Jankowitz v. Kaplan
| Decision Date | 07 December 1917 |
| Docket Number | 20,598 |
| Citation | 165 N.W. 275,138 Minn. 452 |
| Parties | J. JANKOWITZ v. B. KAPLAN AND ANOTHER |
| Court | Minnesota Supreme Court |
Action in the municipal court of Minneapolis to recover $394.69 upon 10 promissory notes. The opinion states the facts. The case was tried before Charles L. Smith, J., who made findings and ordered judgment in favor of defendant Kaplan. From an order denying his motion for a new trial, plaintiff appealed. Affirmed.
Chattel mortgage -- failure to serve notice of sale on person in possession.
1. The failure to serve a copy of the notice of sale in proceedings to foreclose a chattel mortgage upon the person in the actual possession of the mortgaged property, as required by G.S 1913, § 6974, renders the proceedings invalid.
Chattel mortgage -- objection open to mortgagor.
2. The objection to the failure to make such service is open to the mortgagor, though he may have sold the property prior to the date of the foreclosure proceedings.
Chattel mortgage -- set-off.
3. The mortgagee purchased the property at the foreclosure and thereafter sold a part thereof to a third person, receiving therefor an amount in excess of the mortgage debt. It is held that such sale was a conversion of the property, since the foreclosure was void, and in an action to recover a balance due on the mortgage debt the mortgagor may interpose the amount so received as a set-off.
Chattel mortgage -- proof of value unnecessary.
4. It is not necessary in such case to prove the value of the property. Powell v. Gagnon, 52 Minn. 232 distinguished.
Robert M. Works, for appellant.
W. B. McIntyre, for respondent.
This action was brought in the municipal court of Minneapolis to recover upon 10 promissory notes, amounting in the aggregate to the sum of $400. Defendant had judgment and plaintiff appealed from an order denying a new trial.
The defense to the action was that the payment of the notes was secured by a chattel mortgage upon certain personal property, for which the notes were given by defendants as a part of the purchase price; that prior to the commencement of the action plaintiff under the authority of the mortgage and in proceedings to foreclose the same, which were defective and void, took possession of the mortgaged property, of the alleged value of $1,600, and thereafter wrongfully converted it to his own use. Plaintiff's reply to the answer was a general denial. The trial court found the facts in favor of the defense and ordered judgment accordingly.
The evidence shows without dispute that the notes were in fact secured by a chattel mortgage; that plaintiff some time in April, 1915, attempted to foreclose the mortgage, and to that end took possession of the property, and at the sale in the foreclosure proceedings became the purchaser of all of the property for the sum of $150, that being the highest and best bid offered. It further appears that subsequent to the foreclosure plaintiff sold a part of the property to a third person for the consideration of $500; and he still retains in his possession the remainder thereof.
Whether plaintiff converted the property to his own use by the sale just mentioned depends upon the question whether the foreclosure was valid or invalid. If invalid the conversion is clear. But if valid, there is an end of the case and plaintiff should prevail, for defendants in that event would be in no position to complain that the property did not bring enough to pay the mortgage debt, or to complain of the subsequent sale by plaintiff of a part of the property.
1. It appears that after defendants became the owners of the property in January, 1914, by various subsequent sales and transfers it came into the possession of one B. Rodner, who at the time of the foreclosure was in the undisputed possession of the property, using the same for the purposes for which it was adapted. The property made up the equipment of a steam laundry and Rodner was operating the laundry at the time the property was taken in the foreclosure proceedings. No notice of the foreclosure was served upon him, and herein is the defect which the trial court held to invalidate the foreclosure. Upon the record here presented we are clear that the trial court was right in that conclusion.
We have heretofore held that the statute authorizing the foreclosure of chattel mortgages must be strictly complied with. Powell v. Hardy, 89 Minn. 229, 94 N.W. 682. In that case the notice of foreclosure was served upon the mortgagors, as in the case at bar, but there was a failure to post the same in three public places, as required by the...
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