Meyer v. Michaels

95 N.W. 63, 69 Neb. 138, 1903 Neb. LEXIS 29
CourtNebraska Supreme Court
DecidedMay 20, 1903
DocketNo. 11,286
StatusPublished
Cited by4 cases

This text of 95 N.W. 63 (Meyer v. Michaels) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meyer v. Michaels, 95 N.W. 63, 69 Neb. 138, 1903 Neb. LEXIS 29 (Neb. 1903).

Opinions

Duffie, C.

This is an action in replevin brought by • Herman J. Meyer against Adolph Michaels for the possession of a certain stock of goods and trade fixtures. William R. Learn intervened, claiming a portion of the property as against both the other parties. There was a verdict for the intervener for that portion of the property claimed by him, and for the defendant- for the remainder. From a judgment rendered thereon the plaintiff prosecutes error to this court.

To a proper understanding of the questions hereinafter considered, a somewhat extended statement of the facts leading up to this action is necessary. About the first day of May, 1896, the defendant and one Fred H. Meyer, a son of the plaintiff, formed a partnership to engage in the wholesale business of watch-makers’ tools, supplies and materials and other goods, in the city of Omaha, under the firm name of Michaels & Fred H. Meyer. Of their capital $4,482 were borrowed and evidenced by twenty-four notes, each for $186.75, so arranged that one of the series fell due every sixty days. The notes were signed by the members of the firm as principals, and by the plaintiff as surety. On December 5, 1896, the principals on the notes signed [140]*140a note payable to the plaintiff for the amount then unpaid on the said series of notes, and at the same time signed a mortgage, purporting to secure such note, covering their stock and trade fixtures, ostensibly for the purpose of indemnifying the plaintiff against loss or damage by reason of his suretyship. Whether such note and mortgage were ever delivered was an issue in this case. They were, however, placed in the hands of a third party, then in the employ of the firm, for safe keeping. For some time they were thought to have been lost. On May 21, 1897, Fred H. Meyer, in the firm name, signed a note, payable in thirty days, to the plaintiff, for the amount then unpaid on the said series of notes, and a mortgage, purporting to secure such note, on the stock and trade fixtures of the firm. This note and mortgage were ostensibly given for the same purpose as the former note and mortgage. It is claimed by the plaintiff that this note and mortgage were given in the place and in renewal of the first note and mortgage, which wa.s then believed to have been lost. This second note and mortgage were placed in the hands of Mr. Crane, an attorney, by Fred H. Meyer. On June 3 following, the firm of Michaels & Fred II. Meyer was dissolved, the, junior member transferring his interest therein to- the defendant. On learning of this second note and mortgage and that it contained a clause providing that it should not be filed for thirty days, the plaintiff hesitated to accept it, but finally decided to do so and it was delivered to him June 22, 1897. It is claimed by the defendant that this note and mortgage were signed and delivered without his knowledge or consent, and without authority on the part of his said partner to bind him thereby. At the time they were made, suits, aided by attachment, were pending against the firm, and some of the trade fixtures, covered by the mortgage, had been seized, under the writs issued in such suits, by the intervener as constable. The property thus seized was mostly ponderous articles which were not removed from the place of business of the firm, but were turned over by the intervener to a custodian, sworn by him, who receipted [141]*141therefor to the intervener. The custodian at the time was in the employ of the firm, and the firm continued to use the attached property in the course of business, as they had used it before the levy was made. This action was commenced on June 22, 1897, the day the last note and mortgage were delivered to the plaintiff. By his amended petition the plaintiff claims a right to the possession of the property in controversy, by virtue of said mortgage, which he alleges was given in place and in renewal of that given December 5, 1896; the intervener claims by virtue of the levies made by him.

It is conceded that neither the first note payable to the plaintiff nor that made May 21,1897, were due at the commencement of this action. Plaintiff’s right to possession of the property in controversy, under either or both mortgages, is based on a clause therein giving him the right of possession at any time he might deem himself' unsafe or insecure. The court instructed the jury on the theory that there was no evidence that any facts or circumstances arose after the delivery of the second mortgage and before the commencement of this action, which would justify the plaintiff in taking possession of the property. In this state the discretion conferred by such clause may not be exercised arbitrarily. The mortgagee must have reasonable grounds for believing himself unsafe or insecure. Newlean & Hoard v. Olson, 22 Neb. 717; Case Plow Works v. Marr, 33 Neb. 215; Rector-Wilhelmy Co. v. Nissen, 35 Neb. 716. The grounds must be such as did not exist or were not known to the mortgagee at the time of taking the mortgage. Roy v. Goings, 96 Ill. 361; Barrett v. Hart, 42 Ohio St. 41. The instructions of the court in this case perhaps go a little further than the authorities warrant, in that they ignore the fact that certain conditions might have existed at the time the mortgage was given, which, coming to the knowledge of the mortgagee for the first time after taking the mortgage, would justly cause him to feel unsafe and insecure and would entitle him to the possession of the property. The second mortgage was signed May 21, 1897; [142]*142the evidence is conclusive that it was not accepted by the mortgagee until June 22 of the same year, the day on Avhich this suit was commenced. It is not shoAvn in evidence that •any fact or circumstance arose or came to the knowledge of the plaintiff between the time of his acceptance of the mortgage and the commencement of this suit, that would justify the seizure of the property under the unsafe or insecure- clause. All the facts and circumstances that would justify a feeling of unsafety or insecurity on his part, existed and were known to him at the time he accepted the mortgage. Hence, if there be error in this regard it is error without prejudice.

There is evidence tending to show that at the time the plaintiff became surety on the notes of the firm, it Avas agreed between him and the principals that they would indemnify him by security on the stock. The plaintiff contends that this agreement was in effect a verbal chattel mortgage and that the plaintiff would be entitled to possession thereunder, if for any reason the written chattel mortgages were invalid. A sufficient ansAver to this contention is that the plaintiff bases his right of recovery on the written instruments. We discover no allegation that he claimed the right to the possession of the property by virtue of any verbal mortgage. Consequently, it was not error for the court to ignore that theory of the case.

Complaint is made that the court in effect directed a finding in favor of the intervener for the goods claimed by him by Adrtue of his levy of the writs of attachment thereon, thus ignoring plaintiff’s theory that there had been an abandonment of such levies. The record of the attachment cases, including the officer’s return, were introduced in evidence. They show a valid levy. The other eAddence in the case on that point is to the effect that the intervener after making the levy appointed a third party custodian of the,property, which consisted of ponderous articles, and they were left in the place of business of the defendants in the attachment case and were used by the firm as before the levy.

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Cite This Page — Counsel Stack

Bluebook (online)
95 N.W. 63, 69 Neb. 138, 1903 Neb. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meyer-v-michaels-neb-1903.