Graham v. Blinn

• Citation: 30 P. 446,3 Wyo. 746
• Parties: GRAHAM v. BLINN et al
• Decision Date: 01 July 1892
• Court: United States State Supreme Court of Wyoming

30 P. 446

3 Wyo. 746

GRAHAM v. BLINN et al

Supreme Court of Wyoming

July 1, 1892

Error to district court, Fremont county; JESSE KNIGHT, Judge.

Action by Edgar C. Graham against Horace C. Blinn, Frank B. Sheldon and William P. Thorinly on a promissory note, and on a chattel mortgage securing same, executed by Blinn. Judgment for defendants. Plaintiff brings error. Reversed.

Judgment reversed and cause remanded.

Brown &amp Arnold, for plaintiff in error.

Potter & Burke, for defendants in error.

MERRELL J. GROESBECK, C. J., and CONAWAY, J., concur.

OPINION

MERRELL, J.

This action was brought in the trial court by plaintiff in error against defendant Blinn on a promissory note, and on a chattel mortgage executed by said Blinn to secure said note. Defendants Sheldon and Thorinly were joined as parties interested in the property mortgaged, under a subsequent chattel mortgage executed by Blinn to Sheldon, and by him sold with the note thereby secured to defendant Thorinly. The petition of plaintiff alleges that there is due and unpaid from defendant Blinn to plaintiff on said promissory note the sum of $ 270.06, with interest from May 23, 1891, at 12 per cent. per annum. This is admitted by the answer of all the defendants, and is established by satisfactory and unconflicting proof. The judgment is against plaintiff for costs. This is error for which the judgment must be reversed. There is no possible view which may be taken of this case which can deny the plaintiff judgment on his note against the defendant Blinn.

The issue raised by the pleadings, and litigated in the trial court, is as to priority of liens under the Graham and Sheldon mortgages. Only defendants Sheldon and Thorinly appear in this court to resist the reversal of the judgment. Their interest in the litigation was only as to the question of priority of liens under the two mortgages. The adjudication of this question was in their favor. They claim that this adjudication is correct, and according to the law and the evidence in the cause, and that the judgment that they go hence without costs was, as to them, not erroneous. The material facts as to these chattel mortgages are substantially as follows: The mortgage to plaintiff, Graham was executed by defendant Blinn on September 13, 1888, to secure the payment of $ 500, the amount of a promissory note of the same date, with interest at the rate of 12 per cent. per annum, also executed by defendant Blinn in favor of plaintiff, Graham. This mortgage was filed with the county clerk on October 13, 1888, but no affidavit for its renewal under the statute was ever filed, although the promissory note thereby secured was, according to its terms, due one year after its date. The Sheldon mortgage was executed April 7, 1891, to secure the payment of the amount of a note of that date, executed by defendant Blinn in favor of defendant Sheldon, for $ 375, with interest thereon. An objection is made to this mortgage that it does not state that it is intended for security, and the amount for which it is security, as required by our statute on the subject of chattel mortgages. The instrument is in a very common form of chattel mortgages. Part of the conditions of defeasance is as follows: "Provided, nevertheless, that if the said party of the first part, his heirs, executors, administrators, or assigns, shall well and truly pay unto the said party of the second part, his heirs, executors, administrators, or assigns, the sum of three hundred and seventy-five dollars, within sixty days after the execution of this instrument, with interest thereon at the rate of one and one half per cent. per month from date till paid, according to the conditions of a certain promissory note," etc.; and one of the conditions of the instrument is: "In case default shall be made in the payment of the said principal sum of money hereby intended to be secured," etc. No words could more plainly show that this instrument was intended for security, and the amount for which it is security. Besides, the entire instrument purports on its face to be a "chattel mortgage," and not an absolute bill of sale. A chattel mortgage is always intended as security, and no particular form of words is required to show the amount secured.

The real question in the cause is, which of the two mortgages has the prior lien? This question was adjudicated in the trial court, and it is proper that it be considered here. This question does not affect the defendant Blinn, as both mortgages are valid and of full force as against him. The question is between plaintiff, Graham, and defendants Sheldon and Thorinly. The charges of confederation between the three defendants to defraud plaintiff by means of the Sheldon mortgage are not proven. Sheldon's mortgage was taken by him for a valuable consideration, but with full knowledge on his part that the mortgage debt of Blinn to Graham had not been paid or the mortgage canceled, though the term for which it was given had expired more than 60 days before, --in fact, more than 18 months before, --and no affidavit of renewal had been filed or notice of foreclosure given. The consideration of the Sheldon mortgage, and the note thereby secured, was to secure Sheldon against loss on a certain promissory note, which he had signed as joint maker with Blinn, the proceeds of which were paid to the latter, a part of which was to be paid in the discharge of the sum due on the Graham note and mortgage, but which Blinn omitted to pay. Without discussing the question as to Sheldon's position, in view of the fact that he took his mortgage with full notice of the existence of the mortgage from Blinn to Graham, and that it was not renewed by affidavit, and was void as to subsequent mortgagees and purchasers in good faith, and whether or not Sheldon's act in taking his mortgage with such knowledge of the existence of the mortgage, good as between Graham and Blinn, was mala fides, we shall consider only the attitude of Thorinly, he being a subsequent purchaser of the note, before its maturity, executed by Blinn to Sheldon, and payable to the order of the latter. The mortgage was not assigned in writing, but from the testimony appears to have been transferred by delivery from Sheldon to Thorinly at the time the note was sold, indorsed, and transferred. It is contended that the evidence does not show that the mortgage securing the note made by Blinn, payable to the order of Sheldon and transferred by him to Thorinly, was ever transferred and delivered by Sheldon to Thorinly, but we think that the evidence discloses this fact. There was no written assignment of this mortgage, but that was not necessary. Our law on chattel mortgages does not require this, although it makes provision for a record of such assignments. The main object of such a record is to give notice to the mortgagor of the transfer, so that he may make tender of the amount due to the proper party, the owner of the mortgage; but, where the note has been assigned, he could not well make tender to the payee of the note, but would necessarily make it to the bona fide holder thereof. We do not see that...