Boswell v. First National Bank of Laramie

• Court: United States State Supreme Court of Wyoming
• Citation: 16 Wyo. 161,92 P. 624
• Parties: BOSWELL v. FIRST NATIONAL BANK OF LARAMIE
• Decision Date: 10 February 1908

92 P. 624

16 Wyo. 161

BOSWELL v. FIRST NATIONAL BANK OF LARAMIE

Supreme Court of Wyoming

February 10, 1908

16 Wyo. 161 at 211.

Original Opinion of December 7, 1907, Reported at: 16 Wyo. 161.

Rehearing denied.

H. V S. Groesbeck, for plaintiff in error (on petition for rehearing).

One partner cannot by a general power of attorney authorize another to execute for him a firm chattel mortgage. (McManus v. Smith (Ore.), 61 P. 844; Weeks v Rake Co., 58 N. H., 101; Cavanaugh v. Salisbury (Utah), 63 P. 39; Guthiel v. Gilmer, id., 817; Peterson v. Armstrong, 66 id., 767; Meyer v Michaels (Neb.), 95 N.W. 63; Kahn v. Becnel, 108 La. 296; Lee v. Ferguson, 5 La. Ann., 532.) The mala fides of the transaction is apparent from the fact that some of the obligations were those of the individual partner who executed the mortgages. (Lance v. Butler, 135 N. C., 419; Hartness v. Wallace, 106 N. C., 427; Bank v. Bayliss, 41 Mo. 274; Garner v. Hudgins, 46 Mo. 399; Goddard v. McCune, 122 Mo. 426; Gibbs v. Bates, 43 N.Y. 192; Kimball v. Walker, 30 Ill. 482; Patterson v. Martin, 6 Ired. L., 111; Redenbaugh v. Kelton, 130 Mo. 558; Story on Part. (7th Ed.), 148.)

The better policy and more reasonable rule, sustained by excellent authority, is that an officer's disqualifying interest renders the acknowledgment void for all purposes, so that the instrument is not entitled to record and is not notice to anyone. (Kothe v. Krag-Reynolds Co., 20 Ind.App. 293; Wilson v. Traer, 20 Iowa 231; Bank v. Radtke, 87 Iowa 363; Bank v. Stockdale, 121 Iowa 748; Smith v. Clark, 69 N.W. 1011; Lee v. Murphy, 112 Cal. 364; Wasson v. Connor, 54 Miss. 351; Hayes v. Asso., 124 Ala. 663; Bexar Asso. v. Heady, 21 Tex. Civ., 154; Thurlough v. Dresser, 98 Me. 161; 1 Ency. L. (2d Ed.), 493, and cases cited; 1 Supp. Ency. L., p. 67, and cases cited.)

The plaintiff in error stands in the attitude of a bona fide creditor, as well as an innocent purchaser. The mortgages were not good against him without a proper acknowledgment in the absence of actual notice, and the notary was disqualified upon the proof offered. (Edinger v. Grace, 8 Colo.App. 21; Asso. v. O'Lynn, 95 N.W. 368; Wilson v. Griess, 64 Neb. 792; Jenkins v. Jones, 138 Ala. 664; Crane v. Chandler, 5 Colo. 21; Wilcox v. Jackson, 7 Colo. 521; Sage v. Browning, 51 Ill. 217; Forest v. Tinkham, 29 Ill. 141; Rehkopf v. Miller, 59 Ill.App. 662; Hainey v. Alberry, 73 Mo. 427; 33 L. R. A., 237, note; Withers v. Baird, 32 Am. Dec., 757, notes; Springer v. Lipsis, 209 Ill. 261; Jones v. Noel, 139 Ill. 381; Van Heusen v. Radcliff, 17 N.Y. 583; Weill v. Zacher, 92 Ill.App. 296; Fahndrich v. Hudson, 76 Ill.App. 641, 645; McDowell v. Stewart, 83 Ill. 538; Bank v. Baker, 62 Ill.App. 154.)

We think the objection to the introduction of the power of attorney on the grounds that it was incompetent, immaterial and irrelevant, was a sufficient objection as to the lack of proof that Julia A. Bird executed it. Her signature was not sworn to, and it was necessary to prove her signature, as the witness was without the jurisdiction. Thomas Bird could not and did not identify it. Without proof as to her execution of the instrument, it was not shown that Thomas Bird had any authority to execute the mortgage in her behalf, and it was void for that omission in the proof. (Schouweiler v. McCaull, 99 N.W. 95; Barlow v. Collins, 139 Ala. 543; 1 Curr. L., 55; Elmslie v. Thurman, 40 So. 67 (Miss.); Carolan v. Yoran (N. Y.), 104 A.D. 488; Power v. Goins (Tenn.), 35 S.W. 902; Paolillo v. Faber (N. Y.), 56 A.D. 241.) Creditors are entitled to attack mortgages. (9 Cent. Dig. Col., 2689-2692, Secs, 365, 566.) The acknowledgments to the power of attorney were not properly or sufficiently certified. (Freedman v. Oppenheim (N. Y.), 80 A.D. 487.) It did not appear that William J. Bird was known to the officer certifying to his acknowledgment.

