Broom v. Armstrong

• Decision Date: 01 December 1890
• Citation: 11 S.Ct. 73,137 U.S. 266,34 L.Ed. 648
• Parties: BROOM et al. v. ARMSTRONG
• Court: U.S. Supreme Court

137 U.S. 266

11 S.Ct. 73

34 L.Ed. 648

BROOM et al. v. ARMSTRONG.

December 1, 1890.

This case arose upon a complaint filed in the district court of Weber county, Utah territory, on the 22d of July, 1885, by James C. Armstrong, the appellee, against Mills H. Beardsley, to foreclose a mortgage of certain chattels, made January 14, 1885, by Beardsley to Armstrong, as security for the payment of his promissory note of that date to Armstrong for the sum of $8,000, payable in four months, with interest from date at 1 per cent. per month, payable monthly from date until paid, both before and after judgment, until maturity; and, if not paid at maturity, 10 per cent. additional, as cost for collection; which mortgage was duly recorded, as provided by the laws of the territory. On the 22d of September, thereafter, Arm. strong, with leave of the court, filed an amended complaint, making John Broom and E. A. Whitaker parties defendant, in which he alleged that the two defendants Broom and Whitaker, after the* orig- inal suit was instituted, had claimed an interest in the mortgaged chattels; that Broom's claim arose from his being a purchaser of the mortgaged property at a sale on August 13, 1885, under an execution issued upon a judgment dated March 18, 1885, against the defendant Beardsley, in favor of the Utah National Bank, for $3,160; that the property having been levied upon by the United States marshal, and sold, as above stated, was delivered by the marshal to Broom, as purchaser thereof, and put into his possession; that Whitaker's claim arose out of a mortgage upon the same property, made to him by Broom August 22, 1885, to secure the payment of $4,130, advanced by him to Broom; that this action on the original complaint had been pending from the date of the filing thereof to that time; that a notice of the pendency thereof was filed in the recorder's office of Weber county on the 11th of August, 1885; and that the defendants had due notice and actual knowledge of all these facts and proceedings at the time the levy was made on the mortgaged property, and at the time Broom received and took possession of the same. Wherefore, in addition to his prayer for foreclosure against Beardsley, in the original complaint, he prayed that the two defendants Broom and Whitaker, and all persons claiming under them, subsequently to the execution of said chattel mortgage, be foreclosed of all right or claim or equity of redemption in the said property, and every part thereof. The defendants Broom and Whitaker, and the defendant Beardsley also, filed their respective demurrers to the amended and supplemental complaint, as not stating facts sufficient to constitute a cause of action, both of which demurrers were overruled. Thereupon, the defendants Broom and Whitaker filed their separate answer, setting up, among other defenses, the levy upon the property mortgaged, the purchase by Broom at the judicial sale thereof, and the invalidity of the lien of the chattel mortgage after the expiration of 90 days from the maturity of the note which it secured. The case was submitted to the court on the pleadings and proofs. A decree was rendered for the plaintiff in accordance with the prayer of the amended complaint, finding that Beardsley was liable for the principal and interest due on the note, with 10 per cent. additional for collection, etc., and that the said amount was a valid lien upon the property described in the amended and supplemental complaint; and directing a sale of the mortgaged property to satisfy the same, with costs, etc. The supreme court of the territory affirmed the decree of the district court, (13 Pac. Rep. 364,) and that decree of affirmance is brought to this court for review by the present appeal.

S. Shellabarger and J. M. Wilson, for appellants.

[Argument of Counsel from pages 268-274 intentionally omitted] J. G. Sutherland, John R. McBride, H. W. Smith, and John B. Goode, for appellee.

LAMAR, J. There seems to be no dispute as to any material fact in the case. The note and chattel mortgage sued upon were executed on the 14th of January, 1885, recorded on the 17th of the same month, and became due on the 14th of May, 1885. The action for foreclosure was commenced, and the notice of pendency properly recorded, within the 90 days provided by the statute of Utah for the lien to continue in force after the maturity of the debt secured by the mortgage. By the terms of the mortgage, it was provided that the mortgaged property should remain in the possession of the mortgagor, who, in accordance therewith, retained such possession until the property was levied on and sold under execution against the mortgagor. This levy, therefore, was made after the 90 days from the maturity of the debt secured by the mortgage had expired, and while the property was in the possession of the mortgagor. The main contention of the appellants is that the district and supreme courts erred in holding that the appellee, by virtue of his mortgage and the pendency of the foreclosure suit, had a lien upon the property as against the levy and sale on the 13th of August, under which the appellant Broom made his purchase. This presents the question which really controls this case, viz.: Did the appellee, on the day of sale, have any right or interest in the property superior to that of the appellant Broom? To sustain their contention, the appellants rely upon sections 2805 and 2837 of the Compiled Laws of Utah. The former of these sections provides that 'any mortgage of personal property, acknowledged and filed as hereinbefore provided, shall thereupon, if made in good faith, be good and valid as against the creditors of the mortgagor and subsequent purchasers and mortgagees, from the time it is so filed for record until the maturity of the entire debt or obligation for the security of which the same was given, and for a period of ninety days thereafter, provided the entire time shall not exceed one year.' Section 2837 provides that 'every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels, unless the same be accompanied by a delivery within a reasonable time, and be followed by an actual and continued change of the possession of the thing sold or assigned, shall be conclusive...