Dix v. Smith

• Decision Date: 06 November 1899
• Citation: 60 P. 303,9 Okla. 124,1899 OK 115
• Parties: DIX v. SMITH.
• Court: Oklahoma Supreme Court

60 P. 303

9 Okla. 124, 1899 OK 115

DIX v. SMITH.

Supreme Court of Oklahoma

November 6, 1899

Syllabus by the Court.

Where a creditor brings suit against his debtor, and sues out a writ of attachment, but before levying the same learns that the debtor's property is covered by a chattel mortgage, and upon receiving such information buys the chattel mortgage debt, and has the mortgage assigned to himself, and thereafter causes said property to be seized under such attachment, he thereby waives his lien under the chattel mortgage; and, in case the attachment is discharged, either by the court on the trial or by appealing from the judgment of the trial court and executing an appeal bond, the creditor cannot maintain an action in replevin to secure the possession of the mortgaged property, so that he may foreclose his mortgage, for the reason that the mortgage lien is waived by the attachment of the property covered thereby.

Error from district court, Kingfisher county; before Chief Justice John H. Burford.

Action by John Smith against John A. Dix. Judgment for plaintiff. Defendant brings error. Reversed.

J. H Antrobus and W. C. Stevens, for plaintiff in error.

W. W Noffsinger, for defendant in error.

BURWELL J.

E. J Stout and J. B. Stout, on August 3, 1893, executed and delivered to the Bank of Hennessey a chattel mortgage upon 2,000 bushels of wheat to secure the payment of a certain promissory note of even date therewith for $300. In January 1894, the mortgagors above named were indebted to one John Smith, who commenced an action against them on said indebtedness in the justice's court, and caused to be issued out of said court an order of attachment, which was levied upon the wheat included in the chattel mortgage given by the defendant in that action to the Bank of Hennessey; but, before the officer made the levy under the attachment order upon the wheat, the plaintiff in that action, Mr. Smith, purchased the note and mortgage referred to above from the bank, paying $137 therefor. On the trial before the justice, judgment was rendered in favor of plaintiff, and the attachment was sustained. The defendants appealed from this judgment, and executed an appeal bond, which was duly approved. Thereupon, the justice ordered the officer to return the wheat, amounting to 676 bushels, which had been removed from the place of defendants to Hennessey, and placed in the elevator of one John A. Dix, the plaintiff in error in this action, to the defendants. Mr. Smith then demanded possession of the wheat from Dix, and from J. H. Crider and Fred Ehler, partners doing business under the firm name and style of J. H. Crider & Co., which firm had, subsequent to the levying of the attachment and transfer of the mortgage from the Bank of Hennessey to Smith, taken a chattel mortgage on the same wheat to secure a debt of $360. After Mr. Smith had made the demand from Mr. Dix, J. H. Crider, and Fred Ehler, he commenced an action of replevin in the district court to recover the possession of the wheat, claiming a lien thereon by virtue of the mortgage which he had purchased from the Bank of Hennessey. On the trial of this case, after plaintiff had introduced his evidence and rested, a demurrer thereto was interposed by the defendants, which was overruled as to Dix, but sustained as to J. H. Crider and Fred Ehler. Mr. Dix then introduced evidence on his behalf, and judgment was by the court rendered in favor of the plaintiff. From this judgment the defendant, Dix, appeals to this court.

Under this state of facts, was the plaintiff entitled to recover in this action in the district court? The Statutes of Oklahoma of 1893 provide as follows:

"Sec. 3279. Personal property mortgaged may be taken under attachment or execution, issued at the suit of a creditor of a mortgagor.

"Sec. 3280. Before the property is so taken, the officer must pay or tender to the mortgagee the amount of the mortgage debt and interest, or must deposit the amount thereof with the county treasurer, payable to the order of the mortgagee.

"Sec. 3281. When the property thus taken is sold under process, the officer must apply the proceeds of the sale as follows: First, to the payment of the sum paid to the mortgagee, with interest from the date of such payment; and, second, the balance, if any, in like manner as the proceeds of sales under execution are applied in other cases."

Now when Mr. Smith commenced his action in the justice's court, and sought to attach the property of E. J. Stout and J. B. Stout, he found that it was covered by a chattel mortgage. Under the sections of the statute above quoted, he had to pay off the mortgage before he could levy his attachment on the wheat. Smith paid the mortgagee the amount of the mortgage debt, took an assignment of the mortgage from him to himself, and immediately thereafter attached the property covered by the same. At common law, the equity of a mortgagor in property could not be attached; but by the statutes of several of the states, this rule has been changed, so that the interest of a mortgagor in chattel property may be attached, garnished, or seized and sold under execution. This, however, can only be done by statutory permission. At common law, the legal title was, by the mortgage, vested in the mortgagee, and this title became absolute upon default. The mortgagor only had the equity of redemption,--nothing more. The supreme court of Massachusetts, in the case of Badlam v. Tucker, 1 Pick. 399, in speaking of the right to attach mortgaged personal property, said: "A mere equitable interest cannot be...