Kingsland & Ferguson Mfg. Co. v. Chrisman

• Decision Date: 24 December 1887
• Citation: 28 Mo.App. 308
• Parties: THE KINGSLAND & FERGUSON MANUFACTURING COMPANY, Appellant, v. JOSEPH CHRISMAN et al., Respondents.
• Court: Kansas Court of Appeals

28 Mo.App. 308

THE KINGSLAND & FERGUSON MANUFACTURING COMPANY, Appellant, v. JOSEPH CHRISMAN et al., Respondents.

Court of Appeals of Missouri, Kansas City.

December 24, 1887

APPEAL from DeKalb Circuit Court, HON. JOSEPH P. GRUBB, Judge.

Reversed and remanded.

Statement of case by the court.

This is an action in replevin for the recovery of the possession of certain personal property. The facts are as follows: On the fourth day of May, 1884, one W. C. Everett sold to one Stephen Gaucher the property in controversy, for which Gaucher executed to Everett his promissory note. To secure this note, Gaucher executed, on the same day, a chattel mortgage on the property to Everett. Before the maturity of the note, Everett assigned the same, by writing his name on the back thereof and delivering it to one Sheldon, for a valuable consideration; and, thereafter, and before the maturity of the note, said Sheldon, in the same manner assigned the note to plaintiff, for a valuable consideration. By the terms of the mortgage, the mortgageor was to retain the possession of the mortgaged property until default in paying the note. After the maturity of the note, the debt being unpaid, the defendants were in possession of the property mortgaged. How they acquired this possession does not appear. In their answer they pleaded ownership. At the trial the plaintiff, after proof of the foregoing facts rested. Thereupon the defendants demurred to the evidence. The court sustained the demurrer, and plaintiff has appealed.

W. S HERNDON, for the appellant.

I. Under the decisions of the Supreme Court of this state, a mortgage given to secure a note is regarded as incident to the note, and passes with it to every holder at the time he receives it, without any transfer or assignment distinct or separate from the paper it is given to secure. Johnson v. Johnson, 81 Mo. 336; McQuie v. Peay, 58 Mo. 50; Bank v. Mastin, 61 Mo. 435; Pickett v. Jones, 63 Mo. 195.

II. A mortgagee of personal property is entitled to the possession after condition broken. Bowens v. Benson, 57 Mo. 26. The transfer of the debt and mortgage by Everett to Sheldon, and the transfer of the same to the plaintiff by said Sheldon, made the plaintiff the " real party in interest," and suit was properly brought in the name of plaintiff. Rev. Stat., sec. 3462.

III. The taking of the non-suit by the plaintiff, with leave to move to set the same aside, was not a failure " to prosecute its action with effect and without delay" until after four days after taking the same had elapsed, or until the end of the term. Rev. Stat., secs. 3854 and 3707.

S. H. CORN, for the respondents.

I. The execution of the chattel mortgage vested in Everett the legal title to the mules, and the right to possession on default of payment. Robinson v. Campbell, 8 Mo. 365, 315; Dean v. Davis, 12 Mo. 112; Lacy v. Gibony, 36 Mo. 320; Pace v. Pierce, 49 Mo. 393; Bowens v. Benson, 57 Mo. 26.

II. The rights of the assignee of a note, secured by mortgage, to the mortgaged property, are equitable only, and not legal. He has the right to have the lien enforced for his benefit, but he acquires no right to the possession of property, whether personal or real. Anderson v. Bumgartner, 27 Mo. 86; Mitchel v. Laden, 36 Mo. 533.

III. After the assignment of the note, the mortgagee held the legal title in trust for the benefit of the holder. A trustee may bring ejectment or replevin; the cestui que trust cannot. The plaintiff, in this case, not having the legal title, cannot maintain this action. Jones on Chattel Mortgages (2 Ed.) sect. 503, and cases there cited; France v. Thomas, 86 Mo. 80; Siemers v. Schrader, 88 Mo. 20.

