Cone v. Ivinson

• Decision Date: 19 May 1893
• Parties: CONE v. IVINSON
• Court: Wyoming Supreme Court

33 P. 31

4 Wyo. 203

CONE v. IVINSON

Supreme Court of Wyoming

May 19, 1893

Re-hearing Granted, 4 Wyo. 203 at 230. Decision on re-hearing, February 28, 1894.

Commenced in District Court December 19, 1889.

ERROR to District Court of Albany County, HON. M. C. SAUFLEY Judge.

This case was determined upon the pleadings, the facts being fully stated by Clark, J., who delivered the opinion of the court.

Judgment reversed and cause remanded.

I. P Caldwell, and Nellis Corthell, for plaintiff in error.

The plaintiff's mortgage was and continued to be a lien upon the property up to the time of sale, prior and paramount to the lien of the defendant. Upon the sale of the property these liens attached in the same order to the proceeds. The defendant is not a subsequent mortgagee in good faith, not having parted with a present valuable consideration, but having notice of the prior mortgage. (Jones Chat. Mort. 312, 313, 316, 318; People's Savings Bank v. Bates, 120 U.S. 556; Coddington v. Bay, 20 Johns., 637; Thompson v. Van Vechten, 27 N.Y. 581; Van Hensen v. Radcliff, 17 N.Y. 583; Wilson v. Leslie, 20 O., 161; Kendall v. Mason, 7 O. S., 199.) When mortgaged property has been sold or converted into money the lien of the mortgage follows the fund and binds it in all respects as it was bound before conversion of the property. (Wait Fraud. Conv., 44; Gibson v. Warden, 14 Wall., 244; Astor v. Miller, 2 Paige, 68; Bartlett v. Gale, 4 Paige, 503; Curran v. Ark. 15 How., 304; Platt v. Stewart, 13 Blatch., 500; Gimbel v. Stolte, 59 Ind. 453; Ball v. Green, 90 Ind. 76; Brown v. Stewart, 1 Md. Ch., 87; Olcutt v. Bynum, 17 Wall., 44; Markey v. Langley, 2 Otto, 142; Platt v. Bright, 31 N.J. Eq. 86; Bank v. Roberts, 44 N.Y. 192; Keel v. Levy, 24 P. 253; Lowe v. Wing, 13 N. W., 892; Brackett v. Harvey, 91 N.Y. 214; Rider v. Edgar, 54 Cal. 127.)

In opposition to rehearing: The allegations of a pleading must be liberally construed. (Rev. Stat., Sec. 2483; Shank v. Teeple, 33 Ia. 139.) If petition indefinite the defect is attacked by motion, not demurrer. (Pomeroy on Rem., 549.) Allegations will be construed to sustain rather than destroy cause of action. (Olcott v. Carroll, 39 N.Y. 436; I Chitty, 237; Allen v. Patterson, 7 N.Y. 480.) Although the word "procure" is not used in petition, its equivalents are used. Fraud is charged by the usual form of allegation. It makes no difference whether defendant converted the sheep or the fund. (Baker v. Beers, 6 Atl., 35; McPheetus v. Page, 22 A. 101.) Plaintiff had a right to elect as to remedies. (Below v. Robbins, 45 N. W., 416.)

Brown & Arnold, for defendant in error.

The lien of plaintiff's mortgage upon the chattels continued after the sale; he had the same rights after sale as before, no more, and no less. It is neither alleged that the sheep were sold to an innocent purchaser, nor that defendant interfered with plaintiff's right of possession, nor that defendant took the sheep, or asserted dominion over them, nor that the sale was in hostility to the mortgage, nor that upon sale the herd was divided among several purchasers; therefore plaintiff has no right to complain. For aught that appears the proceeds of sale were the value of the equity conceded by the pleading to be vested in defendant. The petition does not state a cause of action. (Jones Chat. Mort., 461; Goulet v. Asseler, 22 N.Y. 225; Hall v. Omaha Nat. Bank, 64 N.Y. 550; Hathaway v. Brayman, 42 N.Y. 322; Manning v. Managhan, 28 N.Y. 585.) The legal title was never in the plaintiff. (Rev. Stat., Chap. 5; Sanford v. Bell, 2 N. D., 6; Byrd v. Forbes, 3 Wash. Ty., 318; Chapman v. State, 5 Or., 432; Randall v. Higby, 37 Mich. 40; People v. Bristol, 35 Mich. 28; Campbell v. Quackenbush, 33 Mich. 287; Graham v. Blinn, 3 Wyo. 746.)

CLARK, JUSTICE. GROESBECK, C. J., concurs. CONAWAY, JUSTICE, dissenting.

OPINION

CLARK, JUSTICE. (Statement of case.)

