Credit Bureau, Inc. v. Moninger

284 N.W.2d 855 (Neb. 1979)

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Nature of the Case

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Facts

P obtained a default judgment against D in the amount of $1,518.27 on October 20, 1977. No appeal was taken from this judgment. On May 16, 1978, D renewed his prior note to D1 in the amount of $2,144.74. The renewed note was to be secured by a security agreement on feeder pigs and a 1975 Ford pickup owned by D, but no security agreement was entered into at that time. On June 27, 1978, at the request of the Bureau, a writ of execution was issued on its judgment in the amount of $1,338.50, the balance remaining due on the judgment. The deputy county sheriff who received the writ examined the motor vehicle title records on July 7, 1978, to determine if a lien existed as of that date on the pickup owned by Moninger. Finding no encumbrance of record, the deputy sheriff proceeded to D's place of employment to levy on the vehicle. D informed the officer that there was money borrowed from D1 against the pickup and that D1 had title to the vehicle. The officer proceeded to the vehicle, 'grabbed a hold of the pickup,' and stated: 'I execute on the pickup for the County of Custer.' The officer did not take possession of the vehicle at that time, nor did he ask for the keys to the vehicle. D and D1then executed a security agreement on the vehicle which was then filed. Notation of the security interest was made on the title to the pickup truck that same day on July 10th. The vehicle was seized by deputy sheriffs on July 13, 1978, and sold at sheriff's sale on August 14, 1978, for $2,050. The sheriff filed a motion in the county court for a determination of the division of the proceeds from the sheriff's sale. D1 joined the action by application for the proceeds of the sheriff's sale, basing its claim on its alleged status as a secured creditor. The county court orally ruled that the deputy sheriff had knowledge of the possible lien against the vehicle as of July 7, 1978; that such notice made any execution subject to the lien; that the vehicle was not ponderous and physical possession could have been taken by the officer; that the notice of the possible lien resulted in a valid lien in D1 as of July 7, 1978; that the proceeds of the sheriff's sale should go to D1; and that the sheriff in making a levy 'at that time' (July 7, 1978) used due care and acted properly as a stakeholder. The written order differed. By its written order, the county court found that the sheriff was a stakeholder; that a valid levy was not made on the vehicle until July 12, 1978; that D1’s lien was perfected on July 10, 1978; that the sheriff had notice of the claim to a lien on July 7, 1978; that the knowledge of the sheriff was imputed to P; that D1’s lien was prior to P’s lien; and that the proceeds of the sheriff's sale should be paid to D1. On appeal, the District Court affirmed the judgment of the county court. This appeal followed.