IV. Section 3462, of the Revised Statutes, was not intended to confer on the " real party in interest" all the remedies of the persons through whom he derived his interest; he may enforce his rights through such remedies as he may have by a suit in his own name.

V. The court did not err in assessing damages and entering judgment against the securities in the replevin bond within four days after the non-suit was taken. An unsuccessful trial is a " failure to prosecute with effect," and, if we had not made our judgment final, plaintiff could not have had the pleasure of coming to the court.

PHILIPS P. J.

This case presents the single question, can the assignee of a debt, secured by chattel mortgage, without an assignment of the mortgage itself, maintain, in his own name, the action of replevin for the recovery of the possession of the mortgaged property? The court below held that he could not.

At first impression this question seemed easily answered. But in the absence of any direct adjudication by our Supreme Court, I find it, on examination of the authorities, by no means free from embarrassment. There is no question of the general proposition, that the assignment of the note carried the mortgage with it. The debt is the principal thing; the mortgage, which is but the security, is the mere incident of the debt; and on the maxim, omne principale, trahet ad se accessorium, where the debt goes the mortgage follows. But the courts say that this following of the mortgage after the debt, where only the debt is formally assigned, is but an equitable assignment as to the mortgage, and not a legal transfer. Thus Richardson, J., in Anderson v. Baumgartner (27 Mo. 86), said: " The doctrine is well settled that the transfer of a deed carries with it in equity the mortgage as a security." In Tisen v. People's Ass'n (57 Ala. 331), Brickell, C. J., said: " An assignee of the debt would in equity pass the mortgage." And likewise, Wilde, J., in Crain v. Pain (4 Cush. 485), treats the transfer of the mortgage as an incident of the debt, as an equitable transfer. Accordingly, Jones, in his work on Chattel Mortgages, section 503, asserts the doctrine to be, that: " The mortgagee's legal interest does not pass by his assignment of the debt. Such assignee cannot maintain replevin in his own name for the mortgaged property; though he may, in the absence of any express or implied stipulation to the contrary, bring such action in the name of the mortgageor, who holds, in such case, the legal title in trust for such assignee's benefit." In support of the text, the case of Ransdall v. Tewksbury (73 Me. 197) is cited. The case fully sustains the proposition. The argument is, that the interest of the mortgagee in the property vests solely by virtue of the mortgage, which represents the property. Had no mortgage been taken he would have no title or interest whatever in the property. The note in nowise had any effect upon the title to the property. The whole office of the note being limited to the payment of the consideration for the property sold by the mortgagee to the mortgageor, the assignment of the note could not affect the title to the property it was given to pay for. The assignment of the debt gave to the assignee an equitable interest, at least, in the mortgage, the mortgagee holding it in trust for the benefit of the holder of the debt. Such equitable interests are protected by the courts of law, and may be enforced in the name of the party holding the legal, as distinguished from the equitable, title. This seems to be the holding in Massachusetts and Alabama. Crane v. Pain, supra; Prout v. Root, 116 Mass. 410; Graham v. Rogers, 21 Ala. 498; see, also, Harman v. Barhytt, 31 N.W. 488, and note.

Most of the cases, which I have been able to find, where the assignee was allowed to maintain the action in his own name is where the mortgage itself was assigned in writing. In such case the assignee, without question, holds the legal title. In Langdon v. Buel (9 Wend. 80), the action was trespass de bonis asportatis, brought in the name of Langdon, who was the mortgagee, but who had previously transferred the note, secured by the mortgage, to one Pitcher. Spencer, C. J., said: " A mortgagee of personal property, upon the failure of the mortgageor to perform the condition of the mortgage, acquires an absolute title to the chattel. The notes which this mortgage was given to secure appear to have been assigned or transferred to one Pitcher. When they were so transferred does not appear * * * Did not the mortgage pass with the notes as incident to them, and should not the...