Court Opinion

ID: 6587442
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:50:12.250032+00
Date Added: 2024-06-11T15:57:14.685637
License: Public Domain

ON MOTION ROE REHEARING.
Potter, Justice.
Upon the original hearing of this case, the judgment of the district court was reversed. A rehearing was granted, upon which the former order of reversal was vacated, and the judgment was affirmed, in part. The plaintiff in error now moves for a second rehearing.
It is urged that the district court tried the case upon an entirely different theory than that upon which we affirm the judgment. This claim was made and insisted upon at the previous hearings; we hold that whether or not, as a matter of fact the trial court imputed to the bank the knowledge of its cashier, who in his dealings with the bank was engaged in transacting his own business, that fact is not disclosed by the record; and that there is sufficient evidence to show knowledge on the part of the bank independently of that. There are no special findings of fact, or conclusions of law in the record. The case was not tried to a jury, and therefore there are no instructions to guide us to a correct knowledge of any particular theory which may have determined the case in the mind of the trial court, if that is at all material. Upon the evidence and the case as presented thereby it appears that the court found generally for the defendant in error, and rendered judgment in his favor. We are of the opinion that the evidence supports the judgment in so far as it has been affirmed, and it is not ground in such case for reversal that it is asserted, however truthfully outside of the record, that the trial court trying the case without the intervention of a jury, was largely influenced or entirely *168so by some matters which are not material or do not in themselves determine the relative rights and liabilities of the parties.
It is contended that the admission of the statements of the cashier made at the bank, after he had resumed his duties there, indicates that the trial court tried and decided the case upon the theory that the knowledge of such cashier concerning the mortgage to Luman, and that the moneys in controversy were the proceeds of the mortgaged sheep, was binding upon the bank, and constituted like knowledge on its part. In the first place, it may be said, that even had the court entertained such a view at the time of the admission of the testimony, it can hardly be assumed by the appellate court, under the disclosures of the record already pointed out, that such a theory or opinion prevailed until, and influenced entirely, or largely, the finding and judgment. But beyond that, we are unable to attach to those statements of the cashier the importance, merit, or effect with which counsel regards them. Such statements did not reach the point of notice to the bank of 'the facts or any of them which was required to render it liable. Nothing in the declarations so received, established or indicated any notice to or knowledge of the bank; neither could any notice to or knowledge of the cashier regarding those essential facts be predicated upon anything brought out by the said statements. Knowledge of the cashier was self-evident, and-required no proof beyond the facts that he owned the sheep, sold them, received the purchase price, and was the mortgagor of the sheep in the mortgage held by Luman., The declarations, the admission of which was complained of, went only to show that the money was sent to the bank, the disposition which was afterward made of it, and that such application was without the consent of such cashier, who had deposited the proceeds with the bank. The fact of the receipt of the money and its disposition as stated was testified to by another bank officer, and the cashier also testified concerning his consent with respect to the after *169transactions of the bank. The admission of the statements was therefore not prejudicial; they did not tend' to' establish any kind of notice, and such admission was harmless error, if error at all. Had such declarations gone to the extent of proving notice on the part of the-cashier, a very different question would have been presented.
We can not regard the case of Smith v. Crawford County State Bank, 61 N. W., 378, as controlling of the-points involved in the case at bar. It is quite evident that an entirely different statute and mortgage were under consideration in that case. We do not hold, however, that even under our statutory provisions and the mortgage in question, the lien of the mortgage attached to the proceeds; if we did, there would not arise any question of notice in the case. What we do hold is that the provisions of our statute which authorize the insertion in a chattel mortgage of permission to the mortgagor to retain possession, and sell portions of the mortgaged property, and apply the proceeds to the debt secured by the mortgage, and the existence of such a permission in the-mortgage itself, imports constructive notice, the mortgage being properly filed, of the fact not only that the property therein described is covered by the mortgage, but of the provision for the sale by the mortgagor and the application of the proceeds, as well, and that such proceeds in the hands of the mortgagor are held in trust, and any one who obtains them with notice or knowledge that they are the proceeds of certain property, which property was in fact covered by the mortgage, is liable to respond to the mortgagee therefor. Having constructive notice of the fact of the mortgage and its provisions, and actual notice or knowledge of the source from which the money was-derived, the liability follows. Rehearing must be denied..
GROBsbeck, C. J. concurs.