In this state it seems that a chattel mortgage is a mere lien or security, and no title passes until foreclosure and sale. (Byrd v. Forbes, 3 Wash. Ty., 318; Cadwell v. Pray, 41 Mich. 307; Wood v. Weimar, 104 U.S. 786.) The defendant was entitled to demand. (Wells on Replevin, 356, 371; Hull v. Carnley, 17 N.Y. 202; 7 Cyc., 2526; Roberts v. Norris, 67 Ind. 386.) The foreclosure sale of the chattels involved in the replevin suit would have been void even if it had been obtained from the sheriff as receiver, because it was in custodia legis, and the same reason should apply as to purchaser under the sheriff's sale. (Fulghum v. Williams, 114 Ga. 643; Jones on Chat. Mort., Sec. 443.) Where a chattel mortgage authorizes the mortgagor to sell the mere fact that a third person is in possession of the property, claiming ownership, does not show that his possession is wrongful, in the absence of proof that he did not acquire possession of the mortgagor. (Pritchard v. Hooker, 114 Mo.App. 605.)

It makes no difference that the sheriff was in possession under a void order, or that Boswell claimed his right to the cattle, in his pleading and by his evidence.

The sheriff was in possession of the property of Bird Brothers at the time of the foreclosure sale, and the foreclosure proceedings were void, and it was incumbent upon the mortgagee to take possession of the property, without breach of peace, when he desired to foreclose; but it did not have the possession of the property at any time. Furthermore, if an affidavit for renewal continues the mortgage in force for each succeeding year, then there will be no default in payment; and replevin will not lie to recover of a third person in possession property mortgaged to secure a debt, before maturity of the debt or any forfeiture under the mortgage. (Buck v. Payne, 52 Miss. 271; Boreger v. Langenberg, 42 Mo.App. 7.) And where it is agreed that the mortgagor shall retain possession (as where a renewal affidavit is filed) the mortgagee cannot maintain replevin against one who takes the chattel. (Pierce v. Stevens, 30 Me. 184; Laubenheimer v. McDermott, 5 Mont. 512.)

As to the duty of the mortgagee to exercise the right of sale or foreclosure within reasonable time, even after taking possession or not at all, see Whittemore v. Fisher, 132 Ill. 243. We think there are no authorities that permit a mortgagee to play fast and loose with the other creditors of his mortgagor, by constantly renewing the mortgage. At any rate, its lien became waived by its mistatement of the amount due in the last renewal affidavit, and by its failure to take possession under the foreclosure proceedings by statutory sale. (Jones on Chat. Mort., 710.) And a mortgagee by selling in any other mode than in equity or in the manner provided by statute, waives all claim for deficiency. (Jones on Chat. Mort., Sec. 711.)

The jury should have been permitted to decide whether the explanations of Thomas Bird and others were sufficient to overcome the presumption arising from the execution of the John Bird and Thomas Bird notes, and the bill of sale. The evidence in relation to the receiver proceedings should have gone before the jury, as a matter of excuse and justification, and perhaps in mitigation of damages.

BEARD, JUSTICE. POTTER, C. J., and MATSON, District Judge, concur.

OPINION

ON PETITION FOR REHEARING.

BEARD JUSTICE.

The plaintiff in error has filed a petition for a rehearing in this case, in which it is urged that the court was in error on each and every question decided. It is contended that a chattel mortgage on co-partnership property is invalid unless the mortgage is signed by each and every member of the firm in person, and that authority to do so cannot be conferred by power of attorney. The statute requiring such mortgages to be executed by each member of the firm was evidently intended to limit the general agency of the members of the firm, and one of its purposes was to prohibit one member without the knowledge or consent of the others from creating specific liens upon the firm property. But we can perceive no good reason--nor has any been advanced--why such authority cannot be conferred by a proper power of attorney for that purpose as well as in at least equally important business transactions such as the encumbrance or conveyance of real estate.

It is urged with much ability and at length in counsel's brief in support of the petition for rehearing, that the record of the mortgages in this case did not constitute constructive notice by reason of the fact that they were acknowledged before a notary who was at the time a stockholder of the corporation which was the mortgagee, and that the district court erred in refusing to permit the plaintiff in error to prove that fact on the trial. We are and were at the time the decision in this case was handed down, aware of the conflict in the decisions upon that question. In the case before us the mortgages were valid between the parties although not acknowledged. (See paragraph 2 of the opinion.) The acknowledgments are in due form and there is nothing either upon the faces of the instruments or in the certificates of acknowledgment to indicate that the notary was a stockholder in the mortgagee corporation or had any interest in the mortgages. They were fair and regular upon their faces. They were, therefore, admissible to record for the reasons stated in the opinion, and imparted constructive notice to subsequent purchasers. In addition to the authorities cited in the opinion, see Read v. Loan Co., 68 Ohio St. 280, 67 N.E. 729; National Bank of Fredericksburg v. Conway, 17 F. Cas. 1202, Case No 10037, and Fair v. Bank, 70 Kan. 612, 79 P. 144. In the Kansas case last cited it was held that "a chattel mortgage, regular upon its face, duly filed for record, and accompanied by an affidavit of renewal, filed in proper time and regular upon its...