Waggoner v. First National Bank of Creighton

• Decision Date: 05 December 1894
• Docket Number: 5549
• Citation: 61 N.W. 112,43 Neb. 84
• Parties: ABSALOM WAGGONER ET AL. v. FIRST NATIONAL BANK OF CREIGHTON ET AL
• Court: Nebraska Supreme Court

61 N.W. 112

43 Neb. 84

ABSALOM WAGGONER ET AL. v. FIRST NATIONAL BANK OF CREIGHTON ET AL

No. 5549

Supreme Court of Nebraska

December 5, 1894

ERROR from the district court of Knox county. Tried below before ALLEN, J.

REVERSED AND REMANDED.

Gregory Day & Day, Green & Baxter, and H. S. Draper, for plaintiffs in error, cited: Cobbey, Chattel Mortgages, sec. 434; Deeter v. Sellers, 102 Ind. 458; Nichol v Stewart, 36 Ark. 612; Durkee v. Stringham, 8 Wis. 1.

W. L Henderson, O. W. Rice, and Barnes & Tyler, contra, cited: 1 Lindley, Partnership, sec. 11; Pleasants v. Fant, 22 Wall. [U.S.], 116; Chapman v. Lipscomb, 18 S. Car., 222; Dils v. Bridge, 23 W.Va. 20; Beckwith v. Talbot, 2 Col., 639; 17 Am. & Eng. Ency. Law, 852; Plunkett v. Dillon, 3 Del. Ch., 498.

OPINION

RAGAN, C.

On the 7th day of May, 1891, a promissory note, due in five months, for $ 987.20 was given to the Boyer-Shelly Company. This note was signed "James Carlin, S. F. Backus." On the same day a chattel mortgage was given to the Boyer-Shelly Company to secure the payment of this note on the following property: "Sixty head of steers, two and three years old, and branded with slit in right ear. Said cattle were purchased in Union Stock Yards, South Omaha, Nebraska, and are to be shipped to Creighton, Nebraska, and taken to James Carlin's place, four and one-half miles north, put in pasture and remain until ready for market. The above described cattle are all the cattle of this brand on Mr. Carlin's place. That said stock, cattle, and chattels are now in perfect health and in the undisputed possession of said party of the first part on the premises of said party, on section 33, township 30, range 5, in Knox county, Nebraska." This mortgage began as follows: "Know all men by these presents, that we, S. F. Backus and James Carlin (comprising the firm S. F. Backus & Co.), of the county of Knox and state of Nebraska," etc. The mortgage was signed "James Carlin, S. F. Backus," and a true copy thereof was filed in the office of the county clerk of Knox county, on the 9th day of May, 1891, at 9 o'clock A. M., and indexed "Backus S. F. & Co., mortgagor; Boyer-Shelly Company, mortgagee." On the 18th day of May, 1891, a note for $ 374.50 was given to the said Boyer-Shelly Company, due October 7, 1891. This note was signed "S. F. Backus & Co., by Jas. Carlin." On said 18th day of May a chattel mortgage was given to the said Boyer-Shelly Company on the following described property, to-wit: "Thirty-five steers, two years old, and branded with slit in right ear. Said cattle were purchased in Union Stock Yards, South Omaha, Nebraska, and are to be shipped to Creighton, Nebraska, and taken to James Carlin's place four and one-half miles north, put in pasture and remain until ready for market. The above described cattle are all the cattle of this brand and age, except sixty head of cattle mentioned in mortgage dated May 7, 1891, and located on James Carlin's place." This mortgage began as follows: "Know all men by these presents, that we, S. F. Backus and James Carlin (comprising the firm S. F. Backus & Co.), in the county of Knox, state of Nebraska," etc., and the mortgage was signed "S. F. Backus & Co., by Jas. Carlin," and a copy thereof was filed in the office of the county clerk of Knox county on the 26th day of May, 1891, at 9 o'clock A. M., and appears to have been indexed "Backus S. F. & Co., mortgagor; Boyer-Shelly Company, mortgagee." On the 2d of April, 1891, a note for $ 315, due five months after date, was given by James Carlin to the First National Bank of Creighton, Nebraska, and on the same day, for the purpose of securing the payment of said note, James Carlin gave a chattel mortgage to the said bank on the following described property, to-wit: "Thirty-five head of two and three year old steers, marked with a slit in the right ear, kept on my farm near Bazile Mills, Nebraska." This mortgage, or a copy thereof, was filed in the office of the county clerk of said Knox county on the 6th of July, 1891, at 9 o'clock A. M. On the 24th day of July, 1891, James Carlin gave another note for $ 309 to said First National Bank, due ninety days after date, and on the same day executed another chattel mortgage covering the identical property described in his first mortgage to said bank, and this mortgage, or a copy thereof, was filed in the office of the county clerk of Knox county on the 25th of July, 1891, at 9 o'clock A. M. On the 8th day of October, 1891, James Carlin gave two notes to the State Bank of Creighton, Nebraska, one for $ 700 and one for $ 600, each due ninety days after date; and to secure the payment of the same, on said 8th of October, he executed to the State Bank of Creighton a chattel mortgage on the following described property, to-wit: "Sixty-four two and three year old steers, all marked with a slit in right ear, and are to be fed at Bazile Mills, Nebraska." This mortgage, or a copy thereof, was filed in the office of the county clerk of Knox county on the 13th of October, 1891, at 9 o'clock A. M.

