION STOCK YARDS NAT. BANK

v.HASKELL ET AL.

Supreme Court of Nebraska.

April 17, 1902.

Commissioners' opinion. Department No. 2. Appeal from district court, McPherson county; Sullivan, Judge.

“Not to be officially reported.”

Action by the Union Stock Yards National Bank against Riley E. Haskell and others. From a judgment in favor of plaintiff, but awarding insufficient relief, plaintiff appeals. Affirmed.Kennedy & Learned, for appellant.

Hoagland & Hoagland, for appellees.

OLDHAM, C.

This was an action to foreclose a real estate mortgage on lands situated in McPherson county, Neb. The mortgage purported to have been made to secure the payment of a note given by defendant Riley Haskell to the plaintiff bank for $3,325, dated May 1, 1896, and due six months after date; but, as clearly appeared by a written contract entered into by plaintiff bank and defendant Riley Haskell at the time these instruments were executed, this mortgage was really given as additional security for the payment of whatever sum should be found due on a note of $11,035, given by defendant Haskell to the firm of Allyn, Smith & Co. on July 31, 1894, and indorsed by said firm to the plaintiff bank. The only question involved in this controversy with which we have to deal is the claim of defendant Haskell for a credit of $1,689 on this note, this sum being the proceeds of the sale of three car loads of his cattle made by Allyn, Smith & Co. in Chicago, the proceeds of which was placed by them to their credit in plaintiff's bank on January 30, 1895. The trial court allowed this credit to defendant Haskell, and rendered a judgment in favor of plaintiff for the balance due on the note, and entered a decree of foreclosure of the mortgage in conformity with such judgment, and plaintiff brings the case to this court on appeal.

The material facts connected with this controversy are that the firm of Allyn, Smith & Co. were engaged in the business of buying and selling cattle on commission; that they occupied an office in South Omaha, Neb., in a building next to the building in which plaintiff's bank was conducted; and that they did all their banking business with plaintiff, and plaintiff was thoroughly familiar with their method of transacting business. In connection with selling cattle on commission, they loaned money to cattlemen, to be used in the purchase of cattle. When such loans were made, the firm would draw checks on the bank for the amount of the loan, and when the deal was consummated would take a note and chattel mortgageon the cattle and indorse this note to the bank and receive credit on their account for it against the checks which they had drawn on the bank. In the summer of 1894 this firm agreed with the defendant Riley Haskell to loan him money for the purchase of cattle in the state of Utah. In pursuance of this agreement, Haskell went to Utah, and purchased a large number of cattle. When the cattle were purchased he would pay for them by drafts on Allyn, Smith & Co., and Allyn, Smith & Co. would honor these drafts by checks on the plaintiff bank, which were paid by the bank. After Haskell purchased his cattle he shipped them to his ranch in McPherson county, Neb., gave the firm of Allyn, Smith & Co. his note for $250 for their commission on the loan, and also gave to them his note for $11,035 for the loan, and secured this note by a chattel mortgage on all the cattle which he had purchased. This chattel mortgage contained the following, among other, conditions: “And, in case that removal may hereafter become necessary, and be consented to in writing by the party of the second part, the costs and expenses of any such removal shall be borne and paid by the party of the first part, and, when removed or shipped for sale, they shall be consigned to Allyn, Smith & Co., mortgagee aforesaid, at South Omaha, Neb., to be sold on commission.” In conformity with their course of dealing, Allyn, Smith & Co. indorsed this note to plaintiff bank, and received credit for it on their account. Payments on this note, about which there is no dispute, were made from time to time by the application of the proceeds of the sale of cattle shipped to South Omaha by defendant Haskell until the amount claimed to be due on the note at the time this suit was begun was $2,755.71. From the amount so claimed the court below deducted the disputed credit of $1,687, and found the amount due plaintiff to be $1,072.06. In January, 1895, and a short time before the note became due, Allyn, Smith & Co. requested the defendant Haskell to make a shipment of cattle to them, to be applied on his note. In conformity with this request, Haskell shipped four car loads of cattle to Allyn, Smith & Co. at South Omaha on the 28th day of January, 1895. Three car loads of the cattle so shipped were mortgaged cattle, and one car load was mixed cattle of his own. When these cattle were received at South Omaha the car load of Haskell's cattle was sold there by Allyn, Smith & Co., and part of the proceeds of the sale of this car load of cattle was applied on the commission note of $250 which Allyn, Smith & Co. held against Haskell, and the remainder of the proceeds of the sale of this car load was properly accounted for. The other three car loads of cattle were sold by Allyn, Smith & Co. through a commission firm in Chicago. By direction of Allyn, Smith & Co., Haskell went with the cattle to Chicago, bearing a letter of instruction from the firm to the Chicago Commission Company. The proceeds of the sale of the cattle in Chicago were remitted by draft to Allyn, Smith & Co., and this draft they placed to their credit in the plaintiff bank on the 30th day of January, 1895, one day before Haskell's note became due. On the day that this draft was placed to the credit of Allyn, Smith & Co. at the bank, their account was overdrawn $1,187.03, and the firm was then insolvent. The trial court found that the bank knew the condition of Allyn, Smith & Co. at the time this draft was placed to their credit, and the evidence fully sustains this finding of fact. The court also found that the bank knew that the draft was for the proceeds of cattle which Allyn,...