First Nat. Bk. Fergus Falls v. Anderson

• Decision Date: 12 March 1878
• Parties: FIRST NATIONAL BANK OF FERGUS FALLS <I>vs.</I> MICHAEL ANDERSON.
• Court: Minnesota Supreme Court

24 Minn. 435

FIRST NATIONAL BANK OF FERGUS FALLS vs. MICHAEL ANDERSON.

Supreme Court of Minnesota.

March 12, 1878.

Appeal by defendant from a judgment of the district court for Otter Tail county, McKelvy, J., presiding, adjudging that the plaintiff recover possession of the property described in the complaint, or the value thereof.

E. E. Corliss and Edwin S. Chittenden, for appellant.

Mason & Williams and Chas. D. Kerr, for respondent.

GILFILLAN, C. J.

Action in replevin. Collins, the owner of the property, consisting of a stock of goods and fixtures in a store, being indebted to Wetmore upon twenty-two promissory notes, falling due successively at intervals of one month, amounting to $1,300, executed a mortgage upon it to Wetmore, to secure such indebtedness. The mortgage contained the usual clause authorizing the mortgagee, upon default in payment of the principal or interest of the debt, or in case of any attempt to remove, dispose of or injure the property, or if the mortgagor should not take care of it, or if the mortgagee should deem himself insecure, to take possession of the property and sell the same, and apply the proceeds to payment of the debt; and it also contained the further clause that as long as the conditions of the mortgage should be fulfilled, the mortgagor should remain in possession of the property; and he agreed to keep said property in as good condition as it was then in, excepting the usual sale of goods in carrying on the business of the mortgagor, and he agreed to keep the stock up to the amount then on hand.

The mortgagee assigned this mortgage to the plaintiff, and the mortgagor afterwards voluntarily turned over the possession of the property to the plaintiff for the purpose of being applied in payment of the indebtedness it was given to secure, and then authorized the plaintiff to sell the property and pay its claim against it. At this time no creditor of the mortgagor had commenced any proceedings against him, but afterwards a firm of his creditors recovered judgment and issued execution against him to this defendant, sheriff of the county, who thereunder levied on and took from the plaintiff the property then remaining. Hence this action.

By reason of the clause in the mortgage authorizing the mortgagor to remain in possession, and make sales of the property in the course of his business, without satisfaction of the mortgage debt, it was void as to the creditors of the mortgagor. Horton v. Williams, 21 Minn....