On the 19th day of December, 1889, the plaintiff in error filed his petition in the district court of Albany County, in which he alleged:

"That heretofore, to wit: on the 6th day of October, 1884, William Lawrence and James McGibbon, then and now copartners as Lawrence and McGibbon, were indebted to the plaintiff in the sum of twenty-two thousand one hundred and seventy dollars ($ 22,170.00), and to secure the payment of the said sum said Lawrence and McGibbon made their two certain promissory notes of that date, each for the sum of eleven thousand eighty-five dollars ($ 11,085.00), payable in nine and twenty-one months respectively, after the date thereof, to the order of the plaintiff, with interest at ten per cent per annum from date until paid; and at the same time, and to further secure the payment of the said indebtedness said Lawrence & McGibbon executed and delivered to the plaintiff a chattel mortgage, conveying to the plaintiff twelve thousand three hundred and ninety head (12,390) of sheep, branded with the 'Block Y' brand, thus , together with the natural increase of said sheep, all of which said sheep were then ranging and pasturing at, or near, the ranches of the said Lawrence & McGibbon, in Albany County, and the Territory of Wyoming; also fourteen (14) head of horses, branded with the said 'Block Y' brand, and all harnesses, wagons, and farm implements and tools belonging to the said Lawrence & McGibbon, and then at or near the ranches aforesaid, together with certain other property in said mortgage more particularly described, which said mortgage was duly executed, acknowledged and delivered, and was thereafter, to wit: on the 6th day of October, 1884, at five o'clock p. m., duly filed for record in the office of the county clerk, an ex-officio register of deeds of said Albany County, and Territory of Wyoming, and was duly recorded in Book 'B' of the Chattel Mortgage Records, on page 137. That said indebtedness, notes, and mortgage have ever since remained, and still remain in full force and effect and unsatisfied, except as to four thousand head (4,000) of said sheep, which were sold by said Lawrence & McGibbon and released from said mortgage by the plaintiff, and the proceeds thereof applied on plaintiff's debt, and there is still due and unpaid of said indebtedness the sum of six thousand one hundred and twenty-eight dollars and nineteen cents ($ 6,128.19), together with interest thereon at the rate of twelve per cent per annum from the 14th day of November, 1888.

"Plaintiff further alleges that after the execution of the said mortgage, to-wit: on the 28th day of January, 1887, said defendant Edward Ivinson, to secure a pretended antecedent indebtedness of the said Lawrence & McGibbon to him in the sum of twenty thousand dollars ($ 20,000.00), procured from the said Lawrence & McGibbon a chattel mortgage upon seven thousand one hundred (7,100) head of the sheep conveyed by plaintiff's mortgage above described, being all of said sheep then remaining unsold; and that thereafter, to-wit: on the 22d day of August, 1888, said defendant Ivinson procured the execution by said Lawrence & McGibbon of a certain other chattel mortgage, conveying, with other property, to him all the property described in the aforesaid mortgage to plaintiff, except the four thousand (4,000) head of sheep theretofore sold by said Lawrence & McGibbon as aforesaid, securing the payment of said indebtedness of the said Lawrence & McGibbon to said Ivinson. That said Ivinson caused his said mortgages to be recorded in the office of the county clerk, an ex-officio register of deeds of said Albany County and Territory aforesaid.

"Plaintiff further alleges that thereafter, to wit: on the 20th day of May, 1889, said Lawrence & McGibbon, at the request and instigation of said Ivinson, sold and disposed of all of said sheep theretofore unsold, for a large sum of money, to wit: about the sum of twenty thousand dollars ($ 20,000.00), and that said Ivinson collected and retained the proceeds of said sale, to wit: the said sum of twenty thousand dollars ($ 20,000.00).

"Plaintiff further alleges that said defendant, at and before the time when he obtained from said Lawrence & McGibbon the first of his said mortgages, and at and before the time when he obtained from them the second of his said mortgages, and at and before the time when he collected and retained the proceeds of said sale as aforesaid, and at all times since the execution of the said mortgage to plaintiff, had full notice and knowledge of plaintiff's claim, and of the existence of said indebtedness, and of the giving of said mortgage, and of the fact that the same constituted and was a lien and incumbrance upon the sheep aforesaid, and that the defendant procured each of his said mortgages, and collected and retained the proceeds of said sale, without other consideration than the said antecedent indebtedness and with full knowledge of the plaintiff's rights, and fraudulently for the purpose of hindering, delaying and defrauding the creditors of the said Lawrence & McGibbon, and especially this plaintiff, of their just debts.

"That the plaintiff had no knowledge of the said fraud and fraudulent acts of the said defendant, and did not discover the same until long after the sale and disposal of the said mortgaged property, and that such facts have only recently, and long since the sale of said mortgaged property, come to his knowledge.

"Plaintiff further alleges that said Lawrence & McGibbon, after the giving of said mortgages to defendant had no other property out of which the plaintiff could recover his debt, and that by reason of the aforesaid fraudulent acts of said defendant plaintiff has been unable to and is still unable to collect his said indebtedness from the said Lawrence & McGibbon.

"Plaintiff further alleges that he has duly...