Hamilton v. Diefenderfer

Beard, Justice. ■ The defendant in error, Diefenderfer, commenced these two actions against the plaintiff in error, Hamilton, to recover the possession of certain personal property, and for damages for the alleged wrongful taking and detention of the same. The cases involve the same questions and were consolidated for the purpose of trial and were tried to the court without a jury, and in each case the court found that the plaintiff below was entitled to the possession of the property and that he had sustained damages in the sum of ten dollars and rendered judgment accordingly. Prom those judgments the defendant below brings error. The cases have been submitted together in this court, and one opinion will cover both cases. The property in question was owned by one John Schmitt, who on February 21, 1907, executed a chattel mortgage thereon to Marie Schmitt, his wife, to secure two notes of $500 each, one due January 1, 1908, and the other due January 1, 1909. The mortgage was filed in the office of the County Clerk and duly indexed February 23, 1907. On December 3, 1908, Marie Schmitt assigned the mortgage to Diefenderfer, which assignment was duly filed and indexed [272] on the same day, and at the same time the note due January 1, 1909, was indorsed and delivered by her to Diefenderfer. The consideration as recited in the assignment of the mortgage being one dollar and other valuable considerations. It appears by the evidence that Diefenderfer had, on September 23, 1908, signed a note, as surety for John Schmitt, to the Sheridan National Bank for $690, due ninety days after date;' and that at the time the note and mortgage were so transferred to him by Marie Schmitt, he agreed with her to pay the note to the Bank on which he was surety for John Schmitt, and that he did pay it on December 11, 1908, before it was due. John Schmitt had absconded a few days before Diefenderfer procured the note and mortgage from Marie Schmitt, and on the day he procured the same he took possession of the mortgaged property, deeming himself insecure. On July 18, 1908, John Schmitt executed a chattel mortgage on the property to the plaintiff in error, Hamilton, to secure a note of that date for $600, due Nov. 18, 1908, which mortgage was duly filed and indexed and renewed from time to time by affidavits. A few days after Diefenderfer took possession of the property Hamilton took possession of a part of it and Diefenderfer replevied it, and soon afterwards Hamilton took possession of the balance of it; hence the two suits. It is not claimed that if the mortgage held by Diefenderfer was a valid and subsisting lien upon the property it would not be superior to the lien of the Hamilton mortgage. The defenses to it pleaded in the answer are, that it was given without consideration; that it was given to hinder, delay and defraud the creditors of John Schmitt; that the notes secured by it had been paid; and that Diefenderfer was not a bona fide purchaser. The first two defenses are not seriously contended for by counsel for plaintiff in error. The note was negotiable in form and by our statute is deemed prima facie to have been issued for a valuable consideration, (Sec. 3182 Comp. Stat. 1910) and there was no evidence offered to rebut this presumption; and the evidence fell far [273] short of proving that the mortgage was given for the purpose or with the intent of hindering, delaying or defrauding the creditors of John Schmitt. These-matters were referred to briefly in the brief of counsel for plaintiff in error, but were practically abandoned in a supplemental brief filed after oral argument, by agreement of counsel and leave of court, in which they say: “The brief of plaintiff in error filed in the above case was confined to two questions, namely: That the mortgage, while in the hands of Marie Schmitt, was satisfied, paid, and should have been cancelled, and that Diefen-derfer was not a bona fide purchaser.” In view of that statement of counsel we deem it unnecessary to further discuss the questions previously referred to. On the question of the payment of the note held by Diefen-derfer, while in the hands of Marie Schmitt, the only evidence was that she had stated to Hamilton and others a short time before she assigned the note and mortgage to Diefen-derfer, in substance, that it was paid; that she thought it was paid; that there was nothing to it; that Hamilton’s mortgage was first; that it was no good; that she had neglected to cancel it; and that she would go -to the court house and cancel it as soon as her condition would permit. Each and all of these statements testified to as having been made by Marie Schmitt, were made within two or three weeks before she assigned the note and mortgage to Diefenderfer and long after Hamilton took his mortgage, and there is no evidence that Diefenderfer had any knowledge at or before the time he took the assignment that she had made any such statements. On the other hand it appears that she had the note in her possession, it was not yet due, was not marked paid or otherwise cancelled, she indorsed and delivered it to Diefenderfer for a valuable consideration and signed and acknowledged an assignment of the mortgage which remained uncancelled on the record. By her indorsement of the note she engaged or impliedly warranted that it was in all respects genuine; that it was the valid instrument it purported to be; and that she had lawful title to it (1 Daniel on [274] Negotiable Instruments (5th Ed.), Sec. 669a) ; and that it was a valid and subsisting obligation. (Idem. Sec. 673; 7 Cyc. 831; and Sec. 3224, Comp. Stat. 1910.) All of these things are in direct conflict with the statements which it is testified she made a short time before as to payment. Assuming, but without deciding, that the statements of. Marie Schmitt were competent and adihissible evidence of payment, her acts and the circumstances of the transactions are so conflicting with those statements that the court may well have concluded that the defense of payment had not been established by a preponderance of the evidence. The findings of the court are general and we cannot say that they were not based upon that ground, which to our minds was a reasonable conclusion considering all of the evidence and the circumstances surrounding the transaction. If the note was not paid, the lien of the mortgage remained a prior and superior lien to that of the Hamilton mortgage and could have been enforced by Marie Schmitt had it remained in her hands, and was equally valid and enforceable in the hands of her assignee. Hamilton's rights were not affected and he was placed in no worse position by reason of the assignment. The evidence being sufficient to sustain the findings and judgment of the District Court on this branch of the case, and as the judgment must be affirmed for that reason, the other question, namely: whether or not Diefenderfer was a bona fide purchaser, becomes immaterial and will not therefore be considered. The judgment of the District CoujI in each case is affirmed. Affirmed. Scott, C. J., and Pottpr, J., concur.