Nagle v. First National Bank

77 N.W. 1074, 57 Neb. 552, 1899 Neb. LEXIS 30

• Court: Nebraska Supreme Court
• Decided: January 19, 1899
• Docket: No. 8621
• Status: Published

Opinion

Irvine, C.

Prior to March 15, 1892, R. R. Grotte was engaged in the liqnor business in Omaha. He became indebted to the firm of Nagle & Brecher, who, on the date mentioned, instituted an action against him, aided by proceedings in attachment. The proceedings were begun under telegraphic instructions from Nagle & Brecher to attorneys in Omaha, and the petition filed was for goods sold and delivered. As a matter of fact the claim was for money lent, and some time after the institution of the proceedings and the levying of the writ of attachment upon Grotte’s stock the petition'was amended so as to count, upon money lent instead of goods sold and delivered. A motion was made to dissolve the attachment. This motion was overruled. Grotte brought the case to this court, where the judgment of the district court was affirmed. (Grotte v. Nagle, 50 Neb. 363.) The day the attachment was levied Grotte had agreed with Montgomery, Charlton & Ilall, attorneys representing a number of other creditors, to execute in their favor mortgages upon his stock. Three or four of these mortgages had been drawn and-signed by Grotte by 5 o’clock on that day, but none was then recorded. It was, however, agreed that the creditors should be put in possession; but before this was accomplished the Nagle & Brecher at-, tachment had been levied. Grotte, however, proceeded to execute the mortgages, which were filed for record the following morning. A few days thereafter the present action was begun by the mortgagees to foreclose their mortgages. They alleged the attachment proceedings and a contest with regard to the different claims, and a receiver was appointed, who, pursuant to the orders of tlie court, sold the stock. The controversy became one between Nagle & Brecher claiming under the attachment on the one side, and- the mortgagees on the other, as to the right to the fund resulting from the sale. The decree of the district court was in favor of the mortgagees, and Nagle & Brecher bring the case here for review.

Counsel have saved us a detailed examination of quite a large record by agreeing substantially as to the facts of the case and as to the question presented, which is, whether the abandonment by Nagle & Brecher of their first petition, and the amendment already referred to, operated so far to discharge the original attachment as to postpone the rights of Nagle & Brecher to those mortgagees whose rights accrued subsequent to the original levy, but before the amendment.

Counsel for the mortgagees present a large number of authorities to establish two propositions: First, that the amendment of the petition from one for goods sold and delivered to one for money lent operated as a change of the cause of action. Secondly, that an amendment which does substantially change the cause of action in an attachment case discharges the attachment as to rights accruing between the original levy and the time of amendment. Without deciding it, we assume that the first proposition is sound, but we think the second is subject to certain qualifications which prevent its operation in favor of the mortgagees in this case. It will undoubtedly be conceded that the judgment of the district court on the motion to discharge the attachment,, affirmed by this court in Grotte v. Nagle, supra, operated as an adjudication as between the parties to that case of the. regularity and continued effect of the attachment, notwithstanding the amendment made. The mortgagees are not in the position of subsequent attaching creditors or others claiming rights independent of the parties to the attachment'case. Their claim is under voluntary transfers from Grotte, the defendant in that case; and these transfers were not made — that is, they did not bqcome effective — until after tlie levy of the attachment and the service of summons. Section 85 of the Code of Civil Procedure provides: ‘When the summons has been served or publication made, the' action fs pending so as to charge third persons with notice of pendency, and. while pending, no interest can be acquired by third persons in the subject-matter .thereof as against the plaintiff’s title.” The remainder of the section contains special provisions with reference to actions concerning real estate. What has been quoted is merely a declaration of the common law. In a suit very similar to the present the supreme court of the United States held that the propriety of the amendment affected only the regularity of the proceedings in the attachment case, and did not reach the validity of the attachment, or expose it to collateral attack by purchasers Avhose rights accrued after the leAry and before the amendment. It Avas there said: • “The laAV is that he who intermeddles with property in litigation does it at his peril, and is as conclusively bound by the results of the litigation, whatever they may be, as if he had been a party to it at the outset.” (Tillon v. Cofield, 93 U. S. 163.) We are entirely satisfied with the conclusion reached in the case cited, and think it applicable to the 1uav of this state. Whatever collateral attacks might be open to creditors claiming liens of independent derivation, a mortgagee who claims by voluntary transfer subsequent to the levy attacks as a purchaser pendente lite. It is probable that these mortgagees might have been heard in the attachment suit to defend their rights. But in any event, as their rights accrued subsequent and therefore subject to the attachment, they were bound by the result of that case.

The briefs are so copious in their citation of authorities that we shall not attempt a detailed review thereof. We think that all the cases are reconcilable with the principle upon which Ave base the decision. Thus, Heidel v. Benedict, 63 N. W. Rep. [Minn.] 490, was a contest betAveen an attaching creditor and the assignee under a general assignment for creditors, and the decision was based on the ground that the assignee represented creditors and could assert their rights rather than those of the transferee from the debtor. In this state the assignee represents the debtor, except as otherwise expressly authorized (Lancaster County Bank v. Gillilan, 49 Neb. 165), so that if the case were otherwise in point, it would not be applicable to the law of this state. And even to reach the result there reached the court found it necessary to hold that the decision of a motion to discharge an attachment was not an adjudication which protected the attachment from collateral attack, — a ruling certainly contrary to the laxv of this state. Freeman v. Creech, 112 Mass. 180, while on its face an authority in favor of the mortgagees, is founded on an express statute protecting purchasers from attachments where such amendments have been made, unless they have been given notice of the application to amend. Other cases, well represented by Whitney v. Brunette, 15 Wis. 67, are cases where an attachment was absolutely void until after the amendment. Such of course do not bind even the defendant' pripr to the amendment. To this class of cases belongs Bauer v. Deane, 33 Neb. 487, where it was held that where no cause of action was stated against the defendant whose property was attached, a subsequent amendment would not cause the attachment to relate back to the time of levy. In Farwell v. Wright, 38 Neb. 445, no cause of action existed when the attachment was issued, and it was held that the attachment could not be aided by a subsequent acquisition of a cause of action. These were proceedings between the original parties. If in point at all, they -would militate against the correctness of the decision in the attachment case, but they do not indicate that that decision can be disregarded. On the contrary, Rudolf v. McDonald, 6 Neb. 163, holds that when property has been seized under an order of attachment, no question of ownership raised, or fraud or collusion alleged, final judgment concludes all inquiry by third persons concerning the regularity of the proceedings, no matter how‘erroneous they may have been; and the same conclusion is reached in Horkey v. Kendall, 53 Neb. 522. We conclude, therefore, that the judgment of the district court giving the mortgagees priority over Nagle & Brecher was erroneous.

Reversed and'remanded.