It appears that about November 1, 1891 Waggoner & Birney, the plaintiffs in error, at the request of James Carlin, paid to the Boyer-Shelly Company the full amount of the principal and interest due them on the notes and chattel mortgages held by them and which had been given them on the 7th and 18th days of May, as already stated; and the Boyer-Shelly Company indorsed and delivered said notes and chattel mortgages securing the same to Waggoner & Birney, and at the same time executed and delivered to Waggoner & Birney releases of said chattel mortgages. The object of this transaction was that Carlin desired Waggoner & Birney to lend him some $ 300 and take a mortgage on all these cattle to secure the amount due the Boyer-Shelly Company and the amount Waggoner & Birney was to advance him. For this purpose Waggoner & Birney appear to have taken the note of Carlin for the amount of the Boyer-Shelly Company's notes and interest and the amount which Waggoner & Birney were to lend or advance Carlin; and at the same time took a chattel mortgage on the ninety-four head of cattle described in the Boyer-Shelly Company's mortgages to secure its payment. About the time Waggoner & Birney had this transaction with Carlin they ascertained that the mortgages made to the Boyer-Shelly Company purported to be executed in the name of S. F. Backus & Co., and thereupon Waggoner & Birney deposited with their bankers at South Omaha the notes and mortgages they had purchased of the Boyer-Shelly Company, the releases of the same, and the new mortgage executed to them by Carlin, and instructed their bankers to send the new mortgage made by Carlin to Knox county for record. The bank, however, by mistake and contrary to the orders of Waggoner & Birney, appears to have sent to the county clerk of Knox county the releases of the Boyer-Shelly Company's mortgages and these releases appear to have been entered of record by the county clerk of Knox county. The evidence also tends to show that about May 1, 1891, S. F. Backus and James Carlin both resided in South Omaha. About this time Carlin became the owner of a piece of land near Bazile Mills, in Knox county. That an agreement was entered into about this time between Carlin and Backus that the latter should have the option of becoming a half owner in the land, but this part of the agreement between them was never consummated. By virtue of the agreement between the parties, however, Backus advanced $ 300 towards paying for the sixty head of cattle which were purchased of the Boyer-Shelly Company on the 7th of May, and he and Carlin executed the note and mortgage of that date to the Boyer-Shelly Company for the remainder of the purchase price of said cattle. These cattle were then shipped to and put upon the Carlin farm in Knox county. About the 18th of May, Backus gave his accommodation note to Carlin for $ 600. Carlin appears to have about this time borrowed from the State Bank of Creighton, Nebraska, some $ 600, giving the bank his note for the money and depositing the note of Backus as collateral security. With this money he went to Omaha and purchased the thirty-five head of cattle, for which he executed to the Boyer-Shelly Company the note and mortgage, dated May 18. These cattle were also shipped to the Carlin farm and put on the pasture there with the others.

Backus testified on the trial that he and Carlin, about the first of May, 1891, entered into a copartnership under the firm name of S. F. Backus & Co., that they had drawn and signed articles of copartnership; that these articles of copartnership were never filed in Knox county that all the cattle belonged to the copartnership of S. F. Backus & Co.; that he, Backus, did not know until about Thanksgiving day, 1891, that Carlin had attempted to mortgage the property to the banks, or to any one else; that the agreement between himself and Carlin was, when the cattle were sold or disposed of, that he, Backus, should first have back the amount of money he had advanced to the copartnership and should also have one-half of the profits made on the cattle; that he mortgaged his house and lot in South Omaha to raise the money to pay the freight on the cattle shipped to the Carlin firm in Knox county; that this copartnership was not to run any specified length of time. Several witnesses also testified on the trial that Backus had told them that he had no partner; that Carlin was not his partner, and that the only interest he had in the cattle was $ 300 he had loaned Carlin, or advanced to Carlin, towards their purchase. Carlin did not testify in the case, but Birney testified that Carlin had told him about November 1, 1891, that Backus "had nothing to do with the cattle;" that he,...