Durr v. Landau

Decision Date07 December 1900
Citation108 Wis. 401,84 N.W. 437
PartiesDURR v. LANDAU ET AL.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

Appeal from superior court, Milwaukee county; Oren T. Williams, Judge.

Action by Emil Durr against J. E. Wildish, as assignee of Adolph Landau, and others. From a judgment for defendants, plaintiff appeals. Affirmed.

On April 30, 1896, Adolph Landau gave the plaintiff a chattel mortgage to secure the payment of four notes of $625 each, due November 1, 1896, May 1, 1897, November 1, 1897, and May 1, 1898. This mortgage covered a stock of crockery and other merchandise and trade fixtures. It was duly filed May 4, 1896. It contained the following clause: “The mortgagors shall have the right to sell goods covered by this mortgage, and add to the stock by purchasing other goods.” The mortgagor remained in possession, and sold goods, and made additions to the stock as follows: Sales, $6,690.53; additions, $4,423.36. During this time he paid the first note and interest on the other notes to January 30, 1897, in all about $765, leaving a trifle over $1,500 unaccounted for, and which he used for other purposes. He attempted to file statements as required by chapter 241, Laws 1887, but it is admitted that such statements were not in compliance therewith. The mortgage was in fact owned by the German-American Bank, the plaintiff being its trustee. The mortgagor remained in possession, and continued to make sales, until December 9, 1897, at which time plaintiff claims the representatives of the bank took possession. This is denied by defendants. The evidence shows that possession was contested, both parties claiming possession, until December 13th, when Landau made a voluntary assignment for the benefit of his creditors to the defendant Wildish. The latter attempted to take absolute possession, but was ejected by the plaintiff's representatives. The matter got into court, and possession of the property was eventually given the assignee. See 100 Wis. 411, 76 N. W. 355. By stipulation of the parties, the property was sold by the assignee, and the proceeds were to stand in lieu of the property, and are now held by the assignee. The plaintiff brings this action to foreclose said mortgage and to secure such proceeds. The court made findings at great length on the question of possession, and concluded that the mortgage was valid as to the fixtures, and void as to the other property, by reason of the failure of Landau to comply with the provisions of the statute. Judgment was entered for plaintiff for the value of the fixtures, and for the defendants as to the remainder of the proceeds. The plaintiff brings this appeal from that part of the judgment which adjudges that the assignee is entitled to hold a part of said proceeds.Hoyt & Olwell, for appellant.

W. J. & J. H. Turner, for respondents.

BARDEEN, J. (after stating the facts).

The mortgage in suit contained the following provision: “The mortgagors shall have the right to sell goods covered by this mortgage, and add to the stock by purchasing other goods. It is especially agreed that this mortgage shall and does cover such afteracquired property.” Further than as above stated, no provision was made regarding the disposition of the proceeds of such sales. The complaint and the evidence show that while the mortgagor was in possession he sold goods to the amount of $6,690.53, and expended $4,423.36 in additions to the stock. That during this period he had paid about $765 on the mortgage debt, leaving over $1,500 wholly unaccounted for, even if he paid for all additions to the stock,--a fact not shown. A mortgage which permits the mortgagor to remain in possession of the mortgaged property, and to sell it, and apply the proceeds, partially or wholly, to his private use, is void as to creditors. Place v. Langworthy, 13 Wis. 629;Blakeslee v. Rossman, 43 Wis. 116. The same is true if the mortgage is given with the understanding, express or implied, that the mortgagor shall go on selling the property in the usual course of trade, applying the proceeds to his own use. Anderson v. Patterson, 64 Wis. 557, 25 N. W. 541;Bank v. Joannes, 98 Wis. 321, 73 N. W. 997;Baumbach Co. v. Hobkirk, 104 Wis. 488, 80 N. W. 740. Where any such understanding exists, the fact that the mortgagee has taken possession of the property does not validate it in a contest with creditors. Blakeslee v. Rossman, supra. It is probable that since the passage of chapter 241, Laws 1887, and in view of the decision in Roundy v. Converse, 71 Wis. 524, 37 N. W. 811, a mortgage which permits the mortgagor to sell the property and make additions to the stock, and does not make express provision as to the application of proceeds, might be held valid where statements were filed as required by the statute. But in this case it is admitted that no such statements were...

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22 cases
  • In re Antigo Screen Door Co.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • April 14, 1903
    ... ... v. Joannes, 98 Wis. 321, 73 N.W. 997; Charles ... Baumbach Company v. Hobkirk et al., 104 Wis. 488, 80 ... N.W. 740; Durr v. Wildish, 108 Wis. 401, 84 N.W ... 437. In the first and last cases cited it is said that where ... any such understanding exists, the fact that ... ...
  • Hasbrouck v. LaFebre
    • United States
    • Wyoming Supreme Court
    • October 13, 1915
    ... ... 541; ... Bank of Kanbauna v. Joannes, 98 Wis. 321, 73 N.W ... 997; Charles Baumbach Co. v. Hobkirk, 104 Wis. 488, ... 80 N.W. 740; Durr v. Landau, 108 Wis. 401, 84 N.W ... 437; Franzke v. Hitchson, 105 Wis. 1, 80 N.W. 931; ... In re Thorsen, 209 F. 961 (Wis.); Knapp v. Trust ... ...
  • Madson v. Rutten
    • United States
    • North Dakota Supreme Court
    • October 23, 1907
    ... ... 389; ... Wilson v. Voight, 9 Colo. 614, 13 P. 726; ... Gallagher v. Rosenfield, 47 Minn. 507, 50 N.W. 696; ... Stein v. Munch, 24 Minn. 390; Durr v ... Wildish, 108 Wis. 401, 84 N.W. 437; Baumbach Co. v ... Hobkirk, 104 Wis. 488, 80 N.W. 740; Wells v ... Langbein (C. C.) 20 F. 183; In re ... ...
  • Madson v. Rutten
    • United States
    • North Dakota Supreme Court
    • October 23, 1907
    ...v. Voight, 9 Colo. 614, 13 Pac. 726;Gallagher v. Rosenfield, 47 Minn. 507, 50 N. W. 696;Stein v. Munch, 24 Minn. 390;Durr v. Wildish, 108 Wis. 401, 84 N. W. 437;Baumbach Co. v. Hobkirk, 104 Wis. 488, 80 N. W. 740;Wells v. Langbein (C. C.) 20 Fed. 183;In re Beede (D. C.) 138 Fed. 441; 2 Cobb......
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