Wagoner Nat. Bank v. Welch

164 F. 813, 90 C.C.A. 589, 1908 U.S. App. LEXIS 4680
Court of Appeals for the Eighth Circuit·Decided October 30, 1908·No. No. 2,733·Published·Cited by 3 cases

Opinion

SANBORN, Circuit Judge.

The Wagoner National Bank, a corporation, brought an action upon a promissory note for $584.25 and upon a mortgage on certain personal property to secure the payment of this note, which the plaintiff alleged that the defendants made, and demanded judgment for the amount of the note, for $50 damages, for costs, and for general relief. It filed an affidavit and undertaking in replevin, and caused a writ of replevin for the mortgaged property to be issued, and a portion of it was taken from the defendants under this writ and delivered to the bank. At the same time the bank caused a writ of attachment to issue under which the marshal seized certain property of the defendants which was not mortgaged. The defendants answered that they owed the plaintiff only $350; that about February, 1903, they were coerced to sign the note and mortgage for $584, but that the only amount they received therefor was $350 paid to them about March 4, 1902; that the difference was usurious interest ; that the allegations in the affidavit for replevin and in the affidavit for attachment were false; and they prayed that the property delivered to the plaintiff by virtue of the writ of replevin be returned to them, and for $500 damages, that the writ of attachment be dissolved, and that the property seized by the marshal thereunder be returned to them, and that they recover $500 damages for the wrongful suing out of the writ of attachment, the taking and detention of the property. The case was tried without a jury in the absence of the plaintiff. The court found that the note for $584.25 was usurious and void except to the extent of $350, that the mortgaged property replevined was worth $505, that the plaintiff was entitled to the possession of property named in the mortgage to satisfy its just claim of $350, that the defendants were entitled to recover of the plaintiff the difference between $505 and $350, or $155, on account of the mortgaged property replevined, that no grounds for the issue of the attachment existed, that the value of the attached property was $245, and that the defendants were entitled to recover $155 plus this $245, making in all $400, and it rendered judgment against the bank for that amount. This judgment was [815] affirmed by the Court of Appeals of the Indian Territory, and that af-firmance is now challenged.

No evidence and no bill of exceptions appear in the record in this case, and the question is whether or not the judgment can be sustained upon the pleadings and the findings of the trial court. Two classes of personal property were involved in this action, mortgaged property worth $505 seized under the writ of replevin and delivered to the mortgagee, the plaintiff, and property worth $245 seized and held by the marshal under the writ of attachment. The court found that the plaintiff was entitled to the possession of property named in its mortgage to satisfy its just claim of $350, and rendered judgment against it for $155, the difference between the amount of its mortgage debt and the value of the mortgaged property. This was a radical error. The plaintiff, the mortgagee, had the right to the possession of the mortgaged property until its just claim of $350 was paid. If the defendants did not pay it, the plaintiff had the right to sell so much of the mortgaged property as it was necessary to sell to realize the $350 and the costs of the sale, and the extent of the right of the defendants was to recover the surplus, if any, remaining after the $350 and costs were paid. Upon default in the payment of a debt secured by a mortgage, the burden is upon the mortgagor and not upon the mortgagee. His right to any of the mortgaged property is conditioned by his payment of the debt, either out of the proceeds of a sale of the property, or otherwise. The right of the mortgagee to enforce his lien upon and to collect his claim out of the mortgaged property is not conditioned by his payment of the difference between the amount of the debt due to him and the value of his security, and yet that was the effect of this judgment. It compelled the mortgagee to pay the difference between the amount of the mortgage debt and the value of the mortgaged property in order to collect anything out of the latter. The judgment should have been to the effect that the mortgagors pay to the mortgagee, within a time certain, the $350 and costs of the replevin, that upon such payment the mortgaged property replevined be returned to the defendants, and that upon default in such payment so much of the replevined property as should be necessary be sold at public auction upon due notice to satisfy the plaintiff’s claim of $350 and costs, and that the remainder of the mortgaged property, or of its proceeds, if any, be returned to the defendants.

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Wagoner Nat. Bank v. Welch, 164 F. 813, 90 C.C.A. 589, 1908 U.S. App. LEXIS 4680 (8th Cir. 1908).

164 F. 813 (Wagoner Nat. Bank v. Welch) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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