69-109. Security interest; personal property; sale or transfer without consent; penalty.

Any person who, after having created any security interest in any article of personal property, either presently owned or after-acquired, for the benefit of another, shall, during the existence of the security interest, sell, transfer, or in any manner dispose of the said personal property, or any part thereof so given as security, to any person or body corporate, without first procuring the consent, in writing, of the owner and holder of the security interest, to any such sale, transfer or disposal, shall be deemed guilty of a Class IV felony.

Source

Annotations

1. Constitutionality

2. Sale with consent of mortgagee

3. Sale without consent of mortgagee

4. Criminal responsibility

1. Constitutionality

Section is not in conflict with Article I, section 9, Constitution of Nebraska. State v. Heldenbrand, 62 Neb. 136, 87 N.W. 25 (1901).

2. Sale with consent of mortgagee

In a prosecution for the unlawful sale of mortgaged property without the written consent of the mortgagee, oral consent of the mortgagee to the sale, coupled with payment of the value of the property, is a defense. Mullins v. State, 146 Neb. 521, 20 N.W.2d 385 (1945).

Sale by mortgagor under agreement with mortgagee for application of proceeds on mortgage debt is equitable assignment of proceeds. Lathrop v. Schlauger, 113 Neb. 14, 201 N.W. 654 (1924).

Where sale is made with consent of mortgagee, mortgagor is agent of mortgagee. State ex rel. Davis v. Brown County Bank of Long Pine, 112 Neb. 642, 200 N.W. 866 (1924); Farmers State Bank of Petersburg v. Anderson, 112 Neb. 413, 199 N.W. 728 (1924); Farmers State Bank of Stella v. Home State Bank of Humboldt, 106 Neb. 711, 184 N.W. 170 (1921).

Mortgagee waives his lien where sale is made with his consent by mortgagor. Warrick v. Rasmussen, 112 Neb. 299, 199 N.W. 544 (1924); Seymour v. Standard Live Stock Comm. Co., 110 Neb. 185, 192 N.W. 398 (1923); Gosnell v. Webster, 70 Neb. 705, 97 N.W. 1060 (1904); Drexel v. Murphy, 59 Neb. 210, 80 N.W. 813 (1899).

Mortgagor may contract for future sale and disposition of property. Morris v. Persing, 76 Neb. 80, 107 N.W. 218 (1906).

3. Sale without consent of mortgagee

Mortgagee may recover payment of one who sells property subject to mortgage without notice. Caproon v. Mitchell, 77 Neb. 562, 110 N.W. 378 (1906).

Mortgagee, without knowledge of unauthorized sale, does not ratify by accepting proceeds. Gosnell v. Webster, 70 Neb. 705, 97 N.W. 1060 (1904).

A mortgagee of chattels will be held to have ratified an unauthorized sale of the property by knowingly receiving and retaining the proceeds of sale. Ayers v. McConahey, 65 Neb. 588, 91 N.W. 494 (1902).

Mortgagee may either disavow the sale and retake property or ratify it and recover proceeds of sale. Burke v. First Nat. Bank of Pender, 61 Neb. 20, 84 N.W. 408 (1900).

4. Criminal responsibility

Although section does not expressly require fraud, judicial construction of the section has established that proof of fraud is required for a conviction thereunder. It is presumed that when a statute has been construed by the Supreme Court, and the same is substantially reenacted, the Legislature gave to the language the significance previously accorded it by the Supreme Court. State v. Hocutt, 207 Neb. 689, 300 N.W.2d 198 (1981).

Conviction of disposing of mortgaged personal property sustained. Pulliam v. State, 169 Neb. 661, 100 N.W.2d 704 (1960).

Law was enacted to prevent fraudulent transfer of mortgaged chattel property. Pulliam v. State, 167 Neb. 614, 94 N.W.2d 51 (1959).

Information is not fatally defective because it fails to allege name of person or body corporate to whom sale or transfer was made. Hunt v. State, 143 Neb. 871, 11 N.W.2d 533 (1943).

In prosecution hereunder accused may show as defense (1) that full value of mortgaged chattel has been turned over to mortgagee or (2) that the mortgage debt has been paid. Fiehn v. State, 124 Neb. 16, 245 N.W. 6 (1932).

Wrongdoer cannot be convicted in Nebraska on sole charge of selling mortgaged property when actual sale occurred in Iowa. Forney v. State, 123 Neb. 179, 242 N.W. 441 (1932).

Mortgage upon unplanted crop is invalid as basis of conviction of tenant in case he sells crops not planted at time the mortgage in lease was executed. Nelson v. State, 121 Neb. 658, 238 N.W. 110 (1931).

Lien on properly identified crop extends to harvested crop unless otherwise provided, and it is a crime to sell same. Eigbrett v. State, 111 Neb. 388, 196 N.W. 700 (1923).

Statute contains all the elements of the crime for which it is sought to provide punishment, and criminal intent is not an essential ingredient of the offense. State v. Butcher, 104 Neb. 380, 177 N.W. 184 (1920).

Section applies to sale to partnerships. State v. Stapel, 103 Neb. 135, 170 N.W. 665 (1919).

Sale of mortgaged property without mortgagee's consent is punishable. Wilson v. State, 43 Neb. 745, 62 N.W. 209 (1895).

To constitute offense, the sale of the property must have been made by the mortgagor during the existence of the mortgage lien without the written consent of the owner and holder of the debt secured by the mortgage. State v. Hughes, 38 Neb. 366, 56 N.W. 982 (1893).

Information need not allege intent. State v. Hurds, 19 Neb. 316, 27 N.W. 139 (1886).