Conversion—Liability of an Auctioneer for Sale of Stolen or Mortgaged Chattels—\u3ci\u3eState Sec. Co. v. Svoboda\u3c/i\u3e (Neb. 1961)

An auctioneer, by contract with an owner and a senior mortgagee, sold farm equipment at auction. He had no actual knowledge of a recorded junior mortgage held by the plaintiff, and paid the proceeds of the sale, minus his own commission, to the senior mortgagee, the surplus going to the owner. This conversion action was brought by the junior mortgagee against the auctioneer. The lower court, after presentation of the evidence, sustained a motion to dismiss. Held, reversed for the plaintiff; judgment ordered in the sum of the sale price, which was found to be the actual value, less the amount of the senior mortgage, and the auctioneer\u27s fees. The general rule imposing liability upon the auctioneer may seem at first glance to be unfair to the auctioneer, since it imposes a liability without fault. But it is believed that the rule achieves substantial justice, considering the rights of all involved