Otto v. Burch

Post, C. J. This was an action upon an appeal undertaking executed by Henry Otto as principal and the other defendants, Bartling and Kees, as sureties, which resulted in a judgment for the plaintiff in the district court for Gage county, and from which the defendants therein prosecute error. The facts essential to an understanding of the decisive question of the controversy are as follows: Otto, the principal defendant, in the month of April, 1889, executed in favor of James W. Graham his two promissory [896] notes for $80 each., payable July 1 and December 1, after date, secured by a mortgage upon a certain span of mules. Subsequently, the note maturing July 1 being due and wholly unpaid, the defendants in error, as agents for Graham, took possession of said mules by virtue of the mortgage, which they were proceeding to foreclose by means of notice and sale, when said property was taken from them under a writ of replevin issued by a justice of the peace in a suit by Otto, the mortgagor. A trial before the justice resulted in a judgment for the defendant therein for a return of the property, or in case return thereof could not be had, for $165.98 damage, the value of the defendant’s possession, and which was, upon the execution of the undertaking here involved, removed by appeal into the district court. Upon the perfecting of said appeal a trial was had in the district court, which also resulted in a judgment for the defendants for a return of the property, or in case return thereof could not be had, for the value of the defendants’ possession, assessed at $81.10. Thereafter, to-wit, in the month of August, 1891, said property not having been returned in accordance with the order of the district court, and execution upon said judgment having been returned unsatisfied, Graham, in his own name, commenced an action of replevin against Otto, alleging that he was entitled to the possession of said property by virtue of the mortgage above described. The suit last mentioned was prosecuted to final judgment in favor of the plaintiff therein, to whom the mortgaged property had in the meantime been delivered under the writ of replevin, and who thereafter proceeded to foreclose his said mortgage by notice and sale of the property therein described. It appears from admissions in the record that the proceeds of said sale, after deducting costs and expenses, did not exceed the amount of the note maturing December 1, 1889, upon which it was by the mortgagee applied, leaving the defendants below liable, as here claimed, upon their appeal undertaking for the amount of the note first maturing, [897] with costs of suit. In .that view the district court concurred, judging from instructions given and refused, apparently upon the theory that the judgment in the first mentioned suit is conclusive in so far only as it relates to the note maturing previous to commencement thereof. It is, on the other hand, contended that the right of defendants in error to a return of the property, or for the' value of their possession, was inseverable and exhausted by the final judgment in their favor, although no provision was made for declaring the entire debt due upon the mortgagor’s failure to pay the first note at maturity. It is further contended that said judgment was, in consequence of the privity between the defendant in error and Graham, satisfied, except as to damages, assessed at $4.10, and unpaid costs, by the delivery to the latter of the mortgaged property in the subsequent suit and the disposition thereof by him in accordance with the terms of his mortgage. There is, it seems to us, much force in that contention. Graham, the party in interest, has had the benefit of the mortgage security, the proceeds thereof have been applied by him upon Otto’s indebtedness in conformity with the terms of the contract, and we are aware of no principle which can be invoked to sustain a judgment in addition thereto upon the appeal undertaking of the latter for the amount of such indebtedness. That an action will lie on the appeal undertaking of the plaintiff in replevin, to whom the property has been delivered, upon his refusal to return the same after final judgment for the defendant, upon which execution has been returned unsatisfied, is not doubted. The party to whom has been awarded a return of the property, or its value, or the value of his possession, as the case may be, provided a return thereof cannot be had, is not required to resort to* an action of replevin in order to reap the fruits of the judgment in his favor. But where, as in this instance, instead of pursuing his remedy upon the appeal undertaking, he recovers the property by means •of an action, of replevin by reason of his original title [898] or right of possession, he will be held to have waived his right to the alternative relief. The fact that it was Graham, the mortgagee in the case at bar, instead of the defendants in error, as his agents, who resorted to the process of the court in order to recover the property cannot be regarded as material. It is sufficient, as already intimated, that he, Graham, recovered such property while the judgment for his benefit was in force, and disposed of it in this manner and for the purpose contemplated by the mortgage. Although we have been referred to no case arising out of a state of facts precisely similar to those here involved, the principle which must govern in the determination of the question presented was distinctly recognized in Rinker v. Lee, 29 Neb., 783. In the case cited, which was a suit below upon a replevin bond executed by Rinker as plaintiff in favor of Lee as defendant, it was shown that the property in controversy was, subsequent to the delivery thereof to the former, taken from his possession and delivered to Lee by means of a writ of replevin in an action wherein one Bentley was plaintiff and the said Rinker was defendant. The court, by Nokval, J., in commenting upon the foregoing facts when urged as a defense by Rinker in the action upon his undertaking, said: “The condition of the replevin undertaking is That the said Avalon R. Rinker, plaintiff, shall duly prosecute his action, and pay all the costs and damages which may be awarded against him, and shall return said property to said defendant in case judgment for the return thereof shall be rendered.’ The damages and costs recovered in the replevin suit have been paid. When the property came again into the possession of Lee, the condition of the replevin bond to return the property was fulfilled. The mules having been taken from the possession of Rinker and delivered to the plaintiff, makes it impossible for the defendants to literally comply with the judgment for their return. It appearing that during the pendency of the replevin suit the property came into the possession of Lee, in as good condition and [899] as valuable as when replevied, he cannot afterward maintain an action for its value.” In addition to the cases cited in support of the conclusion there reached, our attention is directed to Harrow v. Ryan, 31 Ia., 156, in which it was held that where property replevied is restored to the possession of the defendant before the determination of his rights with respect thereto, such fact will defeat his claim for the value of-the property in an action on the replevin bond, whether the restoration be through the act of the plaintiff or by means of legal process. The recovery by Graham of the property under the mortgage, and the disposition thereof by him, amounted, as we have seen, to a satisfaction of the judgment in the replevin suit, except as to unpaid costs and damages. It follows that the district court erred in permitting the defendants in error to recover upon the replevin bond for the value of their possession as determined in the replevin suit, for which the judgment must be reversed and the cause remanded to that court. Reversed.