## Facts

- Credit Bureau of Broken Bow, Inc. obtained a default money judgment against John V. Moninger for $1,518.27, leaving an unpaid balance of $1,338.50.
- Moninger renewed a note with Broken Bow State Bank for $2,144.74; the renewal contemplated collateral including a 1975 Ford pickup, but no security agreement was executed at that time.
- A writ of execution issued on the judgment, and on July 7, 1978 a deputy sheriff checked title records and found no recorded encumbrance on the pickup.
- The deputy served Moninger with the writ at his workplace and stated he was executing on the pickup; Moninger told the deputy the Bank had loaned money against the pickup and had the title.
- The deputy physically touched the pickup and declared he was executing on it, but did not take possession or the keys at that time.
- On July 10, 1978, the Bank and Moninger executed a security agreement covering the pickup, filed it, and noted the Bank’s interest on the vehicle title that day.
- Deputy sheriffs seized the pickup on July 13, 1978; it was sold at sheriff’s sale on August 14, 1978 for $2,050.
- The county court awarded sale proceeds to the Bank based on its perfected lien; the district court affirmed.

## Issues

1. Whether a valid levy occurred on July 7, 1978 such that the judgment creditor became a “lien creditor” as of that date under Article 9.
2. Whether information given to the deputy sheriff about the Bank’s claimed interest constituted “knowledge” imputable to the judgment creditor, defeating lien-creditor priority over an unperfected security interest.

## Decision

- Reversed and remanded.
- The court held a valid levy occurred on July 7, 1978 when the deputy sheriff asserted dominion and control over the pickup pursuant to the writ.
- The judgment creditor became a lien creditor on July 7, 1978.
- Any notice conveyed to the deputy sheriff was not imputable to the judgment creditor because the deputy acted as a public officer executing process, not as the creditor’s agent.
- Because the Bank’s security interest was unperfected when the lien creditor’s interest arose, the judgment creditor had priority to the sale proceeds.

## Legal Principles

- A creditor becomes a “lien creditor” when it acquires a lien by attachment, levy, or similar process; a levy is accomplished when the executing officer asserts dominion or control over the property under a writ, even without immediate physical removal.
- Under Article 9 priority rules, a lien creditor has priority over a secured party with an unperfected security interest unless the lien creditor had knowledge of the security interest when the lien was acquired.
- Notice or information given to a sheriff or deputy executing a writ is not automatically imputed to the judgment creditor, because the officer acts as an officer of the law rather than as the creditor’s agent for purposes of the knowledge requirement.

## Conclusion

The court ruled that the execution levy created lien creditor status on July 7, and the creditor lacked imputable knowledge of the Bank’s then-unperfected interest; therefore, the judgment creditor’s lien had priority over the Bank’s later-perfected security interest in the pickup and its sale proceeds.


Credit Bureau of Broken Bow, Inc. v. Moninger, 204 Neb. 679, 284 N.W.2d 855 (Neb. 1979)