First National Bank of Goldfield v. Murphy

By the Court,

Norcross, J. :

This is an appeal from an order dissolving an attachment. Action was brought by the appellant against the above-named respondent to recover upon a promissory note. At the time the complaint was filed a writ of attachment was issued, based upon an affidavit, which, after setting out the making of a certain promissory note and the failure of the defendant to pay the same, recited "that the same was secured by 50,000 shares of stock, which were afterwards surrendered and placed in escrow by said defendant, and rendered nugatory.”

The defendant moved to dissolve the attachment upon the ground of insufficiency of the affidavit upon which it was based, and in support of the motion to dissolve also filed an affidavit in which he alleged the making of the note sued upon and the delivery to the defendant of certificate No. 80 of the Great Western Gold Mining and Milling Company for 50,000 shares of its capital stock as security for the payment of the amount specified in the note; that the plaintiff accepted such certificate of stock as security for the payment of said note; that at all *466times since the indorsement and delivery of said certificate of stock the said plaintiff has held and retained the same as such security; that said certificate has never at any time been surrendered to or otherwise delivered to defendant by the plaintiff or by any one else; that, at the time of the issuance of said writ of attachment, said certificate of stock was so held as security for the payment of said indebtedness, and for no other purpose; that the affidavit on attachment is false and untrue in so far as it states or pretends to state that said stock was ever surrendered to the defendant or that said security was ever rendered nugatory.

In opposition to the motion to dissolve, an affidavit on behalf of the plaintiff, made by the cashier of the bank, among other things, recites: " That to secure the payment of said note the said defendant delivered to plaintiff stock certificate No. 80, showing that defendant was the owner of 50,000 shares of the capital stock of the Great Western Gold Mining and Milling Company. That no transfer of the stock represented by said certificate was made to this plaintiff upon the books of said mining company, or otherwise, except as above set forth. That on or about the 12th day of June, 1909, said defendant withdrew said certificate No. 80 from plaintiff as such security and placed the same in escrow. That said certificate of stock and the stock represented by the same was by agreement of said defendant placed in said escrow by agreement with one S. H. Brady, by the terms of which said Brady was to pay certain specified sums of money for the use of defendant and others, and upon such payments said stock was to be delivered to said S. H. Brady. .But in case said payments were not made then said escrow directed as follows: 'In case any of the above payments are not promptly paid, the contents are to be returned to the grantors, on demand, within thirty days of such default, upon the payment of charges, and the bank’s responsibility for the custody hereof ceases at the expiration of said thirty days. No assignment or transfer of this escrow can be made, but contents may be withdrawn by *467mutual consent. ’ That at the time said certificate No. 80 was placed in said escrow the said defendant delivered to plaintiff the following order, to wit: 'Goldfield, Nevada, June 11, 1909. First Nat. Bank, Goldfield, Nevada— Dear Sir: I hereby authorize you to deduct such sums of money from a certain escrow between S. H. Brady and J. T. Murphy et al. as may be coming to me for my proportion of same to the extent of six thousand dollars and interest, the amount of a certain note which I owe to you. Yours truly, John T. Murphy.’ That said Brady did not make the payments specified in said agreement or option, and said certificate No. 80 still remains in said escrow.”

The ground upon which the attachment was based is the first cause specified in section 123 of the old practice act (Stats. 1869, c. 112), as amended (Stats. 1907, p. 105), which recites: "In an action upon a judgment or upon a contract, expressed or implied, for the direct payment of money, which is not secured by mortgage, lien or pledge upon real or personal property, situated or being in this state, and if so secured when such security has been rendered nugatory by the act of the defendant.” Section 124 of the same act provided: "The clerk of the court shall issue' the writ of attachment upon receiving and filing an affidavit by or on behalf of the plaintiff showing the nature of the plaintiff’s claim, that same is just, the amount which the affiant believes the plaintiff is entitled to recover, and the existence of any one of the grounds for an attachment enumerated in the preceding section.”

Considering the affidavit on attachment alone, it does not specifically allege that the note sued upon was not at the time the suit was instituted secured by a mortgage, lien, or pledge. So far as appears from the affidavit, the note may have been otherwise secured than by the stock certificate described. If we consider the affidavit as alleging the giving of security which has subsequently been rendered nugatory by act of the defendant, it fails in this respect to comply with the requirements of the statute. If the placing of the stock certificate in escrow *468rendered the security nugatory, the plaintiff was as much the cause thereof as the defendant, for the plaintiff, holding the certificate of stock as a pledge, had to consent to any modification of the conditions of its security.

When we consider the affidavits in support of and in opposition to the motion to dissolve, it cannot be said, we think, that the security originally given was ever rendered nugatory by act of the defendant. Plaintiff continued to hold possession of the stock certificate under the escrow agreement, which agreement, if carried out, would enable the plaintiff to deduct the amount of its note with accrued interest and costs from the payments paid in accordance with the escrow agreement. If the escrow agreement was not carried out, the plaintiff still held the stock certificate as security for the payment of the note.

The order appealed from is affirmed.