Security interest; personal property; sale by auctioneer; no liability under conditions specified.
The auctioneer, who in good faith and without notice of a security interest therein, sells personal property at auction, which is in fact subject to a security interest, for a principal whose identity has been disclosed, in which property the auctioneer has no interest but acts only as an intermediary of the owner is not liable to the holder of the security interest for any damage sustained as a result of such sale.
Source:Laws 1963, c. 391, § 1, p. 1242; Laws 1969, c. 543, § 2, p. 2194; Laws 1971, LB 961, § 2.
Section held constitutional, but auctioneer to be relieved of liability must meet all conditions, including actual disclosure of principal's identity. State Securities Co. v. Norfolk Livestock Sales Co., Inc., 187 Neb. 446, 191 N.W.2d 614 (1971).
Where auctioneer, in good faith, without notice of security interests of Farmers Home Administration, and for principals whose identities had not been disclosed, sold cattle, he was not liable to government in conversion. United States v. Chappel Livestock Auction, Inc., 523 F.2d 840 (8th Cir. 1975).
Where security agreement between bank and debtor granted security interest in livestock for farming operations rather than for personal, family, or household purposes or for business purposes, a security interest in livestock used in farming operations, as opposed to inventory, was created. First State Bank v. Maxfield, 485 F.2d 71 (10th Cir. 1973).
Title to the one hundred forty-five head of cattle passed to H & O Farms at the time the plaintiff delivered them and, therefor, any interest the plaintiff retained was no more than a security interest provided there was no agreement between the parties, either expressly or in course of conduct, that altered the result. Myers v. Columbus Sales Pavilion, Inc., 575 F.Supp. 805 (D. Neb. 1983).